US patent law overview. Changes in the USPTO. Proposed patent reform. Developments in U.S. case law. International developments. Inequitable conduct and IDS.

1. June 28, 20181
Developments in US Patent Law
John Fonder
May 3, 2010
US Patent Law Overview
Changes in the USPTO
Director Kappos’ new vision for USPTO
Proposed Patent Reform
Developments in U.S. Case Law
In re Bilski
Therasense Inc.
International Developments
Patent prosecution highway
Filings and timelines
Inequitable Conduct and IDS

2. Developments in US Patent Law
John Fonder
May 2010
© 2010 Patterson Thuente Christensen Pedersen, P.A., some rights reserved - www.ptslaw.com
RIGHT TO USE: This presentation may be freely distributed, used and/or modified, so long as appropriate attribution is made that
includes retention of the firm name in connection with any materials from this presentation.
DISCLAIMER: This presentation and any information contained herein is intended for informational purposes only and should not be
construed as legal advice. Seek competent legal counsel for advice on any legal matter.

3. Background
Myself
University of Minnesota, J.D.
University of Michigan, M.B.A.
University of Minnesota, B.S.E.E.
Patterson Theunte Christenson
Pedersen
Legal Practice Areas
• Patent Prosecution
• IP Litigation
• Copyright, Trademark &
Trade Secret
• International IP Protection
Technology Areas
• Electrical/Electronics
• Telecommunications
• Internet/Electronic
Commerce
• Medical Devices
June 28, 20183

4. Agenda
US Patent Law Overview
Changes in the USPTO
Director Kappos’ new vision for USPTO
Proposed Patent Reform
Developments in U.S. Case Law
In re Bilski
Therasense Inc.
International Developments
Patent prosecution highway
Filings and timelines
Inequitable Conduct and IDS
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5. US Patent Law Overview
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6. Types of Patent Protection
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United States
Utility patents
Protects the purpose or
useful function of an article
Design patents
Protects the ornamental
features of an article
Plant Patents
Protects invented or
discovered plants that are
asexually reproduced by the
inventor
China
Invention patents
Similar to U.S. Utility
patents
Design patents
Similar to U.S. Design
No U.S. equivalent
Utility Model
No U.S. equivalent

7. US Patent Law: Constitution
“To promote the Progress of Science and useful Arts, by securing for limited
Times to Authors and Inventors the exclusive Right to their respective
Writings and Discoveries” - US Constitution Article I, Section 8
A patent is a legal monopoly for a limited period of time granted by the
government on an invention in exchange for the inventor disclosing the
invention to the public
The owner of a patent has the right to exclude others from making, using or
selling the invention
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8. US Patent Law: Federal Statutes
35 U.S.C. § 101 – Patentable Inventions
Any new and useful process, machine, manufacture, or composition of
matter…
35 U.S.C. 102 – Conditions of Patentability; Novelty
Right to a Patent, unless…
Burden on the Patent Office
35 U.S.C. 103 – Conditions of Patentability
Non-Obviousness
35 U.S.C. 112 – Specification
Duty to disclose the Invention to the Public
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9. US Patent Rules
Federal Cases
International Treaties (e.g.,Paris Convention)
Regulations (37 CFR)
U.S. Patent Office Examiner’s Manual (MPEP)
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10. US Patent Rules
An Invention Must Be Novel to Be Patentable
The invention cannot be “known or used by others in this country, or
patented or described in a printed publication in this or a foreign country
- 35 USC §102(a)
The invention cannot be “patented or described in a printed publication in this
or a foreign country or in public use or on sale in this country, more than one
year prior to the date of the application for patent in the United States”
- 35 USC §102(b)
The invention cannot be described in a patent application filed by another
before the invention by the applicant for the patent
- 35 USC §102(e)
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11. US Patent Rules
A patent may not be obtained … if the differences between the subject
matter sought to be patented and the prior art are such that the subject
matter as a whole would have been obvious at the time the invention was
made to a person having ordinary skill in the art….
- 35 USC §103
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12. Changes in the USPTO
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13. Changes in the USPTO
New leadership
David Kappos
6th Undersecretary of Commerce for Intellectual Property and
Director of the USPTO (sworn in August 13)
• Speedy appointment & confirmation under Obama Administration
• Average term in recent years is 2 – 4 years
Sharon Barner: Deputy Undersecretary of Commerce for Intellectual
Property & Deputy Director of the USPTO (October 13)
Robert Stoll: Commissioner of Patents (October 5)
Arti Rai: Administrator for External Affairs (October 19)
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14. Director Kappos’ New Vision for the USPTO
USPTO is re-engineering its internal processes in attempt to reduce delay
USPTO is re-engineering its quality measures and the statistics it will use to
report quality
First Action Interview program increases chances of a first action allowance
USPTO Director's blog, currently internal, will soon be going external on
USPTO web site
CAFC decision in Bose gives USPTO good guidance on inequitable conduct
in terms of trademark statements of use, USPTO is looking for input on how
to provide better guidelines for submission of statements of use
PCT and international patenting issues will play a central role in USPTO
policy
June 28, 201814

