Legitimate Advocacy and Genuine Misrepresentation of Material FactsAugust 25, 2014

The Federal Circuit has issued a decision inApotex Inc. v. UCB, Inc., upholding a district court's finding that Apotex's U.S. Patent No. 6,767,556 ("the '556 patent") is unenforceable due to inequitable conduct.

Dr. Sherman, founder and chairman of Apotex, wrote the '556 patent application and is its sole inventor. The '556 is based on Canadian application filed on April 5, 2000. The ’556 patent is generally directed to a process for manufacturing tablets of moexipril tablets—an angiotensin-converting enzyme (“ACE”) inhibitor used to treat hypertension. The ’556 patent discloses a process of making moexipril tablets consisting mostly of moexipril magnesium obtained by reacting moexipril or its acid addition salts with an alkaline magnesium compound to improve stability and prevent degradation of the normally instable moexipril hydrochloride.

Two existing drugs— Univasc and Uniretic—were both cited as prior art in the prosecution of the '556 patent, and were also asserted to infringe the '556 patent after issuance. During prosecution, Dr. Sherman, through his patent attorney, asserted that the prior drugs did not render the invention of the '556 patent obvious because the process for making them simply combined components, rather than reacting them. However, evidence presented at trial indicated that Dr. Sherman suspected that the existing drugs were made by the process recited in his application at the time the application was filed, and later conducted experiments to confirm that the components in those existing drugs were reacted, rather than simply combined as he represented to the PTO. The court also found that Dr. Sherman has misled or failed to inform a declarant, Dr. Lipp, regarding the true nature of the existing drugs in relation to the claimed invention, resulting in a declaration by Dr. Lipp that perpetuated Dr. Sherman's mischaracterizations of those existing drugs. In addition, the court determined that Dr. Sherman withheld relevant prior art from the PTO. The district court held the combined misrepresentations and withholdings were material to the prosecution of the '556 patent, and that Dr. Sherman intended to deceive the PTO based on his overall pattern of misconduct, and therefore the '556 patent was unenforceable due to inequitable misconduct.

On appeal, Dr. Sherman argued that the conduct before the PTO was merely advocating a particular interpretation of the prior art. However, the Federal Circuit determined that his statements were not mere advocacy for a preferred interpretation; his statements were factual in nature and contrary to the true information he had in his possession. The court clarified that there is no duty to disclose suspicions or beliefs regarding the prior art, and that there is nothing wrong with advocating, in good faith, a reasonable interpretation of the teachings of the prior art. However, affirmatively and knowingly misrepresenting material facts regarding the prior art goes beyond failing to disclose a personal belief or alternative interpretations of the prior art, and enters the realm of inequitable conduct, which may result in an unenforceable patent.

The full opinion is available here.