2012 Patent Update                                Paul Conover                     for Medical Device Companies           ...
Review of Recent Changes to Patent Law    •    Leahy-Smith American Invents Act – Sept. 2011    •    Three phrases of impl...
September 2011 Prosecution-Focused Provisions    • Prioritized examination           – $4800 fee for request (half for sma...
First Inventor To File©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP ...
First Inventor to File    •    “A person shall be entitled to a patent unless the claimed         invention was patented, ...
First Inventor to File – March 16, 2013    • Should our company change its patent filing practices?           – File more/...
Take Home Points  •       File before March 16, 2013 if possible  •       File more often and more quickly after March 16,...
Third Party                     Submissions©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson ...
Third Party Submissions in Pending Applications    •    Can submit printed publications: patents, published         patent...
Third Party Submissions, Questions    • Should I use this process to challenge competitor      patent applications?       ...
Take Home Points  •       Inexpensive way to potentially narrow a competitor’s claims          ($180 fee for up to 10 prio...
Post-Grant and Inter            Partes Review©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olso...
Changes to Post-Issuance Disputes    Before AIA                                                   After AIA    • Inter Par...
Summary of Post Issuance Review                       Post-Grant Review                         Inter Partes Review Basis ...
Advantages of Inter Partes Review vs. Litigation    •    Lower Burden of Proof (preponderance of the evidence)    •    Low...
Advantages of Litigation vs. Inter Partes Review    •    Infringement can be adjudicated    •    Full scope of claims and ...
Derivation                 Proceedings©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bea...
Derivation Proceedings    •    Address “stolen” inventions           – Eventually will replace interferences    •    Requi...
Take Home Points    • Invention documentation is still important      (lab notebooks, etc.)    • Important to monitor IP o...
Supplemental Exam©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all r...
Benefit and Exceptions    • Patent cannot be held unenforceable on information      considered    • Benefit does not apply...
Costs – Proposed Sept. 10, 2012    • PTO Filing Fees             Large                                   Small       Micro...
Infringement              Defenses©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, L...
Defenses to Infringement    • Expanded prior commercial use defense           – One year before earlier of (1) effective f...
Formalities    • Changes to requirements for declarations,      assignments, other filing documents    • Uncooperative/una...
Significant Cases Impacting          Medical Devices©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Marten...
Induced Infringement:          Medical Method Patents©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Marte...
Akamai v. Limelight        McKesson v. Epic©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson ...
AKAMAI V. LIMELIGHT & MCKESSON V. EPIC                                                                 v.  How many people...
Technology    McKesson Patent:    Method of electronic communication    between healthcare providers    and their patients...
Multistep Method Claims    Method Claims:                                                    EXAMPLE           Multiple st...
Direct Infringement    One Infringer performs                                            EXAMPLE    ALL of the steps      ...
Induced Infringement           Knowledge of the                                           EXAMPLE            patent       ...
NEW Law on Divided Infringement    • A party can show induced infringement where      both the inducer and the induced par...
Take Home Points    • Consider all possible infringers           – Draft different sets of patent claims           – Focus...
Claim Construction©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all ...
Retractable Technologies    v. Becton, Dickinson©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, O...
RETRACTABLE TECHNOLOGIES V. BECTON,    DICKINSON                                                                 v.       ...
Claim Term In Dispute    • Retractable Syringe      Assembly Designed For      One Use                                    ...
District Court Construction of “Body”                                                                 • “a hollow outer st...
District Court    • Patents infringed    • Patents not invalid© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserve...
Federal Circuit Reverses – No Infringement    • “Body” is limited to one-piece structure           – None of claims expres...
Federal Circuit’s “Rule” of Claim Construction    “In reviewing the intrinsic record to construe the claims,    we strive ...
Lack of Consensus At Federal Circuit            Role of Specification in Construing Claims        “Claim construction is t...
Lack of Consensus At Federal Circuit            “Body” Should Not Be Limited To One Piece    • Claim language to be given ...
Lack of Consensus At Federal Circuit            Role of Specification in Construing Claims    • Specification may shed lig...
Lack of Consensus At Federal Circuit       Whether Deference Should Be Given to District Court           “It is time we st...
Disputed Inventorship          & Willful Infringement©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Marte...
Bard Peripheral Vascular  v. Gore©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LL...
