An Economic Analysis of Patent Law’s Inequitable Conduct Doctrine

In recent years, patent law’s inequitable conduct doctrine has attracted considerable attention from judges, legislators, patent lawyers, and commentators. This trend culminated most recently in Therasense, Inc. v. Becton, Dickinson & Co., an en banc decision from the Federal Circuit that revised certain aspects of the doctrine. Building on the work of other scholars, this Article proposes an instrumental view of the doctrine as, ideally, a tool for inducing patent applicants to disclose the optimal quantity of information relating to the patentability of their inventions; it then presents a formal model of the applicant’s choices in deciding how much information to reveal. The model suggests, among other things, that even after Therasense, the conditions that trigger a finding of inequitable conduct are at best only a rough proxy for the conditions defining optimal disclosure. The model also illuminates how, both pre- and post-Therasense, the doctrine poorly defines many of the variables affecting a rational applicant’s decisionmaking process and thus potentially encourages risk-averse agents to overdisclose. Although the model neither confirms nor refutes critics’ claims that the doctrine routinely induces overdisclosure and excessive administrative costs, the model demonstrates how various reforms including but not limited to those adopted in Therasense, can be expected to reduce these reputed consequences. The model also suggests, however, that the need for some type of inequitable conduct doctrine may be greater in a regime like the United States, which lacks an effective system for post-grant oppositions. Conversely, if the United States adopted a post-grant opposition system, the need for a robust inequitable conduct doctrine would decline.

Article | View PDF | Appears in Volume 53, Issue 3

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