The opinion of the court was delivered by: Ackerman, Senior District Judge.
This matter comes before the Court on Schering's defense of
inequitable conduct in the above-referenced case. This Court
severed the defense of inequitable conduct from Boehringer's
claim of infringement and Schering's defense of obviousness. On
January 20, 2000 a jury found the Boehringer had proven
infringement by a preponderance of the evidence and that
Schering had failed to demonstrate that the 5,476,778 Patent
(hereinafter "the '778 Patent") was obvious. Thereafter, this
Court held a two-day hearing on the issue at hand, i.e.,
whether Boehringer engaged in inequitable conduct before the
United States Patent Office (hereinafter "USPO").
After carefully consideration, for the reasons stated below,
this Court finds that Schering has failed to prove that
Boehringer engaged in inequitable conduct that would invalidate
the '778 Patent. Accordingly, since all substantive issues have
now been resolved in this matter, together with an Order issued
on this same date, final judgment shall be entered in this
matter in favor of Boehringer.*fn1
Inequitable conduct means any "affirmative misrepresentation
of a material fact, failure to disclose material information, or
submission of false material information, coupled with an intent
to deceive." Refac International, Ltd. v. Lotus Development
Corp., 81 F.3d 1576, 1581 (Fed.Cir. 1996) (quoting Molins PLC
v. Textron, Inc., 48 F.3d 1172, 1178 (Fed.Cir. 1995)). The
party alleging "inequitable conduct" must prove by clear and
convincing evidence a threshold level of both the materiality of
the withheld or misrepresented information as well as the
opposing party's intent to deceive. Id. This high burden of
proof is required because each duly issued patents enjoy a
presumption of validity. "Clear and convincing" evidence is
evidence that produces an abiding conviction that the truth of a
factual contention is highly probable. Buildex, Inc. v. Kason
Indus., Inc., 849 F.2d 1461, 1463 (Fed.Cir. 1988) (citing
Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81
L.Ed.2d 247 (1984)).
Once a threshold level of materiality and intent is
established, the Court must balance these findings to determine
whether the equities of the case warrant a finding of
inequitable conduct. Molins, 48 F.3d at 1178. In balancing the
materiality of the undisclosed or misrepresented information and
the applicant's intent to deceive the USPO, the Court must
consider all of the evidence, including evidence of the
applicant's good faith. Id., 48 F.3d at 1181; Kingsdown
Medical Consultants Ltd. v. Hollister, Inc., 863 F.2d 867, 876
(Fed.Cir. 1988); Schering's Post-Trial Br. at p. 12. Because
this Court's inquiry must consider materiality and intent
together, "the more material the omission or misrepresentation,
the less intent that must be shown to reach a conclusion of
inequitable conduct." Akzo N.V. v. United States International
Trade Commission, 808 F.2d 1471, 1481-82 (Fed.Cir. 1986). This
ultimate determination is entrusted to the Court's discretion.
Halliburton Co. v. Schlumberger Technology Corp.,
925 F.2d 1435, 1439-1440 (Fed.Cir. 1991).
The materiality of a reference for purposes of an inequitable
conduct defense is tested by the standard enunciated in
37 C.F.R. § 1.56. Prior to amendment in 1992, information was deemed
material if there was a "substantial likelihood that a
reasonable examiner would have considered the information
important in deciding whether to allow the application to issue
as a patent." Refac, 81 F.3d at 1581; 37 C.F.R. § 1.56 (1984).
In 1992, however, this standard was amended to provide that
"information is material to patentability when it is not
cumulative to information already of record or being made of
record in the application, and (1) It establishes, by itself or
in combination with other information, a prima facie case of
unpatentability of a claim; or (2) It refutes, or is
inconsistent with, a position the applicant takes . . ."
