When Legitimate Advocacy Crosses the Line to Inequitable Conduct

Stephen G. Adrian | August 27, 2014

Apotex Inc. and Apotex Corp. v. UCB, Inc., and Kremers Urban Pharmaceuticals, Inc., andSchwarz Pharma, Inc., Paddock Laboratories, LLLC, andPerrigo Company 

August 15, 2014

Panel: Reyna, Wallach, and Hughes.  Opinion by Reyna.

There is a line separating strong advocacy for your patent application and violating your duty of candor before the U.S. Patent & Trademark Office. This precedential decision illustrates when the line is crossed to result in a finding of inequitable conduct, leading to a patent becoming unenforceable.


U.S. Patent No. 6,767,556 is directed to a process for manufacturing moexipril tablets. Moexipril is an angiotensin-converting enzyme (ACE) inhibitor which is susceptible to degradation and instability. The sole independent claim 1 states:

1.   A process of making a solid pharmaceutical composition comprising moexipril magnesium, said process comprising the step of reacting moexipril or an acid addition salt thereof with an alkaline magnesium compound in a controlled manner in the presence of a sufficient amount of solvent for a predetermined amount of time so as to convert greater than 80% of the moexipril or moexipril acid addition salt to moexipril magnesium.

Dr. Sherman, the sole inventor, is the founder and chairman of Apotex and wrote the specification of the ‘556 patent application. Dr. Sherman has written approximately a hundred applications, and directs all litigation for Apotex.

The specification of the ‘556 patent discusses prior art in the Background section which was subsequently applied by the patent Examiner during prosecution. This prior art included: U.S. Patent No. 4,743,450 directed to stabilizing an ACE inhibitor using alkaline magnesium compounds; the accused products UNIVASC and UNIRETIC which are made in accordance with the ‘450 patent; and a 1990 article by Gu et al, which examined the chemistry in stabilizing moexipril as resulting from “neutralization” by the outer surface of granulated material possibly because “a portion of the moexipril hydrochloride was converted to cation salts via granulation” (i.e., moexipril magnesium was obtained). Three Office Actions were issued by the Examiner during prosecution. In the first Office Action, the Examiner relied on the ‘450 patent and another reference in rejecting the claims. Dr. Sherman’s counsel argued that the prior art did not disclose a reaction, but only disclosed combining moexipril and magnesium hydrochloride. As support, a Product Monograph for UNIVASC and a portion of the Orange Book were submitted to show that the product contained magnesium oxide, arguing that there was mere combining of the ingredients without reaction.

The Examiner then rejected the claims a second time over a combination of the ‘450 patent and the Gu article. Counsel again responded that the components are merely combined and any reaction is insignificant. Once more, counsel directed the Examiner to the Product Monograph and the Orange Book.

The Examiner issued a third and final rejection based on the Gu article and the ‘450 patent, finding that the neutralization taught by the references constituted a reaction. In response, the same arguments of mere combining without significant reaction were repeated. In further support, an expert declaration was submitted to explain that the function of the stabilizer is to inhibit reactions which would degrade the active ingredient, and that the stabilizer needs to be unreacted to perform this function.

A telephone interview subsequently occurred, in which agreement was reached to amend claim 1 to require greater than 80% conversion. As reasons for allowance, the Examiner stated in part:

Rather, the prior art teaches that only a portion of drug (if any) may be converted to the alkaline salt and that the stable product results entirely or primarily not from conversion to alkaline salts, but from stabilization of the moexipril hydrochloride by the presence of the alkaline stabilizing compound in the final product.

On the surface of these facts, it seems that counsel effectively advocated its arguments to obtain allowance. However, during trial at the district court, additional factual findings were uncovered causing the district court to rule that the ‘556 patent is unenforceable due to inequitable conduct. Among the findings: Dr. Sherman was aware that UNIVASC was made according to his claimed process; Dr. Sherman concealed this knowledge from the USPTO; Dr. Sherman misrepresented the nature of UNIVASC and the prior art through his counsel’s arguments and the expert’s declaration; Dr. Sherman withheld relevant prior art; and Dr. Sherman submitted results of experiments he never conducted. The district court found that the combined misrepresentations and withholding of prior art were material to the prosecution in that the Examiner adopted the misrepresentations verbatim and would not have allowed the claims had he been aware that UNIVASC contained moexipril magnesium. The district court further concluded that the single most reasonable inference that could be drawn from the evidence was that Dr. Sherman intended to deceive the USPTO.

With respect to materiality, the CAFC found that clear and convincing evidence demonstrated that Dr. Sherman engaged in material misconduct in that: Dr. Sherman was actively involved in the prosecution; he instigated the representations made on his behalf by his counsel and the expert; he omitted important details of the prior art in his specification which had been known to him; and he directly instructed his counsel to continue pressing his arguments through an expert declaration. Furthermore, Dr. Sherman made affirmative misrepresentations of material facts. Apotex’s internal tests, conducted before the first Office Action, showed that moexipril in UNIVASC is mainly present as moexipril magnesium, yet Dr. Sherman repeatedly asserted that the process for manufacturing UNIVASC did not involve a reaction. As part of the infringement case years after the patent issued, Apotex confirmed that UNIVASC contains more than 80% moexipril magnesium.

The CAFC further found that Dr. Sherman’s misconduct was “but-for material” to the issuance of the patent. The Examiner’s rejections were based on the same prior art that was the subject of the misrepresentations.

Although the CAFC agreed that Dr. Sherman had no duty to disclose his own suspicions or beliefs regarding the prior art, and that there is nothing wrong with advocating a reasonable interpretation of prior art in good faith, the misconduct of Dr. Sherman went beyond to affirmatively and knowingly misrepresenting material facts regarding the prior art. The CAFC further commented that Dr. Sherman’s actions, at a minimum, came close to the affirmative misconduct in Therasense which could justify finding inequitable conduct without a showing of but-for materiality.

With respect to intent, the CAFC affirmed that clear and convincing evidence establishes intent to deceive. Dr. Sherman knew or at least had a strong suspicion that he was seeking a patent on the same process used to obtain an already existing drug; Dr. Sherman was aware that some of the assertions in the specification were at least misleadingly incomplete or inaccurate; Dr. Sherman admitted that experiments described with past tense in the specification were never actually performed; and Dr. Sherman was aware that additional misrepresentations were made on his behalf to the USPTO and that he directed his counsel to bolster the arguments with a declaration of an expert who was deliberately shielded from the truth. As summed up by the CAFC, “[h]e knew enough to recognize that he was crossing the line from legitimate advocacy to genuine misrepresentation of material facts. In aggregate, Dr. Sherman’s conduct evidences a pattern of lack of candor.”


There is nothing wrong with strongly advocating a reasonable interpretation of the prior art in good faith.

When describing prior art in your specification, accurately describe the prior art, and do not omit teachings which may not be favorable to your position.

When you become aware of facts which are not favorable to your position, your duty of candor requires you to bring these facts before the USPTO.

Withholding these facts from your counsel will not shield any patent subsequently obtained from being held unenforceable.

When describing experiments in your specification, do not use past tense unless the experiments were actually performed.

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