Pleading Inequitable Conduct

By: Tyler Hampy

Rule 9(b) of the Federal Rules of Civil Procedure specifies that:

“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake. Malice, intent, knowledge, and other conditions of a person’s mind may be alleged generally.”

The court in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 91 U.S.P.Q. 2d (BNA) 1656 (Fed. Cir. 2009), discussed in detail how particular a pleading of inequitable conduct must be, both as to intent and materiality, to comply with Rule 9(b).

The court first addressed the act or omission alleged to be the basis for inequitable conduct, its materiality and the duty of disclosure. The court explained that pleadings must “contain explicit rather than implied expression of the circumstances constituting fraud.”

Therefore, a pleading is not sufficient if it merely restates the substantive elements of inequitable conduct without a particularized factual basis for that claim. The court concluded that a pleading for inequitable conduct must identify “the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO.”

First, pleading the “what,” at least for an undisclosed reference, includes identifying the particular claim and limitations to which that reference is relevant.

Second, pleading the “where” includes referencing where the material information is located.

Third, pleading the “why” and “how,” again for an undisclosed reference, includes identifying the particular claim limitation (or combination) alleged to be missing from the reference before the examiner. “Why” includes the reason the reference is not cumulative, and therefore, material. “How” concerns how a patent examiner would have used that reference to evaluate the claims.

Finally, pleading the “who” means naming an individual. The court stated that the pleading was deficient because it only named the “[company], its agents and/or attorneys.”

The court next addressed the intent to deceive, particularly the inferences pertaining to the necessary state of mind: intent and the knowledge of the facts necessary for intent. The court emphasized that pleadings must allege underlying facts from which a court may “reasonably infer” a particular person acted with the state of mind necessary for inequitable conduct.

Thus, the facts alleged must permit a reasonable inference that the person “(1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.”

The court further explained that the “reasonable inference” needed for intent and knowledge in the context of Rule 9(b) is less demanding than that needed to prove those issues at trial. Such a reasonable inference need only be plausible and flow logically from the alleged facts, including “objective indications of candor and good faith.” In contrast, to prove inequitable conduct on the merits, the clear and convincing standard demands that any such inference be the “single most reasonable inference able to be drawn from the evidence.”

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