strategies in view of patent reform may 9, 2012...•america invents act enacted sept. 16, 2011...

GREENBERG TRAURIG, LLP | ATTORNEYS AT LAW | WWW.GTLAW.COM

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AIChE Webinar

Patents and the America Invents Act: Strategies in View of Patent Reform

May 9, 2012

Heath Briggs

Greenberg Traurig, LLP


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Webinar Overview

• America Invents Act (AIA) Background

• Review AIA Highlights and Discuss Impact

• Switch to first-to-file

• New prior art standards

• New ways to challenge patents

• Q & A Session


AIA Background

• America Invents Act

enacted Sept. 16, 2011

• Bi-partisan legislation

and first major

overhaul of the U.S.

Patent System in

nearly 60 years

• 1952 Patent Act

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AIA Background

• AIA implemented in three-phases

• Phase 1 – Effective September 16, 2011

• Phase 2 – Effective September 16, 2012

• Phase 3 – Effective March 16, 2013

• Review / discuss highlights of each phase


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AIA Background

• Phase 1 Changes – Effective September 16 2011

• Prioritized Examination

• Effective September 26, 2011

• Special fees for “micro entities”

• Elimination of “Best Mode” defense

• Addition of prior user rights defense

• Elimination of “tax strategy” patents

• False marking suits -- severely restricted

• Prohibition of patenting of human organisms


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AIA Background

• Phase 2 Changes – Effective September 16, 2012

• Third-party submissions of prior art

• Supplemental examination by patent owners

• New opposition process

• New inter partes review process

• New inventorship oath standards


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AIA Background

• Phase 3 Changes – Effective March 16, 2013

• First-to-file

• New prior art standards

• Derivation proceedings


Phase 1 Changes

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Prioritized Examination

• Need a patent ASAP?

• For addt’l fee of $4800 the U.S. Patent and

Trademark Office (“USPTO”) will guarantee

a final decision on a patent application

within 12 months

• Typical patent processing time: 2-5 years

• Price is $2400 for small entities

• Act now!

• Limited to 10,000 applications

• Approx. 3100 applications filed as of April 13


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Prioritized Examination

• Potential strategy: for “core” / “high

value” technology consider prioritized

examination

• Broad scope: applicable to any newly filed

or pending patent application


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Special Micro Entity Fees

• Old law: only large and small entities

• Large entities pay regular USPTO fees

• Small entities (≤499 employees) receive a 50%

discount on many regular fees

• New law: addition of micro entities

• A “micro entity” receives a 75% discount on many

regular fees


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• Not widely applicable (narrowly defined)

• Solo / small inventors

• Inventors (i) with ≤ 4 other patents, and (ii) who do not

currently make “a lot of money”, and (iii) who are not

obligated to assign to an employer

• The ≤ 4 other patents does not include prior patents assigned

to prior employer

• “A lot of money” means > 3x median household income

• Colleges, Universities and other Institutes of Higher

Education


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• Cannot yet take advantage (maybe by Q3?)

• Although enacted, the fees have not yet been set by

the USPTO

• See: http://www.uspto.gov/aia_implementation/faq.jsp

http://www.uspto.gov/aia_implementation/faq.jsp


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Elimination of Best Mode Defense

• Old law: patent could be invalidated for

failure to disclose the best mode of

making / using an invention


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• New law: can no longer invalidate a

patent for failure to disclose the best

mode

• Still required to disclose the best mode

• Yes, there is an inconsistency / tension in the

law


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• Strategy: Continue to disclose the best mode

• Since the law still requires that the best mode be disclosed, inventors should still disclose the best mode so as to comply with the law, even though the patent cannot be invalidated for failure to do so

• Best mode may be required to properly claim / describe the invention

• Potential ramifications for non-disclosure:

• Inability to get a patent to the “best mode” of an invention

• Fraud?


