AIA and Patent Due Diligence Understanding the AIA Impact and Best - - PowerPoint PPT Presentation

AIA and Patent Due Diligence

Understanding the AIA Impact and Best Practices for the Due Diligence Process

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Presenting a live 90-minute webinar with interactive Q&A

Thomas L. Irving, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C. Lauren L. Stevens, Global Patent Group, San Francisco Donna M. Meuth, Associate General Counsel, Eisai, Andover, Mass.

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AIA and Due Diligence

May 29, 2013 for Strafford

Donna Meuth Lauren Stevens, Ph.D. Tom Irving

GLOBAL PATENT GROUP, LLC.

Disclaimer

• These materials are public information and have been prepared solely for

educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials should not be taken as individualized legal advice and do not reflect the views of FINNEGAN, EISAI, or GLOBAL PATENT GROUP LLC. It is understood that each case is fact-specific, and that the appropriate solution in any case will

• vary. Therefore, these materials may or may not be relevant to any

particular situation. Thus, FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC

• r the panelists cannot be bound either philosophically or as

representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC or the panelists. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

6

IP Due Diligence Post-AIA

• Dangers in doing an inadequate investigation

– Increases in shareholder and antitrust lawsuits – “Buying” an IP lawsuit

• Need to evaluate potential risk / reward of existing claims, threats or

suits

– Was the right law applied? – If an application is filed in the name of the applicant, was it perfected? – If find a problem, is there any way out without scrapping the deal?

• Need to analyze possibilities for future claims

– Failure to recognize that transaction may impose IP

• bligations on suitor
• Examples: to pay royalties / to indemnify / to provide grant backs /

to disclose / to keep secret

7

Biggest Impact of AIA on IP Due Diligence?

• May be the practical impact

– May need more time (and expense) but there is

• ften A LOT of time pressure in an IP due diligence

– May need to educate clients on variety of additional considerations in light of AIA – Aim for clear understanding of what will and will not be part of the due diligence investigation

8

Three Basic Categories of IP Due Diligence

• 1. Ownership/Transferability

– Clear title to that IP – Transferability or assignability of in-licensed technology

• 2. Freedom to operate (“FTO”)
• Freedom to use the target company’s technology without

infringing the IP rights of third parties

• 3. Validity/enforceability

– Determination of the validity and enforceability of the target’s IP

9

Pre-AIA Diligence

• Inventorship correct?
• Any inventorship disputes?
• Assignments executed and recorded?
• Any liens?
• Any transfers of ownership?
• Any government funding?
• Small entity?

10

Post-AIA Diligence

• ALL of those issues

AND

• New oath / declaration
• ADS-related issues
• Inventor vs. Applicant
• New formal requirements

11

Overview of Final Rules

12

Inventor’s Oath / Declaration

9/16/2012 Old Law

• Pending US apps
• US 371 based on PCT with

PCT filing date prior to 9/16

AIA

• New US apps (including cons/divs)
• US 371 based on PCT with

PCT filing date after 9/16

13

Quick Reference

• U.S. Application filed up to September 15, 2012 (current rules)
• U.S. National Stage Application based on PCT application with

a PCT filing date up to September 15, 2012 (current rules)

• U.S. Application on/after September 16, 2012 (new rules)
• U.S. National Stage Application based on PCT application with

a PCT filing date of on/after September 16, 2012 (new rules)

• U.S. Continuation/Divisional application filed on/after

September 16, 2012 (new rules)

14

Was Proper Inventor’s Oath Used? AIA SEC. 4

(“shall apply to any patent application that is filed on or after [Sept. 16, 2012]) Compare old §115: The applicant shall make oath that he believes himself to be the

• riginal and first inventor of the process, machine, manufacture, or composition of

matter, or improvement thereof, for which he solicits a patent; and shall state of what country he is a citizen.

15

Execution of the Declaration

• Can use “legal” name
• Can be signed by hand or can use electronic

signature if inventor applies himself

• Date of execution is not relevant

– PTO will not review

• No requirement to name each inventor if all

named in ADS – can sign different papers

16

Execution of Oath / Declaration

• Did the inventors review the application?

– No longer required to state that inventor has reviewed and understands contents of application but rules still require that inventor review and understand application before execution

• Were changes made to the application after

execution?

17

Was The Oath / Declaration Timely Filed?

• May be filed “late” if ADS is filed within the Missing

Parts period indicating the name, residence and mailing address of each inventor and late surcharge is paid

• Deadline for submitting an executed Inventor’s

Oath/Declaration (or Substitute Statement) is “no later than the date on which the issue fee for the patent is paid”

• If filed with fees, surcharge fee for late filing of
• ath/dec, but no executed oath/dec then the PTO

will not mail a Notice to File Missing Parts

18

Changing Inventorship

• Provisional

– A request signed by a party set forth in §1.33(b) identifying inventors by legal names and fee

• Non-provisional

– An ADS in accordance with §1.76 identifying inventors by legal name, fee, oath/declaration – No longer required to aver lack of deceptive intent or explain correction

• Patent/Reissue

– Similar procedures as to old rules

19

Changing Inventor Information

• Corrections to the name of an inventor or

changes to the order of the inventors can be effected via:

– ADS – Fee – No longer need petition under §1.182

20

Inventorship Under the AIA

• AIA did not amend 35 USC § 116:

– When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. – Inventors may apply for a patent jointly even though

• (1) they did not physically work together or at the same time,
• (2) each did not make the same type or amount of contribution, or
• (3) each did not make a contribution to the subject matter of every

claim of the patent.

21

Combined Assignment/Declaration

• Must include required information/statements
• Assignment recordation transmittal must include

“conspicuous indication of an intent to utilize the assignment as required oath or declaration”

– PTO will scan assignment into IFW before forwarding to recordation branch – Assignment cannot be recorded until USSN is provided – If filed in application, the Assignment/Declaration will not be recorded

22

Inconsistencies?

• Most recent submission of ADS or
• ath/declaration will govern except…

–Most recent ADS will govern priority claim(s) –Inventorship changes must comply with

§1.48

–If oath/declaration and ADS filed together, ADS will govern

23

Formal Documents in an AIA World

• Was the appropriate ADS submitted at the

time of filing?

• Was it signed?
• Did it include correct priority information?
• Was an Applicant named? Or was the

application filed in the name of the inventors?

24

ADS

• Option to name inventors (by “legal” name) and

provide inventor mailing address

• Option to name “Applicant”

– Assignee, person to whom inventors are obligated to assign, other person with sufficient proprietary interest

– Can correct Applicant via new ADS

• To request change of applicant, file new ADS
• Consider carefully whether to name “Applicant”

25

Filing By Other Than Inventor (“Assignee Filing”) AIA SEC. 4

(“shall apply to any patent application that is filed on or after [Sept. 16, 2012])

§118. Filing by other than inventor.

Whenever an inventor refuses to execute an application for patent, or cannot be found or reached after diligent effort, a person to whom the inventor has assigned or agreed in writing to assign the invention or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is necessary to preserve the rights

• f the parties or to prevent irreparable damage; and the

Director may grant a patent to such inventor upon such notice to him as the Director deems sufficient, and on compliance with such regulations as he prescribes.

OLD NEW

§118. Filing by other than inventor.

A person to whom the inventor has assigned or is under an

• bligation to assign the invention may make an application

for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient.

Still need to name inventor and provide §115 inventor documentation.

26

What Does This Mean Right Now?

• Any application for patent filed after the effective date (Sept.

16, 2012) is subject to the new provisions of §115 and §118.

• “effective filing date” is not relevant to these transition

provisions, just the actual filing date.

27

AIA Amendments to 35 USC 120

• Continuing applications filed after March 16, 2013 based on

applications filed before March 16 will be under the “old” version of 35 USC § 120

28

Filing in the Name of the Applicant?

