Optimize and Protect Your Patent Portfolio

Optimize and Protect Your Patent Portfolio

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COUNCIL OF CHAIRS MEETING University of South Carolina

Graniteville Room Thomas Cooper Library Columbia, SC May 15, 2013 Michael Randall Health Sciences South Carolina


M. Randall

COUNCIL OF CHAIRS, COLUMBIA SC, MAY 15

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Abstract The Centers of Economic Excellence (CoEE) Program, has an objective of economic advancement of the State of South Carolina. Patent licensing is an avenue through which SmartStateTM Chairs and Center Members can positively impact SC’s economy, at each of the State’s research universities. Patents may lead to significant value if properly written, maintained and defended. This session covers the basics of patenting, as well as important points to consider with regard to patents.


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Outline • • • • • • • •

Introduction Patent Basics Protecting Your IP Careful Patenting Building a Strong Patent Portfolio Patent Litigation IP Trends and Statistics Summary


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Introduction: Who Am I? Mike Randall • CEDO HSSC • Almegacy LLC, Electronic Materials

Disclaimer…I am NOT a lawyer…this is NOT legal advice or written law • All information contained herein are for informational purposes only • No warranty • Consult a qualified IP lawyer for legal advice Optimize and Protect Your Patent Portfolio

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Introduction: Why Patent? Personal/Professional: • Part of Employment Agreement (Assignment, Work Agreement (Gatorade)) • •

Potential $: Share net license revenue with no/minimal investment risk Prestige/professional accomplishment (credentials)

Organizational (Assignee): • Tech Transfer Income (Bayh-Dole Act of 1980) •

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SmartState Endowed Chairs have applied for 366 U.S. and international patents since the program started in 2002. They have received 54 U.S. and international patents. USC, MUSC, and Clemson already have 85 licenses based on IP from the research of SmartState Endowed Chairs resulting in revenue of >$900,000 in license income. Est. >~$50M in licensed product sales based on AUTM Average License rate (1.8% of sales on average)

Sources: • http://www.autm.net/AM/Template.cfm?Section=FY_2011_Licensing_Activity_Survey&Template=/CM/ContentDis play.cfm&ContentID=9925 • http://en.wikipedia.org/wiki/Gatorade • http://en.wikipedia.org/wiki/Bayh%E2%80%93Dole_Act Optimize and Protect Your Patent Portfolio

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Introduction: University Resources Resources are ready to help generate and utilize IP Clemson • Clemson University Research Foundation (CURF) • Idea Disclosure: http://media.clemson.edu/research/technologytransfer/confidential-invention-disclosure.pdf • Technology Transfer: http://curf.technologypublisher.com/ • Resources: http://www.clemson.edu/curf/?page_id=105 MUSC • Foundation for Research Development (FRD) • Idea Disclosure: http://academicdepartments.musc.edu/frd/inventors/inventors.forms • Technology Transfer: http://musc.technologypublisher.com/ • Resources: http://academicdepartments.musc.edu/frd/ USC • Office of Technology Commercialization • Idea Disclosure: http://ip.research.sc.edu/PDF/Invention_Disclosure_2012.pdf • Technology Transfer: http://ip.research.sc.edu/technologies.shtml • Resources: http://ip.research.sc.edu/resources.shtml Optimize and Protect Your Patent Portfolio

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IP and Patent Basics • IP = Intellectual Property • Intangible property resulting from creativity. A number of distinct types of creations of the mind for which a set of exclusive rights are recognized • Owners are granted exclusive rights to intangible assets, such as musical, literary, and artistic works; discoveries and inventions; and words, phrases, symbols, and designs. • Common types of IP • • • • •

copyrights trademarks patents industrial design rights trade secrets

• Legal principles governing intellectual property have evolved over centuries • The British Statute of Monopolies (1623) is seen as the origin of patent law. • The ability of the US to grant patent rights is given in the US Constitution (1788), Article 1, Section 8 (The Legislative Branch, Powers of Congress): • “The Congress shall have power...To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries” Optimize and Protect Your Patent Portfolio

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Patent Basics: Patent (U.S. Utility Patent): Set of exclusive rights granted by a national government to an inventor or their assignee for a limited

period of time in exchange for a public disclosure of the invention. A patent may be granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof, and claims that right in a formal patent application, if that patent is granted by the government. The qualification ‘utility’ is used in the United States to distinguish it from other types of patents (e.g. design patents), which should not be confused with utility models granted by other countries.


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Patent Basics: Duration Patent (U.S. Utility Patent, cont.) Duration: • Applications filed on or after June 8, 1995: Patent term is 20 years from the filing date of the earliest U.S. application to which priority is claimed (excluding provisional applications). • Applications pending or patents still in force on June 8, 1995, the patent term is either 17 years from the issue date or 20 years from the filing date of the earliest U.S. or international (PCT) application to which priority is claimed (excluding provisional applications), the longer term applying. The patent term in the US was changed in 1995 to bring U.S. patent law into conformity with the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs). Optimize and Protect Your Patent Portfolio

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Patent Basics: Importance and Value • A patent is a legal right, granted to the inventor or the assignee, by a government to allow the owner to keep others from producing your invention for its duration. It gives you the right to sue potential infringers. Note: it does not grant you the right to produce the invention, as there may be other IP in force that may limit your rights to produce.

