Boehringer Ingelheim Vetmedica v. Schering-Plough

• Decision Date: 20 June 2000
• Docket Number: No. CIV. 96-4047(HAA).,CIV. 96-4047(HAA).
• Citation: 106 F.Supp.2d 667
• Parties: BOEHRINGER INGELHEIM VETMEDICA, INC., et al., Plaintiffs, v. SCHERING-PLOUGH CORPORATION and Schering Corporation, Defendants.
• Court: U.S. District Court — District of New Jersey

106 F.Supp.2d 667

BOEHRINGER INGELHEIM VETMEDICA, INC., et al., Plaintiffs, v. SCHERING-PLOUGH CORPORATION and Schering Corporation, Defendants.

No. CIV. 96-4047(HAA).

United States District Court, D. New Jersey.

June 20, 2000.

Jennifer Gordon, Jonathan A. Marshall, Scott D. Stimpson, Pennie & Edmonds, New York City, for Plaintiffs.

Sidney David, Paul H. Konchanski, Lerner, David, Littenberg, Krumholz & Mentlik, Westfield, NJ, for Defendants.

OPINION

ACKERMAN, Senior District Judge.

This matter comes before the Court on Schering's defense of inequitable conduct in the above-referenced case. This Court severed the defense of inequitable conduct from Boehringer's claim of infringement and Schering's defense of obviousness. On January 20, 2000 a jury found the Boehringer had proven infringement by a preponderance of the evidence and that Schering had failed to demonstrate that the 5,476,778 Patent (hereinafter "the '778 Patent") was obvious. Thereafter, this Court held a two-day hearing on the issue at hand, i.e., whether Boehringer engaged in inequitable conduct before the United States Patent Office (hereinafter "USPO").

After carefully consideration, for the reasons stated below, this Court finds that Schering has failed to prove that Boehringer engaged in inequitable conduct that would invalidate the '778 Patent. Accordingly, since all substantive issues have now been resolved in this matter, together with an Order issued on this same date, final judgment shall be entered in this matter in favor of Boehringer.¹

I. DISCUSSION

This is not the Court's first opinion on the issue of inequitable conduct and the standards that apply thereto. See Boehringer Ingelheim v. Schering-Plough, 984 F.Supp. 239 (D.N.J.1997) (hereinafter "Boehringer I"); Boehringer Ingelheim v. Schering-Plough, 6 F.Supp.2d 324 (D.N.J. 1998) (hereinafter "Boehringer II") and Boehringer Ingelheim v. Schering-Plough, 68 F.Supp.2d 508, 536 (D.N.J.1999) (hereinafter "Boehringer III"). Therefore, this Court will not engage in a lengthy recitation of the relevant case law but instead will focus on the law which is most relevant to this inquiry. In addition, familiarity with the subject matter at issue is assumed.

Inequitable conduct means any "affirmative misrepresentation of a material fact, failure to disclose material information, or submission of false material information, coupled with an intent to deceive." Refac International, Ltd. v. Lotus Development Corp., 81 F.3d 1576, 1581 (Fed.Cir. 1996) (quoting Molins PLC v. Textron, Inc., 48 F.3d 1172, 1178 (Fed.Cir.1995)). The party alleging "inequitable conduct" must prove by clear and convincing evidence a threshold level of both the materiality of the withheld or misrepresented information as well as the opposing party's intent to deceive. Id. This high burden of proof is required because each duly issued patents enjoy a presumption of validity. "Clear and convincing" evidence is evidence that produces an abiding conviction that the truth of a factual contention is highly probable. Buildex, Inc. v. Kason Indus., Inc., 849 F.2d 1461, 1463 (Fed.Cir. 1988) (citing Colorado v. New Mexico, 467 U.S. 310, 316, 104 S.Ct. 2433, 81 L.Ed.2d 247 (1984)).

Once a threshold level of materiality and intent is established, the Court must balance these findings to determine whether the equities of the case warrant a finding of inequitable conduct. Molins, 48 F.3d at 1178. In balancing the materiality of the undisclosed or misrepresented information and the applicant's intent to deceive the USPO, the Court must consider all of the evidence, including evidence of the applicant's good faith. Id., 48 F.3d at 1181; Kingsdown Medical Consultants Ltd. v. Hollister, Inc., 863 F.2d 867, 876 (Fed.Cir.1988); Schering's Post-Trial Br. at p. 12. Because this Court's inquiry must consider materiality and intent together, "the more material the omission or misrepresentation, the less intent that must be shown to reach a conclusion of inequitable conduct." Akzo N.V. v. United States International Trade Commission, 808 F.2d 1471, 1481-82 (Fed.Cir.1986). This ultimate determination is entrusted to the Court's discretion. Halliburton Co. v. Schlumberger Technology Corp., 925 F.2d 1435, 1439-1440 (Fed.Cir.1991).

