The document discusses changes to US patent law made by the America Invents Act. It focuses on four main aspects: adopting a first-inventor-to-file system, expanding what qualifies as prior art, allowing for prior user defenses, and increasing third party involvement in patent prosecution. The changes will have strategic implications for technology companies in areas like product development timelines, IP management practices, and contractual agreements.

1. “ The New Patent Law: What Should Management Do Now ? " Ted Sabety (Moderator) February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

2. Fundamentally Changed the U.S. Patent Statute. Enacted September 16, 2011 Effective Dates are Staged These changes have business strategic implications for technology companies. “ American Invents Act” February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

3. Focus on Four Aspects First to File Wins the Race Trade Secret Dynamic Changes Some Inventions Ineligible More Third Party Involvement in Prosecution Process February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

4. First Inventor to File The First Inventor to File a Patent Application on an Invention gets the Patent over the earlier inventor who files later. Getting a Filing Date becomes even more critical. Effective March 16, 2013. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

5. First to File Moves Up Prior Art Any public use, sale or disclosure of the Invention before the filing date is prior art. Or described in a competing patent application filed before the filing date . Expands prior art to anything around the world, not just the US. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

6. What’s Left of the One Year Grace Period? Exception: Inventor has a one year grace period for “disclosures” either “made by the inventor” or “another who obtained the subject matter ... from the inventor....” OPEN LEGAL QUESTION: does “disclosures” include “public use” or “sale” ? “ Textualist” Supreme Court might say “no.” House Report doesn’t say. (See pg. 40-43). Orrin Hatch cryptically said yes. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

7. Trade Secrets in Balance with Patents Always a strategic tension between maintaining a trade secret and filing for a patent: Disclosure to the public with the risk of either no patent issuing or patent invalidity vs: Risk of reverse engineering or independent invention. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

8. Prior User Defense “ Prior User” refers to a trade secret user who decided not to file a patent. The “Prior User” cannot be liable if a first filer obtains a patent over the same invention. Caveats: Use must be over 1 year prior to the later filing date. On going, bona fide use in the United States. Personal to the entity practicing. Doesn’t apply to University or Federally funded inventions. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

9. Lack of “Best Mode” will not Invalidate The “best mode” is typically the valuable trade secret: the “secret sauce.” The patent disclosure must include a description of the “best mode” of practicing the invention. Now, there is no basis to bring an invalidity claim for failure to disclose the “best mode.” February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

10. Some Inventions Ineligible: Tax preparation or tax strategy patents Patents encompassing a human organism Limitations on “business method” patents. Precludes financial transaction inventions It may also preclude other computer related inventions. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

11. Third Party Involvement Third party submission of prior art during prosecution is now permitted and the art will be considered. Post Grant Review proceedings: Post Grant Review (estoppel applies) Inter Partes Review (estoppel applies) Ex Parte Reexam Supplemental Examination Permits attorney to repair prosecution problems. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

12. Strategic Concerns How will IP management practices change? How will product announcement, beta-testing or product roll-out timing change ? Are there things small companies should be doing that are different from large companies ? How much more should companies expand their involvement in their competitor’s patent prosecution processes? Can we expect new kinds of contractual terms in licenses? How will this affect risk allocation in acquisitions? What new things should small companies be doing to maintain their IP attractiveness to larger companies? February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

13. Our Panel Manny W. Schecter Chief Patent Counsel IBM Corporation Peter C. Schechter Partner Edwards Wildman Palmer LLP Ted Sabety (moderator) Principal Sabety +associates, PLLC February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved

14. February 1, 2012 NOT LEGAL ADVICE (C) 2012 Ted Sabety All Rights Reserved Get Competitive Advantage from our Strategic Viewpoint