Issue 06/12 | February 22, 2006
Failure to Disclose Declarant's Relationship to Assignee Sustained as a Basis for Inequitable Conduct

Continuing the increase in the judicial recognition of inequitable conduct, the federal circuit in Ferring et al. v. Barr Labs., Inc., No. 05-1284 (Fed. Cir. Feb. 15, 2006), affirmed the summary judgment grant of unenforceability for inequitable conduct based on the applicant's failure to disclose to the PTO the relationships of multiple declarants to the assignee. Practitioners are advised to diligently investigate and disclose any prior relationships between affiants or declarants (who submit statements during prosecution) and assignee when submitting declarations.

Ferring's `398 patent-in-suit is directed to an antidiuretic composition in solid oral dosage form for absorption in the human gastrointestinal tract. The composition was known in the prior art for use in sublingual, peroral, and nasal administration forms, and exclusively licensed to Ferring in the prior art `491 patent. In an effort to overcome rejections based on the `491 patent, applicants during prosecution submitted declarations by both inventors and non-inventors stating that the prior art disclosure of peroral administration did not include an orally administered form that was absorbed in the GI tract. Applicants never disclosed that four of the five declarations submitted to the PTO were written by scientists who had been employed or had received research funds from Ferring, and that the principal inventor participated in the drafting of two of the four declarations submitted by non-inventors. The district court found the omission highly material, inferred intent based on the high level of materiality, and granted summary judgment of unenforceability in favor of Barr.

Relying on Refac and Paragon, the federal circuit affirmed, holding that a declarant's prior relationships with the patent applicant may be material, particularly where (1) the declarant's views on the underlying issue important to patentability and (2) the past relationship to the applicant was a significant one. Here, the declarations challenged the veracity of a second reference and claimed that the reference was inapplicable to human gastrointestinal absorption. According to the court, the declarations were not only pivotal, but were essentially opinions supported largely by the declarants' own scientific expertise and little else. The court supported its reasoning on materiality by noting that the examiner's request for declarations by non-inventors accentuated the concern about the objectivity of those providing declarations and their relationship to Ferring. The court affirmed the finding of intent based on the stated importance of the declarants' objectivity combined with the "deliberate concealment" of their relationships with Ferring.

In a lengthy dissent, Judge Newman sharply criticized the Court's departure from Kingsdown's clear and convincing standard requiring objective evidence of materiality and intent to deceive. She recounted the tenuous relationships of each of the four declarants with Ferring, the inventor's knowledge of only one of the scientist's relationships, and the fact that that none any of the scientists had anything to gain or lose as a result of the issuance of the '398 patent as probative of a lower level of materiality, sufficient to survive a motion for summary judgment. She criticized the panel majority's holding that deceptive intent was established as a matter of law if the applicant "should have known" that information might be material to patentability as an unwarranted resurrection of an era when inequitable conduct was widely criticized as a "plague" upon the patent litigation system.

Please visit http://media.aplf.org/rm/20060221-public/Ferring.pdf for a copy of the case for your reference.

To discuss these topics further, please feel free to contact the author Michael R. Dzwonczyk, (mdzwonczyk@sughrue.com), at Sughrue Mion, PLLC in Washington DC, USA.

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