Merck v Teva: Prosecution laches and inequitable conduct
Last week, Merck reported a victory on appeal in the TEMODAR Patent Infringement Lawsuit here.
The claim (initial pleadings here - pdf alert) was dismissed on January 26, 2010 by District Judge Sue L. Robinson, concluding that the patent was unenforceable due to prosecution laches and/or inequitable conduct:
a) Prosecution Laches ("unreasonable and unexplained delay in prosecution"):
“51. It is the court's conclusion that the "ends" - commercialization of a very successful cancer drug - do not justify the "means" employed by CRCT in this case. Taken in the totality, this case involves eleven patent applications, ten bandonments and no substantive prosecution for a decade”.
b) Inequitable conduct (“applicants for patents and their legal representatives have a duty of candor, good faith, and honesty in their dealings with the PTO”):
“77. It is the court's conclusion, therefore, that the withheld information directly contradicts statements made in the '291 patent's specification regarding the utility of the claimed compounds, and directly contravenes the patentability of (broadly-written) claim 28. For these reasons, the withheld inactivity data is highly material.
83. … It is the court's finding that Stevens committed inequitable conduct by failing to disclose, in accordance with his duty, the information discussed supra”.
You can read Ms Robinson’s entire opinion here (pdf alert).
On November 9, 2010, The Federal Circuit reversed the District Court’s findings and conclusions. Main arguments are:
a) Prosecution Laches:
“to establish prejudice an accused infringer must show evidence of intervening rights, i.e., that either the accused infringer or others invested in, worked on, or used the claimed technology during the period of delay.
There has been no evidence presented that anyone was deterred from entering the market for temozolomide because Cancer Research’s patent issued in 1993 rather than several years earlier. Thus, the delay had only limited consequences to Barr and the public.
Barr has failed to establish either that it or that others developed or invested in temozolomide or any other claimed tetrazine compound between 1982 and 1991, the period of delay. Accordingly, Barr cannot establish prosecution laches as a matter of law, and we reverse the decision of the district court.
Because we conclude that the district court committed legal error in holding the ’291 patent unenforceable for prosecution laches in the absence of any evidence of intervening rights, we need not decide if Cancer Research’s delay in prosecuting the ’291 patent was unreasonable or unexplained”.
b) Inequitable conduct:
“... materiality and intent are separate requirements, and intent to deceive cannot be found based on materiality alone … In this case, evidence that Stevens coauthored articles that contradict the disclosure of the ’291 patent specification does not alone establish that Stevens with-held those studies
intending to deceive the PTO.
… While publication to the scientific community is not the same as disclosure to the PTO and does not foreclose a finding of deceptive intent, … the prompt publication of data in multiple articles over the entire course of prosecution is inconsistent with finding that intent to deceive is the single most reasonable inference to draw from the evidence in this case… Also, Stevens did not selectively withhold information; the withheld information includes both positive and negative data regarding the claimed tetrazine derivatives… Accordingly, an equally reasonable inference to draw from the evidence is that Stevens viewed publication of all the data as important to his career as a scientist but did not appreciate their potential importance to the patentability of the tetrazine derivatives patent claims”.
The decision has not been unanimous. Judge Prost, in dissent, considers that:
“the majority propounds a new and unsupportable legal standard for prosecution laches. With regard to inequitable conduct, the majority not only creates a new evidentiary standard, but it also ignores virtually unassailable credibility findings made by the district court after a four-day bench trial”.
Ms Prost interpretation of the case:
a) Prosecution Laches:
“Neither the Supreme Court nor this court has required a defendant to establish prejudice to assert prosecution laches.
... even if prejudice is required, there is no basis for the majority’s new requirement that one must confine himself to the period of prosecution delay in determining whether prejudice exists. Such a requirement (1) discounts the relationship between prosecution laches and broad public interests in the timely issuance of patents and (2) imposes a novel time restriction on the harm suffered.
By requiring this particularized prejudice, the majority sidesteps the real harm at issue in this case. The Supreme Court has explicitly recognized that delaying a patentee’s monopoly period harms the public by delaying its free use of the patented invention. Woodbridge, 263 U.S. at 48-49. Here, the applicant first filed the patent application disclosing temozolomide in 1982. By stalling prosecution for its own business purposes for nearly a decade, Cancer Research obtained a patent which does not expire until 2014—almost thirty-two years after the first application in this chain was filed”.
b) Inequitable conduct
“The majority veers from our precedent in at least two respects: (1) it creates
a new evidentiary standard for establishing inequitable conduct, and (2) it
inexplicably rejects the district court’s unassailable credibility determinations, which served as the basis for its conclusion that inequitable conduct occurred... an inventor, Dr. Stevens, withheld important data from the U.S. Patent and Trademark Office (“PTO”) that contradicted the disclosure in the patent applications”.
Full text of both appeal opinions can be found here (pdf alert).