Monsanto v. Bayer Bioscience: Federal Circuit Holds Patent Unenforceable Following Patentee's Failure to Disclose Material Notes

Monsanto Corp. v. Bayer Bioscience N.V.

Federal Circuit, January 25, 2008, No. 2007-1109
Slip Opinion

On January 25, the Federal Circuit affirmed the District Court for the Eastern District of Missouri’s holdings: 1) that Bayer’s patent for certain chimeric genes was unenforceable for inequitable conduct, and 2) that the district court had jurisdiction to declare three related patents unenforceable.

The Federal Circuit held that Bayer’s patent was unenforceable for inequitable conduct. Judge Gajarsa's opinion held that Bayer breached its duty of candor and good faith to the United States Patent and Trademark Office in failing to disclose its employee’s notes on another researcher’s poster at a scientific conference.

The court also upheld the district court’s jurisdiction over three other patents relating to the chimeric genes, holding that the district court still retained jurisdiction because of Monsanto’s request for attorney fees, despite Bayer's motion to dismiss the claims on the other patents and subsequent signing of a covenant not to sue Monsanto for infringement of those patents.

Dennis Crouch of Patently-O summarizes the opinion.
Lawrence B. Ebert of IPBiz mentions some interesting aspects of the case's procedural history.
Stephen Albainy-Jenei of Patent Baristas warns that “note-taking can come back to bite your patent.”

The case involved a patent for chimeric genes containing a Bt toxin-coding gene, intended to create insect-resistance in plants. At the time of prosecution, Bayer had disclosed Dr. Wayne Barnes’s abstract but distinguished its claims from this prior art to overcome an initial rejection by the patent examiner for obviousness. However, Bayer did not disclose its employee’s notes on Dr. Barnes’ poster, which contained more details about the extent of his research. The Federal Circuit did not decide whether, as the district court found, the notes “would establish a prima facie case of unpatentability.” It nonetheless held the notes were material because they directly contradicted Bayer’s arguments for patentability to the PTO, satisfying the standard of 37 C.F.R. § 1.56(2)(i).

The Federal Circuit did not find clear error in the district court’s finding of intent to deceive the PTO. It had previously held that “intent may be inferred where a patent applicant knew, or should have known that withheld information would be material.” The district court had found Bayer’s explanations for withholding the notes to be unpersuasive.

Monsanto had originally sought a declaratory judgment in December 2000 that its MON810 genetically modified corn, which incorporated the Bt toxin gene, did not infringe any of Bayer’s four patents. Bayer sought dismissal of its infringement claims and filed a covenant not to sue Monsanto for infringement of those patents, but the district court still retained jurisdiction under 35 U.S.C. § 285 because of Monsanto’s request for attorney fees. Citing Nilssen v. Osram Sylvania, Inc., the Federal Circuit held that the district court’s § 285 jurisdiction to determine inequitable conduct conferred jurisdiction to hold all three patents unenforceable. Though the patents were no longer in suit, the patents’ unenforceability automatically followed the determination of inequitable conduct.