• USPTO is interpreting the "filed by" language in 35 USC 120 as simply

requiring at least one common inventor

• PTO suggestion:

– (1) file the continuation application naming only the inventors – (2) subsequently, file a new ADS naming the assignee as the Applicant, with a 3.73 certification and Power of Attorney from the assignee

• However, the USPTO will recognize priority claims in continuing

applications regardless of who is named as the Applicant as long as the requirements of 37 CFR 1.78 are satisfied: – In order for an application to claim the benefit of a prior-filed copending nonprovisional application or international application designating the United States of America, each prior-filed application must name as an inventor at least one inventor named in the later- filed application and disclose the named inventor's invention claimed in at least one claim of the later-filed application in the manner provided by the first paragraph of 35 U.S.C. 112.

29

Naming the Applicant?

• It is the nationality or residence of the applicants of a

PCT application that determine which Receiving Offices are competent for filing the PCT

• As of September 16, if an assignment is in place, and

the company is named as the applicant for all countries (and inventors are “inventor only”), then the RO must be selected based on the nationality/residence of the company only – inventor nationality/residents are irrelevant

30

Filing in the Name of the Applicant?

• Was the “Applicant” perfected?

– If ADS names Applicant, then Applicant must perfect rights to act before payment of issue fee

• Assignee must provide “documentary

evidence”

• Record the assignment

31

The “Applicant” (cont’d)

• If application is being prosecuted by “Applicant,”

then Applicant should execute the power of attorney

• No requirement to satisfy § 3.71 or § 3.73 for

Applicant who is initially named in ADS

• PTO will accept the signature of a practitioner of

record on a §3.73(c) statement on behalf of the assignee without requiring further evidence of the practitioner’s authority to act on behalf of the assignee

32

New Formalities: Statement for Transition Applications

• If a nonprovisional application filed after March 16 claims

priority to a foreign, U.S. or PCT application filed before March 16 and contains or contained at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of

– four months from the actual filing date – four months from the date of entry into the national stage – sixteen months from the filing date of the prior-filed application – the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application

33

Examination Guidelines

• “If a disagreement between the applicant and an

examiner cannot be resolved informally and results in a rejection that would otherwise be inapplicable, the applicant may respond to the merits of the rejection with an explanation of why the Office‘s treatment of the application as a pre-AIA application

• r an AIA application is improper.”
• Appeal: If cannot be resolved, applicant would have

to appeal

– See pp. 11041 of Exam Guidelines (2/14/13)

34

New Formalities: Certified Copy of Foreign Priority Document

• Certified copy of any foreign priority application must be filed within the

later of:

– 4 months from the actual filing date; or – 16 months from the filing date of the prior foreign application

• Certified copy is needed prior to publication of application since U.S.

patents and U.S. patent application publications have a prior art effect under the as of their earliest effective filing date, which might be the foreign priority date.

• Delayed submission of certified copy of foreign priority document must

include petition showing good and sufficient cause for delay and petition fee

35

Ways to Satisfy Certified Copy Requirement

• Applicant files certified copy of foreign priority document with

USPTO; or

• USPTO obtains certified copy of foreign priority document

from foreign intellectual property office participating in priority document exchange agreement program (participating foreign office) upon request from applicant; or

• Applicant files interim copy of foreign priority document and

subsequently files certified copy

36

Note of Caution: Preliminary Amendments

• For applications filed on or after September 21,

2004:

– Preliminary amendment that is present on the filing date

• f the application is part of the original disclosure of the

application

• For applications filed before September 21, 2004:

– Preliminary amendment that is present on the filing date

• f the application is part of the original disclosure of the

application if the preliminary amendment was referred to in the first executed oath or declaration under 37 CFR 1.63 filed in the application.

• See MPEP § 602 and § 608.04(b)

37

USPTO Guidelines re: Preliminary Amendments

• PTO makes distinction between claims added in a

preliminary amendment filed on the same day as an application and claims presented at a later date

– [A]n amendment (other than a preliminary amendment filed on the same day as such application) seeking to add a claim to a claimed invention that is directed to new matter in an application filed on or after March 16, 2013, that, as originally filed, discloses and claims only subject matter also disclosed in a previously filed pre-AIA application to which the application filed on or after March 16, 2013, is entitled to priority or benefit under 35 U.S.C. 119, 120, 121, or 365, would not change the application from a pre-AIA application into an AIA application.

38

Thank You!

Lauren Stevens, Ph.D. Global Patent Group, LLC Tel: (650) 387-3813 lstevens@globalpatentgroup.com

GLOBAL PATENT GROUP, LLC.

39

AIA and Due Diligence

May 29, 2013 for Strafford

Donna Meuth Lauren Stevens, Ph.D. Tom Irving

GLOBAL PATENT GROUP, LLC.

Disclaimer

• These materials are public information and have been prepared solely for

educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials should not be taken as individualized legal advice and do not reflect the views of FINNEGAN, EISAI, or GLOBAL PATENT GROUP LLC. It is understood that each case is fact-specific, and that the appropriate solution in any case will

• vary. Therefore, these materials may or may not be relevant to any

particular situation. Thus, FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC

• r the panelists cannot be bound either philosophically or as

representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC or the panelists. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

41

Three Basic Categories of IP Due Diligence

• 1. Ownership/Transferability

– Clear title to that IP – Transferability or assignability of in-licensed technology

• 2. Freedom to operate (“FTO”)
• Freedom to use the target company’s technology without

infringing the IP rights of third parties

• 3. Validity/enforceability

– Determination of the validity and enforceability of the target’s IP

42

Overview of Types of FTO Searches

• Litigation search (of target and its IP)
• FTO search relating to products/services to be

acquired/licensed and future products/services

• Validity of the key IP assets to be acquired/licensed
• Maintenance fees
• Ownership: obtain assignments at the PTO, considering

possible inventors and their obligations (present and past)

43

Searches: General Considerations

• Consider both in-house search resources and outside searchers
• Technology specific searchers or preferred searchers having multi-

technical capability?

• Contact preferred outside searchers (especially patent searchers)

in advance to make sure that deadlines can be met

– Consider having 2-3 searchers available: reduce possibility of scheduling conflicts or workload causing delay – Which is more important: budget or time? – Establish initial search budget parameters – Confirm a time frame and have searcher commit to it – Rolling basis for results

• Reduces delay in analysis of search results

44

Litigation Search

• Obvious reasons to check this:

– IS THE CLIENT BUYING A LAWSUIT? – How does it affect the deal? – What are the chances of success?

• Other reasons

– May have duty of disclosure in pending related applications (MPEP 2001.06(c))

• Do you mention to target, if there is a related litigation, and substantive

material allegations have not been brought to attention of USPTO? – Broader issue: this concept can apply to any issues discovered that might affect the value of the portfolio – If the problem is correctable, do you wait until the deal goes through? – What if deal is almost certain to go through?

45

Litigation Search (cont.)

• Litigation – existence and status

– Potential (U.S. and abroad)

• Pre-data room searches might not detect

– Actual (U.S. and abroad)

• Including ITC

– Previous litigations

• If settled, ask for settlement agreement (need to know rights

and obligations imposed by agreement and its limits)

– Administrative proceedings

• US PTO (ex parte reexams, IPRs, reissues,

interferences/derivation proceedings, business method PGRs)

– Oppositions

46

Overview of Freedom to Operate Analysis: Will Third Party Patents Impact Business Objectives?

• FTO Search: Identify potentially relevant third party patents/applications

– Emphasis on competitors’ patents and patents relating to key technology

• Determine scope of third party patents

– Claim interpretation – claim language/specification/file history

• Comparison of construed claims to:

– products/services to be acquired/licensed – future products/services

• How to manage risk associated with FTO Issues?