• Used alone, or as part of an effective patent portfolio, patents may give the owner a “legal monopoly” which may enable high product margins by limiting competition (exclusive rights). • Also valuable for credentials • May increase the value of a company, especially if you are focused on getting investment $ or on licensing revenue. Optimize and Protect Your Patent Portfolio

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Patent Basics: USC Title 35, Patents • The invention granted by the patent: • Must be “new, useful, and non-obvious” (USC 35 101, 102, 103)* • Must include a full description of the invention and background materials relating thereto sufficient to enable one of “ordinary skill in the art” to make and use the invention (enablement) (USC 35 103, 112)

• Patent application includes drawings, a

discussion of prior art, a detailed description of the preferred embodiment(s) and claims *USC= United States Code Optimize and Protect Your Patent Portfolio

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Patent Basics: Patents, Patentability Title 35 of the United States Code (USC): 4 parts, currently 37 chapters and 376 sections (149 are currently used). Sections 1-42 establish the USPTO. Sections 101, 102, 103 and 112 (in Part II) are very important to inventors • Part I--United States Patent and Trademark Office • Part II--Patentability of Inventions and Grant of Patents • Part III--Patents and Protection of Patent Rights • Part IV--Patent Cooperation Treaty Section 101 (New, Useful): Whoever invents or discovers any new and useful process,* machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title. Patents are not granted for all new and useful inventions and discoveries. Invention or discovery must come within the boundaries set forth by 35 U.S.C. 101. Examples of subject matter not patentable under the statute are: A. Printed Matter B. A Naturally Occurring Article C. Scientific Principle

*“Process" as defined in 35 U.S.C. 100, means process, art or method, and includes a new use of a known process, machine, manufacture, composition of matter, or material. Optimize and Protect Your Patent Portfolio

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Patent Basics: Patents, Patentability 35 U.S.C. §102: Section 102 of 35 USC Part II (Novelty and loss of right to patent): "Conditions for Patentability” Describes some conditions when a patent should not be granted to an inventor (generally related to when an invention is already known publicly). Each subsection of section 102 describes a different kind of prior art which can be used as evidence that an invention is already public, including inventions that have already been described in other patent applications or publications and/or inventions that have been on sale for more than a year before filing. Section 102 was revised as a part of the America Invents Act (AIA)

(a) Novelty; Prior Art.— A person shall be entitled to a patent unless— (1) the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention; or (2) the claimed invention was described in a patent issued under section 151, or in an application for patent published or deemed published under section 122 (b), in which the patent or application, as the case may be, names another inventor and was effectively filed before the effective filing date of the claimed invention.

(b) Exceptions.— (1) Disclosures made 1 year or less before the effective filing date of the claimed invention.— A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.

(2) Disclosures appearing in applications and patents.— A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if— (A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;

(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person. Optimize and Protect Your Patent Portfolio

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Patent Basics: Patents, Patentability 35 U.S.C. § 103 (Obviousness): Provides that a patentable invention must not have been obvious to a "person having ordinary skill in the art" in view of the appropriate prior art. The most important judicial decisions in interpreting 35 USC 103 is Graham v. John Deere Co.. And more recently KSR v. Teleflex in which the Supreme Court of the United States reaffirmed Graham v. Deere and moved away from reliance on the TSM (Teaching-Suggestion-Motivation) test. The most important section of section 103 is 103(a):

35 U.S.C. 103 Conditions for patentability; non-obvious subject matter. (a) A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.


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Patent Basics: PHOSITA, POSITA, OSITA Definition from MPEP (Manual of Patent Examining Procedure), Section 2141.03, Level of Ordinary Skill in the Art [R-6] (Abridged) The person of ordinary skill in the art is a hypothetical person who is presumed to have known the relevant art at the time of the invention. Factors that may be considered in determining the level of ordinary skill in the art may include: (A) "type of problems encountered in the art;" (B) "prior art solutions to those problems;" (C) "rapidity with which innovations are made;" (D) "sophistication of the technology; and" (E) "educational level of active workers in the field. In a given case, every factor may not be present, and one or more factors may predominate "A person of ordinary skill in the art is also a person of ordinary creativity, not an automaton." (KSR International Co. v. Teleflex Inc.) "[I]n many cases a person of ordinary skill will be able to fit the teachings of multiple patents together like pieces of a puzzle." The "hypothetical 'person having ordinary skill in the art' to which the claimed subject matter pertains would, of necessity have the capability of understanding the scientific and engineering principles applicable to the pertinent art." References which do not qualify as prior art because they postdate the claimed invention may be relied upon to show the level of ordinary skill in the art at or around the time the invention was made. Moreover, documents not available as prior art because the documents were not widely disseminated may be used to demonstrate the level of ordinary skill in the art. For example, the document may be relevant to establishing "a motivation to combine which is implicit in the knowledge of one of ordinary skill in the art." If the only facts of record pertaining to the level of skill in the art are found within the prior art of record, the court has held that an invention may be held to have been obvious without a specific finding of a particular level of skill where the prior art itself reflects an appropriate level. "The importance of resolving the level of ordinary skill in the art lies in the necessity of maintaining objectivity in the obviousness inquiry." The examiner must ascertain what would have been obvious to one of ordinary skill in the art at the time the invention was made, and not to the inventor, a judge, a layman, those skilled in remote arts, or to geniuses in the art at hand. Optimize and Protect Your Patent Portfolio

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Patent Basics: Patents, Patentability 35 U.S.C. Section 112 dictates form and content of the patent specification and form and content of the claims. The first paragraph introduces 3 requirements, the written description requirement, the enablement requirement, and the best mode requirement. The second paragraph limits the ability of claims to be too open-ended or unclear. 35 U.S.C. 112 Specification: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention. The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. A claim may be written in independent form, if the nature of the case admits, in dependent or multiple dependent form. Subject to the following paragraph, a claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed. A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers. A claim in multiple dependent form shall contain a reference, in the alternative only, to more than one claim previously set forth and then specify a further limitation of the subject matter claimed. A multiple dependent claim shall not serve as a basis for any other multiple dependent claim. A multiple dependent claim shall be construed to incorporate by reference all the limitations of the particular claim in relation to which it is being considered. An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof. Optimize and Protect Your Patent Portfolio

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Patent Basics: Inventorship AN INVENTOR MUST CONTRIBUTE TO THE CONCEPTION OF THE INVENTION The definition for inventorship can be simply stated: The threshold question in determining inventorship is who conceived the invention. Unless a person contributes to the conception of the invention, he or she is not an inventor. Typically reduction to practice, is irrelevant in determining the inventor

