19

Decision Standards for Duty of Disclosure
Researcher: Tatsuya Misawa (*)

In U.S. patent practice, applicants are obligated to "disclose all information to the USPTO (United States
Patent and Trademark Office) that the applicant knows to be material to the examination, and not to alter or
inaccurately convey the facts," that is, they are imposed the duty of candor. Information subject to disclosure is
not limited to the prior art as mentioned below, violation of the duty is recognized as inequitable conduct and therelevant right is deemed to be unenforceable. Due to the uncertainty of the U.S. intellectual property precedents,
patent applicants in Japan now must worry about the handling of the duty of disclosure system.
The determination of "materiality" and "intent to mislead" under the U.S. duty of disclosure system wasconsidered in view of the decision standards of the court, such as immediate relevance between information thatmust be disclosed and claims, cumulative prior art, indirect evidence, recognition of information that must be
disclosed, errors, and disclosure of non-English language references.
In addition, a comparison was conducted between the U.S. duty of disclosure system and the Japanesesystem for disclosure of information on prior art documents, which is similar to the U.S. system, and thereby
consideration was given to the desirable system in both countries.

Ⅰ Introduction
The United States adopts an information
disclosure system in which applicants have a duty
to disclose all the prior art that they know of in
relation to the contents of a relevant patentapplication when filing an application and applicantscannot exercise their rights if they violate this duty.
Prior art that applicants have a duty to disclose
includes not only that which applicants know of at
the time of filing the relevant application but alsothat which they subsequently come to know of
before a patent is granted. Therefore, applicants
have a duty to submit prior art cited in search
reports and notices of reasons for refusal preparedby foreign patent offices in a timely manner.
Such system is considered to be significant insecuring precise examination. However, because
the extremely subjective question of whether aperson having a duty to disclose knew of prior art
will become the focus of dispute on the duty of
disclosure violations in litigation, the decision
standard of the court is actually ambiguous.
Therefore, this research and study was
conducted to understand the details of this systemin the United States and the actual judicial
precedents thereof.

Ⅱ Decision Standards for Duty ofDisclosure Violations
1

Decision Standards for Materiality

Inequitable conduct, or violations of the duty of
disclosure, must be established by clear andconvincing evidence with regard to the decision
standards of both the materiality of the prior art
that the applicant failed to submit and theapplicant's intent to mislead the USPTO examiner,
and any person asserting inequitable conduct ischarged with the burden of proof. Materiality andintent are questions of fact subject to clear
examination error standards. The CAFC upholds
local court authority as long as there is no clear andcertain conviction that a misjudgment has been
issued.
By establishing decision standards formateriality and intent, the court performs
comparative deliberations to determine whether
the acts of the applicant constitute inequitableconduct.
(1) Evaluation of Immediate Relevance toClaimsFor the determination of materiality, theclaimed invention becomes a standard. However,with regard to the distance between the prior art inquestion and the claimed invention, that is, thequestion of how close the information subject to theduty of disclose should be to the prior art depends
on what kinds of references are provided to theexaminer, and there is no absolute measure.
In the decision on Baxter International, Inc v.
McGaw, Inc.,(*1) the CAFC decided that
determination of inequitable conduct required atwo-step analysis. This meant that it must be first
determined whether the undisclosed reference
meets a threshold level of materiality, and also
whether the evidence shows a threshold level ofintent to mislead the PTO. Once theabovementioned determinations have been made, it(*) Intellectual Property Division, Seiko Epson Corporation(*1) 149 F.3d 1321, 47 USPQ 2d 1225(Fed.Cir.1998).
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is necessary to weigh materiality and intent. If
there is substantial likelihood that a reasonable
examiner would regard it as material when
performing the examination for whether to allow apatent for the application in question, a reference isregarded as material.
(2) Decisions on Cumulative Prior Art
It has been decided that there is no need tosubmit prior art that is merely cumulative.(*2) Inother words, it is not material.
In Rolls-Royce Ltd. v. GTE Valera Corp.,(*3) itwas ruled that "Nothing in law or logic, however,requires an applicant to submit non-material,
merely cumulative references for PTO review," andthat there was no requirement to submit prior art
that had been raised by the examiner, nor prior artof cumulative content.
2

