The Duty of Candor and Good Faith Dealing Not Limited to Disclosing Prior Art

12 May 2016

The Duty of Candor and Good Faith Dealing Not Limited to Disclosing Prior Art

Anyone sufficiently involved with the prosecution of a patent application has a “duty of candor and good faith dealing with the [USPTO], which includes a duty to disclose to the Office all information known to that individual to be material to patentability” (emphasis added) 37 C.F.R. § 1.56 (Rule 56). For each patent application, the duty of disclosure extends to all “individuals associated with the filing or prosecution.” Rule 56. This certainly includes named inventors and any patent attorneys or agents, as well as “every other person who is substantively involved” with the application. Failure to satisfy the high duty of disclosure standard has many potential repercussions. For a patent owner, the greatest repercussion is the potential for a patent to be held unenforceable due to inequitable conduct.


Relatively recently, the US Court of Appeals for the Federal Circuit clarified the standard for inequitable conduct. The Federal Circuit explained that, to prove inequitable conduct, the asserting party must establish “but-for” materiality. In other words, it must be proven that the PTO would not have allowed a claim had it been aware of the undisclosed information. Therasense, Inc v. Becton, Dickinson & Co. 649 F.3d 1276, 1291 (Fed. Cir. 2011). The Federal Circuit noted that materiality is often linked to a validity determination – if a claim is invalidated during litigation based on the deliberately withheld information (such as a prior art reference), “then that reference is necessarily material because a finding of invalidity in a district court requires clear and convincing evidence, a higher evidentiary burden than that used in prosecution at the PTO.” Id at 1292. However, the Federal Circuit has also acknowledged that the “but-for” materiality standard can still be met even if the information is not sufficient to render any of the patent claims invalid in a US court. Because the PTO only requires a preponderance of evidence of nonpatentability, while invalidation in a US court requires clear and convincing evidence, it is possible that the PTO would not have allowed the claim had it been aware of the undisclosed information. See American Calcar v. American Honda Motor. 768 F.3d 1185 (Fed. Cir. 2014)


Most often, the material “information” to be disclosed to the USPTO takes the form of prior art references. However, Rule 56 quoted above was intentionally drafted to broadly cover disclosure of “all information” rather than simply “prior art.” In February of this year, the Federal Circuit once again considered the question of materiality in connection with a determination of inequitable conduct, The Ohio Willow Wood v. Alps South, __ F.3d ___, Nos. 2015-1132, -1133 (Fed. Cir. Feb. 19, 2016). This decision by the Federal Circuit serves as a reminder to all individuals involved with the prosecution of a patent application that the disclosure requirement of Rule 56 is not limited to prior art references.


In Ohio Willow Wood, OWW asserted infringement against Alps South, who then sought reexamination of the claims. Appealing a rejection from the reexamination, OWW argued before the USPTO Board that certain testimony relied upon by the examiner in making his rejection was uncorroborated and therefore should not be given weight. The Board agreed, reversing the examiner’s rejection and explaining that the examiner erred in crediting uncorroborated testimony.


Following the reexamination, a US District Court found that OWW actually had corroborating evidence during the reexamination proceeding. On appeal, the Federal Circuit agreed with the District Court that the withheld corroborating evidence was material. In particular, the Federal Circuit noted that, although the evidence itself did not conclusively prove that an anticipating device was on sale before the critical date, the evidence was sufficient to corroborate the testimony relied upon by the examiner. Moreover, the Federal Circuit agreed with the District Court that corroboration (or lack thereof) was the dispositive issue before the Board. Thus, the withheld evidence became “but-for” material to patentability when OWW argued to the Board that the testimony was uncorroborated and should not be given weight. Because this withholding was also deemed intentional, the Federal Circuit affirmed the lower court’s determination of inequitable conduct.


The adversarial litigation system in the US is excellent at rooting out any deceptive practice. Whenever a patent is being enforced, accused infringers scour all available information to identify any failures to comply with Rule 56. Thus, it is vital to remember during prosecution that the duty to disclose extends to all material information, and not merely prior art.

About the author

 W. Douglas Hahm

W. Douglas Hahm

W. Douglas Hahm is a partner at Wenderoth, Lind & Ponack in Washington, where his practice focusses on preparing applications for and procuring patents in mechanical and electrical technologies on behalf of domestic and foreign clients. Hahm also provides opinions and strategic guidance on infringement and validity of United States patents, and counsels international and domestic clients on all aspects of patent law. His practice encompasses a wide range of technologies including medical devices, internal combustion engines, semiconductor devices, furniture hardware, batteries, consumer products and appliances, steering and suspension systems and waste treatment systems. He previously worked for the U.S.Department of Defense for six years as an engineer, where he was assigned to oversee various aspects of the repair and overhaul process for nuclear-powered U.S. Naval vessels.

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