Therasense, Inc. v. Becton, Dickinson and Co.

United States Court of Appeals
for the Federal Circuit
__________________________

THERASENSE, INC. (NOW KNOWN AS ABBOTT
DIABETES CARE, INC.)
AND ABBOTT LABORATORIES,
Plaintiffs-Appellants,
v.
BECTON, DICKINSON AND COMPANY,
AND NOVA BIOMEDICAL CORPORATION,
Defendants-Appellees,
AND

BAYER HEALTHCARE LLC,
Defendant-Appellee.
__________________________

2008-1511, -1512, -1513, -1514, -1595
__________________________

Appeals from the United States District Court for the
Northern District of California in consolidated case nos.
04-CV-2123, 04-CV-3327, 04-CV-3732, and 05-CV-3117,
Judge William H. Alsup.
___________________________

Decided: May 25, 2011
___________________________

JOHN M. WHEALAN, of Silver Spring, Maryland argued
for plaintiffs-appellants on rehearing en banc. With him
on the brief were ROHIT K. SINGLA and PETER A. DETRE,
THERASENSE v. BECTON 2

Munger, Tolles & Olson LLP, of San Francisco, California;
and JEFFREY I. WEINBERGER, of Los Angeles, California;
JEFFREY A. LAMKEN and MICHAEL G. PATTILLO, JR.,
MoloLamken LLP, of Washington, DC. Of counsel were
CHANTAL M. D’APUZZO, FRED A. ROWLEY, JR., ANDREW W.
SONG and DONALD W. WARD, Munger, Tolles & Olson
LLP, of Los Angeles, California.

BRADFORD J. BADKE, Ropes & Gray LLP, of New York,
New York, argued for defendants-appellees Becton, Dick-
inson and Company, et al. on rehearing en banc. With
him on the brief was SONA DE. Of counsel was GABRIELLE
M. CIUFFREDA.

RACHEL KREVANS, Morrison & Foerster LLP, of San
Francisco, California, argued for defendant-appellee
Bayer HealthCare LLC on rehearing en banc. With her
on the brief were BRIAN M. KRAMER and GREGORY W.
REILLY, of San Diego, California; and KENNETH P. GEORGE
and JOSEPH M. CASINO, Amster Rothstein & Ebenstein
LLP, of New York, New York. Of counsel were JASON R.
BARTLETT, PARISA JORJANI, and WESLEY E. OVERSON.

RAYMOND T. CHEN, Solicitor, Office of the Solicitor,
United States Patent and Trademark Office, of Alexan-
dria, Virginia argued for amicus curiae the Director of the
United States Patent and Trademark Office on rehearing
en banc. With him on the brief were BERNARD J. KNIGHT,
JR., General Counsel, SYDNEY O. JOHNSON, JR. and JANET
A. GONGOLA, Associate Solicitors. Of counsel on the brief
was SCOTT R. MCINTOSH, Attorney, Appellate Staff, Civil
Division, United States Department of Justice, of Wash-
ington, DC.

CAROLYN B. LAMM, American Bar Association, of Chi-
cago, Illinois, for amicus curiae The American Bar Asso-
3 THERASENSE v. BECTON

ciation on rehearing en banc. Of counsel on the brief were
MICHAEL A. VALEK and WILLIAM L. LAFUZE, Vinson &
Elkins LLP, of Houston, Texas.

JOHN L. COOPER, Farella Braun & Martel LLP, of San
Francisco, California, for amicus curiae Dolby Laborato-
ries, Inc. on rehearing en banc.

RICHARD G. TARANTO, Farr & Taranto, of Washington,
DC, for amicus curiae Verizon Communications, Inc. on
rehearing en banc. Of counsel on the brief were JOHN
THORNE and GAIL F. LEVINE, Verizon Communications
Inc., of Arlington, Virginia.

DAVID HRICIK, Mercer University School of Law, of
Macon, Georgia, for amicus curiae Professor David Hricik
on rehearing en banc.

PAUL H. BERGHOFF, McDonnell, Boehnen, Hulbert &
Berghoff, LLP, of Chicago, Illinois, for amicus curiae
Intellectual Property Owners Association on rehearing en
banc. With him on the brief was KURT W. ROHDE. Of
counsel on the brief were DOUGLAS K. NORMAN and KEVIN
H. RHODES, Intellectual Property Owners Association, of
Washington, DC. Of counsel was HERBERT C. WAMSLEY,
Intellectual Property Owners Association, of Washington,
DC.

ROBERT P. GREENSPOON, Flachsbart & Greenspoon,
LLC, of Chicago, Illinois, for amici curiae Acacia Research
Corporation and 1st Media, LLC on rehearing en banc.

IAN SCOTT, Duane Morris LLP, of New York, New
York, for amicus curiae Apotex, Inc. on rehearing en banc.
With him on the brief were JOSEPH M. BENNETT-PARIS, of
Atlanta, Georgia; ROBERT GOULD and ELESE HANSON, of
THERASENSE v. BECTON 4

Chicago, Illinois; and MATTHEW C. MOUSLEY, of Philadel-
phia, Pennsylvania. Of counsel on the brief was
SHASHANK UPADHYE, Apotex, Inc., of Toronto, Canada.

FREDERICK F. HADIDI, Chao Hadidi Stark & Barker
LLP, of Menlo Park, California for amici curiae 22 Patent
Prosecution Firms and Practitioners on rehearing en
banc. Of counsel on the brief was JULIE Y. MAR-SPINOLA,
Sawyer Law Group, P.C., of Palo Alto, California.

CHRISTIAN E. MAMMEN, University of California Hast-
ings College of the Law, of San Francisco, California, for
amici curiae Intellectual Property Law Professors on
rehearing en banc.

LELAND W. HUTCHINSON, JR., Freeborn & Peters LLP,
of Chicago, Illinois, for amici curiae Ole K. Nilssen and
Geo Foundation, Ltd. on rehearing en banc. With him on
the brief were JONATHAN HILL and MATTHEW J. KRAMER.

MARK A. PERRY, Gibson, Dunn & Crutcher LLP, of
Washington, DC, for amici curiae Sanofi-Aventis and
Microsoft Corporation on rehearing en banc. With him on
the brief were MATTHEW D. MCGILL and WILLIAM G.
JENKS.

ROBERT A. ARMITAGE, Eli Lilly and Company, of Indi-
anapolis, Indiana, for amici curiae 43 Patent Practitioners
Employed by Eli Lilly and Company on rehearing en
banc. With him on the brief were JAMES J. KELLEY and
MARK J. STEWART.

CHRISTOPHER E. CHALSEN, Milbank, Tweed, Hadley &
McCloy LLP, of New York New York, for amicus curiae
The American Intellectual Property Law Association on
rehearing en banc. With him on the brief were LAWRENCE
5 THERASENSE v. BECTON

T. KASS and NATHANIEL T. BROWAND. Of counsel on the
brief was ALAN J. KASPER, American Intellectual Property
Law Association, of Arlington, Virginia.

HANSJORG SAUER, Biotechnology Industry Organiza-
tion, of Washington, DC, for amicus curiae The Biotech-
nology Industry Organization on rehearing en banc.

TIMOTHY D. JOHNSTON, Nutter McClennen & Fish
LLP, of Boston, Massachusetts, for amicus curiae Boston
Patent Law Association, on rehearing en banc. With him
on the brief was RORY P. PHEIFFER

STEVEN C. SEREBOFF, SoCal IP Law Group LLP, of
Westlake Village, California, for amicus curiae Conejo
Valley Bar Association on rehearing en banc. With him
on the brief were MARK A. GOLDSTEIN and M. KALA
SARVAIYA.

ROBERT C. NISSEN, Oblon, Spivak, McClelland, Maier
& Neustadt, LLP, of Alexandria, Virginia, for amicus
curiae ECORE International, Inc. on rehearing en banc.

BRUCE M. WEXLER, Paul, Hastings, Janofsky &
Walker LLP, of New York, New York, for amici curiae
Eisai Co., Ltd. et al. on rehearing en banc. With him on
the brief were STEPHEN B. KINNAIRD and IGOR V.
TIMOFEYEV, of Washington, DC.

JAMES K. STRONSKI, Frommer Lawrence & Haug LLP,
of New York, New York, for amicus curiae The Federal
Circuit Bar Association on rehearing en banc. Of counsel
on the brief was TERENCE P. STEWART, Stewart & Stewart,
of Washington, DC.
THERASENSE v. BECTON 6

ROBERT J. MCAUGHAN, JR., Locke Lord Bissell & Lid-
dell, LLP, of Houston, Texas, for amicus curiae Houston
Intellectual Property Law Association on rehearing en
banc.

GREGORY L. DISKANT, Patterson Belknap Webb & Ty-
ler LLP, of New York, New York, for amici curiae Johnson
& Johnson and The Procter & Gamble Company on re-
hearing en banc. With him on the brief were EUGENE M.
GELERNTER and CHARLES D. HOFFMANN; and PHILIP S.
JOHNSON, ERIC I. HARRIS and HENRY S. HADAD, of New
Brunswick, New Jersey.

BRAD D. PEDERSEN, Patterson Thuente Christensen
Pedersen, P.A., of Minneapolis, Minnesota, for amicus
curiae Patterson Thuente Christensen Pedersen, P.A. on
rehearing en banc.

CARTER G. PHILLIPS, Sidley Austin LLP, of Washing-
ton, DC, for amicus curiae Pharmaceutical Research and
Manufacturers of America on rehearing en banc. With
him on the brief were JEFFREY P. KUSHAN, ERIC A.
SHUMSKY and JAMES C. OWENS; and CONSTANTINE L.
TRELA, JR., of Chicago, Illinois. Of counsel on the brief
was DAVID E. KORN, Pharmaceutical Research and Manu-
facturers of America, of Washington, DC.

JAMES R. BATCHELDER, Howrey LLP, of East Palo
Alto, California, for amicus curiae SAP America, Inc. on
rehearing en banc.

WILIAM L. RESPESS, Nanogen Inc., of San Diego, Cali-
fornia, for amicus curiae San Diego Intellectual Property
Law Association on rehearing en banc. Of counsel on the
brief was DOUGLAS E. OLSON, Paul Hastings, Janofsky &
Walker, of San Diego, California.
7 THERASENSE v. BECTON

CHARLES W. SHIFLEY, Banner & Witcoff, Ltd., of Chi-
cago, Illinois, for amicus curiae The Intellectual Property
Law Association of Chicago on rehearing en banc.

DANIEL J. POPEO, Washington Legal Foundation of
Washington, DC, for amicus curiae Washington Legal
Foundation on rehearing en banc. With him on the brief
was RICHARD A. SAMP.

BRUCE A. LEHMAN, International Intellectual Property
Institute, of Washington, DC, for amicus curiae Interna-
tional Intellectual Property Institute, on rehearing en
banc.

JEFFREY M. SAMUELS, University of Akron School of
Law, Akron, Ohio, for amicus curiae The University of
Akron School of Law on rehearing en banc. With him on
the brief was ROBERT C. KAHRL.

JEFFREY D. MILLS, King & Spalding LLP, of Austin,
Texas, for amicus curiae Association of Citizens for Patent
Protection in the Public Interest on rehearing en banc.
With him on the brief was BRIAN C. BANNER.

HENRY C. DINGER, Goodwin Procter LLP, of Boston,
Massachusetts, for amici curiae Teva Pharmaceuticals
USA, Inc., et al. Cisco Systems, Inc., and Generic Phar-
maceutical Association on rehearing en banc. With him
on the brief were ELAINE HERRMANN BLAIS, NICHOLAS K.
MITROKOSTAS and ANDREW M. BATCHELOR.

DAN L. BAGATELL, Perkins Coie Brown & Bain, P.A.,
of Phoenix, Arizona, for amicus curiae Intel Corporation
THERASENSE v. BECTON 8

on rehearing en banc. Of counsel on the brief was TINA
M. CHAPPELL, Intel Corporation, of Chandler, Arizona.
__________________________

Before RADER, Chief Judge, NEWMAN, LOURIE, BRYSON,
GAJARSA, LINN, DYK, PROST, MOORE, O’MALLEY, and
REYNA, Circuit Judges.
Opinion for the court filed by Chief Judge RADER, in
which Circuit Judges NEWMAN, LOURIE, LINN, MOORE,
and REYNA join in full, and in which Circuit Judge
O’MALLEY joins in part V.
Concurring-in-part and dissenting-in-part opinion filed by
Circuit Judge O’MALLEY.
Dissenting opinion filed by Circuit Judge BRYSON, in
which Circuit Judges GAJARSA, DYK, and PROST join.
RADER, Chief Judge.
The United States District Court for the Northern
District of California found U.S. Patent No. 5,820,551
(“the ’551 patent”) unenforceable due to inequitable
conduct. Therasense, Inc. v. Becton, Dickinson & Co., 565
F. Supp. 2d 1088 (N.D. Cal. 2008) (“Trial Opinion”).
Therasense, Inc. (now Abbott Diabetes Care, Inc.) and
Abbott Laboratories (collectively, “Abbott”) appeal that
judgment. This court vacates and remands for further
proceedings consistent with this opinion.
I
The ’551 patent involves disposable blood glucose test
strips for diabetes management. These strips employ
electrochemical sensors to measure the level of glucose in
a sample of blood. When blood contacts a test strip,
glucose in the blood reacts with an enzyme on the strip,
resulting in the transfer of electrons from the glucose to
the enzyme. A mediator transfers these electrons to an
9 THERASENSE v. BECTON

electrode on the strip. Then, the electrons flow from the
strip to a glucose meter, which calculates the glucose
concentration based on the electrical current.
The ’551 patent claims a test strip with an electro-
chemical sensor for testing whole blood without a mem-
brane over the electrode:
1. A single use disposable electrode strip for
attachment to the signal readout circuitry of a
sensor to detect a current representative of the
concentration of a compound in a drop of a whole
blood sample comprising:

a) an elongated support having a substantially
flat, planar surface, adapted for releasable
attachment to said readout circuitry;

b) a first conductor extending along said surface
and comprising a conductive element for
connection to said readout circuitry;

c) an active electrode on said strip in electrical
contact with said first conductor and positioned to
contact said whole blood sample;

d) a second conductor extending along said surface
comprising a conductive element for connection to
said read out circuitry; and

e) a reference counterelectrode in electrical
contact with said second conductor and positioned
to contact said whole blood sample,

wherein said active electrode is configured to be
exposed to said whole blood sample without an
THERASENSE v. BECTON 10

intervening membrane or other whole blood
filtering member . . . .

’551 patent col.13 l.29-col.14 l.3 (emphasis added). “Whole
blood,” an important term in the claim, means blood that
contains all of its components, including red blood cells.
In the prior art, some sensors employed diffusion-
limiting membranes to control the flow of glucose to the
electrode because the slower mediators of the time could
not deal with a rapid influx of glucose. Other prior art
sensors used protective membranes to prevent “fouling.”
Fouling occurs when red blood cells stick to the active
electrode and interfere with electron transfer to the
electrode. Protective membranes permit glucose mole-
cules to pass, but not red blood cells.
Abbott filed the original application leading to the
’551 patent in 1984. Over thirteen years, that original
application saw multiple rejections for anticipation and
obviousness, including repeated rejections over U.S.
Patent No. 4,545,382 (“the ’382 patent”), another patent
owned by Abbott. The ’382 patent specification discussed
protective membranes in the following terms: “Option-
ally, but preferably when being used on live blood, a
protective membrane surrounds both the enzyme and the
mediator layers, permeable to water and glucose mole-
cules.” Col.4 ll.63-66. “Live blood” refers to blood within
a body.
In 1997, Lawrence Pope, Abbott’s patent attorney,
and Dr. Gordon Sanghera, Abbott’s Director of Research
and Development, studied the novel features of their
application and decided to present a new reason for a
patent. Pope presented new claims to the examiner based
on a new sensor that did not require a protective mem-
brane for whole blood. Pope asserted that this distinction
11 THERASENSE v. BECTON

would overcome the prior art ’382 patent, whose elec-
trodes allegedly required a protective membrane. The
examiner requested an affidavit to show that the prior art
required a membrane for whole blood at the time of the
invention.
To meet this evidentiary request, Dr. Sanghera sub-
mitted a declaration to the U.S. Patent and Trademark
Office (“PTO”) stating:
[O]ne skilled in the art would have felt that an ac-
tive electrode comprising an enzyme and a media-
tor would require a protective membrane if it were
to be used with a whole blood sample. . . . [O]ne
skilled in the art would not read lines 63 to 65 of
column 4 of U.S. Patent No. 4,545,382 to teach
that the use of a protective membrane with a
whole blood sample is optionally or merely pre-
ferred.
J.A. 7637. Pope, in submitting Sanghera’s affidavit,
represented:
The art continued to believe [following the ’382
patent] that a barrier layer for [a] whole blood
sample was necessary . . . .
One skilled in the art would not have read the dis-
closure of the [’382 patent] as teaching that the
use of a protective membrane with whole blood
samples was optional. He would not, especially in
view of the working examples, have read the “op-
tionally, but preferably” language at line 63 of
column [4] as a technical teaching but rather mere
patent phraseology.
....
THERASENSE v. BECTON 12

