#ACIDevicePatents

ACI’s 7th Advanced Summit onMedical Device Patents

Around the World in 30 Months: Maximizing

your International Medical Device Patent Portfolio

Paul Brown

Hogan Lovells

International LLP

Jeffrey J. Hohenshell

Medtronic, plc

March 1, 2017

Michele Van Patten Frank

Venable LLP

#ACIDevicePatents

Disclaimer:

•The views presented are our personal views and are not necessarily the views of our employers (e.g. Medtronic) or clients

•JJH is licensed to practice before the US PTO, IA and MN

•JJH and MVF are not licensed to practice law outside the United States

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Further Disclaimer:

•The vast majority of people that have given views on what is going to happen in relation to the UPC in the last few months has been wrong – today may be a continuation of that…

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Iceland

Present European System

• Central grant

• Central opposition

• National enforcement

Norway

Italy

Poland

Germany

Sweden

Ireland

Switz

erland

Austria

Czech

Republic Slovakia

Hungary

Lithuani

a

Latvia

Romania

Bulgaria

Estonia

France

Nether

lands

Denmark

Finland

United

Kingdom

Turkey

Spain

Serbia

Albania

FYR

Macedonia

Cyprus

Portugal

Belgium

Slovenia

Luxembourg

Greece

Croatia

#ACIDevicePatents

The Main Jurisdictions -Germany

• Germany• Bifurcated system means that validity and infringement are considered

separately

• Infringement is usually considered first in Mannheim, Dusseldorf or Munich• Mannheim typically 9 months to trial (but can be as quick as 6 months)

• Munich typically 9-12 months to trial

• Dusseldorf typically 12-18 months to trial

• However, limited disclosure of named documents• Makes pleading infringement difficult in some cases

• Validity is considered later by the Federal Patent Court in Munich• Up to 2.5 years until hearing in Munich

• Harsh on validity, just slow

• Injunctions can be granted before validity considered• Infringement court may stay proceedings or injunction if clear novelty attack – “A

predominant likelihood that the patent will fail”

5

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The Main Jurisdictions – UK

• UK

• Validity and infringement are considered together, allowing "squeezes"

• No "standing" requirement to challenge validity

• "Declaration of non-infringement" available to create squeeze

• Disclosure available

• Product/process description

• Disclosure of relevant docs 2 years either side of the priority date

• Hard on validity

• Relatively fast – roughly 12 months to trial

• The quality of UK judgments means that they are persuasive in other European jurisdictions, including Germany and the Netherlands

6

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The Main Jurisdictions – The Netherlands

• The Netherlands• Quick jurisdiction

• Accelerated proceedings in ~6 months

• Normal proceedings in ~12 months

• Used by patentees to block imports to Europe through the Rotterdam harbour or Amsterdam (Schiphol) airport

• Used by "infringers" to get quick decisions on validity

• Increasingly used for (cross-border) preliminary injunctions & (cross-border) evidentiary seizure and disclosure actions

• Fast preliminary injunction proceedings (hearing in 4-8 weeks)

• IP cases are “always urgent”

7

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Current practice…

• Patentees tend to sue in Germany• Choice of Court now more important than ever

• Validity of electronics patents (particularly) now being looked at more closely by infringement courts

• UK often used for revocation actions• German courts must consider decisions of other jurisdictions

• The Netherlands particularly good for PI• Germany good if the patent has survived a validity challenge and the

application is made urgently

• Unlikely in UK in non-pharma case

8

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Unified Patent Court

• Central grant

• Central opposition

• Central enforcement

Italy

Poland

Germany

Sweden

Ireland

Switzer

land

Austria

Czech

Republic Slovakia

Hungary

Lithuania

Latvia

Romania

Bulgaria

Estonia

France

Nether

lands

Croatia

Denmark

Greece

Finland

United

Kingdom

?

Spain

Cyprus

Portugal

Belgium

Slovenia

Luxembourg

Malta

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AIA Revolution in US File 1 year 2 years 3 years

Median ~ 2.5 years to decision

Old Days

Average ~ 30-41 months from filing to

reexam certificate plus PTOappeals possible

By statute, 1 year from institution PTO litigation is significantly to final written decision faster and less expensive

Now than district court litigation

PTO litigation is significantlyPTO Litigation faster than inter partes reexam

+ 6 months for exceptional cases

District Court Patent Litigation

Inter Partes Reexam

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Will UPC be a Similar Revolution?