– Validity analysis – Design-around – License/common ownership-joint research agreement options, pre-AIA, or as broadened under AIA for patents/applications with at least one claim with an effective filing date after March 15, 2013

47

Freedom to Operate Search

• Gather information from Target Company on its products, processes, and

services sufficient to initiate FTO search

– Confidentiality agreements should be in place with Target

• Consider pros and cons of buyer’s personnel (e.g., engineers) having access to

confidential information. (If the deal does not close, could there be a future allegation of breaching the confidentiality agreement?)

• Initiate the FTO search as soon as possible

– Search will take some time – Work on other aspect of FTO while waiting for search results

• evaluate third party patents and applications cited in file histories of key Target

patents and applications

• Consider providing useful information to help focus the searcher

– What does client want to do with the technology?

• Make sure the searcher understands key technology

– What are the immediate and long term objectives of client? – What is the competitive landscape?

• Provide the FTO searcher with a listing of known competitors

48

Objective: Identify FTO “Show Stopper” US Patents Before Investing Too Much

• What is and what is not an FTO “show stopper”

– Considerations when third party patent appears to be infringed:

• Who is patentee (major competitor v. non-player in market)?

– Patentee’s enforcement history (i.e. license, litigate, etc.)

• Does target company know of “show stopper”?
• Is it truly infringed (claim construction, prosecution disclaimers)?
• Design-around possibilities?
• Potential damages/injunction relief
• Is patent valid and enforceable?
• Has license already been obtained?
• Can patent be bought?
• What if the “show stoppers” are applications?

– Check foreign file histories (may be more advanced)

• Does target company have patent leverage?

49

FTO Analysis

• Analyze results from the FTO search to determine if there are any issues

with 3rd party U.S. patents or pending applications

– For each patent identified during the FTO search, compare claims to target company’s technology (current and future) – Consider specifications of the third party patents and, if needed, file histories – Categorize as relevant or not

• Assess validity of third-party patent claims reading on target company’s

technology

• Identify technical questions for subsequent discussions with key technical

personnel of target

• Query target company

– Did it know of patent? – Does it have an opinion of counsel on the infringement and validity of the patent?

• May not want to see it, but good to know if exists

– Does it have a license to practice the patented invention covering the relevant field of use?

50

FTO: Pending Applications

• Source of pending patent applications

– Directly from search: published patent applications – Close calls on issued patents and check for related continuing cases – Monitoring competitors’ pending patent applications

• What to do:

– Pending claims are broad and could cover current or future products

• Are they patentable?
• Should a patentability analysis be undertaken?

– Claims could be in state of flux

• No enforceable right yet
• Closely monitor – yes
• Should you submit art to the PTO or to applicant?

– PTO: Very risky; not recommended, though expanded prior art submission provisions under AIA – Applicant: risky also, puts burden on applicant to submit

– Should a license be sought? Common ownership pursued?

51

Data Gathered (Still Pre-Data Room)

• In light of what has been learned so far,

develop plan for data room

– Provide target with an updated list of information being sought from “data room” and interviews with Target personnel – Request inventory of information in data room

• Plan how much time and person power will be needed

52

Interviews at Target Company

• People to be interviewed:

– Inventors on key patents – Attorneys who prosecuted target’s key patents – Maybe opinion counsel – Attorneys who furnished Orange Book listing opinions, if any – Declarant(s) (if a declaration submitted during prosecution of patents at issue) – Technical people from target with knowledge of technical aspects of products and services and subject matter patented in key patents or relevant third party patents – Target personnel with knowledge of existing or potential IP disputes

• An objective: what patents (third parties’ or Novaline’s) were the subject
• f existing or potential disputes

53

Freedom to Operate

• Likely to know at least some of the problematic

third party patent(s) from pre-data room investigation and initial FTO searching

• Identify existing or threatened claims of

infringement based on 3rd party IP

– Request target to identify any existing or threatened claims of infringement based on a third party’s IP, including what action, if any, the target has taken regarding those claims.

• Licenses?
• Opinions?
• If threats, basis for DJ?

54

FTO: Threat of a Patent Infringement Action

• Legal options

– Seek possible redress in reps and warranties, e.g., indemnification

• Assess liability exposure
• Business method patent
• Patent troll (only monetary damages, not injunction)

– eBay case: injunctions not automatic; court applies equitable considerations

– Offensive options

• Declaratory judgment litigation

– “case or controversy” (MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 166 L.Ed.2d 604 (2007))

• Reexamination

– Options before Sept. 16, 2012: ex parte, inter partes – Options after Sept. 16, 2012: ex parte reexamination, inter partes review, post-grant review (PGR for business method claims as of September 16, 2012; PGR for all other claims with effective filing date on or after March 16, 2013) – Risks and limits of reexamination

55

How To Deal With Gaps In Information

• After reviewing information in the data room and comparing it to

information disclosed in interviews with the Target’s representatives and publicly available information, determine where there are gaps in the data room information

– Do any of the gaps relate to critical issues?

• Ask the target to provide missing information

– If the target is unwilling, is that a red flag? – Could the requested information be highly confidential or privileged? – If the target updates the data room to add documents that the buyer did not request, what could this indicate?

• Consider conducting additional discussions with Target’s representatives or
• ther relevant personnel
• Can representations and warranties address topics relating to

missing/incomplete information?

– Also consider requiring the target to schedule specific items and referring to the schedules in the reps and warranties

56

Freedom to Operate

• Often FTO is the deal maker or deal breaker

– Significant factor to be taken into account in assessing value and structure of deal

• Providing an FTO analysis in a timely and thorough

manner permits the client to make an informed decision about whether and how to proceed with the transaction

– Could be determining factor in evaluating whether current and future business objectives can be met

57

Freedom to Operate - Reporting

• The report to the client should address both the risks

associated with third party IP and means of managing the risks, including:

– Status and potential outcomes (upside/downside) of any current IP litigation involving the target – Likelihood of future IP litigation

• Address any infringement allegations made by or to third parties
• Provide an overview of the competitive landscape and how the deal might

alter the landscape

– Scope of identified third-party patents presenting actual or potential blocking issues for current or future products

• Client might have a particular interest in patents involving particular

technologies and/or patents assigned to particular competitors

– Potential risks associated with any identified third party patent applications

58

• The report to the client should address both the risks

associated with third party IP and means of managing the risks, including:

– Ways of mitigating risks associated with third party patents/applications

• Design-around possibilities
• Invalidity positions
• Attacks

– Declaratory Judgment Action – Reexamination- ex parte or inter partes – Smoke Bomb Through Transom: providing the patent applicant with prior art and a claim chart – Interference

– IP rights licensed-in by the target

• Provide an overview of licensed-in IP rights and extent to which there

might not be a full transfer

• Significant limitations on term or scope of licenses

Freedom to Operate – Reporting (cont.)

59

FTO-Related Representations and Warranties

• Examples of topics to cover in FTO-related representations and

warranties – Infringement by Target:

• No action, suit, proceeding, or investigation is pending or

threatened against the Target

• Target has not received any communication alleging that the

target has violated or would violate any third party IP rights

• Target’s business and its products and services do not

directly or indirectly infringe any third party IP or violate any contract or license with any third party

• Target has not infringed any third party IP in the course of

developing any product or service, etc.

• Note: Target’s counsel might consider limits, such as knowledge and

best efforts to prosecute AIA applications in light of uncertainty of new law.

60

Overview of Analysis of Target Company’s Patents and Applications

• Objectives:

1) Will the Target’s patents and applications adequately protect key products and services? 2) Will they be valid and enforceable? Does pre-AIA or AIA law apply?

• Process

– Identify Target’s IP and focus on the key patents and applications; – Assess scope of key patents/applications (and relevant claims); and – Identify relevant prior art (either from search, file histories, or any

• ther sources).

