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Knobbe attorneys recently presented on "What Businesses & Engineers Need to Know About Recent Changes in U.S. Patent Law" at an event hosted by the Sino-American Biomedical and Pharmaceuticals Professionals Association (SABPA), the American Society of Mechanical Engineers (ASME) and Knobbe Martens.
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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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 3
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 4
1. Protecting Your Rights
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 5
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 6
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 7
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 8
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 9
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 10
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 11
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 12
AIA makes it easier to patent related inventions that are:
1. commonly owned
or
2. made under a joint research agreement
AIA Encourages Collaboration
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 13
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 14
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 15
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 16
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 17
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 18
2. Prosecution Strategies
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 19
“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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 20
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 21
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 22
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 23
Virtual Marking
• Example:
Patent
http://www.symantec.com/about/profile/policies/virtual_pat
ent_marking.jsp
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 24
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 25
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 26
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 27
3. Defending Yourself Against Third Party Patents
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 28
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 29
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 30
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 31
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 $180 fee, you can submit up to 10 prior art references (patents, patent publications or other printed publications)
• Must be accompanied by concise description of asserted relevance of each submitted document
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 32
Use Caution When Challenging A Publication
• Can’t challenge if application has been allowed
• Can’t challenge if it’s more than 6 months after publication and any claim has already been rejected
• Risk = patent examiner considers submitted prior art and allows broad claims anyway
• Discuss with your patent attorney the pros and cons of holding back “best” prior art for potential post-grant challenges
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 33
How Do You Challenge An Issued Patent?
Before AIA
• Ex Parte Reexam
• Inter Partes Reexam
• Interferences
After AIA
• Ex Parte Reexam
• Post-Grant Review (PGR)
• Inter Partes Review (IPR)
• Derivation Proceedings
• Interferences (Legacy)
• Transitional Program for
Covered Business Method
(CBM) Patents
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 34
Summary of Potential Third-Party Involvement
Filing Issue 9 mo.
Pre-issuance
Submission
($)
Inter partes review (IPR)
($$$)
Post-grant review (PGR)
($$$)
Derivation action/proceeding
($$$)
Ex parte reexamination
($$)
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 35
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 36
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 37
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 38
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
© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 39
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?