(379) DEPARTMENT OF COMMERCE
Patent and Trademark Office
[Docket No. PTO-P-2021-0058]
Duties of Disclosure and Reasonable Inquiry During Examination,
Reexamination, and Reissue, and for Proceedings Before the Patent Trial and
Appeal Board
AGENCY: United States Patent and Trademark Office, Department of Commerce.
ACTION: Notice.
SUMMARY: The duty of candor and good faith in dealing with the United
States Patent and Trademark Office (USPTO) includes the duty to disclose
to the USPTO information material to the patentability of a claimed
invention. Each party submitting a paper to the USPTO has an additional
duty to perform an inquiry that is reasonable under the circumstances,
including reviewing documents to identify information that is material to
the patentability of a claimed invention. The USPTO relies on each
individual who is subject to these duties to abide by them. The duties are
imposed to assist patent examiners and administrative patent judges in
evaluating patentability effectively and efficiently. The duties promote
robust and reliable patents, and drive competition and economic growth. In
the pharmaceutical space, the duties promote robust and reliable patents
that incentivize and protect innovation that brings life-saving drugs to
the American people while not unnecessarily delaying more affordable
generic drugs.
This notice is intended to clarify the duties, including as to materials
or statements material to patentability or statements made to the USPTO
that are inconsistent with statements submitted to the FDA and other
governmental agencies.
FOR FURTHER INFORMATION CONTACT: Ali Salimi, Senior Legal Advisor,
Officeof Patent Legal Administration, Office of the Deputy Commissioner for
Patents, at 571-272-0909.
SUPPLEMENTARY INFORMATION:
I. Background: On July 9, 2021, President Biden issued an Executive
Order on Promoting Competition in the American Economy, 86 Fed. Reg. 36987
(2021). President Biden expressed concern that "too often, patent and other
laws have been misused to inhibit or delay-for years and even decades-
competition from generic drugs and biosimilars, denying Americans access to
lower-cost drugs." The President called for action "to help ensure that the
patent system, while incentivizing innovation, does not also unjustifiably
delay generic drug and biosimilar competition beyond that reasonably
contemplated by applicable law."
On September 9, 2021, Senator Patrick Leahy and Senator Thom Tillis sent
a letter to Mr. Andrew Hirshfeld, Performing the Functions and Duties of
the Under Secretary of Commerce for Intellectual Property and Director of
the USPTO, requesting that the Office "take steps to reduce patent
applicants' making inappropriate conflicting statements in submissions to
the [USPTO] and other federal agencies." The letter provided a specific
example in which "inconsistent statements submitted to the Food and Drug
Administration (FDA) to secure approval of a product-asserting that the
product is the same as a prior product that is already on the market-can
then be directly contradicted by statements made to the [USPTO] to secure a
patent on the product." The letter noted that such inconsistent statements
"should be cause for rejecting the application and, when made knowingly and
with bad intent, potentially other sanctions.
"This notice is part of the USPTO's efforts to put into effect the
Administration's goals and address the Senators' concerns. It is also part
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of the USPTO's ongoing mission to issue robust and reliable patents and to
make sure our intellectual property ecosystem works to bring more
innovation to impact - in every technological space including the critical
pharmaceutical space. This notice clarifies the "duty of disclosure" and
"duty of reasonable inquiry" owed to the USPTO and American public. This
notice specifically addresses these duties as they relate to information
and statements material topatentability including, but not limited to,
those received from orsubmitted to the FDA and other governmental agencies.
II. Who Has a Duty to Disclose Material Information: The duty to
disclose applies to matters pending before the USPTO and extends broadly to
"[e]ach individual associated with the filing and prosecution of a patent
application" and "[e]ach individual associated with the patent owner in a
reexamination proceeding." 37 CFR 1.56(a) and 1.555(a). For patent
applications, including reissue applications, these individuals include
each inventor named in the application, each attorney or agent who prepares
or prosecutes the application, and "[e]very other person who is
substantively involved in the preparation or prosecution of the application
and who is associated with the inventor, the applicant, an assignee, or
anyone to whom there is an obligation to assign the application."
