Intellectual PropertyPractice

U.S. Patent Law – A Procedural Overview

The Patent - An Overview

To encourage development of new and useful inventions.

Process, machine, manufacture, composition of matter.

Provides an exclusionary right.

Over 7.6 million patents to date.

Contents of a Patent Generally

Title, Cross-Reference to Related Applications, Reference to Sequence Listing/Program, Background, Brief Summary of the Invention, Brief Description of the Drawings, Abstract, Sequence Listing/Program.

Detailed Description Must provide a written description of the invention.

This includes the figures. Must enable another to make and use the invention.

Claims Define the scope of the patent. Independent, Dependent, Multiple Dependent.

Rights ConferredPrevent others from:

Making

Using

Selling

Offering to sell; or

Importing

the invention without permission. This is not an affirmative grant.

A licensee does not infringe.

Generally, for 20 years from filing.

Using These Rights

A patent may be used offensively or defensively

Offensively

- As a sword to extract money from others.

Defensively

- As a shield to keep competitors out of the market.

Infringement Claims define the boundaries of the patent rights. Determination is a two-step process:

“Construe” the claims;

Prosecution estoppel can limit claim scope; See if the accused product/process “reads on” the construed

claims; Can turn into a “battle of the experts” for complex

technologies.

Infringement can be: Direct; Contributory; Inducement.

Doctrine of Equivalence can expand claim scope.

Infringement – ExampleClaims

A mouse-trapping device, comprising a platform and a spring bar pivotally attached to the platform for engaging a mouse, responsive to the mouse stepping on the platform.

A mouse-trapping device of claim 1, wherein the platform comprises a capacitive detector circuit coupled to the spring bar responsive to, the capacitive detector circuit releasing the spring bar responsive to a change in nominal capacitance representative of the mouse stepping on the platform.

ExampleLimitations/Elements

Independent claim 1:(1) Platform;(2) Spring bar;(3) Pivotal attachment; and(4) Responsiveness to a mouse.

Dependent claim 2:Everything in claim 1;(5) Capacitive detector circuit; and(6) Responsiveness to change in capacitance.

ExampleInfringement

Construe each element.

Compare the construed elements to the accused device.

- Mousetrap with platform and attached spring bar infringes claim 1, but not claim 2.

- Mousetrap with additional capacitive detector circuit infringes claims 1 and 2.

If claim 1 is invalidated during litigation, claim 2 may still be valid and infringed.

- Dependent claims are backups for the independents.

Remedies for InfringementInjunction

Court orders the infringer to stop infringing.

eBay v MercExchange has made it harder to get; now, plaintiff must show:

- Irreparable harm;

- No adequate remedy at law (money can’t fix it);

- Balance of the hardships favours plaintiff over defendant;

- In junction is not against the public interest.

Remedies for InfringementDamages

Reasonable royalty

Lost profits

Attorneys Fees

Defenses to InfringementInvalidity

Patents are presumed to be valid, and can only be proved invalid by “clear and convincing evidence.”

Section 112

- Written description, enablement, best mode, definiteness

Section 102 – Novelty

Section 103 – Obviousness

KSR v. Teleflex has made proving this easier for some technologies.

PHOSITA is creative, “obvious to try” is OK, use common sense (hindsight bias is not a big concern).

Defenses to InfringementOther

Statute of Limitations- Six years

Laches- Presumed after six years

Equitable estoppel Failure to Mark or Notice

- A warning letter will provide notice, however. Incorrect inventorship Inequitable conduct during prosecution License 35 U.S.C. 271(e)(1): No infringement if infringing activity is

used solely for purposes of seeking FDA approval. 

Litigation ProcedureUsing the Sword

Prefiling Inquiry

Filing the Complaint

- Jurisdiction and Venue

Discovery

- Documents, Witnesses, Expert Witnesses

Claim Construction (Markman Hearing)

Motions for Summary Judgment

Trial

Appeal

ProcedurePrefiling Inquiry

Required by Rule 11 of Fed. R. Civ. P.

Attorney must make a reasonable inquiry of the facts and law before filing the complaint.

Federal Circuit requires an infringement analysis.

- Independently construe the claims;

- Independently apply the construed claims to the accused product/process.

Sanctions can result if not done.

ProcedureBringing the Complaint

Court must have personal jurisdiction over defendant.

The venue must also be correct.

ProcedurePersonal Jurisdiction

Look for sufficient minimum contacts with the forum state

Sales within the U.S.

Office or agent in the U.S.

No jurisdiction = No case

ProcedureInternational Reach

Some patents can “reach out” of the U.S. NTP v. RIM

Every step in a method claim must be done in the U.S.

A system claim is infringed if use and control is from within the U.S.

35 U.S.C. 271(g): Product made outside the US according to a patented process will infringe unless the product is materially changed.

ProcedureVenue

Where defendant resides; or

Where any infringement occurred.

A corporation “resides” anywhere where it is subject to personal jurisdiction.

ProcedurePreliminary Injunction

Court order to stop infringement before any formal determination is made.

