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What Businesses & Engineers Need to Know About Recent Changes in U.S. Patent Law

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Knobbe attorneys recently presented on "What Businesses & Engineers Need to Know About Recent Changes in U.S. Patent Law" at an event hosted by the Sino-American Biomedical and Pharmaceuticals …

Knobbe attorneys recently presented on "What Businesses & Engineers Need to Know About Recent Changes in U.S. Patent Law" at an event hosted by the Sino-American Biomedical and Pharmaceuticals Professionals Association (SABPA), the American Society of Mechanical Engineers (ASME) and Knobbe Martens.

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  • 1. What Businesses & Engineers Need to Know About Recent Changes in U.S. November 8, 2012 Patent Law ASME OC Section, SABPAThe recipient may only view this work. No other right or license is granted.
  • 2. Overview • Protecting Your Rights – Agnes Juang, Partner in Irvine office • Ph.D. Chemistry, Caltech • J.D., UC Davis • Prosecution Strategies – Terry Tullis, Associate in Irvine office • B.S., M.S. Mechanical Engineering, Stanford • J.D., UCLA; M.B.A., UC Berkeley • Defending Yourself Against Third Party Patents – Sabing Lee, Partner in Irvine office • B.S., M.S., Materials Engineering, UCLA • J.D., UC Berkeley© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2
  • 3. America Invents Act (AIA) • Signed into law September 16, 2011 • Changes previously in effect – Prioritized examination – Elimination of best mode defense – Virtual marking • Changes implemented September 16, 2012 – Third-party submissions – Inter partes review – Supplemental examination • Changes coming March 16, 2013 and later – First-inventor-to-file – Post-grant review – Derivation proceedings – Micro-entity status© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 3
  • 4. 1. Protecting Your Rights© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 4
  • 5. AIA Rewards Early Filing A Invents A Files B Invents B Files Independently • Pre-AIA: First to Invent – A can earn right to patent by demonstrating prior invention date • AIA: First Inventor to File – B has the right to patent • Effective: March 16, 2013 KEY POINT File early! Utilize provisional application(s).© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 5
  • 6. AIA Expands the Field of Prior Art Prior Art • Patented, described in a printed publication, or in public use, on sale, or otherwise available to the public • Before the effective filing date Effective: apply to patents with effective filing dates on or after March 16, 2013© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 6
  • 7. Prior Art (Example 1) A Invents A Files Less than 1 year B Invents B presents at Independently trade show in the U.S. • Pre-AIA: B’s U.S. trade show disclosure is not prior art. • AIA: B’s trade show disclosure is prior art. KEY POINT Any public disclosure or publication by a 3 rd party inventor is prior art.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 7
  • 8. Prior Art (Example 2) A Invents A Files Less than 1 year B Invents B presents at Independently trade show in Europe • Pre-AIA: B’s foreign trade show disclosure is not prior art. • AIA: B’s trade show disclosure is prior art. KEY POINT No distinction between U.S. and foreign disclosures under AIA.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 8
  • 9. AIA Allows Limited Pre-filing Disclosure One-Year Grace Period • For first disclosure by – inventor – joint inventor – another who obtained the subject matter disclosed from the inventor or joint inventor • Effective: apply to patents with effective filing dates on or after March 16, 2013© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 9
  • 10. Pre-filing Disclosure (Example 1) A Invents A Files Less than 1 year B Invents A presents at B presents at Independently trade show in trade show in Europe Europe • Pre-AIA: A and B’s disclosures are not prior art. • AIA: A and B’s disclosures are not prior art. KEY POINT First disclosure by inventor creates a 1-year grace period for U.S. Filing. Disclosure by others (B) within the 1-year grace period is NOT prior art.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 10
  • 11. Pre-filing Disclosure (Example 2) A Invents A Files Less than 1 B Invents B presents at year B Files Independently trade show in Europe • Pre-AIA: B’s disclosure is not prior art to A. • AIA: B’s disclosure is prior art to A but is not prior art to B, and A’s patent application is not prior art to B. KEY POINT Early disclosure may be beneficial if filing in the U.S. only.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 11
  • 12. AIA Encourages Collaboration AIA makes it easier to patent related inventions that are: 1. commonly owned or 2. made under a joint research agreement© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 12
  • 13. Common Ownership A & B assigns rights to all patent A Invents A Filesapplications to C B Invents B Files B’s Application Publishes • Pre-AIA: B’s application is not prior art for an obviousness rejection. • AIA: B’s application is not prior art for obviousness or anticipation rejection. KEY POINT Have employees sign employment agreement with an obligation to assign all patent rights to company.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 13
