Therasense Decision to Influence the Choice Between Ex Parte vs. Inter Partes Patent Reexamination?

On May 25, 2011, the Federal Circuit issued its the long awaited en banc decision in Therasense, Inc. v. Becton, Dickinson & Co. 2008-1511.  The majority opinion authored by Chief Judge Randall Rader established a single new standard for determining materiality in inequitable conduct cases. This 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.

Unlike the prior standard used in determining materiality of undisclosed information, the new standard assesses materiality on a preponderance of evidence burden of proof standard giving the patent claims their broadest reasonable construction in light of and consistent with the supporting patent specification. Presumably, because the majority opinion rejected the applicability of the USPTO’s materiality standard under 37 CFR § 1.56(b)(1), the new “but for” standard will take into account any rebuttable evidence that is proffered by the patent owner such as antedating non-statutory bar prior art and objective indicia of non-obviousness, irrespective of the fact that none of such rebuttal evidence was ever submitted to the USPTO for consideration prior to patent issuance.

A consequence of the new “but for” test for materiality is that, at least for those filings that include art forming the basis of an inequitable conduct defense to infringement, inter partes patent reexamination is now the more attractive option.

With the “important to a reasonable examiner” standard and the “prima facie unpatentable” standards eliminated in Therasense as materiality standards for proving inequitable conduct, ex parte reexamination becomes less attractive for use in corroborating an inequitable conduct defense. Previously the reasonable examiner standard was at least arguably evidenced upon a mere decision to reexamine/reject claims in either form of patent reexamination. However, Post-Therasense, the new goal is for the reexamined patent claims to be canceled or amended based on the undisclosed patents and printed publications, such would be dispositive that the original claims should not have issued in their original form.

Because the new “but for” standard allows the patent owner to submit rebuttable evidence, the third party requester needs to be cognizant that patents and printed publications that qualify as prior art under 35 U.S.C. §§ 102(a) or (e) may be vulnerable to antedating by the patent owner. Moreover, if the bases for the rejections are solely under 35 U.S.C. § 103, the patent owner may be able to rebut the prima facie case of obviousness through proof of objective indicia of non-obviousness, such as proof of unexpected results.

Particularly, in inter partes reexamination where the third party requester may participate at every stage of the proceedings, including independent rights to appeal the BPAI and Federal Circuit, the third party is provided with the most effective tool to prove materiality. USPTO statistics (here) demonstrate that challengers are far more successful in forcing claim amendment/cancellation in an inter partes patent reexamination.

Akin to the new “but for” materiality standard of the district courts, in patent reexamination, claims are also a broadest reasonable construction. Likewise, prior art is also evaluated under a preponderance of evidence standard in patent reexamination. See for example, MPEP §§ 2258(I)(G) and 2658(I).

Where the third party requester has a strong case of unpatentability of original patent claims based undisclosed prior patents and printed publications previously known by the patent owner, reexamination, preferably inter partes reexamination may be a tool of choice, if filed promptly, to prove the “but for” test for materiality Post-Therasense.