Walker Process Proof: The Proper Prescription (Draft)

Abstract

In its seminal Walker Process decision, the Supreme Court authorized an antitrust damage lawsuit based on fraudulent statements inducing the U.S. Patent Office to issue a patent. In that case, the Court also laid out proof requirements for such an antitrust case. Subsequently, certain of the circuit courts of appeal have engrafted one or more proof requirements onto the “Walker Process” antitrust cause of action. In particular, recent decisions of the Federal Circuit have required (1) clear and convincing proof of the “fraud on the Patent Office”; (2) proof of all the elements of common law fraud; (3) proof of a threshold quantum of enforcement of the offending patent; and/or (4) direct, affirmative evidence of the fraud. After a review of historic patent legislation and Supreme Court holdings concerning fraud on the Patent Office, this article critically assesses each of these proof requirements. The article concludes that none of the requirements can be squared with either the decision in Walker Process or the Supreme Court decisions establishing the general principles governing the particular proof issue. In addition, the article concludes that each of the four proof requirements contravenes pertinent policy considerations. Ultimately, the article contends that in a Walker Process antitrust case, (1) the preponderance of the evidence standard should govern proof of the “fraud” element of the claim; (2) proof of the elements of the common law cause of action for fraud should not be required; (3) the claimant need not show any particular enforcement of the offending patent in order to establish antitrust injury and damages; and (4) circumstantial proof of the fraud should be sufficient to support a jury verdict.

Keywords: Walker Process, antitrust, pharmaceuticals, patents

JEL Classification: I18, K21, L40, L41, L65