  • 14. Joint Research A & B executes joint research A Invents A Files agreement B Invents B Files B’s Application Publishes • Pre-AIA: B’s application is not prior art for an obviousness rejection. • AIA: B’s application is not prior art for obviousness or anticipation rejection. KEY POINT Execute joint research agreements and disclose the names of the parties to the join research agreement in the application.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 14
  • 15. Common Ownership Under AIA A Invents A Files B Files B Invents B Assigns B’s Application Application to A Publishes • Pre-assignment: B’s application is prior art. • Assignment prior to A files: B’s application is not prior art for anticipation or obviousness rejection. KEY POINT Prior art effect of an earlier filed unpublished application (B) may be avoided by creating common ownership prior to filing a later application (A).© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 15
  • 16. Derivation Proceedings A Invents A Files B takes from A B Files • AIA still protects true inventors – the earlier application was derived from the actual inventor, and – was filed without inventor’s authorization • Keep your lab notebooks! • Keep records of any confidential disclosure.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 16
  • 17. Take Home Points – Protect Your Rights • Consider filing applications prior to March 16, 2013 – File complete provisional applications – Disclosures made on or after 3/16/2012 are relevant • Consider risks associated with first-to-disclose strategy – Disclosure prior to filing can destroy foreign patent rights • Best option to preserve priority after March 16, 2013 may be to file provisional(s) – File frequently to cover improvements • Don’t throw away lab notebooks • Keep careful records of pre-filing public and confidential disclosures • Use employment agreements, assignments, and joint research agreements© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 17
  • 18. 2. Prosecution Strategies© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 18
  • 19. “Standard” Patent Prosecution • Utility application – PTO Filing Fees ~$1,500 plus fees for size, extra claims, etc. – Timing: Examination starts after ~1 – 3 year wait – Average 2-3 (or more) office actions over 1-3 more years • Small Entity Status – 50% discount if owner is (and has no obligation outside) a: • Person/individual • Small business (< 500 employees, affiliates) • Non-profit organization – Established at filing, update at issue fee, maintenance fees© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 19
  • 20. 75% Micro-Entity Status off • March 2013 • On-going Qualification: 1) Micro-entity status via: • Qualifies as Small entity; and • Not named on more than 4 previously filed US non- provisional applications; and • Gross income in previous calendar year < 3 times median household income; and • No obligation under contract or law to convey or license to an entity that would not meet the gross income requirement. -OR- 2) Certify an employee of, or assigned/licensed to, an institution of higher learning.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 20
  • 21. Prioritized Exam – Track I • Prioritized Exam (since September 2011) – 12 months to final action or allowance – Petition + $4,800 fee + $430 fee – All application formalities at time of filing – No design, reissue or provisional applications – Maximum 30 claims with 4 independent – 3 month office action response period • Maximum 10,000 Track I applications per fiscal year • 855 filed 2011 after Sept. 26, 2011 • 5,036 filed in 2012 • Early stats show that over half of all patent applications filed under Track I were allowed within ~ 1 year© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 21
  • 22. Best Mode Requirement – Is it Dead? • Courts: Elimination of best mode defense – Failure to disclose best mode does not make a patent invalid or unenforceable • Patent Office – However, disclosure of best mode is still required under 35 U.S.C. 112, 1st paragraph for patentability Your Invention© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 22
  • 23. Virtual Marking • Example: Patent http://www.symantec.com/about/profile/policies/virtual_pat ent_marking.jsp© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 23
  • 24. Supplemental Examination • Owner can request PTO reconsider/correct relevant information – PTO only: No third party involvement – PTO fees: $18,000 ($9,000 small, $4,500 micro entity) – Ex parte reexamination if raises a substantial new question of patentability • Otherwise ~60% refund • Result: Patent cannot be held unenforceable on information considered, subject to certain exceptions© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 24
  • 25. When to Consider Supplemental Exam • Enforcement – If planning to enforce the patent, consider filing supplemental examination with sufficient time to complete any ex parte reexamination before filing suit • Declaratory Judgment (DJ) Actions – If aware of possible DJ against patent, consider filing supplemental examination before DJ is filed • ANDA Litigation – If patent will be listed in Orange Book, consider filing supplemental examination as part of due diligence, or at a minimum, prior to receiving notice© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 25
  • 26. Take Home Points on Prosecution Strategies • Confirm whether you qualify for reduced fees • Speed and value through prioritized examination • Talk to your patent attorney about Best Mode • Consider Virtual Marking • Consider Supplemental Examination on your issued patents to address prior art© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 26
  • 27. 3. Defending Yourself Against Third Party Patents© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 27
