Fraud in Obtaining Patent and Revocation

Patent rights are statutory right created under the terms and conditions of the national patent law. Nonetheless, if any patent protection is fraudulently obtained, patentees is free to use it to stop competitors and charge high prices to consumers. The patent offices are neither permitted nor equipped to detect any fraud during the prosecution of the patent application. However, patent office obviously expects patent applicants to act in good faith, failing which a patent may be held to be invalid if it is proved in invalidation suite that patent was obtained by fraud, false suggestion, or misrepresentation. Therefore, all the applicants for grant of a patent have a duty of candour, good faith, and honesty in dealings with the patent office.

Remedy against fraud

But what are the possible remedies available to the competitors if they suspect that the fraud has occurred? One possibility is seeking invalidation of a patent before the courts as it was done by Becton -Dickinson in in Therasense, Inc. v. Becton-Dickinson, Inc. [649 F.3d 1276 (Fed. Cir. 2011)]. In this case Becton was able to convince the court with clear and conclusive evidence that Therasense had manipulated the experiment results to obtain the US 5,820,551 patent for disposable glucose test strips for diabetes. In this case Abbott Laboratories (Abbott), the successor to Therasense, Inc. (defendant), obtained patents for disposable glucose test strips for diabetes. Becton-Dickinson, Inc. brought suit, seeking a declaratory judgment that Abbott’s patents were invalid. In its patent application, in USPTO, Abbott had asserted that its invention required a protective membrane, and that such a membrane was not merely optional or preferred. This stand was in contrast to a previous assertion by Abbott’s European patent counsel to the European Patent Office (EPO) where counsel had stated that the protective membrane of the invention was optional, but preferable. In fact, Abbott withheld this statement made before the EPO from USPTO. Founding this assertion correct the United States District Court ruled the glucose test strip patents unenforceable due to inequitable conduct on the part of Abbott. A panel of the United States Court of Appeals for the Federal Circuit affirmed, but then granted rehearing en banc.

Similarly, Australian Federal Court revoked a patent directed to a specific form of Warner-Lambert’s blockbuster cholesterol lowering drug, Lipitor (Ranbaxy Australia Pty Ltd v Warner-Lambert Co LLC (2008) 77 IPR 449) based on the false representation that the R form of the drug was ten times greater in activity. This fact was found material to the patent office’s considerations in granting the patent. Court held that this information was no only false but also misleading. In this case Ranbaxy Australia was able to prove that all of the data available to Warner-Lambert showed that the R form of the drug had an activity level that was only about two times greater than the racemate.

In yet another classic case of fraud on patent office, Delaware District Court in Cancer Research Technology et al. v Barr Laboratories et al. (2010) while revoking the patent relating tetrazine compound temozolomide, highlights the extent of the duty of good faith that is owed to the Patent Office (USPTO) by patent applicants. In this case Cancer Research Technology (CRT) filed series of patent application covering tetrazine compounds of temozolomides marketed under Trade Name Temodar®. However, series of these applications were rejected by USPTO on the grounds that the application did not include data showing the efficacy of the claimed compounds in humans. But in the impugned patent, the applicant convinced the examiner that there is no need to provide data showing efficacy in humans as the animal test data is already present in the application was sufficient. This patent was allowed by the examiner. However, in the invalidation action the opponent was able to produce the documents where one of the inventors’ published papers on tetrazine derivatives, including papers showing that some of the compounds covered by the claims were inactive. Court found that this information was not shared with Patent office when broad claims including the inactive compounds were granted. The court held that the data showing inactivity was material to patentability and should have been disclosed to the USPTO and declared patent as unenforceable due to invalid broad claims.

Position in India

The revocation proceedings under section 25(2) or section 64 based on grounds of fraud, false suggestion or misrepresentation are invariably raised but rarely pursued during trial in Indian courts. Theoretically speaking, any fraud in the creation of any patent right should be dealt severely by the patent office or the courts when the same is brought to the notice by the competitors. Such patent may face invalidation action of the interested competitor. According to section 64(1)(j) of the Patents Act, 1970, a patent may be revoked patent when a patentee secure patent protection based on false suggestion or representation. Patent is liable to be revoked under section 64(1)(o) if leave to amend complete specification under section 57 or section 58 was obtained by fraud. Additionally, Section 64(1)(m) of the Act states “that the applicant for the patent has failed to disclose to the Controller the information required by section 8 or has furnished information which in any material particular was false to his knowledge” is a ground for revocation of patent. In other words, section 64(1)(j), section 64(1)(o) and Section 8 read with Section 64(1)(m), seeks to ensure, and foster an honest and forthright disclosures of any information relating to patent by the patentee. Since the term ‘fraud’ is not clearly defined in the patent law, the patent office and courts rely on the common law meaning given to any fraudulent act. Normally, such act is covered under inequitable conduct or violation of duty of disclosure.

Cautionary remarks

These cases and many other cases relating non-disclosure of information material to grant of patent in many other countries is treated as fraud on patent office and such granted patents are liable to revocation if the opponent produce clear and convincing evidence before the court. These cases highlight the need of the inventors/ applicants to share all the relevant data to their patent facilitators for the purpose of drafting the patent specification and during its prosecution before patent offices of all jurisdictions including India. In practice, at times such information is not shared to avoid rejection of patent or curtailment of the scope of the claims. But court invariable favor the opponent if it turns out later that patent grant was obtained by fraud. Courts are unlikely to take lenient view as they believe that inventors are in the best position to know all the information/documents surrounding their inventions. Therefore, withholding any information which is material to ascertain the grant of patent may lead revocation of a patent by the opponent. Unlike in other countries such as US, Australia and Israel, there is no direct provision under the Indian patent law that empower the controller to revoke any fraudulent patent grant. This means if patent is obtained by fraud, it is more likely to stand and enforceable unless it is challenged in the revocation proceedings. In India opponent at times raise the ground of ‘unclean hands’, in patent invalidation disputes as a principle of equity. But this defense is likely to be successful only if the defendant proves though clear and convincing evidence that the patent applicant has breached a ‘duty of candor and good faith’ by misrepresenting or suppressing information submitted to the Patent Office. Nonetheless, it is known that patent fraud is extremely difficult to discover and prove. However, the competitors, who have deep and broad knowledge of both the relevant market and the relevant technology, are best position to uncover patent fraud and prove it. But at times, even these extremely strong competitors are rarely able to uncover inequitable conduct in the prosecution of a patent, let alone prove it. An expert opinion would be helpful if the opponent suspect that an alleged patent is obtained by fraud upon the patent office.

Indian patent offices are not permitted or equipped to detect any fraud during the prosecution of a patent application. However, patent offices expect patent applicants to act in good faith, failing which a patent may be held to be invalid if it is proven, in an invalidation suit, that the patent was obtained by fraud, false suggestion, or misrepresentation. Therefore, all the applicants for grant of a patent have a duty of candor, good faith, and honesty in dealings with the patent office. DPS Parmar discusses the repercussions of obtaining a patent and subsequent revocation in this article. Mr. Parmar is a Special Counsel at LexOrbis. After joining the IPAB as Technical Member (Patents) in 2011, he has been instrumental in writing some path breaking and insightful decisions on Indian patent law issues.