11

Statement of

claim: facts and

evidence re:

infringement

(Rule 13)

0 1 2 3 4 5 6 7 8 9 10 11 12

JUDGE-

MENT

(Rule

118)

written proceedings Interim proceedings oral proceedings

3

months

month

2

months

INTERIM

STAGE

(Rules 101 to

110)

CLOSURE

INTERIM

STAGE

(3 months

– Rule

101)

WITNESS

HEARING

(Rule 104

(9))

ORAL

HEARING

(Rules 111

to 116)

Reply brief: facts

and evidence re:

non-infringement;

invalidity

(Rules 24 and 25)

Plaintiff´s

reply for

infringement

and defense

to validity

(Rule 29) and

application

to amend

(Rule 30)

Defendant´s rejoinder re:

infringement, nullity and

amendments (Rule 32)

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Medtronic Was an Early Adopter of IPR Process

1 Acantha LLC 23 DePuy Synthes 45 Lifeport Sciences LLC 67 The University of North Carolina

2 Adidas AG 24 Edwards Lifesciences Corp 46 Linvatec Corporation 68 Troy Norred

3 Allergan Industrie, SAS 25 Elekta Inc. 47 Mark Barry 69 UAB Research Foundation

4 Apex Medical Corp. 26 Endoheart AG 48 Masimo Corporation 70 Ultradent Products, Inc.

5 Arthrex 27 Endotach LLC 49 Medline Industries, Inc. 71 Under Armour, Inc.

6 Atrium Medical Corporation 28 Ethicon 50 Medshape, Inc. 72 United States Endoscopy Group, Inc.

7 AVX Corporation 29 Flexuspine, Inc. 51 Medtronic, Inc. (+ subs) 73 University of Rochester

8 Becton, Dickinson & Company 30 Footbalance System Oy 52 My Health, Inc. 74 US Endodontics, LLC

9 Blatchford Products Limited 31 Four Mile Bay, LLC 53 Nevro Corp. 75 Varian Medical Systems, Inc.

10 Bonutti 32 Freedom Innovations, LLC 54 Nobel Biocare Services AG 76 Vascular Solutions, Inc.

11 Boston Scientific Corporation (+ subs) 33 Galderma S.A. 55 NuVasive, Inc 77 W. L. Gore & Associates, Inc.

12 C. R. Bard, Inc. 34 Globus Medical Inc. 56 Olympus America, Inc. 78 Waraw Orthopedic, Inc.

13 Cardiocom LLC 35 Gold Standard Instruments, LLC 57 Orthophoenix, LLC 79 Wright Medical Group, Inc.

14 CardioNet 36 Greatbatch, Ltd. 58 Perfect Surgical Techniques, Inc. 80 Zero Gravity Inside, Inc.

15 Catheter Connections, Inc. 37 InfoBionic, Inc. 59 Philips Electronics North America 81 Zimmer, Inc. (+ subs)

16 Cayenne Medical, Inc. 38 Innovative Medical Devices LLC 60 Praxair Distribution, Inc. 82 Zoll Medical Corporation

17 CDx Diagnostics, Inc. 39 INO Therapeutics LLC 61 ResMed Limited

18 Celgene Corporation 40 Instradent USA, Inc. 62 Robert Bosch Healthcare Systems, Inc.

19 Coalition For Affordable Drugs VI LLC 41 Ivera Medical Corporation 63 Sirona Dental Systems GmbH

20 ConvaTec Technologies Inc. 42 Karl Storz Endoscopy-America, Inc. 64 Smith & Nephew, Inc.

21 Covidien 43 Kerr Corporation 65 Stryker Corporation

22 Davol Inc. 44 Lantz Medical, Inc. 66 Terumo

0

5

10

15

20

25

30

35

40

45

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81

PatentOwner Pe oner

#ACIDevicePatents

Central Divisions

13

• The location of one of the 3 limbs of the Court’s “Central Division” for revocation actions: Article 7(2) UPC Agreement:

Aldgate Tower

London

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(A) Human necessities (B) Performing operations,

transporting

(F) Mechanical engineering,

lighting, heating, weapons,

blasting

(C) Chemistry, metallurgy (D) Textiles, paper

(E) Fixed constructions

(G) Physics

Covering pharmaceuticals

and biotechnology

(H) Electricity

LONDON PARIS MUNICH

UPC Central Division

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The Unitary Patent Court (UPC)

Court of Appeal

Luxembourg CJEU

Luxembourg

Local DivisionCentral

DivisionRegional Division

Appeal

EU Member states

Paris Munich London

For a group of Member States

Referral (request for preliminary ruling)

F UK DE NL DK IT BE

Düsseldorf Mannheim Munich Hamburg15

Sweden Estonia Latvia Lithuania

Stockholm

Paris London Den Haag Kopenhavn Milano Brussels

SE EE LV LTIPC:

B,

D,

E,

G,

H

IPC:

F

IPC:

A, C

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Value of Action up to … Cap on Recoverable Costs

€250,000 €38,000

€500,000 €56,000

€1,000,000 €112,000

€2,000,000 €200,000

€4,000,000 €400,000

€8,000,000 €600,000

€16,000,000 €800,000

€30,000,000 €1,200,000

€50,000,000 €1,500,000

More than €50,000,000 €2,000,000

Loser Pays

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Recommendations• Audit Your OUS Portfolio

• Only “real” patent proprietors can opt in or out for sure

• Forms may be difficult to manage

• Audit Your Agreements • Existing agreements

• Does your Licensor agree to Opt – in or Out?

