Therasense, Inc. v. Becton, Dickinson and Co.

concurring in part and dissenting in part.

Patent practitioners regularly call on this court to provide clear guidelines. They seek to know under precisely what circumstances governing principles will be applied, and precisely how they will be applied. While precision may be in the nature of what patent practitioners do, and the desire for defining rules in the scientific world understandable, the law does not always lend itself to such precision. Indeed, when dealing with the application of equitable principles and remedies, the law is imprecise by design.

I understand and admire the majority’s desire to respond to practitioners’ calls for precision and clarity. I also understand its concern with perceived litigation abuses surrounding assertions of inequitable conduct. I believe, however, that the majority responds to that call and addresses those concerns in ways that fail to acknowledge and remain true to the equitable nature of the doctrine it seeks to cabin.

I respectfully dissent from those portions of the majority opinion which describe the test it directs lower courts to apply in assessing materiality and which vacates and remands for further inquiry the materiality determinations made by the district court in this case. As ex*1297plained below, I concur in the remainder of the majority’s decision and judgment.

I.

I concur in the majority’s decision to vacate and remand the judgment of the district court with instructions to reconsider its finding of inequitable conduct. Specifically, because the district court understandably referred to standards governing its intent determination drawn from our prior case law, the district court should be given the opportunity to assess, in the first instance, whether the evidence, and its credibility determinations, support a finding of a specific intent to deceive. In this regard, like the other dissenters, I agree with the majority’s holding that, as a prerequisite to a finding of inequitable conduct, a district court must find that the conduct at issue is of “sufficient culpability to require a finding of intent to deceive.” Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed.Cir. 1988). In making this determination, intent to deceive and materiality must be found separately. District courts may not employ a “sliding scale,” nor may they infer intent from materiality alone.1 Finally, I agree that a district court may infer intent from indirect and circumstantial evidence, but only where it is “the single most reasonable inference able to be drawn from the evidence.” Maj. Op. at 1290 (quoting Star Scientific Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed.Cir.2008)).

II.

It is at this point that my views, respectfully, diverge from those of both the majority and the other dissenters. This is so because, when addressing the types of conduct that should be deemed of sufficient concern to allow for a finding of inequitable conduct, both the majority and dissent strain too hard to impose hard and fast rules.

“The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case.” Weinberger v. Romero-Barcelo, 456 U.S. 305, 312, 102 S.Ct. 1798, 72 L.Ed.2d 91 (1982) (quoting Hecht Co. v. Bowles, 321 U.S. 321, 329, 64 S.Ct. 587, 88 L.Ed. 754 (1944)). While courts of equity “must be governed by rules and precedents no less than the courts of law,” Lonchar v. Thomas, 517 U.S. 314, 323, 116 S.Ct. 1293, 134 L.Ed.2d 440 (1996), “[flexibility rather than rigidity has distinguished” equitable jurisdiction, Weinberger, 456 U.S. at 312, 102 S.Ct. 1798. “Equity eschews mechanical rules; it depends on flexibility.” Holmberg v. Armbrecht, 327 U.S. 392, 396, 66 S.Ct. 582, 90 L.Ed. 743 (1946).

Traditional notions of equitable relief apply with equal force in the context of patents. eBay Inc. v. MercExchange, LLC, 547 U.S. 388, 393-94, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006) (holding that a categorical rule of granting an injunction to a prevailing patent holder abrogates a district court’s discretion in granting equitable relief and runs afoul of traditional principles of equity). We have long recognized that the doctrine of inequitable conduct is based in equity. Kingsdown, 863 F.2d at 876 (“[T]he ultimate question of whether inequitable conduct occurred is equitable in nature.”). Despite this longstanding *1298principle, both the majority and dissenting opinions eschew flexibility in favor of rigidity. Both opinions suggest tests for materiality to apply in all cases. Their respective materiality inquiries are black or white, while equity requires judicial consideration of shades of gray.

