A recent court decision shines light on the importance of exercising ‘candor and good faith’ when applying

Arguably, one of the most important rules underlying the patenting process is the duty of candor and good faith in dealing with the U.S. Patent Office, and specifically the duty to disclose any known information that is “material to patentability.” Determining materiality can be straightforward, but at times it can be as subjective as it sounds. Nevertheless, it is important not to trivialize this duty as the consequences can be severe.

For example, if a breach is coupled with an intent to deceive the Patent Office, it rises to the level of “inequitable conduct,” which renders the resulting patent unenforceable.

That means the patent holder has no ability to leverage patent rights against competitors, even if their patent was otherwise valid and even if a competitor was openly and brazenly infringing the patent.

The question of inequitable conduct and any resulting unenforceability generally only arises long after a patent has been issued and often well into an infringement litigation — after the patent owner has already dedicated significant time, effort and resources in securing and trying to enforce their patent rights.

Duty to disclose

A recent decision from the U.S. Court of Appeals for the Federal Circuit, Belcher Pharmaceuticals LLC v. Hospira Inc., highlights the importance of exercising candor, good faith and diligence in connection with the duty to disclose.

In Belcher, a federal circuit court affirmed the district court’s decision that Belcher’s patent was unenforceable because of inequitable conduct. The district court found that Belcher’s chief science officer, Darren Rubin, had withheld material information from the Patent Office during prosecution of its patent and did so with an intent to deceive.

Belcher’s patent is directed to a L-epinephrine formulation having a pH between 2.8 and 3.3. The patent explains how L-epinephrine can degrade over time and how drug manufacturers have tried to mitigate this issue by adding bisulfate antioxidants and increasing overages. The patent claims that its invention fulfills a “great medical need” for a preservative and sulfite-free liquid formulation of L-epinephrine that can maintain sterility with minimal (if any) overages, and with minimal levels of degradants.

The pH range specified for Belcher’s formulation (2.8 to 3.3) was key to patentability.

In fact, during prosecution, Belcher overcame a rejection from the Patent Office by arguing that the claimed pH range of 2.8 to 3.3 was critical in reducing a form of degradation in the L-epinephrine. The patent was issued on March 15, 2016.

The formulation at issue in Belcher’s patent was also the subject of a New Drug Application (NDA) that Belcher submitted to the U.S. Food and Drug Administration for approval. At trial, Rubin testified that he was involved in the development of Belcher’s formulation, as well as in Belcher’s patent application process and NDA review process, and the record before the FDA made clear that, prior to Belcher’s patent being issued, Rubin had been in possession of information about prior epinephrine products with pH ranges that fell within or overlapped the pH range of 2.8 to 3.3 specified in Belcher’s patent.

Belcher communicated with the FDA extensively about these prior epinephrine products and their pH ranges in support of its NDA. Moreover, during the FDA review process, Belcher changed the pH range it had been using to the 2.8 to 3.3 range in its patent to match one of the prior epinephrine products in hopes of accelerating the FDA’s approval.

The FDA approved Belcher’s NDA on July 29, 2015. None of the information concerning the prior epinephrine products that played a role in the FDA’s review of the NDA was disclosed to the Patent Office.

Deceptive intent

The district court determined that the withheld information was material to patentability. This is because the court considered Belcher’s patent to be obvious, and therefore invalid, in view of the withheld information. Further, the court found that withholding the information was done with deceptive intent and concluded that the patent was unenforceable because of inequitable conduct.

The court acknowledged there was no direct evidence of deceptive intent, but it was able to infer deceptive intent from circumstantial evidence surrounding Belcher’s communications with, and actions before, the FDA.

The decision is a reminder of the duty to disclose with loyalty and good faith, and it highlights the importance of coordinating regulatory approval strategies with patent prosecution.

William P. O’Sullivan is an attorney and Karen A. Stevens is a paralegal with the Manchester-based law firm of Sheehan Phinney.

If there’s a breach with an intent to deceive the Patent Office, the patent is unenforceable.