An applicant for a software patent has a duty to disclose information that is material or relevant to the patent application. This means that if the applicant knows about another invention that is similar to the applicants own innovation, the applicant must disclose the other invention. If the material information is not disclosed and a patent is issued, the patent may be found unenforceable for inequitable conduct.
When a patent holder sues to enforce a patent, the defendant will often look for evidence of inequitable conduct in order to invalidate the patent and end the patent enforcement action. Typically this will involve combing through mountains of documents that the inventors or their attorneys had knowledge of in order to find information that could have been disclosed during examination of the patent. If the defendants can find evidence of inequitable conduct, they can escape paying damages for their infringement.
The information that must be disclosed is defined by 37 C.F.R. 1.56(a) which states that the information is material if: "(1) It establishes, either by itself or in combination with other information, a prima facie case of unpatentability of a claim; or (2) It refutes, or is inconsistent with, a position the applicant takes in (i) Opposing an argument of unpatentability relied on by the Office, or (ii) Asserting an argument of patentability."
The danger to patent holders is that disclosure requirements provide a way for an infringer to invalidate an otherwise valid patent. The infringer doesn't have to show that he didn't infringe the patent. Instead he need only show that the patentee engaged in inequitable conduct while obtaining the patent. This is a real danger because inventors in their professional activities are exposed to mountains of potentially relevant information. In addition, the patent examination process, particularly when multiple applications are filed in many different jurisdictions, also brings forward much potentially relevant material.
The test for inequitable conduct is whether a patent would not have issued "but for" the alleged inequitable conduct. Thus if a patent examiner would have allowed patent claims anyway had he known of information that was known to the inventors, there is no inequitable conduct. This is significant because it is almost impossible for an inventor to disclose everything she knows in her area of expertise with a remote chance of being material. If the test were whether everything the inventor knew remotely bearing on the subject of the patent was disclosed, most patents could be invalidated for inequitable conduct.
Patents can still be invalidated for egregious misconduct, such a filing a false affidavit. And patent applicants must disclose all material information. However, software patentees need not be concerned if they do not disclose the many documents that mentions a common software operation or structure used in their invention, but that is not an inventive element or relevant to the patentability of their invention. This is also a great benefit to the United States Patent and Trademark Office, as examiners are spared from reviewing thousands of pages of immaterial information disclosed out of fear that during an infringement action the patent holders will be accused of inequitable conduct if the information is not disclosed.
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