Applying Rule 56 as amended by the U.S. Patent and Trademark Office (USPTO) in 1992, the U.S. Court of Appeals for the Federal Circuit upheld the district court’s determination of inequitable conduct where the patentee intentionally failed to disclose the material fact that the alleged "surprising discovery" of the invention was based on inventor’s "insight" as opposed to actual experimental results. Purdue Pharma L.P. v. Endo Pharmaceuticals Inc., Case Nos. 04-1189, -1347 and -1357 (Fed. Cir. Jun. 7, 2005) (Plager, Sr. C.J.).
In the subject patent, the written description states that the inventors "surprisingly discovered" that using a four-fold range of dosages (e.g., between 10 mg and 40 mg) of oxycodone formulations could achieve the same clinical results as the prior art opioid formulations using an eight-fold range of dosages (e.g., between 10 mg and 80 mg). After the patent issued, one inventor, Dr. Kaiko, testified that it was his "insight," as opposed to any clinical results or testing, that led to discovery of the reduced range. Purdue concedes that no clinical testing had ever been conducted to support the assertion made in the application specification but insists that, nevertheless, it did not misrepresent facts or fail to disclose material facts to the USPTO.
The trial court, citing to patent specification and prosecution history, held that the record clearly and convincingly established that Purdue repeatedly made arguments to the USPTO that implied clinical results had been obtained to support the "discovery" and that it consistently argued the "clinical significance" of the discovery to the USPTO. The district court cited to assertions made by the inventor, Dr. Kaiko, to the USPTO about his "surprising discovery" suggesting that the discovery was supported by clinical results. The district court held the patent to be unenforceable. Purdue appealed.
The Federal Circuit agreed that the prosecution history supported the trial court’s conclusion; the fact that Dr. Kaiko’s "insight" provided the only support for the surprising discovery was material under Rule 56. Citing Bruno Indep. Living Aids, Inc. v. Acorn Mobility Servs., Ltd., the Court stated that "we give deference to the USPTO’s formulation at the time an application is being prosecuted before an examiner of the standard of conduct it expects to be followed in proceedings in the Office." Information is regarded as material under amended Rule 56 if, inter alia, it "refutes, or is inconsistent with, a position the applicant takes in …[a]sserting an argument of patentability."
The Federal Circuit agreed with the trial court that Purdue should have disclosed the material fact that the "surprising discovery" was not based on clinical testing to the USPTO since the information was inconsistent with the "result obtained" and quantitative arguments for patentability it presented. While the Court agreed with Purdue that a discovery can be made by insight or by experiment, it noted that if the invention is made by "insight," the patent applicant cannot argue patentability before the USPTO using language that would imply experimental results had been obtained.
The Federal Circuit also agreed with the trial court’s finding regarding the intent element of inequitable conduct. Purdue argued that it acted in good faith when asserting (during prosecution) its belief that it had discovered the oxycodone formulations of the invention were effective over a four-fold dosage range as compared to an eight-fold dosage range for other opioids. The Court noted that notwithstanding Purdue’s belief in those assertions, it intentionally withheld the material fact as to the source of the "surprising discovery," and in the context of a pattern of misdirected statements Purdue made during prosecution which suggested that it had obtained clinical results, an intent to mislead could be inferred.
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