On March 2, 2020 the Federal Circuit affirmed a district court decision of inequitable conduct by prosecution counsel based on failure to sufficiently investigate and disclose the details of an on-sale bar. GS Cleantech Corp. v. Adkins Energy LLC, Nos. 2016-2231, 2017-1838 (Fed. Cir. Mar. 2, 2020). This case is a cautionary tale for patent prosecution counsel analyzing and citing potential statutory bar activity before the U.S. Patent and Trademark Office (the “USPTO”).
More than one year prior to patent filing, the patentee made a series of disclosures to a third party. One such disclosure was an August 1, 2003 email attaching a proposal for a “No-Risk trial” of the invention, stating that the third party had “sixty days to operate the unit and confirm its value,” at which point it could “purchase the system” or “return . . . [it] (no questions asked)” (the “2003 Proposal”). On August 17, 2004 (over one year later), the patents-in-suit were filed. During prosecution, counsel made certain key disclosures to the USPTO:
- Feasibility Testing - First, counsel disclosed that, in May 2004, feasibility testing was performed, but omitting mention of the 2003 Proposal and other pre-critical date testing;
- First Declaration - Second, counsel filed an inventor Declaration attaching the 2003 Proposal, but stating, based on representations by the inventor, that the proposal was delivered on August 18, 2003 (one day after the critical date) and that the claimed invention was “never carried out and that the proposal was irrelevant”; and
- Second Declaration - Third, counsel filed a second inventor Declaration stating that the 2003 Proposal was sent on August 1, 2003, but that it was “unsigned” (in contrast to the version sent on August 18, 2003). Counsel did nothing to otherwise explain its significance.
Analysis and Preferred Practices
After finding that the 2003 Proposal qualified as an on-sale bar, the district court held that prosecution counsel “participated in the inequitable conduct by either purposely evading or failing to seek out relevant information related to the offer for sale.” The Federal Circuit affirmed, noting that counsel “chose advocacy over candor.” According to the Federal Circuit, counsel should have known that the First Disclosure was false, at least because prosecution counsel testified that “they themselves were skeptical of the veracity of the [inventor’s] claim.” Further, the Federal Circuit stated that the term “unsigned” in the Second Disclosure created the false impression that the August 1, 2003 email was somehow less significant than the signed version delivered on August 18, 2003. The Federal Circuit concluded that “the single most reasonable inference able to be drawn” from prosecution counsel’s conduct was that prosecution counsel had a “specific intent to deceive” the USPTO.
In light of the Federal Circuit’s holding, prosecution counsel may wish to consider several practices to minimize its exposure to inequitable conduct. First, and consistent with established practice, prosecution counsel should make a written request for all statutory bar information to anyone associated with prosecution. Second, upon receipt of any such information, prosecution counsel should take the time to arrange the documents chronologically and question inventor(s) concerning potential inconsistencies in their pre-critical date story. In the event prosecution counsel proceeds with an application, counsel should cite all relevant pre-critical date activity in an information disclosure statement without characterization or advocacy. Should the Examiner issue a rejection based upon a statutory bar, prosecution counsel should advocate based on legal standards while adhering to established well-settled facts.