61

Detailed Evaluation of Target’s Patents and Applications

• Coverage/protection:

– Do products fall within literal scope of claims of key patents? – Do the claims provide adequate scope of protection to prevent design- arounds? – Are these claims likely to be found valid and enforceable? – Technical information

• Review technical information available for current products and services
• f the target (short term) and for future products and services (long term)
• Where are the gaps in the technical information?
• Has the target merely provided publicly available information?
• Is more needed?
• Identify further information to request and key Target personnel that

might be able to discuss technical details (see above)

62

Evaluation of Target’s Patents: Scope

• Claim construction is fundamental building block for scope of

protection and validity analysis; must be done first

• Focus on key patents and relevant claims within those

patents

• Flag potential claim construction issues, such as:

– Narrow construction of claim term

• Current noninfringement position
• Future vulnerability to design-around claims

– Broad construction

• Problems with prior art

– Ambiguity (defective claim drafting)

• Indefiniteness issues (35 U.S.C. §112(b))
• Consider foreign counterparts for consistency in claim

interpretation positions

63

Evaluation of Target’s Patents: Scope

• Framework for claim construction = Phillips v. AWH Corp., 415

F.3d 1303 (Fed. Cir. 2005) (en banc)

– “The specification is always highly relevant to claim construction and is the single best guide to the meaning of a claim term in dispute.” – “The specification necessarily informs the correct construction of the claim.”

• special definition given to a claim term by the patentee
• intentional disclaimer, or disavowal, of claim scope by the inventor

– “It is appropriate to rely heavily on the written description for guidance as to the meaning of the claims.” – “Importantly, the person of ordinary skill is deemed to have read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification.”

64

Arguments in Related Cases May Affect Scope

• Consider related U.S. patents and applications and any available foreign

patents and applications, including their file histories

– Microsoft Corp. v. Multi-Tech Systems, Inc., 357 F.3d 1340 (Fed. Cir. 2004): Statement in prosecution of one patent to construe a claim term in three patents sharing a common specification – Hakim v. Cannon Avent Gp., plc, 479 F.3d 1313 (Fed. Cir. 2007): Narrowing arguments in a parent case that were not expressly rescinded in prosecution

• f continuation application, operated to narrow the claim. “Although a

disclaimer made during prosecution can be rescinded, permitting recapture of the disclaimed scope, the prosecution history must be sufficiently clear to inform the examiner that the previous disclaimer, and the prior art . . . may need to be re-visited.” See also, Heuft Systemtechnik GmbH v. Industrial Dynamics Co, Ltd. 2008 WL 2518562 (Fed. Cir. June 25, 2008)(unpublished).

65

Arguments Made In Corresponding Foreign Patent Applications May Affect Scope

• In evaluating infringement under the doctrine of

equivalents, “representation[s] to foreign patent

• ffices should be considered ... when [they] comprise

relevant evidence.” [citing Caterpillar].

• Representations made to foreign patent offices are

relevant. – Tanabe v. US ITC, 109 F.3d 726 (Fed. Cir. 1997)

66

More on Arguments In Corresponding Foreign Patent Applications

• Caterpillar Tractor Co. v. Berco, S.p.A., 714 F.2d 1110, 1116,

219 U.S.P.Q. 185, 188 (Fed. Cir. 1983)

– Alleged infringer raised Caterpillar’s instructions to foreign counsel indicating that Berco's equivalent embodiment was not contemplated – “Though no authority is cited for the proposition that instructions to foreign counsel and a representation to foreign patent offices should be considered, and the varying legal and procedural requirements for

• btaining patent protection in foreign countries might render

consideration of certain types of representations inappropriate, there is ample such authority in decisions of other courts and when such matters comprise relevant evidence they must be considered. Stratoflex, Inc. v. Aeroquip Corp., (Fed. Cir. 1983).” [found insufficient in this case – infringement judgment affirmed].

• See also, discussion of Therasense in validity/enforceability slides,

infra.

67

• Language that one of ordinary skill in the art would

understand to change or narrow the ordinary meaning of the claim terms – Computer Docking Station Corp. v. Dell, Inc., 519 F.3d 1366 (Fed. Cir. 2008). – Bayer v. Elan, 212 F.3d 1241 (Fed. Cir. 2000). – Alloc Inc. v. ITC, 342 F.3d 1361 (Fed. Cir. 2004). – SciMed Life Systems, Inc. v. ACS, Inc. (Fed. Cir. 2001).

Review Specification and Prosecution History for Special Definition and/or Language of “Clear Disavowal”

68

Evaluation of Target’s Patents: Technical Information

• Compare the construed claims to available technical

information relating to the target’s current products/services, future targets/services, and likely design-arounds

– Reevaluate gaps in available technical information – Identify further information to request from target – Based on the evaluation, prioritize claims for validity studies

69

Thank You! Presenters’ Contact Information

Donna Meuth Associate General Counsel Eisai Inc. Donna_Meuth@eisai.com Tel: 978-837-4862

70

AIA and Due Diligence

May 29, 2013 for Strafford

Donna Meuth Lauren Stevens, Ph.D. Tom Irving

GLOBAL PATENT GROUP, LLC.

Disclaimer

• These materials are public information and have been prepared solely for

educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials should not be taken as individualized legal advice and do not reflect the views of FINNEGAN, EISAI, or GLOBAL PATENT GROUP LLC. It is understood that each case is fact-specific, and that the appropriate solution in any case will

• vary. Therefore, these materials may or may not be relevant to any

particular situation. Thus, FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC

• r the panelists cannot be bound either philosophically or as

representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with FINNEGAN, EISAI, GLOBAL PATENT GROUP LLC or the panelists. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed.

72

Three Basic Categories of IP Due Diligence

• 1. Ownership/Transferability

– Clear title to that IP – Transferability or assignability of in-licensed technology

• 2. Freedom to operate (“FTO”)
• Freedom to use the target company’s technology without

infringing the IP rights of third parties

• 3. Validity/enforceability

– Determination of the validity and enforceability of the target’s IP

73

• USPTO recognizes also:

– “The Office appreciates that the courts may ultimately address questions concerning the meaning of AIA 35 U.S.C. 102 and

• 103. However, as a practical matter, the Office needs to

provide examination guidelines so that the public is aware of how the Office will apply AIA 35 U.S.C. 102 and 103. The Office considers its interpretation of AIA 35 U.S.C. 102 and 103 as set forth in these examination guidelines to be the correct interpretation of AIA 35 U.S.C. 102 and 103 based upon the statutory language of the AIA and its legislative history.”

For Now, Practitioners Will Have to Operate in the Dark; Courts Will Ultimately Interpret the AIA

See Examination Guidelines, 78 Fed.Reg. 11,061 (Feb. 14, 2013)

74

“effective filing date” is the key to navigating the road- map of the AIA and considering March 15/16 issues!

75

• §100(i)(1) The term ‘effective filing date’ for a claimed invention

in a patent or application for patent means—

– (B) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121, or 365(c). – (A) if subparagraph (B) does not apply, the actual filing date of the patent

• r the application for the patent containing a claim to the invention; or
• Entitlement does not necessarily require best mode (AIA SEC. 15(b))

35 U.S.C. §100(i)(1): Effective Filing Date for Claimed Invention

76

• What law was the patent examined under?
• Was that correct?
• What law are current patent applications being

examined under?

• Is it correct?
• Worth moving pre-AIA claims to a mixed

application (JMM)?

For Analyzing Validity/Patentability in a Due Diligence

77

• Pre-AIA §102(a)-(g)

– seven subsections

• §102(a): known or used by others; §102 (b): statutory bar―sale, offer for sale, patented,

published by anyone; §102 (c): abandoned; §102 (d): first patented elsewhere; §102(e): prior patents & published applications of others; §102(f): derivation; §102(g): first to invent;

– combination of both the “novelty” requirement and a set of “loss of right” to patent provisions; no clear delineation between the two, or so it is argued by some.

• Pre-AIA §103

– three subsections

• (a) non-obviousness requirement from 1952 Patent Act;
• (b) amendments in light of Biotechnology Process Patent Act of 1995; and
• (c) provisions relating to commonly assigned patents and patents developed

pursuant to Joint Research Agreements.

“Old” § 102 and § 103: All Claims EFD Before 3/15/13

Could apply to certain patents until at least through March 15, 2034!

78

Prior Art Under the AIA New 35 U.S.C. §102: All Claims EFD After 3/15/13 and JMM’s (At Least One Claim with EFD Before 3/16/13 and At Least One Claim with EFD After 3/15/13)

(a)(1): A public disclosure ANYWHERE in the world before the EFD of the claimed invention; OR (a)(2): Patent filing disclosures (in the U.S. or PCT designating the U.S.) that later become public, that name another inventor, and were effectively filed before the EFD of the claimed invention. b) Exceptions from prior art c) Expands exceptions subject to CREATE Act (joint research agreements/mergers); and d) new definition of “effectively filed” for 102(a)(2) (sort of like old 102(e))

79

• What is prior art under the new law, absent a Nomiya‐type

admission, must either form

– a § 102(a)(1) public disclosure – something made “available to the public” in the new words found in AIA §102(a)(1); or – an “effectively filed” AIA § 102(a)(2) patent filing disclosure. Effectively filed AIA § 102(a)(2) art requires that ultimately at least one of the following three documents publish (“special publications”):

• a U.S. patent;
• a U.S. patent application, or
• a U.S.‐designating PCT application.

Prior Art Under the AIA New 35 U.S.C. §102

Note: “Office does not view the AIA as changing the status quo with respect to the use of admissions as prior art.” Examination Guidelines pp. 11064 and 11075.

80

• SEC. 3(n)(1) Except as otherwise provided in this section, the

amendments made by this section shall take effect upon the expiration

• f the 18-month period beginning on the date of the enactment of this

Act, [March 16, 2013] and shall apply to any application for patent …that contains or contained at any time:

A. a claim to a claimed invention that has an effective filing date as defined in section 100(i) [remember: “entitled to”] …, that is on or after the effective date described in this paragraph [March 16, 2013]; or B. a specific reference under §§ 120, 121, 365(c) to any patent or application that contains or contained at any time such claim. [antecedent for “such claim” has to be sub.para. (A)?]

First AIA Transition Provision: EFD after 3/15/13

81

• SEC. 3(n)(2): The provisions of sections 102(g), 135, and

291 of title 35, United States Code, as in effect on [March 15, 2013], shall apply to each claim of an application for patent, and any patent issued thereon, for which the amendments made by this section also apply, if such application or patent contains or contained at any time—

– (A) a claim to an invention having an EFD as defined in section 100(i) of title 35, United States Code, that occurs before [March 16, 2013]; or – (B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains

• r contained at any time such a claim.

Second Transition Provision: EFD Before 3/16/13 and After 3/15/13!!

82

• “section 3(n)(2) does indicate that the provisions of 35 U.S.C.

102(g), 135, and 291 as in effect on March 15, 2013, shall apply to “each claim” of an application for patent, and not simply the claim

• r claims having an EFD that occurs before March 16, 2013, if the

condition specified in section 3(n)(2) occurs. Therefore, “each claim” of an application presenting a claim to a claimed invention that has an effective filing date before March 16, 2013, but also presenting claims to a claimed invention that has an effective filing date on or after March 16, 2013, is subject to AIA 35 U.S.C. 102 and 103 and is also subject to the provisions of 35 U.S.C. 102(g), 135, and 291 as in effect on March 15, 2013.”

FITF Examination Guidelines:

• SEC. 3(n)(2)

See pp. 11069, 11072 of Examination Guidelines (2/14/13)

83

• Some may seek out SEC.3(n)(2), owing to

advantages of AIA.

– Elimination of Metallizing Engineering forfeiture (according to USPTO); – liberalization of the CREATE ACT and common ownership in 102(c); – possible elimination of pre-AIA statutory bars that are not AIA prior art!!!

• SEC. 3(n)(2): the Mixer!

84

If You Find a Potential Issue in a Due Diligence, Can You Change or Correct Claim to Priority?

85

A B

X

D C

March 16, 2013

abandoned

add claim only entitled to C filing date

Date Z

at Date Z, D can’t disclaim priority claim to C and replace it with a priority claim to X to get back to pre-AIA

X

• AIA §100(i)(1) relating to entitlement to benefit or

priority , “entitled … to priority/benefit”

• Corresponding language in AIA §102(d) defining when

subject matter found in a patent filing is to be regarded as having been effectively filed, “entitled … to claim the priority/benefit” “Entitled to priority” vs. “Entitled to claim priority”

86

• “The AIA draws a distinction between actually being entitled to priority to,
• r the benefit of, a prior-filed application in the definition of effective filing

date of a claimed invention in AIA 35 U.S.C. 100(i)(1)(B), and merely being entitled to claim priority to, or the benefit of, a prior-filed application in the definition of effectively filed in AIA 35 U.S.C. 102(d).”

FITF Examination Guidelines: “Entitled to” and “Entitled to Claim”

See pp. 11078 of Examination Guidelines (2/14/13).

Entitled to priority/benefit

• f prior-filed app

Merely entitled to claim priority/benefit of prior-filed app

v.

Definition of effective filing date (EFD) Definition of effectively filed

87

• §102(d) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVE AS PRIOR

ART.

– For purposes of determining whether a patent or application for patent is prior art to a claimed invention under subsection (a)(2), such patent or application shall be considered to have been effectively filed, with respect to any subject matter described in the [US] patent or [US or PCT designating the US] application-

• “(2) if the patent or application for patent is entitled to claim a right of priority under

section 119, 365(a), or 365(b), or [entitled] to claim the benefit of an earlier filing date under section 120, 121, or 365(c), based upon 1 or more prior filed applications for patent, as of the filing date of the earliest such application that describes the subject matter.” [“entitlement” trumps “describes”- therefore enablement is required?]

• “(1) if paragraph (2) does not apply, as of the actual filing date of the patent or the

application for patent”

More “Effectively Filed” for US patents and US/PCT-designating US applications (§102(a)(2)): §102(d)

88

• Generally, the “EFD” is the actual patent application filing date in

the case of a still-pending application, unless the claimed invention is entitled to priority/benefit of an earlier patent filing.

• EFD has nothing to do with §102(a)(2) but rather with assessing

the validity/patentability of a claimed invention in view of §§ 102(a)(1) and (2). – Effectively filed has everything to do with §102(a)(2) as prior art.

“Effectively Filed” v. EFD

89

• This entitlement to priority/benefit exists where
• Best Mode: Note that the best mode requirement still exists at least for all US

nonprovisional patent filings because it remains in 35 U.S.C. 112(a).

“Effectively Filed” v. EFD

(1) a claim for priority/benefit is made, and

(2) the earlier patent filing contains written description and enablement support

• f the claimed invention, as the AIA expressly removed the requirement of

disclosing the best mode in an earlier application for the purposes of showing entitlement to priority/benefit.

90

• “To provide support for a claim

under 35 U.S.C. 112(a), it is necessary that the specification describe and enable the entire scope of the claimed invention. [...continued...]

• …However, in order for a prior art document to

describe a claimed invention under AIA 35 U.S.C. 102(a)(1) or (a)(2), the prior art document need only describe and enable one skilled in the art to make a single species or embodiment of the claimed invention…the disclosure may be cited for all that it would reasonably have made known to a person of

• rdinary skill…the description requirement of

AIA 35 U.S.C. 102(a)(1) and (a)(2) does not preclude an examiner from applying a disclosure in an obviousness rejection under AIA 35 U.S.C. 103 simply because the disclosure is not adequate to anticipate the claimed invention under AIA 35 U.S.C. 102(a)(1) or (a)(2).”

FITF Examination Guidelines: Requirements for §112 Support v. Requirements for Anticipatory or Obviousness Prior Art Under §102(a)(1) and (2)/ § 103

See pp. 11074 of Examination Guidelines (2/14/13)

Emphasis added

FITF Examination Guidelines: Requirements for §112 Support v. Requirements for Anticipatory or Obviousness Prior Art Under §102(a)(1) and (2)/ § 103 See pp. 11078 of Examination Guidelines (2/14/13) “AIA 35 U.S.C. 102(d) requires that a prior-filed application to which a priority or benefit claim is made must describe the subject matter from the U.S. patent, U.S. patent application publication, or WIPO published application relied upon in a rejection.

…AIA 35 U.S.C. 102(d) does not require that this description meet the requirements of 35 U.S.C. 112(a).”

However, Emphasis added

92

• For claims with an effective filing date after March 15,

2013 (and all claims in a JMM application), a foreign priority date can be used offensively as prior art under AIA’s 35 U.S.C. §102(a)(2) against the patent claims of

• thers, as long as the subject matter in one of the three

special publications was at least described in a foreign priority document which was “effectively filed” relative to the relevant subject matter. (See 35 U.S.C. §102(a)(2) and §102(d)).

Hilmer Doctrine Abolished by §102(d)

93

Hypothetical on ’001 and ’002 Patents: Pre-AIA

’002 Issue

10-1-2002 10-17-2000

’002 US appln filed

1-18-2000

’002 foreign priority appln filed

11-1-1999

’001 foreign priority appln filed

10-19-2000

’001 US appln filed

6-11-2002

’001 issue

• Pre-AIA, the ’001 US application because of Hilmer, was not §102(e)/103 prior

art against the claims of the ’002 patent because ’001 priority was irrelevant.

94

94

94

Hypothetical on ’001 and ’002 Patents: AIA - Possible Game Changer

’002 Issue

10-1-2002 10-17-2000

’002 US appln filed

1-18-2000

’002 foreign priority appln filed

11-1-1999

’001 foreign priority appln filed

10-19-2000

’001 US appln filed

6-11-2002

’001 issue

• If the ’001 patent was “effectively filed” (relevant disclosure of ’001 patent at least described in the

’001 foreign application) on 11-1-1999, then the ’001 patent is §102(a)(2) prior art as of 11-1-1999 against the claims of the ’002 patent, whether the effective filing date of the relevant claims of the ’002 patent is 1-18-2000 or 10-17-2000. 95

95

95

Hypothetical on ’001 and ’002 Patents: AIA - Is it a Game Changer?

’002 Issue

10-1-2002 10-17-2000

’002 US appln filed

1-18-2000

’002 foreign priority appln filed

11-1-1999

’001 foreign priority appln filed

10-19-2000

’001 US appln filed

6-11-2002

’001 issue

Is there a §102(b)(2) exception to remove the ’001 §102(a)(2) prior art against the ‘002 patent claims? Whatever the effective filing date of the ’002 claim, §102(b)(2) could apply to remove the §102(a)(2) prior art if the requirements of either §102(b)(2)(A) or §102(b)(2)(B) can be met.

96

96

96

U.S. Prov. Appl.

CN

U.S. Appl. Non-Prov. PCT (des. U.S.)

Chinese

USPAT USPAT FR PCT (des. U.S.) USPAT

Pub. Appl. Pub. PCT Appl. Pub. PCT Appl.

French English

• NO geographical or language distinction
• Entitlement to claim priority/benefit of US Prov App., CN app., and FR app.
• Important date is when “effectively filed” not when published.
• Hilmer doctrine abolished.

Impact of § 102(d)(2) – Prior Art Date

Prior art date Prior art date Prior art date

Following publication, disclosure has retroactive availability as prior art as of the date effectively filed for novelty and obviousness purposes.

97

• §102 (b)(1) 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

• btained the subject matter disclosed directly or indirectly from the inventor or a

joint inventor; or (B) the subject matter [independently?] 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.

New 35 U.S.C. § 102(b) – Defines Exceptions to Prior Art “grace period”

98

Exception ONLY Good For Exact Subject Matter Described: Before or After? §102(b)(1) Exception ONLY for the same subject matter earlier disclosed; “related” subject matter could still be used against the patentee under §103 and MIGHT even preclude the claimed invention from being patentable at all because of §103 !!! What if inventor discloses X and the disclosee discloses X and Y?

The same argument regarding disclosed vs. related subject matter is also made regarding §102(b)(2), which is the exception to §102(a)(2). Notably, §102(b)(2) does not include a grace period and includes three classes of exceptions, whereas §102(b)(1) includes only two classes of exceptions.

See pp. 11061 of Examination Guidelines (2/14/13).

99

• §102 (b)(2) EXCEPTIONS – …

(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

• r 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

• r subject to an obligation of assignment to the same person.

New 35 U.S.C. § 102(b) (con't) No “grace period”

100

• “if the inventor or a joint inventor had publicly disclosed

elements A, B, and C, and a subsequent intervening U.S. patent, U.S. patent application publication, or WIPO published application discloses elements A, B, C, and D, then only element D of the intervening U.S. patent, U.S. patent application publication, or WIPO published application is available as prior art under AIA 35 U.S.C. 102(a)(2).”

• Must mean all requirements met for a § 102(b)(2) exception.

FITF Examination Guidelines §102(b)(2) Example

See pp.11077 of Examination Guidelines (2/14/13). See slides on Rule 130 declarations, infra.

101

– No requirement that the mode of disclosure be the same; – No requirement that the disclosure be a verbatim or ipsissimis verbis disclosure of the intervening disclosure. – “[I]f subject matter of the intervening disclosure is simply a more general description of the subject matter previously publicly disclosed by the inventor or a joint inventor, the exception in AIA 35 U.S.C. 102(b)(1)(B) applies to such subject matter of the intervening disclosure.”

FITF USPTO Examiner Guidelines:

“Same” Required for §102(b)(1)(B) and §102(b)(2)(B)

See pp. 11061 of Examination Guidelines (2/14/13). Judgment call for the practitioner analyzing validity in a due diligence?

102

• “AIA 35 U.S.C. 102(b)(2)(C) provides that certain prior patents and published

patent applications of co-workers and collaborators are not prior art either for purposes of determining novelty (35 U.S.C. 102) or nonobviousness (35 U.S.C. 103). This exception, however, applies only to prior art under AIA 35 U.S.C. 102(a)(2), namely, U.S. patents, U.S. patent application publications, or WIPO published applications effectively filed, but not published, before the effective filing date of the claimed invention. This exception does not apply to prior art that is available under 35 U.S.C. 102(a)(1)…. A prior disclosure, as defined in AIA 35 U.S.C. 102(a)(1), by a co-worker or collaborator is prior art under AIA 35 U.S.C. 102(a)(1) unless it falls within an exception under AIA 35 U.S.C. 102(b)(1), regardless of whether the subject matter of the prior disclosure and the claimed invention was commonly owned not later than the effective filing date of the claimed invention.”

FITF Examination Guidelines: §102(b)(2)(C) is Exception to § 102(a)(2) Only and Applies to Novelty and Nonobviousness See pp. 11072 of Examination Guidelines (2/14/13).

103

• §102(b)(2)(C) exception does not remove a

§102(a)(1) prior art, OR a double-patenting rejection, or a lack of enablement rejection - a “document need not qualify as prior art to be applied in the context of double patenting

• r enablement.”