There is no teaching or suggestion of unprotected
active electrodes for use with whole blood speci-
mens in [the ’382 patent] . . . .
J.A. 7645-46.
Several years earlier, while prosecuting the European
counterpart to the ’382 patent, European Patent EP 0 078
636 (“EP ’636”), Abbott made representations to the
European Patent Office (“EPO”) regarding the same
“optionally, but preferably” language in the European
specification. On January 12, 1994, to distinguish a
German reference labeled D1, which required a diffusion-
limiting membrane, Abbott’s European patent counsel
argued that their invention did not require a diffusion-
limiting membrane:
Contrary to the semipermeable membrane of D1,
the protective membrane optionally utilized with
the glucose sensor of the patent is [sic] suit is not
controlling the permeability of the substrate . . . .
Rather, in accordance with column 5, lines 30 to
33 of the patent in suit:
“Optionally, but preferably when being used on
live blood, a protective membrane surrounds both
the enzyme and the mediator layers, permeable to
water and glucose molecules.”
See also claim 10 of the patent in suit as granted
according to which the sensor electrode has an
outermost protective membrane (11) permeable to
water and glucose molecules. . . . Accordingly, the
purpose of the protective membrane of the patent
in suit, preferably to be used with in vivo meas-
urements, is a safety measurement to prevent any
course [sic] particles coming off during use but not
a permeability control for the substrate.
13 THERASENSE v. BECTON

J.A. 6530-31 (emphases added).
On May 23, 1995, Abbott’s European patent counsel
submitted another explanation about the D1 reference
and EP ’636.
“Optionally, but preferably when being used on
live blood, a protective membrane surrounds both
the enzyme and the mediator layers, permeable to
water and glucose molecules.”
It is submitted that this disclosure is unequivo-
cally clear. The protective membrane is optional,
however, it is preferred when used on live blood in
order to prevent the larger constituents of the
blood, in particular erythrocytes from interfering
with the electrode sensor. Furthermore it is said,
that said protective membrane should not prevent
the glucose molecules from penetration, the mem-
brane is “permeable” to glucose molecules. This
teaches the skilled artisan that, whereas the [D1
membrane] must . . . control the permeability of
the glucose . . . the purpose of the protective
membrane in the patent in suit is not to control
the permeation of the glucose molecules. For this
very reason the sensor electrode as claimed does
not have (and must not have) a semipermeable
membrane in the sense of D1.
J.A. 6585 (first and third emphases added).
II
In March 2004, Becton, Dickinson and Co. (“Becton”)
sued Abbott in the District of Massachusetts seeking a
declaratory judgment of noninfringement of U.S. Patent
Nos. 6,143,164 (“the ’164 patent”) and 6,592,745 (“the ’745
patent”). Becton’s product was a blood glucose test strip,
the BD Test Strip. Abbott countersued Becton in the
THERASENSE v. BECTON 14

Northern District of California alleging that Becton’s strip
infringed the ’164, ’745, and ’551 patents. The District of
Massachusetts then transferred its case to the Northern
District of California. Abbott then sued Nova Biomedical
Corp. (“Nova”), Becton’s supplier, alleging infringement of
the patents asserted in Abbott’s suit against Becton. In
August 2005, Abbott also sued Bayer Healthcare LLC
(“Bayer”), alleging that its Microfill and Autodisc blood
glucose strips infringed the ’551 and ’745 patents. The
Northern District of California consolidated all of the
cases.
The district court granted summary judgment of non-
infringement of all asserted claims in the ’164 and ’745
patents. Therasense, Inc. v. Becton, Dickinson & Co., 560
F. Supp. 2d 835, 854, 880 (N.D. Cal. 2008). The district
court also found nearly all of the asserted claims of the
’745 patent invalid due to anticipation. Id. at 880.
Following a bench trial, the district court determined
that claims 1-4 of the ’551 patent were invalid due to
obviousness in light of the ’382 patent and U.S. Patent
No. 4,225,410 (“the ’410 patent”). Trial Opinion at 1127.
The central issue for obviousness was whether the prior
art would have disclosed a glucose sensor without a
membrane for whole blood to a person of ordinary skill in
the art. The district court found that the ’382 patent
disclosed sensors in which “a protective membrane was
optional in all cases except the case of live blood, in which
case the protective membrane was preferred—but not
required.” Id. at 1103. Of primary relevance here, the
district court held the ’551 patent unenforceable for
inequitable conduct because Abbott did not disclose to the
PTO its briefs to the EPO filed on January 12, 1994 and
May 23, 1995. Id. at 1127.
15 THERASENSE v. BECTON

Abbott appealed the judgments of invalidity, unen-
forceability, and noninfringement. Therasense, Inc. v.
Becton, Dickinson & Co., 593 F.3d 1289 (Fed. Cir. 2010),
vacated, 374 Fed. Appx. 35 (Fed. Cir. 2010). A panel of
this court unanimously upheld the district court’s judg-
ments of noninfringement and invalidity. Id. at 1311. On
unenforceability, the panel also affirmed, but with a
dissent. Id. at 1312-25 (Linn, J., dissenting).
Recognizing the problems created by the expansion
and overuse of the inequitable conduct doctrine, this court
granted Abbott’s petition for rehearing en banc and
vacated the judgment of the panel. Therasense, 374 Fed.
Appx. at 35. This court now vacates the district court’s
inequitable conduct judgment and remands.
III
Inequitable conduct is an equitable defense to patent
infringement that, if proved, bars enforcement of a patent.
This judge-made doctrine evolved from a trio of Supreme
Court cases that applied the doctrine of unclean hands to
dismiss patent cases involving egregious misconduct:
Keystone Driller Co. v. General Excavator Co., 290 U.S.
240 (1933), Hazel-Atlas Glass Co. v. Hartford-Empire Co.,
322 U.S. 238 (1944), overruled on other grounds by Stan-
dard Oil Co. v. United States, 429 U.S. 17 (1976), and
Precision Instruments Manufacturing Co. v. Automotive
Maintenance Machinery Co., 324 U.S. 806 (1945).
Keystone involved the manufacture and suppression of
evidence. 290 U.S. at 243. The patentee knew of “a
possible prior use” by a third party prior to filing a patent
application but did not inform the PTO. Id. at 243. After
the issuance of the patent, the patentee paid the prior
user to sign a false affidavit stating that his use was an
abandoned experiment and bought his agreement to keep
secret the details of the prior use and to suppress evi-
THERASENSE v. BECTON 16

dence. Id. With these preparations in place, the patentee
then asserted this patent, along with two other patents,
against Byers Machine Co. (“Byers”). Keystone Driller Co.
v. Byers Mach. Co., 4 F. Supp. 159 (N.D. Ohio 1929).
Unaware of the prior use and of the cover-up, the court
held the patents valid and infringed and granted an
injunction. Id. at 160.
The patentee then asserted the same patents against
General Excavator Co. and Osgood Co. and sought a
temporary injunction based on the decree in the previous
Byers case. Keystone, 290 U.S. at 242. The district court
denied the injunctions but made the defendants post
bonds. Id. The defendants discovered and introduced
evidence of the corrupt transaction between the patentee
and the prior user. Id. at 243-44. The district court
declined to dismiss these cases for unclean hands. Id. On
appeal, the Sixth Circuit reversed and remanded with
instructions to dismiss the complaints. Id. The Supreme
Court affirmed. Id. at 247.
The Supreme Court explained that if the corrupt
transaction between the patentee and the prior user had
been discovered in the previous Byers case, “the court
undoubtedly would have been warranted in holding it
sufficient to require dismissal of the cause of action.” Id.
at 246. Because the patentee used the Byers decree to
seek an injunction in the cases against General Excavator
Co. and Osgood Co., it did not come to the court with
clean hands, and dismissal of these cases was appropri-
ate. Id. at 247.
Like Keystone, Hazel-Atlas involved both the manu-
facture and suppression of evidence. 322 U.S. at 240.
Faced with “apparently insurmountable Patent Office
opposition,” the patentee’s attorneys wrote an article
describing the invention as a remarkable advance in the
17 THERASENSE v. BECTON

art and had William Clarke, a well-known expert, sign it
as his own and publish it in a trade journal. Id. After the
patentee submitted the Clarke article to the PTO in
support of its application, the PTO allowed a patent to
issue. Id. at 240-41.
The patentee brought suit against Hazel-Atlas Glass
Co. (“Hazel-Atlas”), alleging infringement of this patent.
Id. at 241. The district court found no infringement. Id.
On appeal, the patentee’s attorneys emphasized the
Clarke article, and the Third Circuit reversed the district
court’s judgment, holding the patent valid and infringed.
Id. The patentee then went to great lengths to conceal
the false authorship of the Clarke article, contacting
Clarke multiple times, including before and after Hazel-
Atlas’s investigators spoke to him. Id. at 242-43. After
Hazel-Atlas settled with the patentee, the patentee paid
Clarke a total of $8,000. Id. These facts surfaced in a
later suit, United States v. Hartford-Empire Co., 46 F.
Supp. 541 (N.D. Ohio 1942). Hazel-Atlas, 322 U.S. at 243.
On the basis of these newly-discovered facts, Hazel-
Atlas petitioned the Third Circuit to vacate its judgment,
but the court refused. Id. at 243-44. The Supreme Court
reversed. Id. at 251. The Supreme Court explained that
if the district court had learned of the patentee’s decep-
tion before the PTO, it would have been warranted in
dismissing the patentee’s case under the doctrine of
unclean hands. Id. at 250. Likewise, had the Third
Circuit learned of the patentee’s suppression of evidence,
it also could have dismissed the appeal. Id. Accordingly,
the Supreme Court vacated the judgment against Hazel-
Atlas and reinstated the original judgment dismissing the
patentee’s case. Id. at 251.
In Precision, the patentee suppressed evidence of per-
jury before the PTO and attempted to enforce the perjury-
THERASENSE v. BECTON 18

tainted patent. 324 U.S. at 816-20. The PTO had de-
clared an interference between two patent applications,
one filed by Larson and the other by Zimmerman. Id. at
809. Automotive Maintenance Machinery Co. (“Automo-
tive”) owned the Zimmerman application. Id. Larson
filed his preliminary statement in the PTO proceedings
with false dates of conception, disclosure, drawing, de-
scription, and reduction to practice. Later, he testified in
support of these false dates in an interference proceeding.
Id. at 809-10.
Automotive discovered this perjury but did not reveal
this information to the PTO. Id. at 818. Instead, Auto-
motive entered into a private settlement with Larson that
gave Automotive the rights to the Larson application and
suppressed evidence of Larson’s perjury. Id. at 813-14.
Automotive eventually received patents on both the
Larson and Zimmerman applications. Id. at 814. Despite
knowing that the Larson patent was tainted with perjury,
Automotive sought to enforce it against others. Id. at 807.
The district court found that Automotive had unclean
hands and dismissed the suit. Id. at 808. The Seventh
Circuit reversed. Id. The Supreme Court reversed the
Seventh Circuit’s decision, explaining that dismissal was
warranted because not only had the patentee failed to
disclose its knowledge of perjury to the PTO, it had ac-
tively suppressed evidence of the perjury and magnified
its effects. Id. at 818-19.
IV
The unclean hands cases of Keystone, Hazel-Atlas, and
Precision formed the basis for a new doctrine of inequita-
ble conduct that developed and evolved over time. Each of
these unclean hands cases before the Supreme Court
dealt with particularly egregious misconduct, including
perjury, the manufacture of false evidence, and the sup-
19 THERASENSE v. BECTON

pression of evidence. See Precision, 324 U.S. at 816-20;
Hazel-Atlas, 322 U.S. at 240; Keystone, 290 U.S. at 243.
Moreover, they all involved “deliberately planned and
carefully executed scheme[s] to defraud” not only the PTO
but also the courts. Hazel-Atlas, 322 U.S. at 245. As the
inequitable conduct doctrine evolved from these unclean
hands cases, it came to embrace a broader scope of mis-
conduct, including not only egregious affirmative acts of
misconduct intended to deceive both the PTO and the
courts but also the mere nondisclosure of information to
the PTO. Inequitable conduct also diverged from the
doctrine of unclean hands by adopting a different and
more potent remedy – unenforceability of the entire
patent rather than mere dismissal of the instant suit. See
Precision, 324 U.S. at 819 (dismissing suit); Hazel-Atlas,
322 U.S. at 251 (noting that the remedy was limited to
dismissal and did not render the patent unenforceable);
Keystone, 290 U.S. at 247 (affirming dismissal of suit).
In line with this wider scope and stronger remedy, in-
equitable conduct came to require a finding of both intent
to deceive and materiality. Star Scientific Inc. v. R.J.
Reynolds Tobacco Co., 537 F.3d 1357, 1365 (Fed. Cir.
2008). To prevail on the defense of inequitable conduct,
the accused infringer must prove that the applicant
misrepresented or omitted material information with the
specific intent to deceive the PTO. Id. The accused
infringer must prove both elements—intent and material-
ity—by clear and convincing evidence. Id. If the accused
infringer meets its burden, then the district court must
weigh the equities to determine whether the applicant’s
conduct before the PTO warrants rendering the entire
patent unenforceable. Id.
This court recognizes that the early unclean hands
cases do not present any standard for materiality. Need-
less to say, this court’s development of a materiality
THERASENSE v. BECTON 20

requirement for inequitable conduct does not (and cannot)
supplant Supreme Court precedent. Though inequitable
conduct developed from these cases, the unclean hands
doctrine remains available to supply a remedy for egre-
gious misconduct like that in the Supreme Court cases.
As inequitable conduct emerged from unclean hands,
the standards for intent to deceive and materiality have
fluctuated over time. In the past, this court has espoused
low standards for meeting the intent requirement, finding
it satisfied based on gross negligence or even negligence.
See Driscoll v. Cebalo, 731 F.2d 878, 885 (Fed. Cir. 1984)
(“Where they knew, or should have known, that the
withheld reference would be material to the PTO’s consid-
eration, their failure to disclose the reference is sufficient
proof of the existence of an intent to mislead the PTO.”);
Orthopedic Equip. Co., Inc. v. All Orthopedic Appliances,
Inc., 707 F.2d 1376, 1383-84 (Fed. Cir. 1983) (requiring
only gross negligence to sustain a finding of intent). This
court has also previously adopted a broad view of materi-
ality, using a “reasonable examiner” standard based on
the PTO’s 1977 amendment to Rule 56. See Am. Hoist &
Derrick Co. v. Sowa & Sons, Inc., 725 F.2d 1350, 1362
(Fed. Cir. 1984); see also 37 C.F.R. § 1.56 (1977) (a refer-
ence is material if “there is a substantial likelihood that a
reasonable examiner would consider it important in
deciding whether to allow the application to issue as a
patent”). Further weakening the showing needed to
establish inequitable conduct, this court then placed
intent and materiality together on a “sliding scale.” Am.
Hoist, 725 F.2d at 1362. This modification to the inequi-
table conduct doctrine held patents unenforceable based
on a reduced showing of intent if the record contained a
strong showing of materiality, and vice versa. In effect,
this change conflated, and diluted, the standards for both
intent and materiality.
21 THERASENSE v. BECTON

This court embraced these reduced standards for in-
tent and materiality to foster full disclosure to the PTO.
See id. at 1363. This new focus on encouraging disclosure
has had numerous unforeseen and unintended conse-
quences. Most prominently, inequitable conduct has
become a significant litigation strategy. A charge of
inequitable conduct conveniently expands discovery into
corporate practices before patent filing and disqualifies
the prosecuting attorney from the patentee’s litigation
team. See Stephen A. Merrill et al., Nat’l Research Coun-
cil of the Nat’l Academies, A Patent System for the 21st
Century 122 (2004). Moreover, inequitable conduct
charges cast a dark cloud over the patent’s validity and
paint the patentee as a bad actor. Because the doctrine
focuses on the moral turpitude of the patentee with ruin-
ous consequences for the reputation of his patent attor-
ney, it discourages settlement and deflects attention from
the merits of validity and infringement issues. Commit-
tee Position Paper, The Doctrine of Inequitable Conduct
and the Duty of Candor in Patent Prosecution: Its Current
Adverse Impact on the Operation of the United States
Patent System, 16 AIPLA Q.J. 74, 75 (1988). Inequitable
conduct disputes also “increas[e] the complexity, duration
and cost of patent infringement litigation that is already
notorious for its complexity and high cost.” Brief and
Appendix of the American Bar Ass’n as Amicus Curiae at
9.
Perhaps most importantly, the remedy for inequitable
conduct is the “atomic bomb” of patent law. Aventis
Pharma S.A. v. Amphastar Pharm., Inc., 525 F.3d 1334,
1349 (Fed. Cir. 2008) (Rader, J., dissenting). Unlike
validity defenses, which are claim specific, see 35 U.S.C.
§ 288, inequitable conduct regarding any single claim
renders the entire patent unenforceable. Kingsdown Med.
Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 877 (Fed.
THERASENSE v. BECTON 22

