Pay The (PTO) Piper: Correct Erroneously Underpaid Maintenance Fees To Avoid Inequitable Conduct Challenges

• Published date: 30 August 2021
• Subject Matter: Intellectual Property, Patent
• Law Firm: Finnegan, Henderson, Farabow, Garrett & Dunner, LLP
• Author: Ms Jill MacAlpine, Amanda K. Murphy, Adriana L. Burgy, Samantha Leff, Stacy Lewis and Thomas L. Irving

In the context of a district court litigation, a U.S. patent must be valid and enforceable or any potential reward for the Patent Owner will be moot. Defendants may argue that a patent is unenforceable in light of inequitable conduct committed during prosecution of the underlying patent application, but the standard to meet the requisite inequitable conduct to warrant unenforceability is supposedly higher after Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1290 (Fed. Cir. 2011) (en banc) ("This court now tightens the standards for finding both intent and materiality in order to redirect a doctrine that has been overused to the detriment of the public.").

Prior to Therasense, a finding of inequitable conduct required, for example, "evidence of affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Establishing that a patent owner "should have known of [the] materiality" was sufficient to support a finding of inequitable conduct. See Bristol-Myers Squibb Co. v. Rh'ne-Poulenc Rorer, Inc., 326 F.3d 1226, 1229 (Fed. Cir. 2003)‏; Ulead Systems, Inc. v. 351 F.3d 1139, 1144 (Fed. Cir. 2003). In Therasense, however, the Federal Circuit adopted a higher standard for proving inequitable conduct, requiring clear and convincing evidence that the patentee "knew of the reference, knew that it was material, and made a deliberate decision to withhold it." Therasense, 649 F.3d at 1290.

Under Therasense, the standard for materiality is now "but for," and "prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art." Id. at 1291. In addition, "[w]hen the patentee has engaged in affirmative acts of egregious misconduct, such as the filing of an unmistakably false affidavit, the misconduct is material." Id. at 1292. "[T]o meet the clear and convincing evidence standard, the specific intent to deceive must be 'the single most reasonable inference able to be drawn from the evidence.'" Id. at 1290.

Importantly, the issuance of a U.S. patent does not toll the period for assessing inequitable conduct. For example, after grant, a patent owner must continue to pay maintenance fees throughout the lifespan of the patent to avoid abandoning the patent. Small entities (e.g., small business concerns, independent inventors, and non-profit organizations meeting the definition in 37 C.F.R. ' 1.27) may...