Best Practices for Challenging Bad Patent Claims by Non-Practicing Entities - Presenation: Dana Rao, Adobe Systems, Inc. - IP Law Summit

D R | Vi P id t I t ll t l P t & Liti tiPatent Trolls in 2014Dana Rao | Vice-President, Intellectual Property & Litigation

© 2014 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.

Who are we?

© 2014 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential. 2

What are they?

A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or

A patent troll, also called a patent assertion entity (PAE), is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question, thus engaging in economic rent-seeking.supply services based upon the patents in question, thus engaging in economic rent-seeking.

P t t A ti E titi S i l P t t Pl i tiffsPatent Aggregation Entities sSerial Patent Plaintiffs


It’s growing

NPEs filed 58.7% of lawsuits in 2012, up from 24.6% in 2007

One study estimated $29B impact to economy – beyond techOne study estimated $29B impact to economy beyond tech

For Adobe, represents 80% of our litigation budgetGranted over 30 indemnification requests since 2012


Over 55% of NPE litigation targets those making less than $10M in revenue



What is fueling the industry?

Easy MoneyCapital Investment

Vague patentsRise of the Patent MarketplaceRise of the Patent Marketplace


What to do about patent trolls

FightManage your budget

AIA Tools Legislative Reform

Patent QualityPatent Quality


Manage your budget

Pre-negotiated price for six months

Alternate Fee Arrangements for Patent Litigation

“All you can eat” for that time period

No true up but can adjust for significantly changed circumstances

Fix price for next six months to ensure both sides are getting benefit of bargainFix price for next six months to ensure both sides are getting benefit of bargain

Requires trust relationship

Side benefit: gets in house attorneys out of low value invoice review

Consolidate Law Firms

Allows you to take the cases to trial as

Use JDG/shared counsel whenever possible


Allows you to take the cases to trial as necessary

AIA Tools

Inter Partes Review500 petitions in FY13 (early FY14 indicates could double

Covered Business Method Review• Can be filed any time in the life of the

patent (outside of PGR)

Must be sued or charged with infringementCan be filed up to a year after a complaint is filed (outside PGR window)

• Must be sued or charged with infringement

• Limited to business method patents, but interpreted broadly

• Can use any sort of prior art

Can use printed publication or patent prior art

If granted, will typically get you a

• Only estopped for art that was actually raised.

• Test for eligibility appears to be conflated with 101

stay

You are estopped from raising any printed publication or patent prior art afterwards (raised or could have

• 48 petitions in FY13

Post Grant Review• Can only be filed in the 9 months after a

post AIA patent is grantedafterwards (raised or could have been raised)

$23K filing fees; multiple petitions may be required, typical cost is

post AIA patent is granted

• Any ground of prior art

• You are estopped for any art that was raised or could have been raised

© 2014 Adobe Systems Incorporated. All Rights Reserved. Adobe Confidential.

may be required, typical cost is $600K-$800K

10

Legislative reform

Provision Description BillProvision Description BillFee Shifting Raises current fee shifting

standard to require court to shift fees unless substantially justified

House Act; Cornyn/Hatch Senate

y jJoinder/Bonding Attach fees to an interested party Hatch; House and Cornyn have

a joinder provisionCustomer Stay Enables manufacturers to get Leahy, HouseCustomer Stay Enables manufacturers to get

stays on behalf of customersLeahy, House

Heightened Pleading

Requires additional information in complaint

Cornyn, Houseg

Discovery Cost Shifting

Requires either party to pay for discovery requested beyond core documents

Cornyn, House

Discovery Stay Stays all discovery other than Markman related until Markman

Cornyn, House

CBM Expansion Expands CBM program to include Schumer


software

Fee Shifting

The court shall award, to a prevailing party, reasonable fees unless the court finds that the position and conduct of the nonprevailing party was reasonable justified in law and fact or that special circumstances (such as severe economic hardship to a named inventor) make an award unjust


Software Patent Quality

101 is the wrong focus101 is the wrong focus

Why are claims not tied to the specification?

.Whoever discovers that a certain useful result will be produced, in any art, . p , y ,machine, manufacture, or composition of matter, by the use of certain means, is entitled to a patent for it; provided he specifies the means he uses in a manner so full and exact, that any one skilled in the science to which it appertains can by using the means he specifies without any addition to orappertains, can, by using the means he specifies, without any addition to, or subtraction from them, produce precisely the result he describes. And if this cannot be done by the means he describes, the patent is void. And if it can be done, then the patent confers on him the exclusive right to use the means he specifies to produce the result or effect he describes, and nothing more.And it makes no difference, in this respect, whether the effect is produced by chemical agency or combination; or by the application of discoveries or principles in natural philosophy known or unknown before his invention; or byprinciples in natural philosophy known or unknown before his invention; or by machinery acting altogether upon mechanical principles. In either case he must describe the manner and process as above mentioned, and the end it accomplishes. And any one may lawfully accomplish the same end without i f i i th t t if h b t ti ll diff t f th


infringing the patent, if he uses means substantially different from those describedwww.patentprogress.com

Software Patent Quality part II

Increase 112 analysis at examination

Require declarations of support in the specification

Declarations throughout prosecution

Technical dictionaries

Allow claims to be interpreted in light of specificationAllow claims to be interpreted in light of specification

Crowdsource prior art

Novelty/Non-obviousness is the proper tooly p p

Does everyone really need all those patents?


In conclusion...

Tactics:

Manage Budget; Fight; Use the AIA; Litigation Reform; Improve Patent QualityQuality

!Join the Fight!
