Court Says Regeneron Engaged in Litigation Misconduct and Withheld Material Information from Patent Office

On Thursday, August 6, Judge Katherine B. Forrest of the U.S. District Court for the Southern District of New York issued a memorandum decision and order indicating that Regeneron had withheld material information in connection with the prosecution of U.S. Patent No. 8,502,018, and engaged in litigation misconduct when asserting that patent against Merus B.V. 

The court imposed an adverse inference that Regeneron’s agents had intended to deceive the U.S. Patent and Trade Office (USPTO) during prosecution of the ‘018 patent and stated that the “application of these inferences to the court’s prior finding of materiality appears to lead inexorably to one final determination: That Regeneron engaged in inequitable conduct in connection with the prosecution of the ‘018 patent,” noting a more detailed decision would follow. 

In issuing her ruling, Judge Forrest ruled that the trial declarations submitted by three Regeneron trial witnesses, including two of its employees accused of inequitable conduct “led directly and indirectly to a waiver of attorney-client privilege and identification of discovery misconduct.” 

After detailing the  “troubling” “pattern of conduct by Regeneron throughout this case” and the court’s efforts to address the repercussions of Regeneron’s misconduct, the court’s opinion laid out three categories of documents that Regeneron improperly withheld, noting that ‘[f]ailure to make full and adequate production of the documents within the first two categories alone warrants serious sanctions.” 

With respect to the third category of documents, the court stated “[i]ndeed, it is deeply troubling that some of those documents contain statements directly contradictory” to one of Regeneron’s witnesses’ “sworn trial declaration.” 

The court concluded that under these circumstances an adverse inference that Regeneron’s employees intentionally mislead the USPTO was appropriate. These inferences, when applied to the court’s finding that Regeneron’s agents withheld material information from the USPTO, led the court to conclude “that Regeneron engaged in inequitable conduct in connection with the prosecution of the ‘018 patent.” 

This marks the third counterclaim upon which Merus has prevailed in this litigation, initiated by Regeneron. Inequitable conduct was the only remaining claim at issue before the court.

“We are very pleased with the court’s decision in our favor,” said Ton Logtenberg, CEO of Merus. “From the outset Merus maintained that the ‘018 patent is invalid, not infringed and was procured by inequitable conduct. And despite Regeneron’s concession on two of those points, Merus felt compelled to press its inequitable conduct claim because as a U.S. patent-holder itself, Merus does not believe that Regeneron’s patent should have been permitted to issue and interfere with any company’s legitimate business. This case has imposed substantial burden on Merus, which was clearly unjustified.  Our company remains uniquely positioned to produce best-in-class bispecific antibody therapeutics capable of attacking tumors in multiple ways.”

This decision is particularly important according to Kirkland & Ellis LLP’s Patricia A. Carson and Peter B. Silverman, who represent Merus, as they note: “It brings to a close Merus’s third successful counterclaim against Regeneron, and has provided a sound resolution for our client, who has been embroiled litigation for over a year.”

The case is Regeneron Pharmaceuticals Inc. v. Merus B.V., case number 14-1650 in the Southern District of New York.

The Merus release can be found here.