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New Prior User Rights Defense

• Old law: “secret” prior use of a

technology was not a defense to patent

infringement

• Entity could potentially be “on the hook” for

patent infringement even if it had been

secretly using a technology for years before

the asserted patent was filed


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• New law: “secret” prior use of a

technology is now a defense provided

the prior use:

• occurred more than 1 year before the

asserted patent was filed; and

• occurred in the United States; and

• was commercial in nature


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• Successful assertion of the defense does

not invalidate the asserted patent

• Patent owner can still sue others

• Prior user rights are non-transferrable

• Cannot “license” or “sell” your prior user rights to

others


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• Potential strategy: for new technology

that is “hard to police” (e.g., new

methods of manufacture), consider

keeping the technology as a trade secret

• Now less downside to protecting new technology via

trade secret

• Risk of patent infringement still exists


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• Risk 1: No guarantee that the prior

commercial use can be used as a defense • Because the “prior use” must have began more than

1 year before the asserted patent was filed, there

is still a risk of patent infringement due to unknown

/ secret patents

• Patents do not publish for 18 months (in most instances)

• Some patents do not publish until they are granted

• Potentially 1.5 years (or more) of

uncertainty as to whether the defense

can be used


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• Risk 2: The prior use must be

commercial in nature, such as: • An actual arm’s length sale, or

• Another arm’s length commercial transfer of a

useful end result of the commercial use, or

• An internal commercial use (e.g., pre-marketing

regulatory approval of drugs)


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• Risk 3: “Abandoned” technology cannot

be asserted


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• Risk 4: Defense must be proved by clear

and convincing evidence

• Higher standard than “preponderance of the

evidence”

• Risk 5: Raising the defense, but later

failing to demonstrate a reasonable basis

for it requires that the court award

attorney fees to the patent owner


Phase 2 Changes

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Third-party submissions of prior art

• Old law: Third parties allowed to submit

prior art during pendency of a patent

application, but could not comment on

the art, and had a narrow time window

to submit the prior art


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• New law: Third parties can submit prior

art with comments and have a large

time window to submit

• Art must be submitted before issuance of the

notice of allowance and after either the 1st

office action or 6-months after publication

• Cheap: $180 per submission

• Limited to 10 references


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• Potential strategy: consider monitoring

competitor patent filings and submitting

“killer” prior art and with comments,

when available


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• Potential risks:

• Since the submitter does NOT get another

chance to participate, the patent owner may

be able to “cleanse” the patent over the

submitted art

• May be harder to invalidate the patent during

later proceedings

• Potential alternative: keep art “in back

pocket” for opposition, inter partes review, or

litigation proceedings


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Supplemental Examination by Patent

Owners

• Old law: patent owners could not cure an

inequitable conduct charge by

resubmitting their patent for review by

the USPTO

• Example: failure to disclose a known

material prior art reference could ruin a

patent, even if the patent owner tried to

correct the mistake by resubmitting to the

USPTO


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Owners

• New law: newly introduced

supplemental examination proceedings

allow patent owners to “resubmit” their

patent to the USPTO to “cleanse” the

patent of any inequitable conduct charge


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Owners

• Potential strategy: patent owners should

consider a supplemental examination

when known material prior art was

omitted during prosecution of the original

patent


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Owners

• Downsides / Risks:

• Expensive -- current proposed rules require

more than $21,000 in filing fees • No small / micro entity fees

• With attorney fees, total cost to “cleanse” the

patent could exceed $100,000

• Patent owners -- weigh cost relative to patent value

• Patent could be revoked by USPTO

• The patenting process will reopen if the

submitted art raises a “substantial new question

of patentability”


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Post-Grant Review (Oppositions)

• Old law: no ability for third-party to

oppose patent at the USPTO on all

grounds of validity

• Patent reexamination proceedings exist (and

still do), but may be under utilized because:

• Some proceedings are ex parte –- i.e., after the

initial filing the requestor / challenger does not

get to participate

• Some proceedings are inter parties, but only

limited grounds for invalidity can be raised


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• New law: can challenge (oppose) any

granted patent at the USPTO and on all

validity grounds

• Patent must be opposed within 9 months of

its grant date


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• Old law: USPTO not required to complete

reexamination in any specific time frame

• Old inter partes reexaminations usually

“dragged out” for several years


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• New law: Statute requires completion of

an opposition proceeding within 12-18

months

• Faster than old inter partes reexaminations

• Faster than typical patent litigation


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• Opposition proceedings will be conducted

via a 3-judge panel with discovery,

witnesses, etc.