37 C.F.R. § 1.56 (1992). The post-1992 standard further provides
that a "prima facie case of unpatentability is established when
the information compels a conclusion that a claim is
unpatentable under the preponderance of evidence,
burden-of-proof standard, giving each term in the claim its
broadest reasonable construction consistent with the
specification, and before any consideration is given to evidence
which may be submitted in an attempt to establish a contrary
conclusion of patentability." Id. Although Schering suggests
that the pre-amendment standard applies to this
case, Schering argues in its brief that it has proven the
materiality of the relevant references under both the pre- and
post-1992 standards. See e.g., Schering's Post-Trial Br. at p.
5 (the "change [in the standard] is unimportant in the present
case because there are a number of reasons why the Collins and
Benfield homogenate would clearly have been material under
Rule 56 before and after the 1992 change"). For purposes of this
Opinion, this Court will apply both the pre-1992 and post-1992
standard for materiality.
It is axiomatic in patent law that a patentee has no duty to
disclose material prior art which is merely cumulative of (or
less material than) other art submitted to the USPO. See
Halliburton, 925 F.2d at 1440; Baxter Int'l, Inc. v. McGaw,
Inc., 149 F.3d 1321, 1328 (Fed.Cir. 1998). Thus, a defense of
inequitable conduct will fail if it is based on the
non-disclosure of prior art which was merely cumulative of other
art disclosed to the USPO.
"Intent" for purposes of an inequitable conduct defense means
"design, resolve, or determination with which a person acts; a
state of mind in which a person seeks to accomplish a given
result through a course of action." Molins, 48 F.3d at 1180.
Intent "need not be proven by direct evidence" and is "most
often proven by a showing of acts, the natural consequences of
which are presumably intended by the actor." Id. An intent to
deceive is "found when in light of all the evidence, the conduct
indicates `sufficient culpability to require a finding of intent
to deceive.'" Paragon Podiatry Laboratory, Inc. v. KLM
Laboratories, Inc., 984 F.2d 1182, 1183 (Fed.Cir. 1993).
Proof of inequitable conduct based upon the non-disclosure of
prior art may be rebutted by showing: (1) that the disputed
reference was not material; (2) that if the reference was
material, the applicant did not know of its existence or that
the reference was "merely cumulative" of another reference
already disclosed; (3) if the applicant knew of the contested
reference, the applicant did not know of its materiality; or (4)
that the applicant did not intend to mislead the PTO by failing
to disclose it. Elk Corp. v. GAF Building Materials Corp.,
168 F.3d 28, 30-31 (Fed. Cir. 1999).
Here, Schering argues that Boehringer failed to disclose and
intentionally misrepresented the following information to the
USPO: (a) the origins of the work completed by Drs. Collins and
Benfield and (b) the existence of Drs. Dea and Van Alstine's
work and its relevance to the '778 Patent application. Each of
these arguments will be discussed in turn.
A. Drs. Collins and Benfield's Work
Schering argues that Boehringer intentionally included Drs.
Collins and Benfield's homogenate work in the section entitled
"The Invention" rather than citing that work as prior art in an
effort to deceive the USPO of the true state of the prior art at
the time of Boehringer's invention. I disagree and find that
Schering has failed to prove by clear and convincing evidence
that this information was material and that Boehringer included
this work in "The Invention" section of the '778 Patent to
deceive the USPO.
1. Materiality of the Drs. Collins and Benfield Homogenate
Work
The first inquiry this Court undertakes is to determine
whether Boehringer made a material misrepresentation to the USPO
regarding the Collins and Benfield work.*fn2
As stated above, where a party alleges inequitable conduct
from an affirmative misrepresentation of information, the party
must prove by clear and convincing evidence (1) the information
submitted was material and false and (2) the information was
submitted with an intent to deceive. J.P. Stevens & Co., Inc.
v. Lex Tex Inc., 747 F.2d 1553, 1559 (Fed.Cir. 1984), cert.
denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed.2d 60 (1985).
Materiality in this case will be measured by both the standard
in place at the time Boehringer initially filed its application
for the '778 Patent as well as the standard enacted in 1992
while the '778 Patent was still pending before the USPO. Under
either standard, this Court concludes that Schering has not met
its burden of proving a threshold level of materiality with
respect to the Drs. Collins and Benfield work.
