Unclean Hands

  • Separate Unclean Hands Defense: Per S. Ct., applies to “particularly egregious misconduct, including perjury, the manufacture of false evidence, and the suppression of evidence” + “‘deliberately planned and carefully executed scheme[s] to defraud’ not only the PTO but also the courts,” and sole remedy is dismissal of case. No need to show materiality. See Precision, 324 U.S. at 816-20, 65 S. Ct. 993; Hazel-Atlas, 322 U.S. at 240, 64 S. Ct. 997; Keystone, 290 U.S. at 243, 54 S. Ct. 146; but see Regeneron (Fed. Cir. 07/27/17) (2-1) (unclean hands “‘is not a source of power to punish’” so post-prosecution misconduct cannot render patent unenforceable.)
  • Misconduct Must Have “Immediate And Necessary Relation” To The Equity Sought: “Courts of equity do not make the quality of suitors the test. They apply the maxim requiring clean hands only where some unconscionable act of one coming for relief has immediate and necessary relation to the equity that he seeks in respect of the matter in litigation. They do not close their doors because of plaintiff’s misconduct, whatever its character, that has no relation to anything involved in the suit, but only for such violations of conscience as in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication.” Keystone Driller (U.S. 12/04/1933). Where patent owner guilty of “clear misconduct in breaching commitments to a third party and clear misconduct in litigation,” the “‘immediate and necessary relation’ standard, in its natural meaning, generally must be met if the conduct normally would enhance the claimant’s position regarding legal rights that are important to the litigation if the impropriety is not discovered and corrected.” Gilead Sciences (Fed. Cir. 04/25/18) (aff’g district court unclean hands determination and judgment of unenforceability of two patents, after $200 million jury verdict, based on business misconduct and litigation misconduct, where (1) Merck violated “firewall” agreement not to allow anyone involved in patent prosecution to join conference call where other company would disclose more information about its product, by having Merck in-house patent prosecutor join call, after which prosecutor used knowledge learned on call to write narrow claims targeting what he learned on call, lessening risk of invalidity, (2) prosecutor denied in deposition having been on the call, and (3) prosecutor gave intentionally false testimony about reasons for the narrowing amendment.). See Patently O (04/25/18) (questioning application of unclean hands where no equitable relief was sought by the patent owner).