Former PTO Chief Weighs In On Inequitable Conduct

By Jacqueline Bell, jackie.bell@portfoliomedia.com
As published in IP Law 360 by Portfolio Media, Inc.

Wednesday, Mar 12, 2008 --- A former commissioner of the U.S. Patent and Trademark Office has expressed concern over an ongoing fight involving a provision of the Senate's Patent Reform Act that deals with the inequitable conduct doctrine.

In a letter to Sens. Patrick Leahy (D-Vt.) and Arlen Specter (R-Pa.), former PTO Commissioner Harry F. Manbeck argued that it would be unwise to “eviscerate the doctrine as it now stands,” while conceding that some legislative modification may be justified.

The inequitable conduct doctrine allows a judge to render a patent unenforceable if the patent was obtained by making misleading statements to the PTO or by omitting material information.

The Senate version of the Patent Reform Act aims to codify this judicially created doctrine in part by providing that information is “material” if a reasonable examiner would consider the information important when deciding whether to grant the patent.

The generics pharmaceutical industry has pushed lawmakers to block any further changes to the inequitable conduct doctrine, arguing that revisions being proposed by other stakeholders would only make it harder for generics to invalidate patents.

Other groups are asking senators to narrow the patent reform bill's inequitable conduct provision, arguing that the inequitable conduct argument should only be used after a court first makes a judgment of invalidity.

Those stakeholders, including the American Intellectual Property Law Association, argue that such a limitation would address what they see as a far-too-frequent use of the inequitable conduct doctrine when patents are challenged.

Others opposed to the current inequitable conduct provision say lawmakers should consider adopting a materiality standard that would only allow a court to render a patent unenforceable if the PTO actually relied on the misrepresentation when it granted the patent, a so-called “but for” standard.

Manbeck argued in his letter that both arguments should not sway Senate leaders to make changes to the current provision.

“To change the 'but for' standard in judging inequitable conduct or to require that invalidity must be found by a court before inequitable conduct can be considered would, in my opinion, lead to undesirable mischief in patent prosecution,” Manbeck said in his letter.

“Also, to provide that inequitable conduct could be cured by reissue proceedings also seems unwise since such a change would seriously detract from present deterrents against intentional misconduct,” Manbeck added.

Manbeck was PTO commissioner from 1990-1992. He has since been in private practice.

Still, some legislative reform of the inequitable conduct may be warranted, Manbeck says, noting that the present system involves an “all or nothing approach.” If inequitable conduct is found, the judge declares the patent unenforceable.

Manbeck argues that there could be lesser sanctions than complete unenforceability, since there are degrees of misconduct and an attorney could also be acting improperly without a client's knowledge.

“When inequitable conduct has occurred there should be a penalty enforced ... However, I believe that it would not be unreasonable for the contemplated legislation to provide the courts with the ability to impose lesser sanctions than complete unenforceablity,” Manbeck said.

Legislative watchers expect the hotly contested legislation to hit the Senate floor in late April.