Since Schering contends that Boehringer misrepresented the
Collins and Benfield work in the '778 Patent application by
including this work under the heading "The Invention," it is
helpful to review exactly how the homogenate work was included
in "The Invention" section of the '778 Patent application. That
section provided:
A tissue homogenate obtained from piglets in
SIRS-infected herds consistently reproduced the
respiratory and reproductive forms of SIRS when
intransally inoculated in gnotobiotic piglets and
pregnant sows. Gnotobiotic piglets so inoculated with
either unfiltered or filtered (0.45, 0.22, or 0.1 μm)
inoculum became anorectic and developed microscopic
lung lesions similar to lesions seen in SIRS-affected
herds. The same inoculum also caused reproductive
effects identical to those seen in SIRS-infected
herds. A viral agent has been recovered from the
tissue homogenate. . . .
PTX 1. It is undisputed that the work described from the
beginning of the above-cited paragraph through to the sentence
"The same inoculum also caused reproductive effects identical to
those seen in SIRS-infected herds" is truly the work of Drs.
Collins and Benfield and was not part of the invention.
Schering argues that "[I]f the Examiner had known that the
prior art already included the Collins and Benfield homogenate
and filtering work which established that the agent was a
virus (as opposed to a mycotoxin or chlamydia, for example),
the only question the Examiner would have had to ask and answer
was whether one skilled in the art would have been motivated to
take the MSD [mystery swine disease] virus already identified as
contained in the Collins and Benfield homogenate and inoculate
it on simian lines, known to be very permissive, with a
reasonable expectation of success." Schering's Post-Trial Br. at
p. 7 (internal citation omitted); see also Id. at pp. 7-8.
a. The USPO knew that PRRS was a virus
First, Schering argues that Boehringer's misrepresentation was
material because it kept the examiners ignorant of the fact that
the prior art disclosed that PRRS was a virus. Putting aside the
questions of whether or not it was important for the examiners
to know that PRRS was a virus to evaluate the obviousness of the
'778 Patent and whether Collins and Benfield's work would have
informed the USPO of this, Schering has failed to prove the
materiality of this misrepresentation because Boehringer did
inform the USPO that PRRS was a virus. In the prosecution of the
'778 Patent, Boehringer disclosed to the USPO the article
entitled "Mystery swine disease in the Netherlands: the
isolation of Lelystad virus" by Dr. Wensvoort, et al. which was
published in the July 1991 edition of The Veterinary Quarterly.
See PTX 7 (hereinafter "Wensvoort," "Wensvoort reference" or
"Wensvoort article"). The Wensvoort article disclosed that an
unknown virus was the likely cause of PRRS. Indeed, the
Wensvoort reference disclosed that:
The mycoplasmas M. hyosynoviate, M. hyopneumoniae,
and Acholeplasma laidlawii, and the viruses
encephalomyocarditis virus and porcine enterovirus
types 2 and 7 were isolated from individual pigs. An
unknown agent, however, was characterized as a virus
and designated Lelystad virus. . . . Of 165 sows
reportedly afflicted with the disease, 123 (75 per
cent) seroconverted to Lelystad virus, whereas less
than 10 per cent seroconverted to any of the other
virus isolates or to the known viral pathogens.
Antibodies directed against Lelystad virus were also
found in pigs with mystery swine disease in England,
Germany and in the United States. We conclude that
infection with Lelystad virus is the likely cause of
mystery swine disease.
PX7 at B 067199 (emphasis added). Therefore, the examiners of
the '778 Patent had an article before them for consideration
which concluded that a virus was responsible for mystery swine
disease.
