1 Therasense v. Becton Dickinson and Bayer John M. Whealan Associate Dean for IP Law George Washington Law School

2 How did we get here? ‘551 patent (U.S. Patent No. 5,820,551) ‘551 patent (U.S. Patent No. 5,820,551) technology involves disposable blood glucose test strips technology involves disposable blood glucose test strips claim feature – no membrane is required for the sensor when blood is tested claim feature – no membrane is required for the sensor when blood is tested Therasense sued BD and Bayer for patent infringement of the ‘551 patent Therasense sued BD and Bayer for patent infringement of the ‘551 patent BD and B asserted, inter alia, that BD and B asserted, inter alia, that ‘551 patent was invalid as obvious ‘551 patent was invalid as obvious ‘551 patent was unenforceable due to IC ‘551 patent was unenforceable due to IC

3 How did we get here? DCT DCT Found patent invalid as obvious Found patent invalid as obvious Found inequitable conduct (IC) Found inequitable conduct (IC) Federal Circuit Federal Circuit Affirmed on obviousness Affirmed on obviousness Affirmed on IC Affirmed on IC J. Linn – strong dissent on IC J. Linn – strong dissent on IC Therasense filed a petition for en banc review Therasense filed a petition for en banc review

4 Federal Circuit granted en banc review 1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced? 1. Should the materiality-intent-balancing framework for inequitable conduct be modified or replaced? 2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford- Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands? 2. If so, how? In particular, should the standard be tied directly to fraud or unclean hands? See Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945); Hazel-Atlas Glass Co. v. Hartford- Empire Co., 322 U.S. 238 (1944), overruled on other grounds by Standard Oil Co. v. United States, 429 U.S. 17 (1976); Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240 (1933). If so, what is the appropriate standard for fraud or unclean hands? 3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued? 3. What is the proper standard for materiality? What role should the United States Patent and Trademark Office’s rules play in defining materiality? Should a finding of materiality require that but for the alleged misconduct, one or more claims would not have issued? 4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc). 4. Under what circumstances is it proper to infer intent from materiality? See Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc). 5. Should the balancing inquiry (balancing materiality and intent) be abandoned? 5. Should the balancing inquiry (balancing materiality and intent) be abandoned? 6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context. 6. Whether the standards for materiality and intent in other federal agency contexts or at common law shed light on the appropriate standards to be applied in the patent context.

5 Therasense outside counsel legal team Rohit K. Singla Rohit K. Singla Peter A. Detre Jeffrey I. Weinberger MUNGER, TOLLES & OLSON LLP Jeffrey A. Lamken Jeffrey A. Lamken Michael G. Pattillo Jr. MOLOLAMKEN LLP John M. Whealan John M. Whealan

6 Therasense Opening Brief I. Courts May Render a Patent Unenforceable for Inequitable Conduct Only Where the Patent Was Procured Through Conduct Tantamount to fraud I. Courts May Render a Patent Unenforceable for Inequitable Conduct Only Where the Patent Was Procured Through Conduct Tantamount to fraud A. Supreme Court Precedent Recognizes Inequitable Conduct Only in Cases of Egregious, Fraud-Like Conduct A. Supreme Court Precedent Recognizes Inequitable Conduct Only in Cases of Egregious, Fraud-Like Conduct B. Trademark and Copyright Impose Similarly Exacting Requirements B. Trademark and Copyright Impose Similarly Exacting Requirements C. Congress Adopted the “Unenforceability” Defense Against the Backdrop of a “Fraudulent Procurement” Standard C. Congress Adopted the “Unenforceability” Defense Against the Backdrop of a “Fraudulent Procurement” Standard D. Unclean-Hands Principles Support a Fraud-Based Limit Where, as Here, Important Property Rights Are at Stake D. Unclean-Hands Principles Support a Fraud-Based Limit Where, as Here, Important Property Rights Are at Stake

7 Therasense Opening Brief II. Under This Court’s En Banc Precedent, Inequitable Conduct Requires a Showing That the Patentee Acted With Specific Intent To Deceive the PTO into Granting the Patent II. Under This Court’s En Banc Precedent, Inequitable Conduct Requires a Showing That the Patentee Acted With Specific Intent To Deceive the PTO into Granting the Patent A. This Court Should Reinvigorate Kingsdown’s Requirement of Specific Intent To Deceive the PTO A. This Court Should Reinvigorate Kingsdown’s Requirement of Specific Intent To Deceive the PTO B. Supreme Court Precedent Supports Kingsdown’s “Intent To Deceive” Standard B. Supreme Court Precedent Supports Kingsdown’s “Intent To Deceive” Standard C. Kingsdown’s Intent Standard Is Consistent With Other Areas of Intellectual Property Law C. Kingsdown’s Intent Standard Is Consistent With Other Areas of Intellectual Property Law D. Sound Policy Considerations Support the Kingsdown Standard D. Sound Policy Considerations Support the Kingsdown Standard

8 Therasense Opening Brief III. A Patent Should Be Unenforceable for Inequitable Conduct Only Where the Patent Would Not Have Issued Absent the Misconduct III. A Patent Should Be Unenforceable for Inequitable Conduct Only Where the Patent Would Not Have Issued Absent the Misconduct A. Supreme Court Precedent Requires But-For Causation A. Supreme Court Precedent Requires But-For Causation B. But-For Causation Is Required in Related Contexts B. But-For Causation Is Required in Related Contexts C. Courts Should Not Render Valuable Patents Unenforceable Based on Violations of PTO Rules Where Causation Is Unproved C. Courts Should Not Render Valuable Patents Unenforceable Based on Violations of PTO Rules Where Causation Is Unproved

