A charge of inequitable conduct before the United States Patent and Trademark Office (“PTO”) may sound like a threat that would only be of concern to patent lawyers and their high technology clients. However, because anyone can be sued for patent infringement without notice and patents can issue for any novel, non-obvious and useful invention, all attorneys should be aware of the increasingly common, and thanks to the Court of Appeals for the Federal Circuit, increasingly broad defense of inequitable conduct before the PTO.
Inequitable conduct is a defense that renders a patent unenforceable as a matter of equity due to an intentional, material misrepresentation or omission during prosecution of patent. Because the doctrine is rooted in equity, the defense can be invoked when there is either a high level of materiality or a high level of intent, even if the other element is low.
If there is a sufficiently high level of both materiality and intent, the patentee can also be subject to antitrust liability, Walker Process v. Food Machinery, 86 S. Ct. 347 (1965), and not just an inability to enforce the patent.
The issue of intent has always been recognized as fact specific and subjective. By contrast, on its face the issue of materiality has the potential of being part of an objective standard. However, as the Court of Appeals for the Federal Circuit (CAFC) recently explained in Digital Control Inc. v. The Charles Machine Work, 437 F.3d 1309 (2006), the rules or scope of what is “material” has changed over time and not always been consistently applied.