Cir. 1988). Unlike other deficiencies, inequitable conduct
cannot be cured by reissue, Aventis, 525 F.3d at 1341, n.6,
or reexamination, Molins PLC v. Textron, Inc., 48 F.3d
1172, 1182 (Fed. Cir. 1995). Moreover, the taint of a
finding of inequitable conduct can spread from a single
patent to render unenforceable other related patents and
applications in the same technology family. See, e.g.,
Consol. Aluminum Corp. v. Foseco Int’l Ltd., 910 F.2d 804,
808-12 (Fed. Cir. 1990). Thus, a finding of inequitable
conduct may endanger a substantial portion of a com-
pany’s patent portfolio.
A finding of inequitable conduct may also spawn anti-
trust and unfair competition claims. See Dow Chemical
Co. v. Exxon Corp., 139 F.3d 1470, 1471 (Fed. Cir. 1998)
(unfair competition claim); Walker Process Equip., Inc. v.
Food Mach. & Chem. Corp., 382 U.S. 172, 178 (1965)
(antitrust action for treble damages). Further, prevailing
on a claim of inequitable conduct often makes a case
“exceptional,” leading potentially to an award of attor-
neys’ fees under 35 U.S.C. § 285. Brasseler, U.S.A. I, L.P.
v. Stryker Sales Corp., 267 F.3d 1370, 1380 (Fed. Cir.
2001). A finding of inequitable conduct may also prove
the crime or fraud exception to the attorney-client privi-
lege. See In re Spalding Sports Worldwide, Inc., 203 F.3d
800, 807 (Fed. Cir. 2000).
With these far-reaching consequences, it is no wonder
that charging inequitable conduct has become a common
litigation tactic. One study estimated that eighty percent
of patent infringement cases included allegations of
inequitable conduct. Committee Position Paper at 75; see
also Christian Mammen, Controlling the “Plague”: Re-
forming the Doctrine of Inequitable Conduct, 24 Berkeley
Tech. L.J. 1329, 1358 (2009). Inequitable conduct “has
been overplayed, is appearing in nearly every patent suit,
and is cluttering up the patent system.” Kimberly-Clark
23 THERASENSE v. BECTON

Corp. v. Johnson & Johnson, 745 F.2d 1437, 1454 (Fed.
Cir. 1984). “[T]he habit of charging inequitable conduct in
almost every major patent case has become an absolute
plague. Reputable lawyers seem to feel compelled to
make the charge against other reputable lawyers on the
slenderest grounds, to represent their client’s interests
adequately, perhaps.” Burlington Indus., Inc. v. Dayco
Corp., 849 F.2d 1418, 1422 (Fed. Cir. 1988); see also
Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1358 (Fed.
Cir. 2008); Multiform Desiccants, Inc. v. Medzam, Ltd.,
133 F.3d 1473, 1482 (Fed. Cir. 1998); Magnivision, Inc. v.
Bonneau Co., 115 F.3d 956, 960 (Fed. Cir. 1997); Allied
Colloids Inc. v. Am. Cyanamid Co., 64 F.3d 1570, 1578
(Fed. Cir. 1995); Molins, 48 F.3d at 1182.
Left unfettered, the inequitable conduct doctrine has
plagued not only the courts but also the entire patent
system. Because allegations of inequitable conduct are
routinely brought on “the slenderest grounds,” Burlington
Indus., 849 F.2d at 1422, patent prosecutors constantly
confront the specter of inequitable conduct charges. With
inequitable conduct casting the shadow of a hangman’s
noose, it is unsurprising that patent prosecutors regularly
bury PTO examiners with a deluge of prior art references,
most of which have marginal value. See Brief for the
United States as Amicus Curiae at 17 (submission of nine
hundred references without any indication which ones
were most relevant); Brief of the Biotechnology Industry
Organization as Amicus Curiae at 7 (submission of eight-
een pages of cited references, including five pages listing
references to claims, office actions, declarations, amend-
ments, interview summaries, and other communications
in related applications). “Applicants disclose too much
prior art for the PTO to meaningfully consider, and do not
explain its significance, all out of fear that to do otherwise
risks a claim of inequitable conduct.” ABA Section of
THERASENSE v. BECTON 24

Intellectual Property Law, A Section White Paper: Agenda
for 21st Century Patent Reform 2 (2009). This tidal wave
of disclosure makes identifying the most relevant prior art
more difficult. See Brief for the United States as Amicus
Curiae at 1 (submission of “large numbers of prior art
references of questionable materiality . . . harms the
effectiveness of the examination process”). “This flood of
information strains the agency’s examining resources and
directly contributes to the backlog.” Id. at 17-18.
While honesty at the PTO is essential, low standards
for intent and materiality have inadvertently led to many
unintended consequences, among them, increased adjudi-
cation cost and complexity, reduced likelihood of settle-
ment, burdened courts, strained PTO resources, increased
PTO backlog, and impaired patent quality. This court
now tightens the standards for finding both intent and
materiality in order to redirect a doctrine that has been
overused to the detriment of the public.
V
To prevail on a claim of inequitable conduct, the ac-
cused infringer must prove that the patentee acted with
the specific intent to deceive the PTO. Star, 537 F.3d at
1366 (citing Kingsdown, 863 F.2d at 876). A finding that
the misrepresentation or omission amounts to gross
negligence or negligence under a “should have known”
standard does not satisfy this intent requirement.
Kingsdown, 863 F.2d at 876. “In a case involving nondis-
closure of information, clear and convincing evidence
must show that the applicant made a deliberate decision
to withhold a known material reference.” Molins, 48 F.3d
at 1181 (emphases added). In other words, the accused
infringer must prove by clear and convincing evidence
that the applicant knew of the reference, knew that it was
material, and made a deliberate decision to withhold it.
25 THERASENSE v. BECTON

This requirement of knowledge and deliberate action
has origins in the trio of Supreme Court cases that set in
motion the development of the inequitable conduct doc-
trine. In each of those cases, the patentee acted know-
ingly and deliberately with the purpose of defrauding the
PTO and the courts. See Precision, 325 U.S. at 815-16
(assertion of patent known to be tainted by perjury);
Hazel-Atlas, 322 U.S. at 245 (a “deliberately planned and
carefully executed scheme to defraud” the PTO involving
both bribery and perjury); Keystone, 290 U.S. at 246-47
(bribery and suppression of evidence).
Intent and materiality are separate requirements.
Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d
1354, 1359 (Fed. Cir. 2003). A district court should not
use a “sliding scale,” where a weak showing of intent may
be found sufficient based on a strong showing of material-
ity, and vice versa. Moreover, a district court may not
infer intent solely from materiality. Instead, a court must
weigh the evidence of intent to deceive independent of its
analysis of materiality. Proving that the applicant knew
of a reference, should have known of its materiality, and
decided not to submit it to the PTO does not prove specific
intent to deceive. See Star, 537 F.3d at 1366 (“the fact
that information later found material was not disclosed
cannot, by itself, satisfy the deceptive intent element of
inequitable conduct”).
Because direct evidence of deceptive intent is rare, a
district court may infer intent from indirect and circum-
stantial evidence. Larson Mfg. Co. of S.D., Inc. v. Alu-
minart Prods. Ltd., 559 F.3d 1317, 1340 (Fed. Cir. 2009).
However, to meet the clear and convincing evidence
standard, the specific intent to deceive must be “the single
most reasonable inference able to be drawn from the
evidence.” Star, 537 F.3d at 1366. Indeed, the evidence
“must be sufficient to require a finding of deceitful intent
THERASENSE v. BECTON 26

in the light of all the circumstances.” Kingsdown, 863
F.2d at 873 (emphasis added). Hence, when there are
multiple reasonable inferences that may be drawn, intent
to deceive cannot be found. See Scanner Techs. Corp. v.
ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir.
2008) (“Whenever evidence proffered to show either
materiality or intent is susceptible of multiple reasonable
inferences, a district court clearly errs in overlooking one
inference in favor of another equally reasonable infer-
ence.”). This court reviews the district court’s factual
findings regarding what reasonable inferences may be
drawn from the evidence for clear error. See Star, 537
F.3d at 1365.
Because the party alleging inequitable conduct bears
the burden of proof, the “patentee need not offer any good
faith explanation unless the accused infringer first . . .
prove[s] a threshold level of intent to deceive by clear and
convincing evidence.” Star, 537 F.3d at 1368. The ab-
sence of a good faith explanation for withholding a mate-
rial reference does not, by itself, prove intent to deceive.
VI
In the past, this court has tried to address the prolif-
eration of inequitable conduct charges by raising the
intent standard alone. In Kingsdown, this court made
clear that gross negligence alone was not enough to justify
an inference of intent to deceive. 863 F.2d at 876.
Kingsdown established that “the involved conduct . . .
must indicate sufficient culpability to require a finding of
intent to deceive.” Id. (emphasis added). This higher
intent standard, standing alone, did not reduce the num-
ber of inequitable conduct cases before the courts and did
not cure the problem of overdisclosure of marginally
relevant prior art to the PTO. To address these concerns,
this court adjusts as well the standard for materiality.
27 THERASENSE v. BECTON

In Corona Cord Tire Co. v. Dovan Chemical Corp., the
Supreme Court considered the materiality of a patentee’s
misrepresentation to the PTO. 276 U.S. 358, 373-74
(1928). The patentee had submitted two affidavits, falsely
claiming that the invention had been used in the produc-
tion of rubber goods when in fact only test slabs of rubber
had been produced. Id. Because the misrepresentation
was not the but-for cause of the patent’s issuance, the
Court held that it was immaterial and refused to extin-
guish the patent’s presumption of validity:
Production of rubber goods for use or sale was not
indispensable to the granting of the patent.
Hence the affidavits, though perhaps reckless,
were not the basis for it or essentially material to
its issue. The reasonable presumption of validity
furnished by the grant of the patent, therefore,
would not seem to be destroyed.
Id. at 374. Although Corona Cord does not address
unclean hands, the precursor to inequitable conduct, it
demonstrates the Court’s unwillingness to extinguish the
statutory presumption of validity where the patentee
made a misrepresentation to the PTO that did not affect
the issuance of the patent. Corona Cord thus supports a
but-for materiality standard for inequitable conduct,
particularly given that the severe remedy of unenforce-
ability for inequitable conduct far exceeds the mere re-
moval of a presumption of validity.
This court holds that, as a general matter, the mate-
riality required to establish inequitable conduct is but-for
materiality. When an applicant fails to disclose prior art
to the PTO, that prior art is but-for material if the PTO
would not have allowed a claim had it been aware of the
undisclosed prior art. Hence, in assessing the materiality
of a withheld reference, the court must determine
THERASENSE v. BECTON 28

whether the PTO would have allowed the claim if it had
been aware of the undisclosed reference. In making this
patentability determination, the court should apply the
preponderance of the evidence standard and give claims
their broadest reasonable construction. See Manual of
Patent Examining Procedure (“MPEP”) §§ 706, 2111 (8th
ed. Rev. 8, July 2010). Often the patentability of a claim
will be congruent with the validity determination—if a
claim is properly invalidated in district court based on the
deliberately withheld reference, then that reference is
necessarily material because a finding of invalidity in a
district court requires clear and convincing evidence, a
higher evidentiary burden than that used in prosecution
at the PTO. However, even if a district court does not
invalidate a claim based on a deliberately withheld refer-
ence, the reference may be material if it would have
blocked patent issuance under the PTO’s different eviden-
tiary standards. See MPEP §§ 706 (preponderance of the
evidence), 2111 (broadest reasonable construction).
As an equitable doctrine, inequitable conduct hinges
on basic fairness. “[T]he remedy imposed by a court of
equity should be commensurate with the violation.”
Columbus Bd. of Educ. v. Penick, 443 U.S. 449, 465
(1979). Because inequitable conduct renders an entire
patent (or even a patent family) unenforceable, as a
general rule, this doctrine should only be applied in
instances where the patentee’s misconduct resulted in the
unfair benefit of receiving an unwarranted claim. See
Star, 537 F.3d at 1366 (“[j]ust as it is inequitable to
permit a patentee who obtained his patent through delib-
erate misrepresentations or omissions of material infor-
mation to enforce the patent against others, it is also
inequitable to strike down an entire patent where the
patentee committed only minor missteps or acted with
minimal culpability”). After all, the patentee obtains no
29 THERASENSE v. BECTON

advantage from misconduct if the patent would have
issued anyway. See Keystone, 290 U.S. at 245 (“The
equitable powers of the court can never be exerted in
behalf of one . . . who by deceit or any unfair means has
gained an advantage.”) (emphasis added) (internal cita-
tions omitted). Moreover, enforcement of an otherwise
valid patent does not injure the public merely because of
misconduct, lurking somewhere in patent prosecution,
that was immaterial to the patent’s issuance.
Although but-for materiality generally must be proved
to satisfy the materiality prong of inequitable conduct,
this court recognizes an exception in cases of affirmative
egregious misconduct. This exception to the general rule
requiring but-for proof incorporates elements of the early
unclean hands cases before the Supreme Court, which
dealt with “deliberately planned and carefully executed
scheme[s]” to defraud the PTO and the courts. Hazel-
Atlas, 322 U.S. at 245. When the patentee has engaged in
affirmative acts of egregious misconduct, such as the
filing of an unmistakably false affidavit, the misconduct is
material. See Rohm & Haas Co. v. Crystal Chem. Co., 722
F.2d 1556, 1571 (Fed. Cir. 1983) (“there is no room to
argue that submission of false affidavits is not material”);
see also Refac Int’l, Ltd. v. Lotus Dev. Corp., 81 F.3d 1576,
1583 (Fed. Cir. 1996) (finding the intentional omission of
declarant’s employment with inventor’s company ren-
dered the affidavit false and that “[a]ffidavits are inher-
ently material”). After all, a patentee is unlikely to go to
great lengths to deceive the PTO with a falsehood unless
it believes that the falsehood will affect issuance of the
patent. See id. at 247 (pointing out that patentee’s law-
yers “went to considerable trouble and expense” to manu-
facture false evidence because they believed it was needed
to obtain issuance of the patent). Because neither mere
nondisclosure of prior art references to the PTO nor
THERASENSE v. BECTON 30

failure to mention prior art references in an affidavit
constitutes affirmative egregious misconduct, claims of
inequitable conduct that are based on such omissions
require proof of but-for materiality. By creating an excep-
tion to punish affirmative egregious acts without penaliz-
ing the failure to disclose information that would not have
changed the issuance decision, this court strikes a neces-
sary balance between encouraging honesty before the
PTO and preventing unfounded accusations of inequitable
conduct.
The concurrence mischaracterizes this exception for
affirmative egregious acts by limiting it to the example
provided – the filing of an unmistakably false affidavit.
Based on this misunderstanding, the concurrence asserts
that this court’s test for materiality is unduly rigid and
contrary to Supreme Court precedent. In actuality,
however, the materiality standard set forth in this opin-
ion includes an exception for affirmative acts of egregious
misconduct, not just the filing of false affidavits. Accord-
ingly, the general rule requiring but-for materiality
provides clear guidance to patent practitioners and courts,
while the egregious misconduct exception gives the test
sufficient flexibility to capture extraordinary circum-
stances. Thus, not only is this court’s approach sensitive
to varied facts and equitable considerations, it is also
consistent with the early unclean hands cases – all of
which dealt with egregious misconduct. See Precision,
324 U.S. at 816-20 (perjury and suppression of evidence);
Hazel-Atlas, 322 U.S. at 240 (manufacture and suppres-
sion of evidence); Keystone, 290 U.S. at 243 (bribery and
suppression of evidence).
The concurrence appears to eschew the use of any test
because, by definition, under any test for materiality, a
district court could not find inequitable conduct in cases
“where the conduct in question would not be defined as
31 THERASENSE v. BECTON

such [under the test].” Although equitable doctrines
require some measure of flexibility, abandoning the use of
tests entirely is contrary to both longstanding practice
and Supreme Court precedent. Courts have long applied
rules and tests in determining whether a particular
factual situation falls within the scope of an equitable
doctrine. See, e.g., Winter v. Natural Res. Def. Council,
Inc., 129 S.Ct. 365, 374 (2008) (four-factor test for pre-
liminary injunctions); eBay Inc. v. MercExchange, L.L.C.,
547 U.S. 388, 391 (2006) (four-factor test for permanent
injunctions); Gutierrez v. Waterman S.S. Corp., 373 U.S.
206, 215 (1963) (“the test of laches” requires both unrea-
sonable delay and consequent prejudice). Moreover, the
Supreme Court has made clear that such tests serve an
important purpose in limiting the discretion of district
courts.
[C]ourts of equity must be governed by rules and
precedents no less than the courts of law . . . [be-
cause] the alternative is to use each equity chan-
cellor’s conscience as a measure of equity, which
alternative would be as arbitrary and uncertain as
measuring distance by the length of each chancel-
lor's foot. . . .
After all, equitable rules that guide lower courts
reduce uncertainty, avoid unfair surprise, mini-
mize disparate treatment of similar cases, and
thereby help all litigants. . . .
Lonchar v. Thomas, 517 U.S. 314, 323 (1996) (internal
quotations omitted). This court therefore rejects the view
that its test – albeit flexible enough to capture varying
manifestations of egregious and abusive conduct – is
inappropriate in the context of the way inequitable con-
duct has metastasized.
THERASENSE v. BECTON 32

This court does not adopt the definition of materiality
in PTO Rule 56. As an initial matter, this court is not
bound by the definition of materiality in PTO rules. See
Merck & Co., Inc. v. Kessler, 80 F.3d 1543, 1549-50 (Fed.
Cir. 1996) (“[T]he broadest of the PTO’s rulemaking
powers . . . does NOT grant the Commissioner the author-
ity to issue substantive rules.”); see also 57 Fed. Reg. 2021
(Jan. 17, 1992) (The PTO stated that Rule 56 “do[es] not
define fraud or inequitable conduct.”). While this court
respects the PTO’s knowledge in its area of expertise, the
routine invocation of inequitable conduct in patent litiga-
tion has had adverse ramifications beyond its effect on the
PTO. As discussed above, patent prosecutors, inventors,
courts, and the public at large have an interest in reining
in inequitable conduct. Notably, both the American Bar
Association and the American Intellectual Property Law
Association, which represent a wide spectrum of interests,
support requiring but-for materiality (which is absent
from Rule 56).
This court has looked to the PTO’s Rule 56 in the past
as a starting point for determining materiality. See Am.
Hoist, 725 F.2d at 1363. Rule 56 has gone through sev-
eral revisions, from the “fraud” standard in its original
promulgation in 1949 to the “reasonable examiner” stan-
dard in 1977 to the current version, which includes any
information that “refutes or is inconsistent with” any
position the applicant took regarding patentability. See
37 C.F.R. § 1.56 (1950); 37 C.F.R. § 1.56 (1977); 37 C.F.R.
§ 1.56 (1992). Tying the materiality standard for inequi-
table conduct to PTO rules, which understandably change
from time to time, has led to uncertainty and inconsis-
tency in the development of the inequitable conduct
doctrine. See, e.g., Digital Control, Inc. v. Charles Mach.
Works, 437 F.3d 1309, 1316 (Fed. Cir. 2006) (applying
1977 version of Rule 56); Bruno Independent Living Aids,
33 THERASENSE v. BECTON

