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The Far-Reaching Effects of Inequitable Conduct

By Michael Epstein

The Federal Circuit recently held that an applicant's failure to disclose material notes to the U.S. Patent and Trademark Office ('PTO') can result in a finding of inequitable conduct that may render a patent, and even related patents, unenforceable. In Monsanto Co. v. Bayer Bioscience, N.V, No. 2007-1109, ___ F.3d ___, 2008 WL 200027, 85 U.S.P.Q.2d 1582 (Fed. Cir. Jan. 25, 2008) ('Monsanto III'), the Federal Circuit affirmed the District Court for the Eastern District of Missouri's holdings: 1) that a patent was unenforceable for inequitable conduct based on the applicant's failure to disclose its employee's notes that directly contradicted claims made by the applicant during prosecution; and 2) that the district court had jurisdiction to declare three related patents unenforceable as well despite the fact that the patent holder had previously filed a motion to dismiss claims based on these three patents and had signed a covenant not to sue for infringement thereof.

In 2000, Monsanto Co. ('Monsanto') brought a declaratory judgment action against Bayer Bioscience N.V. ('Bayer') challenging the validity and enforceability of four Bayer patents (the 'Bayer Patents'), and asserting that Monsanto's transgenic corn products did not infringe these patents. The Bayer Patents all related to the insertion of the amino terminal portion of an insecticidal toxin from Bacillus thuringiensis genes (the 'Bt toxin') into plants. Bt toxins, which are proteins, are toxic to certain crop-destroying insects, but harmless to humans. Thus, plants that are genetically engineered to produce the Bt toxin in sufficient quantities are insect-resistant, yet still safe for human consumption.

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