Opinion ID: 1366847
Heading Depth: 2
Heading Rank: 1

Heading: Who Owes the Duty of Candor

Text: The majority correctly recognizes that the duty of candor is codified at 37 C.F.R. § 1.56 and includes the duty to disclose to the PTO all information that is material to the issue of patentability known to certain individuals. 37 C.F.R. § 1.56(a). As the majority further notes, the question in this case is to whom does the duty of candor extend under the language every other person who is substantively involved in Rule 56(c)(3)? The majority holds that a district court may consider an individual's position within the company, role in developing or marketing the patented idea, contact with the inventors or prosecutors, and representations to the PTO when deciding whether an individual is substantively involved, regardless of whether those factors relate to the person's awareness of the merits of the application in question or engagement in any specific activity relating to that application. Majority Op. at 974-75, 975-76, 977 n. 4. The majority goes even further to extend the duty generally to those on the commercial side of patented product development, because they are the types of people most likely to have knowledge of § 102(b) prior art. Majority Op. at 976. With all due respect, I find no basis in the rule or in any policy for such an expansive reading of Rule 56(c)(3). The obligation imposed by the duty of candor is to disclose to the PTO information material to patentability. 37 C.F.R. § 1.56(a). Because one cannot assess whether information is material to patentability without knowledge of the technical details or legal merits of an application, it should be self-evident that when Rule 56(c)(3) talks about persons who are substantively involved it is referring to those persons who are both (1) engaged in the preparation or prosecution of an application and (2) sufficiently apprised of the technical details or legal merits of the application as to be able to assess the materiality of any information they may know or discover as the application is prepared or prosecuted. This naturally excludes not only the typists, clerks, and similar personnel who assist with the application in a non-substantive way as described in the Manual of Patent Examining Procedure (MPEP) § 2001.01, but also corporate officers, managers, employees, and all other individuals who are neither aware of the technical details or legal merits of the application nor engaged in the preparation or prosecution thereof. Simply having a general interest or even a financial interest in the invention or a general awareness of the application is not enough. This interpretation does not improperly import into Rule 56(c)(3) the knowledge component from materiality, as suggested by the majority. Majority Op. at 976. Instead, it recognizes that Rule 56(c)(3) uses the phrase substantively involved. The use of the word substantive[] limits the set of individuals who have a duty to disclose to those who possess a specific understanding of the substance of the application. This has nothing to do with the question of whether any particular piece of information is material, but relates to the separate question of whether a person is substantively involved; i.e., sufficiently apprised of the details of the application as to be in a position to make that assessment. Reading the separate parts of Rule 56 in harmony is not improperly conflating them, as the majority suggests. The majority reads substantive[] to mean that the involvement relates to the content of the application or decision related thereto, and that the involvement is not wholly administrative or secretarial in nature. Majority Op. at 974 (citing MPEP § 2001.01 (8th ed., rev.2, May 2004)). Such an expansive interpretation is nowhere suggested in the cited section of the MPEP or anywhere in Rule 56. The PTO could easily have written a rule as broad as that set forth by the majority. However, the PTO purposefully limited the duty of disclosure to material information in order to limit the submission of irrelevant and cumulative information that could overwhelm the PTO and obscure potentially important disclosures. See Duty of Disclosure, 42 Fed.Reg. 5589 (Jan. 28, 1977) (`Relevant' is replaced by `material' because the latter term connotes something more than a trivial relationship.); MPEP § 2001 (8th ed., rev.2, May 2004) (There is no duty to submit information which is not material to the patentability of any existing claim.). By extension, the PTO also limited the duty to those individuals in a position to determine what disclosures are materialthose substantively involved in the preparation or prosecution of the application. While I do not quibble about the majority's characterization of this as a threshold inquiry, calling it such does not justify writing substantively out of the rule and lowering the threshold to extend the duty to disclose to everyone having some relationship to the invention or application no matter how peripheral or tangential it may be to the substance of the application. The majority's interpretation places on persons who are not in a position to assess materiality an obligation to disclose information the relevance of which they have no way of determining. The effect is either to encourage the filing of information regardless of its materiality, just to be on the safe side, or to widen the net of inequitable conduct that may be cast by accused infringers after the fact in litigation. Neither result is desired or warranted and cannot be justified on the rationalization that Rule 56(c)(3) is simply an innocuous threshold inquiry. Indeed, this court has held that the identity of the individual accused of inequitable conduct is essential to the determination of whether the patent can be found unenforceable. See Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1330 (Fed.Cir.2009) (The pleading, however, provides no factual basis to infer that any specific individual, who owed a duty of disclosure in prosecuting the '685 patent, knew of the specific information in the [prior art] patents that is alleged to be material to the claims of the '685 patent.). Finally, the majority suggests that intent should solve the concern I have expressed. Majority Op. at 976-77. With all due respect, that suggestion is premised on circular reasoning that ignores Rule 56(c)(3) entirely. If intent was all that mattered, there would be no need to be concerned at all about who had the duty to disclose.