Regeneron Pharmaceuticals v. Merus N.V. , 878 F.3d 1041 ( 2017 )

United States Court of Appeals
for the Federal Circuit
______________________
REGENERON PHARMACEUTICALS, INC.,
Plaintiff-Appellant
v.
MERUS N.V.,
Defendant-Appellee
______________________
2016-1346
______________________
Appeal from the United States District Court for the
Southern District of New York in No. 1:14-cv-01650-KBF,
Judge Katherine B. Forrest.
_____________________
ON PETITION FOR REHEARING EN BANC
______________________
NEAL KUMAR KATYAL, Hogan Lovells US LLP, Wash-
ington, DC, filed a petition for rehearing en banc for
plaintiff-appellant. Also represented by WILLIAM DAVID
MAXWELL; THOMAS SCHMIDT, New York, NY; CHRISTOPHER
P. BORELLO, MICHAEL ENZO FURROW, BRENDAN M.
O’MALLEY, ROBERT SETH SCHWARTZ, Fitzpatrick, Cella,
Harper & Scinto, New York, NY.
PATRICIA A. CARSON, Kirkland & Ellis LLP, New York,
NY, filed a response to the petition for defendant-
appellee. Also represented by SAUNAK DESAI, AARON D.
2 REGENERON PHARMACEUTICALS v. MERUS N.V.
RESETARITS, DAVID N. DRAPER; JOHN C. O’QUINN, Wash-
ington, DC; PETER B. SILVERMAN, Merus US, Inc., Cam-
bridge, MA.
KEVIN EDWARD NOONAN, McDonnell, Boehnen, Hul-
bert & Berghoff, LLP, Chicago, IL, for amicus curiae
Seven Chicago Patent Lawyers. Also represented by
JEFFREY PALMER ARMSTRONG, AARON VINCENT GIN, JAMES
LEE LOVSIN, JEREMY E. NOE, ANDREW W. WILLIAMS,
DONALD LOUIS ZUHN, JR.
RICHARD ABBOTT SAMP, Washington Legal Founda-
tion, Washington, DC, for amicus curiae Washington
Legal Foundation.
EDWARD DAVID MANZO, Husch Blackwell LLP, Chica-
go, IL, for amicus curiae Intellectual Property Law Asso-
ciation of Chicago. Also represented by ROBERT H. RESIS,
Banner & Witcoff, Ltd., Chicago, IL.
MELISSA A. BRAND, Biotechnology Innovation Organi-
zation, Washington, DC, for amicus curiae Biotechnology
Innovation Organization. Also represented by HANSJORG
SAUER; BRIAN PAUL BARRETT, Eli Lilly and Company,
Indianapolis, IN.
AARON RUSSELL FISCHER, Patterson Belknap Webb &
Tyler LLP, New York, NY, for amicus curiae New York
Intellectual Property Law Association. Also represented
by ANNEMARIE HASSETT, NYU School of Law, New York,
NY; ROBERT JOSEPH RANDO, The Rando Law Firm, P.C.,
Syosset, NY.
MICHAEL EDWARD MCCABE, JR., McCabe Law LLC,
Potomac, MD, for amici curiae David Hricik, Michael
Edward McCabe, Jr.
______________________
REGENERON PHARMACEUTICALS v. MERUS N.V. 3
Before PROST, Chief Judge, NEWMAN, LOURIE, DYK,
MOORE, O’MALLEY, REYNA, WALLACH, TARANTO, CHEN,
HUGHES, and STOLL, Circuit Judges.
NEWMAN, Circuit Judge, with whom REYNA, Circuit
Judge, joins, dissents from the denial of the petition for
rehearing en banc.
PER CURIAM.
ORDER
A combined petition for panel rehearing and rehear-
ing en banc was filed by appellant Regeneron Pharmaceu-
ticals, Inc., and a response thereto was invited by the
court and filed by appellee Merus N.V. Several motions
for leave to file amici curiae briefs were also filed and
granted by the court. The petition for rehearing and amici
curiae briefs were first referred to the panel that heard
the appeal, and thereafter, the petition for rehearing,
response, and amici curiae briefs were referred to the
circuit judges who are in regular active service. A poll was
requested, taken, and failed.
Upon consideration thereof,
IT IS ORDERED THAT:
The petition for panel rehearing is denied.
The petition for rehearing en banc is denied.
The mandate of the court will issue on January 2,
2018.
FOR THE COURT
December 26, 2017 /s/ Peter R. Marksteiner
Date Peter R. Marksteiner
Clerk of Court
United States Court of Appeals
for the Federal Circuit
______________________
REGENERON PHARMACEUTICALS, INC.,
Plaintiff-Appellant
v.
MERUS N.V.,
Defendant-Appellee
______________________
2016-1346
______________________
Appeal from the United States District Court for the
Southern District of New York in No. 1:14-cv-01650-KBF,
Judge Katherine B. Forrest.
______________________
NEWMAN, Circuit Judge, with whom REYNA, Circuit
Judge, joins, dissenting from the denial of the petition for
rehearing en banc.
