Intellectual Property
Practice
U.S. Patent Law – A Procedural
Overview
The Patent - An Overview
To encourage development of new and useful
inventions.


Process, machine, manufacture, composition of matter.

Provides an exclusionary right.

Over 7.6 million patents to date.
Contents of a Patent
Generally


Title, Cross-Reference to Related Applications,
Reference to Sequence Listing/Program, Background,
Brief Summary of the Invention, Brief Description of
the Drawings, Abstract, Sequence Listing/Program.
Detailed Description



Must provide a written description of the invention.
 This includes the figures.
Must enable another to make and use the invention.
Claims



Define the scope of the patent.
Independent, Dependent, Multiple Dependent.
Rights Conferred
Prevent others from:

Making

Using

Selling

Offering to sell; or

Importing
the invention without permission.


This is not an affirmative grant.

A licensee does not infringe.
Generally, for 20 years from filing.
Using These Rights
A patent may be used offensively or defensively
Offensively

-
As a sword to extract money from others.
Defensively

-
As a shield to keep competitors out of the market.
Infringement

Claims define the boundaries of the patent rights.

Determination is a two-step process:
“Construe” the claims;


See if the accused product/process “reads on” the construed
claims;

Can turn into a “battle of the experts” for complex
technologies.
Infringement can be:


Prosecution estoppel can limit claim scope;

Direct;

Contributory;

Inducement.
Doctrine of Equivalence can expand claim scope.
Infringement – Example
Claims

A mouse-trapping device, comprising a platform and a
spring bar pivotally attached to the platform for engaging
a mouse, responsive to the mouse stepping on the
platform.

A mouse-trapping device of claim 1, wherein the platform
comprises a capacitive detector circuit coupled to the
spring bar responsive to, the capacitive detector circuit
releasing the spring bar responsive to a change in
nominal capacitance representative of the mouse
stepping on the platform.
Example
Limitations/Elements
Independent claim 1:
(1) Platform;
(2) Spring bar;
(3) Pivotal attachment; and
(4) Responsiveness to a mouse.
Dependent claim 2:
Everything in claim 1;
(5) Capacitive detector circuit; and
(6) Responsiveness to change in capacitance.
Example
Infringement

Construe each element.

Compare the construed elements to the accused device.
-
Mousetrap with platform and attached spring bar infringes
claim 1, but not claim 2.
-
Mousetrap with additional capacitive detector circuit
infringes claims 1 and 2.

If claim 1 is invalidated during litigation, claim 2 may still
be valid and infringed.
-
Dependent claims are backups for the independents.
Remedies for Infringement
Injunction

Court orders the infringer to stop infringing.

eBay v MercExchange has made it harder to get; now,
plaintiff must show:
-
Irreparable harm;
-
No adequate remedy at law (money can’t fix it);
-
Balance of the hardships favours plaintiff over defendant;
-
In junction is not against the public interest.
Remedies for Infringement
Damages

Reasonable royalty

Lost profits

Attorneys Fees
Defenses to Infringement
Invalidity

Patents are presumed to be valid, and can only be
proved invalid by “clear and convincing evidence.”

Section 112
Written description, enablement, best mode, definiteness
-

Section 102 – Novelty

Section 103 – Obviousness

KSR v. Teleflex has made proving this easier for some
technologies.
-
PHOSITA is creative, “obvious to try” is OK, use common
sense (hindsight bias is not a big concern).
Defenses to Infringement
Other

Statute of Limitations
-

Laches
-

-



Presumed after six years
Equitable estoppel
Failure to Mark or Notice


Six years
A warning letter will provide notice, however.
Incorrect inventorship
Inequitable conduct during prosecution
License
35 U.S.C. 271(e)(1): No infringement if infringing activity is
used solely for purposes of seeking FDA approval.
Litigation Procedure
Using the Sword

Prefiling Inquiry

Filing the Complaint
-

Jurisdiction and Venue
Discovery
-
Documents, Witnesses, Expert Witnesses

Claim Construction (Markman Hearing)

Motions for Summary Judgment

Trial

Appeal
Procedure
Prefiling Inquiry

Required by Rule 11 of Fed. R. Civ. P.