15. Director Kappos’ New Vision for the USPTO
Rules on claims and continuations rescinded
(Tafas v. Kappos, 541 F. Supp. 2d 805 (E.D. Va. 2008))
“Continuation Rule” and “RCE Rule” would have permitted an applicant to
file only two continuation applications and one request for continued
examination (“RCE”) per application family
“Claims Rule” would have permitted an applicant to file five independent
claims and twenty-five total claims per application
USPTO announced October 8, 2009 that it will rescind the claiming and
continuations rules package.
“In taking the actions we are announcing today, we hope to engage the
applicant community more effectively on improvements that will help make
the USPTO more efficient, responsive, and transparent to the public.”
– David Kappos, Director of the USPTO
June 28, 201815

16. The Push for Patent Reform
S. 515/H.R. 1260: Key Proposed Changes
First-inventor-to-file system
• Changes/expands definition of what is prior art
• Redefines effective filing dates
Damages
• Gatekeeper compromise—judge decides whether each party’s
damages theories are appropriate before trial
Expanded Reexamination Proceedings
• Reexaminations may be requested based on published prior art
• Inter Partes Reexams opened up to all patents (not just those filed
after November 2000)
Additional Post-Grant Review
• Third party can file cancellation petition based on any ground of
invalidity (rather than simply published prior art) within 12 months of
issuance
June 28, 201816

17. The Push for Patent Reform
Administration is pushing both Senate and House very strongly to get this
done this year
Reason behind push is two fold
Need to fix Patent Office funding issue
Desire to take advantage of the political compromise reached on
damages issue
It seems there is a chance that patent reform may pass this year
June 28, 201817

18. Patent Reform Act Comparison
Include comparison to current Chinese patent law
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19. Developments in US Case Law
June 28, 201819

20. KSR v. Teleflex
Teaching-Suggestion-Motivation test no longer the mandatory test
Common-sense and ordinary creativity may now be factors
Graham v. John Deere analysis reaffirmed
Scope and content of the prior art
Difference between the prior art and the claims
Level of skill in the pertinent art
Relevant Secondary considerations
USPTO Examiners must still identify the reason why a person of ordinary
skill in the art would have combined the prior art elements
June 28, 201820

21. In re Bilski
Bilski and Warsaw filed a patent application on April 10, 1997 for a method of
hedging risks in commodities trading
Federal Circuit’s Decision
A process is statutory subject matter if it either is tied to a particular
machine or apparatus, or transforms a particular article into a different
state or thing. In Re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008)
Thus, Bilski’s method was not patentable subject matter
Oral argument before US Supreme Court scheduled for November 9, 2009
Will hopefully provide guidance on business method patents as patentable
subject matter
William Mitchell College of Law IP Institute filed one of many amicus briefs
June 28, 201821

22. Therasense v. Becton Dickinson
Pending Federal Circuit en banc hearing on the issue of inequitable conduct
Questions of law
Should the materiality-intent-balancing framework for inequitable conduct
be modified?
What is the proper standard for materiality?
What is the proper standard for fraud and unclean hands?
Should the balancing of materiality and intent by abandoned?
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23. Developments in US Prosecution
June 28, 201823