Source: http://www.uspto.gov/web/offices/pac/mpep/s2137.html


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Patent Basics: Elements of a Patent Abstract: Summary of the invention Drawings: You will also need to include drawings with your application, if they are necessary for showing how the invention works. Some applications (such as for pure chemicals) don't include a drawing, unless a process can be diagrammed by a flowchart. Your drawings must illustrate every aspect of the invention specified in the claims. All patent applications must include drawings if the subject matter permits. Specification: With the help of the drawings, explains the invention. The specification contains several elements. Collectively, these elements form a narrative that describes and distinguishes the invention. Every specification must describe the invention so that someone knowledgeable in the field of the invention (POSITA) can make and use it without further experimenting. Specification must also disclose the "best mode" of creating and using the invention. If the inventor knows of a better way (or "best mode") to create the invention and fails to disclose it, that failure could result in the loss of patent rights. The specification includes: • Title of the invention: Your title should be brief, but also technically accurate and descriptive. • Background of the invention: You must include the field or subject matter of the invention and a description of all relevant prior inventions. Here's where thorough research pays off. When you refer to earlier inventions, point out specific problems that your invention solves. • Brief summary of the invention: This is an overview of what you claim your invention can do. Summarize its advantages. Show just how your invention solves the problems you described in the background section. • Brief summary of the drawings: The drawings are individually described • Detailed description of the invention: Thorough description of the structure and operation of the invention…must be complete enough that a POSITA can follow it to make and use the invention. • Claims: Define the scope or boundaries of the patent. These are detailed statements of exactly what your invention covers. Because the scope of your patent rights are based on what you declare in the claims, they are the most important section of the application.

Note: The USPTO has strict requirements for both claims and drawings, so be sure to study other patents in your field to become familiar with the format of these sections. All patent applications must include a drawing if the subject matter permits. Optimize and Protect Your Patent Portfolio

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Patent Basics: Elements of a Patent


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Patent Basics: Elements of a Patent


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Patent Basics: Process of getting a patent An interactive version of this flow chart is available at: http://www.uspto.gov/patents/pr ocess/index.jsp Also a complete guide on the US patenting process is available at: http://www.uspto.gov/patents/re sources/types/utility.jsp Notes: 1. You have 12 months from 1st Public Disclosure to file a U.S. Patent. However, you must file a U.S. application (Utility or Provisional) before any Public Disclosure, in order to preserve the right to file in most foreign countries including most EU, Canada, and Japan 2. Filing a Utility or Provisional Patent application prior to Public Disclosure gives you 12 months to file a foreign application Optimize and Protect Your Patent Portfolio

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Patent Basics: Provisional Application • Since June 8, 1995, applicants get the benefit of a provisional application in a corresponding non-provisional application filed no later than 12 months after the provisional application filing date. The Intent was to place domestic applicants on an equal footing with foreign applicants with respect to the patent term. • Benefits 1. Patentability evaluated as though filed on the earlier provisional application filing date (one year to make public disclosure…can sell or offer to sell in that period (test market)). 2. Resulting publication or patent treated as of the earlier provisional application filing date 3. Twenty-year patent term measured from the later non-provisional application filing date 4. Lower cost, simpler filing option compared to a utility filing 5. Allows the term "Patent Pending" to be applied in connection with the description of the invention for 12 months prior to non-provisional filing. Allows for stronger nonprovisional filing 6. Provides simplified filing with a lower initial investment and with 12 months to assess the invention's commercial potential before committing to the higher cost filing and prosecuting non-provisional application 7. Establishes an official United States patent application filing date for the invention 8. Begins the Paris Convention priority year 9. Enables immediate commercial promotion of the invention with greater security against having the invention stolen 10.Preserves application in confidence without publication • Notes: provisional applications cannot claim benefit of a previously filed application. The later-

filed non-provisional application must include at least one claim particularly pointing out and distinctly claiming the subject matter, which the applicant regards as the invention. The written description and any drawing(s) of the provisional application must adequately support the subject matter claimed in the later-filed non-provisional application. • For further information, see http://www.uspto.gov/patents/resources/types/provapp.jsp Optimize and Protect Your Patent Portfolio

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Patent/Patentability Search • Inventor generally does preliminary search • Is never perfect…should be staged/iterative…your patent attorney can use your initial search to perform a patent/patentability study • Should be disciplined (set up a systematic summary with standardized search terms and methodologies…standardize your analysis summary in a spreadsheet and keep careful, consistent notes) • Results in stronger, more focused claims…Can pay for itself through fewer PTO Office Actions and less attorney fees • USPTO website quick and advanced search, combined with Google Patents or the like is a good method for doing your own patent search (www.uspto.gov) Optimize and Protect Your Patent Portfolio

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Patent Basics: Resources USPTO Web Patent Database www.uspto.gov/patft/ for patent and patent application searches •

Quick search (two-term Boolean searching)

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Advanced Boolean searching

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Patent number searching

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Author searching

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Keyword searching

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Date searching

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Images are “clunky” use Google Patents or similar for PDFs

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PAIR (Public Application Information Retrieval system)

Other • ESP@CE: http://ep.espacenet.com/ (European and access to world search) • Japan Patent Office: http://www.jpo.go.jp/ • World Patent Database (WIPO) PATENT SCOPE: http://www.wipo.int/pctdb/en/ • Other/Private: Google Patents, Delphion, IP Lawyer’s • http://www.technologytransfertactics.com/ Optimize and Protect Your Patent Portfolio

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Patent Basics: Patent Fees Attorney’s Fees: Patent/Patentability Search: $300 to $1,500 (depends upon complexity) Application Preparation: $2,000 to $8,000 (depends upon complexity) USPTO: Filing Fees: $330/$165 Patent Search: $540/$270 Examination: $220/$110 Post Allowance: $1,510/$755 USPTO Total: $2,600/$1,300 http://www.uspto.gov/web/offices/ac/qs/ope/fee2009september15.htm Total (US Only, Includes Maintenance): ~$7,385 to ~$14,585 Small Entity ~$12,470 to ~$19,760 Large Entity Foreign Filings: Varies greatly (typically $50,000 to $100,000++, $70,000 typical) WIPO is inexpensive and defers major (national) costs for up to 18 additional months Large Entity

