Hot Issues in Patent Law

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Hot Issues in Patent Law

• Steven G. Saunders
• ssaunders_at_bromsun.com
• 617-443-9292

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Topics

• Basics
• Portfolio development
• Litigating patents
• Demand letters
• Patent ownership
• IP holding companies
• Due diligence in MA context
• Downward slide of patent rights

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Basics

• Why patent a technology?
• Often provides exclusivity for a limited period
• Considerations
• Marketing the technology
• License revenue
• Competitor patent activity
• Raising money
• Inventor recognition

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Statutory Requirements

• Usefulness
• Novel
• Non-obvious

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Beware of Traps

• One year statutory bar
• Absolute novelty in many foreign jurisdictions
• Offer for sale
• Experimental use

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Procurement Process

• Learn about the invention
• Search prior art
• Form US and non-US filing strategy
• File in US and/or non-US jurisdiction
• Receive office actions and prepare responses
• Allowance and issue fee payment
• Continuations

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Portfolio Development

• Common problems
• Learning about existence of inventions
• Educate RD, marketing, management
• Incentives
• Capturing details of the invention
• Invention disclosure forms
• Proving early conception and reduction to
  practice
• Lab notebooks
• Test procedures
• Prototypes

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IP Creation Process
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Asserting Patents Against Third Parties

• Patent Litigation is very complex
• Legal Issues
• Evolving standards seemingly not refined
• Factual Issues
• Technology
• Not straightforward fact patterns
• Decision-makers commonly not versed in patent law
  or technology
• Very expensive
• Typically costs 2MM and up

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Pre-Complaint Considerations

• Do claims cover relevant product?
• Literal or equivalent infringement
• Which defendant to sue?
• Are the claims strong?
• Breadth of the claims
• Prior art
• Remedial action to strengthen patent
• File complaint first or engage in settlement
  discussions?
• Laches or estoppel risk
• Declaratory judgment risk

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Litigation

• Markman hearing unique to patent law
• Construe meaning of claims
• Damages
• Floor reasonable royalty
• Lost profits
• Injunctions
• These should be paramount considerations in
  crafting claims

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Responding to Demand Letter

• Preliminary steps
• Confirm not abandoned
• Review patent family and related foreign patents
• Clearance opinion to avoid willfulness?
• Knorr-Bremse and Seagate cases
• Similar analysis still is very useful
• Response
• Send prior art? Risks
• Ask for more information to learn their position?
• Answer substantively? Arrange meeting? License?

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Patent Ownership

• Inventor initially assumed to own
• Employment agreements
• Assignment to employer
• Hired to invent doctrine
• Shop rights

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IP Holding Companies

• Benefits
• Centralized management
• Tax benefits Delaware and Nevada
• Drawback
• No lost profit damages

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Due Diligence in M A Context

• Classic Due Diligence
• Value Proposition

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Classic Due Diligence

• Issues
• Does the company own all of its patents?
• How much term is left in those patents?
• Does the company infringe any third party
  patents?
• Are the patents valid?
• Any applications still pending?

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Value Proposition

• What value does the portfolio bring to the deal?
• Analyze claim scope
• Consider relevant market
• Design around possibilities

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Downward Slide of Patent Rights

• Willful Infringement Seagate
• Inducement - DSU
• Doctrine of Equivalents Festo
• Injunctions eBay v. MercExchange
• Obviousness KSR v. Teleflex
• Declaratory Judgment Actions Medimmune
• Reasonable apprehension of suit relaxed
• Recent PTO Rule Changes
• Dramatic changes to patent filing and prosecution
  strategies

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Questions?