Decision Standards for Intent to Mislead(1) Determination of Intent
One more necessary element of the duty of
disclosure is the determination of whether theapplicant deliberately did not reveal information,that is, whether there was "intent to mislead."To establish "intent to mislead," logically it
should be possible to demand presentation of allprior art that was not disclosed by the inventor andall documents in the possession of the inventor that
could indicate the motives of the inventor (evidence
showing that there was an intention to deceive thePTO) for evidence disclosure procedures. In
addition, since it is possible to obtain testimony
from the inventor and any agents connected to theprosecution of the patent, it was considered easy toobtain direct evidence of intent. In fact, however,since it is likely that almost all the questions during
the testimony will cause the party's lawyer to raise
objections, or the lawyers may instruct the inventor
and the agents to refuse to answer by citing
lawyer-client
privilegeorprofessional
confidentiality principles, it is extremely difficult toestablish direct evidence. For this reason for
decisions on intent to mislead, in J.P. Stevens & Co.,
Inc. v. LEX TEX Ltd., Inc.,(*4) the court held that for
the establishment of evidence, proof of direct intent
was not required, and that indirect intent or grossnegligence was sufficient. In Rohm & Haas Co. v.
Crystal Chemical Co.,(*5) the court held that withregard to the proof of intent to mislead, a certain
degree of inference is permissible. This broadened

the decisions of the courts.
The decision of whether having some serious
negligence = indirect intent to mislead has beenpresumed in a variety of cases.
(2) Establishment of Intent to Mislead
through Indirect Evidence
As mentioned previously, some boundaries forintent to mislead were established in J.P. Stevens &Co., Inc. v. LEX TEX Ltd., Inc.(*6) It is rare for theaccused infringer to have direct evidence showing
intent. Accordingly, it is necessary to infer
imputable intent from actions, etc. that offer somekind of corroboration. As standard for this, thecourt stated in (FMC Corporation v. Manitowoc
Company)(*7) that "No single factor or combinationof factors can be said always to require an inferenceof intent to mislead; yet a patentee facing a highlevel of materiality and clear proof that it knew orshould have known of that materiality, can expect tofind it difficult to establish "subjective good faith"sufficient to prevent the drawing of an inference ofintent to mislead." In the same case the court heldthat "An applicant must be chargeable withknowledge of the materiality of the art orinformation; yet an applicant who knew of the art orinformation cannot intentionally avoid learning of
its materiality through gross negligence, i.e., it may
be found that the applicant "should have known" ofthat materiality." In other words, if the applicant
knew the materiality of the information that was
not disclosed, even if it is claimed that there was nointent to cause a wrong determination by the Office,there is a high probability that it will be presumed
that there was intent to mislead. It is alsosuggested that if there is intentional neglect in theinvestigation of whether information is material, it
is likely that it will be presumed that there wasgross negligence with regard to the recognition ofmateriality.
(3) Circumstances of Recognition
It is possible to establish whether a patent
holder knew of information that should have been
disclosed through indirect evidence. There are thefollowing decisions in specific cases on thedetermination of the circumstances that could beknown.
First, in FMC Corporation v. Hennessey
Industries Inc.,(*8) the court stated that in instanceswhere there is clear evidence that the applicant wasaware of the existence, as well as the materiality, ofprior art, there was good justification to presume(*2) Rule 1.98 (c) "When the disclosures of two or more patents or publications listed in an information disclosure statement aresubstantively cumulative, a copy of one of the patents or publications may be submitted without copies of the other patents
or publications provided that a statement is made that these other patents or publications are cumulative."(*3) 800 F.2d 1101, 231 USPQ 185(Fed. Cir. 1986).
(*4) 747 F.2d 1553 223 USPQ 1089(Fed.Cir.1984).
(*5) 722 F.2d 1556, 220 USPQ 289(Fed.Cir.1983).
(*6) 747 F.2d 1553 223 USPQ 1089(Fed.Cir.1984).
(*7) 835 F.2d 1411,1415,5 USPQ 1115-1116(Fed.Cir.1987).
(*8) 836 F.2d 521,5 USPQ2d 1271(Fed.Cir.1987).
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intent, and that convincing evidence of subjective
good faith would be necessary to refute this. In thisdecision, with respect to whether there was an
obligation to search prior art, the court refused tomake the decision on the existence of a duty tosearch, and ruled that in this case the broad patent
search conducted by FMC Corporation for theattack on the validity of the patent was not an
obligation that Hennessey Industries Inc. was
required to fulfill. However, the court also decided
that the act of intentionally ignoring the possibility
that prior art exists, for example, the act of notconducting any kind of prior art search, may bepresumed to be intent.
With regard to the recognition of information,
the requirement to determine the point at which
the information actually becomes known (as in
Nordberg v. Telsmith,(*9) even if the prior art inquestion is actually physically present in a bookcase,it cannot be assumed that it was known), can beconsidered a precedent in judging the boundaries ofawareness of information. If there is clear evidence
that the applicant actually did not know, it ispossible to avoid a breach of the duty of disclosure.
However, in cases where there is an intentional
refusal to learn, for example, not conducting a priorart search, and submission of an application without
accessing past applications for one's own company's
patents,(*10) there is no clear decision on whether
this would be considered intent to mislead.(*11)(4) Decisions on Errors in the Examination
Process
With regard to violations of the duty of
disclosure, the court's decisions are divided over
the relationship between negligence and intent tomislead. In Kingsdown Medical Consultants, Ltd v.
Hollister Inc.(*12) a specific answer was given on thequestion of whether to judge acts of non-disclosure
caused by the applicant's error during the patentexamination process as intent to mislead.
The CAFC ruled that "a finding that particular
conduct amounts to 'gross negligence' does not of
itself justify an inference of intent to deceive; theinvolved conduct, viewed in light of all the evidence,
including evidence indicative of good faith, must
indicate sufficient culpability to require a finding ofintent to deceive."(*13)
However, in Rohm & Haas Co. v. Crystal
Chemical Co.,(*14) as noted by the court, if