The majority defines materiality under a but-for test, with an exception for intentionally false affidavits filed with the PTO.2 Maj. Op. at 1291-93. The dissent, on the other hand, defines materiality according to Rule 56. Both tests fail to provide district courts with flexibility to find inequitable conduct in an extraordinary case where the conduct in question would not be defined as such under either test. This result is contrary to the very nature of equity and centuries of Supreme Court precedent. I cannot, accordingly, lend support to either of the immutable tests proposed by my colleagues.

While the majority states that, despite the strictures of the test it adopts, “the unclean hands doctrine remains available to supply a remedy for egregious misconduct like that in the Supreme Court cases,” that statement does not address the concerns I express here.3 Maj. Op. at 1287-88. Since, as the majority painstakingly explains, the doctrine of inequitable conduct we are defining grew, out of those “unclean hands” cases, the asserted dichotomy is a false one. See Consol Alumi-

num Corp. v. Foseco Int’l, Ltd., 910 F.2d 804, 812 (Fed.Cir.1990) (“Indeed, what we have termed ‘inequitable conduct’ is no more than the unclean hands doctrine applied to particular conduct before the PTO.”) (citations omitted). There is no support — and the majority cites none — for the proposition that inequitable conduct is somehow independent of the unclean hands principles the Supreme Court described and explained in its trilogy of cases. The remainder of the majority opinion makes clear, moreover, that the majority’s purpose, and that of the test it adopts, is to delimit and narrow the contours of the unclean hands doctrine when applied to the application process before the PTO, not to acknowledge flexibility in it.4

We should adopt a test that provides as much guidance to district courts and patent applicants as possible, but, in doing so, we may not disregard the equitable nature of the inquiry at hand. Thus, we must make clear that, while we believe the test we offer encompasses virtually all forms of conduct sufficient to warrant a finding of inequitable conduct, we leave open the possibility that some form of intentional misconduct which we do not currently envision could warrant equitable relief. This approach respects the Supreme Court’s recognition that courts of equity “exercise judgment in light of prior precedent, but *1299with awareness of the fact that specific circumstances, often hard to predict in advance, could warrant special treatment in an appropriate case.” Holland v. Florida, — U.S. -, 130 S.Ct. 2549, 2563, 177 L.Ed.2d 130 (2010).

Consistent with the flexible nature of equity jurisdiction, moreover, we should recognize that determining the proper remedy for a given instance of inequitable conduct is within the discretion of district courts, subject, of course, to statutory constraints. Keystone Driller Co. v. Gen. Excavator Co., 290 U.S. 240, 245-46, 54 S.Ct. 146, 78 L.Ed. 293 (1933) (“[Courts of equity] are not bound by formula or restrained by any limitation that tends to trammel the free and just exercise of discretion.”); Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 386, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970) (“In selecting a remedy the lower courts should exercise the sound discretion which guides the determinations of courts of equity, keeping in mind the role of equity as the instrument for nice adjustment and reconciliation between the public interest and private needs as well as between competing private claims”) (internal quotations and citations omitted). While we have held previously that a finding of inequitable conduct renders unenforceable all claims of the wrongly procured patent and, in certain circumstances, related patents, this singular remedy is neither compelled by statute, nor consistent with the equitable nature of the doctrine.5 Accordingly, I would overrule those cases and hold that, in the exercise of its discretion, a district court may choose to render fewer than all claims unenforceable, may simply dismiss the action before it, or may fashion some other reasonable remedy, so long as the remedy imposed by the court is “commensurate with the violation.” Columbus Bd. of Educ. v. Penick, 443 U.S. 449, 465, 99 5.Ct. 2941, 61 L.Ed.2d 666 (1979); see also Hecht, 321 U.S. at 329, 64 S.Ct. 587 (“The essence of equity jurisdiction has been the power of the Chancellor to do equity and to mould each decree to the necessities of the particular case.”); Miller v. French, 530 U.S. 327, 360, 120 S.Ct. 2246, 147 L.Ed.2d 326 (2000) (“These cases recognize the importance of permitting courts in equity cases to tailor relief ... to the exigencies of particular cases and individual circumstances. In doing so, they recognize the fact that in certain circumstances justice requires the flexibility necessary to treat different cases differently — the rationale that underlies equity itself.”) (Breyer, J., dissenting) (emphasis added). Allowing for flexibility in the remedy would reduce the incentive to use inequitable conduct as a litigation tactic and address many of the concerns that trouble my colleagues and were expressed by Abbott and certain amici in these en banc proceedings.6

*1300III.

