Duty of Disclosure Before USPTO Highlighted in Federal Register

USPTO Trademarks
USPTO Trademarks

On July 29th, 2022, the current director of the United States Patent and Trademark Office (USPTO), Katherine Vidal, published a notice in the federal register regarding the duty of disclosure before the patent office. The notice begins by discussing to whom the duty of disclosure applies. The second portion of the notice emphasizes the consistency of disclosure to the USPTO among other governmental agencies and commercialization activities, including market testing, offers for sale, and reduction to practice. The notice reminds practitioners, “The USPTO hold those individual subject to this duty [of disclosure] to the highest standards. In close cases where the materiality of consistency of the information is in question, the applicant should consider submitting this information to the USPTO.”

This notice comes after the recent Executive Order on Promoting Competition in the American Economy and a letter from Senator Patrick Leahy and Thom Tillis to the USPTO to reduce conflicting statements among government agencies. As an example, the Senators provided a specific example where, ‘‘inconsistent statements submitted to the Food and Drug Administration (FDA) to secure approval of a product—asserting that the product is the same as a prior product that is already on the market— can then be directly contradicted by statements made to the [USPTO] to secure a patent on the product.’’ Accordingly, this notice is meant to address the duty of disclosure and the duty of reasonable inquiry as it relates to the material submitted or received from other governmental agencies.
Director Vidal highlights four different topics as they relate to the duty of disclosure standard:

1. Who Has a Duty to Disclose

The duty of disclosure applies equally to practitioners and non-practitioners alike. The determining factor for determining the application of duty of disclosure is the individual’s relationship to the proceeding, and the type of proceeding before the USPTO.

For example, under 37 CFR 1.56(a) and 1.555(a), “each individual” associated with the application during prosecution has a duty of disclosure.

For reexamination proceedings, “each individual” associated with the patent owner has a duty of disclosure.

In proceedings before the Patent Trial and Appeal Board (PTAB), the duty of disclosure not only extends to “each individual” associated with the application, but also to patent owners that present substitute claims in post grant proceedings.

2. What Material Information Must Be Disclosed

Individuals must disclose information material to the patentability of their application. 37 CFR 1.56(b) defines when information should be disclosed if it is not a part of the record. First, information should be disclosed when it establishes, by itself or in combination with other information, a case for unpatentability. Second, information that would refute a position taken by the applicant when opposing an argument made by the USPTO or when asserting an argument for patentability.

The patent office equates the duty of disclosure to the office to the obligations imposed by Rule 11 of the Federal Rules of Civil Procedure. From Rule 11(b):

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

3. What Is the Duty of Reasonable Inquiry

‘‘The presentation to the Office (whether by signing, filing, submitting, or later advocating) of any paper by a party, whether a practitioner or nonpractitioner, constitutes a certification under § 11.18(b).’’ 37 CFR 1.4(d)(4)(i). Section 11.18(b) includes 11.18(b)(2), which calls for a duty of reasonable inquiry to ensure that the paper is not being presented for any improper purpose, the legal contentions are warranted by law, the allegations and other factual contentions have evidentiary support, and the denials of factual contentions are warranted on the evidence.

The notice emphasizes that each party presenting information to the USPTO, both practitioners and non-practitioners, have a duty of disclosure that is reasonable for the given circumstances. For example, the USPTO highlights the duty of disclosure on the applicant to review documents submitted and received from other government agencies. The example highlights that the duty of disclosure applies if any correspondence with other agencies is material to the patentability of a pending application. The failure to inquire under reasonable circumstances could ultimately result in sanctions, including the termination of proceedings before the USPTO.

4. Duty of Reasonable Inquiry Arising in Dealings With Other Government Agencies

In the final section of the notice, the notice provides an overview of recent case law demonstrating how the duty of disclosure should be consistent across all government agency proceedings. In Belcher Pharms., LLC v. Hospira, Inc. (Fed. Cir. 2021), the courts found that the chief science officer acted inequitably when the submissions made to the FDA were inconsistent with the positions taken at the USPTO. Additionally, in Bruno Independent Living Aids, Inc. v. Acorn Mobility Services, Ltd. (Fed. Cir. 2005), the courts found inequitable conduct when an official chose to disclose material prior art to the FDA but not to the USPTO.

Similarly, consistent disclosure can also apply to market testing and commercialization activities. For example, in GS Cleantech Corp. v. Adkins Energy LLC (Fed. Cir. 2020), the courts found inequitable conduct when the inventor and their lawyers deliberately chose not to disclose an offer for sale and reduction to practice that would have prevented the granting of a patent and failed to correct their false statements.

In conclusion, Director Vidal asserts that deliberate schemes or practices that prevent the unimpeded sharing of information between parties under the duty to disclose do not comply with acting in accordance with candor and good faith under 37 CFR 1.56(a). Accordingly, the notice provides ample guidance for all parties under the duty to disclose, including whom the duty of disclosure applies to and the equivalence of the duty of disclosure to the Patent Office to all other branches of government and commercial actions.

John DeStefano
Technical Advisor

John DeStefano, is a patent and technology technical advisor at Founders Legal. He received his Bachelor’s Degree in Electrical Engineering from Missouri University of Science and Technology (Rolla) and is pursuing a J.D. at Franklin Pierce School of Law with a focus on intellectual property.