inequitable conduct is discovered during theapplication process, the applicant can rectify orovercome the inequitable conduct by taking action
to inform the examiner of the facts. The converse
interpretation is that in the event an applicant
detects flaws during the examination process, he isrequired to make diligent efforts to bring it to theattention of the examiner, and that failure to makesuch effort could be presumed to be intent tomislead.
(5) Decision Standards Involving Non-English
Language References
In Key Pharmaceuticals Inc. v. Hercon
Laboratories Corp.,(*15) there was no intent tomislead found, even though there was no propertranslation of a foreign language reference thatshould be disclosed, and no concise statement ofrelevance; while in Semiconductor Energy
Laboratory Co. Ltd. v. Samsung Electronics Co. Ltd.,(*16)
the failure to provide proper translation offoreign references that should be disclosed and thelack of a proper concise statement of relevance led
to a ruling of intent to mislead. At first glance thesecases appear to involve similar actions related todisclosure by applicants with different decisions.
In other words, even if the material portion ofa non-English language reference is not included in
the translated portion, the court will not
automatically infer that there is intent to mislead.
As noted by the district court in Key
Pharmaceuticals Inc. v. Hercon Laboratories Corp.,"the finding on intent in particular depended heavily
on the presentation of evidence and witness
testimony at trial. The trial court was able to hearthese matters first hand and assess witness
credibility," and that if it is not found that theactions of the attorney prosecuting the case "allow a
clear inference of a deceitful motive," it will be
ruled that there is no intent to mislead, and no
existence of inequitable conduct. On the other hand,in Semiconductor Energy Laboratory Co. Ltd. v.
Samsung Electronics Co. Ltd, the district court
applied the standard that "a requirement in finding
intent to deceive should be determined through theevaluation of the objective circumstances as awhole." As a result of a significant loss of credibility
before the court by the inventor and patentee of
Semiconductor Energy Laboratory Co. Ltd., it was
ruled that there was inequitable conduct. The issue(*9) 48 F.3d 1172,33 USPQ2d 1824(Fed.Cir.1995).
(*10) For patent applications in which an adequate prior art search has not been conducted, questions arise on the substantive
aspects, so such applications cannot be considered practical examples.
(*11) In FMC Corporation v. Manitowoc Company, the court cautioned that it is not possible to promote ignorance such as
ignoring the possibility of the existence of material information or prior art simply for the purpose of avoiding therecognition of the existence of such information (that is material enough to be needed to be disclosed).
(*12) 863 F.2d 867, 9 USPQ 1384(Fed.Cir.1988).
(*13) 863 F.2d p876.
(*14) 722 F.2d 1556, 220 USPQ 289 (Fed.Cir.1983).
(*15) 161 F.3d 709, 48 USPQ2d 1911 (Fed.Cir. 1998).
(*16) 204 F.3d 1368; 2000 U.S. App. LEXIS 3164; 54 U.S.P.Q.2D (BNA) 1001(Fed.Cir.2000).