Inc. v. Acorn Mobility Servs., Ltd., 394 F.3d 1348, 1352-53
(Fed. Cir. 2005) (applying 1992 version of Rule 56).
Experience thus counsels against this court abdicating its
responsibility to determine the boundaries for inequitable
conduct.
This court declines to adopt the current version of
Rule 56 in defining inequitable conduct because reliance
on this standard has resulted in the very problems this
court sought to address by taking this case en banc. Rule
56 provides that information is material if it is not cumu-
lative and:
(1) It establishes, by itself or in combination with
other information, a prima facie case of unpat-
entability of a claim; or
(2) It refutes, or is inconsistent with, a position
the applicant takes in:
(i) Opposing an argument of unpatentabil-
ity relied on by the Office, or
(ii) Asserting an argument of patentability.
37 C.F.R. § 1.56. Rule 56 further provides that a “prima
facie case of unpatentability is established when the
information compels a conclusion that a claim is unpat-
entable . . . before any consideration is given to evidence
which may be submitted in an attempt to establish a
contrary conclusion of patentability.” Id. (emphasis
added). The first prong of Rule 56 is overly broad because
information is considered material even if the information
would be rendered irrelevant in light of subsequent ar-
gument or explanation by the patentee. Under this
standard, inequitable conduct could be found based on an
applicant’s failure to disclose information that a patent
examiner would readily agree was not relevant to the
prosecution after considering the patentee’s argument.
Likewise, the second prong of Rule 56 broadly encom-
THERASENSE v. BECTON 34

passes anything that could be considered marginally
relevant to patentability. If an applicant were to assert
that his invention would have been non-obvious, for
example, anything bearing any relation to obviousness
could be found material under the second prong of Rule
56. Because Rule 56 sets such a low bar for materiality,
adopting this standard would inevitably result in patent
prosecutors continuing the existing practice of disclosing
too much prior art of marginal relevance and patent
litigators continuing to charge inequitable conduct in
nearly every case as a litigation strategy.
The dissent’s critique of but-for materiality relies
heavily on definitions of materiality in other contexts.
Contrary to the implication made in the dissent, however,
but-for proof is required to establish common law fraud.
Common law fraud requires proof of reliance, which is
equivalent to the but-for test for materiality set forth in
this opinion. See 37 C.J.S. Fraud § 51 (“the reliance
element of a fraud claim requires that the misrepresenta-
tion actually induced the injured party to change its
course of action”); Restatement (Second) of Torts § 525
(1977) (fraud requires that the party “relies on the mis-
representation in acting or refraining from action”); see,
e.g., Exxon Mobil Corp. v. Ala. Dept. of Conservation &
Natural Res., 986 So. 2d 1093, 1116 (Ala. 2007) (reliance
element of fraud “can be met only if the plaintiff does, or
does not do, something that the plaintiff would or would
not have done but for the misrepresentation of a material
fact”); Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th
1226, 1239 (Cal. 1995) (same); Luscher v. Empkey, 206
Neb. 572, 576 (Neb. 1980) (same); Spencer v. Ellis, 216 Or.
554, 561 (Or. 1959) (same). The remaining examples in
the dissent, where but-for materiality is not required,
have limited relevance to inequitable conduct. While but-
for materiality may not be required in every context, it is
35 THERASENSE v. BECTON

appropriate for inequitable conduct in light of the numer-
ous adverse consequences of a looser standard.
Moreover, if this court were to consider standards of
materiality in other contexts, the most analogous area of
law is copyright. See Sony Corp. of Am. v. Univ. City
Studios, Inc., 464 U.S. 417, 439 (1984) (finding it appro-
priate to draw an analogy between copyrights and patents
“because of the historic kinship between patent law and
copyright law”). But-for proof is required to invalidate
both copyrights and trademarks based on applicant
misconduct. See 17 U.S.C. § 411(b)(1) (copyright); Citi-
bank, N.A. v. Citibanc Group, Inc., 724 F.2d 1540, 1544
(11th Cir. 1984) (trademarks). The dissent concedes that
“but for” materiality is required to cancel a trademark but
contends that it is not required to invalidate federal
registration of a copyright. Various courts have held
otherwise. See 2 Melville B. Nimmer & David Nimmer,
Nimmer on Copyright § 7.20[B][1] (rev. ed. 2010) (“plain-
tiff’s failure to inform the Copyright Office of given facts is
without substance, to the extent that the Office would
have registered the subject work even had it known those
facts”). Moreover, the Copyright Act has codified this “but
for” requirement, making clear that copyright registration
is sufficient to permit an infringement suit, even if the
certificate of registration contains inaccurate information,
unless “the inaccuracy of the information, if known, would
have caused the Register of Copyrights to refuse registra-
tion.” 17 U.S.C. § 411(b)(1); see also 2 Nimmer on Copy-
right § 7.20[B][2] (explaining that the materiality
“standard [set forth in the 2008 amendment to the Copy-
right Act] is well in line with the construction of the Act
prior to this amendment”).
THERASENSE v. BECTON 36

VII
In this case, the district court held the ’551 patent un-
enforceable for inequitable conduct because Abbott did not
disclose briefs it submitted to the EPO regarding the
European counterpart of the ’382 patent. Trial Opinion
at 1127. Because the district court found statements
made in the EPO briefs material under the PTO’s Rule 56
materiality standard, not under the but-for materiality
standard set forth in this opinion, this court vacates the
district court’s findings of materiality. Id. at 1113, 1115.
On remand, the district court should determine whether
the PTO would not have granted the patent but for Ab-
bott’s failure to disclose the EPO briefs. In particular, the
district court must determine whether the PTO would
have found Sanghera’s declaration and Pope’s accompany-
ing submission unpersuasive in overcoming the obvious-
ness rejection over the ’382 patent if Abbott had disclosed
the EPO briefs.
The district court found intent to deceive based on the
absence of a good faith explanation for failing to disclose
the EPO briefs. Id. at 1113-16. However, a “patentee
need not offer any good faith explanation unless the
accused infringer first . . . prove[s] a threshold level of
intent to deceive by clear and convincing evidence.” Star,
537 F.3d at 1368. The district court also relied upon the
“should have known” negligence standard in reaching its
finding of intent. See Trial Opinion at 1113 (“Attorney
Pope knew or should have known that the withheld
information would have been highly material to the
examiner”). Because the district court did not find intent
to deceive under the knowing and deliberate standard set
forth in this opinion, this court vacates the district court’s
findings of intent. Id. at 1113-16. On remand, the dis-
trict court should determine whether there is clear and
convincing evidence demonstrating that Sanghera or Pope
37 THERASENSE v. BECTON

knew of the EPO briefs, knew of their materiality, and
made the conscious decision not to disclose them in order
to deceive the PTO.
For the foregoing reasons, this court vacates the dis-
trict court’s finding of inequitable conduct and remands
for further proceedings consistent with this opinion. This
court also reinstates Parts I, III, and IV of the panel
decision reported at 593 F.3d 1289, affirming the district
court’s judgment of obviousness, noninfringement, and
anticipation, respectively. The judgment below is
AFFIRMED-IN-PART, VACATED-IN-PART, and
REMANDED-IN-PART.
COSTS
Each party shall bear its own costs.
 United States Court of Appeals
for the Federal Circuit
__________________________

THERASENSE, INC. (NOW KNOWN AS ABBOTT
DIABETES CARE, INC.)
AND ABBOTT LABORATORIES,
Plaintiffs-Appellants,
v.
BECTON, DICKINSON AND COMPANY,
AND NOVA BIOMEDICAL CORPORATION,
Defendants-Appellees,
AND

BAYER HEALTHCARE LLC,
Defendant-Appellee.
__________________________

2008-1511,-1512,-1513,-1514,-1595
__________________________

Appeals from the United States District Court for the
Northern District of California in consolidated Case Nos.
04-CV-2123, 04-CV-3327, 04-CV-3732, and 05-CV-3117,
Judge William H. Alsup.
___________________________

O’MALLEY, Circuit Judge, concurring in part and dissent-
ing in part.
Patent practitioners regularly call on this court to
provide clear guidelines. They seek to know under pre-
cisely what circumstances governing principles will be
applied, and precisely how they will be applied. While
THERASENSE v. BECTON 2

precision may be in the nature of what patent practitio-
ners do, and the desire for defining rules in the scientific
world understandable, the law does not always lend itself
to such precision. Indeed, when dealing with the applica-
tion of equitable principles and remedies, the law is
imprecise by design.
I understand and admire the majority’s desire to re-
spond to practitioners’ calls for precision and clarity. I
also understand its concern with perceived litigation
abuses surrounding assertions of inequitable conduct. I
believe, however, that the majority responds to that call
and addresses those concerns in ways that fail to ac-
knowledge and remain true to the equitable nature of the
doctrine it seeks to cabin.
I respectfully dissent from those portions of the major-
ity opinion which describe the test it directs lower courts
to apply in assessing materiality and which vacates and
remands for further inquiry the materiality determina-
tions made by the district court in this case. As explained
below, I concur in the remainder of the majority’s decision
and judgment.
I.
I concur in the majority’s decision to vacate and re-
mand the judgment of the district court with instructions
to reconsider its finding of inequitable conduct. Specifi-
cally, because the district court understandably referred
to standards governing its intent determination drawn
from our prior case law, the district court should be given
the opportunity to assess, in the first instance, whether
the evidence, and its credibility determinations, support a
finding of a specific intent to deceive. In this regard, like
the other dissenters, I agree with the majority’s holding
that, as a prerequisite to a finding of inequitable conduct,
a district court must find that the conduct at issue is of
3 THERASENSE v. BECTON

“sufficient culpability to require a finding of intent to
deceive.” Kingsdown Med. Consultants, Ltd. v. Hollister
Inc., 863 F.2d 867, 876 (Fed. Cir. 1988). In making this
determination, intent to deceive and materiality must be
found separately. District courts may not employ a “slid-
ing scale,” nor may they infer intent from materiality
alone. 1 Finally, I agree that a district court may infer
intent from indirect and circumstantial evidence, but only
where it is “the single most reasonable inference able to
be drawn from the evidence.” Maj. Op. at 25 (quoting
Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d
1357, 1366 (Fed. Cir. 2008)).
II.
It is at this point that my views, respectfully, diverge
from those of both the majority and the other dissenters.
This is so because, when addressing the types of conduct
that should be deemed of sufficient concern to allow for a
finding of inequitable conduct, both the majority and
dissent strain too hard to impose hard and fast rules.
“The essence of equity jurisdiction has been the power
of the Chancellor to do equity and to mould each decree to
the necessities of the particular case.” Weinberger v.
Romero-Barcelo, 456 U.S. 305, 312 (1982) (quoting Hecht
Co. v. Bowles, 321 U.S. 321, 329 (1944)). While courts of

1 While I join this portion of the majority opinion
(Part V), I do so with the understanding that the majority
does not hold that it is impermissible for a court to con-
sider the level of materiality as circumstantial evidence in
its intent analysis. As in all other legal inquiries involv-
ing multiple elements, the district court may rely on the
same items of evidence in both its materiality and intent
inquiries. A district court must, however, reach separate
conclusions of intent and materiality and may not base a
finding of specific intent to deceive on materiality alone,
regardless of the level of materiality.
THERASENSE v. BECTON 4

equity “must be governed by rules and precedents no less
than the courts of law,” Lonchar v. Thomas, 517 U.S. 314,
323 (1996), “[f]lexibility rather than rigidity has distin-
guished” equitable jurisdiction, Weinberger, 456 U.S. at
312. “Equity eschews mechanical rules; it depends on
flexibility.” Holmberg v. Armbrecht, 327 U.S. 392, 396
(1946).
Traditional notions of equitable relief apply with
equal force in the context of patents. eBay Inc. v. Mercex-
change, LLC, 547 U.S. 388, 393-94 (2006) (holding that a
categorical rule of granting an injunction to a prevailing
patent holder abrogates a district court’s discretion in
granting equitable relief and runs afoul of traditional
principles of equity). We have long recognized that the
doctrine of inequitable conduct is based in equity.
Kingsdown, 863 F.2d at 876 (“[T]he ultimate question of
whether inequitable conduct occurred is equitable in
nature.”). Despite this longstanding principle, both the
majority and dissenting opinions eschew flexibility in
favor of rigidity. Both opinions suggest tests for material-
ity to apply in all cases. Their respective materiality
inquiries are black or white, while equity requires judicial
consideration of shades of gray.
The majority defines materiality under a but-for test,
with an exception for intentionally false affidavits filed
with the PTO. 2 Maj. Op. at 27-30. The dissent, on the

2 The majority responds to this characterization,
and to the general criticism in this opinion, by defining its
test more broadly and acknowledging a degree of flexibil-
ity within its four corners. For that, I applaud the major-
ity. I do not think, however, that this additional
explanation is sufficient to address all of the concerns
expressed in this opinion. I remain of the view that the
test I propose here is the most consistent with the doc-
trine’s origins.
5 THERASENSE v. BECTON

other hand, defines materiality according to Rule 56.
Both tests fail to provide district courts with flexibility to
find inequitable conduct in an extraordinary case where
the conduct in question would not be defined as such
under either test. This result is contrary to the very
nature of equity and centuries of Supreme Court prece-
dent. I cannot, accordingly, lend support to either of the
immutable tests proposed by my colleagues.
While the majority states that, despite the strictures
of the test it adopts, “the unclean hands doctrine remains
available to supply a remedy for egregious misconduct
like that in the Supreme Court cases,” that statement
does not address the concerns I express here. 3 Maj. Op.
at 20. Since, as the majority painstakingly explains, the
doctrine of inequitable conduct we are defining grew out
of those “unclean hands” cases, the asserted dichotomy is
a false one. See Consol. Aluminum Corp. v. Foseco Int'l,
Ltd., 910 F.2d 804, 812 (Fed. Cir. 1990) (“Indeed, what we
have termed ’inequitable conduct‘ is no more than the
unclean hands doctrine applied to particular conduct
before the PTO.”) (citations omitted). There is no support
– and the majority cites none – for the proposition that
inequitable conduct is somehow independent of the un-
clean hands principles the Supreme Court described and
explained in its trilogy of cases. The remainder of the
majority opinion makes clear, moreover, that the major-
ity’s purpose, and that of the test it adopts, is to delimit
and narrow the contours of the unclean hands doctrine

3 Indeed, this language raises some additional con-
cerns. If “unclean hands” remains available in cases of
PTO misconduct, charges of unclean hands could simply
supplant the very allegations of inequitable conduct the
majority seeks to curb.
THERASENSE v. BECTON 6

when applied to the application process before the PTO,
not to acknowledge flexibility in it. 4
We should adopt a test that provides as much guid-
ance to district courts and patent applicants as possible,
but, in doing so, we may not disregard the equitable
nature of the inquiry at hand. Thus, we must make clear
that, while we believe the test we offer encompasses
virtually all forms of conduct sufficient to warrant a
finding of inequitable conduct, we leave open the possibil-
ity that some form of intentional misconduct which we do
not currently envision could warrant equitable relief.
This approach respects the Supreme Court’s recognition
that courts of equity “exercise judgment in light of prior
precedent, but with awareness of the fact that specific
circumstances, often hard to predict in advance, could
warrant special treatment in an appropriate case.” Hol-
land v. Florida, 130 S. Ct. 2549, 2563 (2010).
Consistent with the flexible nature of equity jurisdic-
tion, moreover, we should recognize that determining the
proper remedy for a given instance of inequitable conduct
is within the discretion of district courts, subject, of
course, to statutory constraints. Keystone Driller Co. v.
Gen. Excavator Co., 290 U.S. 240, 245-46 (1933) (“[Courts
of equity] are not bound by formula or restrained by any
limitation that tends to trammel the free and just exercise
of discretion.”); Mills v. Elec. Auto-Lite Co., 396 U.S. 375,
386 (1970) (“In selecting a remedy the lower courts should

4 At the other end of the spectrum, the dissent’s ac-
knowledgement that a district court retains discretion to
decline to find inequitable conduct even in the face of
evidence of materiality and intent is similarly insufficient
to undercut the unyielding nature of the test for inequita-
ble conduct it adopts. It clearly does not allow, for in-
stance, for a finding of inequitable conduct for conduct not
encompassed by Rule 56.
7 THERASENSE v. BECTON

exercise the sound discretion which guides the determina-
tions of courts of equity, keeping in mind the role of equity
as the instrument for nice adjustment and reconciliation
between the public interest and private needs as well as
between competing private claims.”) (internal quotations
and citations omitted). While we have held previously
that a finding of inequitable conduct renders unenforce-
able all claims of the wrongly procured patent and, in
certain circumstances, related patents, this singular
remedy is neither compelled by statute, nor consistent
with the equitable nature of the doctrine. 5 Accordingly, I
would overrule those cases and hold that, in the exercise
of its discretion, a district court may choose to render
fewer than all claims unenforceable, may simply dismiss
the action before it, or may fashion some other reasonable
remedy, so long as the remedy imposed by the court is
“commensurate with the violation.” Columbus Bd. of
Educ. v. Penick, 443 U.S. 449, 465 (1979); see also Hecht,
321 U.S. at 329 (“The essence of equity jurisdiction has