Small Entity

Patent Maintenance Fees 3.5 years $ 980 $ 490 Patent Maintenance Fees 7.5 years $ 2,480 $ 1,240 Patent Maintenance Fees 11.5 years $ 4,110 $ 2,055 Foreign Maintenance Fees Varies Varies http://www.uspto.gov/web/offices/ac/qs/ope/fee2009september15.htm#maintain As of: 3/21/2011 • http://www.uspto.gov/web/offices/ac/qs/ope/fee2009september15.htm#maintain • http://www.inventionstatistics.com/Patent_Cost.html Optimize and Protect Your Patent Portfolio

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Patent Basics: The File Wrapper • “File Wrapper” is the complete file history at the USPTO including the Original Application, all follow-up correspondence, Office Actions, Declarations by the inventor (or other experts) and attorney responses • The “File Wrapper” becomes public (discoverable by a third party) after a patent issues • File Wrappers are typically available for patents issued after ca. 2004 on line at Public PAIR (Patent Application Information Retrieval ) system: (http://www.uspto.gov/patents/process/search/public_pair/index.jsp)

• If wrapper is not available electronically, it may be purchased (http://portal.uspto.gov/external/portal/!ut/p/c4/04_SB8K8xLLM9MSSzPy8xBz9CP0os3h3cz9X EzcPIwMLvyALA08jF39LE2cjQwMLU_2CbEdFAJrMq7A!/)


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Patent Basics: The File Wrapper


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Patent Basics: Public Disclosure • IS • Any sale or offer to sell (quotation, invoice, receipt, etc.) • Distribution of product literature or spec. sheets • Publication of a technical paper, book, etc. • Oral presentation at an industry conference or trade show • Public advertisement • Discussions with a potential customer without a verbal or written Non-Disclosure Agreement (NDA) • Public use of the invention

• IS Not • Conversations with co-workers within the scope of their employment • Discussions with a potential customer under an NDA • Product samples (at no charge) may also be given to the customer for evaluation purposes only (preferably under and NDA)


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Patent Basics: Patent Marks and Patent Pending • A patent owner who makes or sells patented articles, or a person who does so for or under the patentee is required to mark the articles with the word "Patent" and the number of the patent. The penalty for failure to mark is that the patentee may not recover damages from an infringer unless the infringer was duly notified of the infringement and continued to infringe after the notice. • The marking of an article as patented when it is not in fact patented is against the law and subjects the offender to a penalty. • Some persons mark articles sold with the terms "Patent Applied For" or "Patent Pending." These phrases have no legal effect, but only give information that an application for patent has been filed in the Patent and Trademark Office. The protection afforded by a patent does not start until the actual grant of the patent. False use of these phrases or their equivalent is prohibited. • For more information, see: http://www.uspto.gov/web/offices/pac/doc/general/patpend.htm Optimize and Protect Your Patent Portfolio

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Patent Basics: WIPO and PCT World Intellectual Property Organization (WIPO) is a specialized agency of the United Nations dedicated to developing a balanced, accessible international intellectual property (IP) system. Established by the WIPO Convention in 1967 Headquartered in Geneva, Switzerland. The Patent Cooperation Treaty (PCT), international patent law treaty (1970), provides a unified procedure for filing patent applications in each of its contracting states.

A patent application filed under the PCT is called an international application, or PCT application. http://www.wipo.int/export/sites/www /pct/en/list_states.pdf Optimize and Protect Your Patent Portfolio

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Patent Basics: PCT • A patent application filed under the PCT is called an international application, or PCT application. • A single filing of an international application is made with a Receiving Office (RO) in one language. • It then results in a search performed by an International Searching Authority (ISA), accompanied by a written opinion regarding the patentability of the invention, which is the subject of the application. • It is optionally followed by a preliminary examination, performed by an International Preliminary Examining Authority (IPEA). • Finally, the relevant national or regional authorities administer matters related to the examination of application (if provided by national law) and issuance of patent. • The PCT does not provide for the grant of an "international patent", as such multinational patent does not exist, and the grant of patent is a prerogative of each national or regional authority. • Results in an ~30 month time window during which you can develop and evaluate international markets prior to committing to the expense of applying for patent protection in numerous key countries http://en.wikipedia.org/wiki/Patent_Cooperation_Treaty Optimize and Protect Your Patent Portfolio

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Patent Basics: To PCT or Not to PCT?…That is the Question. • Not getting patent protection in every country does not necessarily mean that you will not have protection…typically U.S. Markets are still very large (especially with respect to downstream products).

• PCT is great, but patenting in numerous countries can ultimately be EXTREMELY expensive • Application in each and every country of interest • Examination, Maintenance, etc. fees for each and every country

• How will you enforce? Will you use local legal? • Recommended only for “blockbuster” IP • Consider a potentially cheaper, partial alternative • US patents can be enforced for those importing into the US (Federal District Court)..may require help from Hague Convention Treaty or “Long Arm” Statutes (see: http://www.irmi.com/expert/articles/2003/warren10.aspx) • ITC is effective, quick …requires that infringer import to the U.S. • These may be effective enough as a blocking strategy Optimize and Protect Your Patent Portfolio

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Enforcement of Exclusive Right It is important that your patents be solidly enforceable and that you have the resources to enforce your patent rights. Enforceable: • Work with your IP Office/Lawyer, making sure that you are part of the process (no one knows the invention better than the inventor (you)) • Make sure that your IP Office is willing and able to enforce the IP Resources: • Work with your Tech Transfer Office (Assignee) • Patent Litigation is EXPENSIVE! Contingency is rare • License to a large entity and work enforcement requirements into licensing agreement • Purchase Patent Infringement Insurance ($$$) Optimize and Protect Your Patent Portfolio

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Patent Infringement Commission of a prohibited act with respect to a patented invention without permission (typically a license) from the patent owner. Varies by jurisdiction, but typically includes using or selling the patented invention. In many countries, use is required to be commercial, or to have a commercial purpose.

