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Alerts and Updates

Coordinating IP and Regulatory Filings Can Minimize the Risk of Inequitable Conduct Before the PTO

August 8, 2022

Coordinating IP and Regulatory Filings Can Minimize the Risk of Inequitable Conduct Before the PTO

August 8, 2022

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In view of the notice, companies should review the interface between their IP and regulatory functions to confirm that their interoperation (or lack thereof) does not run afoul of a patent applicant’s duties of disclosure and reasonable inquiry to the PTO.

On July 29, 2022, the U.S. Patent and Trademark Office (PTO) published a Notice on the Duties of Disclosure and Reasonable Inquiry During Examination, Reexamination, and Reissue, and for Proceedings Before the Patent Trial and Appeal Board. The notice was part of the PTO’s response to President Joe Biden’s July 2021 Executive Order on Promoting Competition in the American Economy calling for “help [to] ensure that the patent system, while incentivizing innovation, does not also unjustifiably delay generic drug and biosimilar competition beyond that reasonably contemplated by applicable law.” It also answered Congress’ call for PTO action following the Federal Circuit’s September 2021 ruling that a drug formulation patent was unenforceable based on a drug manufacturer’s inconsistent disclosures to both the PTO and the Food and Drug Administration (FDA). In view of the notice, companies should review the interface between their IP and regulatory functions to confirm that their interoperation (or lack thereof) does not run afoul of a patent applicant’s duties of disclosure and reasonable inquiry to the PTO.

Belcher Teaches a Hard Lesson

Prefatory to the notice, on September 1, 2021, the Federal Circuit in Belcher Pharm. v. Hospira, Inc., 11 F.4th 1345, affirmed a district court ruling that Belcher Pharmaceuticals’ patent for epinephrine formulations was unenforceable. This was due to Belcher withholding reference product information and arguing to the PTO, on the one hand, that its narrower, claimed pH range was a critical, patentable feature distinguishing the invention from the broader range in the prior art before the PTO, while making conflicting disclosures to FDA, on the other hand, of a reference drug with the claimed pH range and asserting to FDA that a change in the in-process pH was a “very minor change.” More specifically, while it argued to the PTO that the narrower pH was “critical” for reducing racemization and degradation of the epinephrine, Belcher presented to FDA, in support of its 505(b)(2) NDA application,[1] stability studies on a reference product that reported the same pH range (2.8-3.3) as the claimed pH range. Accordingly, the Federal Circuit concluded “Belcher’s alleged critical improvement over the prior art was therefore already within the public domain, just not before the examiner”—and failure to disclose the reference product was an omission of material information. See Belcher Pharm., LLC v. Hospira, Inc., Case No. 2020-1799 (Fed. Cir. Sept. 1, 2021) at 14. Significant to the court’s conclusion, during prosecution, Belcher failed to disclose the reference product information to the PTO even though Belcher’s chief science officer oversaw regulatory approval, product development and intellectual property matters, including patent prosecution. The Federal Circuit held that “the district court did not clearly err in finding that the single most reasonable inference is that [the chief science officer] possessed the specific intent to deceive the PTO when withholding the [material prior art reference] product.” Id. at 14-16.

Congress and the U.S. Department of Health and Human Services Call for Coordination of Communications to the PTO and FDA

Weeks later, Congress and the Department of Health and Human Services[2] separately called for changes in the patent system to lower drug costs and to “ensure that drug manufacturers cannot unfairly use the patent system to discourage competition.” The suggested changes included eliminating discretionary denials of patent challenges by the Patent and Trademark Appeal Board (PTAB), trimming “patent thickets” by limiting the number of continuation applications in a patent family, and reducing patent evergreening associated with “product hopping” and other perceived patent abuses. Directly relevant to Belcher, Congress requested that “PTO take steps to reduce patent applicants’ making inappropriate conflicting statements in submissions to the PTO and other federal agencies” and “to enforce patent applicants’ obligations to disclose statements made to other government agencies.”

The PTO Answers the Call

The PTO’s notice responds to this call for change, observing that the duties of disclosure and reasonable inquiry to the PTO “promote robust and reliable patents that drive competition and economic growth” and “incentivize and protect innovation while not unnecessarily delaying more affordable generic drugs.” The notice further states that it is “intended to clarify the duties, including as to… statements made to the USPTO that are inconsistent with statements submitted to the FDA and other governmental agencies.”

The notice reiterates that every individual substantively involved in prosecution has a duty to disclose material information, including those involved in reissue, reexamination and PTAB proceedings such as inter partes review (IPR) or post grant review proceedings. Material information that must be disclosed includes information that “refutes, or is inconsistent with, a position the applicant takes in… [o]pposing an argument of unpatentability relied on by the Office” should be disclosed to the PTO. See Manual of Patent Examining Procedure 2001(b)(2). The notice also makes clear that the duty of candor and good faith and the duty to disclose apply to positions taken by applicants or parties involving the claimed subject matter and that “parties should not take a position about the patentability of challenged claims that is inconsistent with positions taken in submissions to other Government agencies regarding the same subject matter.”

Regarding a “duty of reasonable inquiry,” the notice states that every party submitting papers to the PTO has an obligation to make a reasonable inquiry that “may comprise reviewing documents that are submitted to or received from other Government agencies, including the FDA.” Failure to comply with this duty could result in sanctions under 37 CFR 11.18(c), which range from striking the offending paper, affecting the weight given the offending paper, up to terminating the proceedings in the PTO.