24. Information Disclosure Statements (IDS)
Refers to a submission of relevant background art to the USPTO during
prosecution
Duty of candor and good faith before the USPTO applies to each individual
associated with the filing and prosecution of a patent application
(35 CFR 1.56)
Every inventor, attorney or agent substantially involved in preparation or
prosecution, person associated with inventors or assignees
Duty is to file IDS during the pendency of a patent or re-issue of a patent
application (35 CFR 1.97)
Duty extends to activities during prosecution of related applications
• See McKesson Info. Solutions, Inc. v. Bridge Med., Inc ., 487 F.3d
897 (Fed. Cir. 2007)
IDS considered by the Examiner only when such disclosure complies with
both statutory content requirement and timeliness requirement
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25. 37 CFR 1.98 IDS Content Requirement
A list of all patents, publications, US applications or other information
Legible copies of each non-US patent, each publication or relevant portion of
the publication
A concise explanation of relevance for all non-English documents
English translation without duty to verify
• Reference abstract, search report, prosecution history, counterpart
foreign office action
Figures or drawings of particular relevance
Breach of candor and good faith duty when patentee knowingly submits
partial translations explanations that will mislead the Examiner
See Semiconductor Energy Lab.Co. v. Samsung Elecs. Co., 204 F.3d
1368 (Fed. Cir. 2000)
June 28, 201825

26. 37 CFR 1.98 IDS Content Requirement
Issue is about what needs to be filed
The envelope has gotten bigger, but by how much?
Violation for failing to disclose is serious
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27. Inter Partes Reexamination
Allows any person to challenge the validity of a patent on the basis of
published prior art applicable to the patentability of the claims
Passed as part of American Inventors Protection Act of 1999
Provides less expensive alternative to patent litigation for contesting validity
of issued US patents
Adoption has increased by 140% over the past 3 years
Continued participation by the third-party requester is permitted throughout
the IPR process
June 28, 201827

28. Inter Partes Reexamination
PTSC IPR Statistics
13 total; approximately 2% of IPRs ever filed
Nine on behalf of third-party requesters
• Five reached terminations with all claims cancelled or disclaimed
Four on behalf of patent owners
• One reached termination with all claims confirmed as patentable
June 28, 201828

29. Inequitable Conduct
Valid US patents may be unenforceable if obtained through inequitable
conduct
“Duty to disclose”
Courts making it easier to show inequitable conduct, thus favoring patent
infringers
McKesson v. Bridge Medical (Fed. Circuit 2007)
Indicates higher standard of disclosure
Office actions, allowed claims from other cases by same lawyer not disclosed
by lawyer to USPTO; considered materially relevant
Circumstantial evidence shows deceptive intent
June 28, 201829

30. Inequitable Conduct
Post-McKesson: some cases such as Star Scientific easing up on
requirements
Must make sure patent office is aware of all relevant information to avoid
inequitable conduct and potential unenforceability
June 28, 201830

31. International Developments
June 28, 201831

32. Patent Prosecution Highways
Bilateral agreements between the patent offices of two countries that allow
for expedited application prosecution in certain circumstances
As of July 2009, the USPTO had PPH agreements, either as fully
implemented programs or pilot projects with:
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• Japan
• UK
• Canada
• Korea
• Australia
• Europe
• Denmark
• Singapore
• Germany
• Finland

33. USPTO Timelines
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Patent Average First Action Pendency (months)
2005 2006 2007 2008
21.1 22.6 25.3 25.6
First action pendency increasing
Patent Average Total Pendency (months)
2005 2006 2007 2008
29.1 31.1 31.9 32.2
Average total pendency increasing

34. USPTO Timelines
June 28, 201834
471,382
528,685
611,114
701,147
760,924 771,529 760,795
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
2003 2004 2005 2006 2007 2008 2009
Filings First Actions Backlog
FY08
• Backlog increased
1.4%
• Filings increased
6.1%
• 1st Actions
increased 16.6%
**As of 5/31/09
Source: United States Patent & Trademark Office

35. USPTO Filings From China
June 28, 201835
US Patent Applications Filed By Residents of China
2004 2005 2006 2007
China 3,087 3,649 5,156 5,869
Hong Kong (only) 1,379 1,319 1,318 1,447
In 2007, China had the eighth most US applications of all foreign countries

36. Thank You!
John Fonder| 00 +1 612-252-1557 | fonder@ptslaw.com
June 28, 201836