After Therasense, Why Supplemental Examination Is Less Attractive

Supplemental examination was designed with a specific threat in mind: inequitable conduct. For decades, accused infringers raised the defense routinely, arguing that a patent should be unenforceable because the applicant withheld or misdescribed information during prosecution. A patent owner who later found a problem in its record had few ways to cure it.

Congress created supplemental examination in the America Invents Act to provide that cure. But a few months before the AIA was enacted, the Federal Circuit had already changed the law. Therasense, Inc. v. Becton, Dickinson & Co. (Fed. Cir. 2011) (en banc) made inequitable conduct much harder to prove, and with it, the benefit of supplemental examination became smaller.

What Therasense changed

Before Therasense, courts often applied a flexible approach in which strong evidence of materiality could offset weaker evidence of intent, and materiality could be measured by broad standards. The defense was pleaded frequently and was costly to litigate.

The en banc court tightened both elements:

• But-for materiality. Withheld or misrepresented information is material only if the Office would not have allowed a claim had it known of the information. Courts evaluate this using the preponderance standard and the broadest reasonable construction the Office would apply.
• Exception for affirmative egregious misconduct. Where the patentee engaged in affirmative egregious misconduct, such as filing an unmistakably false affidavit, materiality may be established without the but-for showing.
• Specific intent to deceive. The accused infringer must prove, by clear and convincing evidence, that the applicant knew of the information, knew it was material and made a deliberate decision to withhold it. When intent is inferred from circumstantial evidence, it must be the single most reasonable inference.
• No sliding scale. Intent and materiality are separate requirements; a strong showing on one does not make up for a weak showing on the other.

Why the value of § 257(c) fell

The central benefit of supplemental examination is in 35 U.S.C. § 257(c)(1): a patent cannot be held unenforceable on the basis of conduct relating to information that had not been considered, was inadequately considered or was incorrect in a prior examination, if that information is considered, reconsidered or corrected during supplemental examination.

That protection is most valuable when inequitable conduct is a serious, likely threat. After Therasense, a patent owner whose record contains a minor omission may conclude that an inequitable conduct defense based on it would probably fail anyway. The insurance is worth less when the risk being insured has fallen.

The costs and risks that remain

While the benefit shrank, the burdens of the process did not:

Factor	Effect on the decision
Fees	Substantial fees for the request and for any reexamination ordered; check the current schedule
Reexamination	If a substantial new question is found, ex parte reexamination follows and claims may be amended or cancelled
Public record	The request, the information and the owner’s explanations become public
No § 304 statement	The owner cannot file a patent owner statement before reexamination begins
Exceptions in § 257(c)(2)	No protection for allegations pleaded with particularity, or set out in a specified Hatch-Waxman notice, before the request, or for defenses in an action brought before the process concludes
Fraud referral	Under § 257(e), material fraud may be referred to the Attorney General

Amended claims emerging from the ordered reexamination may also be subject to intervening rights. The detailed steps are covered in supplemental examination procedure.

When owners still use it

Supplemental examination is less attractive, not useless. Situations in which owners have considered it include:

• Pre-litigation clean-up. Before asserting a patent, an owner who knows of a significant reference or error may want the issue resolved, and the § 257(c) protection in place, before any action is filed.
• Licensing and sale diligence. Buyers and licensees may review prosecution records, and resolving a known problem can reduce uncertainty in a transaction.
• Known errors in data. Where an application relied on test results or declarations later found to be inaccurate, supplemental examination lets the owner correct the record. Because such errors can relate to §§ 101 or 112, the broader scope of information allowed in supplemental examination matters.
• Information outside reexamination’s scope. Ordinary ex parte reexamination is limited to patents and printed publications; supplemental examination is not.

Alternatives include reissue, which also allows the Office to consider new information while the owner amends claims; see reissue versus supplemental examination. For an overview of the procedure, see the supplemental examination guide.

Key takeaways

• Therasense (Fed. Cir. 2011) (en banc) requires but-for materiality, except for affirmative egregious misconduct, and specific intent to deceive.
• Intent must be the single most reasonable inference, and there is no sliding scale.
• Because inequitable conduct is harder to prove, the defensive value of § 257(c) fell.
• Fees, reexamination risk, a public record and the § 257(c)(2) exceptions remain.
• Owners still consider it for pre-litigation clean-up, transactions and correcting known data errors.