It was easy to feel a pang of sympathy for Bradford “Jim” Badke and Sona De of Ropes & Gray last May, when the U.S. Court of Appeals for the Federal Circuit handed down its en banc ruling in Therasense v. Becton Dickinson. Everyone was talking about how Badke and De’s opponent, Abbott Labs (which acquired Therasense), had convinced the court to raise the standard for invalidating patents on inequitable conduct grounds. All the attention given to the influential ruling overshadowed the fact that Badke and De had scored win after win for defendants Nova Biomedical and Becton Dickinson in the long and difficult case.
If anyone needs sympathy now, it’s the lawyers on other side. On March 28 the Ropes & Gray lawyers capped the saga with yet another victory when they persuaded San Francisco federal district court judge William Alsup to rule that Abbott committed inequitable conduct, even under the Federal Circuit’s new, heightened standard. Judge Alsup concluded that an Abbott in-house lawyer secured a patent relating to blood glucose monitoring by deceiving the U.S. Patent and Trademark Office. The Abbott lawyer made statements to patent examiners that directly contradicted statements the company made when applying for similar patents in Europe.
The decision affirms a $6 million award of attorneys fees for Nova and BD. It also puts an exclamation mark on eight years of litigation for the defendants and their lawyers at Ropes & Gray. Nova, a Boston-based manufacturer of blood-testing equipment for diabetics, rolled out an advanced blood-sugar monitor back in the early 2000s and agreed to let BD distribute the product under its name. Abbott sued in 2004, contending that Nova and BD infringed four unrelated patents. Nova’s scrappy CEO, Frank Manganaro, spent more than $30 million on the company’s defense, forcing him to lay off employees. “My partners and I decided we would rather go down with the ship and lose the company than give in,” Manganaro told Forbes back in 2010.
Manganaro’s gamble began to pay off in 2008. Badke and De knocked out two of Abbott’s four patents on summary judgment. Judge Alsup invalidated a third patent at a bench trial, and a jury invalidated the fourth and final patent. Badke handled openings and closings throughout, while De took the lead on briefing and cross-examined experts. “We’re proud that we had three different fact-finders and were able to prevail at every phase.” Badke told us. “I have to give Frank Manganaro a lot of credit. He faced a huge potential liability. We could have lost on any of those four patents.”
The case took an unusual turn on appeal. Abbott, represented by Munger Tolles & Olson and MoloLamken, urged the Federal Circuit to rehear the inequitable conduct question en banc, even though the patent at issue was already dead on obviousness grounds. The inequitable conduct defense had become a plague on the patent bar, the company and its many amici argued. The defense rarely worked, but defendants were raising it as a matter of course, driving up litigation costs. A majority of the court sided with Abbott and held that inequitable conduct should only be found when the patent would not have been granted but for intentional deception in the application process.
“When everybody received the en banc order, Abbott may have considered it a win becasue they got the higher standard,” De told us. “People overlook the fact that there was no en banc judge that questioned the district court’s prior-fact-findings or suggested that the outcome should not have been inequitable conduct.”
Badke adds that, after reading the concurrence and dissent, he felt “pretty confident” that the inequitable conduct ruling and the attorney fees award would stand. “The thing that we found comfort in was that our evidence was so thorough.” he said. “We could just take that evidence and place it into a new legal framework.”
The saga ended much like it started, with Badke yet again prevailing on Judge Alsup. “We were able to systematically dismantle their case,” said Badke. “People lose sight of that fact.”