Harry Manbeck on Inequitable Conduct

    By Kevin E. Noonan --

Harry Manbeck, name partner of the Rothwell, Figg, Ernst and Manbeck firm and former Commissioner of the Patent and Trademark Office (1990-1992) has written a letter to Senators Leahy (D-VT) and Specter (R-PA), chairman and ranking member of the Judiciary Committee.  The letter concerns provisions of S. 1145, the patent "reform" bill pending in the Senate, that propose changing the sanctions available for inequitable conduct.  These proposals, as previously discussed on Patent Docs would limit the current sanction, unenforceability of all claims in a patent where the applicant or her counsel had violated the duty of candor, to those situations where one or more patent claims had been found invalid.

Mr. Manbeck's letter reviews for the Senators the development of the current sanction regime, particularly focusing on A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392 (Fed. Cir. 1986).  In that case, inequitable conduct was found, even though the undisclosed prior art had been independently uncovered by the examiner and all claims rendered invalid by that art were cancelled before the patent granted.  The rationale, according to Mr. Manbeck, is that the conduct (intentionally withholding references from the examiner) was enough to merit the sanction, even though none of the granted patent claims had been obtained as a result of the misconduct.  According to Mr. Manbeck, this result discouraged "mischief" during patent prosecution, and is an important check on the temptation to gain an unwarranted advantage by withholding relevant prior art.

Mr. Manbeck recognizes the other side of the issue -- that the inequitable conduct doctrine was intended to discourage misconduct, not unintentional mistake.  While urging that the Senators not adopt a "but for" approach to inequitable conduct, Mr. Manbeck also suggests that sanctions less severe than unenforceability be considered.  Specifically, Mr. Manbeck suggests that infringed claims in a patent "tainted" with inequitable conduct but containing valid and infringed claims be limited to reasonable royalty instead of lost profits damages.  Mr. Manbeck urges that the inequitable conduct doctrine not be weakened by legislation that would bar sanctions for patents containing only valid claims despite evidence of the kind of "mischief" found in A.B. Dick.  According to Mr. Manbeck, this type of misconduct should provoke a sanction so as to maintain its influence in discouraging inequitable conduct.

While ably presenting the case for keeping inequitable conduct sanctions regardless of whether a misbehaving applicant or her counsel is successful or not, neither the letter nor the pending legislation addresses how to prevent honest mistakes during prosecution from being elevated to an inequitable conduct allegation.  Until such a proposal is made, the problem with inequitable conduct will not be solved.

Comments

[Bob]

It seems, though, that Mr. Manbeck has not disclosed that his firm's website accepts the accolade of being "the leading law firm in generic drug law." See http://www.rothwellfigg.com/news_080301.php. It is no wonder, then, that Mr. Manbeck embraces the school-marmish moralism of the current inequitable conduct doctrine.

A patent is an economic right. If the inequitable conduct has affected the scope of the economic right, then it may be appropriate to render some portion of the patent unenforceable (i.e., the affected claims). But when the doctrine becomes unmoored from economic considerations, courts are merely deciding whether a party is morally worthy to possess a patent.

If the pleadings in recent ANDA cases are any guide, the generic drug industry believes that few innovator companies are morally worthy of the protection that their patents provide them. Therefore, it is no surprise that Mr. Manbeck embraces what amounts to a "moral worthiness" test for inequitable conduct.