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In a Split Decision, Federal Circuit Denies Petition for Rehearing En Banc, Declining to Review Panel Decision Requiring Direct Evidence of Intervening Rights for Prosecution Laches Defense

March 07, 2011

Decision icon Decision, en banc

Last Month at the Federal Circuit - March 2011


Rader, Newman, Lourie, Bryson, Gajarsa, Linn, Dyk, Prost, Moore, O’Malley

Dissenting opinions filed by Judges Prost, with whom Gajarsa, Moore, and O’Malley join, and Dyk

[Appealed from: D. Del., Judge Robinson]

In Cancer Research Technology Ltd. v. Barr Laboratories, Inc., No. 10-1204 (Fed. Cir. Feb. 28, 2011), the Federal Circuit, in a 5-5 vote, denied Barr Laboratories, Inc.’s (“Barr”) petition for rehearing en banc of panel decision Cancer Research Technology Ltd. v. Barr Laboratories, Inc., No. 10-1204 (Fed. Cir. Nov. 9, 2010) (“panel decision”), which reversed the district court’s finding of prosecution laches and inequitable conduct.   

Cancer Research Technology Limited (“Cancer Research”) owns U.S. Patent No. 5,260,291 (“the ’291 patent”), which claims a genus of compounds and methods for treating cancer by administering those compounds.  The original application that led to the ’291 patent was filed in August 1982.  The examiner rejected the application for lack of utility.  Rather than respond to the office action, the applicant instead filed a continuation application.  The examiner again issued a utility rejection, and the applicant again filed a continuation application.  This process was repeated nine more times.  Cancer Research eventually took over prosecution and substantively responded to the utility rejection by arguing that the animal tests in the original application were adequate to establish utility in humans.  The PTO agreed and the ’291 patent subsequently issued.

Barr filed an ANDA with a Paragraph IV certification challenging the validity of the ’291 patent.  Cancer Research sued Barr for patent infringement and the district court held the ’291 patent unenforceable for prosecution laches and inequitable conduct.  On appeal, the Federal Circuit reversed, holding that prosecution laches requires a finding of prejudice, which in turn requires a demonstration of intervening rights.  Barr filed a petition for rehearing en banc of the Court’s November 9, 2010, decision and the Court denied the petition.

Judge Prost, with whom Judges Gajarsa, Moore, and O’Malley joined, dissented.  According to the dissent, the panel majority’s decision narrowed the equitable doctrine of prosecution laches by requiring direct evidence of intervening rights.  In Judge Prost’s opinion, the majority’s decision established a rigid rule that “surely discounts the relevant concerns that may arise” when patents are not prosecuted in a timely manner.  Prost Dissent at 3.  According to the dissent, the majority’s decision was contrary to Supreme Court precedent, which distinguishes prosecution laches and intervening rights as independent defenses.  Judge Prost further stated that the rigidity of the majority’s rule was of particular concern because the Supreme Court has repeatedly cautioned against excessive formalism in application of the patent laws.  Instead, the majority should have applied a flexible “totality of the circumstances” test for prosecution laches in order to accommodate the different ways in which the public might be harmed by a delay in the patent monopoly.  Thus, Judge Prost concluded that en banc review should have been granted to prevent the harm done by the panel majority to the equitable doctrine of prosecution laches.

Judge Dyk wrote a separate dissent in which he agreed with Judge Prost’s opinion that a defendant need not show evidence of intervening rights to establish a prosecution laches defense.  However, Judge Dyk disagreed with the other dissenting judges that the proper test should be a “totality of the circumstances” test, since such a test “is really no test at all.”  Dyk Dissent at 1.  According to Judge Dyk, the Supreme Court has not required the use of a “totality of the circumstances test” for prosecution laches, and such a test would be unadvisable because it will not provide patent prosecutors with sufficient guidance as to when they risk a defense of prosecution laches.  Thus, Judge Dyk concluded that the Court should have granted en banc review to provide such guidance.