IP Alert: Federal Circuit Affirms Inequitable Conduct Without Direct Evidence of Deceptive Intent

On September 1, in Belcher Pharmaceuticals, LLC v. Hospira, Inc., the Federal Circuit affirmed the unenforceability of a patent on grounds the patentee engaged in inequitable conduct during prosecution before the USPTO, based on circumstantial evidence showing intent to deceive the USPTO. This case represents the latest guidance from the Federal Circuit on the standard for inequitable conduct set forth in Therasense, Inc. v. Becton, Dickinson & Co.

The claims at issue in Belcher cover adrenaline formulations having a pH between 2.8 and 3.3. Prior to filing the application for the patent-in-suit, Belcher submitted a New Drug Application to the U.S. Food and Drug Administration (FDA). In communications with the FDA, Belcher represented that a 2.8 to 3.3 pH range for an adrenaline formulation was an “old” range.

Belcher’s Chief Science Officer participated in drafting Belcher’s NDA and, though not a patent attorney or patent agent, was also involved in the drafting and prosecution of the application for the patent-in-suit. During prosecution, this Belcher employee asserted to the USPTO that the 2.8 to 3.3 pH range was a “critical” innovation that yielded “unexpected results.” At the time, the employee was in possession of prior art that disclosed the claimed pH range, but did not submit the prior art to the USPTO.

The district court held that the Belcher employee engaged in inequitable conduct by withholding prior art from the USPTO, and Belcher appealed to the Federal Circuit. Inequitable conduct is a defense to patent infringement that, if proven, renders the asserted patent unenforceable. In Therasense, the Federal Circuit held that for a defendant to prevail on an inequitable conduct defense, the defendant must establish both 1) the materiality of a withheld reference, and 2) the applicant’s intent to deceive the USPTO. Prior to Therasense, the Federal Circuit had endorsed a sliding scale analysis, in which highly material prior art could minimize the need to prove intent.

Regarding materiality, the district court had found the asserted claims to be invalid as obvious based on the withheld prior art—a finding Belcher did not challenge. On appeal, the Federal Circuit held the lower court’s determination of invalidity established the withheld prior art as “necessarily material” to patentability.

Turning to the intent prong of the inequitable conduct analysis, the court referenced the Belcher employee’s repeated discussion of the prior art with the FDA, and described his characterization of the claimed pH range to the USPTO as an “about-face.” Therefore, despite no direct evidence of deceptive intent, the court held that the “single most reasonable inference” is that Belcher’s employee possessed the specific intent to deceive the USPTO when withholding the prior art.

Having found both materiality of the withheld prior art and that the Belcher employee intended to deceive the USPTO, the court ruled the patent-in-suit unenforceable for inequitable conduct.

The Belcher decision is another reminder that patent applicants— including their non-attorney employees—are bound by a duty of candor and good faith in dealing with the USPTO. The decision also suggests that the intent prong of the inequitable conduct analysis may remain flexible even after Therasense.

For more information on this topic, please contact Fitch Even partner Brett J. Smith, author of this alert.

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