• Improvement over old inter partes

reexamination, which was entirely based

on paper filings

• Opposition proceedings are only

applicable to “first-to-file” patents

• Patents filed on or after March 17, 2013


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• Potential strategy: when first-to-file

“begins”, consider monitoring competitor

patent filings and opposing patents within

the 9-month opposition window


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• Expensive -- current rules propose at least

$35,800 in filing fees

• With attorney fees and discovery, oppositions

could average $300,000, or more

• Still (likely) not as expensive as “full-blown”

patent litigation, which averages millions of

dollars

• Prohibited (basically) from later challenging

the patent in court


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Inter Partes Review

• Old law: inter partes reexamination

• allowed for a patent challenge at the USPTO

• based solely on paper filings

• decided by patent examiners

• slow


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Inter Partes Review

• New law: inter partes review allows for

a patent challenge at the USPTO, with

discovery, witnesses, etc. and will be

decided by a 3-judge panel

• Almost the same as an opposition, but:

• can only challenge patents based on prior patents or

printed publications

• oppositions can use any evidence, such as on-sale, public use

• can only be filed after the opposition period ends

• Fast - same timing requirements as an opposition –

completion within 12-18 months


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Inter Partes Review

• Potential strategy: defendants should

consider filing an inter partes review in

lieu of challenging the patent in court

• Potentially use when the 9-month opposition

window has passed


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Inter Partes Review


• Same as oppositions


Phase 3 Changes

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First-to-File

• Old law: whomever was the first-to-

invent was awarded patent rights

• “First-to-invent” means the first person to conceive

of the patented idea

• In case of a first-to-invent dispute, an interference

proceeding was held to determine whom was the

first to conceive of the invention

• Very expensive and time consuming

• First-to-invent is not used by any other country


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First-to-File

• New law: whomever is the first-to-file a

patent application is awarded rights

• Race to the patent office

• Aligns the U.S. with the rest of the world …

for the most part

• New law keeps a 1-year grace period relative

to your own disclosures

• Rest of the world = strict novelty, i.e., no grace

period


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First-to-File

• Potential strategy:

• File patents ASAP

• Still document R&D efforts in-case you have

to prove that an invention was stolen from

you

• Derivation proceedings


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First-to-File

• Potential impact:

• Companies involved in non-U.S. markets:

• Minor -- most companies already endeavor

to obtain foreign patents

• De facto already following first-to-file, i.e.

filing patents ASAP

• Companies only involved in the U.S. market:

• More than minor(?) – should implement

strategies to make sure patents are being

filed ASAP


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New Prior Art Standards

• Old law: prior public knowledge, public

use, and sales of an invention could NOT

be used to “knock out” a U.S. patent if

they occurred outside the U.S.


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• New law: global prior art standard –

any public use, sale, or knowledge

anywhere in the world can be used to

invalidate a patent


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• Potential strategy: coordinate with

your foreign entities (if applicable) to

make sure their actions do not affect

U.S. patent rights


Question / Answer Session

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Thank you!

Heath Briggs

Greenberg Traurig LLP

1200 17th Street, Suite 2400

Denver, CO 80202

Ph: 303-685-7418

E-mail: [email protected]

Web: www.gtlaw.com/people/heathjbriggs

mailto:[email protected]

http://www.gtlaw.com/people/heathjbriggs

strategies in view of patent reform may 9, 2012...•america invents act enacted sept. 16, 2011...

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