Attorney must make a reasonable inquiry of the facts and
law before filing the complaint.

Federal Circuit requires an infringement analysis.

-
Independently construe the claims;
-
Independently apply the construed claims to the accused
product/process.
Sanctions can result if not done.
Procedure
Bringing the Complaint

Court must have personal jurisdiction over
defendant.

The venue must also be correct.
Procedure
Personal Jurisdiction


Look for sufficient minimum contacts with the
forum state

Sales within the U.S.

Office or agent in the U.S.
No jurisdiction = No case
Procedure
International Reach
Some patents can “reach out” of the U.S.



NTP v. RIM
-
Every step in a method claim must be done in the
U.S.
-
A system claim is infringed if use and control is from
within the U.S.
35 U.S.C. 271(g): Product made outside the US
according to a patented process will infringe unless
the product is materially changed.
Procedure
Venue

Where defendant resides; or

Where any infringement occurred.

A corporation “resides” anywhere where it is
subject to personal jurisdiction.
Procedure
Preliminary Injunction

Court order to stop infringement before any
formal determination is made.

Typically filed with or just after the complaint.

May be granted in one month or less.


Like having a trial compressed into one month.
Granted in less than 25% of cases.

75% reversal rate.
Procedure
Getting a Preliminary Injunction
For grant of the motion, the patentee must show:

A likelihood of success in proving validity and
infringement;

Irreparable harm if motion is denied;

Greater hardship to patentee if motion is denied
than to infringer if motion is granted; and

The public interest is not harmed if granted.
Procedure
Stopping a Preliminary Injunction

Show that money is enough to compensate the
patentee.


eBay implied that money is always good enough for a
“patent troll.”
A successful request to re-examine the patent
may defeat the motion.
Procedure
Discovery

Interrogatories

Requests for Production

Requests for Admission

Depositions

Experts
Procedure
What is Discoverable?
Everything except:

Attorney-client confidences
-

Destroyed if communicated to another.
Attorney work product
-
Only documents made in preparation of litigation.
There is no “business privilege”

-
Beware of internal emails, memos, etc.!
-
Cannot destroy any relevant documents once a
lawsuit begins.
Procedure
Markman Hearing

Hearing to construe the claims

Weight of evidence:
-
Language of the claims;
-
Written description, including figures;
-
File wrapper;
-
Dictionaries;
-
Expert witnesses.

Frequently ends the case
-
But has a nearly 50% reversal rate.
Procedure
General Principles of Claim Construction

Construed at time of invention

Limitations given their “ordinary meaning”

Construe different words differently

Preamble is generally not limiting

Do not read specific embodiments into the
claims

Construe claims to cover preferred
embodiments

Construe claims to uphold validity.
Procedure
Summary Judgment

Used to end the case before it gets to trial.

Granted if the evidence then in the record is so
clear that no reasonable jury could find
otherwise.
-
All doubt is read in favour of the non-moving party.

Will be denied if other party can show a need
for more discovery.

Most patent cases end here or before.
-
5% of cases actually make it to trial.
-
~10% of cases resolved at summary judgment.
Damages

Reasonable royalty
-

Between hypothetical willing parties.
Lost profits
-
Cannot be less than reasonable royalty.
-
Cannot be speculative.
-
Must be direct and foreseeable result from infringement.
-
Actual computation is at the discretion of the court.

Attorneys Fees
-
Only in “exceptional” cases – inequitable conduct, litigation
misconduct, willful infringement.
Willfulness

Can lead to triple damages and attorneys fees if found

Court determines “willfulness”
-
Looks to commercial behavior and state of mind.