I respectfully dissent from the denial of the requested
rehearing en banc, for this 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 retro-
spectively imposed by “adverse inference” arising from
later misconduct in litigation, without a showing of decep-
2 REGENERON PHARMACEUTICALS v. MERUS N.V.
tive intent before the Patent Office. 1 This departure from
precedent is a disservice to the patent practitioner, the
patentee, and the public.
The district court imposed this adverse inference as a
sanction for later litigation misconduct in an infringement
suit. 2 Precedent does not permit such inference, for it was
established in Therasense, Inc. v. Becton, Dickinson & Co.,
649 F.3d 1276, 1290–91 (Fed. Cir. 2011) (en banc), that
both materiality and deceptive intent must be proved. Of
particular concern are the district court’s cancellation of
its scheduled evidentiary hearing on the question of
intent, and its subsequent nullification of the patent as a
litigation sanction, based not on evidence of specific
intent, but on inference. Therasense instructs:
Intent and materiality are separate requirements.
Hoffmann–La Roche, Inc. v. Promega Corp., 323
F.3d 1354, 1359 (Fed. Cir. 2003). A district court
should not use a “sliding scale,” where a weak
showing of intent may be found sufficient based
on a strong showing of materiality, and vice versa.
Moreover, a district court may not infer intent
solely from materiality. Instead, a court must
weigh the evidence of intent to deceive independ-
ent of its analysis of materiality.
649 F.3d at 1290.
Therasense also requires that, when both materiality
and intent are established by clear and convincing evi-
dence, “the district court must weigh the equities to
determine whether the applicant’s conduct before the
PTO warrants rendering the entire patent unenforceable.”
1 Regeneron Pharms., Inc. v. Merus N.V., 864 F.3d
1343 (Fed. Cir. 2017) (“Maj. Op.”).
2 Regeneron Pharms. Inc. v. Merus B.V., 144
F. Supp. 3d 530 (S.D.N.Y. 2015).
REGENERON PHARMACEUTICALS v. MERUS N.V. 3
Id. at 1287. None of this happened here. Nonetheless,
the court departs from precedent, and sustains the “ad-
verse inference of specific intent to deceive,” with no
hearing and no evidence. Maj. Op. at 1364. En banc
review is warranted.
This court further departs from precedent concerning
sanctions for litigation misconduct. In Aptix Corp. v.
Quickturn Design Systems, Inc., this court held:
The doctrine of unclean hands does not reach out
to extinguish a property right based on miscon-
duct during litigation to enforce the right. Indeed
neither the Supreme Court nor this court has ever
declared a patent unenforceable due to litigation
misbehavior. . . . [T]he remedies for litigation mis-
conduct bar the malfeasant who committed the
misconduct. The property right itself remains in-
dependent of the conduct of a litigant. Litigation
misconduct, while serving as a basis to dismiss
the wrongful litigant, does not infect, or even af-
fect, the original grant of the property right.
269 F.3d 1369, 1375 (Fed. Cir. 2001). The court also
stated that, “[t]he Supreme Court’s decision in Keystone
[Driller Co. v. General Excavator Co., 290 U.S. 240
(1933)], upon which the district court primarily relied,
illustrates that litigation misconduct does not affect the
viability of the property right itself.” Id. (also discussing
Hazel–Atlas Glass Co. v. Hartford–Empire Co., 322 U.S.
238 (1944), overruled on other grounds by Standard Oil
Co. v. United States, 429 U.S. 17, 18 (1976)).
These newly created conflicts have received the atten-
tion of amici curiae, reflecting the importance of the
issues. For example, the New York Intellectual Property
Law Association states concern that the decision is “open
to the interpretation that ‘widespread’ litigation miscon-
duct may warrant an adverse inference of specific intent
whenever it is ‘directly related’ to patent prosecution,
4 REGENERON PHARMACEUTICALS v. MERUS N.V.
even if the evidence does not otherwise support an infer-
ence of specific intent to deceive the Examiner during
prosecution.” The Intellectual Property Law Association
of Chicago observes that this ruling “stigmatizes a prose-
cuting attorney for the sake of punishing his employer for
the actions of litigation counsel.” The Biotechnology
Innovation Organization writes that “it is hard to under-
stand how conduct having no direct nexus to evidence
relating to intent to deceive the PTO could be relevant,
nor how it could ‘require a finding of deceitful intent in
light of all the circumstances.’”
The Washington Legal Foundation observes that “the
district court never conducted any sort of evidentiary
hearing on the issue.” Professor David Hricik and Mi-
chael McCabe, Jr., point to inconsistencies with prece-
dent. Seven Chicago Patent Lawyers state that “this case
raises an important Constitutional issue: whether a
district court’s imposition of an adverse inference sanc-
tion, which bypassed proceedings on specific intent to
deceive the USPTO for inequitable conduct, violated the
procedural due process protections of the Constitution.”
The amici are unanimous in their apprehension of the
implications of the decision.
The court’s contrary holding has produced an irrecon-
cilable split in our jurisprudence, to the detriment of
stability of law and practice. Our en banc attention is
required. I respectfully dissent.