Infringement is only possible in a country where a patent is in force. For a US patent, anyone in the US is prohibited from making, using, selling or importing the patented item, while people in other countries may be free to make the patented item in their country. The scope of protection varies from country to country. Typically, a party (that is not the patent owner and without a license) which manufactures, imports, uses, sells, or offers for sale patented technology, during the term of the patent and within the country of issue, is considered to infringe the patent. In the U.S., one may also commit indirect infringement if they actively and knowingly induce another to infringe. No infringement action may be started until the patent issues, but pre-grant protection is available under 35 U.S.C. § 154(d), allowing a patent owner to obtain royalty damages for infringing activities occurring prior to issuance. The right to obtain provisional damages requires the owner to show that (1) infringing activities occurred after the publication of the patent application, (2) patented claims are substantially identical to the claims in the published application, and (3) infringer had "actual notice" of the published patent application. The test for infringement varies from country to country, but generally requires that the infringing party's product (or method, service, etc.) falls within one or more of the claims of the patent. The process employed involves "reading" a claim onto the technology of interest. If all of the claim's elements are found in the technology, the claim is said to "read on" the technology; if a single element from the claim is missing from the technology, the claim does not literally read on the technology and the technology does not infringe the patent with respect to that claim. Optimize and Protect Your Patent Portfolio

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IP and Patent Basics: Doctrine of Equivalents Legal rule in most of the world's patent systems (including the U.S.) allowing a court to hold a party liable for patent infringement even though the infringing device or process does not fall within the literal scope of a patent claim, but nevertheless is equivalent to the claimed invention. Varies by country • US: The doctrine of equivalents analysis is applied to individual claim limitations, not to the invention as a whole. The legal test, is whether the difference between the limitation in the accused device and the limitation literally recited in the patent claim is "insubstantial”

• One way of determining whether a difference is "insubstantial" or not is called the "triple identity" test. Under the triple-identity test, the difference between the limitation in the accused device and the limitation literally recited in the patent claim may be found to be "insubstantial" if the limitation in the accused device if:

1. It performs substantially the same function 2. It performs substantially in the same way 3. It yields substantially the same result as the limitation literally recited in the patent claim Optimize and Protect Your Patent Portfolio

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Litigation: Patent Infringement In response to allegations of infringement, an accused infringing party will generally assert one or more of the following: • It does not practice and was not practicing the patented invention • It was not performing any infringing act in the territory covered by the patent • The patent has expired • The patent (or the particular claim(s) alleged to be infringed) is invalid, because the invention in question does not meet patentability or includes a formal defect, rendering the patent invalid or unenforceable (request for re-examination) • It has obtained a license under the patent • The patent holder is infringing patent rights belonging to the accused infringing party, and the party may resolve the dispute in settlement or cross-licensing • The accused party practiced the invention before the patent holder filed for the patent and has proof of this trade secret Optimize and Protect Your Patent Portfolio

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Patent Litigation: US Process

Patent owner: • Investigation • legal consultation (3rd party opinion letter preferred) • Be careful with communication to the other side (to prevent Declaratory Judgment action) Potential Infringer: • Get clearance before designing competing products (opinion letter to prevent triple damages) • Legal consultation (opinion letter) is a must after receiving threat of infringement • File DJ action if appropriate seeking non-infringement/invalidity During litigation: • Summary Judgment motion can be filed before the trial Source: • Preferably get experts for infringement and damages http://www.wangpatent.com/file%20US%20lit.pdf • Be prepared to respond to discovery requests Optimize and Protect Your Patent Portfolio

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Patent Litigation: Relevant Courts and Damages • • • •

Civil Case Federal Court US District Court>US Court of Appeals>US Supreme Court Damages: •

Lost profits -- Patent holder can recover money for the sales he or she would have made, as well as interest. Royalties -- When an infringer loses a patent case, that party becomes, in essence, a licensee and may have to pay a reasonable royalty for any future sales using the technology. Court costs -- In most patent infringement cases, both parties named in the suit are responsible for their own court costs. In some cases, however, the infringer may have to pay the patent holder's court costs. Treble damages -- A court may decide to award treble damages to a patent owner, especially in cases of willful infringement. Use of FtO helps avoid this. Injunction -- an order that the patent defendant stop infringing the patent now and in the future.

•

•

• •

• Or, International Trade Commission (ITC) if there is a domestic industry (not typically for NPEs…unless) • • • •

Section 337 of the Tariff Act of 1930, 19 U.S.C. 1337 Favors the complainant, fast, technical Injunctive relief (no $ awards) after 60 days if President doesn’t stop it Appeals to US Court of Appeals for Federal Circuit (CAFC)


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Request for Re-Examination 35 U.S.C. 302 Request for reexamination: “Any person at any time may file a request for reexamination by the Office of any claim of a patent on the basis of any prior art cited under the provisions of section 301 of this title...The request must set forth the pertinency and manner of applying cited prior art to every claim for which reexamination is requested. Unless the requesting person is the owner of the patent, the Director promptly will send a copy of the request to the owner of record of the patent.” To have a patent reexamined, an interested party must submit prior art that raises a "substantial new question of patentability” (Now: RLP or “Reasonable Likelihood of Prevailing,” Post AIA). Re-Examination system founded in 1980 Two types: Inter Partes and Ex Partes • Inter Partes: Requester participates after request is submitted (more expensive, better for requester) • Ex Partes: Requester has no input after request is submitted (cheaper, better for patent holder) Source: MPEP (Manual of Patent Examining Procedure) Optimize and Protect Your Patent Portfolio