Factors include copying, knowledge of the patent, good
faith belief in non-infringement, behavior during litigation.
Alleged in about 90% of cases
-
Found in about 50% of the cases.
-
Affirmed about 90% of the time.
Must be shown with clear and convincing evidence
Willfulness
New Case Law

Seagate has changed the “willfulness” standard

Patentee must now show “objective recklessness”

No “affirmative duty of care” for alleged infringers
-
Implies that a non-infringement opinion is no longer
mandatory.

Waiver of attorney-client privilege for opinion counsel
does not typically extend to trial counsel

Waiver of work product immunity for opinion counsel does
not typically extend to trial counsel.
Costs
i.
Prefiling investigation ~ $5,000.
ii.
Preparation and filing of complaint ~ $3,000.
iii.
Initial Disclosures ~ $3,000.
iv.
Preparation of Proposed Scheduling Order ~ $3,000.
v.
Preparation of discovery requests ~ $15,000 to $20,000.
vi.
Preparation of discovery request responses ~ $15,000 to
$20,000.
Costs
vii.
Preparation for and participate in defensive or offensive
deposition ~ $15,000 per witness.
viii.
Expert discovery: ~$15,000 per expert report on
infringement; ~$15,000 per expert report on validity; and
between ~$50,000 to $100,000 per report on damages.
ix.
prepare for and defend/take expert deposition ~ $15,000
per expert.
x.
expert witness fees ~ $25,000 per technical witness and
~$50,000 for damages expert.
xi.
Preparation of claim construction and/or summary
judgment brief on infringement or validity ~ $20,000 to
$30,000 per brief.
xii.
Preparation for and attend claim construction or summary
judgment hearing: with expert testimony ~ $30,000,
without expert testimony ~$20,000.
Costs
Pretrial activities - Preparation of case-in-chief:
Deposition designations ~ $5,000 per witness.
Trial consultants ~ $25,000 to $50,000.
Mock trial, if any ~$100,000+
Motions in limine ~$5,000 each.
Pretrial brief ~$25,000.
Pretrial activities week before trial: $40,000 legal fees and
$40,000 expert witness fees.
Costs
Two Week Trial:
Counsel fees (2 attorneys) ~ $120,000.
Expert witness fees for 3 witnesses ~ $40,000.
Food and lodging ~ $60,000.
Total Litigation Costs ~$1.3 million
Licensing
Licensing v. Assignment

A license is a contract between licensor and licensee,
granting the licensee rights to a patent in exchange for
performing obligations.
-
Can be revoked if licensee fails to meet these obligations.
-
May be non-negotiable.

An assignment is a grant by the assignor of a property
interest in a patent to an assignee.
-
Is irrevocable.
-
Is negotiable.
Licensing v. Assignment
When is assignment preferred?

Between employee and employer

Lump sum sales price
-
Removes time-related risks from assignor.
-
Also destroys possible “blue sky” benefits.

Raising capital by selling assets

For startup companies
Licensing Considerations


Exploitation of existing patent portfolio
-
Royalty payments over lifetime of the patent
-
Performance Obligations

Pre-market

Post-Market
Cross-licensing
MedImmune v. Genetech
New options for licensees


The old law:
-
Licensee in good standing could not challenge the validity of
the patent.
-
“Reasonable apprehension of suit” to bring a declaratory
judgment action.
The new law:
-
Licensee can challenge the patent while still enjoying the
protection of the license.
-
“Reasonable apprehension of suit” no longer required –
easier to bring declaratory judgment action.
ITC

No damages – can only stop importation of goods

Decision must be rendered in one year
-
Like a district court suit compressed into a single year.

Costs similar to suit in district court

All findings reviewable by district court
New Prosecution Rules

New rules become effective Nov. 1, 2007

These rules significantly affect:
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Number of claims that can be presented;
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The number of continuing applications that can be filed;
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The number of RCEs that can be filed.
New Prosecution Rules
Examination of Claims

An Examination Support Document (ESD) is required
if application(s) contain:
-
More than 5 independent claims; or
-
More than 25 claims in total.
-
ESD must be filed before first office action on the merits.

