An Economic Analysis of Patent Law's Inequitable Conduct Doctrine
46 Pages Posted: 10 Jan 2011 Last revised: 3 Jan 2015
Date Written: January 6, 2011
In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers, and commentators, culminating most recently in the Federal Circuit’s decision to revise certain aspects of the doctrine in its en banc decision in Therasense, Inc. v. Becton, Dickinson & Co. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The model suggests, among other things, that even after Therasense the conditions that trigger a finding of inequitable conduct are at best only a rough proxy for the conditions that define optimal disclosure. The model also illuminates how, both pre- and post-Therasense, the doctrine poorly defines many of the variables affecting a rational applicant’s decisionmaking process, and thus potentially encourages risk-averse agents to overdisclose. Although the model neither confirms nor refutes critics’ claims that the doctrine routinely induces overdisclosure and excessive administrative costs, the model demonstrates how various reforms, including but not limited to those adopted in Therasense, can be expected to reduce these reputed consequences. Finally, however, the model suggests that the need for some type of inequitable conduct doctrine may be greater in a regime like that of the United States, which at present lacks an effective system for post-grant oppositions. Conversely, if the United States adopted a post-grant opposition system, the need for a robust inequitable conduct doctrine would decline.
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