37 CFR 1.56(c); see 37 CFR 1.171. For reexamination proceedings, these
individuals include "the patent owner, each attorney or agent who
represents the patent owner, and every other individual who is
substantively involved on behalf of the patent owner in a reexamination
proceeding." 37 CFR 1.555(a).
The duty to disclose also extends to parties and individuals involved in
a proceeding before the Patent Trial and Appeal Board (PTAB). According to
37 CFR 42.11(a), "Parties and individuals involved in the proceeding have a
duty of candor and good faith to the Office during the course of a
proceeding." Not only does the duty apply to each individual associated
with a patent application (including a reissue application) or
reexamination proceeding that is on appeal to the PTAB, but the duty to
disclose also extends to patent owners presenting substitute claims in an
inter partes review or post grant review proceeding. "Under 37 C.F.R. § 42.
11, all parties have a duty of candor, which includes a patent owner's duty
to disclose to the Board information of which the patent owner is aware
that is material to the patentability of substitute claims, if such
information is not already of record in the case." Lectrosonics, Inc. v.
Zaxcom, Inc., IPR2018-001129, 001130, Paper 15 at 9-10 (PTAB Feb. 25, 2019)
(precedential).
III. What Material Information Must Be Disclosed: "[I]nformation 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 in: (i) Opposing an
argument of unpatentability relied on by the Office, or (ii) Asserting an
argument of patentability." 37 CFR 1.56(b). The USPTO holds those
individuals subject to this duty to the highest standards. In close cases
where the materiality or consistency of the information is in question, the
applicant should consider submitting this information to the USPTO. See
Manual of Patent Examining Procedure (9th ed. Rev. 10.2019) (MPEP) § 2004,
item 10.
Specifically, the duty of candor and good faith, and by extension the
duty to disclose, applies to positions taken by applicants or parties
involving the claimed subject matter. For instance, in PTAB proceedings,
parties should not take a position about the patentability of challenged
claims that is inconsistent with positions taken in submissions to other
Government agencies regarding the same subject matter. See, e.g., Rules of
Practice for Trials Before the Patent Trial and Appeal Board and Judicial
Review of Patent Trial and Appeal Board Decisions, Final Rule, 77 FR 48612,
48630 (Aug. 14, 2012) ("The scope of the duty [of candor and good faith] is
comparable to the obligations toward the tribunal imposed by Rule 11 of the
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Federal Rules of Civil Procedure.").
If a party to a USPTO proceeding discovers that an earlier position
taken in a submission to the USPTO or another Government agency was
incorrect or inconsistent with other statements made by the party, the
party must promptly correct the record. See, e.g., In re Tendler,
Proceeding No. D2013-17 (USPTO Jan. 1, 2014) (suspending a practitioner for
four years for failure to correct the written record after learning of
inaccuracies in a declaration the practitioner had filed). In the context
of prosecution, an applicant must disclose to the USPTO any information
that refutes, or is inconsistent with, a position the applicant takes in:
(i) opposing an argument of unpatentability relied on by the Office, or
(ii) asserting an argument of patentability. See 37 CFR 1.56(b)(2). In
the context of PTAB proceedings, if the party is or becomes aware of
incorrect or inconsistent positions, the party must make the PTAB panel
aware of the incorrect or inconsistent positions and must submit the
inconsistent information. Patent owners may bring information, including
prior art and incorrect or inconsistent positions, to the attention of the
USPTO through supplemental examination, ex parte reexamination, reissue
applications, or submissions under 37 CFR 1.501. During prosecution, third
parties may have an opportunity to disclose information to the USPTO
through third party submissions under 37 CFR 1.290 and protests under
37 CFR 1.291. After issuance, third parties may disclose information
directed to issued patents to the USPTO via submissions under 37 CFR 1.501,
in ex parte reexamination, or in PTAB trial proceedings. A finding of
"fraud," "inequitable conduct," or violation of duty of disclosure through
bad faith or intentional misconduct with respect to any claim in an
application or patent, renders all the claims thereof unpatentable or
invalid. MPEP § 2016.
Patent examiners also have the ability to require submission of
information that may be reasonably necessary to properly examine or treat a
matter in a pending or abandoned application. 37 CFR 1.105(a)(1). The
information that must be submitted to comply with a requirement for
information under 37 CFR 1.105 may not be material to patentability in
itself under 37 CFR 1.56, but it is necessary to obtain a complete record
from which a determination of patentability may be made. MPEP § 704.12(a).