5 While the 1952 Act codified the defense of unclean
hands in paragraph (1) of 35 U.S.C. § 282, it did not
specify a remedy. See 35 U.S.C. § 282 (providing that
“unenforceability” is a defense to an infringement action);
P. J. Federico, “Commentary on the New Patent Act,” 75
J. PAT. & TRADEMARK OFF. SOC'Y 161, 215 (1993) (explain-
ing that paragraph (1) includes “equitable defenses such
as laches, estoppel and unclean hands”). The statute,
thus, provides no guidance as to whether, in its equitable
discretion, a court may render some, but not all, claims
unenforceable. In J.P. Stevens & Co. v. Lex Tex, Ltd., 747
F.2d 1553 (Fed. Cir. 1984), we cited cases collected from a
treatise for the proposition that inequitable conduct
renders all of a patent’s claims unenforceable. Id. at
1561. None of those cases, however, are binding on this
court and, for the reasons stated above, I find this propo-
sition inconsistent with the power of the Chancellor to
“mould” each decree to the necessities of the particular
case.
THERASENSE v. BECTON 8

been the power of the Chancellor to do equity and to
mould each decree to the necessities of the particular
case.”); Miller v. French, 530 U.S. 327, 360 (2000) (“These
cases recognize the importance of permitting courts in
equity cases to tailor relief . . . to the exigencies of particu-
lar cases and individual circumstances. In doing so, they
recognize the fact that in certain circumstances justice
requires the flexibility necessary to treat different cases
differently – the rationale that underlies equity itself.”)
(Breyer, J., dissenting) (emphasis added). Allowing for
flexibility in the remedy would reduce the incentive to use
inequitable conduct as a litigation tactic and address
many of the concerns that trouble my colleagues and were
expressed by Abbott and certain amici in these en banc
proceedings. 6
III.
To provide guidance to district courts to aid in the ex-
ercise of their discretion in inequitable conduct inquiries –
beyond the Supreme Court’s direction that “any willful act
concerning the cause of action which rightfully can be said
to transgress equitable standards of conduct is sufficient
cause for the invocation of the maxim by the chancellor,”
Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co.,
324 U.S. 806, 814-16 (1945) – I believe such guidance
should reflect the concerns expressed by the Supreme
Court in the case trilogy from which the doctrine
emerged. As the Court said in Precision, at minimum,

6 One of the evils described by Abbott and amici is
the possibility of an order barring enforcement of a patent
based on misrepresentation of an applicant’s “small entity
status.” To the extent unenforceability may be too harsh
in such circumstances – a point on which I do not opine –
district courts would have discretion to fashion some
lesser remedy to address that form of intentional decep-
tion.
9 THERASENSE v. BECTON

equity requires that, when seeking the public benefit of a
government sponsored monopoly, applicants must act
“fairly and without fraud or deceit.” Id. Similarly, in
Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S.
238 (1944), the Court found that, regardless of the impact
of such conduct on patentability, the doors of equity
should be closed to a patentee who presented to the
patent office, as impartial, an article it authored. Id. at
247.
With this general guidance in mind, I believe conduct
should be deemed material where: (1) but for the conduct
(whether it be in the form of an affirmative act or inten-
tional non-disclosure), the patent would not have issued
(as Chief Judge Rader explains that concept in the major-
ity opinion); (2) the conduct constitutes a false or mislead-
ing representation of fact (rendered so either because the
statement made is false on its face or information is
omitted which, if known, would render the representation
false or misleading); or (3) the district court finds that the
behavior is so offensive that the court is left with a firm
conviction that the integrity of the PTO process as to the
application at issue was wholly undermined. In adopting
such a test, I also believe we should confirm, as explained
above, that the equitable nature of the doctrine demands
that this test provide guidance only – albeit firm guidance
– to district courts with respect to the exercise of their
discretion in the face of inequitable conduct claims.
For the reasons ably articulated by the majority, I do
not believe we should direct district courts to use Rule 56
as the measure of materiality in this context. As the
majority points out, among other things, it is both too
vague and too broad – leaving room for findings of inequi-
table conduct in circumstances not sufficiently egregious
to fall within the bounds of the Supreme Court trilogy
from which the doctrine emerged. I also cannot agree
THERASENSE v. BECTON 10

completely with the test proposed by the majority. Given
the scope and complexity of PTO proceedings, misconduct
can and does occur outside the context of written affida-
vits. In certain circumstances, regardless of the impact
on patent issuance, such misconduct is sufficiently egre-
gious that, when accompanied by the requisite intent to
deceive, it could support a finding of inequitable conduct.
Indeed, in Hazel-Atlas, the article in question was not
presented to the PTO through an affidavit. 322 U.S. at
240-41. Both tests, moreover, fail to allow room to ad-
dress conduct beyond their contours which equity should
not ignore.
IV.
Applying the test I propose, or any reasonable test for
materiality that comports with Supreme Court precedent,
I would affirm the district court’s finding that the nondis-
closure of information in this case was material. Indeed, I
believe the omissions here qualify as material under the
majority’s “but-for plus” standard and that, even accept-
ing that test as the governing standard, a remand on the
issue of materiality is neither necessary nor appropriate.
As the other dissenters note, whether the prior art
taught that glucose sensors could be used to test whole
blood without a protective membrane was a key focus of
the PTO examiner’s patentability inquiry. After request-
ing permission to submit extrinsic evidence in response to
a rejection from the PTO, Abbott submitted a sworn
declaration from its expert Dr. Gordon Sanghera accom-
panied by statements from its counsel Lawrence Pope.
Both contained representations to the examiner regarding
what they alleged to be the appropriate understanding of
the critical prior art reference with which the examiner
was concerned. Among other things, they asserted un-
equivocally that one skilled in the art would not have read
11 THERASENSE v. BECTON

the prior art to say that use of a protective membrane
with whole blood samples was optional. Omitted from
these declarations was the fact that Abbott had made
contrary representations on this same matter to the
European Patent Office (“EPO”) in connection with the
earlier prosecution of a European patent application.
There, Abbott represented that it was “unequivocally
clear” that the same prior art language meant that the
protective membrane was, in fact, optional.
The district court concluded that these non-
disclosures were “highly material” because “they centered
on the precise sentence in question [in the prior art refer-
ence], its meaning and what it taught.” Therasense, Inc.
v. Becton, Dickson & Co., 565 F. Supp. 2d 1088, 1112
(N.D. Cal. 2008). More specifically, the district court
found:
This is unlike the situation where a reference is
already before an examiner who can draw his or
her own conclusions as to what it teaches and is
able to discount spin offered by counsel. See In-
nogenetics, N.V. v. Abbott Labs., 512 F.3d 1363,
1379 (Fed. Cir. 2008). Although the key sentence
itself was indeed before Examiner Shay, the in-
quiry had shifted to a point of extrinsic evidence.
That is, Examiner Shay had acquiesced to Attor-
ney Pope’s request to resort to extrinsic evidence
to show that the sentence would have been under-
stood by skilled artisans differently than its words
suggested. Having received permission to supply
extrinsic evidence, Attorney Pope was duty-bound
to present any inconsistent extrinsic information
known to him. In the arena of extrinsic evidence,
the examiner was unable to fend for himself. He
had no way of knowing what, if any, contrary ex-
trinsic information had been left out of the Sang-
THERASENSE v. BECTON 12

hera declaration. He was completely dependent
on Attorney Pope and Dr. Sanghera to fully dis-
close any extrinsic information, pro and con,
known to them on the factual point covered by the
submission.
Id. The district court’s materiality conclusions were
thorough and correct. They should be affirmed.
V.
I do not weigh in on the policy debate between the ma-
jority and the dissenters. There are merits to the con-
cerns expressed by each, and they may be relevant, in
varying degrees, to the exercise of a court’s discretion in a
particular case. Policy concerns cannot, however, justify
adopting broad legal standards that diverge from doc-
trines explicated by the Supreme Court. A desire to
provide immutable guidance to lower courts and parties
similarly is not sufficient to justify the court’s attempt to
corral an equitable doctrine with neat tests.
To the extent there are concerns with litigation
abuses surrounding the improper use of this otherwise
important doctrine, there are vehicles available to the
district court to address those concerns. Careful applica-
tion of the pleading requirements set forth in Exergen
Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed. Cir.
2009), early case management techniques designed to
ferret out and test unsupported inequitable conduct
claims, orders to stay discovery or consideration of such
claims pending all other determinations in the case, or
even sanctions, are all tools district courts can employ
where appropriate.
For these reasons, I concur in part in and dissent in
part from the decision the majority announces today. I
would leave to district courts the discretion to apply this
13 THERASENSE v. BECTON

equitable doctrine to the unique circumstances with
which they are presented, while encouraging them to keep
in sight their obligation to guard against abuses of it.
 United States Court of Appeals
for the Federal Circuit
__________________________

THERASENSE, INC. (NOW KNOWN AS ABBOTT
DIABETES CARE, INC.)
AND ABBOTT LABORATORIES,
Plaintiffs-Appellants,

v.
BECTON, DICKINSON AND COMPANY,
AND NOVA BIOMEDICAL CORPORATION,
Defendants-Appellees,

AND

BAYER HEALTHCARE LLC,
Defendant-Appellee.
__________________________

2008-1511,-1512,-1513,-1514,-1595
__________________________

Appeals from the United States District Court for the
Northern District of California in consolidated Case Nos.
04-CV-2123, 04-CV-3327, 04-CV-3732, and 05-CV-3117,
Judge William H. Alsup.
__________________________

BRYSON, Circuit Judge, with whom GAJARSA, DYK, and
PROST, Circuit Judges, join, dissenting.

There is broad consensus that the law of inequitable
conduct is in an unsatisfactory state and needs adjust-
THERASENSE v. BECTON 2

ment. In recent years, differing standards have been
applied in determining whether particular conduct rises
to the level of inequitable conduct sufficient to render a
patent unenforceable. That doctrinal uncertainty has had
adverse consequences both for patent litigation and for
the PTO. In litigation, counterclaims of inequitable
conduct have been raised in too many cases and have
proved difficult to resolve. In the PTO, the lack of a clear
and uniform standard for inequitable conduct has led
some patent prosecutors to err on the side of “over-
disclosure” in order to avoid the risk of rendering all
claims of an otherwise valid patent unenforceable because
of the omission of some marginally relevant reference. As
a result, examiners have frequently been swamped with
an excess of prior art references having little relevance to
the applications before them.

These problems can be traced, at least in part, to doc-
trinal uncertainty on three points: First, what standard
of intent should be applied in assessing an allegation that
an applicant has made false representations or failed to
disclose material facts to the PTO. Second, what stan-
dard of materiality should be applied to such misrepre-
sentations or nondisclosures. Third, whether there
should be a “sliding scale” under which a strong showing
of either materiality or intent should be able to make up
for a weaker showing on the other element.

There is substantial agreement as to the proper reso-
lution of two of those three issues. First, the parties to
this case and most of the amici agree that proof of inequi-
table conduct should require a showing of specific intent
to deceive the PTO; negligence, or even gross negligence,
should not be enough. Second, the parties and most of the
amici agree that a party invoking the defense of inequita-
ble conduct should be required to prove both specific
3 THERASENSE v. BECTON

intent and materiality by clear and convincing evidence;
there should be no “sliding scale” whereby a strong show-
ing as to one element can make up for weaker proof as to
the other.

However, on the remaining issue—the proper stan-
dard to apply in determining whether the conduct at issue
is sufficiently material to render the patent in suit unen-
forceable—there is sharp disagreement. That disagree-
ment is what divides the court in this case. The majority
takes the position that nondisclosures should be deemed
sufficiently material to trigger the defense of inequitable
conduct only if, had the matter in question been disclosed,
the applicant would not have obtained a patent. That
position, however, marks a significant and, I believe,
unwise departure from this court’s precedents. Since its
first days, this court has looked to the PTO’s disclosure
rule, Rule 56, 37 C.F.R. § 1.56, as the standard for defin-
ing materiality in inequitable conduct cases involving the
failure to disclose material information. In its current
form, that rule provides that information is material not
only if it establishes a prima facie case of unpatentability,
but also if it refutes or is inconsistent with a position the
applicant takes before the PTO with respect to patentabil-
ity. I would adhere to the materiality standard set forth
in the PTO’s disclosure rule for two basic reasons: First,
the PTO is in the best position to know what information
examiners need to conduct effective and efficient exami-
nations, i.e., what information is material to the examina-
tion process. Second, the higher standard of materiality
adopted by the majority will not provide appropriate
incentives for patent applicants to comply with the disclo-
sure obligations the PTO places upon them.

Twenty-three years ago, in Kingsdown Medical Con-
sultants v. Hollister, Inc., this court was faced with con-
THERASENSE v. BECTON 4

flicting precedents regarding the “intent” requirement of
the doctrine of inequitable conduct. The court resolved
those conflicts in an en banc decision that all members of
the court joined. 863 F.2d 867 (Fed. Cir. 1988) (en banc).
The court held that even proof of “gross negligence” is not
sufficient to satisfy the intent to deceive requirement.
Instead, the court concluded that in order for particular
conduct to justify holding a patent unenforceable, the
conduct in question, “viewed in light of all the evidence,
including evidence indicative of good faith, must indicate
sufficient culpability to require a finding of intent to
deceive.” Id. at 876.

The Kingsdown court did not find it necessary to ad-
dress the proper standard for determining materiality,
because that issue had been addressed in earlier cases.
Four years before Kingsdown, a five-judge panel opinion
in J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553 (Fed.
Cir. 1984), had addressed the materiality requirement
and made the following observations, which have re-
mained the law until today: First, the court endorsed the
principle, previously adopted by our predecessor court,
that inequitable conduct is broader than common law
fraud. Id. at 1559 (citing Norton v. Curtiss, 433 F.3d 779,
793 (CCPA 1970)). Second, the court explained that
inequitable conduct could be based on the failure to
disclose material information as well as the submission of
false material information. Id. Third, the court stated
that the disclosure requirement set forth in PTO Rule 56,
37 C.F.R. § 1.56 (1984), established “the appropriate
starting point” because that standard “most closely aligns
with how one ought to conduct business with the PTO.”
J.P. Stevens, 747 F.2d at 1559. In so doing, the court
referred to its earlier opinion in Driscoll v. Cebalo, 731
F.2d 878, 884 (Fed. Cir. 1984), where the court had stated
that PTO Rule 56 “essentially represents a codification of
5 THERASENSE v. BECTON

the ‘clean hands’ maxim as applied to patent applicants.”
Moreover, just a year before the decision in Kingsdown,
the court in Gardco Manufacturing, Inc. v. Herst Lighting
Co., 820 F.2d 1209, 1214 (Fed. Cir. 1987), had reiterated
that Rule 56 set forth the appropriate standard for de-
termining the materiality of undisclosed information in
an inequitable conduct case.

Since that time there have been occasional departures
from the holding in Kingsdown as to the requisite level of
intent to establish inequitable conduct. As to materiality,
however, the court has consistently held that the PTO’s
Rule 56 sets the proper baseline for determining material-
ity, although there has been some variation in our deci-
sions with regard to which version of the PTO’s rule
applies in particular cases.

The appropriate cure for departures from the princi-
ples of inequitable conduct that were put in place at the
time of Kingsdown would be to reaffirm those principles,
as summarized above. The majority, however, has taken
a far more radical approach. With respect to the issue of
materiality, the majority has adopted a test that has no
support in this court’s cases and is inconsistent with a
long line of precedents dating back to the early years of
this court. The effect of the majority’s new test, moreover,
does not merely reform the doctrine of inequitable con-
duct, but comes close to abolishing it altogether. I re-
spectfully dissent from that aspect of the court’s decision.
In my view, what is needed is not to jettison the doctrine
of inequitable conduct, but simply to reaffirm the princi-
ples set down in the early years of this court in light of
the provisions of the current PTO disclosure rule, and
require adherence to those principles. As applied to the
duty of an applicant or attorney to disclose material
THERASENSE v. BECTON 6

information in the course of prosecuting a patent applica-
tion, those principles can be summarized as follows:

1. Inequitable conduct requires proof, by clear and
convincing evidence, that the applicant or attorney in-
tended to mislead the PTO with respect to a material
matter.

2. Materiality is measured by what the PTO demands
of those who apply for and prosecute patent applications.
The disclosure standard that the PTO expects those
parties to comply with is set forth in the current version
of the PTO’s Rule 56. Under that standard, inequitable
conduct requires proof that the information at issue either
established, by itself or in combination with other infor-
mation, a prima facie case of unpatentability, or was
inconsistent with a position taken by the applicant before
the PTO with respect to patentability.