BARD PERIPHERAL VASCULAR V. GORE                                                                 v.     Arterial prosthesi...
The Technology    • Expanded PTFE as a Vascular Graft© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.   52
The Case that Never Dies    1974 – (April) Gore Patent Application Filed    1974 – (October) Bard Patent Application Filed...
Huge Damages     • Bard asserted patent against Gore     • Jury found patent valid and infringed        • $102M in lost pr...
Joint Inventorship: Four factors         1. Inventors must have some open line of            communication during or in te...
Insufficient communication        “Although Gore argues that [Gore] “conveyed [the        internodal distance] physically ...
Practice Tips: Provider and tester    • Carefully worded agreements between provider of      materials and tester of mater...
Take Home Points    • Carefully worded agreements in joint development           – Establish who does what           – NDA...
Reconsideration of Willful Infringement     February 2012 Panel Decision: “Determining whether     or not infringement is ...
SEAGATE Test    • Clear and convincing evidence infringer acted      despite an objectively high likelihood of infringing ...
Willfulness Standard    • Inquiry: Whether a reasonable person would have      considered there to be a high likelihood of...
Employee Agreements          & Invention Assignment©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens...
Abbott Point of Care      v. Epocal©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, ...
ABBOTT POINT OF CARE v. EPOCAL                                                                 v.                   Do you...
Abbott Claims Ownership Based On    Employment Agreements© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved.   65
Holding    • Abbott doesn’t own the patents    • Can’t sue    • Case Dismissed© 2012 Knobbe, Martens, Olson & Bear, LLP al...
1984 Agreement Assigned Inventions To    Abbott’s Predecessor© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved...
1999 Consulting Agreement Did Not    Continue Assignment Provisions    • Lauks resigns, terminating employment    • Employ...
Lesson Learned    • If you want your current or former inventors to assign      their inventions, make automatic assignmen...
Medical Diagnostics -          Eligible for Patents?©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Marten...
Mayo v. Prometheus©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all ...
MAYO V. PROMETHEUS                                                                 v.                Is a medical diagnost...
Patentable Subject Matter    • §101: “Whoever invents or discovers any new      and useful process, machine, manufacture, ...
Exceptions to §101    • Judge made exceptions to patentable subject      matter           – Natural Products           – N...
Prometheus Representative Claim    1. A method, comprising:          (a) administering a drug X; and          (b) determin...
Prometheus Opinion    • The administering and detecting steps aren’t      sufficient           – Routine and conventional ...
Exceptions for Specific Applications    • Specific applications of natural laws are      patentable, however:           – ...
Take Home Points    • Consider Claim Strategies:           – Less focus on the natural law           – Multiple perspectiv...
Deciding Obviousness©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP al...
Kinetic Concepts   v. Smith & Nephew©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear,...
KINETIC CONCEPTS V. SMITH & NEPHEW                                                                 v.    What is the role ...
Parties    Plaintiffs    • Wake Forest – Patent Assignee    • Kinetic Concepts – Exclusive Licensee    Defendant    • Smit...
Technology    Negative Pressure Wound Treatment    Method and Apparatus Claims© 2012 Knobbe, Martens, Olson & Bear, LLP al...
Legal Standard - Obviousness    Question of law based on underlying findings of fact.© 2012 Knobbe, Martens, Olson & Bear,...
Legal Standard - Obviousness    Underlying factual determinations (Graham factors)            1. The scope and content of ...
Stipulated Jury Verdict Form    1) A series of questions as to whether certain       enumerated differences between the pr...
Jury Verdict on Obviousness    • Factual Questions: Graham factor findings generally      favoring Plaintiffs    • Advisor...
S&N: JMOL of Obviousness    Smith & Nephew:    Jury verdict only “advisory” (i.e. non-binding).    No deference to “implic...
S&N: JMOL of Obviousness    District Court    • Review underlying factual findings for substantial      evidence    • Revi...
Federal Circuit    • Because district court included ultimate question of      obviousness on verdict form, all underlying...
Federal Circuit - Legal Standard    • “Because obviousness is a mixed question of law      and fact, we first presume that...
Federal Circuit – Obviousness Analysis    Substantial evidence supports jury’s implied findings    that:           – None ...
