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Note: Inequitable-Conduct Doctrine Reform: Is the Death Penalty for Patents Still Appropriate?

By Nicole M. Murphy. Full text here.

Over the past three years, the Federal Circuit has contributed to the rise in inequitable-conduct defenses by failing to apply the doctrine consistently. First, the court broadened the scope of the doctrine’s materiality element to include information unrelated to patentability and failed to offer guidance on how to apply multiple materiality standards. Second, the court inconsistently applied the intent-to-deceive element by permitting “highly material” information to be sufficient instead of requiring additional evidence. The potential windfall advantage for alleged patent infringers is irresistible based on the draconian effects of an inequitable conduct finding, rendering entire patents unenforceable. For example, failure to correctly file the patentee’s status or pay maintenance fees could preclude a patent holder from obtaining relief against infringers and likely discourages enforcement of its patent rights.

Congress has repeatedly tried and failed to address the uncertainty created by the Federal Circuit’s variable application of the doctrine. This Note proposes that the Federal Circuit, sitting en banc, adopt minimum penalty guidelines, similar to existing criminal law sentencing guidelines. The proposed guidelines tailor the penalty of inequitable conduct findings to the materiality and intent of the misconduct, while rejecting the requirement to hold the entire patent unenforceable. Ensuring misconduct does not go unpunished, while increasing certainty in patent rights, are the main virtues of this Note’s proposed guidelines.