3. Intent to mislead and materiality must be sepa-
rately proved. There is no “sliding scale” under which the
degree of intent that must be proved depends on the
strength of the showing as to the materiality of the infor-
mation at issue. 1

1 It is important to distinguish between relaxing
the required proof of intent if the proof of materiality is
strong, which is impermissible, as opposed to considering
the degree of materiality as relevant to the issue of intent,
which is appropriate, particularly given that direct evi-
dence of intent, such as an admission of deceptive pur-
pose, is seldom available. See Cargill, Inc. v. Canbra
Foods, Ltd., 476 F.3d 1359, 1366 (Fed. Cir. 2007); Ferring
B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1190-91 (Fed. Cir.
2006); GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274
(Fed. Cir. 2001); Paragon Podiatry Lab., Inc. v. KLM
Labs., Inc., 984 F.2d 1182, 1189 (Fed. Cir. 1993); Merck &
7 THERASENSE v. BECTON

These principles not only are consistent with our law
on inequitable conduct but, if implemented consistently,
should be sufficient to address the practical problems that
have arisen under the current regime. While the majority
is correct that inequitable conduct claims have been
raised too often in the past, there are less Draconian
means of addressing that problem than those proposed by
the majority. First, the refinements to the doctrine
suggested here would be likely to significantly reduce the
frequency with which the defense is raised. Second, this
court has recently held that the strict pleading require-
ments of Fed. R. Civ. P. 9(b) apply to counterclaims of
inequitable conduct, requiring detailed factual averments
and not merely notice pleading with respect to such
claims. Such pleading requirements are likely to discour-
age baseless counterclaims. See Exergen Corp. v. Wal-
Mart Stores, Inc., 575 F.3d 1312, 1326-29 (Fed. Cir. 2009).
Third, assertions of inequitable conduct that lack factual
and legal support can be controlled by trial courts through
application of the sanctions provided by Fed. R. Civ. P. 11.
Finally, as this court has repeatedly held, the doctrine of
inequitable conduct is an equitable doctrine, and even
when the elements of intent and materiality are satisfied,
it remains for the district court to determine, in the
exercise of its equitable judgment, whether, “in light of all
the particular circumstances, the conduct of the patentee
is so culpable that its patent should not be enforced.”
LaBounty Mfg., Inc. v. U.S. Int’l Trade Comm’n, 958 F.2d
1066, 1070 (Fed. Cir. 1992).

With regard to the problem of “over-disclosure” of
large numbers of marginally relevant references in the
course of patent prosecution, the PTO in its amicus brief

Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1422
(Fed. Cir. 1989).
THERASENSE v. BECTON 8

expresses confidence that strict judicial adherence to the
“clear and convincing” standard by which accused infring-
ers must prove specific intent to deceive the PTO will
largely solve that problem. Since the problem of over-
disclosure directly affects the PTO, there is no reason not
to credit the PTO’s assertion that a tightening of the
intent element of the inequitable conduct doctrine should
be sufficient to address the problem and that a drastic
modification of the materiality element not only is not
required, but would be contrary to the PTO’s interest in
efficient examinations.

II

The majority holds that a failure to disclose informa-
tion is “material” for purposes of inequitable conduct only
if it satisfies the “but for” test; i.e., the conduct must be
such that, but for the conduct, the claims would have been
found unpatentable. This is not a tweak to the doctrine of
inequitable conduct; it is fundamental change that would
have the effect of eliminating the independent role of the
doctrine of inequitable conduct as to disclosure obligations
except in limited circumstances. This court has repeat-
edly rejected the “but for” test as too restrictive in light of
the policies served by the inequitable conduct doctrine.
See Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d
1418, 1421 (Fed. Cir. 1989); see also Purdue Pharma L.P.
v. Endo Pharms. Inc., 438 F.3d 1123, 1132 (Fed. Cir.
2006); Hoffmann-LaRoche, Inc. v. Promega Corp., 323
F.3d 1354, 1368 (Fed. Cir. 2003); Molins PLC v. Textron,
Inc., 48 F.3d 1172, 1179-80 (Fed. Cir. 1995); A.B. Dick Co.
v. Burroughs Corp., 798 F.2d 1392, 1396 (Fed. Cir. 1986).
Those policies dictate that it should continue to do so.

As the PTO persuasively argues in its amicus brief,
the “but for” standard for materiality is too restrictive to
9 THERASENSE v. BECTON

serve the purposes that the doctrine of inequitable con-
duct was designed to promote. If a failure to disclose
constitutes inequitable conduct only when a proper disclo-
sure would result in rejection of a claim, there will be
little incentive for applicants to be candid with the PTO,
because in most instances the sanction of inequitable
conduct will apply only if the claims that issue are invalid
anyway. For example, under the “but for” test of materi-
ality, an applicant considering whether to disclose facts
about a possible prior use of the invention would have
little reason to disclose those facts to the PTO. If the
applicant remained silent about the prior use, the patent
issued, and the prior use was never discovered, the appli-
cant would benefit from the nondisclosure. But even if
the prior use was discovered during litigation, the failure
to disclose would be held to constitute inequitable conduct
only if the prior use otherwise rendered the relevant
claims invalid. The applicant would thus lose nothing by
concealing the prior use from the PTO, because he would
not be at risk of losing the right to enforce an otherwise
valid patent.

In that situation, particularly if the opportunity to ob-
tain a valuable patent is at stake, there will be no in-
ducement for the applicant to be forthcoming. If the
applicant withholds prior art or misleadingly discloses
particular matters and succeeds, he obtains a patent that
would not have issued otherwise. Even if the nondisclo-
sure or misleading disclosure is later discovered, under
the majority’s rule the applicant is no worse off, as the
patent will be lost only if the claims would otherwise be
held invalid. So there is little to lose by following a course
of deceit. It is no indictment of the uprightness and
professionalism of patent applicants and prosecutors as a
group to say that they should not be subjected to an
incentive system such as that. After all, it has long been
THERASENSE v. BECTON 10

recognized that “an open door may tempt a saint.” Given
the large stakes sometimes at issue in patent prosecu-
tions, a regime that ensures that a dishonest but poten-
tially profitable course of action can be pursued with
essentially no marginal added risk is an unwise regime no
matter how virtuous its subjects.

It is unrealistic to expect that other means will pro-
vide an effective deterrent to ensure that material infor-
mation will not be withheld during patent prosecutions.
The PTO advises us that the prospect of enforcing the
duty of disclosure other than through the threat of inequi-
table conduct claims is not possible or practical. The
prospect of agency disciplinary action for disclosure
violations is unrealistic, the PTO explains, because the
Office is required by statute to file any charges within five
years, see 28 U.S.C. § 2462, and it seldom learns of ineq-
uitable conduct within that period of time. In addition,
the PTO explains that it rarely has access to relevant
facts regarding inequitable conduct, because it lacks
investigative resources. As a result, the PTO has con-
cluded that a court is the best forum in which to consider
alleged breaches of the disclosure duty in the context of
an inequitable conduct defense. See Patent and Trade-
mark Office Implementation of 37 C.F.R. § 1.56, 1095 Off.
Gaz. Pat. & Trademark Office 16 (Oct. 11, 1988).

III

Aside from its practical infirmities, the “but for” stan-
dard adopted by the majority is inconsistent with the duty
that the Supreme Court and the PTO have both described
as applying to those who seek patents in the ex parte
application process.
11 THERASENSE v. BECTON

A

The doctrine of inequitable conduct has its origins in a
trilogy of Supreme Court decisions dating back to the
1930s. The first of the three cases, Keystone Driller Co. v.
General Excavator Co., 290 U.S. 240 (1933), applied the
equitable principle of “unclean hands” in a case in which a
patentee’s representative had obtained a false affidavit
and taken other steps to avoid the disclosure of a possibly
invalidating prior use of the patented invention. The
patentee obtained a favorable decree in an infringement
action against a different defendant and then relied on
that decree in obtaining preliminary injunctions against
the defendants in the cases before the Court.

The Supreme Court found the connection between
earlier and later cases to be sufficient “to show that
plaintiff did not come with clean hands” in the later cases.
Based on that finding, the Court concluded that the
previous misconduct justified the dismissal of the com-
plaints in those cases. In reaching that determination,
the Court did not find it necessary to decide whether the
evidence of prior use that the plaintiff had suppressed
would have had the effect of invalidating the patent. It
was enough that the improper conduct had “immediate
and necessary relation to the equity [that the patentee
sought] in respect of the matter in litigation.” 290 U.S. at
245.

A decade later, in Hazel-Atlas Glass Co. v. Hartford-
Empire Co., 322 U.S. 238 (1944), the Supreme Court
again held a patent unenforceable, this time in part
because of misconduct by the patentee before the Patent
Office in obtaining the patent. The patentee, encounter-
ing resistance to issuance of the patent by the Patent
Office, arranged for the publication of an article in a trade
THERASENSE v. BECTON 12

publication that described the invention as a remarkable
advance in the field. The article purported to be the
product of a disinterested party, even though it was
actually written by one of the patentee’s lawyers. The
patent ultimately issued. The article was also used in
court, where it assisted the patentee in obtaining a favor-
able judgment from an appellate court. The patentee
subsequently went to considerable lengths to ensure that
the truth regarding the authorship of the article would
not emerge. The efforts at concealment failed, however,
and the accused infringer sought relief in the lower court
based on the misconduct.

Because the misconduct was discovered after the ex-
piration of the term of court during which the judgment in
question was entered, the Supreme Court invoked the
doctrine of after-discovered fraud, which permitted a
court to revisit a judgment even after the end of the term
in which it was entered, if the circumstances “are deemed
sufficiently gross to demand a departure from rigid ad-
herence to the term rule.” 322 U.S. at 244. The Court
found that standard to be satisfied on the facts before it.

In response to the argument that the article in ques-
tion was not “basic” to the issues in litigation, the Su-
preme Court stated that the circumstances did not “call
for such an attempted appraisal.” 322 U.S. at 247. The
Court explained: “Hartford’s officials and lawyers
thought the article material. They conceived it in an
effort to persuade a hostile Patent Office to grant their
patent application, and went to considerable trouble and
expense to get it published.” Id. The Court added that
Hartford’s fraud “had its genesis in the plan to publish an
article for the deliberate purpose of deceiving the Patent
Office . . . . Had the District Court learned of the fraud on
the Patent Office at the original infringement trial, it
13 THERASENSE v. BECTON

would have been warranted in dismissing Hartford’s
case.” Id. at 250. Significantly, the Court did not regard
the issue of Hartford’s conduct as turning on whether the
fraudulent conduct was the “but for” cause of the issuance
of the patent. The Court stated that it would have come
to the same conclusion even if the statements from the
fraudulently procured article were actually true. Id. at
247. “But for” causation was not necessary to finding
materiality. Instead, the Court focused on the patentee’s
“deliberate purpose of deceiving the Patent Office” as the
core reason for refusing to enforce the patentee’s rights in
the patent.

A year later, the Supreme Court again addressed the
issue of the effect of misconduct during proceedings before
the Patent Office on subsequent patent enforcement
actions in court. That case, Precision Instrument Manu-
facturing Co. v. Automotive Maintenance Machinery Co.,
324 U.S. 806 (1945), arose following an involved sequence
of events, the upshot of which was that Automotive ob-
tained rights to a patent knowing that the original appli-
cant had made false statements pertaining to the dates of
conception and reduction to practice of the claimed inven-
tion. The Supreme Court held the patent unenforceable,
applying the doctrine of unclean hands against the patent
owner based on its knowledge of the misconduct that
occurred during the prosecution of the patent.

The Court explained that the sort of misconduct nec-
essary to trigger a court’s refusal to aid “the unclean
litigant” need not be “of such a nature as to be punishable
as a crime or as to justify legal proceedings of any charac-
ter. Any willful act concerning the cause of action which
rightfully can be said to transgress equitable standards of
conduct is sufficient cause for the invocation of the maxim
by the chancellor.” 324 U.S. at 815. The Court added
THERASENSE v. BECTON 14

that “where a suit in equity concerns the public interest
as well as the private interests of the litigants this doc-
trine assumes even wider and more significant propor-
tions.” Id. The enforcement of a patent, the Court stated,
is a matter “concerning far more than the interests of the
adverse parties. The possession and assertion of patent
rights are ‘issues of great moment to the public.’” Id. In a
statement that has served as the basis for the subsequent
development of the doctrine of inequitable conduct, the
Court added that “[t]he far-reaching social and economic
consequences of a patent . . . give the public a paramount
interest in seeing that patent monopolies spring from
backgrounds free from fraud or other inequitable con-
duct.” Id. at 816.

The Court refused to enforce Automotive’s patent be-
cause it concluded that Automotive “knew and suppressed
facts that, at the very least, should have been brought in
some way to the attention of the Patent Office.” 324 U.S.
at 818. The Court explained, “Those who have applica-
tions pending with the Patent Office or who are parties to
Patent Office proceedings have an uncompromising duty
to report to it all facts concerning possible fraud or inequi-
tableness underlying the applications in issue. . . . Public
interest demands that all facts relevant to such matters
be submitted formally or informally to the Patent Office,
which can then pass upon the sufficiency of the evidence.
Only in this way can that agency act to safeguard the
public in the first instance against fraudulent patent
monopolies.” Because Automotive had prosecuted the
patent application and obtained the patent “without ever
attempting to reveal to the Patent Office or to anyone else
the facts it possessed concerning the application’s fraudu-
lent ancestry,” the Court concluded that Automotive “has
not displayed that standard of conduct requisite to the
maintenance of this suit in equity.” Id. at 819.
15 THERASENSE v. BECTON

As in the Keystone and Hazel-Atlas cases, the Su-
preme Court in the Precision Instrument case did not look
to whether the conduct in question would have rendered
the plaintiff’s application unpatentable. In holding all of
Automotive’s patents to be unenforceable, the Court found
it was enough that the plaintiff had intentionally with-
held information from the Patent Office that should have
been submitted so that the Patent Office could consider it.
There was no suggestion in the Court’s opinion that the
dismissal of the action would be appropriate only if, but
for the conduct, the patent would not have issued.

The principles set down by the Court in Keystone, Ha-
zel Atlas, and Precision Instrument can be summarized as
follows: (1) the public has a special interest in seeing that
patent monopolies “spring from backgrounds free from
fraud or other inequitable conduct”; (2) as a corollary to
that public interest, patent applicants “have an uncom-
promising duty to report to [the Patent Office] all facts
concerning possible fraud or inequitableness underlying
the applications”; (3) all facts relevant to such matters
must be submitted to the Patent Office, “which can then
pass upon the sufficiency of the evidence”; (4) the inten-
tional failure to disclose to the Patent Office that a patent
application is tainted by fraud is sufficient cause to justify
not enforcing the patent; and (5) the misconduct in ques-
tion need not constitute actionable fraud; it is sufficient if
the conduct constitutes a willful act that violates stan-
dards of equitable conduct in dealing with the Patent
Office. 2

2 Two decades before the Keystone-Hazel-Precision
trilogy, the Supreme Court considered the effect of mis-
statements made during prosecution on the validity of a
patent on a method for vulcanizing rubber. Corona Cord
Tire Co. v. Dovan Chem. Corp., 276 U.S. 358 (1928).
THERASENSE v. BECTON 16

Before the Patent Office, the inventor attempted to swear
behind a reference by submitting affidavits averring an
earlier date of conception and reduction to practice for his
invention. The inventor asserted that he had successfully
used the claimed method “in the vulcanization of rubber
goods,” and one of his fellow chemists stated that the
method had been used “in the actual vulcanization of
rubber goods, such as hose, tires, belts, valves and other
mechanical goods.” Id. at 373. In fact, at the time re-
ferred to in the affidavits the inventor had used his
method only on test slabs of rubber. The Court noted that
whether the claimed method was used in the production
of useful articles was not relevant to the asserted claims,
and it therefore held that the false affidavit, while reck-
less, was not “the basis for” or “essentially material to”
the issuance of the patent. The Court therefore declined
to invalidate the asserted claims on that ground. Id. at
374.
Although the majority cites Corona as support for its
narrow interpretation of the materiality requirement for
inequitable conduct, Corona is of little relevance to that
issue. Corona predates the creation of the inequitable
conduct doctrine and has never been cited by the Supreme
Court in any case addressing unclean hands or inequita-
ble conduct. Apart from the fact that the decision ad-
dressed the issue of validity, rather than enforceability,
the Court’s decision was based on its conclusion that the
affidavit in question was not material because what
mattered was that the method had been used to vulcanize
rubber, not that it had been used to vulcanize rubber that
was in turn used to make particular goods. Given that
the nature of the rubber objects that the inventor vulcan-
ized was not relevant to the issues before the Patent
Office, it is not surprising that the Court found the error
not to be material. In any event, the Court’s choice of
language—stating that the affidavits “were not the basis
for [the issuance of the patent] or essentially material to
its issue,” is not restricted to a “but for” test, but suggests
a broader standard for materiality.
17 THERASENSE v. BECTON

Shortly after the decisions in the Keystone, Hazel At-
las, and Precision Instrument cases, the Supreme Court
made a further observation that bears directly on the
responsibilities of attorneys and applicants who appear
before the PTO. The Court endorsed the statement that,
“By reason of the nature of an application for patent, the
relationship of attorneys to the Patent Office requires the
highest degree of candor and good faith. In its relation to
applicants, the Office . . . must rely upon their integrity
and deal with them in a spirit of trust and confidence . . .
.” Kingsland v. Dorsey, 338 U.S. 318, 319 (1949). Because
the PTO lacks the investigative and research resources to
look behind representations by applicants and their
counsel, it necessarily relies on those representations as
to many facts that arise during the prosecution of patent
applications, including experimental results obtained by
the applicants, the state of the prior art, and the knowl-
edge of persons of skill in the art in the field in question.
Some of these facts will be uniquely in the hands of the
applicant and, as a practical matter, undiscoverable by an
examiner at the PTO. For those reasons, the PTO has
imposed a duty on applicants to provide examiners with
information that is material to patentability.

