Docket No. 2016-1346
PROST, NEWMAN, WALLACH
July 27, 2017
Update (Dec. 26, 2017): Petition for rehearing en banc denied; Judges Newman and Reyna dissented, concerned that under this decision “inequitable conduct in patent prosecution can be retrospectively imposed by ‘adverse inference’ arising from later misconduct in litigation, without a showing of deceptive intent before the Patent Office” as required by Therasense (FC 2011, en banc).
Brief summary: DC finding of inequitable conduct based on “adverse inference of specific intent to deceive the PTO”, apparently due in part to litigation misconduct, affirmed.
Summary: Regneron appealed DC holding that US 8,502,018 claiming “[a] genetically modified mouse, comprising in its germline human unrearranged variable region gene segments inserted at an endogenous mouse immunoglobulin locus” is unenforceable for inequitable conduct. The DC held a first bench trial on the materiality of the “Withheld References” (Bruggemann, Taki, Zou and Wood) and scheduled but never held a second bench trial on specific intent to deceive (Therasense, FC 2011). The DC “drew an adverse inference of specific intent to deceive the PTO” against Regeneron, discussing “Regneron’s repeated violations of the [DC’s] discovery orders and improper secreting of relevant and non-privileged documents.” The ‘018 patent issued from the “‘176 application” which was filed one of several continuations of a divisional of US 6,596,541 (the ‘541 patent). During prosecution, Regeneron argued the cited art only taught “random and not targeted insertion”, amended the claims to require insertion at “an endogenous” mouse immunoglobulin locus, and submitted “a presentation” asserting “that it had developed a commercial embodiment of the claimed mouse with surprising results”, an assertion found to be undisputably false (“Regeneron had not developed any such mouse at the time.”) Regeneron also intereviewed the case with the Examiner in March 2013 and “relied on the misleading presentation” at that meeting. The Examiner then issued a Notice of Allowance, stating “[t]he prior art does not teach or suggest” insertion “at an endogenous mouse immunoglobulin locus.” Prior to issuance of the Notice of Allowance, “a third-party filed a submission in the parent application of the ‘018 patent, describing three” of the Withheld References (Wood is a PCT application not included in that submission). A Wood co-inventor (Dr. Alt) an author on Taki and Zou (Dr. Rajewsky) were on Regeneron’s scientific advisory board before the ‘018 patent was filed. “During prosecution, these individuals corresponded with Dr. Murphy, an ‘018 patent inventor, expressing concerns about his characterizations of the prior art in related publications.” And Regeneron’s in-house counsel was aware of but did not disclose the Withheld References, but Regneron did subsequently disclose the same “in every related application having the same specification and similar claims.” Regneron argued it was under no obligation to disclose the Withheld References because “they were not but-for material.”
Under Therasense, “materiality” must be “but-for materiality”, meaning “the PTO would not have allowed a claim had it been aware of the undisclosed prior art” provided it is not “merely cumulative” (Dig. Control, FC 2006). A “specific intent to deceive the PTO” (“a deliberate decision to withhold a known material reference” must also be shown, and may be inferred from circumstantial evidence (Star Scientific, FC 2008; Molins, FC 1995; Apotex, FC 2014). The FC panel opinion explains that DC findings of materiality are reviewed for clear error and a finding of inequitable conduct based on those facts for an abuse of discretion. In reviewing materiality, the FC panel first concluded that “under the broadest reasonable construction” of the claims, the DC “correctly found that the claims are not limited to mice that solely comprise mouse constant region gene segments” (“Claim 1 encompasses humanized, fully human, and reverse chimeric mice”) and that, based on this construction, “the Withheld References were but-for material and were not cumulative.” The FC panel also found the DC did not abuse its discretion “by drawing an adverse inference of specific intent” against Regeneron based on litigation misconduct (detailed in the FC panel opinion). Unlike in Aptix (FC 2001 (“courts may not punish a party’s post-prosecution misconduct by declaring the patent unenforceable”), relied on in Judge Newman’s dissent (the “absence of trial and trial findings on” intent “cannot be substituted by inference”)), the FC panel wrote, “[h]ere, Regneron is accused not only of post-prosecution misconduct but also of engaging in inequitable conduct during prosecution” and it was “[o]nly after Merus proved the remaining elements of inequitable conduct” that the DC held the patent unenforceable.” Thus, the DC decision was affirmed.
Federal Circuit summaries 