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The Impact of Therasense on Patent Reform

Posted On: Jul. 19, 2011   By: Scott A. McKeown

patent reform

Did Therasense Moot Supplemental Examination?

Supplemental Examination, as currently proposed in the patent reform legislation, would enable Patentees to effectively cure inequitable conduct for all but the most offensive conduct. This reform provision was designed to combat the plague of inequitable conduct charges that existed prior to the Therasense decision

Supplemental examination would enable the Patentee to have the USPTO consider, reconsider, or correct information believed to be relevant to its patent if the information presented a substantial new question of patentability (SNQ).  If an SNQ is found to exist, the supplemental examination would include a full examination of the claims. (not just limited to patents and printed publications as in current reexamination practices).  Once Supplemental Examination concludes, the issues brought before the Office in the second examination cannot serve as a basis for an inequitable conduct defense.

The legislative proposal hoped to provide a post grant opportunity to cure such issues as it was well established by the courts that patent reexamination and patent reissue could not cure such defects…..that is, until Therasense.

In order to prove inequitable conduct, intent to deceive must exist relative to a material misrepresentation. As to materiality, Therasense changed the standard from a “reasonable examiner” test for materiality to a ”but for” standard of materiality. The new “but for” standard defines material information as any non-cumulative information which, had it been disclosed prior to patent issuance, would have prevented the patent from issuing.

This same “but for” materiality standard is applied in Walker Process antitrust claims. Earlier this year, a California District Court explained that while a USPTO proceeding cannot cure fraudulent conduct, it can be dispositive of a “but for” materiality standard, noting:

The re-issuance does not cure the alleged fraud, but it is dispositive of whether the PTO would have issued the original [patent].

Because the PTO reexamines re-issuance applications as if being presented for the first time, the fact that the PTO did re-issue Defendant’s patent even with the prior art precludes Plaintiff from plausibly pleading [Walker Process].

The practical impact of the “but for” standard of Therasense is that patent reexamination and patent reissue, can now be used to cure inequitable conduct, albeit indirectly. The pending Supplemental Examination provision of the patent reform legislation proposes to do what the CAFC has seemingly already done. 

As Supplemental Examination would open a patent up to additional grounds of rejection, 112, 101, etc. One is left wondering whether or not Patentees are better off simply filing a patent owner initiated reexamination (ex parte) that may consider only patents and printed publications—-and do it today rather than waiting for the proposed patent reform procedure.

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