As stated above, a reference cannot be material if it is
merely cumulative of the references before the USPO. Thus,
assuming arguendo that Collins and Benfield work disclosed
that PRRS was a virus, Schering has failed to prove that that
reference was material in light of the evidence that it would
have been cumulative of the Wensvoort reference which was
disclosed to the USPO. Accordingly, since the identification of
PRRS as a virus was before the USPO, Schering has failed to
prove that Boehringer kept the USPO ignorant of that
fact.*fn3 Thus, in this respect Schering has failed to prove
that including the Collins and Benfield work under the heading
"The Invention," was a material misrepresentation.
b. Collins and Benfield's Teachings
First, Schering has not proven to this Court that the
homogenate work conclusively revealed that PRRS was a virus, at
the time of the patent prosecution. Dr. Easterday, an expert in
veterinary virology, testified that one would not necessarily
know that PRRS was a virus from the fact that it had been
filtered at 0.1 μm. Tr. at 16.119. Dr. Collins, who was directly
involved with the homogenate work, even testified that his work
on the PRRS homogenate did not conclusively show that PRRS was a
virus. Tr. at 3.37. Dr. Collins said that at the time he was
involved in the homogenate work, he hypothesized that PRRS might
be a virus but he never proved that PRRS was a virus or not a
virus. Tr. at 3.65. He explained that he "hadn't concluded that
it was a virus, because it could have been something new, never
discovered before that passed through or a toxin or whatever. We
were working on a hypothesis that possibly or probably was a
virus, but we wanted to keep our minds open to toxins or new
discoveries or whatever that were small and could pass through a
filter of that size." Tr. at 3.117. Dr. Harris, Boehringer's
scientist and co-inventor of the '778 Patent who received the
homogenate from Dr. Collins, testified that when he received the
homogenate he was sure that it contained the causative agent for
PRRS but that he did not know conclusively that the causative
agent was a virus. Tr. at 4.107108. Although Schering offered
evidence to the contrary, this Court credits the testimony of
Boehringer's witnesses and finds that Schering has not proven
that disclosure of the Collins an Benfield homogenate work as
prior art would have informed the USPO that PRRS was a virus.
Second, as this Court has held in the past, even assuming that
the homogenate work revealed that a virus was the cause of PRRS,
Schering has not proven that that discovery was not material to
the USPO's obviousness determination. To be important to the
USPO's obviousness decision the prior art must have been
important to showing that one of ordinary skill would have a
reasonable expectation of success growing PRRS on simian cells.
Schering has failed to convince this Court that mere knowledge
that PRRS was a virus would have been important in determining
the obviousness of the '778 Patent.
This testimony is supported by the failure of others to
isolate and grow PRRS on simian cells or even attempt to isolate
PRRS on simian cells. For example, Dr. Collins' team failed to
isolate PRRS. This is very telling given that Dr. Collins' team
worked with the homogenate, hypothesized that PRRS was a virus,
and had scientists who exceeded the level of ordinary skill in
the art. Dr. Collins supervised the isolation attempts of two
Ph.D. virologists in his laboratory and another scientist, D.
McCullough, who was visiting South Dakota Statute University.
Tr. at 3.37. These scientists tried without success to grow
PRRS. Their attempts were not fleeting. Dr. McCullough worked
nearly full-time attempting to isolate the causative agent. Tr.
at 3.42. Dr. Benfield's personal failure to isolate PRRS is also
probative of this issue. Dr. Benfield, an experienced scientist,
who had access to both the homogenate and Boehringer's list of
available cells which included simian cells did not have any
success growing PRRS. Nor did Dr. Benfield even attempt to grow
PRRS on simian cells. Tr. at 3.46.
In addition to the failure of Dr. Collins's team, Dr.
Collins's testimony about the state of the art in 1990 and 1991
is also helpful in this regard. Dr. Collins testified that when
he reviewed the list of cells available to him through
Boehringer, he concluded that "there was nothing particularly
unusual or enlightening to me from this list," despite the fact
that simian cells were on the list of available cells. Tr. at
3.46. Dr. Collins testified further that when he learned that
Dr. Harris had success growing PRRS on simian cells, he was
surprised. Tr. at 3.48-3.49.