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Protecting Your IP • If you suspect infringement, work with your IP Office: DO NOT directly accuse suspected infringer, as outright or improperly worded accusations may lead to the accused seeking “Declaratory Relief,” “Injunctive Relief,” “Request for PTO Patent Re-Examination” and loss of venue • Patent litigation is protracted, expensive, unpredictable, intrusive, and exhausting, but may be necessary: • • • • • • •

Median Award (2011 basis): $4M US (range from 1995 to 2011: $1.9M to $16.1M) NPE (non practicing entities) awards average ~2X that of practicing entities Median jury award ~20X that of median bench award University NPEs have higher success rate than non university NPEs, but awards tend to be smaller Both PEs and NPEs have ~67% success rate at trial (NPEs less successful in settling than PEs) Median Cost: ~$1.5M per side (can easily exceed this)…little contingency work Median time to trial ~2.3 years with large range (“Rocket Dockets” much faster)

• If you have to litigate, use “Rocket Docket” (with jury) or ITC (if domestic industry can be demonstrated) Sources: PWC 2012 Patent Litigation Study, Banner & Witcoff, Ltd., “Building & Enforcing IP Value”, E. Horowitz, A. Pacelli, “ITC: Forum of Choice For Patent Litigation,” New York Law Journal 10/12/10. Optimize and Protect Your Patent Portfolio

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Protecting Your IP: Patent Litigation…Traditional • Patent Infringement is not a criminal act • Infringement hearings are in civil court, typically federal district court • Typically a jury trial • Complainant chooses venue (see “Rocket Docket”) as long as significant tie to case

• This process can be slow • As a result, if complainant is successful, judge may issue a cease and desist (C and D) order for injunctive relief • It is getting to be harder and more expensive to successfully sue for infringement (KSR Obviousness, etc.) Optimize and Protect Your Patent Portfolio

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Patent Litigation…The “Rocket Docket” • A court noted for its speedy disposition of cases, often by maintaining strict adherence to the law as it pertains to filing deadlines, etc. • Tend to favor the plaintiff • Originally applied to the United States District Court for the Eastern District of Virginia in the 1970s • As of September 2011, the Eastern District of Virginia had the shortest average time from filing to disposition for civil cases that went to trial (at 12.1 months) Other IP “Rocket Dockets” • United States District Court for the Eastern District of Texas • United States District Court for the Northern District of California • United States District Court for the Southern District of California • United States District Court for the Northern District of Georgia • United States District Court for the Western District of Wisconsin Source: http://en.wikipedia.org/wiki/Rocket_docket Optimize and Protect Your Patent Portfolio

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Protecting Your IP: Patent Litigation… ITC • ITC = U.S. International Trade Commission • Pursuant to Section 337 of the Tariff Act of 1930 (USC 19 Chapter 4, Subtitle II, Part II, section 1337) • ITC is not a federal court • No jury • Staff acts as a third party on behalf of the public interest • Available to owners of US patents, provided that the 'domestic industry' requirement is met

• Increasingly popular method of patent infringement litigation • Many complex, high impact cases • ITC has broad authority to issue broad injunctive relief in the form of exclusion orders

• Limited exclusion orders directed to infringing goods • General exclusion orders directed to infringing goods regardless of source • The ITC 337 route is relatively fast (~12-18 months) • Preferred by complainants (burden on respondent once case is taken on by ITC) Optimize and Protect Your Patent Portfolio

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Careful Patenting • Make sure that your specification is enabling to a POSITA • • • • • •

AIA makes this less necessary, but it is still a good idea Be accurate, detailed and succinct Define all key terms noted in claims Provide all necessary information for a POSITA to practice Include “best mode” Remember: Patent examiner is not necessarily a POSITA

• Be ready to defend everything in specification/patent (keep good experimental notes and do not destroy them for 20+ years) • Claim ranges should be supported by the data in the specification…do not overstate claims • • •

Remember the “doctrine of equivalents” Overstating may lead to issues with the USPTO as well as prior art issues Make sure that dependent claims are narrower than independent parent claims

• Make sure to include patents/literature from other countries in your patent/patentability search (esp. Japan) and update as needed • Make sure to get patent rights assigned correctly •

Include all inventors, exclude non-inventors (get declarations)

• Consider “freedom to operate” or “product clearance” study prior to practicing your invention • • •

Can build value Can reduce damages (potential of treble damages without) Identifies any licenses/rights needed to practice


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Careful Patenting: Make Sure that Your Patent is Defensible Be prepared to be deposed on your patent • Experimental details • Definition of units and terms • Supporting experimentation (notebook, etc.) • How the invention was used in practice • Definition of POSITA with respect to your patent • This can be very hard to do after several years • The value of the patent may be strongly dependent upon its defensibility • Be consistent…if you are deposed, it is likely you will later have to testify at trial…inconsistency leads to lack of credibility…if you have to correct prior testimony, have a good reason to do so. • Remember that anything you say can, and will likely be used against you Optimize and Protect Your Patent Portfolio

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Careful Patenting: Make Sure that Your Claims Say What you Mean them to

From: US 6,243,254 11. A laminated ceramic capacitor having: a plurality of dielectric layers containing the dielectric ceramic according to claim 1; a plurality of inner dielectric layers comprising Ni or a Ni alloy and existing among a plurality of said dielectric layers; and external electrodes in electrical continuity to a plurality of said inner dielectric layers and being on the surface of said ceramic capacitor. Optimize and Protect Your Patent Portfolio

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From: US 6,243,254

Careful Patenting: Make Sure that Dependent Claims Specify a Further Limitation in Comparison to the Parent Claim


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Careful Patenting: Use definitions that are standard, consistent and intended Data Types: SUBJECT