FITF Examination Guidelines: Don’t Remove ODP,DP, or Non-Enablement With §102(b)(2)(C)

See pp. 11080 of Examination Guidelines (2/14/13).

104

• § 102(c) COMMON OWNERSHIP UNDER JOINT RESEARCH AGREEMENTS.—
• Subject matter disclosed and a claimed invention shall be deemed to have been owned by the

same person or subject to an obligation of assignment to the same person in applying the provisions of subsection (b)(2)(C) if—

1) the subject matter disclosed was developed and the claimed invention was made by, or on behalf of, 1 or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention; 2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and 3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.

CREATE Act Now In §102(c): Will It Help Cure a Potential Issue Discovered in Due Diligence? Proactively take care of potential §102(a)(2)

• r §§ 102(a)(2) /103 problem ?

10 5

105

Can You Eliminate Prior Art Under The New Statute By Buying It?

• § 102(c) says it shall be deemed to be
• wned by the same person or subject to an
• bligation of assignment if the subject

matter claimed was developed under a JRA before the effective filing date of the claimed invention. See also §102(b)(2)(c) (common ownership exception to §102(a)(2)) and § 102(c) allows folding JRA into §102(b)(2)(C)

10 6

106

• New §103:

– 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 . . . . [see 125 STAT. 287]

• Big change!! Old law was “at the time the invention

was made.” Usually, EFD is later in time; maybe more prior art under all of §§102 (a)(1), (a)(2) and 103!! Pre-AIA or AIA Obviousness Standard Apply?

107

Enactment:

• Sept. 16, 2011

PCT Filing First to Invent System Applies

Straddling the Effective Date

“First To Invent” System or “FITF” System? (see SEC. 3(n)(1)(A) and (n)(2)) (Even if one claim not supported at priority date is eventually canceled, still in FITF.)

PCT Filing Priority Date

Enactment:

• Sept. 16, 2011

Effective Date: March 16, 2013

Priority Date “FITF” System Applies PCT Filing

Enactment:

• Sept. 16, 2011

Scenario 1: no claims entitled to priority date: FITF Scenario 2: all claims entitled to priority date: first-to-invent Scenario:3: at least 1 claim not entitled to priority date: mixed

Assumes “priority date” is ex-US

108

• If JMM patent/application in due diligence, was statement filed?
• If filing JMM to address potential issue, will need to file statement
• 37 CFR §1.55(j) Requirements for certain applications filed on or after

March 16, 2013.

– “If a nonprovisional application filed on or after March 16, 2013, claims priority to a foreign application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the nonprovisional application, four months from the date of entry into the national stage as set forth in §1.491 in an international application, sixteen months from the filing date of the prior-filed foreign application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the nonprovisional application.

FITF USPTO FINAL RULES: Statement Required for Mixed Applications

109

• Do not have to identify how many or which claims have EFD after

March 15, 2013.

• Do not have to identify subject matter disclosed that is not also

disclosed in the prior-filed application.

• Statement only for mixed applications (“transition applications”).

No statement required if claim only subject matter filed before March 16 or after March 15? FITF USPTO FINAL RULES: Statement Required for Mixed Applications - Considerations

See pp. 11083, 11084 of Examination Guidelines (2/14/13). pp 11030, Rules, Fed. Reg. v. 78, No. 31 (2/14/13).

110

• Statement does not require applicant to do further

investigation.

– No statement required if the applicant “reasonably believes on the basis of information already known” that there was no claim with EFD after March 15, 2013. – Presenters’ Comment: Appears as if PTO working in Therasense standard because if no statement is filed based

• n the applicant’s reasonable belief, the single most

reasonable inference cannot be an intent to deceive. FITF USPTO FINAL RULES: Statement Required for Mixed Applications - Considerations

See pp. 11027, 11,030 of Rules (2/14/13).

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• Examination Guidelines pp. 11084:

– “when subject matter is claimed in an application having priority to or the benefit of a prior-filed application (e.g., under 35 U.S.C. 120, 121, or 365(c)), care must be taken to accurately determine whether AIA or pre-AIA 35 U.S.C. 102 and 103 applies to the application.” – Or both, of course, in the transitional/JMM application.

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Detailed Review of the Validity of the Target IP

• Prior art sources

– Art available in files (U.S. and foreign)

• “public accessibility” issue?

– Art identified in validity and FTO searches

• May still be waiting for some search results (requested on

a rolling basis)

– Inventors’ publications and presentations pre-filing

• With smaller, less patent-sophisticated businesses, this

can often be a fertile ground for finding very relevant prior art

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Evaluation of Validity of Key Patents: Novelty

• Novelty

– Straight-forward anticipation?

• See Net MoneyIN, Inc. v. VeriSign, Inc545 F.3d 1359 (Fed. Cir.

2008)(arranged and combined in the prior art in the same way as claimed)

– But don’t forget inherency

• Can arise with so-called “improvement” patents or selection

inventions

• Not easy to establish inherency, however. Standard is high:

“necessarily and inevitably”

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Evaluation of Validity of Key Patents: Obviousness

• Obviousness

– Separate patents into categories

• Allowed pre-KSR (may need to closely reevaluate)
• Allowed post-KSR

– Under KSR Intern. Co. v. Teleflex, Inc., 127 S.Ct. 1727 (2007),

• bviousness not determined by a strict application of the teaching-

suggestion-motivation (“T-S-M”) test, but rather by analyzing the factors set forth in Graham v. John Deere):

• the scope and content of the prior art;
• differences between the prior art and the claims at issue; and
• the level of ordinary skill in the pertinent art.
• And “[s]uch secondary considerations as commercial success, long felt but

unsolved needs, failure of others, etc., … may have relevancy.”

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Evaluation of Validity of Key Patents: More on Obviousness

• Obviousness: Post-KSR era

– Generally, more difficult to establish nonobviousness

• Ordinarily “creative” skilled artisan
• Use of known elements for known function to yield expected results

– Look for evidence of unexpected benefit or result (e.g., synergism)

• Obviousness to try: finite v. very large number of possibilities
• Look for teachings away or disincentive to make a modification to arrive at claimed invention

(But see, In re Kubin, “quasi-agnostic”)

– KSR addressed motivation – Obviousness still requires reasonable expectation of success

• For “predictable” technologies (mechanical and electrical) could be easier to establish

reasonable expectation

• Chemistry and biology are well recognized as “unpredictable” technologies; reasonable

expectation of success remains a viable argument in addressing obviousness issues.

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• Sufficiency of the specification

– First paragraph of 35 U.S.C. §112 (must be satisfied at time of filing):

• Written description of invention
• Enablement: sufficient information to enable one skilled in

the art to make and use the invention without undue experimentation

• Best mode contemplated by the inventor(s) for carrying out

the invention (still a statutory requirement!)

– Second paragraph of 35 U.S.C. §112

• Distinctly claiming what the inventors consider as their

invention

Validity of the Key Patents of the Target Company

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Validity: Double Patenting

• Double patenting: unjust extension of patent term for same or obvious variant
• f earlier patent

– Two types: same invention and obviousness-type double patenting – “Hot button” defense of generic companies challenging validity of patents of pharmaceutical company

• Generic companies call it “evergreening”
• Innovative pharmaceutical companies call it “life cycle management”
• Ways to address obviousness-type double patenting

– Protection of § 121 prevents double patenting in later patent if issued from a divisional application resulting from a restriction requirement issued in a parent application – Terminal disclaimer: disclaiming terminal portion of second patent that extends beyond the expiration date of the earlier patent and maintaining common

• wnership
• Cannot file a terminal disclaimer after expiration of earlier patent

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Validity: Double Patenting

• Check families of patents

– Terminal disclaimers must have been filed before expiration of first patent.