Typically filed with or just after the complaint.

May be granted in one month or less.

Like having a trial compressed into one month.

Granted in less than 25% of cases.

75% reversal rate.

ProcedureGetting a Preliminary Injunction

For grant of the motion, the patentee must show:

A likelihood of success in proving validity and infringement;

Irreparable harm if motion is denied;

Greater hardship to patentee if motion is denied than to infringer if motion is granted; and

The public interest is not harmed if granted.

ProcedureStopping a Preliminary Injunction

Show that money is enough to compensate the patentee.

eBay implied that money is always good enough for a “patent troll.”

A successful request to re-examine the patent may defeat the motion.

ProcedureDiscovery

Interrogatories

Requests for Production

Requests for Admission

Depositions

Experts

ProcedureWhat is Discoverable?

Everything except:

Attorney-client confidences

- Destroyed if communicated to another.

Attorney work product

- Only documents made in preparation of litigation.

There is no “business privilege”

- Beware of internal emails, memos, etc.!

- Cannot destroy any relevant documents once a lawsuit begins.

ProcedureMarkman Hearing

Hearing to construe the claims

Weight of evidence:

- Language of the claims;

- Written description, including figures;

- File wrapper;

- Dictionaries;

- Expert witnesses.

Frequently ends the case

- But has a nearly 50% reversal rate.

ProcedureGeneral Principles of Claim

Construction Construed at time of invention

Limitations given their “ordinary meaning”

Construe different words differently

Preamble is generally not limiting

Do not read specific embodiments into the claims

Construe claims to cover preferred embodiments

Construe claims to uphold validity.

ProcedureSummary Judgment

Used to end the case before it gets to trial.

Granted if the evidence then in the record is so clear that no reasonable jury could find otherwise.

- All doubt is read in favour of the non-moving party.

Will be denied if other party can show a need for more discovery.

Most patent cases end here or before.- 5% of cases actually make it to trial.

- ~10% of cases resolved at summary judgment.

Damages

Reasonable royalty- Between hypothetical willing parties.

Lost profits- Cannot be less than reasonable royalty.

- Cannot be speculative.

- Must be direct and foreseeable result from infringement.

- Actual computation is at the discretion of the court.

Attorneys Fees- Only in “exceptional” cases – inequitable conduct, litigation

misconduct, willful infringement.

Willfulness Can lead to triple damages and attorneys fees if found

Court determines “willfulness”

- Looks to commercial behavior and state of mind.

Factors include copying, knowledge of the patent, good faith belief in non-infringement, behavior during litigation.

Alleged in about 90% of cases

- Found in about 50% of the cases.

- Affirmed about 90% of the time.

Must be shown with clear and convincing evidence

WillfulnessNew Case Law

Seagate has changed the “willfulness” standard

Patentee must now show “objective recklessness”

No “affirmative duty of care” for alleged infringers

- Implies that a non-infringement opinion is no longer mandatory.

Waiver of attorney-client privilege for opinion counsel does not typically extend to trial counsel

Waiver of work product immunity for opinion counsel does not typically extend to trial counsel.

Costs

i. Prefiling investigation ~ $5,000.

ii. Preparation and filing of complaint ~ $3,000.

iii. Initial Disclosures ~ $3,000.

iv. Preparation of Proposed Scheduling Order ~ $3,000.

v. Preparation of discovery requests ~ $15,000 to $20,000.

vi. Preparation of discovery request responses ~ $15,000 to $20,000.

Costsvii. Preparation for and participate in defensive or offensive

deposition ~ $15,000 per witness.

viii. Expert discovery: ~$15,000 per expert report on infringement; ~$15,000 per expert report on validity; and between ~$50,000 to $100,000 per report on damages.

ix. prepare for and defend/take expert deposition ~ $15,000 per expert.

x. expert witness fees ~ $25,000 per technical witness and ~$50,000 for damages expert.

xi. Preparation of claim construction and/or summary judgment brief on infringement or validity ~ $20,000 to $30,000 per brief.

xii. Preparation for and attend claim construction or summary judgment hearing: with expert testimony ~ $30,000, without expert testimony ~$20,000.

CostsPretrial activities - Preparation of case-in-chief:

Deposition designations ~ $5,000 per witness.

Trial consultants ~ $25,000 to $50,000.

Mock trial, if any ~$100,000+

Motions in limine ~$5,000 each.

Pretrial brief ~$25,000.

Pretrial activities week before trial: $40,000 legal fees and $40,000 expert witness fees.

Costs

Two Week Trial:

Counsel fees (2 attorneys) ~ $120,000.

Expert witness fees for 3 witnesses ~ $40,000.

Food and lodging ~ $60,000.

Total Litigation Costs ~$1.3 million

LicensingLicensing v. Assignment

A license is a contract between licensor and licensee, granting the licensee rights to a patent in exchange for performing obligations.

- Can be revoked if licensee fails to meet these obligations.

- May be non-negotiable.

An assignment is a grant by the assignor of a property interest in a patent to an assignee.