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of submitting a partial translation is not a questionof the illegality of the act itself, rather it is related
to the question of deciding on the overall credibilityof the applicant.
Incidentally, for documents written inlanguages other than English, many patentexaminers perform the investigations using only
the content noted in the concise explanation orwithin the scope based on the information obtained
from the appearance of the document. Although the
PTO examiners have the resources and authority toobtain translations of documents written inlanguages other than English on their own, unless
an examiner believes there is an extremely large
possibility that the document is material to theexamination, it is actually rare for this to occur.
Since it also gives rise to extra costs and extends
the examination process, examiners are notencouraged to obtain translations on their own.
Under these circumstances, the PTO made therequirement of submitting a "concise statement" ofrelevance for each of the non-English language
references cited in the IDS.(*17) A "complete"translation into English for foreign language
materials is not necessarily required, but it isusually better to submit full translations for several
points rather than "concise statements" of
relevance, excerpts and abstracts.(*18)
3Weighing the Balance of Materiality andIntentIf it is proved that the thresholds formateriality and intent are reached, the court must
weigh the balance of the standards for these two,and decide whether to conclude that inequitableconduct as a legal issue has occurred.(*19) Whenconsidering the relative balance of these two, it ispresumed that the limit levels for both materiality
and intent have been met. In other words, if themateriality does not exceed the required minimum
level (regardless of how high the degree of intent
may be), there is no inequitable conduct.
If there is clear evidence of good faith, thecourt will not find inequitable conduct. Furthermore,
if the degree of materiality is low, gross negligenceis insufficient, and a certain higher level of intent isdemanded.
4

Conclusions and Observations
In addition to the existence of intent tomislead, inequitable conduct includes the act ofmaking positive statements of material facts,
not-disclosing material information, or making
submissions on the pretext that it is material
information. The standards for materiality of
information are decided based on whether suchinformation would influence a decision by areasonable examiner about whether to allow apatent. It has not been made clear whether the
court's decision standards for materiality arechanging to obvious patentability along with therevision of the rules.
The intent to mislead must be inferred fromthe facts and circumstances of the actions of theapplicant. This circumstantial evidence must
indicate acts that go beyond mere gross negligenceor inappropriate behavior; i.e. actions that do notreach a threshold of serious misrepresentation will
not be found to be inequitable conduct. It may bepossible to claim that the breadth of the court's
decisions is expanding, since a certain degree ofinference is permitted for proof of intent to mislead.
As mentioned previously, for decisions prior to the1988 Kingsdown decision,(*20) there were a varietyof cases of strict decisions of defects in thedisclosure process against the patent applicants andpatentees, for example, cases where intent tomislead was found regardless of the existence ofrecords suggesting that neither the patentee nor
his agents considered information material due tothe existence of undisclosed prior art discovered
independently by the examiner in the examination
procedure after interference,(*21) cases where intent
could be inferred if there was evidence of grossnegligence,(*22) and cases where it was held that if
there was clear evidence that the applicant wasaware that the prior art existed and that it wasmaterial, there was good justification to infer intent
and clear and convincing evidence of subjective
good faith was required to refute such inference.(*23)
The 1988 Kingsdown decision created a
disturbance in this flow. The Kingsdown decisionstated that "a finding that particular conduct
amounts to 'gross negligence' does not of itself
justify an inference of intent to deceive; theinvolved conduct, viewed in light of all the evidence,
including evidence indicative of good faith, must
indicate sufficient culpability to require a finding ofintent to deceive." This was a clear decision on the
point that (gross) negligence does not necessarilyequal proof of intent to mislead.
After the Kingsdown decision, court decisions(*17) M.P.E.P. §609A(3).
(*18) M.P.E.P. §609A(3) notes that "Submission of an English language abstract of a reference may fulfill the requirement for aconcise explanation."(*19) American Hoist, 725 F.2d at 1364, 220 U.S.P.Q. at 774.
(*20) Kingsdown Medical Consultants, Ltd v. Hollister Inc., 863 F.2d 867, 9 USPQ2d 1384(Fed.Cir.1988).
(*21) A.B.Dick Co. v. Burroughs Corp. 798 F.2d 1392,230 USPQ 894(Fed.Cir.1986).
(*22) J.P.Stevens & Co.,INC v. LEX TEX LTD., INC.747 F.2d 1553 223 USPQ 1089(Fed.Cir.1984).
(*23) FMC Corporation v. Hennessey Industries Inc. 836 F.2d 521,5 USPQ2d 1271(Fed.Cir.1987).
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became strict for the person accused of
infringement, that is, the side protesting breachesof the duty to disclose. In other words, court
decisions restrain the submission of claims fromthe accused infringers based on unwarranted
inequitable conduct.
As this illustrates, although the overall trend is
not clear, it can be said that for the proof of intent
there is a tendency of a higher degree of difficulty
for proof on the side accused of infringement.
The predictability for decision standards
depends heavily on the individual cases, and it
cannot be claimed that there is necessarily a clear
trend in precedents. One reason for this is thenecessity to prove intent in order to rule that there
is inequitable conduct. Proof of intent is a problem
that depends on the relationships of the various
facts. Since there are also subjective standards, it
can probably be said that it is inherently
incompatible with precise tests. A second reason isthat different judges have different ideas regarding"how far the court should go to maintain or
invalidate a patent." With regard to thedetermination of inequitable conduct, since it isnecessary to make a subjective decision, as
mentioned above, decisions in this field may be
more likely to reflect the inclinations of the benchwith respect to patents in general than other issues
for both the original trial and the appeals.
With regard to the issue of information
disclosure, although it is an issue of a duty of candor,
it is thought to be possible to construct ways tobenefit applicants, the patent office and third parties
through technological methods. In particular, forprior art cited in the reasons for rejection ofcorresponding foreign applications, the constructionof a database that can be mutually searched by the
U.S. patent office and the country in question would
greatly decrease the burden on an applicant. This is
expected to be addressed in the future between
patent offices.