The work of Dr. Collins's team and Dr. Collins's credible
testimony in this case weighs heavily on this Court's conclusion
that even if Schering were right that Dr. Collins's work
conclusively determined that PRRS was a virus, that knowledge
would not have been material to the obviousness determination
because there was nothing about this knowledge that would have
shed light on whether the art taught one to isolate PRRS on
simian cells. Moreover, although Mr. Chladek, one of the
inventors of the '778 Patent, testified that it would have been
helpful to know that PRRS was a virus before trying to isolate
it, he did not testify that such knowledge would have taught him
to use simian cells or would have been material to the
obviousness decision.*fn4
Thus, under the post-1992 standard of materiality, Schering
has not proven that a prima facie case of obviousness would have
been compelled based upon the homogenate work even giving each
term in the claim its broadest reasonable construction
consistent with the specification, and before any consideration
is given to evidence which may be submitted in an attempt to
establish a contrary conclusion of patentability. In addition,
Schering has not proven that the homogenate work would have been
important to a reasonable examiner under the pre-1992 standard
of materiality.
c. Other Evidence of Immateriality
Moreover, this Court's conclusion that Schering has not proven
the materiality of the homogenate work is buttressed further by
the fact that the homogenate work was disclosed to the USPO in
connection with the related '563 Patent and the USPO neither
rejected the '563 Patent as obvious nor questioned Boehringer in
light of the homogenate work. In this case, Boehringer's '563
Patent and the '778 Patent were both pending before the USPO at
the same time. It is uncontested that the '563 Patent is broader
than the '778 Patent but "not patentably distinct" from the '778
Patent. Tr. at 20:99. In connection with the related '563 Patent
application, Boehringer disclosed to the Patent Office an
abstract by Drs. Collins and Benfield. See PTX 89. That
abstract originated from a presentation made by Drs. Collins,
Benfield, Goyal and Shaw at a Conference of Research Workers and
Animal Diseases in November of 1990. Tr. at 16.76. That abstract
disclosed that:
"Piglets inoculated with filtered (0.45 Sm or 0.22
μm) or unfiltered tissue homogenates became
anorectic, lethargic, huddled, rubbed their snouts
vigorously on the walls of the isolators, and
developed rough hair coats by 4 days post-inoculation
(PI) . . . Sera collected at necropsy did not contain
antibodies to Leptospira bratislava, Eperthrozoon
suis, pseudorabies, encephalomyocarditis,
haemagglutinating encephalomyelitis, swine influenza,
and transmissible gastroenteritits viruses."
Evidence of the USPO's reaction to the homogenate work is
particularly instructive in this case because the same examiners
who considered the '778 Patent also considered the '563 Patent
application. There is evidence that on August 12, 1992, Examiner
Preston, who was considering the '778 Patent and '563 Patent
both (a) indicated that he read the Collins abstract in
connection with the '563 Patent and (b) searched for prior art
in connection with the '778 Patent. Tr. 21.131:5-10. Also,
Examiner Caputo, who ultimately permitted the '778 Patent also
reviewed the Collins abstract during the pendency of the '778
Patent. Tr. 21.133:3-14; 21.134. The evidence that at least one
examiner who considered the Collins abstract considered
contemporaneously prior art in the '778 Patent prosecution
heavily supports this Court's conclusion that the homogenate
work would not have been important to a reasonable examiner or
would "compel a conclusion" of obviousness under
37 C.F.R. § 1.56.*fn6 The evidence that a second examiner, Examiner
Caputo who ultimately allowed the '778 Patent, also reviewed the
Collins abstract during the pendency of the '778 Patent is also
probative of the materiality of the Collins and Benfield
homogenate work and supports this Court's conclusion.
Thus, this Court finds that Schering has failed to prove that
Boehringer's inclusion of the Drs. Benfield and Collins work
under the heading "The Invention" was a material
misrepresentation or that Boehringer's failure to rely upon the
Collins and ...