To provide guidance to district courts to aid in the exercise of their discretion in inequitable conduct inquiries — beyond the Supreme Court’s direction that “any willful act concerning the cause of action which rightfully can be said to transgress equitable standards of conduct is sufficient cause for the invocation of the maxim by the chancellor,” Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 814-16, 65 S.Ct. 993, 89 L.Ed. 1381 (1945) — I believe such guidance should reflect the concerns expressed by the Supreme Court in the case trilogy from which the doctrine emerged. As the Court said in Precision, at minimum, equity requires that, when seeking the public benefit of a government sponsored monopoly, applicants must act “fairly and without fraud or deceit.” Id. Similarly, in Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S.Ct. 997, 88 L.Ed. 1250 (1944), the Court found that, regardless of the impact of such conduct on patentability, the doors of equity should be closed to a patentee who presented to the patent office, as impartial, an article it authored. Id. at 247, 64 S.Ct. 997.

With this general guidance in mind, I believe conduct should be deemed material where: (1) but for the conduct (whether it be in the form of an affirmative act or intentional non-disclosure), the patent would not have issued (as Chief Judge Rader explains that concept in the majority opinion); (2) the conduct constitutes a false or misleading representation of fact (rendered so either because the statement made is false on its face or information is omitted which, if known, would render the representation false or misleading); or (3) the district court finds that the behavior is so offensive that the court is left with a firm conviction that the integrity of the PTO process as to the application at issue was wholly undermined. In adopting such a test, I also believe we should confirm, as explained above, that the equitable nature of the doctrine demands that this test provide guidance only — albeit firm guidance— to district courts with respect to the exercise of their discretion in the face of inequitable conduct claims.

For the reasons ably articulated by the majority, I do not believe we should direct district courts to use Rule 56 as the measure of materiality in this context. As the majority points out, among other things, it is both too vague and too broad — leaving room for findings of inequitable conduct in circumstances not sufficiently egregious to fall within the bounds of the Supreme Court trilogy from which the doctrine emerged. I also cannot agree completely with the test proposed by the majority. Given the scope and complexity of PTO proceedings, misconduct can and does occur outside the context of written affidavits. In certain circumstances, regardless of the impact on patent issuance, such misconduct is sufficiently egregious that, when accompanied by the requisite intent to deceive, it could support a finding of inequitable conduct. Indeed, in Hazel-Atlas, the article in question was not presented to the PTO through an affidavit. 322 U.S. at 240-41, 64 S.Ct. 997. Both tests, moreover, fail to allow room to address conduct beyond their contours which equity should not ignore.

IV.

Applying the test I propose, or any reasonable test for materiality that comports with Supreme Court precedent, I would affirm the district court’s finding that the *1301nondisclosure of information in this case was material. Indeed, I believe the omissions here qualify as material under the majority’s “but-for plus” standard and that, even accepting that test as the governing standard, a remand on the issue of materiality is neither necessary nor appropriate.

As the other dissenters note, whether the prior art taught that glucose sensors could be used to test whole blood without a protective membrane was a key focus of the PTO examiner’s patentability inquiry. After requesting permission to submit extrinsic evidence in response to a rejection from the PTO, Abbott submitted a sworn declaration from its expert Dr. Gordon Sanghera accompanied by statements from its counsel Lawrence Pope. Both contained representations to the examiner regarding what they alleged to be the appropriate understanding of the critical pri- or art reference with which the examiner was concerned. Among other things, they asserted unequivocally that one skilled in the art would not have read the prior art to say that use of a protective membrane with whole blood samples was optional. Omitted from these declarations was the fact that Abbott had made contrary representations on this same matter to the European Patent Office (“EPO”) in connection with the earlier prosecution of a European patent application. There, Abbott represented that it was “unequivocally clear” that the same prior art language meant that the protective membrane was, in fact, optional.