Finally, the notice appears to impose a requirement to coordinate IP and regulatory filings by noting that deliberate schemes or established practices that prevent those with a duty of candor from learning of such documents does not satisfy the duties of candor and good faith. The notice indicates that the duties of disclosure and reasonable inquiry include the duty to disclose paragraph IV certifications relevant to pending proceedings, including PTAB proceedings. (“Consequently, to assist USPTO staff in evaluating patentability effectively and efficiently, the party receiving a paragraph IV certification should review such documents to determine whether they are material to the patentability of any pending matters before the USPTO, such as pending applications, reexamination proceedings, or issues in proceedings pending before the PTAB… [S]uch information must be submitted to the USPTO during the pendency of the matter.”)

Implications for IP Strategy

Up to now, some degree of coordination between IP and regulatory affairs/manufacturing has been advisable to minimize creating patentee’s own prior art based on clinical and marketing announcements and publications and to capture IP value for discoveries made in clinical research. However, in many companies, intellectual property is a separate department from clinical and regulatory affairs, and unlike in Belcher, the head of clinical and regulatory affairs does not usually play a role in patent prosecution. For patent challengers, this has made it difficult to establish the intent prong for inequitable conduct, even if voluminous regulatory filings contained a statement or citation that would fall under patent office disclosure rules if someone substantively involved in patent prosecution were aware of the statements or citations.

However, the PTO has now given notice that deliberate schemes or established practices to prevent those with a duty of disclosure from obtaining material information fails to meet the duty of candor owed the PTO. This appears to lower the bar for establishing intent to deceive while imposing an affirmative duty on patent practitioners to coordinate with regulatory colleagues and review materials submitted to FDA or other government agencies for statements inconsistent with positions taken at the PTO. At the very least, coordination of IP and regulatory affairs would be needed to avoid taking inconsistent positions before the PTO and regulatory agencies and to ensure that reference products and potentially relevant publications cited to FDA are also disclosed to the PTO.

The PTO notice contemplates greater scrutiny by patent examiners, noting that if an examiner has a reasonable basis for concluding that someone with a duty to disclose has information that would aid in examination, the examiner may require submission of information even if it is not necessarily material to patentability, e.g., statements made or information submitted to other government agencies such as the FDA

Practice Tips

Following the notice, patent challengers and the PTO will be closely scrutinizing regulatory and other government filings for inconsistencies with positions taken in prosecution, highlighting the need to coordinate IP and regulatory functions. The risk of inconsistent statements may be higher for patented products where marketing approval was obtained using pathways that rely on reference product or predicate device information (such as 505(b)(2), ANDA, BPCIA or 510(k) pathways), so special attention to coordination may be needed for products approved under those pathways.

Some practice tips for coordinating IP and regulatory affairs to avoid inconsistent disclosures include the following:

  • Update information disclosure statement (IDS) reminder letters and memos to refer to the duty of reasonable inquiry to identify material information submitted to government agencies, especially where that information is inconsistent with positions taken before the PTO.

It may be helpful to alert internal or external clients regarding the PTO’s clarification that the duty of candor includes the duty to disclose and duty of reasonable inquiry to identify material information submitted to government agencies, especially where that information is inconsistent with positions taken before the PTO.

  • Create disclosure forms for clinical/regulatory to submit for IP review.

It may be helpful to establish a process similar to a pre-publication review process, e.g., creating a “regulatory disclosure form,” where reference products, references cited in technical information submitted to FDA and any reference product features raised by FDA are submitted by the regulatory/clinical groups to the IP group for review and/or disclosure to the patent office. This will help to ensure that if a regulatory filing relies on literature references in the clinical summary and nonclinical and clinical study reports those literature references are also reviewed for disclosure to the patent office.

  • Provide cross-function training.

It may be helpful to provide a training module for IP and clinical and regulatory affairs personnel to learn about the potential risks of making inconsistent disclosures to regulatory agencies and the PTO and to facilitate communication between functions. This might also include having an IP attorney work with product development teams, comprised of members from R&D, regulatory and patent counsel, so that IP can stay informed regarding regulatory submissions and highlight any regulatory positions that might be inconsistent with or weigh against patentability. This might also include making sure that litigation counsel is coordinating with prosecution counsel to submit material information from ongoing litigations, including invalidity contentions from related litigations where IPR petitions have been timely filed to challenge the asserted patents.

  • Develop IP strategies that rely on features that are not co-extensive with reference product features relied on for regulatory approval.

Coordination with clinical/regulatory affairs and/or regulatory disclosure forms will also assist the IP group to formulate patent strategy and develop arguments for patentable features that are distinct from features relied on in regulatory comparisons.

  • Monitor PTO notices that address other concerns raised by Congress and FDA.

Those involved in substantive prosecution may want to monitor future PTO notices that might address FDA’s suggestions to trim patent thickets by limiting the number of continuation applications in a patent family, or that might otherwise impact product-lifecycle patent strategies.

For More Information

If you have any questions about this Alert, please contact Vicki G. Norton, Ph.D., Matthew C. Mousley, any of the attorneys in our Intellectual Property Practice Group, any of the attorneys in our Life Sciences and Medical Technologies Industry Group or the attorney in the firm with whom you are regularly in contact.


[1] A 505(b)(2) NDA is a streamlined approval process, where the 505(b)(2) NDA holder relies on FDA’s finding of safety and/or effectiveness for a reference listed drug.

[2] Senators Thom Tillis and Patrick Leahy introduced legislation to abolish Fintiv—one aspect in Congress’ letter to PTO. “We are concerned that one important tool to help thwart these abuses of the patent system―the inter partes review (IPR) process―has been weakened by administrative changes that are not grounded in statute. Specifically, the U.S. Patent and Trademark Office (USPTO) has, in recent years, begun frequently denying petitions for IPR for reasons not based on the merits, which has made it more difficult to curtail anti-competitive practices by prescription drug companies.”

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.