• New Agreements• Standard Opt in or out clauses

• Create a Strategy• All In

• All Out

• Hybrid• Can you have your cake and eat it too?

• If you opt in, will competitors who wished they had opposed get a second bite at the apple?

• Did your competitor give you a second chance for revocation in a single procedure after the 9 month EPO opposition period?

• Create Criteria for your patents to decide whether to opt in or out• Would an invalidity attack be likely?

• Is the patent a high value asset?

• Is there royalty revenue?

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But is it going to happen?

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Strategies for Europe

• Forum shopping

• Pre-emptive revocation actions

• To opt out or not to opt out?

• Major markets/markets of major competitors

• Creating new law…

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Maximizing Strength of International Portfolio

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Where to file: Top 10 Countries

3M Legacy Medtronic WIPO ReportUS US ChinaJapan Germany JapanCanada Japan USKorea France KoreaGermany Australia EPOChina South KoreaUK ChinaFrance CanadaAustralia SwitzerlandMexico India

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Where to file: Legacy Medtronic Focus

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Why?

•Patent holders typically initiate in Germany

• Edwards v. Sorin (invalid)

• Cook v. Edwards (no infringement)

• AGA v. Occlutech (valid and infringed, overturned on appeal)

• Edwards v. Corevalve (no infringement)

•Defendants prefer U.K.

• Edwards v. Cook (invalid and not infringed)

• Corevalve v. Edwards (valid but no inf.)

• Occlutech v. AGA (valid but no inf.)

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Key Differences

• First-to-file vs. First-to-invent vestiges

• Absolute novelty vs. US grace period

• Claims for methods of treating humans

• Joint inventor disputes

• What constitutes prior art• On-sale/offer-for-sale• Public use and verbal disclosures• Prior-filed, unpublished applications

• Duty of disclosure

• Litigation process: forum, discovery, privilege rules, legal standards

• Loser pays

• Patent Term Extensions/Adjustments

• Uses to obtain data for FDA or reg submissions

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Loser Pays?

• True in general, but:

• Actual costs rarely recoverable OUS

• Cost orders on an issue by issue basis take sting out of some loses, Monsato Technology LLC v. Cargill International SA & Another [2007] EWHC 3113

• Cook Case: Judge ordered that Cook should pay 80% of Edwards’ costs and make an interim payment of £650,000 towards those costs within 21 days

• Edwards claimed costs of £2,360,000

• Judge found pre-assessment costs of £1,500,000

• In US Octane case brings US law closer to European practice

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Regulatory or FDA Data Generation

• US: Exemption for activities “reasonably related to the development and submission of information” to the FDA

• Not available OUS for Medical Devices

• Often medical device litigation initiates

in Europe

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Comparing and Contrasting US and Europe Patentability Standards

Patentable Subject Matter in the United States is Different from Europe

• Medical devices are patentable in both the United States and the Europe.

• US: surgical techniques and methods of medical treatment, and methods of diagnosis or treatment are patentable subject matter.

• Europe: those methods are not patentable.

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U.S. Patent Standards Are Different from Europe

• US: novelty and non-obviousness. • Not an obvious variation or combination of subject matter previously

known to those of ordinary skill in the art.

• EP: novelty and inventiveness. • Article 52 EPC, EPO applies a problem-solution involves solving a

technical problem in a non-obvious way

(i) is the invention novel; and

(ii) if it is, then choosing as the closest prior art the reference that shares the most features with the invention. The differences are then compared to determine the problem that is solved by the invention. The question then becomes whether the solution would be obvious when solving the technical problem.

• US vs EP Continuations• Got disclosed but unclaimed subject matter?

• In EPO (UK, GER)• EP Examiners are sticklers for literal support

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Absolute Novelty Not Well Understood by US Attys

•No grace period and, in general, pre-filing disclosure is fatal

•But important details, e.g.:• Confidentiality protects

• German Gebrauchsmuster (six month grace period for applicant’s use or description)

• “Disclosure” may be a high standard

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Example:

•Patentee holds press conference showing new heart valve before filing application for inventive hinge. Photos taken and put in newspaper.

• Insufficient prior art because no experts at press conference and photos didn’t show hinge well enough.

• See 1998 German Appellate Decision, S B SpA v. S J M Inc. (Case No. BGH-137-94).