8.1 Duty of Candor & Good Faith

The U.S. patent system is built upon an administrative process where the United States Patent and Trademark Office (USPTO) relies heavily on the honesty and transparency of patent applicants. Because patent examiners face limited time and resources when conducting prior art searches, the law imposes a strict duty of candor and good faith on applicants and their representatives. On the Patent Bar examination, questions concerning 37 C.F.R. § 1.56 (commonly referred to as Rule 56), the individuals bound by this duty, the standard of materiality, and the judicial doctrines surrounding inequitable conduct are tested with extreme precision.

The Legal Foundation: 37 C.F.R. § 1.56 (Rule 56)

Under 37 C.F.R. § 1.56(a), a patent by its very nature is affected with a public interest. Public policy demands that all patent applications be examined free from fraud or deceptive conduct. Rule 56 establishes that each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the USPTO. This duty includes a specific obligation to disclose to the Office all information known to that individual to be material to patentability.

Key administrative aspects of Rule 56 include:

• No Obligation to Search: Rule 56 does not create a affirmative duty to conduct a prior art search before filing an application. However, if an individual subject to the duty knows of material prior art or information, that information must be disclosed to the USPTO.
• Temporal Scope: The duty of disclosure exists throughout the entire prosecution of the application until the patent actually issues or the application becomes abandoned.
• Administrative Rejections: Under current USPTO administrative procedure, patent examiners do not investigate or reject claims based on fraud or breach of Rule 56 during ex parte prosecution. Issues of deceptive intent and inequitable conduct are left to judicial determination in federal court litigation or specific post-grant proceedings.

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Individuals Bound by the Duty of Disclosure

Rule 56 does not apply vaguely to an entire corporate entity; rather, it applies individually to specific natural persons associated with the application. Under 37 C.F.R. § 1.56(c), the duty of disclosure applies strictly to three defined categories of individuals:

Defining "Substantively Involved"

To be "substantively involved" under Category 3, an individual must exercise active judgment regarding the technical content, legal arguments, or prosecution strategy of the application. Examples include:

• An in-house corporate scientist who assists the patent attorney in drafting claims or answering Office Actions.
• A corporate licensing vice president who directs the prosecution strategy and evaluates prior art references.
• A technical consultant who reviews draft responses and advises on technical distinctions over cited art.

Conversely, corporate officers or directors who merely receive high-level status updates or sign financial transfers without participating in application substance are not bound by Rule 56. Similarly, clerical personnel who format documents, handle docketing, or transmit paperwork are explicitly excluded.

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The Materiality Standard: Rule 56 vs. Therasense

A critical area of testing on the Patent Bar is distinguishing the administrative standard of materiality enforced by the USPTO under Rule 56 from the judicial standard applied by federal courts when evaluating charges of inequitable conduct.

The Rule 56 Administrative Standard

Under 37 C.F.R. § 1.56(b), information is material to patentability if it is not cumulative to information already of record in the application, and it meets either of the following two tests:

1. Prima Facie Case of Unpatentability: It establishes, by itself or in combination with other information, a prima facie case of unpatentability of a claim. A prima facie case is established when the information would compel a reasonable examiner to conclude that a claim is unpatentable, giving the claim its broadest reasonable construction and before considering any argument or evidence presented by the applicant.
2. Inconsistent Position: It refutes, or is inconsistent with, a position the applicant takes in asserting an argument of patentability or opposing an argument of unpatentability before the Office.

Information is not material if it merely duplicates prior art already cited by or submitted to the examiner (cumulative art).

The Judicial Standard: Therasense v. Becton Dickinson

Prior to 2011, courts frequently applied broad standards of materiality, leading to widespread accusations of inequitable conduct in litigation. In the landmark en banc decision Therasense, Inc. v. Becton, Dickinson & Co. (Fed. Cir. 2011), the Federal Circuit heightened the standards required to prove inequitable conduct in court, establishing two distinct requirements:

1. But-For Materiality: The withheld prior art must be "but-for material." Information is but-for material if the USPTO would not have allowed a claim had it been aware of the undisclosed information. (The court applies the preponderance of the evidence standard and broadest reasonable interpretation standard used by the USPTO during examination).
2. Affirmative Egregious Misconduct Exception: If the applicant engages in affirmative egregious misconduct—such as submitting a perjured affidavit or fabricated test results—but-for materiality is not required. The egregious misconduct itself satisfies the materiality prong.
3. Specific Intent to Deceive: The accused party must prove by clear and convincing evidence that the applicant acted with the specific intent to deceive the USPTO. Intent cannot be inferred solely from materiality; withholding a material reference out of gross negligence or inadvertence does not constitute inequitable conduct.

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Consequences of Inequitable Conduct

When a federal court determines that an applicant or practitioner committed inequitable conduct during the prosecution of a patent application, the consequences are severe:

• Total Unenforceability: Inequitable conduct acts as the "atomic bomb" of patent law. Unlike a finding of invalidity (which applies claim-by-claim), inequitable conduct renders all claims of the patent completely unenforceable—even valid claims that were entirely untainted by the misrepresentation.
• Infectious Unenforceability: The taint of inequitable conduct can spread to related patents in the same family (e.g., continuations, divisionals, or reissues) if the deceptive conduct directly leveraged or impacted the prosecution of those related applications.
• Practitioner Discipline: Registered patent attorneys and agents who participate in fraudulent conduct or breach their duty of candor face disciplinary sanctions from the USPTO Office of Enrollment and Discipline (OED) under 37 C.F.R. Part 11, ranging from public reprimand to permanent disbarment from practice before the USPTO.