what businesses & engineers need to know about recent changes in u.s. patent law

What Businesses & Engineers Need to

Know About Recent Changes in U.S.

Patent Law

November 8, 2012

ASME OC Section, SABPA

The recipient may only view this work. No other right or license is granted.

© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2

Overview

• Protecting Your Rights

– Agnes Juang, Partner in Irvine office

• Ph.D. Chemistry, Caltech

• J.D., UC Davis

• Prosecution Strategies

– Terry Tullis, Associate in Irvine office

• B.S., M.S. Mechanical Engineering, Stanford

• J.D., UCLA; M.B.A., UC Berkeley

• Defending Yourself Against Third Party Patents

– Sabing Lee, Partner in Irvine office

• B.S., M.S., Materials Engineering, UCLA

• J.D., UC Berkeley


America Invents Act (AIA)

• Signed into law September 16, 2011

• Changes previously in effect

– Prioritized examination

– Elimination of best mode defense

– Virtual marking

• Changes implemented September 16, 2012

– Third-party submissions

– Inter partes review

– Supplemental examination

• Changes coming March 16, 2013 and later

– First-inventor-to-file

– Post-grant review

– Derivation proceedings

– Micro-entity status


1. Protecting Your Rights


AIA Rewards Early Filing

• Pre-AIA: First to Invent – A can earn right to patent by

demonstrating prior invention date

• AIA: First Inventor to File – B has the right to patent

• Effective: March 16, 2013

B Invents

Independently

A Invents A Files

B Files

File early! Utilize provisional application(s).

KEY POINT


AIA Expands the Field of Prior Art

• Patented, described in a printed publication, or in public

use, on sale, or otherwise available to the public

• Before the effective filing date

Effective: apply to patents with effective filing dates on or

after March 16, 2013

Prior Art


Prior Art (Example 1)

• Pre-AIA: B’s U.S. trade show disclosure is not prior art.

• AIA: B’s trade show disclosure is prior art.

B Invents

Independently

A Invents A Files

B presents at

trade show in

the U.S.

B presents at

trade show in

the U.S.

B presents at

trade show in

the U.S.

Any public disclosure or publication by a 3rd party inventor is prior art.

KEY POINT

Less than 1 year


Prior Art (Example 2)

• Pre-AIA: B’s foreign trade show disclosure is not prior art.

• AIA: B’s trade show disclosure is prior art.

B Invents

Independently

A Invents A Files

B presents at

trade show in

Europe

B presents at

trade show in

Europe

B presents at

trade show in

Europe

No distinction between U.S. and foreign disclosures under AIA.

KEY POINT

Less than 1 year


AIA Allows Limited Pre-filing Disclosure

• For first disclosure by

– inventor

– joint inventor

– another who obtained the subject matter disclosed from

the inventor or joint inventor

• Effective: apply to patents with effective filing dates on or

after March 16, 2013

One-Year Grace Period


Pre-filing Disclosure (Example 1)

• Pre-AIA: A and B’s disclosures are not prior art.

• AIA: A and B’s disclosures are not prior art.

First disclosure by inventor creates a 1-year grace period for U.S. Filing.

Disclosure by others (B) within the 1-year grace period is NOT prior art.

KEY POINT

B Invents

Independently

A Invents A Files

B presents at

trade show in

Europe

B presents at

trade show in

Europe

Less than 1 year

A presents at

trade show in

Europe

A presents at

trade show in

Europe


B Files

Pre-filing Disclosure (Example 2)

Less than 1

year

• Pre-AIA: B’s disclosure is not prior art to A.

• AIA: B’s disclosure is prior art to A but is not prior art to B, and

A’s patent application is not prior art to B.

Early disclosure may be beneficial if filing in the U.S. only.

KEY POINT

B Invents

Independently

A Invents A Files

B presents at

trade show in

Europe

B presents at

trade show in

Europe

B presents at

trade show in

Europe


AIA makes it easier to patent related inventions that are:

1. commonly owned

or

2. made under a joint research agreement

AIA Encourages Collaboration


Common Ownership

• Pre-AIA: B’s application is not prior art for an obviousness rejection.

• AIA: B’s application is not prior art for obviousness or anticipation

rejection.

B’s Application

Publishes

A & B assigns

rights to all

patent

applications to C

B Invents

A Invents

B Files

A Files

B Files

Have employees sign employment agreement with an obligation to assign all

patent rights to company.

KEY POINT


Joint Research

• Pre-AIA: B’s application is not prior art for an obviousness rejection.

