Duty of Candor to Disclose Inter Partes Review: The Gauntlet Has Been Thrown Down

On May 2, 2014, the Eastern District of Virginia¹ held that attorneys must inform the Court of any pending Inter Partes Review (IPR) regarding patents asserted in litigation. Failure to do so may violate the general duty of candor and good faith to the Court.

The case involves five related patents regarding aspects of “viewing multimedia content on the small screens of mobile terminals.”²

While its motion for summary judgment of invalidity was pending, defendant Samsung filed a request for an IPR before the US Patent and Trademark Office (PTO) challenging the validity of the patents-in-suit. But nobody alerted the Court to the parallel PTO proceeding. The Court then granted, in part, and denied, in part, Samsung’s motion for summary judgment. Unhappy with the result, the plaintiff patentee filed a motion for reconsideration, informing the Court for the first time of the parallel proceeding.

Once it found out about the IPR, the Court devoted more than 20 pages of its opinion to the issue of an attorney’s duty of candor. The Court noted that an attorney’s general duty of candor requires him to disclose IPR proceedings.

The Court explained that “[i]n addition to the [Virginia Rules of Professional Conduct] Rule 3.3 duty of candor, there is also a broader general duty of candor and good faith that encompasses an attorney’s duty to advise a district court of any development that may affect the outcome of the litigation.”³ The general duty of candor is a “continuing duty to inform the Court of any development which may conceivably affect the outcome of litigation.”⁴ The Court reasoned that the IPR proceeding was a development that could impact the outcome of the litigation. Thus, “[t]he parties should have notified [the] Court of the IPR petition as soon as it was filed.”⁵ Failure to alert the Court of the IPR proceeding was “a glaring omission,” and a failure by counsel “to comply with their general duty of candor and good faith.”⁶

Despite the lengthy admonishment, there was no formal reprimand. Instead, the Court cautioned that “the issuance of [the o]pinion is more than sufficient to place all patent practitioners on notice that future failures to disclose to the Court any concurrent inter partes review proceedings will be met with far sharper consequences.”⁷

Prudent attorneys should disclose any related PTO proceeding that may affect the outcome of the litigation as soon as possible. If you have questions, please contact Janine A. Carlan, Taniel E. Anderson, or the Arent Fox professional who handles your matters.