Patent Exclusions and Antitrust after Therasense
Herbert J. Hovenkamp
University of Iowa - College of Law
December 12, 2011
U Iowa Legal Studies Research Paper No. 11-39
A patent may be held invalid if it was obtained by “inequitable conduct” before the PTO during the process of patent prosecution. In its Therasense decision the Federal Circuit imposed severe requirements against those attempting to defend against a patent on the basis of inequitable conduct, insisting that inequitable conduct be measured essentially by a subjective test. Objective “reasonable person” tests such as negligence or even gross negligence will not suffice. By contrast, the Supreme Court has insisted that the conduct giving rise to a wrongful infringement action violating the antitrust laws be initially based on an objective test – whether a reasonable person knowing what he knew would have brought this suit under these circumstances. Only after passing this objective screen may an antitrust claimant seek to determine any subjective intent that may be needed for an antitrust claim.
The principal distinction between Therasense and Walker Process antitrust complaints based on improper patent infringement actions pertains to the time of evaluation. “Inequitable conduct” generally refers to actions and state of mind (under Therasense) that occur during the patent prosecution process. By contrast, Walker Process necessarily refers to actions and state of mind at the time a patent infringement action is filed or the patent holder engages in other exclusionary conduct, and this may be many years after issuance. This has several implications.
First, there could be inequitable conduct under Therasense but relative innocence at the time of an infringement suit if (a) the patent has been assigned to an innocent recipient; or (b) the persons within the firm who were guilty of the inequitable conduct are no longer available and the persons who file the later infringement suit are unsuspecting. This is highly likely to be true for firms with thousands of patents, because the kinds of things that would yield inequitable conduct are often not plain from the patent prosecution record. One conceptual difficulty of Therasense is that state of mind refers to persons, but large firms have many persons. Further, those filing an infringement suit on a ten year old patent have little incentive to dig too deeply in order to find out whether now departed applicants and their agents engaged in equitable conduct.
Second, a patent might have been obtained without inequitable conduct, but subsequent evidence of prior art or barring sales or use might emerge, and the person filing the infringement action might have knowledge of these things. In that case a Walker Process antitrust claim should be permitted even though the person prosecuting the patent was innocent of inequitable conduct as Therasense defines it.
Number of Pages in PDF File: 42
Keywords: antitrust, infringement actions, patents, intellectual property, inequitable conduct
Date posted: August 24, 2011 ; Last revised: December 29, 2013