Paul ConoverOrange County OfficePaul.Conover@knobbe.comCurtis HuffmireOrange County OfficeCurtis.Huffmire@knobbe.comKaren ...
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2012 Patent Update for Medical Device Companies

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Knobbe Martens hosted a Pre-Conference Workshop on Monday, October 15, 2012, at the IN3 Medical Device Summit in San Francisco. Knobbe Partners Paul Conover, Curtis Huffmire, and Karen Vogel Weil presented a “Patent Update for Medical Device Companies.” This forum took place in the hub of device investment and innovation in the San Francisco Bay Area, and brought together a diverse group of medtech’s key thought leaders to candidly discuss the critical issues that will define the future of all players in the evolving device space.

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2012 Patent Update for Medical Device Companies

  1. 1. 2012 Patent Update Paul Conover for Medical Device Companies Curtis Huffmire Karen Vogel WeilThe recipient may only view this work. No other right or license is granted.
  2. 2. Review of Recent Changes to Patent Law • Leahy-Smith American Invents Act – Sept. 2011 • Three phrases of implementation • Significantly affects how patents are obtained and how patents can be challenged: – Patent Prosecution Changes – First Inventor to File – Third-Party Submissions – Post-Grant Proceedings • Post-Grant and Inter Partes Review • Derivation Proceedings – Supplemental Examination© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2
  3. 3. September 2011 Prosecution-Focused Provisions • Prioritized examination – $4800 fee for request (half for small entity) – Any new, non-national phase application – < 10,000 apps/year • Patentable subject matter – No tax strategies – No human organisms • Marking – False marking claims more difficult – Website marking© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 3
  4. 4. First Inventor To File©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 4
  5. 5. First Inventor to File • “A person shall be entitled to a patent unless the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention” • Limited 1 year grace period for “disclosure” by inventor and disclosure by others after a “public disclosure” by the inventor • Applies to any claim with an “effective date” after March 16, 2013 • But do not forget foreign rights!© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 5
  6. 6. First Inventor to File – March 16, 2013 • Should our company change its patent filing practices? – File more/faster provisional apps? – How to remain cost effective and minimize distraction? • Should we rush to file applications before March 16? – Any particular circumstances in which we should beat the deadline? • How will continuation and continuation-in-part applications be treated?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 6
  7. 7. Take Home Points • File before March 16, 2013 if possible • File more often and more quickly after March 16, 2013 – File before public disclosure/sale – File many provisional applications • Implement internal infrastructure to promote disclosures • Don’t throw away lab notebooks© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 7
  8. 8. Third Party Submissions©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 8
  9. 9. Third Party Submissions in Pending Applications • Can submit printed publications: patents, published patent applications, articles, etc. • Can submit anonymously • Must be accompanied by concise description of asserted relevance of each submitted document • Must be filed prior to the earlier of: – (1) a notice of allowance; or – (2) the later of: (a) 6 months after the date of first publication; or (b) the date the first rejection of any claim© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 9
  10. 10. Third Party Submissions, Questions • Should I use this process to challenge competitor patent applications? – Should I use the third-party submission process or wait until my competitor’s patent issues and challenge it via post-grant review or in litigation? • What is the downside risk? • How should I decide which of my competitors’ applications to challenge?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 10
  11. 11. Take Home Points • Inexpensive way to potentially narrow a competitor’s claims ($180 fee for up to 10 prior art references) • No estoppel (but presumption of validity) • 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. 11
  12. 12. Post-Grant and Inter Partes Review©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 12
  13. 13. Changes to Post-Issuance Disputes Before AIA After AIA • Inter Partes Reexam • Post-Grant Review • Ex Parte Reexam • Inter Partes Review • Interferences • Derivation Proceedings • Ex Parte Reexam • Interferences (Legacy) • Transitional Program for Covered Business Method Patents© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 13
  14. 14. Summary of Post Issuance Review Post-Grant Review Inter Partes Review Basis Any basis used in litigation Only patents and printed publications When Within 9 months of grant After 9 months from grant or end of Post Grant review or within 12 + before civil action filed month of civil action Targets Priority on/after 3/16/2013 Any Effective 3/16/2013 9/16/2012 Discovery Yes Yes – including depositions Bar Yes Yes Estoppel Yes Yes© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 14