The materiality of a reference for purposes of an inequitable conduct defense is tested by the standard enunciated in 37 CFR § 1.56. Prior to amendment in 1992, information was deemed material if there was a "substantial likelihood that a reasonable examiner would have considered the information important in deciding whether to allow the application to issue as a patent." Refac, 81 F.3d at 1581; 37 C.F.R. § 1.56 (1984). In 1992, however, this standard was amended to provide that "information is material to patentability when it is not cumulative to information already of record or being made of record in the application, and (1) It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) It refutes, or is inconsistent with, a position the applicant takes ..." 37 C.F.R. § 1.56 (1992). The post-1992 standard further provides that a "prima facie case of unpatentability is established when the information compels a conclusion that a claim is unpatentable under the preponderance of evidence, burden-of-proof standard, giving each term in the claim its broadest reasonable construction consistent with the specification, and before any consideration is given to evidence which may be submitted in an attempt to establish a contrary conclusion of patentability." Id. Although Schering suggests that the pre-amendment standard applies to this case, Schering argues in its brief that it has proven the materiality of the relevant references under both the pre- and post-1992 standards. See e.g., Schering's Post-Trial Br. at p. 5 (the "change [in the standard] is unimportant in the present case because there are a number of reasons why the Collins and Benfield homogenate would clearly have been material under Rule 56 before and after the 1992 change"). For purposes of this Opinion, this Court will apply both the pre-1992 and post-1992 standard for materiality.

It is axiomatic in patent law that a patentee has no duty to disclose material prior art which is merely cumulative of (or less material than) other art submitted to the USPO. See Halliburton, 925 F.2d at 1440; Baxter Int'l, Inc. v. McGaw, Inc., 149 F.3d 1321, 1328 (Fed.Cir.1998). Thus, a defense of inequitable conduct will fail if it is based on the non-disclosure of prior art which was merely cumulative of other art disclosed to the USPO.

"Intent" for purposes of an inequitable conduct defense means "design, resolve, or determination with which a person acts; a state of mind in which a person seeks to accomplish a given result through a course of action." Molins, 48 F.3d at 1180. Intent "need not be proven by direct evidence" and is "most often proven by a showing of acts, the natural consequences of which are presumably intended by the actor." Id. An intent to deceive is "found when in light of all the evidence, the conduct indicates `sufficient culpability to require a finding of intent to deceive.'" Paragon Podiatry Laboratory, Inc. v. KLM Laboratories, Inc., 984 F.2d 1182, 1183 (Fed.Cir.1993).

Proof of inequitable conduct based upon the non-disclosure of prior art may be rebutted by showing: (1) that the disputed reference was not material; (2) that if the reference was material, the applicant did not know of its existence or that the reference was "merely cumulative" of another reference already disclosed; (3) if the applicant knew of the contested reference, the applicant did not know of its materiality; or (4) that the applicant did not intend to mislead the PTO by failing to disclose it. Elk Corp. v. GAF Building Materials Corp., 168 F.3d 28, 30-31 (Fed. Cir.1999).

Here, Schering argues that Boehringer failed to disclose and intentionally misrepresented the following information to the USPO: (a) the origins of the work completed by Drs. Collins and Benfield and (b) the existence of Drs. Dea and Van Alstine's work and its relevance to the '778 Patent application. Each of these arguments will be discussed in turn.

A. Drs. Collins and Benfield's Work

Schering argues that Boehringer intentionally included Drs. Collins and Benfield's homogenate work in the section entitled "The Invention" rather than citing that work as prior art in an effort to deceive the USPO of the true state of the prior art at the time of Boehringer's invention. I disagree and find that Schering has failed to prove by clear and convincing evidence that this information was material and that Boehringer included this work in "The Invention" section of the '778 Patent to deceive the USPO.

1. Materiality of the Drs. Collins and Benfield Homogenate Work

The first inquiry this Court undertakes is to determine whether Boehringer made a material misrepresentation to the USPO regarding the Collins and Benfield work.²

As stated above, where a party alleges inequitable conduct from an affirmative misrepresentation of information, the party must prove by clear and convincing evidence (1) the information submitted was material and false and (2) the information was submitted with an intent to deceive. J.P. Stevens & Co., Inc. v. Lex Tex Inc., 747 F.2d 1553, 1559 (Fed.Cir.1984), cert. denied, 474 U.S. 822, 106 S.Ct. 73, 88 L.Ed.2d 60 (1985). Materiality in this case will be measured by both the standard in place at the time Boehringer initially filed its application for the '778 Patent as well as the standard enacted in 1992 while the '778 Patent was still pending before the USPO. Under either standard, this Court concludes that Schering has not met its burden of proving a threshold level of materiality with respect to the Drs. Collins and Benfield work.

Since Schering contends that Boehringer misrepresented the Collins and Benfield...