By Matthew Chun
In an effort to “promote robust and reliable patents” and increase access to life-saving drugs, the United States Patent and Trademark Office (USPTO) recently issued a Federal Register Notice clarifying the responsibilities of individuals involved in the patent application process.
In the July 29, 2022 notice, the USPTO set forth its views on the “duty of disclosure” and “duty of reasonable inquiry,” emphasizing the importance of consistency between statements made to the USPTO, the FDA, and other governmental agencies. While the goals of the Federal Register Notice are certainly noble, its disruptive practical effects leave much to be desired.
Background Context
The USPTO’s Federal Register Notice comes in response to President Biden’s Executive Order on Promoting Competition in the American Economy (July 9, 2021) and a September 9, 2021 letter from Senator Patrick Leahy and Senator Thom Tillis to Mr. Andrew Hirshfeld (then interim Director of the USPTO) advocating for a crackdown on conflicting statements made before various government agencies to unjustly obtain patent protection and regulatory approval for products. For example, while a biotechnology company might be incentivized to claim the similarity of its products to already approved products to benefit from expedited FDA clearance (e.g., via an abbreviated new drug application [ANDA] or a 510(k) submission for medical devices), such statements could cut against patentability as reviewed by the USPTO. The company may therefore be tempted to make conflicting statements to the USPTO about the novelty and non-obviousness of its products, or at least withhold information about its FDA submissions.
In the USPTO’s view, the existing “duty of disclosure” and “duty of reasonable inquiry” can be relied upon to curb such dubious behavior.
The Duty of Disclosure
Under the USPTO’s duty of disclosure, “[e]ach individual associated with the filing and prosecution of a patent application” must disclose to the USPTO any information material to patentability. 37 CFR 1.56(a). This duty extends to the inventors, the attorneys and agents who prepare and prosecute 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.”
While the wording of the rules have not changed, the recent USPTO notice explicitly brings all kinds of new materials within the ambit of the disclosure requirement, including:
- Conflicting statements made to other Government agencies (e.g., statements cutting against novelty that are made to the FDA to qualify for the abbreviated regulatory pathway under 505(b)(2) of the Federal Food, Drug, and Cosmetic Act)
- Non-conflicting information provided to other Government agencies that is material to patentability (e.g., prior art disclosed to the FDA but not to the USPTO; “activities or documents associated with market testing, marketing, or commercialization;” or “paragraph IV certification” documents)
- Any information submitted to another Government agency that is reasonably requested by a patent examiner to aid in examination, regardless of its materiality (e.g., manufacturing information submitted to the FDA in a New Drug Application or Biologics License Application)
Failure to comply with these disclosure rules is sanctionable and can result in a finding of fraud, inequitable conduct, or violation of the duty of disclosure, rendering a patent unenforceable. MPEP § 2016.
The Duty of Reasonable Inquiry
While it may not seem controversial to adopt a policy that promotes honesty before the USPTO, the July 29, 2022 Federal Register Notice takes things further by clarifying just how far parties must go in seeking out the material information they are obligated to disclose.
As the notice makes clear, any paper presented to the USPTO by a party—whether a practitioner or non-practitioner—constitutes a certification under 37 CFR § 11.18(b) that a reasonable inquiry has been made 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.” According to the notice, such reasonable inquiry may include “reviewing documents that are submitted or received from other Government agencies, including the FDA.” Moreover, ignorance may not work as an excuse for non-disclosure, since the notice prohibits practices such as walling off patent attorneys from regulatory attorneys seeking FDA approval to avoid the exchange of material information.
Practical Implications
By defining “reasonable inquiry” in the way that it does, the USPTO goes far beyond simply requiring candor from patent practitioners and their clients. Rather — upon threat of disciplining practitioners and invalidating their clients’ patents — this “clarification” effectively burdens all parties involved with actively seeking out and reviewing what may amount to hundreds, if not thousands, of additional pages of documentation throughout the patenting process. With patent prosecution already becoming an increasingly commoditized business, this expanded conception of the duties of disclosure and reasonable inquiry will likely increase the cost of patent prosecution and may break the bank for many firms.
Patent costs aside, companies will also need to establish new internal processes to coordinate documents being sent to different agencies to “get their story straight.” Law firms, in turn, will have to reorganize to establish collaboration between previously siloed patent prosecution and regulatory practices — both within and between firms. In many cases, the current “walling off” of these practices may prove to have much less to do with “bad faith,” and much more to do with the practical difficulties of interfacing between two distinct and specialized areas of legal practice. If so, the integration of these practices may prove to be no small task.
At the end of the day, honesty is, of course, still the best policy. . . but certain administrative interpretations of “honesty” make for better policies than others. Better solutions are needed to incentivize consistent disclosures across government agencies without placing undue burden on patent practitioners and their clients.