This includes counting claims in any copending
application having a patently indistinct claim.

Effective for:
-
Applications filed on or after Nov. 1, 2007;
-
Applications for which a first office action on the merits was
not mailed before Nov. 1, 2007.
New Prosecution Rules
Claims – How to Count Them
1. A method comprising … (1 independent)
2. The method of claim 1 wherein … (1 dependent)
3. The method of claim 1 or 2 … (2 dependents)
4. The method of claim 3 … (2 dependents)
5. A device formed according to the method of claim 1.
(1 independent)
New Prosecution Rules
ESD – What Is It?
An ESD must include:

A preexamination search statement;

Listing of closest references found;

Identification of claim references found in each
reference;
-
Small entities excepted!

Detailed explanation of patentability over the
references (§102 and §103); and

Showing of support in specification for claims.
New Prosecution Rules
Preexamination search statement

State that search was performed in compliance with
§1.265(b);
-
Searched U.S. patents and publications, foreign patents, and
non-patent literature.

Identify field of search by U.S. class and subclass, and
the date of search; and

Disclose the search logic used to query a database,
the database searched, and the date of search.
New Prosecution Rules
Patentably Indistinct Claims - Identification

Applicants must disclose applications or patents that:
-
Have an inventor in common with the application; and
-
A filing or priority date within two months of the filing or priority
date of the application.

Submit four months from filing date, or two months
from mailing date of filing receipt of other application.

Effective for all applications pending on Nov. 2, 2007.
New Prosecution Rules
Patentably Indistinct Claims - Presumptions
The USPTO will assume that commonly owned
applications will have patentably indistinct claims if:

There is a common inventor;

The filing or priority dates are the same; and

There is substantial overlapping disclosure
-
I.e., at least one claim in on application has support in the
written description of the other application.
New Prosecution Rules
Patentably Indistinct Claims - Rebuttal
Once presumption is established the applicant:

Rebut the presumption; or

File terminal disclaimer
-

Claims in the applications are combined for computational
purposes of the 5/25 limit.
USPTO may require elimination of the patentably
indistinct claims from all but one of the applications.
New Prosecution Rules
Continuation Rules
In an application family, without petition and showing,
applicants can file:
-
Two continuations or CIPs; and
-
One RCE
Anything more requires a petition and showing, except:
-
Divisional applications
For applications filed before August 21, 2007
-
One more continuing application is permitted
These rules apply to applications and RCEs filed on or
after Nov. 1, 2007.
New Prosecution Rules
Continuation Examples
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I
C
C
C
C
C
Petition and
showing required (if
not before Aug. 21)
C
New Prosecution Rules
Continuation Examples
I
I
C
C
R
C
C
R
R
Petition and
showing
required
R
New Prosecution Rules
Divisional Applications

An application which claims non-elected subject
matter that was previously subject to a restriction
requirement.

Without petition and showing, if restriction is not
traversed Applicant may file:

-
Two continuation applications of the divisional; and
-
One RCE in the divisional family.
Anything more requires petition and showing.
New Prosecution Rules
Divisional Examples
R
I
C
C
D
R
C
C
New Prosecution Rules
CIP Applications

Applicant must identify claims in the CIP that are
supported in the parent application.

Claims not so identified get the filing date of the CIP.
New Prosecution Rules
Petition and Showing

Filed within four months of filing date of continuing
application

Petition fee ($400)

An amendment, argument or evidence;
-

Not an IDS
A showing that this could not have been submitted
during the prosecution of the parent
New Prosecution Rules
Provisional Applications

If benefit is claimed to a provisional application that is
not in English:
-
English language translation of the provisional application will
be required.
-
If none is present, Applicant will be given a time period to
provide one, or remove the benefit claim.
-
Translation must also include a statement that the translation
is accurate.
-
Translation may be filed even if provisional is abandoned.