PRIMARY

SECONDARY

TERTIARY

Art and Architecture

Painting by Manet

Article critiquing art piece

ArtStor database

Chemistry/Life Sciences

Einstein's diary

Monograph on Einstein's life

Dictionary on Theory of Relativity

Engineering/Physical Sciences

Patent

NTIS database

Manual on using invention

Performing Arts

Movie filmed in 1942

Biography of the director

Guide to the movie

Example: US 5,581,279 C1, L 46-48 (State of the Art section): The clock chips are therefore programmable in the narrow sense that their operating frequency can be selected. (The word "programmable" as it appears herein is used in the foregoing sense unless other indicated.) Claim 5 of Patent: An arrangement comprising: a monolithic integrated circuit having: programmable clock circuit means for receiving a reference clock signal and devisor data and for dividing said reference clock signal by said devisor data to produce a video memory clock signal and a video dot clock signal; a video controller coupled to said programmable clock circuit for providing said programmable clock circuit means with said devisor data and for receiving the video memory clock signal and the video dot clock signal and for producing a video information data stream; randomaccess memory means, coupled to said video controller, for receiving the video information data stream and producing a video display information data stream; digital-to-analog converter means, coupled to said random-access memory means, for receiving the video information data stream and converting the video information data stream to analog video signals; and programmable memory means coupled to the monolithic integrated circuit for storing said devisor data to be received by the programmable clock circuit means. Optimize and Protect Your Patent Portfolio

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Building Value: Continuation in Part (CiP) • Extends the claims and inventive concepts of original patent • Must have at least one common inventor, otherwise can change inventors • Similar process and costs to filing the original utility application • Can add new matter (new embodiments) • 20 year period marks from original filing date (no extra time, but extra exclusive right (value)) • CiP must be filed before the patenting or abandonment of or termination of the first application • CiP application must contain a specific reference to the earlier filed application •

For more information: http://www.uspto.gov/web/offices/pac/mpep/documents/0200_201_08.htm


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Building Value: Freedom to Operate • In certain cases, an FtO opinion may increase value (discuss with your Tech Transfer folks) • A freedom-to-operate (FtO) search is performed to identify patents or applications which may cover a proposed product or process and are still in force and, from which you may need a license in order to practice your invention. Such a search will be country or region specific and require analysis of claims and legal status. Synonym for infringement search or product clearance study. Should be performed by a competent IP lawyer who gives a letter of opinion. • Remember that a patent does not give you the right to practice your invention. It gives you the right to keep others from practicing your invention. Optimize and Protect Your Patent Portfolio

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Building Value: Domestic Industry • In some infringement cases, a non practicing entity (NPE) can prove a “domestic industry,” thus enabling use of the ITC to enforce a patent. • Made easier for NPEs by InterDigital Communications, LLC v. International Trade Commission, 2010-1093 (Fed. Cir. Jan. 10, 2013) • Work with Tech Transfer to determine strategy regarding how you can achieve domestic industry per the requirements of the ITC considering the recent precedent set by InterDigital Communications, LLC v. International Trade Commission, 2010-1093 (Fed. Cir. Jan. 10, 2013), etc. Optimize and Protect Your Patent Portfolio

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Building a Strong Portfolio Work with your Tech Transfer folks to be creative with licensing • Some companies want to buy IP rather than license • Small companies and startups usually can’t afford large, but need IP • Trading IP rights may sometimes be beneficial • Many licensees will want/need consulting services •

May lead to additional opportunities as well (e.g., SME, Grant Funding)

• Build Value over Time (CiP, FtO, Other) • •

Consider entrepreneurial route (domestic industry) Develop your ideas to demonstrate valuable applications >$

• Make sure that each patent is strong • • • • •

Well researched for prior art and patentability Address obviousness up front Enabling, Consistent, Concise Defensible, Not too far reaching Valuable

• Learn by doing • Work with your Tech Transfer folks to determine how best to play to your strengths • Exploit basic platforms for numerous applications • e.g., surface functionalization of nanoparticles for numerous applications (therapeutics, electronic materials, cosmetics, etc.)

• • •

Multiple patents to build a long lasting, valuable portfolio of licensing opportunities Team with colleagues for cross functionality Team with companies to understand what they need (problem>solution)


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Building a Strong Portfolio: Licensing License: Gives permission to an entity (licensee) to use the invention granted by your patent under the conditions stated in the license agreement. It does not convey ownership of the IP. Licensing can be a major source of revenue for Universities • AUTM: Members total of $2.3B 2009 licensing revenue

May or may not be exclusive depending upon the terms and conditions of the license • May be limited to use in a specific geography or field of use • Exclusive license typically requires greater fees/commitment from licensee Take Back Provision: Usually requires use of the invention to sell products or services at a certain rate or certain other licensing requirements or all or some of the rights conveyed are forfeited Payment Terms: May include an upfront fee as well as a royalty fee that is based upon the amount of benefit to the licensee (e.g., $200K up front fee and 2% of sales (Median of 1.8% per AUTM)) May or may not contain other warranties May be part of a larger agreement (consulting services, business transfer, technology transfer, license sharing, cross license, joint venture, etc.) Some Resources • USPTO: www.USPTO.gov • Patent Resources Group: http://www.patentresources.com/Courses.aspx?link=Drafting+Patent+License+Agreements • Technology Transfer Tactics: http://www.technologytransfertactics.com/ • http://www.fenwick.com/docstore/publications/ip/patent_licensing.pdf Optimize and Protect Your Patent Portfolio

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Building a Strong Portfolio: More Information

http://ipbusinesssummit.com/?utm_source=Invite+to+IP+Business+Summit&utm_campaign=Invite+IP+Summit&utm_medium=email


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Patent Trends: Licensing/Trading/Enforcing Patent Rights • • • •

