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Better Late Than Never—But Better Never If It Is Not True
R. Joseph Trojan, Trojan Law Offices
Consider this scenario. Your company is developing electronic devices for orthopedic applications. You are putting together the data for your first patent application. You want to persuade the patent examiner that your invention works.
The invention is a new portable stimulator of bone growth. Some such devices already are on the market—for example, one attaches to an arm or a leg and speeds up bone healing by delivering an electrical current to the fracture site. Your device is a better-designed version of the existing ones. In fact, the new type of battery can deliver exactly three times as much beneficial electrical current as the older device. A lot of testing has been done with the old device—the subjects wore it for one hour daily and the bone fracture healing time decreased by 10%. It took you nearly a year to gather that data.
The current clinical testing has just started, but you cannot wait a year to file a patent application. Your archrival, Super Bone Co., is working on the same type of improved device, and the company is connected to a big university and surely will get the clinical data much faster than you can. You are contemplating filing the patent application before the clinical tests end. After all, the new battery is three times more powerful. You predict that the results would be three times as good—the bone healing time would decrease by 30%. You don’t have the data yet to prove it, but surely that’s how it would work.
You ask to put the following sentence into the patent application: “We have shown that when worn for one hour daily, the device decreased bone healing time by 30%.” The patent examiner is an avid skier often in need of orthopedic treatment. He believes your “results,” and the patent is granted.
Your product is extremely successful and, thanks to the patent, you are able to command a high price. Furthermore, your predictions are exactly right. Now there are plentiful data from many doctors showing that your device indeed speeds healing by 30%.
Things go well until Super Bone Co. starts selling a device identical to yours. You immediately file a patent infringement lawsuit and anticipate an easy victory. However, a terrible thing happens. Instead of paying you royalty, Super Bone persuades the judge to invalidate your patent. The company argued that you committed inequitable conduct before the Patent Office. Super Bone tells the judge that you have misrepresented your data to the patent examiner. You used the past tense in the application, implying that you already had results showing a 30% improvement. In fact, you only had data showing the battery is three times as powerful and extrapolated to the decreased healing time. Now your patent rights are lost forever.
Inequitable Conduct Explained
A finding of inequitable conduct is both bad for business and humiliating. First, you lose your price protection. Second, your licenses to other companies are likely automatically cancelled—your sources of royalty turned into competitors. Finally, your credibility in the medical community is ruined. But this is not fair! Was your conduct really that bad? Time has proven you right; your device works really well—why are you punished?
Under the law, inequitable conduct is intentional non-disclosure of material information. The information is material if it falls into one of two categories: it weighs on patentability or is inconsistent with the statement that you made to the examiner. As to the intentional part, the more weighty the piece of information, the easier it is to say that it was hidden on purpose. In your case, whether the new device improves healing time weighs on patentability. You stated that such a result already has been documented—while that was not true. You chose the words intentionally; you knew full well that “we have shown” would sound better than “we predict.”
Fortunately, this fictional scenario could have been avoided by a company executive who had some understanding of patent law. First, such an executive would have known that a device could be patented long before the final tests on actual patients. Patent examiners often believe a well-formulated scientific rationale regarding why the invention should work. Instead of hiding the lack of actual data, one should honestly present the extent of what is known. However, the savvy executive would not file a patent application prematurely, while the research still is underway. None of the data gathered after the filing date can be used to support patentability.
For example, the hypothetical scenario had abundant data on the 30% reduction in healing time obtained after the filing of the patent application. Assume that the plot changed and the patent examiner did not believe the invention worked. If the applicant used the new findings, the examiner would refuse to consider the data. Knowing that a convincing portion of data may be on the way, the savvy executive would have waited with filing the patent application.
Interestingly, the date of filing a patent application is no longer an absolute cut-off for any research data. The Court of Appeals for the Federal Circuit recently ruled that, sometimes, later-obtained data can be used in court to defend the patent. In the words of a famously patent-friendly judge, Pauline Newman, “There is no requirement that an invention’s properties and advantages were fully known before the patent application was filed, or that the patent application contains all of the work done in studying the invention.”
In the case Knoll Pharmaceutical Co. v. Teva Pharmaceuticals, the accused infringer claimed that a patented drug composition was obvious—the patentee merely took an obvious step of mixing two known ingredients. Knoll had a patent on Vicoprofen, a mixture of hydrocodone and ibuprofen. Under the law, such a mixture would be non-obvious if it has “unexpected properties.” Indeed, the patentee had data showing that the effect of Vicoprofen was much better than simply the sum of the effects of
the ingredients ibuprofen and hydrocodone. The only problem was that the data were gathered after the patent already was issued. Under the old rule, such data would not have been allowed. However, the new rule states that (at least to defend a patent in a lawsuit) one can gather data at any time.
This controversial decision has not yet been challenged by the US Supreme Court. It is also not known whether the decision applies to the patent prosecution in the Patent Office. In other words, it is not clear whether one can go out and collect data showing to the examiner that the invention works.
In the meantime, the savvy corporate executive would prudently stick to the old rules: (1) Rather than rush with the filing, first gather credible data; (2) If the data seem insufficient, do not try to guess your way through the application process—disguising guesstimates as data may risk invalidation of the patent by the court; and (3) Continue gathering data that strengthen the patent. One day such data may come in handy in court.