- Is irrevocable.

- Is negotiable.

Licensing v. AssignmentWhen is assignment preferred?

Between employee and employer

Lump sum sales price

- Removes time-related risks from assignor.

- Also destroys possible “blue sky” benefits.

Raising capital by selling assets

For startup companies

Licensing Considerations

Exploitation of existing patent portfolio

- Royalty payments over lifetime of the patent

- Performance Obligations

Pre-market

Post-Market

Cross-licensing

MedImmune v. GenetechNew options for licensees

The old law:

- Licensee in good standing could not challenge the validity of the patent.

- “Reasonable apprehension of suit” to bring a declaratory judgment action.

The new law:

- Licensee can challenge the patent while still enjoying the protection of the license.

- “Reasonable apprehension of suit” no longer required – easier to bring declaratory judgment action.

ITC

No damages – can only stop importation of goods

Decision must be rendered in one year

- Like a district court suit compressed into a single year.

Costs similar to suit in district court

All findings reviewable by district court

New Prosecution Rules

New rules become effective Nov. 1, 2007

These rules significantly affect:

- Number of claims that can be presented;

- The number of continuing applications that can be filed;

- The number of RCEs that can be filed.

New Prosecution RulesExamination of Claims

An Examination Support Document (ESD) is required if application(s) contain:

- More than 5 independent claims; or

- More than 25 claims in total.

- ESD must be filed before first office action on the merits.

This includes counting claims in any copending application having a patently indistinct claim.

Effective for:

- Applications filed on or after Nov. 1, 2007;

- Applications for which a first office action on the merits was not mailed before Nov. 1, 2007.

New Prosecution RulesClaims – How to Count Them

1. A method comprising … (1 independent)

2. The method of claim 1 wherein … (1 dependent)

3. The method of claim 1 or 2 … (2 dependents)

4. The method of claim 3 … (2 dependents)

5. A device formed according to the method of claim 1. (1 independent)

New Prosecution RulesESD – What Is It?

An ESD must include:

A preexamination search statement;

Listing of closest references found;

Identification of claim references found in each reference;

- Small entities excepted!

Detailed explanation of patentability over the references (§102 and §103); and

Showing of support in specification for claims.

New Prosecution RulesPreexamination search statement

State that search was performed in compliance with §1.265(b);

- Searched U.S. patents and publications, foreign patents, and non-patent literature.

Identify field of search by U.S. class and subclass, and the date of search; and

Disclose the search logic used to query a database, the database searched, and the date of search.

New Prosecution RulesPatentably Indistinct Claims -

Identification

Applicants must disclose applications or patents that:

- Have an inventor in common with the application; and

- A filing or priority date within two months of the filing or priority date of the application.

Submit four months from filing date, or two months from mailing date of filing receipt of other application.

Effective for all applications pending on Nov. 2, 2007.

New Prosecution RulesPatentably Indistinct Claims -

PresumptionsThe USPTO will assume that commonly owned

applications will have patentably indistinct claims if:

There is a common inventor;

The filing or priority dates are the same; and

There is substantial overlapping disclosure

- I.e., at least one claim in on application has support in the written description of the other application.

New Prosecution RulesPatentably Indistinct Claims -

RebuttalOnce presumption is established the applicant: Rebut the presumption; or File terminal disclaimer

- Claims in the applications are combined for computational purposes of the 5/25 limit.

USPTO may require elimination of the patentably indistinct claims from all but one of the applications.

New Prosecution RulesContinuation Rules

In an application family, without petition and showing, applicants can file:- Two continuations or CIPs; and

- One RCE

Anything more requires a petition and showing, except:- Divisional applications

For applications filed before August 21, 2007- One more continuing application is permitted

These rules apply to applications and RCEs filed on or after Nov. 1, 2007.

New Prosecution RulesContinuation Examples

I

C C

C

I

C

C

CPetition and showing

required (if not before Aug. 21)

New Prosecution RulesContinuation Examples

I

C C

I

C

C

Petition and showing required

RR

R

R

New Prosecution RulesDivisional Applications

An application which claims non-elected subject matter that was previously subject to a restriction requirement.

Without petition and showing, if restriction is not traversed Applicant may file:

- Two continuation applications of the divisional; and

- One RCE in the divisional family.

Anything more requires petition and showing.

New Prosecution RulesDivisional Examples

I CC

R

D CC

R

New Prosecution RulesCIP Applications

Applicant must identify claims in the CIP that are supported in the parent application.

Claims not so identified get the filing date of the CIP.

New Prosecution RulesPetition and Showing

Filed within four months of filing date of continuing application

Petition fee ($400)

An amendment, argument or evidence;

- Not an IDS

A showing that this could not have been submitted during the prosecution of the parent

New Prosecution RulesProvisional Applications

If benefit is claimed to a provisional application that is not in English:

- English language translation of the provisional application will be required.

- If none is present, Applicant will be given a time period to provide one, or remove the benefit claim.

- Translation must also include a statement that the translation is accurate.

- Translation may be filed even if provisional is abandoned.