The district court concluded that these nondisclosures were “highly material” because “they centered on the precise sentence in question [in the prior art reference], its meaning and what it taught.” Therasense, Inc. v. Becton, Dickinson & Co., 565 F.Supp.2d 1088, 1112 (N.D.Cal. 2008). More specifically, the district court found:

This is unlike the situation where a reference is already before an examiner who can draw his or her own conclusions as to what it teaches and is able to discount spin offered by counsel. See Innogenetics, N.V. v. Abbott Labs., 512 F.3d 1363, 1379 (Fed.Cir.2008). Although the key sentence itself was indeed before Examiner Shay, the inquiry had shifted to a point of extrinsic evidence. That is, Examiner Shay had acquiesced to Attorney Pope’s request to resort to extrinsic evidence to show that the sentence would have been understood by skilled artisans differently than its words suggested. Having received permission to supply extrinsic evidence, Attorney Pope was duty-bound to present any inconsistent extrinsic information known to him. In the arena of extrinsic evidence, the examiner was unable to fend for himself. He had no way of knowing what, if any, contrary extrinsic information had been left out of the Sanghera declaration. He was completely dependent on Attorney Pope and Dr. Sanghera to fully disclose any extrinsic information, pro and con, known to them on the factual point covered by the submission.

Id. The district court’s materiality conclusions were thorough and correct. They should be affirmed.

V.

I do not weigh in on the policy debate between the majority and the dissenters. There are merits to the concerns expressed by each, and they may be relevant, in varying degrees, to the exercise of a court’s discretion in a particular case. Policy concerns cannot, however, justify adopting broad legal standards that diverge from doctrines explicated by the Supreme Court. A desire to provide immutable guidance to lower courts and parties similarly is not sufficient to justify the *1302court’s attempt to corral an equitable doctrine with neat tests.

To the extent there are concerns with litigation abuses surrounding the improper use of this otherwise important doctrine, there are vehicles available to the district court to address those concerns. Careful application of the pleading requirements set forth in Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312 (Fed.Cir.2009), early case management techniques designed to ferret out and test unsupported inequitable conduct claims, orders to stay discovery or consideration of such claims pending all other determinations in the case, or even sanctions, are all tools district courts can employ where appropriate.

For these reasons, I concur in part in and dissent in part from the decision the majority announces today. I would leave to district courts the discretion to apply this equitable doctrine to the unique circumstances with which they are presented, while encouraging them to keep in sight their obligation to guard against abuses of it.

with whom

I

There is broad consensus that the law of inequitable conduct is in an unsatisfactory state and needs adjustment. In recent years, differing standards have been applied in determining whether particular conduct rises to the level of inequitable conduct sufficient to render a patent unenforceable. That doctrinal uncertainty has had adverse consequences both for patent litigation and for the PTO. In litigation, counterclaims of inequitable conduct have been raised in too many cases and have proved difficult to resolve. In the PTO, the lack of a clear and uniform standard for inequitable conduct has led some patent prosecutors to err on the side of “over-disclosure” in order to avoid the risk of rendering all claims of an otherwise valid patent unenforceable because of the omission of some marginally relevant reference. As a result, examiners have frequently been swamped with an excess of prior art references having little relevance to the applications before them.

These problems can be traced, at least in part, to doctrinal uncertainty on three points: First, what standard of intent should be applied in assessing an allegation that an applicant has made false representations or failed to disclose material facts to the PTO. Second, what standard of materiality should be applied to such misrepresentations or nondisclosures. Third, whether there should be a “sliding scale” under which a strong showing of either materiality or intent should be able to make up for a weaker showing on the other element.