  15. 15. Advantages of Inter Partes Review vs. Litigation • Lower Burden of Proof (preponderance of the evidence) • Lower Cost (FRCP do not apply) – Limited discovery – Professionalism strictly enforced – Fewer “ancillary” battles (venue, jurisdiction, discovery, etc.) • Quicker (1-2 years) • Better informed decision maker (both technical & legal)© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 15
  16. 16. Advantages of Litigation vs. Inter Partes Review • Infringement can be adjudicated • Full scope of claims and defenses • Full discovery opportunities • Estoppel effect of USPTO Inter Partes proceedings • More expensive to opponent • Jury presents potentially more risk to opponent© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 16
  17. 17. Derivation Proceedings©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 17
  18. 18. Derivation Proceedings • Address “stolen” inventions – Eventually will replace interferences • Requires petition to explain facts surrounding “theft” • Two options – Civil action b/w 2 patents • Filed w/in 1 year of issuance of derived patent – Derivation proceeding at PTO b/w 2 pending apps • Filed w/in 1 year of publication of the derived application • Remedy – Cancelation of claims – Inventor name corrections© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 18
  19. 19. Take Home Points • Invention documentation is still important (lab notebooks, etc.) • Important to monitor IP of competitors and potential competitors • Keep good records of what you disclose to collaborators© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 19
  20. 20. Supplemental Exam©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 20
  21. 21. Benefit and Exceptions • Patent cannot be held unenforceable on information considered • Benefit does not apply to: – Allegations pled in a civil action prior to date of supplemental examination request – Notice (for abbreviated drug application) received by patentee prior to date of supplemental examination request – Defenses to patent infringement, unless supplemental examination and any resulting ex parte reexamination are completed before civil action is brought© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 22
  22. 22. Costs – Proposed Sept. 10, 2012 • PTO Filing Fees Large Small Micro $18,000 $9,000 $4,500 • Refund if ex parte reexamination not ordered Large Small Micro $13,600 $6,800 $3,400© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 23
  23. 23. Infringement Defenses©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 24
  24. 24. Defenses to Infringement • Expanded prior commercial use defense – One year before earlier of (1) effective filing date of asserted patent or (2) public disclosure – In the United States – Process, machine, manufacture, composition of matter used in manufacturing/commercial process • Advice of counsel – codifies Knorr-Bremse – Failure to obtain irrelevant to willfulness/inducement – No adverse inference to be drawn© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 25
  25. 25. Formalities • Changes to requirements for declarations, assignments, other filing documents • Uncooperative/unavailable inventors not as much work© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 26
  26. 26. Significant Cases Impacting Medical Devices©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 27
  27. 27. Induced Infringement: Medical Method Patents©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 28
  28. 28. Akamai v. Limelight McKesson v. Epic©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 29
  29. 29. AKAMAI V. LIMELIGHT & MCKESSON V. EPIC v. How many people does it take to infringe a method patent?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 30
  30. 30. Technology McKesson Patent: Method of electronic communication between healthcare providers and their patients Epic: MyChart software licensed to healthcare providers for use with patients© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 31
  31. 31. Multistep Method Claims Method Claims: EXAMPLE Multiple steps where Method Claim the steps were performed by different Entity A Entity B entities Step 1 Types of Entities: Step 2 A: Healthcare Providers Step 3 B: Patients© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 32
  32. 32. Direct Infringement One Infringer performs EXAMPLE ALL of the steps Method Claim OR Entity A Entity B Agency relationship between the entities Step 1 Example: Step 2 NO direct infringement Step 3 by Entity A NO direct infringement by Entity B© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 33
  33. 33. Induced Infringement Knowledge of the EXAMPLE patent Method Claim Induced the performance of the Entity A Entity B steps Step 1 All steps must be performed (but not Step 2 necessarily by a single entity) Step 3 Example: Infringement by Entity A if it induced Entity B to perform Step 2© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 34
  34. 34. NEW Law on Divided Infringement • A party can show induced infringement where both the inducer and the induced party each perform some of the steps of a method claim. • It is enough that the inducer causes, urges, encourages, or aids the infringing conduct and that the induced conduct is carried out.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 35
  35. 35. Take Home Points • Consider all possible infringers – Draft different sets of patent claims – Focus on both direct and induced infringement – Consider single party and multi-party claims • Consider your own potential infringement liability – Instructions for Use – Training methods© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 36
