9th Circuit Revives False Claims Act Action for Fraud on the Patent Office

by Dennis Crouch

The U.S. Court of Appeals for the Ninth Circuit recently issued a pair of decisions in the qui tam case Silbersher v. Valeant Pharmaceuticals concerning the False Claims Act’s (FCA) public disclosure bar.  The case sets significant precedent in linking FCA claims to patent prosecution and fraud upon the patent office.  The case can be contrasted with Silbersher v. Allergan, Inc., 21-15420, — F.4th — (9th Cir. Aug. 25, 2022) [21-15420], that Silbersher lost.

Background

The False Claims Act (FCA) allows private citizens, known as “relators,” to file qui tam suits on behalf of the government against those who have submitted false or fraudulent claims to the Federal Government. A relator who successfully prosecutes an FCA action is entitled to receive a percentage of any recovery. This bounty system is meant to encourage whistleblowers to come forward with information about fraud against the government. However, the FCA also contains a “public disclosure bar” to prevent opportunistic litigation by relators who do not contribute any original information. The public disclosure bar mandates dismissal of qui tam suits where the allegations are substantially the same as information already publicly disclosed through certain channels enumerated in the statute.

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