There is substantial agreement as to the proper resolution of two of those three issues. First, the parties to this case and most of the amici agree that proof of inequitable conduct should require a showing of specific intent to deceive the PTO; negligence, or even gross negligence, should not be enough. Second, the parties and most of the amici agree that a party invoking the defense of inequitable conduct should be required to prove both specific intent and materiality by clear and convincing evidence; there should be no “sliding scale” whereby a strong showing as to one element can make up for weaker proof as to the other.

However, on the remaining issue — the proper standard to apply in determining whether the conduct at issue is sufficiently material to render the patent in suit unenforceable — there is sharp disagreement. That disagreement is what divides the court in this case. The majority takes the position that nondisclosures should be *1303deemed sufficiently material to trigger the defense of inequitable conduct only if, had the matter in question been disclosed, the applicant would not have obtained a patent. That position, however, marks a significant and, I believe, unwise departure from this court’s precedents. Since its first days, this court has looked to the PTO’s disclosure rule, Rule 56, 37 C.F.R. § 1.56, as the standard for defining materiality in inequitable conduct cases involving the failure to disclose material information. In its current form, that rule provides that information is material not only if it establishes a prima facie case of unpatentability, but also if it refutes or is inconsistent with a position the applicant takes before the PTO with respect to patentability. I would adhere to the materiality standard set forth in the PTO’s disclosure rule for two basic reasons: First, the PTO is in the best position to know what information examiners need to conduct effective and efficient examinations, i.e., what information is material to the examination process. Second, the higher standard of materiality adopted by the majority will not provide appropriate incentives for patent applicants to comply with the disclosure obligations the PTO places upon them.

Twenty-three years ago, in Kingsdown Medical Consultants v. Hollister, Inc., this court was faced with conflicting precedents regarding the “intent” requirement of the doctrine of inequitable conduct. The court resolved those conflicts in an en banc decision that all members of the court joined. 863 F.2d 867 (Fed.Cir.1988) (en banc). The court held that even proof of “gross negligence” is not sufficient to satisfy the intent to deceive requirement. Instead, the court concluded that in order for particular conduct to justify holding a patent unenforceable, the conduct in question, “viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.” Id. at 876.

The Kingsdown court did not find it necessary to address the proper standard for determining materiality, because that issue had been addressed in earlier cases. Four years before Kingsdown, a five-judge panel opinion in J.P. Stevens & Co. v. Lex Tex Ltd., 747 F.2d 1553 (Fed.Cir.1984), had addressed the materiality requirement and made the following observations, which have remained the law until today: First, the court endorsed the principle, previously adopted by our predecessor court, that inequitable conduct is broader than common law fraud. Id. at 1559 (citing Norton v. Curtiss, 433 F.2d 779, 793 (CCPA 1970)). Second, the court explained that inequitable conduct could be based on the failure to disclose material information as well as the submission of false material information. Id. Third, the court stated that the disclosure requirement set forth in PTO Rule 56, 37 C.F.R. § 1.56 (1984), established “the appropriate starting point” because that standard “most closely aligns with how one ought to conduct business with the PTO.” J.P. Stevens, 747 F.2d at 1559. In so doing, the court referred to its earlier opinion in Driscoll v. Cebalo, 731 F.2d 878, 884 (Fed. Cir.1984), where the court had stated that PTO Rule 56 “essentially represents a codification of the ‘clean hands’ maxim as applied to patent applicants.” Moreover, just a year before the decision in Kings-down, the court in Gardco Manufacturing, Inc. v. Herst Lighting Co., 820 F.2d 1209, 1214 (Fed.Cir.1987), had reiterated that Rule 56 set forth the appropriate standard for determining the materiality of undisclosed information in an inequitable conduct case.

Since that time there have been occasional departures from the holding in Kingsdown as to the requisite level of *1304intent to establish inequitable conduct. As to materiality, however, the court has consistently held that the PTO’s Rule 56 sets the proper baseline for determining materiality, although there has been some variation in our decisions with regard to which version of the PTO’s rule applies in particular’ cases.

The appropriate cure for departures from the principles of inequitable conduct that were put in place at the time of Kingsdown would be to reaffirm those principles, as summarized above. The majority, however, has taken a far more radical approach. With respect to the issue of materiality, the majority has adopted a test that has no support in this court’s cases and is inconsistent with a long line of precedents dating back to the early years of this court. The effect of the majority’s new test, moreover, does not merely reform the doctrine of inequitable conduct, but comes close to abolishing it altogether. I respectfully dissent from that aspect of the court’s decision. In my view, what is needed is not to jettison the doctrine of inequitable conduct, but simply to reaffirm the principles set down in the early years of this court in light of the provisions of the current PTO disclosure rule, and require adherence to those principles. As applied to the duty of an applicant or attorney to disclose material information in the course of prosecuting a patent application, those principles can be summarized as follows:

1.Inequitable conduct requires proof, by clear and convincing evidence, that the applicant or attorney intended to mislead the PTO with respect to a material matter.

2. Materiality is measured by what the PTO demands of those who apply for and prosecute patent applications. The disclosure standard that the PTO expects those parties to comply with is set forth in the current version of the PTO’s Rule 56. Under that standard, inequitable conduct requires proof that the information at issue either established, by itself or in combination with other information, a prima facie case of unpatentability, or was inconsistent with a position taken by the applicant before the PTO with respect to patentability.

3. Intent to mislead and materiality must be separately proved. There is no “sliding scale” under which the degree of intent that must be proved depends on the strength of the showing as to the materiality of the information at issue.1

These principles not only are consistent with our law on inequitable conduct but, if implemented consistently, should be sufficient to address the practical problems that have arisen under the current regime. While the majority is correct that inequitable conduct claims have been raised too often in the past, there are less Draconian means of addressing that problem than those proposed by the majority. First, the refinements to the doctrine suggested here would be likely to significantly reduce the frequency with which the defense is raised. Second, this court has recently held that the strict pleading requirements of Fed. R.Civ.P. 9(b) apply to counterclaims of inequitable conduct, requiring detailed factu*1305al averments and not merely notice pleading with respect to such claims. Such pleading requirements are likely to discourage baseless counterclaims. See Exergen Corp. v. Wal-Mart Stores, Inc., 575 F.3d 1312, 1326-29 (Fed.Cir.2009). Third, assertions of inequitable conduct that lack factual and legal support can be controlled by trial courts through application of- the sanctions provided by Fed.R.Civ.P. 11. Finally, as this court has repeatedly held, the doctrine of inequitable conduct is an equitable doctrine, and even when the elements of intent and materiality are satisfied, it remains for the district court to determine, in the exercise of its equitable judgment, whether, “in light of all the particular circumstances, the conduct of the patentee is so culpable that its patent should not be enforced.” LaBounty Mfg., Inc. v. U.S. Int’l Trade Comm’n, 958 F.2d 1066, 1070 (Fed.Cir.1992).

With regard to the problem of “over-disclosure” of large numbers of marginally relevant references in the course of patent prosecution, the PTO in its amicus brief expresses confidence that strict judicial adherence to the “clear and convincing” standard by which accused infringers must prove specific intent to deceive the PTO will largely solve that problem. Since the problem of over-disclosure directly affects the PTO, there is no reason not to credit the PTO’s assertion that a tightening of the intent element of the inequitable conduct doctrine should be sufficient to address the problem and that a drastic modification of the materiality element not only is not required, but would be contrary to the PTO’s interest in efficient examinations.

II

The majority holds that a failure to disclose information is “material” for purposes of inequitable conduct only if it satisfies the “but for” test; i.e., the conduct must be such that, but for the conduct, the claims would have been found unpatentable. This is not a tweak to the doctrine of inequitable conduct; it is fundamental change that would have the effect of eliminating the independent role of the doctrine of inequitable conduct as to disclosure obligations except in limited circumstances. This court has repeatedly rejected the “but for” test as too restrictive in light of the policies served by the inequitable conduct doctrine. See Merck & Co. v. Danbury Pharmacal, Inc., 873 F.2d 1418, 1421 (Fed. Cir.1989); see also Purdue Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1132 (Fed.Cir.2006); Hoffmann-LaRoche, Inc. v. Promega Corp., 323 F.3d 1354, 1368 (Fed.Cir.2003); Molins PLC v. Textron, Inc., 48 F.3d 1172, 1179-80 (Fed.Cir.1995); A.B. Dick Co. v. Burroughs Corp., 798 F.2d 1392, 1396 (Fed.Cir.1986). Those policies dictate that it should continue to do so.

As the PTO persuasively argues in its amicus brief, the “but for” standard for materiality is too restrictive to serve the purposes that the doctrine of inequitable conduct was designed to promote. If a failure to disclose constitutes inequitable conduct only when a proper disclosure would result in rejection of a claim, there will be little incentive for applicants to be candid with the PTO, because in most instances the sanction of inequitable conduct will apply only if the claims that issue are invalid anyway. For example, under the “but for” test of materiality, an applicant considering whether to disclose facts about a possible prior use of the invention would have little reason to disclose those facts to the PTO. If the applicant remained silent about the prior use, the patent issued, and the prior use was never discovered, the applicant would benefit from the nondisclosure. But even if the prior use was discovered during litigation, the failure to disclose would be held to constitute inequitable conduct only if the *1306prior use otherwise rendered the relevant claims invalid. The applicant would thus lose nothing by concealing the prior use from the PTO, because he would not be at risk of losing the right to enforce an otherwise valid patent.

In that situation, particularly if the opportunity to obtain a valuable patent is at stake, there will be no inducement for the applicant to be forthcoming. If the applicant withholds prior art or misleadingly discloses particular matters and succeeds, he obtains a patent that would not have issued otherwise. Even if the nondisclosure or misleading disclosure is later discovered, under the majority’s rule the applicant is no worse off, as the patent will be lost only if the claims would otherwise be held invalid. So there is little to lose by following a course of deceit. It is no indictment of the uprightness and professionalism of patent applicants and prosecutors as a group to say that they should not be subjected to an incentive system such as that. After all, it has long been recognized that “an open door may tempt a saint.” Given the large stakes sometimes at issue in patent prosecutions, a regime that ensures that a dishonest but potentially profitable course of action can be pursued with essentially no marginal added risk is an unwise regime no matter how virtuous its subjects.

It is unrealistic to expect that other means will provide an effective deterrent to ensure that material information will not be withheld during patent prosecutions. The PTO advises us that the prospect of enforcing the duty of disclosure other than through the threat of inequitable conduct claims is not possible or practical. The prospect of agency disciplinary action for disclosure violations is unrealistic, the PTO explains, because the Office is required by statute to file any charges within five years, see 28 U.S.C. § 2462, and it seldom learns of inequitable conduct within that period of time. In addition, the PTO explains that it rarely has access to relevant facts regarding inequitable conduct, because it lacks investigative resources. As a result, the PTO has concluded that a court is the best forum in which to consider alleged breaches of the disclosure duty in the context of an inequitable conduct defense. See Patent and Trademark Office Implementation of 37 C.F.R. § 1.56,1095 Off. Gaz. Pat. & Trademark Office 16 (Oct. 11,1988).

Ill

Aside from its practical infirmities, the “but for” standard adopted by the majority is inconsistent with the duty that the Supreme Court and the PTO have both described as applying to those who seek patents in the ex parte application process.

A

The doctrine of inequitable conduct has its origins in a trilogy of Supreme Court decisions dating back to the 1930s. The first of the three cases, Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S.Ct. 146, 78 L.Ed. 293 (1933), applied the equitable principle of “unclean hands” in a case in which a patentee’s representative had obtained a false affidavit and taken other steps to avoid the disclosure of a possibly invalidating prior use of the patented invention. The patentee obtained a favorable decree in an infringement action against a diff