  • 28. The Importance of Searching/Monitoring • Patents only provide a right to exclude, not a right to practice • Searching is not required, but helps: – Identify key competitors – Assess patentability – Identify patents you might infringe – Identify publications that, if issued, you might infringe – Develop design arounds© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 28
  • 29. Types of Searches • Do-it-yourself (patft.uspto.gov, google.com/patents, Delphion, trade journals, medical databases) • Professional searching (former Examiners) • Industry searching for marked products© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 29
  • 30. What Do You Do If You Find A Problem Patent? Your Invention • Typical options – Design-around – Opinion of counsel (noninfringement, invalidity) – License – Drop the project – Challenge the patent (litigation or PTO) • AIA provides new opportunities to challenge patents you might infringe© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 30
  • 31. How Do You Challenge A Publication? • Review the current claims and status of examination (portal.uspto.gov) • If current claims are of concern, determine if there is any prior art that you believe the Examiner would consider relevant • For a $180 fee, you can submit up to 10 prior art references (patents, patent publications or other printed publications) • Must be accompanied by concise description of asserted relevance of each submitted document© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 31
  • 32. Use Caution When Challenging A Publication • Can’t challenge if application has been allowed • Can’t challenge if it’s more than 6 months after publication and any claim has already been rejected • Risk = patent examiner considers submitted prior art and allows broad claims anyway • Discuss with your patent attorney the pros and cons of holding back “best” prior art for potential post-grant challenges© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 32
  • 33. How Do You Challenge An Issued Patent? Before AIA • Ex Parte Reexam • Inter Partes Reexam • Interferences After AIA • Ex Parte Reexam • Post-Grant Review (PGR) • Inter Partes Review (IPR) • Derivation Proceedings • Interferences (Legacy) • Transitional Program for Covered Business Method (CBM) Patents© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 33
  • 34. Summary of Potential Third-Party InvolvementFiling Issue 9 mo. Post-grant review (PGR) ($$$) Inter partes review (IPR) ($$$) Derivation action/proceeding ($$$) Pre-issuance Ex parte reexamination Submission ($$) ($) © 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 34
  • 35. Post-Grant Review or Inter Partes Review Post-Grant Review Inter Partes Review Effective 3/16/2013 9/16/2012 Targets Priority on/after 3/16/2013 Any Fees $35,800 + $800 for each $27,200 + $600 for each claim claim > 20 > 20 Basis Any basis used in litigation Only patents and printed (prior art, 101, 112) publications Threshold “More likely than not at “Reasonable likelihood” least one claim is petitioner will prevail on at least unpatentable” one claim When Within 9 months of grant + After 9 months from grant or end before civil action filed of post-grant review or within 12 months of civil action Discovery Yes Yes Estoppel Yes Yes© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 35
  • 36. Trial Proceedings Timeline PO Petitioner PO discovery discovery discovery period period period Petitioner PO reply response PO to PO’s to decision PO Oral Written Petition prelim. Decision response reply hearing decision response motion opp’n to to amend motion 3 mo. ≤ 3 mo. 3 mo. 3 mo. 1 mo. Trial begins ≤ 1 year© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 36
  • 37. Take Home Points On Third Party Patents • Consider Post-Grant Review and Inter Partes Review as less expensive alternatives to litigation • Monitor competitors’ pending applications and consider submission of prior art or post-grant procedures • Assess risk of potential post-grant procedures against your own patents by third parties – Set aside budget – Keep continuation pending – File many/quality dependent claims© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 37
  • 38. Action Item List  Consider filing applications  Keep post-grant challenges in (especially non-provisional mind when preparing patent applications) before March 16, applications. 2013  Keep continuations pending and  Consider prioritized examination consider setting aside funds for  Consider whether micro-entity defending. status applies  Consider supplemental exam for  Evaluate current invention strengthening patents harvesting procedures for speed  Obtain assignments of and efficiency provisional applications before  Consider filing more/faster filing provisional applications  Continue documenting  Implement patent/publication inventions and developments monitors for possible prior art  Consider implementing virtual submissions and post-grant marking program action  Consider using new procedures to challenge pending applications and issued patents© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 38
  • 39. Overall Take Home Points • Maintain accurate and dated records of invention • Use agreements with consultants, contractors, and employees • File applications before public disclosure • Understand patent landscape and analyze risk early • Monitor IP and product development trajectories • Consider all forms of IP protection • Your IP attorney can help!© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 39
  • 40. Questions?