A Proper Starting Point for Reforming The Inequitable Conduct Defense.

The Leahy-Hatch bill, The Patent Reform Act of 2006, appropriately keeps the issue of patent enforceability in the courts. A string of failed legislative proposals had suggested adminstrative tribunals. The current bill achieves the threshold point of grounding the inequitable conduct defense in the patent statute. That essentially empowers district courts, and serves to minimize uncertainties about the contours of the defense that arise when courts grapple with the caselaw on inequitable conduct.

Before the issue can be pleaded, a court must have determined that the patent is “not invalid in whole and ..infringed.” The statutory test incorporates the well-known elements of “material” or “false” information, and “intent to deceive or mislead” the PTO. Also set out are indicia of “good faith” that can defeat a charge of inequitable conduct. Consistent with precedent, “clear and convincing” proof is needed before a patent can be deemed unenforceable.

The varied approaches in prior bills range from elimination of the defense, to eliminating it from the courts and creating ‘star chamber’ panels at the Patent Office. These ideas were fostered by the NAS and FTC reports, which I have advocated against when working with professional organizations, commenting to Congressional panels, and at the 2005 “town hall” meetings. The best approach would conform the defense to the better caselaw principles and the best case managment practices, and doing that, would cut away the aspects that have been shown to be abused, or to cause delays, and excessive costs.

It would help if the bill’s sponsors had a better proofreader. It now provides that unenforceability can be found “only if the patent owner {sic} presents clear and convincing evidence” of inequitable conduct. No “patent owner” ever would prove that against its own patent.

The bill puts the issue where it needs to be, in the statute, and in the federal district courts.