B

The PTO has defined the disclosure obligation for
those involved in patent prosecutions in its Rule 56,
which the PTO has promulgated under its statutory
authority to establish regulations that “govern the con-
duct of proceedings in the Office.” 35 U.S.C. § 2(b). When
Rule 56 was first promulgated in 1949, the portion of the
rule that addressed inequitable conduct provided that
“any application fraudulently filed or in connection with
which any fraud is practiced or attempted on the Patent
Office, may be stricken.” 37 C.F.R. § 1.56 (1950).
THERASENSE v. BECTON 18

The Court of Customs and Patent Appeals construed
the PTO’s disclosure rule in its 1970 decision in Norton v.
Curtiss, 433 F.2d at 779. The court in that case upheld
the Commissioner’s authority to strike a patent applica-
tion for fraud on the PTO in violation of the PTO’s Rule
56. Interpreting the term “fraud” in Rule 56, the court
began by noting that the term should not be limited to the
kind of fraud that would be independently actionable as a
tort or crime (which the court referred to as “technical
fraud”). Instead, the court explained that “fraud” as used
in the Rule included “a wider range of ‘inequitable’ con-
duct” that would justify holding a patent unenforceable.
Id. at 793. Defining fraud more broadly for the purpose of
Rule 56 was justified, the court ruled, because “applicants
before the Patent Office are being held to a relationship of
confidence and trust to that agency. The indicated expan-
sion of the concept of ‘fraud’ manifests an attempt by the
courts to make this relationship meaningful.” Id.

In language paralleling the Supreme Court’s discus-
sion in Kingsland v. Dorsey, the Norton court recognized
“a relationship of trust between the Patent Office and
those wishing to avail themselves of the governmental
grants which that agency has been given authority to
issue.” 433 F.2d at 793. In light of the ex parte nature of
patent prosecution, the number of applications filed, and
the limited capacity of the PTO “to ascertain the facts
necessary to adjudge the patentable merits of each appli-
cation,” the court stated that the “highest standards of
honesty and candor on the part of applicants presenting
such facts to the office are . . . necessary elements in a
working patent system.” Id. at 794. For that reason, the
court approved of “the expansion of the types of miscon-
duct for which applicants will be penalized.” Id.
19 THERASENSE v. BECTON

In light of those policies, the court explained that the
test for materiality “cannot be applied too narrowly if the
relationship of confidence and trust between applicants
and the Patent Office is to have any real meaning,” and
that findings of materiality should not be limited to those
cases in which the true facts, if they had been known,
“would most likely have prevented the allowance of the
particular claims at issue.” 433 F.2d at 795. In such
cases, the claims at issue “would probably be invalid, in
any event,” and the question whether the patent was
unenforceable “would really be of secondary importance.”
Id. Accordingly, the court concluded that a proper inter-
pretation of the materiality element must include factors
other than the patentability of the claims at issue, includ-
ing “the subjective considerations of the examiner and the
applicant.” Id.

In 1977, the PTO substantially revised Rule 56 to
make more explicit the disclosure obligations imposed on
patent applicants. Patent Examining and Appeal Proce-
dures, 41 Fed. Reg. 43,729, 43,730 (proposed Oct. 4, 1976).
The 1977 version of the rule imposed a “duty of candor
and good faith” on those involved in the preparation or
prosecution of patent applications and required them “to
disclose to the Office information they are aware of which
is material to the examination of the application.” The
rule defined information as “material” if there was “a
substantial likelihood that a reasonable examiner would
consider it important in deciding whether to allow the
application to issue as a patent.”

Shortly after this court’s creation, the court began ad-
dressing inequitable conduct claims raised in the course
of patent infringement litigation. From the outset, the
court looked to the PTO’s Rule 56 as setting an appropri-
ate standard for the materiality prong of the doctrine of
THERASENSE v. BECTON 20

inequitable conduct. See Am. Hoist & Derrick Co. v. Sowa
& Sons, Inc., 725 F.2d 1350, 1363 (Fed. Cir. 1984) (“The
PTO ‘standard’ is an appropriate starting point for any
discussion of materiality”; failure to satisfy that disclo-
sure obligation, combined with an intent to deceive the
PTO, can render a patent unenforceable); J.P. Stevens,
747 F.2d at 1559 (adopting the materiality requirement
from Rule 56); Gardco, 820 F.2d at 1214 (Rule 56 is
“appropriate starting point for determining materiality”)
(quotation omitted); Fox Indus., Inc. v. Structural Pres.
Sys., 922 F.2d 801, 803 (Fed. Cir. 1990) (adopting Rule 56
standard for materiality). In particular, the court en-
dorsed the use of that standard as the proper test for
materiality when an appropriate level of intent was
shown. See Specialty Composites v. Cabot Corp., 845 F.2d
981, 992 (Fed. Cir. 1988) (“Nondisclosed or false informa-
tion is material if there is a substantial likelihood that a
reasonable examiner would have considered the omitted
reference or false information important in deciding
whether to allow the application to issue as a patent.”);
Halliburton Co. v. Schlumberger Tech. Corp., 925 F.2d
1435, 1440 (Fed. Cir. 1991) (“Information is material if
there is ‘substantial likelihood that a reasonable exam-
iner would consider it important in deciding whether to
allow the application to issue as a patent.’”) (citing the
1977 version of PTO Rule 56).

In the ensuing years, this court has regularly referred
to the “reasonable examiner” test as the standard for
measuring materiality in cases raising claims of inequita-
ble conduct. See, e.g., Golden Hour Data Sys., Inc. v.
Emscharts, Inc., 614 F.3d 1367, 1373-74 (Fed. Cir. 2010);
Leviton Mfg. Co. v. Universal Sec. Instruments, Inc., 606
F.3d 1353, 1358-59 (Fed. Cir. 2010); Astrazeneca Pharms.
LP v. Teva Pharm. USA, Inc., 583 F.3d 766, 773 (Fed. Cir.
2009); Dayco Prods., Inc. v. Total Containment, Inc., 329
21 THERASENSE v. BECTON

F.3d 1358, 1363 (Fed. Cir. 2003) (citing cases). Under
that test, the court has consistently ruled that a false
statement or nondisclosure may be material for purposes
of an inequitable conduct determination even if the inven-
tion in question would otherwise be patentable. See, e.g.,
Digital Control, Inc. v. Charles Mach. Works, 437 F.3d
1309, 1314 (Fed. Cir. 2006); Li Second Family Ltd. P’ship
v. Toshiba Corp., 231 F.3d 1373, 1380-81 (Fed. Cir. 2000);
PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc.,
225 F.3d 1315, 1322 (Fed. Cir. 2000); A.B. Dick, 798 F.2d
at 1397.

In 1992, the PTO revised Rule 56, adopting what it
called a “clearer and more objective definition of what
information the Office considers material to patentabil-
ity.” Duty of Disclosure, 57 Fed. Reg. 2021, 2023 (Jan. 17,
1992). As revised in 1992, the current version of Rule 56
imposes a duty on individuals associated with the filing
and prosecution of an application to disclose to the Office
all information known to be material to patentability as
defined in the rule. Rule 56(a). The rule then states that
information is “material” if it is “not cumulative to infor-
mation 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 unpat-
entability of a claim; or
(2) It refutes, or is inconsistent with, a position
the applicant takes in:
(i) Opposing an argument of unpat-
entability relied on by the Office, or
(ii) Asserting an argument of patentability.
The first part of Rule 56(b) requires the applicant to
provide information that, at least absent explanation or
further supplementation, would compel the conclusion
THERASENSE v. BECTON 22

that the invention is unpatentable. The rule explains
that a “prima facie case of unpatentability” is established
“when the information compels a conclusion that a claim
is unpatentable under the preponderance of the evidence,
burden-of-proof standard, giving each term 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 adopting the rule, the
PTO explained that it intended for applicants to submit
references, of which they were aware, that would render
the pending claims unpatentable over the references.
Proposed Rules, 56 Fed. Reg. 37,321, 37,324 (Aug. 6,
1991). The PTO added that it is the role of the examiner,
not the applicant, to analyze the sufficiency and weight of
a rebuttal argument. See id. The intent standard im-
posed by Rule 56 and adopted by this court answers the
majority’s concerns regarding the breadth of the first part
of Rule 56(b). That provision applies only to applicants
who act with the specific intent to deceive the PTO by
withholding prior art that is so powerful as to render the
pending claims invalid in the absence of further explana-
tion.

It is the second part of the rule, Rule 56(b)(2), to
which the appellants object. That part of the rule re-
quires the applicant to provide information that is incon-
sistent with or refutes a position taken by the applicant
before the office. Rule 56(b)(2) clearly goes beyond a “but
for” test and is therefore the focus of the dispute in this
case.

At the time it adopted the 1992 revision to Rule 56,
the PTO considered the possibility of adopting a “but for”
test of materiality of the sort that the majority has
adopted today. The Office rejected that test, concluding
23 THERASENSE v. BECTON

that adopting such a narrow standard “would not cause
the Office to obtain the information it needs to evaluate
patentability so that its decisions may be presumed
correct by the courts.” The PTO added that if it did not
have the needed information, “meaningful examination of
patent applications will take place for the first time in an
infringement case before a district court.” Duty of Disclo-
sure, 57 Fed. Reg. at 2023.

In the aftermath of that change, this court has fre-
quently treated the PTO’s new version of the rule as
setting forth the proper standard for materiality, in cases
involving claims of failure to disclose material informa-
tion, at least for applications processed after 1992. In
Bruno Independent Living Aids, Inc. v. Acorn Mobility
Services, Ltd., 394 F.3d 1348 (Fed. Cir. 2005), the court
quoted the 1992 version of Rule 56 and held that for
patents prosecuted while that version of the rule was in
effect, “we evaluate the materiality of the [undisclosed
matter] under the standard set forth in the applicable
amended rule.” Id. at 1352-53; see also Hoffmann-
LaRoche, 323 F.3d at 1368 n.2. The court added that “we
give deference to the PTO’s formulation at the time an
application is being prosecuted before an examiner of the
standard of conduct it expects to be followed in proceed-
ings in the Office.” Bruno, 394 F.3d at 1353; see also Bd.
of Educ. v. Am. Bioscience, Inc., 333 F.3d 1330, 1343 (Fed.
Cir. 2003); Purdue Pharma L.P., 438 F.3d at 1129; Mon-
santo Co. v. Bayer Bioscience N.V., 514 F.3d 1229, 1237
(Fed. Cir. 2008); Taltech Ltd. v. Esquel Enters. Ltd., 604
F.3d 1324, 1333 (Fed. Cir. 2010). As it did before 1992,
the court has continued to make clear that it does not
apply a “but for” test for materiality. See Golden Hour
Data Sys., 614 F.3d at 1374; Hoffmann-LaRoche, 323 F.3d
at 1368; Molins PLC, 48 F.3d at 1179-80.
THERASENSE v. BECTON 24

On occasion, when addressing the issue of materiality,
this court has referred to both the 1977 standard and the
1992 standard that supplanted it as pertinent to the
definition of materiality. See, e.g., Digital Control, 437
F.3d at 1316. The court has done so in light of the fact
that, as the PTO has explained, the 1992 standard was
not meant to signal a sharp departure from the 1977
standard. Yet while the two standards were not meant to
be dramatically different, the court has recognized that
the PTO regards the 1992 standard as setting forth a
clearer and more precise statement of the disclosure
necessary to conducting efficient examinations. See
Rothman v. Target Corp., 556 F.3d 1310, 1323 (Fed. Cir.
2009); Purdue Pharma L.P., 438 F.3d at 1129; Pharmacia
Corp. v. Par Pharm., Inc., 417 F.3d 1369, 1373 (Fed. Cir.
2005).

The PTO has explained that the 1992 amendment
was proposed “to address criticism concerning a perceived
lack of certainty in the materiality standard.” M.P.E.P.
§ 2001.04. The revised rule was intended “to provide
greater clarity and hopefully minimize the burden of
litigation on the question of inequitable conduct before the
Office, while providing the Office with the information
necessary for effective and efficient examination of patent
applications.” Id. Moreover, in its brief in this case the
PTO has urged this court to adopt the standard set forth
in the current PTO Rule 56 as the standard for material
nondisclosures rather than referring to both the 1992
standard and the “reasonable examiner” standard from
the 1977 version of the Rule.

Because the PTO is the best judge of what informa-
tion its examiners need to conduct effective examinations,
the PTO’s definition of materiality is entitled to deference
in determining whether the failure to disclose particular
25 THERASENSE v. BECTON

information during patent prosecution constitutes inequi-
table conduct. Moreover, because the PTO has refined the
materiality standard in setting forth what it expects of
applicants and their representatives, there is no need for
courts to apply a broader test of materiality in adjudicat-
ing inequitable conduct claims, as doing so could at least
theoretically result in the imposition of sanctions for a
failure to disclose matters that the PTO does not require
to be disclosed. 3 This is not to suggest that any disclosure

3 The PTO’s Rule 56 deals with the “duty to disclose
information material to patentability” and does not explic-
itly address affirmative false statements to the PTO made
by parties prosecuting a patent application. In some
instances, as in this case, a false or misleading affirma-
tive statement also violates the disclosure requirement,
because when a party makes a statement that is inconsis-
tent with the party’s own prior statement, the failure to
disclose the prior statement constitutes a failure to dis-
close information that “refutes, or is inconsistent with, a
position the applicant takes” in asserting patentability or
opposing an argument of unpatentability relied on by the
PTO. Rule 56(b)(2). An affirmative false statement that
does not separately violate the disclosure rules may
nonetheless be contrary to the broader “duty of candor
and good faith” referred to in paragraph (a) of Rule 56,
which is imposed on “each individual associated with the
filing and prosecution of a patent application.” See
Nilssen v. Osram Sylvania, Inc., 504 F.3d 1223, 1231-32
(Fed. Cir. 2007); Dayco Prods., 329 F.3d at 1363-64.
The majority holds that the “but for” test does not ap-
ply to “affirmative acts of egregious misconduct.” It then
adds that neither “nondisclosure of prior art references to
the PTO nor failure to mention prior art references in an
affidavit constitutes affirmative egregious misconduct”
under any circumstances. As this case illustrates, it is
often difficult to draw a line between nondisclosure and
affirmative misrepresentation. For example, is a submis-
sion to the PTO that purports to describe the state of the
prior art but knowingly omits the closest prior art an
“affirmative act” of misconduct or merely a “non-
THERASENSE v. BECTON 26

requirement that the PTO might have devised would
serve as a predicate for an inequitable conduct charge.
Because inequitable conduct is an equitable doctrine
applied by courts, and not simply a mechanism for judi-
cial enforcement of PTO rules, the scope of the court-made
doctrine is not inseparably tied to the breadth of the
PTO’s disclosure rules. However, the basic purposes of
both the inequitable conduct doctrine and Rule 56 are the
same, and the disclosure duties that the PTO imposes on
applicants, which are defined by Rule 56, are reasonably
calculated to produce the disclosure necessary to promote
efficient conduct of examinations and to discourage the
types of omissions and misrepresentations that (if made
intentionally) raise equitable concerns. In these circum-
stances, considerations of efficiency and economy encour-
age us to embrace the PTO’s approach. So long as it

disclosure of information”? Even the Hazel-Atlas case,
which the majority describes as an example of egregious
misconduct, could be regarded as an instance of nondis-
closure, as the problem identified by the Supreme Court
was the failure to disclose that the article in question was
actually written by an attorney for the patentee. The
distinction between “affirmative acts” and “nondisclosure”
is thus apt to become fertile ground for litigation in the
future, not to mention the distinction between “egregious”
misconduct and misconduct that is assertedly less than
“egregious.”
Contrary to the statement in Judge O’Malley’s sepa-
rate opinion, nothing in this opinion rejects the applica-
tion of the doctrine of inequitable conduct (or “unclean
hands”) as applied to other forms of misconduct, in litiga-
tion or otherwise. This case deals with the consequences
of nondisclosure in violation of the duty of disclosure
imposed by the PTO’s Rule 56, and this opinion is directed
solely to the role of the doctrine of inequitable conduct in
that context.
27 THERASENSE v. BECTON

reasonably aligns with our own equitable calculus, we
should defer to the PTO’s assessment of its needs and
treat intentional breaches of the PTO’s disclosure rules as
providing a basis for a finding of inequitable conduct. See
Bruno Indep. Living, 394 F.3d at 1353.

C

The materiality standard set forth in Rule 56, as
adopted in 1977 and refined in 1992, is not an idiosyn-
cratic contrivance of the PTO; quite the contrary, it is
consistent with the materiality standard that is applied in
a wide variety of other analogous contexts. Although the
relationship between the PTO and patent applicants is
unusual in our law, it is nonetheless appropriate to look
to the way the concept of materiality is applied in other
areas, as disclosure obligations and requirements of
candor are imposed on parties in a wide variety of set-
tings.

Securities law provides a particularly instructive
analogy, as proxy issuers and corporate insiders often
have access to information relevant to a stockholder’s
decision that even the most diligent investor could not
discover. Similarly, a patent applicant is often in a better
position than the examiner to know of relevant art or
potentially invalidating circumstances, such as prior use.
Notably, in the securities law context, a nondisclosure is
typically regarded as material without the need to prove
reliance. Thus, for example, in the case of those who have
an affirmative duty of disclosure to investors under the
securities laws and who fail to comply with that duty, the
Supreme Court has held that “positive proof of reliance is
not a prerequisite to recovery. All that is necessary is
that the facts withheld be material in the sense that a
reasonable investor might have considered them impor-
THERASENSE v. BECTON 28

tant in the making of [the investment] decision.” Affili-
ated Ute Citizens v. United States, 406 U.S. 128, 153-54
(1972). The Supreme Court recently reaffirmed that
standard in Matrixx Initiatives, Inc. v. Siracusano, No.
09-1156 (U.S. Mar. 22, 2011). In a passage that ad-
dressed concerns similar to those raised in this case, the
Court explained that it had adopted the “reasonable
investor” standard to ensure that investors would have
access to information important to their investment
decisions, while being “careful not to set too low a stan-
dard of materiality, for fear that management would bury
the shareholders in an avalanche of trivial information.”
Id., slip op. 10 (quotations and citations omitted).