Ⅲ Comparison with the Japanese
System for Disclosure of Prior
Art Documents
The basis of the U.S. system for disclosure of
information is compliance with the duty of candor.
The U.S. system is a unique system in comparison
to other countries' systems. Even in the United
Kingdom which also uses common law as a base,inequitable conduct will not lead to the invalidationof a patent or the impossibility of exercise of theright.(*24)
However, looking at this U.S. system not only

from a mere ethical aspect of the duty of candor but
also from the aspect as a safety valve in the processof determining the validity of a patent, the system
can be interpreted as a rational system thatmatches the U.S. system architecture fordetermination of patentability.
In the United States, the procedures forinvalidation of a patent after the issuance thereof
are as follows, but when demanding the invalidationof a patent in a suit (infringement suit/declaratory
judgment suit), invalidity must be proven by "clear
and convincing evidence," and this requires theproof of fact with a higher level of certainty than
general proof. In other words, this means that oncea patent is established as a right, the hurdle of adecision to invalidate the patent becomes higher
than that in the examination by the PTO. If the dutyof disclosure system does not exist, the applicant
can hide information that will have a material
influence on patentability at least until the issuanceof a patent by the PTO in order to reduce thepossibility that the patent will be invalidated incomparison to the possibility in the case where therelevant information is examined by the PTO at theexamination stage, even if a suspected infringer has
found the relevant information and makes anargument for the invalidity of the patent in an
infringement suit. In short, in some cases, even if aprior art is sufficient to block the grant of a patentin the examination by the PTO, it cannot invalidate,once a patent is established, the relevant patent in asuit.
This situation is "advantageous to those whohide" seen from the viewpoint of applicants. The
fact that a defective patent that is originally
supposed to be judged invalid at the examination
stage exists by accident as an effective right due tovariations of search capability of the Patent Officecauses an undeniable sense of inequity.(*25) It mustnot be permitted that a strong right that is
exercised as an exclusive right for 20 years remains
effective due to the misfortune (fortune) of prior art
having not been found at the examination stage.
As a methodology for correcting suchinconvenience, it is also considered extremely
rational from the viewpoint of stable and precise
patent rights to change the basic idea of the systemfor disclosure of information from "advantageous tothose who hide" to "disadvantageous to those whohide" by setting severe sanctions.
On the other hand, in Japan, the procedure forinvalidation after the establishment of a patent rightis conducted based on the system of trial forinvalidation. On this occasion, decision standards
for the validity of a patent are the same as the(*24) In the U.K. Patents Act 1949, a false suggestion and representation were reasons for revocation (Section 32).
(*25) Such information can be obtained if the Patent Office has the high search capability and well-developed system to collectinformation from wide general public, such as the opposition system, but it is in practice never possible to obtain
information evenly.

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standards for examination and those for appeals andtrials at the Patent Office. Thus, in Japan, thesituation "advantageous to those who hide" will
never arise even after the establishment of a patent,
because the decision standards for patentability do
not change.
Taking the above into consideration, theintroduction of the duty of disclosure system mainly
for the duty of candor is unlikely to fit in with Japan
simply. Therefore, in Japan, the system should bematured from a viewpoint completely different fromthe United States, i.e. the system for disclosure ofprior art to increase the efficiency of development.
However, the duty of disclosure system toactively motivate applicants to assist in theachievement of precise and prompt examination as
well as the increase of the efficiency ofdevelopment is probably necessary for the futurewhen the value of patent rights as exclusive rights
is going to relatively increase.

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