Inequitable Conduct: Negligence Isn't Enough - Intellectual Property Law - Federal Circuit
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Inequitable Conduct: Negligence Isn't Enough

Patents can be invalidated for a number of reasons— inequitable conduct being one of those reasons.

Last week, the Federal Circuit Court of Appeals broke down the concept of inequitable conduct in the case of Outside the Box v. Travel Caddy.

The District Court held the patents to be unenforceable due to inequitable conduct in the Patent and Trademark Office (PTO).

In order to establish inequitable conduct, the court drew on Therasense, Inc. v. Becton, Dickinson & Co. The court pointed out that there must be a showing that material information related to the patentability was withheld from the PTO, or that material misinformation was provided to the PTO. These omissions or misrepresentations must also have been with the intent to deceive or mislead the patent examiner into granting the patent.

Intent must be proven through clear and convincing evidence.

For Travel Caddy, the problem arose with the fact that a different, yet related patent, had been in litigation. The existence of this litigation had been withheld from the PTO.

The District Court found that there existed clear and convincing evidence that Travel Caddy withheld the information with the intent to mislead the PTO.

The court in Therasense stated that the specific intent prong required knowledge and deliberate action to defraud the PTO.

But when does specific intent arise? Travel Caddy argued that their omission was the product of negligence. Would negligence be sufficient to establish clear and convincing evidence of deceptive intent?

The Federal Circuit Court of Appeals didn't think so. In fact, the court pointed out that even gross negligence would not be enough to establish deceptive intent.

As such, the Federal Circuit Court of Appeals reversed the District Court's ruling.

The court also addressed the inequitable conduct involving the filing fees paid by Travel Caddy, where Travel Caddy paid reduced fees by claiming it was a small entity.

Here, the court ruled that while the status may have been claimed in error, this was not sufficient to void the patent.

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