  36. 36. Claim Construction©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 37
  37. 37. Retractable Technologies v. Becton, Dickinson©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 38
  38. 38. RETRACTABLE TECHNOLOGIES V. BECTON, DICKINSON v. Unrest at the Federal Circuit as to how patent claims should be construed© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 39
  39. 39. Claim Term In Dispute • Retractable Syringe Assembly Designed For One Use “a hollow syringe body comprising a barrel and having a front end portion and a back end portion, the back end portion further comprising at least one radially extending member providing finger grips for the syringe body;”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 40
  40. 40. District Court Construction of “Body” • “a hollow outer structure that houses the syringe components” • not limited to a one-piece body© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 41
  41. 41. District Court • Patents infringed • Patents not invalid© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 42
  42. 42. Federal Circuit Reverses – No Infringement • “Body” is limited to one-piece structure – None of claims expressly recite body that contains multiple pieces – Specification characterizes “invention” as one- piece body – Each figure shows one-piece body – Specification doesn’t disclose body consisting of multiple pieces – Claim differentiation not controlling© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 43
  43. 43. Federal Circuit’s “Rule” of Claim Construction “In reviewing the intrinsic record to construe the claims, we strive to capture the scope of the actual invention, rather than strictly limit the scope of claims to disclosed embodiments or allow the claim language to become divorced from what the specification conveys is the invention . . . [A] construction of “body” that limits the term to a one- piece body is required to tether the claims to what the specifications indicate the inventor actually invented.”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 44
  44. 44. Lack of Consensus At Federal Circuit Role of Specification in Construing Claims “Claim construction is the single most important event in the course of a patent litigation. It defines the scope of the property right being enforced and is often the difference between infringement and non- infringement, or validity and invalidity. Despite the crucial role that claim construction plays in patent litigation, our rules are still ill-defined and inconsistently applied, even by us. Commentators have observed that claim construction appeals are “panel dependent” which leads to frustrating and unpredictable results for both the litigants and the trial court . . . Nowhere is the conflict more apparent then in our jurisprudence on the use of the specification in the interpretation of claim language.”Moore, Rader Dissent from denial of rehearing en banc© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 45
  45. 45. Lack of Consensus At Federal Circuit “Body” Should Not Be Limited To One Piece • Claim language to be given ordinary and customary meaning • “Body” doesn’t have special meaning • Ordinary meaning not limited to one piece • Dependent claims claim one-piece body • References in specification to one-piece body “do not rise to the level of an expression of manifest exclusion or an express disclaimer of claim scope.” Rader Dissent© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 46
  46. 46. Lack of Consensus At Federal Circuit Role of Specification in Construing Claims • Specification may shed light on plain and ordinary meaning • But specification can’t narrow claim term from ordinary meaning unless inventor acted as his own lexicographer or intentionally disclaimed or disavowed claim scope • Here, inventor did not act as lexicographer or disclaim or disavow claim scope • Court cannot rewrite claims to better conform to what it discerns is “invention”, not even to save their validity Moore, Rader Dissent from denial of rehearing en banc.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 47
  47. 47. Lack of Consensus At Federal Circuit Whether Deference Should Be Given to District Court “It is time we stop talking about whether we should reconsider the standard of review we employ when reviewing claim construction decisions from district courts; it is time we do so.” O’Malley Dissent from denial of rehearing en banc. Similar views expressed by Moore, Rader© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 48
  48. 48. Disputed Inventorship & Willful Infringement©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 49
  49. 49. Bard Peripheral Vascular v. Gore©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 50
  50. 50. BARD PERIPHERAL VASCULAR V. GORE v. Arterial prosthesis Makers of Gore-Tex® Who is the inventor? What constitutes willfulness?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 51
  51. 51. The Technology • Expanded PTFE as a Vascular Graft© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 52
  52. 52. The Case that Never Dies 1974 – (April) Gore Patent Application Filed 1974 – (October) Bard Patent Application Filed 1983 – PTO Declares Interference 2001 – CAFC Affirms BPAI Award of Priority to Bard 2002 – Bard Patent Issues (28 years after filing) 2003 – Bard Sues Gore for Infringement 2007 – Jury Finds Patent Valid and Infringed 2009 – Judge Enhances Damages 2012 – CAFC Affirms Validity and Remands Willfulness© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 53
