Limited Materiality Provides Less Basis for Inferring Inequitable Conduct Intent
In the second opinion, the court affirmed the trial court’s finding that Purdue’s actions met a threshold level of materiality; however, it stressed that the level of materiality was not especially high:
Purdue did not expressly misrepresent to the PTO that it had obtained
experimental results establishing a four-fold dosage range for oxycodone, an act
that likely would have been highly material. Instead, Purdue made statements
implying that an empirical basis existed for its discovery and then failed to
disclose that the discovery was based only on insight. This omission of
information was material, but not as material as an affirmative
misrepresentation would have been.
The trial court did not make an explicit finding regarding the level of
materiality. Some language in its opinion, however, indicates the trial court
considered Purdue’s failure to tell the PTO the basis for its discovery to be
highly material. As discussed below, the trial court may have erred to the
extent it relied on a high level of materiality in determining whether Purdue
intended to deceive the PTO and whether Purdue ultimately committed inequitable
The court went on to acknowledge two problems with the trial court’s analysis of the intent prong.
First, in discounting any evidence of good faith put forth by Purdue, the trial
court relied heavily on internal memoranda and trial testimony regarding
Purdue’s admitted inability to prove with experimental results that OxyContin®
was the most efficiently titratable analgesic. This evidence, however, relates
primarily to Purdue’s attempt to gain FDA approval for a proposed labeling claim
rather than its attempt to obtain allowance of its patent claims.
We agree with Purdue that evidence regarding the difficulty in proving the titration claim is not inconsistent with Purdue’s asserted belief that it had discovered its oxycodone formulations were effective over a four-fold dosage range, compared to an eight-fold dosage range for other opioids. While Purdue alleged during prosecution that ease of titration would result from a reduced dosage range, the two concepts are different. Furthermore, the quantum of proof necessary for FDA approval is significantly higher than that required by the PTO. Therefore, evidence that Purdue personnel believed it would be difficult to satisfy FDA requirements is at best marginally related to whether they intended to deceive the PTO. For these reasons, the trial court erred in giving the weight it did to this evidence when determining that Purdue acted with deceptive intent during prosecution of its patents.
The trial court’s second problem was its failure to properly consider the level of materiality. It appears the trial court perceived the level of materiality to be high and inferred deceptive intent from that high materiality, combined with the court’s erroneous finding that any good faith on the part of Purdue was undercut by its admitted inability to prove the ease of titration claim. It is true that in some cases this court has inferred the requisite intent to deceive when a patentee has withheld highly material information such as a key prior art reference and knew or should have known of its materiality. See, e.g., Bruno, 394 F.3d at 1354; Critikon, 120 F.3d at 1256-57. As discussed previously, however, Purdue’s failure to disclose to the PTO that the asserted four-fold dosage range of the claimed oxycodone formulation was based on insight rather than experimental data does not rise to such a high level of materiality. In a case such as this, when the materiality of the undisclosed information is relatively low, there is less basis for inferring intent from materiality alone. See CFMT, 349 F.3d at 1343.
Because of these errors in the trial court’s intent analysis, we are unable to uphold the court’s finding that Purdue intended to deceive the PTO when it failed to disclose that its "surprising discovery" of the reduced dosage range was based only on insight. However, since the trial court is in a better position than we are to evaluate the evidence of record, we think the prudent course is to vacate the inequitable conduct judgment and remand the case to give the trial court an opportunity to reconsider its intent finding. In doing so, the trial court should rethink the relevance of the evidence relating to whether Purdue could prove that OxyContin® was the most easily titratable analgesic. If the trial court still finds that a threshold level of intent to deceive has been established, the court should reweigh its materiality and intent findings to determine whether the sanction of unenforceability due to inequitable conduct is warranted. In making this determination, the trial court should keep in mind that when the level of materiality is relatively low, the showing of intent must be proportionately higher.