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Judge Linn is certainly correct that the Federal Circuit case law is muddled. As I painfully learned last year, the outcome of an inequitable conduct appeal in the Federal Circuit often depends in large part on which judges participate on the panel. Clearly, different panels of the Federal Circuit apply different inequitable conduct standards. This situation is intolerable as a matter of basic justice, and it makes it almost impossible to counsel clients on the strengths and weaknesses of inequitable conduct charges. But I do not think the solution is to make it harder to prove inequitable conduct. To the contrary--I believe the sole test should be whether material information was withheld or misrepresented--with materiality being defined as any information a reasonable examiner would have considered arguably relevant. The burden should be on practitioners to disclose material information and failure should automatically lead to loss of the patent, regardless of whether there was intent to deceive, negligence, or recklessness. This simple approach will avoid the nightmare of endless litigation on the issue of intent and focus the issue on one objective dispute--was material (relevant) information withheld or misrepresented. And the definition of materiality should be very broad--anything even arguably relevant should be disclosed. Those who would make it harder to prove inequitable conduct, like those who promoted deregulation of banking and securities markets, are falling into the same intellectually misguided trap that led to our current economic crises. We need to hold professionals to higher standards of accountability, not to lower standards. Otherwise, the patent system--like the banking and securities systems--will turn into the wild wild west once more, requiring massive governmental bailouts (in this case, massive government stripping away of ill-gotten patents and profits earned from their enforcement). Imposing strict liability on practitioners and patentees who withhold or misrepresent material information is entirely reasonable. A patent is a license to act as a monopolist, often to the detriment of the interests of consumers. We give patents as incentives to develop science and the useful arts, but entitlement to such incentives is a privilege, not an absolute right. It is entirely just and fair that the persons who may receive vast economic benefits from this govenmental benefit program (i.e. patent license) must fully comply with licensing requirements--i.e., disclosing all material information. Failure to comply eliminates a condition precedent to entitlement to the license and, therefore, it is neither arbitrary nor unfair to strip the patent license from the patentee who has withheld material information.
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While I do not disagree with the outcome of the Court's inequitable conduct analysis on the facts of the case, I am troubled by this federal circuit panel's suggestion that attorney argument can almost never constitute inequitable conduct. Attorneys should be held to a higher standard than others who participate in the patent prosecution process, because attorneys have a special duty as officers of the court and members of the patent bar to assure that the ex parte patent prosecution process is conducted based on full and fair disclosure. Attorney argument that is clearly misleading, entirely baseless, and/or that would justify Rule 11 or other similar sanctions in a Federal district or appellate court should be grounds for a finding of inequitable conduct, regardless of whether the attorney can articulate with the benefit of hindsight a good faith excuse or justification. It seems to me that a fundamental problem in the patent system is that patent examiners, under stress to meet their quotas, too often fall prey to clever but clearly incorrect arguments of patent prosecutors, who wear down the examiner into submission by engaging in a series of confusing, misleading, unfair and baseless arguments. It should be the objective of inequitable conduct to deter patent prosecutors from such conduct--and I fear that the panel's decision will be viewed by patent prosecutors as a tacit green light to make misleading and unreasonable arguments in order to grind a busy patent examiner into submission.
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