Therefore, when an examiner has a reasonable basis to conclude that an
individual identified under 37 CFR 1.56(c) or any assignee has information
that would aid in the examination of the application or treatment of some
matter, the examiner may require submission of information that is not
necessarily material to patentability. This requirement could include
statements made or information submitted to other Government agencies such
as the FDA. For example, when examining a claim directed to a process of
manufacturing a particular drug product that was effectively filed more
than one year after FDA approval of the drug product, an examiner may
appropriately require an applicant to submit to the USPTO information
submitted to the FDA (e.g., in a New Drug Application or Biologics License
Application) on how the drug product was manufactured.
IV. What Is the Duty of Reasonable Inquiry: "The presentation to the
Office (whether by signing, filing, submitting, or later advocating) of any
paper by a party, whether a practitioner or non-practitioner, constitutes a
certification under § 11.18(b)." 37 CFR 1.4(d)(4)(i). Section 11.18(b)
includes 11.18(b)(2), which calls for a duty of reasonable inquiry to
ensure that the paper is not being presented for any improper purpose, the
legal contentions are warranted by law, the allegations and other factual
contentions have evidentiary support, and the denials of factual
contentions are warranted on the evidence.¹
Accordingly, each party presenting a paper to the USPTO, whether a
practitioner or non-practitioner, has a duty to perform an inquiry that is
reasonable under the circumstances. This reasonable inquiry may comprise
reviewing documents that are submitted to or received from other Government
agencies, including the FDA. If any reviewed document is material to the
patentability of a pending matter before the Office, such as a patent
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application (including a reissue application), a reexamination proceeding,
or an issue pending before the PTAB, the party has a duty to submit the
information to the USPTO. 37 CFR 1.56, 1.555, 42.11(a); see 37 CFR 42.11
(c), 11.18(b)(2). A duty of reasonable inquiry may exist based on
circumstances known to the party presenting the paper to the USPTO. Failing
to inquire when the circumstances warrant it could result in sanctions or
other action under 37 CFR 11.18(c), which may include: (1) striking the
offending paper; (2) referring a practitioner's conduct to the Director of
Enrollment and Discipline for appropriate action; (3) precluding a party or
practitioner from submitting a paper, or presenting or contesting an issue;
(4) affecting the weight given to the offending paper; or (5) terminating
the proceedings in the Office. See, e.g., In re Hao, Proceeding No. D2021-
14 (USPTO Apr. 27, 2022) (involving disciplinary sanctions predicated on
non-compliance with 37 CFR 11.18).
V. When the Duties of Disclosure and Reasonable Inquiry Arise in
Dealings With Other Government Agencies: Each individual with a duty to
disclose, or party with a duty of reasonable inquiry, should ensure that
the statements made to the USPTO and other Government agencies, or any
statements made on their behalf to other Government agencies regarding the
claimed subject matter, are consistent. See Belcher Pharms., LLC v.
Hospira, Inc., 11 F.4th 1345 (Fed. Cir. 2021) (affirming a district court's
determination of inequitable conduct because the patent owner's Chief
Science Officer failed to provide to the USPTO submissions he made to the
FDA about the prior art that were inconsistent with positions taken before
the USPTO during the prosecution of a pending patent application).
Furthermore, providing material information to other Government agencies,
including the FDA, while simultaneously withholding the same information
from the USPTO undermines both the intent and spirit of the duty of
disclosure and violates those duties. For example, in Bruno Independent
Living Aids, Inc. v. Acorn Mobility Services, Ltd., 394 F.3d 1348, 1354
(Fed. Cir. 2005), the U.S. Court of Appeals for the Federal Circuit
inferred intent to deceive and found inequitable conduct occurred when an
official involved in both the FDA and the USPTO submissions chose to
disclose material prior art to the FDA but not to the USPTO.
