District Of Delaware Denies Motion To Dismiss Infectious Unenforceability Counterclaims
On January 7, 2020, Magistrate Judge Christopher Burke of the District of Delaware issued a Report and Recommendation recommending denial of plaintiff’s motion to dismiss counterclaims of unenforceability based on the doctrine of infectious unenforceability. Guardant Health, Inc. v. Foundation Medicine, Inc., Case No. 1:17-cv-1616-LPS-CJB, D.I. 343 (D. Del. Jan. 7, 2020). The Court found defendants’ allegations supported the existence of an “immediate and necessary” relation between plaintiff’s alleged concealment of the true inventorship of certain earlier-issued patents and enforcement of the patent at issue in the counterclaims.
Plaintiff is the owner of U.S. Patent Nos. 9,598,731, 9,834,822, 9,840,743 (collectively, the “Earlier Patents”), and 9,902,992 (the ’992 Patent). On November 9, 2017, plaintiff sued defendants for infringement of all four patents. Defendants counterclaimed, alleging that the ’992 Patent is unenforceable as a result of plaintiff’s inequitable conduct during prosecution of the Earlier Patents, which was “directly related” to the ’992 Patent. Specifically, defendants alleged that one of plaintiff’s co-founders had used information obtained from his prior employer to conceive of the subject matter claimed in the Earlier Patents and the ’992 Patent and that, to ensure full ownership of its patents, plaintiff actively concealed that co-founder’s inventorship of the Earlier Patents from the U.S. Patent and Trademark Office (PTO). Plaintiff moved to dismiss the counterclaims.
Plaintiff argued that defendants failed to plead a direct relationship between the alleged inequitable conduct and prosecution of the ’992 Patent, and that its patents were too different for the doctrine to apply. The Court disagreed. The Court noted that plaintiff’s formulation would eviscerate the doctrine and render it no different from traditional inequitable conduct. Instead, the doctrine requires only an “immediate and necessary relation” between the alleged inequitable conduct and the equity plaintiff seeks—i.e., enforcement of the ’992 Patent. The Court further found that defendants had sufficiently alleged an “immediate and necessary relation,” pointing to allegations that: (1) there was a significant overlap between the specifications and claims of plaintiff’s patents, even leading the PTO to reject the ’992 Patent on double patenting grounds over one of the Earlier Patents; (2) the ’992 Patent shares a priority date with the Earlier Patents; and (3) the face of the Earlier Patents and the ’992 Patent show they are in the same patent family.
Plaintiff also argued that the ’992 Patent cannot be unenforceable because it names both co-founders as inventors. The Court disagreed because “merely disclosing, in a subsequent application, material that was previously withheld with intent to deceive the PTO” is insufficient to cure inequitable conduct. Adequate curing requires (1) expressly advising the PTO of the misrepresentations, (2) advising the PTO of the actual facts and making clear to the PTO that further prosecution may be required if any PTO action was based on the misrepresentations, and (3) establishing patentability based on the factually accurate record.