Key Pharmaceuticals v. Hercon Laboratories Corporation
United States Court of Appeals for the Federal Circuit (Fed. Cir.)

Decided November 25, 1998BACKGROUND

Your patent application is being finalized or has been recently filed. You sigh in relief that another project is completed. Then your patent practitioner reminds you of your duty to disclose material information, such as domestic and foreign patents, publications and other information, to the United States Patent and Trademark Office (USPTO). You appreciate that the information provided to the USPTO can be used to reject your claims, which sounds a bit like aiding the enemy. Do you disclose everything to your patent practitioner, or keep that thorny reference in the bottom drawer of your desk a secret between you and yourself.

EXECUTIVE SUMMARY:
In this patent infringement suit involving transdermal patch technology, the Fed. Cir. addressed the issue of inequitable conduct on the part of the patentee for providing the USPTO a translation of the abstract of a published Japanese patent application but not a translation of the remainder of the document. Importantly, the remainder of the document, but not the abstract, disclosed information that could be considered relevant to the patentability of the patent at issue. The court noted that this was a close case, but affirmed the District Court's holding of no inequitable conduct on the part of the patentee. The Practice Pointer to be gained from this case is that untranslated or partially translated documents should be carefully evaluated when considering whether to submit them to the USPTO.

THE LAW
Under 37 C.F.R.  1.56, individuals associated with the filing or prosecution of a patent application before the USPTO must submit information material to the patentability of the pending claims. Such individuals include each inventor, each attorney or agent who prepares or prosecutes the application, and every other person substantively involved in the preparation or prosecution of the application. A reference is material if there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent . A finding of inequitable conduct is based on the materiality of the reference and the intent to deceive the USPTO under the relatively high standard of clear and convincing evidence. The penalty for inequitable conduct is rendering the entire patent unenforceable.

IMPORTANCE OF THE CASE
In the words of the court, this is a close case. As such, it provides pointed guidance as to the boundaries of what is, and is not, inequitable conduct. Although patents are not often found unenforceable for inequitable conduct, this is a defense to infringement that is often used in patent litigation.