A patent applicant's misconduct during the prosecution of a patent can render the patent unenforceable under the doctrine of “inequitable conduct.” A recent U.S. Court of Appeals for the Federal Circuit decision, Regeneron Pharmaceuticals v. Merus, potentially extends that doctrine to encompass misconduct during patent-infringement litigation, rather than just during patent prosecution. See No. 2016-1346, 2017 WL 3184400 (Fed. Cir. July 27, 2017). We report here on the Regeneron case and other cases addressing whether litigation misconduct can render a patent unenforceable, and provide guidance for practitioners.

Inequitable Conduct

Inequitable conduct is an equitable defense to patent infringement, and a powerful one: a finding of inequitable conduct as to a single claim of a patent renders all claims of that patent unenforceable. Therasense v. Becton, Dickinson and Co., 649 F.3d 1276, 1289-90 (Fed. Cir. 2011). Inequitable conduct can also “spill over” to render unenforceable other patents within the same patent family. And it can lead to antitrust and unfair competition claims by competitors and consumers.

Inequitable conduct claims usually involve an accusation that, during prosecution, the patent applicant withheld from the examiner one or more prior art references bearing on the application. To prove inequitable conduct, the accused infringer must show by clear and convincing evidence that the applicant withheld a reference that was but-for material to patentability—that is, that the Patent Office would not have approved a claim if it had known of the withheld reference—and that the applicant acted with specific intent to deceive the Patent Office. Id. at 1290.

Litigation Misconduct

In Regeneron, Regeneron sued Merus, alleging infringement of U.S. Patent No. 8,502,018 (the '018 patent), which claims mice that have been genetically modified with human DNA. See Regeneron Pharm. v. Merus,144 F. Supp. 3d 530 (S.D.N.Y. 2015). Merus counterclaimed, alleging inequitable conduct during prosecution of the application that led to the '018 patent.

The district court scheduled a bench trial on the inequitable conduct allegations, and bifurcated that trial into a first phase assessing the materiality of references withheld from the Patent Office and a second phase regarding specific intent to deceive. After the first phase, the district court found that Regeneron had incorrectly represented to the Patent Office that it had created a successful commercial embodiment of the invention, and had not provided to the office four prior art references that the court found to be material. Regeneron, 2017 WL 3184400 at *3.