USPTO regulations (37 C.F.R. 1.56) state that any individual who is substantively involved in the preparation and prosecution of a patent application owes a duty of candor to the USPTO. According to the regulation, this requirement “includes a duty to disclose to the Office all information known to that individual to be material to patentability.” Failure to comply with this requirement can render a patent unenforceable.
In the recent case of Avid Identification Systems, Inc. v. Crystal Import Corp., the Federal Circuit held that this duty can extend to a person — such as a corporate officer — who is neither an inventor nor a prosecuting patent attorney. In the case, Avid’s president demonstrated a new invention at a trade show. More than one year later, the company applied for a patent on the invention. The president was not the inventor, he did not prepare the patent application, and he did not direct the attorneys who did prepare the application. Nonetheless, the Court found that he was “substantively involved” in the prosecution, stating:
We read “substantively involved” to mean that the involvement relates to the content of the application or decisions related thereto, and that the involvement is not wholly administrative or secretarial in nature.
Factors relevant to the court’s decision included that (i) the president specifically hired the inventors to develop the invention, (ii) the president was involved in “all aspects” of the company’s operation, implying that he would have been involved in the patent prosecution, and (iii) the president was included on communcations involving a related European patent application, thus further implying that he would have been involved in prosecution of the U.S. patent.
Because Avid’s president did not disclose the trade show demonstration to the USPTO, the court held the patent to be unenforceable.
The Federal Circuit’s decision serves as a reminder that all individuals involved in patent prosecution matters should consider the duty of disclosure, and that they should provide their patent attorneys or agents with all material information for disclosure to the USPTO.