Failure to Disclose Internal Notes With More Details About Poster Presentation was Material and Intent to Deceive was Inferred

Monsanto Co. v. Bayer Bioscience N.V., [2007-1109](January 25, 2008)[GAJARSA, Bryson, Dyk] The Federal Circuit affirmed the district court’s conclusion that U.S. Patent No.
5,545,565 is unenforceable for inequitable conduct and hold that the district court had jurisdiction to declare U.S. Patent Nos. 5,767,372, 6,107,546, and 5,254,799. Because the Federal Circuit affirmed the district court’s holding that the ’565 patent is unenforceable for inequitable conduct, it did not reach the other issues raised by Bayer relating to the jury findings of invalidity and non-infringement of the patent.
BRIEF: The district court initially granted summary judgment to Monsanto, holding that all four patents were unenforceable due to inequitable conduct, that certain patent claims were invalid, and that the ’565 patent was not infringed. The Federal Circuit reversed the trial court’s claim construction, and vacated the unenforceability and invalidity judgments. On remand Bayer dropped all infringement claims, except for the '565 patent. A jury found the asserted claims of the ’565 patent not infringed and invalid for obviousness and prior invention by Monsanto, and after a bend trial the district court held all four patents unenforceable for inequitable conduct.
LOF: The Federal Circuit reviews the district court’s findings on the threshold issues of materiality and intent for clear error. The ultimate decision on inequitable conduct is reviewed for abuse of discretion. To hold a patent unenforceable for inequitable conduct, a district court must find by clear and convincing evidence that a patent applicant breached its duty of candor and good faith to the United States Patent and Trademark Office by failing to disclose material information, or submitting false material information, with an intent to deceive the PTO.
Although Bayer disclosed the Barnes Abstract during patent prosecution, it did not disclose the notes taken by one of its employees, Dr. Celestina Mariani, regarding the Barnes Poster, to which the abstract was in reference, nor the information contained in the notes. Information is material for the purposes of an inequitable conduct determination if "‘a reasonable examiner would have considered such [information] important in deciding whether to allow the parent application.’" Based on Mariani’s testimony, the district court found it "very obvious" that the poster notes would stand in "sharp contradiction" to Bayer’s argument before the patent examiner, in which Bayer argued that the construct described in the Barnes Abstract was non-toxic and non-enabled. The Federal Circuit agreed that Mariani's notes were material, but said that did not end the inquiry. There also had to be evidence of intent to deceive. Direct evidence of intent to deceive is not necessary, but may be inferred from the surrounding circumstances. The Federal Circuit has held that absent a credible reason for withholding the information, “[i]ntent may be inferred where a patent applicant knew, or should have known, that withheld information would be material to the PTO’s consideration of the patent application.”
As to Bayer's contention that the district court lacked jurisdiction over the patents no longer in suit, the Federal Circuit observed "The parties do not dispute that the district court’s jurisdiction to rule on attorney fees encompassed the jurisdiction to make findings of inequitable conduct regarding all four patents." The Federal Circuit held that a district court’s jurisdiction under § 285 to determine whether there was inequitable conduct in the prosecution of patents that are otherwise no longer in suit confers on that court the jurisdiction to hold such patents unenforceable for inequitable conduct.