9 Therasense Opening Brief IV. The Court Should Eliminate Sliding-Scale Balancing Because It Dilutes Both the Intent and Materiality Requirements IV. The Court Should Eliminate Sliding-Scale Balancing Because It Dilutes Both the Intent and Materiality Requirements

10 Therasense Opening Brief V. This Case Illustrates Why This Court Must Revitalize Inequitable Conduct Standards V. This Case Illustrates Why This Court Must Revitalize Inequitable Conduct Standards A. The Panel Opinion Improperly Substitutes Materiality for Proof of Intent Under a Diluted Standard A. The Panel Opinion Improperly Substitutes Materiality for Proof of Intent Under a Diluted Standard B. Pope and Sanghera’s Interpretation of Dost’s Arguments Was at Least Reasonable B. Pope and Sanghera’s Interpretation of Dost’s Arguments Was at Least Reasonable C. The Panel Decision Abrogates the Rule That Lawyer-Argument Is Not Material C. The Panel Decision Abrogates the Rule That Lawyer-Argument Is Not Material

11 Amicus Briefs Government Government 1.Brief for the United States 1.Brief for the United States Bar Organizations Bar Organizations 2.American Bar Association 3.Federal Circuit Bar 4.American Intellectual Property Law Association 5.Houston Intellectual Property Law Association 6.San Diego Intellectual Property Law Association 7.Washington State Patent Law Association 8.Intellectual Property Law Association of Chicago 9.Conejo Valley Bar Association 10.Boston Patent Law Association

12 Amicus Briefs Public Interest Organizations Public Interest Organizations 11.Washington Legal Foundation 12.Intellectual Property Owners Association 13.Biotechnology Industry Organization 14.International Intellectual Property Institute Academics Academics 15.Seven Intellectual Property Law Professors 16.University of Kentucky Intellectual Property Law Society 17.Professor David Hricik Lawyers Lawyers Patent Prosecution Firms and Practitioners Patent Practitioners Employed by Eli Lilly and Company 20.Patterson Thuente Christensen Pedersen, P.A.

13 Amicus Briefs Corporations Corporations 21.Eisai Co., Ltd. and Eisai Inc. 22.Sanofi-Aventis and Microsoft Corporation 23.Ecore International, Inc. 24.SAP America, Inc. 25.Johnson & Johnson and The Procter & Gamble Company 26.Verizon Communications Inc. 27.Dolby Laboratories, Inc. 28.Ole K. Nilssen and Geo Foundation, Ltd. 29.Apotex, Inc. 30.Acacia Research Corporation and 1st Media, LLC

14 Amicus Briefs Amici Supporting Appellees Amici Supporting Appellees 31.Teva Pharmaceuticals USA, Inc., Cisco Systems, Inc. and Generic Pharmaceutical Association 32.Intel Corporation 33.University of Akron School of Law, Center for Intellectual Property Law and Technology 34.Association of Citizens for Patent Protection in the Public Interest

15 Opposition Briefs Bayer and BD each filed briefs in opposition Bayer and BD each filed briefs in opposition However, it is interesting what issues: However, it is interesting what issues: (i) they agree with us on, and (i) they agree with us on, and (ii) where they disagree (ii) where they disagree

16 Therasense Reply Brief The parties - and most amici - agree on the following: The parties - and most amici - agree on the following: Kingsdown’s Specific-Intent-To-Deceive Standard Should Govern Kingsdown’s Specific-Intent-To-Deceive Standard Should Govern “Reasonable examiner” standard for materiality should be abandoned “Reasonable examiner” standard for materiality should be abandoned “Materiality-Intent Balancing” Should Be Abandoned or Reformed “Materiality-Intent Balancing” Should Be Abandoned or Reformed

17 Therasense Reply Brief Disagreements: Disagreements: 1. Test for materaility 1. Test for materaility Fraud-like “but for”, or Fraud-like “but for”, or PTO Rule 56 PTO Rule Parties disagree on the merits 2. Parties disagree on the merits

18 Therasense Reply Brief Inequitable Conduct Should Require Causation Inequitable Conduct Should Require Causation A. Causation Is Required for Fraud and Unclean Hands A. Causation Is Required for Fraud and Unclean Hands 1. The Foundational Supreme Court Cases Require Fraud or Fraud- Like Conduct 1. The Foundational Supreme Court Cases Require Fraud or Fraud- Like Conduct 2. “Unclean Hands” Requires But-For Causation Where Important Rights Will Be Invalidated 2. “Unclean Hands” Requires But-For Causation Where Important Rights Will Be Invalidated B. But-For Causation Is Required in Related Contexts B. But-For Causation Is Required in Related Contexts C. The Proposal To Adopt Rule 56 Is Contrary to Law C. The Proposal To Adopt Rule 56 Is Contrary to Law D. Defendants’ Policy Arguments Lack Merit D. Defendants’ Policy Arguments Lack Merit

19 Therasense Reply Brief The Finding of Inequitable Conduct by the DCT here Must Be Reversed The Finding of Inequitable Conduct by the DCT here Must Be Reversed A. The District Court’s Use of an Erroneous Standard Precludes Affirmance A. The District Court’s Use of an Erroneous Standard Precludes Affirmance B. The Evidence of Intent To Deceive Falls Short B. The Evidence of Intent To Deceive Falls Short C. Materiality Was Absent C. Materiality Was Absent

20 En banc oral argument Tuesday, Nov. 9, 2010 Tuesday, Nov. 9, recordings/all/therasense.html recordings/all/therasense.html

21 Questions?

22 Thank you….. Contact information: Contact information: