Regeneron appeal on inequitable conduct rejected

The US Court of Appeals for the Federal Circuit has rejected Regeneron’s request for a panel rehearing and rehearing en banc in a case centring on inequitable conduct.

In July last year, the Federal Circuit affirmed a lower court’s ruling that found a patent owned by Regeneron unenforceable because of the biotech company’s inequitable conduct.

US patent number 8,502,018 (“Methods of modifying eukaryotic cells”), which relates to “using large DNA vectors to target and modify endogenous genes and chromosomal loci in eukaryotic cells”, was found to be unenforceable.

In March 2014, Regeneron sued clinical-stage immuno-oncology company Merus at the US District Court for the Southern District of New York.

Merus hit back with a counterclaim of unenforceability due to Regeneron’s inequitable conduct, claiming that Regeneron’s patent prosecutors withheld four references from the US Patent and Trademark Office (USPTO) during prosecution of the ‘018 patent.

In its counterclaim, Merus argued that the references were cited in a third-party submission in related US patent prosecution and in European opposition briefs; were “but-for” material; and were withheld by Regeneron with the specific intent to deceive the USPTO.

Prior art is but-for material if the USPTO would not have allowed a claim had it been aware of the undisclosed prior art (Therasense v Becton Dickinson & Co).

Regeneron claimed that the references were “not but-for material, that they were cumulative of references the USPTO actually relied on during prosecution, and that Regeneron did not have any specific intent to deceive the USPTO”.

According to the Federal Circuit in the July ruling, the New York court “exhaustively detailed Regeneron’s discovery misconduct throughout litigation and sanctioned Regeneron by drawing an adverse inference of [a] specific intent to deceive the USPTO”.

Regeneron had appealed against the decision to the Federal Circuit, but the Federal Circuit affirmed the lower court’s decision, holding that it had properly found that the withheld references were but-for material and were not cumulative.

Regeneron then requested a panel rehearing and a rehearing en banc, but the court rejected both on December 26.

Circuit Judges Pauline Newman and Jimmie Reyna dissented from the denial of the petition for rehearing en banc.

Newman, on behalf of herself and Reyna, said that the decision creates conflicts in important areas of law and practice.

“I previously stated my concern with this ruling that inequitable conduct in patent prosecution can be retrospectively imposed by ‘adverse inference’ arising from later misconduct in litigation, without a showing of deceptive intent before the USPTO,” said Newman.

She added that the departure from precedent is a “disservice” to the patent practitioner, the patentee, and the public.

Ton Logtenberg, CEO of Merus, said that the decision validates the thorough opinions issued by the district court and the Federal Circuit.

“With this order and the strength of Merus’s Biclonics technology, Merus believes it is well-positioned as an innovator in developing bispecific antibody therapeutics to address significant unmet medical needs,” he added.

A spokesperson for Regeneron said the company disagreed with the denial of en banc review.

“We continue to believe that the courts misunderstood or inadequately reviewed the underlying facts and science, as well as the relevant legal standard. We are considering further options, but because this litigation is still pending, we aren’t able to comment further at this time,” they concluded.

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