United States Doctrine of Inequitable Conduct Under Scrutiny Again

The controversial doctrine of inequitable conduct has once again garnered much attention in the patent law community due to the recent denial of certiorari by the US Supreme Court in Aventis Pharma v. Amphastar.  The doctrine of inequitable conduct allows courts to exercise equitable discretion to find a patent unenforceable if the applicant has failed to exercise his or her duty of candor and good faith to the USPTO. The Court in Aventis Pharma v. Amphastar refused to reinstate Sanofi-Aventis’ patent for the blood-thinner Lovenox, which generated $3.8 billion in sales in 2008.  Sanofi-Aventis failed to disclose that the comparative half-life studies between Lovenox and other similar compounds were at different dosages. The US Court of Appeals for the Federal Circuit voted 2-1 in upholding the trial judge’s finding that this conduct was intended to deceive the USPTO to uphold the patent. Amphastar Pharmaceuticals Inc. and Teva Pharmaceutical Industries Ltd., who both challenged the Sanofi patent, are now looking towards creating generic variants of Lovenox.

Infringements of the doctrine of inequitable conduct largely occur when applicants fail to submit material prior art known by the applicant, submit misstatements of fact, or submit mis-descriptions of inventorship. The 2006 split-panel decision in Ferring B. V. v. Barr Laboratories, Inc. reinstated the standard of intent required to use the doctrine as a defense to patent infringement to be that the applicant “should have known” to disclose, coupled with materiality of the information. The doctrine of inequitable conduct is one of many laws that have been cited as causing undue delays and expenses for both the courts and applicants. Innocent or even irrelevant mistakes by patent applicants can result in unenforceability of the entire patent.  As Sanofi noted in its case, the doctrine shows “the ease with which billion-dollar patent rights can be obliterated.” Therefore applicants often end up providing extraneous information to the courts in an effort to ensure compliance. Proposed modifications to the doctrine in recent versions of the Patent Reform Act would eliminate this doctrine as a defense in patent infringement cases and only allow the USPTO to investigate allegations of a violation to impose civil penalties. However the most recent patent-reform bills from 2009 have yet to include changes to the inequitable conduct doctrine.

Many scholars have suggested that the current requirement of intent to deceive as outlined in Ferring should be replaced with a standard of intent that clearly states the requirements for evidence of intention and eliminates the the ability to prove intent from materiality of the information. It has also been proposed that the doctrine should remain as a defense and not be brought within the USPTO’s jurisdiction to investigate cases of inequitable conduct due to current concerns regarding the competence of the USPTO.

The 2007 Canadian case G.D. Searle & Co.  et al. v. Novopharm Limited et al. has caused some people to speculate that the doctrine of inequitable conduct has arrived in Canada. However, Janssen-Ortho Inc. v. Apotex Inc., decided late in 2008, calmed the concerns within the Canadian legal community when the court specifically stated that there is no express duty of candor in Canadian patent law and, if the doctrine were to be applied in Canada, it would only be used in equitable remedies. A degree of uncertainty remains in Canada, but perhaps the United States could utilize some of the discretion that Canadian courts have applied to this debate. In Canada it is clear that applicants have a duty to disclose only what is specifically stated within the Patent Act and in jurisprudence. However Searle & Co. indicates that applicants must reply to examiner requests in “good faith”. The extent of this duty is yet to be clarified, but it is likely courts will approach it with caution to avoid the problems within the current United States patent laws. Narrowing the scope of the duty under the American doctrine of inequitable conduct to resemble Canadian standards would still allow the courts to apply the doctrine in cases of blatant misrepresentation and misleading statements without adding unnecessary burdens to the good faith patent applicant.