That's Incredible!

McKesson Information Solutions, Inc. v. Bridge Medical, Inc.

Perhaps the date on the patent at issue in McKesson Information Solutions, Inc. v. Bridge Medical, Inc., reminded the Federal Circuit of that eponymous 1980's reality television precursor.  Whatever the inspiration, the court in McKesson repeatedly deemed "incredible" -i.e. unbelievable-the prosecuting attorney‘s explanations regarding the nondisclosure of certain information during the patent's prosecution.  Finding those nondisclosures to be both intentional and individually and collectively material, the Federal Circuit affirmed the district court's determination that the patent under review was unenforceable due to inequitable conduct. 

The decision contains an extensive discussion of all the details, but the relevant facts boil down to this:  The prosecuting attorney had similar patent applications pending at the same time before two different examiners and did not communicate adverse information on one application to the different examiner on the other.  Looking at the record, a 2-1 panel in McKesson could not find enough credible evidence to overcome the inference of deceptive intent the specific nondisclosures created.  It made that determination even though the record clearly showed the attorney had done nothing to hide the existence of both applications from either examiner-he just didn't keep them informed of each other's activities.

Given the district court's thorough review of the record and well-reasoned opinion, McKesson could simply stand as an affirmation of the clearly erroneous standard of review.


But some may argue McKesson will breathe new life into the defense of inequitable conduct.  Until now, the Federal Circuit has oft expressed its disdain for the defense. Over-use by patent infringement defendants had earned it a reputation as a litigation plague intended to deter patent holders from pursuing legitimate claims.  In fact, the defense was so ill-favored that last year's patent reform bill contained language watering it down.

No more.  The Senate bill has removed the language limiting the inequitable conduct defense.  Without that limitation, McKesson will surely serve as a breeding ground for a new strain of the defense.  Further, under McKesson, patent applicants may well face an enlarged set of responsibilities to satisfy equities demands. Applicants may not, it seems, rely upon the ability of one examiner to consult with another or even rely on some level of memory, curiosity or diligence on the part of the examiner. Instead, these duties now appear to fall upon the applicant.

Is the dissent in McKesson right?  Will this decision give rise to the next plague of opportunistic litigation? The answer depends upon how courts view the evidentiary requirements of the defense.  The McKesson court seemed to use a sliding scale calculus-one where a compelling case on materiality appeared to reduce the quantum of necessary to prove intent.  That determination may be case specific-particularly because both the court and patentee bogged down in the arguments regarding materiality. The weight of precedent would still seem to require there must be clear and convincing evidence of intent to deceive in order for the defense to succeed.  Rather than a plague, McKesson may only give rise to a contained outbreak-a smattering of decisions clarifying the parameters in which the defense may successfully be asserted.

However, if by design or application, McKesson significantly changes the standard of proof on intent, we are in for something far worse.  Should the defense of inequitable conduct be unmoored from the requirements of clear and convincing evidence, then the McKesson dissent was right--a plague may very well indeed be upon us all.  Interpreting McKesson to mean that every assertion of an inequitable conduct defense requires a review of the minutiae of claim prosecution?  Now THAT's incredible!

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