• AIA: B’s application is not prior art for obviousness or anticipation

rejection.

Execute joint research agreements and disclose the names of the parties to the

join research agreement in the application.

KEY POINT

B’s Application

Publishes

A & B executes

joint research

agreement

B Files B Invents

A Invents A Files

B Files


Common Ownership Under AIA

• Pre-assignment: B’s application is prior art.

• Assignment prior to A files: B’s application is not prior art for

anticipation or obviousness rejection.

B Assigns

Application to A

B’s Application

Publishes

B Files B Invents

A Invents A Files

B Files B Files

Prior art effect of an earlier filed unpublished application (B) may be avoided by

creating common ownership prior to filing a later application (A).

KEY POINT


Derivation Proceedings

• AIA still protects true inventors

– the earlier application was derived from the actual inventor,

and

– was filed without inventor’s authorization

• Keep your lab notebooks!

• Keep records of any confidential disclosure.

B takes from A

A Invents A Files

B Files


Take Home Points – Protect Your Rights

• Consider filing applications prior to March 16, 2013

– File complete provisional applications

– Disclosures made on or after 3/16/2012 are relevant

• Consider risks associated with first-to-disclose strategy

– Disclosure prior to filing can destroy foreign patent rights

• Best option to preserve priority after March 16, 2013 may be to

file provisional(s)

– File frequently to cover improvements

• Don’t throw away lab notebooks

• Keep careful records of pre-filing public and

confidential disclosures

• Use employment agreements, assignments, and

joint research agreements


2. Prosecution Strategies


“Standard” Patent Prosecution

• Utility application

– PTO Filing Fees ~$1,500 plus fees for size, extra claims, etc.

– Timing: Examination starts after ~1 – 3 year wait

– Average 2-3 (or more) office actions over 1-3 more years

• Small Entity Status

– 50% discount if owner is (and has no obligation outside) a:

• Person/individual

• Small business (< 500 employees, affiliates)

• Non-profit organization

– Established at filing, update at issue fee, maintenance fees


Micro-Entity Status

• March 2013

• On-going Qualification:

1) Micro-entity status via:

• Qualifies as Small entity; and

• Not named on more than 4 previously filed US non-provisional applications; and

• Gross income in previous calendar year < 3 times median household income; and

• No obligation under contract or law to convey or license to an entity that would not meet the gross income requirement.

-OR-

2) Certify an employee of, or assigned/licensed to, an institution of higher learning.

75%

off


Prioritized Exam – Track I

• Prioritized Exam (since September 2011)

– 12 months to final action or allowance

– Petition + $4,800 fee + $430 fee

– All application formalities at time of filing

– No design, reissue or provisional applications

– Maximum 30 claims with 4 independent

– 3 month office action response period

• Maximum 10,000 Track I applications per fiscal year

• 855 filed 2011 after Sept. 26, 2011

• 5,036 filed in 2012

• Early stats show that over half of all patent applications filed under Track I were allowed within ~ 1 year


Best Mode Requirement – Is it Dead?

• Courts: Elimination of best mode defense

– Failure to disclose best mode does not make a patent invalid

or unenforceable

• Patent Office

– However, disclosure of best mode is still required under 35

U.S.C. 112, 1st paragraph for patentability

Your Invention


Virtual Marking

• Example:

Patent

http://www.symantec.com/about/profile/policies/virtual_pat

ent_marking.jsp

http://www.symantec.com/about/profile/policies/virtual_patent_marking.jsp

http://www.symantec.com/about/profile/policies/virtual_patent_marking.jsp


Supplemental Examination

• Owner can request PTO reconsider/correct relevant information

– PTO only: No third party involvement

– PTO fees: $18,000 ($9,000 small, $4,500 micro entity)

– Ex parte reexamination if raises a substantial new question of

patentability

• Otherwise ~60% refund

• Result: Patent cannot be held unenforceable on information

considered, subject to certain exceptions


When to Consider Supplemental Exam

• Enforcement

– If planning to enforce the patent, consider filing

supplemental examination with sufficient time to complete

any ex parte reexamination before filing suit

• Declaratory Judgment (DJ) Actions

– If aware of possible DJ against patent, consider filing

supplemental examination before DJ is filed

• ANDA Litigation

– If patent will be listed in Orange Book, consider filing

supplemental examination as part of due diligence, or at a

minimum, prior to receiving notice


Take Home Points on Prosecution Strategies

• Confirm whether you qualify for reduced fees

• Speed and value through prioritized examination

• Talk to your patent attorney about Best Mode

• Consider Virtual Marking

• Consider Supplemental Examination on your issued patents to

address prior art


3. Defending Yourself Against Third Party Patents


The Importance of Searching/Monitoring

• Patents only provide a right to exclude,

not a right to practice

• Searching is not required, but helps:

– Identify key competitors

– Assess patentability

– Identify patents you might infringe

– Identify publications that, if issued,

you might infringe

– Develop design arounds


Types of Searches

• Do-it-yourself (patft.uspto.gov, google.com/patents, Delphion,

trade journals, medical databases)

• Professional searching (former Examiners)

• Industry searching for marked products


What Do You Do If You Find A Problem Patent?

• Typical options

– Design-around

– Opinion of counsel

(noninfringement, invalidity)

– License

– Drop the project

– Challenge the patent (litigation or PTO)

• AIA provides new opportunities to challenge patents you might

infringe

Your Invention


How Do You Challenge A Publication?

• Review the current claims and status of examination (portal.uspto.gov)

• If current claims are of concern, determine if there is any prior art that you believe the Examiner would consider relevant

• For a $180 fee, you can submit up to 10 prior art references (patents, patent publications or other printed publications)

• Must be accompanied by concise description of asserted relevance of each submitted document


Use Caution When Challenging A Publication

• Can’t challenge if application has been allowed

• Can’t challenge if it’s more than 6 months after publication and any claim has already been rejected

• 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


How Do You Challenge An Issued Patent?

Before AIA

• Ex Parte Reexam

• Inter Partes Reexam

• Interferences

After AIA

• Ex Parte Reexam

• Post-Grant Review (PGR)

• Inter Partes Review (IPR)

• Derivation Proceedings

• Interferences (Legacy)

• Transitional Program for

Covered Business Method

(CBM) Patents


Summary of Potential Third-Party Involvement

Filing Issue 9 mo.

Pre-issuance

Submission

($)

Inter partes review (IPR)

($$$)

Post-grant review (PGR)

($$$)

Derivation action/proceeding

($$$)

Ex parte reexamination

($$)


Post-Grant Review or Inter Partes Review

Post-Grant Review Inter Partes Review

Effective

Targets

Fees

Basis

Threshold

When

Discovery

Estoppel

3/16/2013

Priority on/after 3/16/2013

$35,800 + $800 for each claim > 20

Any basis used in litigation (prior art, 101, 112)

“More likely than not at least one claim is unpatentable”

Within 9 months of grant + before civil action filed

Yes

Yes

9/16/2012

Any

$27,200 + $600 for each claim > 20

Only patents and printed publications

“Reasonable likelihood” petitioner will prevail on at least one claim

After 9 months from grant or end of post-grant review or within 12 months of civil action

Yes

Yes


Trial Proceedings Timeline

Petition PO

prelim. response

Decision

PO response

to decision

motion to amend

Petitioner reply

to PO’s response

opp’n to motion

Oral hearing

Written decision

3 mo. ≤ 3 mo. 3 mo. 3 mo.

PO reply

1 mo.

Trial begins ≤ 1 year

PO discovery

period

Petitioner discovery

period

PO discovery

period


Take Home Points On Third Party Patents

• Consider Post-Grant Review and Inter Partes Review as less

expensive alternatives to litigation

• Monitor competitors’ pending applications and consider

submission of prior art or post-grant procedures

• Assess risk of potential post-grant procedures against your own

patents by third parties

– Set aside budget

– Keep continuation pending

– File many/quality dependent claims


Action Item List

Consider filing applications (especially non-provisional applications) before March 16, 2013

Consider prioritized examination

Consider whether micro-entity status applies

Evaluate current invention harvesting procedures for speed and efficiency

Consider filing more/faster provisional applications

Implement patent/publication monitors for possible prior art submissions and post-grant action

Consider using new procedures to challenge pending applications and issued patents

Keep post-grant challenges in mind when preparing patent applications.

Keep continuations pending and consider setting aside funds for defending.

Consider supplemental exam for strengthening patents

Obtain assignments of provisional applications before filing

Continue documenting inventions and developments

Consider implementing virtual marking program


Overall Take Home Points

• Maintain accurate and dated records of invention

• Use agreements with consultants, contractors, and employees

• File applications before public disclosure

• Understand patent landscape and analyze risk early

• Monitor IP and product development trajectories

• Consider all forms of IP protection

• Your IP attorney can help!

Questions?

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