In patent law, “Prior Art” refers to all the information publicly available about an invention. If an applicant applies to the USPTO for a patent on an invention, the application will be denied if Prior Art already describes the invention.
Upon receiving a patent application, the USPTO will conduct its own search for Prior Art. However, the applicant also has a duty to disclose any known, material Prior Art. The disclosure must be full, not partial or selective of any Prior Art that the applicant knows about.
In a patent infringement suit, a defendant can raise an “inequitable conduct” defense alleging that an applicant failed to disclose Prior Art. In 2011, the United States Court of Appeals for the Federal Circuit established a test for inequitable conduct. Under this test, the defendant must prove by clear and convincing evidence that: (1) the applicant misrepresented or omitted material information; with the (2) specific intent to deceive the USPTO. In this test, whether information is material is determined by a “but-for” standard. If the applicant had disclosed the prior art, and the USPTO would have rejected the application, then the information is considered material.
Recently, the Federal Circuit had a chance to apply its inequitable conduct defense test. In American Calcar Inc. v. American Honda Motor Co., plaintiff-appellant Calcar applied for a series of patents related to how a vehicle navigation system accesses internal data. Calcar received their patents, and then sued defendant-appellee Honda for patent infringement of those patents.
Honda raised the defense of inequitable conduct. It claimed that when Calcar applied for their patents, its application to the USPTO deliberately withheld known, material Prior Art. Specifically, Honda introduced a user’s manual that purported to explain in detail how the vehicle navigation system functioned. The user’s manual had been printed and distributed to vehicle owners prior to Calcar’s patent application.
Calcar’s basic defense was that the technical information in the user’s manual was different from the information that formed the basis of its patent applications. It argued that the District Court had failed to account for these differences. The Federal Circuit rejected this argument in applying its test for inequitable conduct.
With respect to the materiality element, the court applied a “but-for” standard. It concluded that the District Court did not clearly err in finding that the USPTO would have rejected Calcar’s patents if it had been aware of the information in the user’s manual.
Going beyond its 2011 test, the Federal Circuit provided additional guidance for analysis of whether a party had specific intent to deceive the USPTO.
The court stated that “partial disclosure of material information about the prior art to the PTO cannot absolve a patentee of intent if the disclosure is intentionally selective.” This sounds reasonable: if you have information about Prior Art, you should disclose all of it. Picking and choosing raises the question of whether you are hiding something.
Furthermore, the court reinforced this determination by allowing District Courts to infer specific intent to deceive. Instead of a complicated analysis about whether or not a piece of undisclosed information was intentionally withheld, a District Court can infer intent if the facts indicate it is the only reasonable inference. This is important, because it means that even if an applicant unintentionally neglects to provide Prior Art, a court can infer that it was done intentionally. In Calcar, the Court agreed with the District Court that it could reasonably infer that Calcar’s non-disclosure of prior art was intentional.
THE BOTTOM LINE
The takeaway from Calcar is that patent applicants need to make sure that they disclose any and all Prior Art of which they are aware. Don’t pick and choose what you want to disclose. If you miss any information, a Court could find that the omission was done intentionally to deceive the USPTO, even if that was not the case.