In general much more licensing and cross licensing/trading Becoming a very sophisticated industry Evolution largely driven by IT and BIO/Pharma Patent litigation via “Rocket Docket” was declining (2008*) but has since revived • Jury trials highly preferred over bench trials for plaintiff • ITC for patent litigation continues to gain popularity • Some data: • $5.5 trillion. Value of U.S. intellectual property as estimated by IBM • $500 billion. Annual patent licensing revenues estimated for the U.S. for the year 2005. “In 1990, it is estimated that in the United States alone $15 billion in revenue was derived from patent licensing. In 1998, that shot up 700 percent to $100 billion • $1.17B US: Largest IP Jury Award (Carnegie Melon vs. Marvell Technology) Sources: •

http://www.inventionstatistics.com/Licensing_Royalty_Revenues.html

•

http://www.techdirt.com/articles/20121226/17582221493/patent-trolling-carnegie-mellon-wins-what-couldbe-largest-patent-verdict-ever-12-billion.shtml

•

*http://www.hugheshubbard.com/PublicationDocuments/Volkwagon.pdf


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Patent Trends: 2010 AUTM Top 20 University Technology Licensing Programs (2010 Revenue Basis) 1. Northwestern University, $180 million 2. New York University, $178 million 3. Columbia University, $147 million 4. University of California System, $104 million 5. Wake Forest University, $86 million 6. University of Minnesota, $84 million 7. Massachusetts Institute of Technology, $69 million 8. University of Washington/Washington Research Foundation, $69 million 9. Stanford University, $65 million 10. University of Wisconsin-Madison/Wisconsin Alumni Research Foundation, $54 million 11. California Institute Of Technology, $52 million 12. University of Rochester, $42 million 13. University of Massachusetts, $40 million 14. University of Michigan, $40 million 15. University of Texas System, $38 million 16. University of Utah, $38 million 17. University of Florida, $29 million 18. University of Iowa Research Foundation, $27 million 19. Duke University, $26 million 20. University of South Florida, $17 million Read more: http://medcitynews.com/2011/12/top-20-u-s-technology-transfer-programs-by-2010-license-income/#ixzz2SMN0Bb85 Optimize and Protect Your Patent Portfolio

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Patent Trends: The America Invents Act (AIA) • • • •

112th Congress Sponsors: Smith and Leahy Signed into law: 9/16/11 A number of significant changes • To: First to file after 3/16/13, From: first to invent (US only since 1996) • Subject matter limitations • Lack of best mode no longer negatives a patent • Joinder limitations • Marking • Advice of counsel cases codified • Prior use defense expanded • Reexamination • New examination procedures • Post-grant, Supplemental review, 3rd party submissions • Other changes to Patent Office procedure and organization


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Patent Trends: KSR and its impact upon obviousness KSR International Co. v. Teleflex, Inc., 550 U.S. 398 (2007): • •

• •

•

•

US Supreme Court decision concerning the issue of obviousness as applied to patent claims Teleflex sued KSR, claiming that one of KSR's products infringed Teleflex's patent on connecting an adjustable vehicle control pedal to an electronic throttle control. KSR argued that the combination of the two elements was obvious, and the claim was therefore not patentable. The district court ruled in favor of KSR, but the Court of Appeals for the Federal Circuit reversed in January 2005. Supreme Court (4/30/07) unanimously reversed the Federal Circuit, holding that the disputed claim 4 of the patent was obvious under the requirements of 35 U.S.C. §103 and that in "rejecting the District Court’s rulings, the Court of Appeals analyzed the issue in a narrow, rigid manner inconsistent with §103 and our precedents," referring to the Fed. Circuit's application of the "teaching-suggestion-motivation" (TSM) test. Justice Kennedy's opinion stated, "A person of ordinary skill is also a person of ordinary creativity, not an automaton." He noted that his description of a person having ordinary skill in the art (PHOSITA) does not conflict with other Fed. Circuit cases describing a PHOSITA as having "common sense" and being able to find motivation "implicitly in the prior art." Kennedy emphasized that his opinion was directed at correcting the "errors of law made by the Court of Appeals in this case" and does not necessarily overturn other Federal Circuit precedent. While not explicitly denouncing the TSM test, the opinion stated that determination of obvious subject matter "must not be confined within a test or formulation too constrained to serve its purpose." Chief Judge Paul Michel of the Fed. Circuit was quoted saying that by his interpretation, the TSM test remains part of the calculation of obviousness, "but it gives us forceful instruction on the manner in which the test is to be applied.” Source: http://en.wikipedia.org/wiki/KSR_v._Teleflex Optimize and Protect Your Patent Portfolio

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Patent Trends: International Trade Commission as an Effective Weapon The ITC has become increasingly popular for patent infringement litigation • • • • •

• • •

Actions brought pursuant to Section 337 of the Tariff Act of 1930 (USC 19 Chapter 4, Subtitle II, Part II, section 1337) Available to owners of US patents if 'domestic industry' requirement is met # of 337 complaints filed at the ITC over the last 40 years have increased considerably Cases are complex and high profile, with many of the cases involving numerous parties and multiple patents The ITC has authority to issue broad injunctive relief in the form of exclusion orders • Issue limited exclusion orders directed to infringing goods of named parties • Issue general exclusion orders directed to infringing goods regardless of source Relatively fast (~18 months) Once the ITC decides to review a case, the burden is largely placed on the respondent Relatively easy for the complainant to prove a domestic industry

http://www.usitc.gov/press_room/documents/featured_news/337facts.pdf Optimize and Protect Your Patent Portfolio

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To Summarize • Patents are important to success of your programs • License revenue ($), credentials

• Work with your IP and Tech Transfer Offices • Learn to patent, it is a process, be patient and persistent • Submit Idea Disclosures • Do so early: “first to file” (AIA)

• Patent carefully • • • •

Proper definitions Don’t claim too much (prior art) Work with the lawyer to write as if you will be deposed Keep excellent careful records over the long term

• Build value

• Additional patents (folio), CiP, FtO, Team with Colleagues, Companies • Consult • Design, demonstrate • Entrepreneur/Domestic Industry

• Work with IP Office if infringement is suspected • If litigation is necessary, use ITC or “Rocket Docket” • Prepare to be deposed

• Learn about licensing/trading IP (Tech Transfer) Optimize and Protect Your Patent Portfolio

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THANK YOU!!! …Panel Discussion…


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