On May 25, 2011, the Federal Circuit (en banc) decided Therasense, Inc. v. Becton, Dickinson and Company, and set forth a tightened standard for establishing inequitable conduct in patent cases.

In order to establish inequitable conduct, and thereby render a patent unenforceable, the accused infringer must prove that the applicant misrepresented or omitted material information with specific intent to deceive the USPTO. Under the old standard, patents could be held unenforceable based on a reduced showing of intent if the record contained a strong showing of materiality, and vice versa.

In Therasense, the court noted that these low standards and sliding scales for intent and materiality have led to many unintended and undesirable consequences, such as increased adjudication cost and complexity, reduced likelihood of settlement, burdened courts, strained PTO resources, increased PTO backlog, and impaired patent quality.

In its decision, the Federal Circuit emphasized that intent and materiality are separate requirements and each must be proven by clear and convincing evidence.

A district court should not use a "sliding scale," where a weak showing of intent may be found sufficient based on a strong showing of materiality, and vice versa. The court also noted that a district court may not infer intent solely from materiality and that a court must weigh the evidence of intent to deceive independent of its analysis of materiality.

While intent may be inferred from indirect and circumstantial evidence, to meet the clear and convincing evidence standard, the specific intent to deceive must be the single most reasonable inference able to be drawn from the evidence.

The court also set a new, heightened standard for establishing materiality. The court held that the materiality required to establish inequitable conduct is "but-for materiality." When an applicant fails to disclose prior art to the PTO, that prior art is but-for material if the PTO would not have allowed a claim had it been aware of the undisclosed prior art. However, the court noted that but-for materiality need not be established in cases of affirmative egregious misconduct.

As a result of this new, tightened standard, the Federal Circuit vacated the District Court's finding of inequitable conduct and remanded the case.

The effect of this decision, assuming it is not overturned by the Supreme Court, is that it will be much more difficult to establish inequitable conduct in patent cases. The decision should also ease the burdens on patent applicants and the USPTO during prosecution of patent applications.