  53. 53. Huge Damages • Bard asserted patent against Gore • Jury found patent valid and infringed • $102M in lost profits D. Ariz. doubled to • $84M in reasonable royalties $371M (willfulness + bad faith) • $19M in costs and attorney fees • D. Arizona denied Gore’s post-verdict JMOL on joint inventorship© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 54
  54. 54. Joint Inventorship: Four factors 1. Inventors must have some open line of communication during or in temporal proximity to their inventive efforts; and 2. Contribute in some significant manner to the conception or reduction to practice 3. Make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and 4. Do more than merely explain to the real inventors well-known concepts and/or the current state of the art.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 55
  55. 55. Insufficient communication “Although Gore argues that [Gore] “conveyed [the internodal distance] physically by making and sending the invention embodiment to [Bard],” it admits that “[Gore] did not verbally convey the internodal distance.” “[Gore] conceived of the invention only after sending the tubes to [Bard] and never communicated that conception to [Bard].”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 56
  56. 56. Practice Tips: Provider and tester • Carefully worded agreements between provider of materials and tester of materials – Establish who does what – NDA – Assignment • For joint inventorship, communication is a two-way street – Tester sends status reports to provider – Consider if provider should continue to interact w/ tester, but risk losing sole inventorship© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 57
  57. 57. Take Home Points • Carefully worded agreements in joint development – Establish who does what – NDA – Assignment • Level of communication – Working alone v. Collaboration© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 58
  58. 58. Reconsideration of Willful Infringement February 2012 Panel Decision: “Determining whether or not infringement is willful is a question of fact that must be established by clear and convincing evidence and is reviewed for substantial evidence.” • Gore Petitioned for Rehearing En Banc • Google, Verizon, Intel Filed Amicus Brief • Seagate’s Objective Prong Should Be Question of Law© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 59
  59. 59. SEAGATE Test • Clear and convincing evidence infringer acted despite an objectively high likelihood of infringing a valid patent – Question of Law – Remand! • Objective risk was known or so obvious it would have been known – Question of Fact© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 60
  60. 60. Willfulness Standard • Inquiry: Whether a reasonable person would have considered there to be a high likelihood of infringement of a valid patent • Objective Prong of Seagate is a Question of Law – Subject to De Novo Review – Judge is Final Arbiter of Whether Defense is Reasonable • Factual Issues Can Be Sent to Jury© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 61
  61. 61. Employee Agreements & Invention Assignment©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 62
  62. 62. Abbott Point of Care v. Epocal©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 63
  63. 63. ABBOTT POINT OF CARE v. EPOCAL v. Do your employment agreements effectively vest patent ownership in the company?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 64
  64. 64. Abbott Claims Ownership Based On Employment Agreements© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 65
  65. 65. Holding • Abbott doesn’t own the patents • Can’t sue • Case Dismissed© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 66
  66. 66. 1984 Agreement Assigned Inventions To Abbott’s Predecessor© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 67
  67. 67. 1999 Consulting Agreement Did Not Continue Assignment Provisions • Lauks resigns, terminating employment • Employment agreements ended • 1999 Agreement – Defines consulting services – Only carried forward confidentiality, non-solicitation and non-competition provisions – Does not address invention assignments or obligations from employment agreements – Does not contain obligation to assign inventions made during consultation period • Automatic assignment would be inconsistent with allowing Lauks to pursue non-conflicting interests© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 68
  68. 68. Lesson Learned • If you want your current or former inventors to assign their inventions, make automatic assignment explicit© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 69
  69. 69. Medical Diagnostics - Eligible for Patents?©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 70
  70. 70. Mayo v. Prometheus©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 71
  71. 71. MAYO V. PROMETHEUS v. Is a medical diagnostic method patentable?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 72
  72. 72. Patentable Subject Matter • §101: “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor…” • Congress intended statutory subject matter to “include anything under the sun that is made by man.” – Diamond v. Chakrabarty, 447 U.S. 303 (1980)© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 73
  73. 73. Exceptions to §101 • Judge made exceptions to patentable subject matter – Natural Products – Natural Laws / Natural Phenomena – Abstract Ideas / Mental Processes© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 74