The Supreme Court has adopted a similar materiality
standard—and rejected a “but for” test for materiality—in
the context of section 14(a) of the Securities Exchange Act
of 1934, regarding proxy solicitations. See TSC Indus.,
Inc. v. Northway, Inc., 426 U.S. 438 (1976). There, the
Court stated that an omitted fact is material “if there is a
substantial likelihood that a reasonable shareholder
would consider it important in deciding how to vote.” Id.
at 449. Significantly, for our purposes, the Court added
that the proper standard

does not require proof of a substantial likelihood
that disclosure of the omitted fact would have
caused the reasonable investor to change his vote.
What the standard does contemplate is a showing
of a substantial likelihood that, under all the cir-
cumstances, the omitted fact would have assumed
actual significance in the deliberations of the rea-
sonable shareholder.
Id.
29 THERASENSE v. BECTON

Even in criminal proceedings that require proof of
materiality, such as prosecutions under the federal mail
and wire fraud statutes, 18 U.S.C. §§ 1341, 1343, a “but
for” test of materiality is not applied. Those laws penalize
not only affirmative misrepresentations, but also the
concealment of material facts. United States v. Olatunji,
872 F.2d 1161, 1167 (3d Cir. 1989); United States v.
O’Malley, 707 F.2d 1240, 1247 (11th Cir. 1983). When a
charge of mail or wire fraud is based on the nondisclosure
of material information in violation of a duty to disclose,
proof of materiality does not require a showing of actual
reliance on the part of the victim; all that is required is
proof that the nondisclosure or concealment be capable of
influencing the intended victim. See Neder v. United
States, 527 U.S. 1, 16, 24-25 (1999). See also United
States v. Riley, 621 F.3d 312, 332-33 (3d Cir. 2010) (non-
disclosed relationship between mayor and purchaser of
city property was material “even if the relationship would
not have per se barred [the purchase].”); United States v.
Szur, 289 F.3d 200, 211-12 (2d Cir. 2002) (securities
broker owed duty to customers to disclose that broker
would earn “exorbitant” commission on trades; such
information was material for the purpose of the wire
fraud statute because it would have been “relevant to a
customer’s decision to purchase the stock”); United States
v. Bronston, 658 F.2d 920, 926 (2d Cir. 1981) (conceal-
ment of information that defendant is under a duty to
disclose is material if the nondisclosure “could or does
result in harm” to the victim).

The same principles have been applied to nondisclo-
sures of material information in civil matters, even civil
matters that have been regarded as having grave per-
sonal consequences. In a denaturalization proceeding, for
example, a “concealment or misrepresentation” made in
the course of the naturalization process is considered
THERASENSE v. BECTON 30

“material” under 8 U.S.C. § 1427(a) if it has “a natural
tendency to influence the decisions of the Immigration
and Naturalization Service”; it is not necessary to show
that the nondisclosure or misrepresentation in question
actually had such an effect. See Kungys v. United States,
485 U.S. 759, 772 (1988). The Supreme Court noted in
that case that it “has never been the test of materiality
that the misrepresentation or concealment would more
likely than not have produced an erroneous decision, or
even that it would more likely than not have triggered an
investigation.” Id. at 771 (emphasis in original).

Even with respect to the common law action for fraud,
deceit, and misrepresentation, which is more exacting
than the doctrine of inequitable conduct, see J.P. Stevens
& Co., 747 F.2d at 1559, the “but for” test does not apply
to the element of materiality. In that setting, as the
Restatement of Torts explains, a matter is material if “a
reasonable man would attach importance to its existence
or nonexistence in determining his choice of action,” or if
the maker of the representation “knows or has reason to
know that its recipient regards or is likely to regard the
matter as important in determining his choice of action.”
Restatement (Second) of Torts § 538 (1977); see Neder v.
United States, 527 U.S. 1, 22 & n.5 (1999) (citing the
Restatement as setting forth the materiality requirement
for common-law fraud). In order for a material misrepre-
sentation to satisfy the causation requirement needed for
an award of damages, it is necessary for the plaintiff to
show reliance on the misrepresentation. However, the
“but for” test does not apply even to tort actions for dam-
ages, as it is not necessary for the plaintiff to show “that
he would not have acted or refrained from acting as he did
unless he had relied on the representation.” Restatement
(Second) of Torts § 546, cmt. b. In none of these settings
31 THERASENSE v. BECTON

has the test for materiality been set at the high “but for”
level adopted by the majority in this case. 4

4 The majority argues that the “but for” test is ap-
plied in both copyright and trademark law to claims of
fraudulent registration. To the contrary, in the copyright
context, courts have rejected the “but for” test in favor of a
rule that a federal registration will be invalidated if the
claimant willfully misstates or fails to state a fact that, if
known, “might have occasioned a rejection of the applica-
tion.” Eckes v. Card Prices Update, 736 F.2d 859, 861-62
(2d Cir. 1984) (emphasis added); see generally 2 Melville
B. Nimmer & David Nimmer, Nimmer on Copyright §
7.20[B][1], at 7-212,4(1) & n.21 (rev. ed. 2010) (“If the
claimant wilfully misstates or fails to state a fact that, if
known, might have caused the Copyright Office to reject
the application, [it] may be ruled invalid.”) (citing numer-
ous cases). In 2008, Congress adopted a “but for” test to
govern the effect of errors on the right to bring a civil
action and the right to heightened remedies, see 17 U.S.C.
§ 411 (Supp. III 2009), but that provision was not made
applicable to the presumption of copyright validity set
forth in 17 U.S.C. § 410(c), which remains subject to the
pre-2008 standards. See 2 Nimmer on Copyright
§ 7.20[B][1], at 7-212.4(2) n.25.2.
As for trademarks, it is true that in deciding whether
fraud on the PTO will result in the cancellation of a mark
on the federal register, courts apply a “but for” test of
materiality. See, e.g., Orient Express Trading Co. v.
Federated Dep’t Stores, Inc., 842 F.2d 650, 653 (2d Cir.
1988) (defining material fact as “one that would have
affected the PTO’s action on the applications”); Citibank,
N.A. v. Citibanc Grp., Inc., 724 F.2d 1540, 1544 (11th Cir.
1984) (requiring “false, material statement by the plain-
tiff of a fact that would have constituted grounds for
denial of the registration had the truth been known.”). As
the author of the leading treatise on trademark law has
pointed out, however, cancellation of a mark from the
federal register does not extinguish the trademark rights
of the mark’s owner or defeat the owner’s right to sue
infringers. 6 J. Thomas McCarthy, McCarthy on Trade-
marks and Unfair Competition § 31.60 (4th ed. 2008).
THERASENSE v. BECTON 32

The course charted by the majority is thus contrary to
the Supreme Court decisions that gave rise to the doctrine
of inequitable conduct, to a long line of our own precedent,
and to the principles of materiality that courts have
applied in other contexts. Under this court’s new rule, an
applicant who conceals information with the intent to
deceive the PTO will be free to enforce his patent unless it
can be proved by clear and convincing evidence that the
patent would not have issued but for the fraud. Even
though the majority justifies its new rule in part by
asserting that it will improve the prosecution of patents
before the PTO, I am convinced that the new rule is likely
to have an adverse impact on the PTO and the public at
large, a view that—significantly—is shared by the PTO
itself.

IV

The facts of this case, as found by the district court,
illustrate why the materiality standard of Rule 56 is a
suitable test for inequitable conduct claims based on
disclosure violations. A central issue during the examina-
tion that led to the issuance of the ’551 patent was
whether the prior art had taught that glucose sensors
could be used to test whole blood without a protective
membrane. The examiner focused on whether the prior

Unlike the effect of a trademark registration, the issuance
of a patent grants a right which, but for the examination
and allowance at the PTO, would not exist. For those
reasons, as McCarthy has explained, the “standard of
disclosure and hence of ‘fraud’ in the procurement of
federal trademark registrations should be, and is, quite
different from that in patent procurement. The stringent
standard[s] of disclosure applicable to patent applications
are . . . not appropriate to applications for trademark
registration.” Id. at § 31.65 (internal quotation and
citation omitted).
33 THERASENSE v. BECTON

art ’382 patent taught the use of sensors without mem-
branes. On its face, the ’382 patent seemed to teach that
sensors could be used without membranes when testing
whole blood because the specification of the ’382 patent,
when discussing the use of sensors with whole blood,
stated the following:

Optionally, but preferably when being used on
live blood, a protective membrane surrounds both
the enzyme and the mediator layers, permeable to
water and glucose molecules.

’382 patent, col. 4, ll. 63-66. A central issue before the
examiner was whether the use of the term “optionally” in
that passage indicated that it was possible to use the
sensors in whole (or live) blood without a protective
membrane.

The district court found that the persons involved in
prosecuting the ’551 application, Abbott’s attorney Law-
rence Pope and its expert, Dr. Gordon Sanghera, made
representations to the examiner that the pertinent pas-
sage in the ’382 patent should not be taken at face value.
In particular, Dr. Sanghera submitted a declaration in
which he stated that even though the ’382 patent referred
to the use of a protective membrane surrounding the
enzyme and mediator layers of the glucose meter as
“optionally, but preferably” present, “one skilled in the art
would have felt that an active electrode comprising an
enzyme and a mediator would require a protective mem-
brane if it were to be used with a whole blood sample.”
For that reason, he stated, he was “sure that one skilled
in the art would not read [the ’382 patent] to teach that
the use of a protective membrane with a whole blood
sample is optionally or merely preferred.” Mr. Pope, the
prosecuting attorney, added his own remarks when
THERASENSE v. BECTON 34

submitting Dr. Sanghera’s declaration. He stated: “One
skilled in the art would not have read the disclosure of the
[’382 patent] as teaching that the use of a protective
membrane with whole blood samples was optional. He
would not, especially in view of the working examples,
have read the optionally, but preferably language . . . as a
technical teaching but rather mere patent phraseology.”
Mr. Pope added: “There is no teaching or suggestion of
unprotected active electrodes for use with whole blood
specimens in [the ’382] patent or the other prior art of
record in this application.” Shortly after those submis-
sions were made, the examiner allowed the claims for a
membraneless sensor.

The problem, the district court found, is that Abbott
had made directly contradictory representations to the
European Patent Office (“EPO”) concerning the teaching
of the ’382 patent in connection with the prosecution of a
European patent application and had not disclosed those
contradictory representations to the PTO. Before the
EPO, Abbott represented that the European counterpart
to the ’382 patent referred to a “protective membrane
optionally utilized with the glucose sensor of the patent,”
and that the membrane was “preferably to be used with in
vivo measurements.” With specific reference to the lan-
guage from the patent reciting the use of the protective
membrane “optionally, but preferably when being used on
live blood,” Abbott told the EPO: “It is submitted that
this disclosure is unequivocally clear. The protective
membrane is optional, however, it is preferred when used
on live blood in order to prevent the larger constituents of
the blood, in particular erythrocytes from interfering with
the electrode sensor.”

The district court found that Abbott’s representations
to the EPO contradicted its representations to the PTO,
35 THERASENSE v. BECTON

made through Dr. Sanghera and Mr. Pope. The court’s
finding on that issue, made after a detailed analysis of the
representations to the two bodies, cannot be held to be
clearly erroneous. The district court also found that
Abbott’s failure to disclose to the examiner that it had
made inconsistent statements to the EPO regarding the
teaching of the ’382 patent was highly material. In par-
ticular, the court found that the failure to disclose the
inconsistency in those statements was the kind of nondis-
closure covered by PTO Rule 56, as being nondisclosure of
information “inconsistent with a position the applicant
takes in . . . [a]sserting an argument of patentability.”
That finding, too, cannot be regarded as clearly erroneous
in light of the central role of the pertinent portion of the
’382 patent in the examination of the application that led
to the issuance of the ’551 patent.

Turning to the issue of intent, the district court found
that Abbott’s failure to disclose material information was
intentional, i.e., it was made with the specific intent to
deceive the PTO. The district court heard live testimony
from Mr. Pope and Dr. Sanghera and conducted a detailed
analysis of their testimony in light of the record. Based
on that analysis, the court concluded that their efforts to
justify their conduct were unpersuasive. The court found
that Mr. Pope and Dr. Sanghera were aware of the con-
trary representations made to the EPO and consciously
chose to withhold them from the PTO. The court carefully
considered their explanations for their failure to disclose
the references and found each witness’s explanation to be
lacking. The court discredited Mr. Pope’s explanation
that he understood the term “unequivocally clear” in the
EPO submission to relate to the permeability of the
membrane, not to the text immediately following the
words “unequivocally clear,” where it is plainly stated
that the membrane is optional. The court was not per-
THERASENSE v. BECTON 36

suaded by Mr. Pope’s statement that he believed “option-
ally, but preferably” meant, in the context of patents,
“optionally, but always.”

The court then considered possible alternative rea-
sons for Mr. Pope’s decision not to disclose the contradic-
tory EPO statements, such as the possibility that Mr.
Pope had misunderstood the meaning of the terms “whole
blood” and “live blood.” Ultimately, however, the district
court could identify no plausible reason for the non-
disclosure and therefore found that Mr. Pope had acted
with deceptive intent. That finding, based on the court’s
consideration of Mr. Pope’s demeanor and overall credibil-
ity, as well as the court’s analysis of the record as a
whole, cannot be said to be clearly erroneous.

For similar reasons, the court found that Dr. Sang-
hera also acted with intent to deceive the PTO. The court
considered and rejected the possibility that Dr. Sanghera
believed that Mr. Pope, Abbott’s counsel before the PTO,
would disclose the material information. The court began
by finding that Dr. Sanghera’s declaration before the PTO
contained representations that were misleading by omis-
sion. The court explained that finding as follows:

He did not have to take this extra step. Having
done so, he was obligated to avoid intentional de-
ception. His sworn statements to the PTO about
the meaning of the “optionally but preferably”
sentence were known by him to be inconsistent
with his own company’s statements to the EPO—
statements he had himself helped craft.

As to Dr. Sanghera’s testimony that he believed that
statements he made to the PTO did not contradict the
statements made to the EPO, the court found that Dr.
37 THERASENSE v. BECTON

Sanghera knew that a representation had been made to
the EPO that the ’326 patent did not require a membrane
when used with whole blood. Noting that Dr. Sanghera’s
trial testimony had been impeached by his prior inconsis-
tent statements on certain points, and finding that Dr.
Sanghera exhibited an “unconvincing trial demeanor,” the
district court found that he acted with the requisite intent
to deceive. As in the case of Mr. Pope, the district court’s
findings as to Dr. Sanghera are not clearly erroneous.

Viewed in light of the district court’s findings, this
case is a compelling one for applying the principles of
inequitable conduct. The district court found that Ab-
bott’s representatives deliberately withheld material from
the PTO that directly refuted Abbott’s contention that one
skilled in the art would have believed that the ’382 patent
taught that a membrane was required for whole blood
analysis. Abbott’s inconsistent position on the teachings
of this critical reference falls squarely within the scope of
information of the sort referred to in PTO Rule 56(b)(2),
i.e., information that “refutes, or is inconsistent with, a
position the applicant takes in . . . [a]sserting an argu-
ment of patentability.” Given the examiner’s focus on the
issue of whether the protective membrane in the prior art
patent was optional or not, the issue was of critical impor-
tance in the prosecution of the application that issued as
the ’551 patent, even though the undisclosed information,
if revealed, may not have resulted in the rejection of the
claims at issue. Accordingly, the district court made all
the findings necessary to support its holding that the ’551
patent was unenforceable for inequitable conduct. 5

5 Understandably relying on this court’s prior case
law, the district court stated at one point that Mr. Pope
“knew or should have known” that the withheld informa-
tion would have been highly material to the examiner,
and at another point the court referred to “balancing the
THERASENSE v. BECTON 38

Because the district court’s factual findings are not
clearly erroneous and because its legal analysis comports
with the proper role of the doctrine of inequitable conduct
in patent law, the district court’s judgment that the ’551
patent is unenforceable for inequitable conduct should be
affirmed.

I respectfully dissent.

levels of materiality and intent.” Although those remarks
suggest a looser standard than that advocated here, they
do not undermine the district court’s ruling on inequitable
conduct, because the district court elsewhere made find-
ings that clearly satisfied the requirements of the more
restrictive standard for inequitable conduct set forth
above. In particular, the court found that Mr. Pope “acted
with specific intent to deceive Examiner Shay and the
PTO,” that Mr. Pope and Dr. Sanghera “made a conscious
and deliberate decision to withhold disclosure to the PTO
of these prior statements” to the EPO, and that both of
them “knew that the EPO materials made affirmative
statements inconsistent with the declaration and the
attorney remarks [to the PTO].” With respect to Dr.
Sanghera, the court found that he “consciously made
sworn statements to the [PTO] that were deliberately
misleading.” With respect to the issue of “balancing,”
moreover, the district judge did not find it necessary to
balance intent against materiality, because he explicitly
found that the evidence was strong as to both materiality
and intent.