USA: Unenforceability of the Patent due to inequitable conduct (CAFC, Regeneron v. Merus)

If during the examination the Applicant withholds any relevant document from the Examiner in the intent to deceive the Patent Office, then this is inequitable conduct and results in the patent being unenforceable. The intent to deceive does not have to be proved directly, but it can be derived from the circumstances. Thus, even a misconduct in the patent litigation can be a sufficient indication for the intent to deceive in the earlier examination proceedings.

Regeneron sued Merus for infringing their patent. Merus defended themself with the objection that the patent was unenforceable due to inequitable conduct. Regeneron would have withheld four relevant prior art documents of which they were aware during the examination procedure. Regeneron replied that the citations were only cumulative with regard to the prior art already considered by the examiner. Moreover, there was no concrete intention to deceive the Patent Office.

The District Court scheduled two hearings. In the first, the relevance of the references should be treated and in the second, the intention to deceive. However, only the first trial took place. The court determined the broadest reasonable interpretation (BRI) of the patent claim and concluded that a reasonable examiner had granted the patent only because he had not had the withheld references ("but-for materiality"). From Regeneron’s tactics during the litigation proceedings concerning the determination of the intention to deceive, the court concluded against Regeneron, that Regeneron was likely to have deceived the Patent Office during the examination proceedings. The court, therefore, ruled that the patent was unenforceable.

The reasoning for this decision was based on the following facts:

Prior to the filing of the patent application relating to genetic engineering, two Regeneron scientists, who had also been involved in the withheld prior art publications, had corresponded with an inventor of the patent in suit over the appraisal of the prior art citations by the inventor and expressed concerns about the correctness of the appraisal.

During the examination procedure, the examiner repeatedly rejected the claims. Although the in-house patent attorney restricted the claims during the procedure by introducing the additional feature of inserting the human gene segments at an "endogenous" mouse immunoglobulin locus, the examiner upheld his objections. It was not until the patent attorney presented a presentation claiming that Regeneron had developed a commercial embodiment of the invention that showed surprising results and had discussed that presentation in a personal interview with the examiner did the examiner allow the requested claims, In the course of the patent litigation, however, it was undisputed that Regeneron had not developed such a commercial product at the time of the presentation and that the corresponding allegation in the presentation was therefore incorrect.

Just before the patent office announced the grant of the patent, a third party filed a submission with the USPTO against a parallel application of Regeneron citing three pre-publications. A fourth citation was a patent application by certain authors of the pre-publications. Regeneron in turn submitted these documents in the examination proceedings for further parallel applications with similar claims, but not with the patent in suit. The court assumed that Regeneron did not submit these documents with the intention of deception to the examiner of the patent in suit.

In the discovery of the patent litigation, Regeneron kept back documents that they actually had in possession and should have submitted. For example:

          At the court's request to present a feature analysis of the claim, the (experienced) trial lawyer of Regeneron responded that he did not understand what the court meant by that and how the claim was to be broken down.

          At the court's request to present an interpretation of the claim, the trial lawyer stated that the claim was clear and that no interpretation was required.

          An important memo by the external patent attorney Jones was first listed on the list of documents enjoying the attorney client privilege, but was removed from the list and filed with the court the night before the patent attorney's testimony was to be taken.

          When the court ordered Regeneron to hand over all documents relating to Dr. Jones Memo, Regeneron presented only a few documents, although it later turned out that many more documents should have to be provided.

          On the list of documents covered by the attorney /client privilege were many who did not meet the requirements for this legal secrecy protection.

          Following the discovery, an affidavit of the in-house patent attorney was submitted in which statements were made on various topics, many of which were included in many documents in the list of protected documents. This challenged the outcome of the discovery process all together.

The court considered sanctions against Regeneron to be indispensable for this litigation. It ruled that the circumstances allowed the conclusion that Regeneron had intended to deceive the examiner and that the consequence of the unenforceability of the patent is the only appropriate measure.

Regeneron filed an appeal against this decision with the Court of Appeals for the Federal Circuit (CAFC). According to settled case-law, it would not be permissible to conclude from the conduct during patent litigation that there was an intention to deceive in the earlier examination proceedings.

The CAFC rejects the appeal. The District Court did not rely solely on behavior in the patent process. Rather, during litigation Regeneron had obstructed the identification of the facts and circumstances relating to the patent examination and to the question of intent to deceive.

Note: It is usually difficult, if not impossible, for the patent infringer to prove that the patent proprietor intended to deceive during the examination process. Here the case law helps by accepting that one can derive the intention to deceive also from the circumstances. The entire course of the case history can play a role. In a blatant case like this, even a cunning patent litigation tactics cannot help.