  74. 74. Prometheus Representative Claim 1. A method, comprising: (a) administering a drug X; and (b) determining the level of metabolite Y, wherein the level of metabolite Y less than about 230 units indicates a need to increase the amount of said drug subsequently administered to said subject and wherein the level of metabolite Y greater than about 400 units indicates a need to decrease the amount of said drug subsequently administered.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 75
  75. 75. Prometheus Opinion • The administering and detecting steps aren’t sufficient – Routine and conventional – “[T]he steps are not sufficient to transform unpatentable natural correlations into patentable applications of those regularities.”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 76
  76. 76. Exceptions for Specific Applications • Specific applications of natural laws are patentable, however: – The “application” must amount to an “inventive concept” in addition to the natural law© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 77
  77. 77. Take Home Points • Consider Claim Strategies: – Less focus on the natural law – Multiple perspectives: Doctor, patient, hospital, lab – Cover devices, systems, and methods – Multiple levels of specificity in dependent claims • Consider Subject Matter Eligibility: – Invalidity defenses if only directed to natural law© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 78
  78. 78. Deciding Obviousness©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 79
  79. 79. Kinetic Concepts v. Smith & Nephew©2012 Knobbe, Martens, Olson & all rights reserved.©2012 Knobbe Martens, Olson & Bear, LLPBear, LLP all rights reserved. 80
  80. 80. KINETIC CONCEPTS V. SMITH & NEPHEW v. What is the role of the jury in determining obviousness?© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 81
  81. 81. Parties Plaintiffs • Wake Forest – Patent Assignee • Kinetic Concepts – Exclusive Licensee Defendant • Smith & Nephew – Accused Infringer© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 82
  82. 82. Technology Negative Pressure Wound Treatment Method and Apparatus Claims© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 83
  83. 83. Legal Standard - Obviousness Question of law based on underlying findings of fact.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 84
  84. 84. Legal Standard - Obviousness Underlying factual determinations (Graham factors) 1. The scope and content of the prior art 2. Differences between the prior art and the claims at issue 3. The level of ordinary skill in the pertinent art 4. Evidence of secondary considerations Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 15-17 (1966)© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 85
  85. 85. Stipulated Jury Verdict Form 1) A series of questions as to whether certain enumerated differences between the prior art and the asserted claims were the only differences that existed 2) Whether certain objective indicia of nonobviousness were present 3) Whether the claims were obvious© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 86
  86. 86. Jury Verdict on Obviousness • Factual Questions: Graham factor findings generally favoring Plaintiffs • Advisory Verdict: Not invalid© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 87
  87. 87. S&N: JMOL of Obviousness Smith & Nephew: Jury verdict only “advisory” (i.e. non-binding). No deference to “implicit” jury findings. Substantial evidence did not support express findings Plaintiffs: Cannot upset the jury’s verdict unless the jury’s explicit and implicit findings are not supported by substantial evidence© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 88
  88. 88. S&N: JMOL of Obviousness District Court • Review underlying factual findings for substantial evidence • Review jury’s ultimate conclusion without deference • JMOL Granted: patents invalid – “the differences between the claimed invention and the prior art, if any, are minimal” • Wake Forest appealed.© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 89
  89. 89. Federal Circuit • Because district court included ultimate question of obviousness on verdict form, all underlying factual questions were implicitly put to jury for resolution • District court required to accept all implicit factual findings supporting verdict that were supported by substantial evidence© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 90
  90. 90. Federal Circuit - Legal Standard • “Because obviousness is a mixed question of law and fact, we first presume that the jury resolved the underlying factual disputes in favor of the verdict and leave those presumed findings undisturbed if they are supported by substantial evidence. Then we examine the ultimate legal conclusion of obviousness de novo to see whether it is correct in light of the presumed jury fact findings.”© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 91
  91. 91. Federal Circuit – Obviousness Analysis Substantial evidence supports jury’s implied findings that: – None of prior art disclosed treatment of wounds using negative pressure, as claimed – Prior art teaches away from claimed invention – There was no reason to combine prior art references – Numerous objective indicia of nonobviousness existed© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 92
  92. 92. Paul ConoverOrange County OfficePaul.Conover@knobbe.comCurtis HuffmireOrange County OfficeCurtis.Huffmire@knobbe.comKaren Vogel WeilLos Angeles OfficeKaren.Weil@knobbe.com Thank you!

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