Activities or documents associated with market testing, marketing, or
commercialization by the patent applicant can also be material to
patentability, and therefore, when material, should be disclosed to the
USPTO. See GS Cleantech Corp. v. Adkins Energy LLC, 951 F.3d 1310, 1330-
1332 (Fed. Cir. 2020) (finding that a district court did not abuse its
discretion in reaching its inequitable conduct determination where the
district court concluded that the inventors and their lawyers made a
deliberate decision to withhold material information from the USPTO
regarding an offer for sale and reduction to practice of the claimed
invention that would have implicated an on-sale bar to the granting of a
patent; the lawyers filed with the USPTO a declaration containing a false
statement about the timing of an offer for sale despite having in their
possession materials that would call into question the veracity of the
statement; and the inventors and lawyers subsequently failed to correct the
false declaration). By following the guidance in this notice, it is
expected that patent applicants can obtain more reliable patent protection
and avoid the findings of inequitable conduct and sanctions noted above.
Similarly, each individual with a duty to disclose, or party with a duty
of reasonable inquiry, should review documents it receives from other
Government agencies to determine whether the information should be
submitted to the USPTO. For example, when a company seeks FDA approval to
market a generic drug before the expiration of patents related to the drug,
the generic drug application (e.g., an Abbreviated New Drug Application
(ANDA)) must contain a "paragraph IV certification" that the patents
submitted to the FDA by the brand-name drug's sponsor, listed in the FDA's
Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange
Book), and related to the drug are invalid, are unenforceable, or will not
be infringed by the generic product. Except in limited circumstances,
notice of a paragraph IV certification must also be communicated to the
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owner of the patent subject to the certification and to the New Drug
Application holder. Such a notice includes a detailed statement providing
factual and legal bases for the paragraph IV certification. 21 CFR 314.95
(c)(7). Consequently, to assist USPTO staff in evaluating patentability
effectively and efficiently, the party receiving a paragraph IV
certification should review such documents to determine whether they are
material to the patentability of any pending matters before the USPTO, such
as pending patent applications, reexamination proceedings, or issues in
proceedings pending before the PTAB. If the content of the detailed
statement, or other information that is part of the ANDA process, is deemed
material to patentability in a pending USPTO matter, then such information
must be submitted to the USPTO during the pendency of the matter, to meet
the duties of candor and good faith and disclosure under 37 CFR 1.56,
1.555, 42.11(a) or (c), or 11.18(b)(2).
Deliberate schemes or established practices to prevent 37 CFR 1.56(c)
individuals from obtaining knowledge of material information is not acting
in accordance with candor and good faith under 37 CFR 1.56(a). For example,
walling off the patent prosecution practitioners from the attorneys seeking
FDA approval, as a way to prevent material information from being exchanged
between the practitioners and attorneys, is inappropriate. The U.S. Supreme
Court has refused to enforce patents where deliberate steps were taken to
suppress material information. See, e.g., Keystone Driller Co. v. Gen.
Excavator Co., 290 U.S. 240 (1933) (patent owner's suit dismissed where the
patent owner paid a third party to keep a prior use secret); Precision
Instruments Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806 (1945) (suit
dismissed where patent owner actively suppressed evidence of perjury to the
USPTO).
Though the FDA compiles paragraph IV certifications and publishes a list
on its website, submitting this list to the USPTO does not satisfy the duty
of disclosure for any material information submitted with the paragraph IV
certification. These lists do not include patent numbers, relevant claims,
or an explanation of the basis for the certification. Therefore,
information and documents submitted with the paragraph IV certification
that are material to patentability or to issues in proceedings pending
before the USPTO, including the PTAB, must be submitted directly to the
USPTO and as described above, the examiner may appropriately require
submission of information concerning the certifications in certain
situations.
July 26, 2022 KATHERINE K. VIDAL
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office
¹"To the best of the party's knowledge, information and belief, formed
after an inquiry reasonable under the circumstances, (i) The paper is not
being presented for any improper purpose, such as to harass someone or to
cause unnecessary delay or needless increase in the cost of any proceeding
before the Office; (ii) The other legal contentions therein are warranted
by existing law or by a nonfrivolous argument for the extension,
modification, or reversal of existing law or the establishment of new law;
(iii) The allegations and other factual contentions have evidentiary
support or, if specifically so identified, are likely to have evidentiary
support after a reasonable opportunity for further investigation or
discovery; and (iv) The denials of factual contentions are warranted on the
evidence, or if specifically so identified, are reasonably based on a lack
of information or belief." 37 CFR 11.18(b)(2).
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