Intellectual Property Practice

1
Intellectual PropertyPractice

• U.S. Patent Law A Procedural Overview

2
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.

3
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.

4
Rights Conferred

• Prevent 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.

5
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.

6
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.

7
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.

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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.

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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.

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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 cant fix it)
• Balance of the hardships favours plaintiff over
  defendant
• In junction is not against the public interest.

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Remedies for InfringementDamages

• Reasonable royalty
• Lost profits
• Attorneys Fees

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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).

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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. 

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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

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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.

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ProcedureBringing the Complaint

• Court must have personal jurisdiction over
  defendant.
• The venue must also be correct.

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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

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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.

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ProcedureVenue

• Where defendant resides or
• Where any infringement occurred.
• A corporation resides anywhere where it is
  subject to personal jurisdiction.

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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.

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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.

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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.

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ProcedureDiscovery

• Interrogatories
• Requests for Production
• Requests for Admission
• Depositions
• Experts

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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.

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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.

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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.

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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.

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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.

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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

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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.

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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.

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Costs

• vii. 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.

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Costs

• Pretrial 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.

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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

35
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.

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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

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Licensing Considerations

• Exploitation of existing patent portfolio
• Royalty payments over lifetime of the patent
• Performance Obligations
• Pre-market
• Post-Market
• Cross-licensing

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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.

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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

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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.

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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.

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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)

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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.

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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.

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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.

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New Prosecution RulesPatentably Indistinct
Claims - Presumptions

• The 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.

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New Prosecution RulesPatentably Indistinct
Claims - Rebuttal

• Once 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.

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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.

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New Prosecution RulesContinuation Examples
I
I
C
C
C
C
Petition and showing required (if not before Aug.
21)
C
C
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New Prosecution RulesContinuation Examples
I
I
C
R
C
C
C
R
Petition and showing required
R
R
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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.

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New Prosecution RulesDivisional Examples
R
R
I
C
C
D
C
C
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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.

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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

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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.