• Boehringer Ingelheim Int’l GmbH v. Barr Laboratories, Inc., 592 F.3d 1340 (Fed.
• Cir. 2010)

– DC: Patent invalid for obviousness-type double patenting – Terminal disclaimer ineffective because filed after first patent expired. – Safe-harbor provision of 35 U.S.C. § 121 precluded the use of the ’086 patent as an invalidating reference. – FC: Reverse and remand. – Terminal disclaimer filed too late, but district court erred in determining safe harbor provision of § 121 did not apply. – § 121 applicable to divisional of a divisional application as long as applications in a divisional chain “honor[ed] . . . the lines of demarcation drawn by the examiner . . . in the restriction requirement.”

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• Inequitable conduct renders all claims unenforceable under the

present law

• Flag potential enforceability issues

– Prior art from related cases in portfolio not cited – Non citation of related patent applications (could be the basis of double patenting rejection) – Non citation of office actions from related U.S. application

• What about foreign applications?
• Patentee papers filed in foreign applications

– Are the examples written in the past tense? Follow up with Target once in data room – Is there activity data reported for the invention in the specification or relied on during the prosecution history

• Any declarations? Check if declarant’s association with assignee disclosed (Ferring,

Nilssen cases)

• Any inconsistent data or arguments

Identification of Potential Enforceability Issues Pertaining to Key Patents of Target

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Enforceability Issues?

• Arguments made in corresponding

foreign patent applications conflict with those made in US prosecution

– Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed.Cir.2011) (en banc)

• “but for” materiality standard
• “single most reasonable inference” intent standard
• No balancing

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• Dayco Products, Inc. v. Total Containment, Inc., 66 U.S.P.Q.2d 1801 (Fed.
• Cir. 2003)

– DC granted summary judgment that 4 Dayco patents were unenforceable for inequitable conduct

• Failed to disclose co-pending application with substantially similar technology
• Failed to disclose prior art patent cited in a co-pending application
• Failed to disclose rejection (by a different examiner) of substantially similar claims in

co-pending application

– FC overturned and remanded for district court to consider intent to deceive.

• McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 897

(Fed. Cir. 2007)‏

– DC: patents unenforceable for inequitable conduct

• Failed to disclose rejections (by a different examiner) in co-pending application
• Failed to disclose allowance of CIP patent (that might have been basis for double

patenting rejection)

• Failed to disclose prior art Baker patent that was disclosed in co-pending application

– FC: Affirmed

Enforceability: Disclosure of Related Proceedings

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Evaluation of Target’s Patents: Enforceability

• Examples

– Note tense used in examples

• Later consider whether there is support for those examples written in past tense or in

present tense but accompanied by reported properties or results

– Prepare list of questions related to the examples, such as:

• Were all of the experiments described in the patents performed as they were

described?

• Are there experiments that were not included in the specification? If so, what were

those results and why were they not included?

• Are there examples in related patents that should have been, but were not, included

in the other? Why not?

– Flag for verification in data room

• Accuracy of the reported examples, any representations of fact, and any statement of

advantageous properties for the claimed invention, even if not relied on expressly during prosecution

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Evaluation of Target’s Patents: Enforceability

• Prepare to look for data in the target’s internal files that is

inconsistent with data submitted to the US PTO

• Prepare to look for prior art in the target’s internal files that

was not submitted to the US PTO

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• Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir.

2007)

– Applicant distinguished claimed canola oil from prior art on the basis of

• xidative stability.

– Examiner rejected claims as anticipated by Wong. – Applicant submitted tests showing the claimed oil and another oil have similar fatty acid compositions, but different oxidative stabilities. – Applicant failed to disclose 2 tests showing the reference oil to have same or even superior oxidative stability. – Applicant explained that the withheld tests either:

• Were performed under unusual conditions and therefore aren’t

comparable to the data given to PTO.

• Did not set forth test conditions and likewise are not comparable.

Omitted Data?

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• Cargill (con't)

– FC: Affirmed unenforceable for inequitable conduct.

• Materiality

– Even if performed under different conditions, the omitted tests were still material. – Examiner would want to see the tests and the explanation.

• Intent

– Repeated nature of the omission and motive to conceal. – High materiality coupled with evidence that applicant should have known of materiality, creates strong inference of intent to deceive. – “Close cases should be resolved by disclosure, not unilaterally by the applicant.”

Omitted Data?

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• MPEP 2001.06(c) Information From Related Litigation

– Where the subject matter for which a patent is being sought is or has been involved in litigation, the existence of such litigation and any other material information arising therefrom must be brought to the attention of the U.S. Patent and Trademark Office. Examples of such material information include evidence of possible prior public use or sales, questions of inventorship, prior art, allegations of "fraud," "inequitable conduct," and "violation of duty of disclosure." Another example of such material information is any assertion that is made during litigation which is contradictory to assertions made to the

• examiner. [citation omitted] Such information might arise during litigation in, for

example, pleadings, admissions, discovery including interrogatories, depositions, and other documents and testimony. – … At a minimum, [e]nough information should be submitted to clearly inform the Office of the nature of these issues so that the Office can intelligently evaluate the need for asking for further materials in the litigation. See MPEP § 1442.04.

Inequitable Conduct: Duty to Disclose Related Litigation

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Evaluation of Target’s Patents: Enforceability

• Get ready for entering the data room: prepare a list of

questions for interviews with inventors and patent agents based on all flagged issues.

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Interviews at Target Company

• People to be interviewed:

– Inventors on key patents – Attorneys who prosecuted target’s key patents – Maybe opinion counsel – Attorneys who furnished Orange Book listing opinions, if any – Declarant(s) (if a declaration submitted during prosecution of patents at issue) – Technical people from target with knowledge of technical aspects of products and services and subject matter patented in key patents or relevant third party patents – Target personnel with knowledge of existing or potential IP disputes

• An objective: what patents (third parties’ or Novaline’s) were the subject
• f existing or potential disputes

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Reporting on Validity and Enforceability of Target’s IP

• General discussion of Target IP

– Strengths and weaknesses – Patent term of key patents

• Identification of issues regarding key IP
• Remedial measures regarding Target’s IP

– Certificate of Correction/reissue to correct mistakes/errors – Narrow claims in reissue or reexamination if prior art creates validity issues – File continuation/division applications

• Would new PTO rules limit?
• Plug gaps in current claim scope and cover design-arounds

– Terminal disclaimer – Evaluation of any post-grant proceeding possibilities

• Other recommendations: reps and warranties

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Reporting on Scope, Validity and Enforceability of Target’s IP (con't)

• Reps and Warranties

– Validity

• Difficult to obtain; unpredictable for Target

– Example: All Target IP is valid and no Third Party has challenged the extent or validity of such IP. Target has not received any communication challenging or questioning validity of any Target IP

– Enforceability

• If access to certain information to assess enforceability is not given, broad rep

and warranty may be appropriate

– Example: All Target IP is enforceable and no Third Party has challenged the enforceability of such IP. Target has not received any communication challenging or questioning enforceability

• f any Target IP
• Target’s perspective: limit to only known information and define “knowledge”

to only certain individuals. Also, consider representation to be based on the “information and belief”

• Buyer’s perspective: push back on the above or force the Target to provide

more information.

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What Changes Should Patent Counsel Make In The Due Diligence Process As A Result Of The AIA?

• New considerations:
• Target patents and applications were

examined under the correct law?

• Examine potential prior art examined under

the correct law

• Broadened common ownership provisions under

AIA apply? help?

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Thank You! Presenters’ Contact Information

Tom Irving Finnegan 901 New York Ave., NW Washington, DC 2001-4413 Tel: 202-408-4082 Fax: 202-408-4400 tom.irving@finnegan.com

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