Dealing Strategically with the America Invents Act

Dealing Strategically with the Panel: Ray Chen, Gerard von Hoffmann,
America Invents Act Brent Babcock
Moderator: Scott Smith

The recipient may only view this work. No other right or license is granted.

Topics

• Brief Overview
• First Inventor to File
• Third-Party Submissions
• Post-Grant Proceedings
– Post-Grant and Inter Partes Review
– Derivation Proceedings
• Supplemental Examination

© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 2

America Invents Act


America Invents Act (AIA)
• Signed into law September 16, 2011
• General Themes
– “Harmonization”
– Simplify and reduce cost of patent
litigation
– Reduce influence of non-practicing
entities
– Varying effective dates
– Some uncertainty


September 2011 Prosecution-Focused Provisions

• Prioritized examination • Inter partes reexam threshold
– $4800 fee for request – Reasonable likelihood that
requester would prevail with
– Any new, non-national phase respect to 1 claim
application
– Must be complete at filing • Patentable subject matter
– < 10,000 apps/year – No tax strategies
– No human organisms
• Micro-entity status
– 75% fee reduction • Virtual marking
– Small entity; less than 4 – Mark using website
unassigned previously filed US
nonprovisional applications;
revenue in previous year < 3
times median household income
– Employee of or assigned to
institution of higher learning


Accelerated Exam v. Prioritized Exam
• Accelerated Exam (old) • Prioritized Exam (new)
– Petition + $130 fee + search – Petition + $4,800 fee + $130
and support documentation fee + all application
formalities at time of filling
– Maximum 20 claims with 3
independent – Maximum 30 claims with 4
independent
– 1 month OA response period
and abandonment if not met – 3 month OA response period;
kicked back to regular
– Average pendency: 186 days docket if not met
– No plant applications – Expected pendency: 12
– No limit to number months
– No design, reissue or
provisional applications
– 10,000 applications per fiscal
year (852 filed 2011)


September 2011 Litigation-Focused Provisions

• No invalidation based upon • Prior user rights
failure to disclose best mode – Personal to accused infringer
• False marking lawsuits – Not just business methods
– Plaintiff must suffer competitive – Defense to infringement based
injury on earlier commercial use

– Marking with expired patent no – Must be >1 year from effective
filing date or patentee’s
longer basis disclosure date
– Applies to all lawsuits pending – Any patent issuing after
or filed on or after September 16, September 16, 2011
2011
• Joinder/Consolidation
– Fed. Cir. has exclusive
jurisdiction over compulsory
counterclaims
– Need more than common
infringed patent for joinder


Recent and Upcoming Changes
September 16, 2012 March 16, 2013
• Third-Party Submissions • First-Inventor-to-File
– Prior art and statement in – Change from first to invent
pending applications
• Derivation Proceedings
• Post-Grant Proceedings
– Change from interferences
– Post-Grant Review
– Inter Partes Review
• Supplemental Examination
• Changed rules re
declarations, assignments
and filing formalities


First Inventor To File


First Inventor to File
• “A person shall be entitled to a patent unless the claimed
invention was patented, described in a printed publication, or in
public use, on sale, or otherwise available to the public before
the effective filing date of the claimed invention”
• Limited 1 year grace period for “disclosure” by inventor and
disclosure or application filed by others after a “public
disclosure” by the inventor
• Earlier filed applications are not prior art if
– 1) derived from inventor
– 2) filed after “public disclosure” by inventor or
– 3) commonly owned by same person at the time of filing
• Applies to any claim with an “effective date” after March 16, 2013


First Inventor to File – March 16, 2013

• Should our company change its patent filing practices?
– File more/faster provisional apps?
– How to remain cost effective and minimize distraction?
• Should we rush to file applications before March 16?
– Any particular circumstances in which we should beat the
deadline?
• How will continuation and continuation-in-part
applications be treated?


Take Home Points

• File before March 16, 2013 if possible
• File more often and more quickly after March 16, 2013
– File before public disclosure/sale
– File many provisional applications
• Implement internal infrastructure to promote disclosures
• Don’t throw away lab notebooks


Third Party
Submissions


Third Party Submissions in Pending Applications
• Old Rule • New Rule
– Limited ability to submit prior art – Can submit patents, published
patent applications or other
– Prior art must be submitted printed publications
within 2 months following
publication of the application – Can submit anonymously
– Can only submit up to 10 pieces – Must be accompanied by
of prior art concise description of asserted
relevance of each submitted
– Cannot submit explanation of the document
relevance of the prior art
– Must be filed prior to the earlier
of:
• (1) a notice of allowance; or
• (2) the later of:
(a) 6 months after the date of
first publication; or
(b) the date the first rejection
of any claim


Third Party Submissions, Questions
• Should I use this process to challenge competitor
patent applications?
– Should I use the third-party submission process or wait until
my competitor’s patent issues and challenge it via post-grant
review or in litigation?
• What is the downside risk?
• How should I decide which of my competitors’
applications to challenge?


Take Home Points

• Inexpensive way to potentially narrow a competitor’s claims
($180 fee for up to 10 prior art references)
• No estoppel (but presumption of validity)
• Risk = patent examiner considers submitted prior art and allows
broad claims anyway
• Discuss with your patent attorney the pros and cons of holding
back “best” prior art for potential post-grant challenges


Post-Grant and Inter
Partes Review


Changes to Post-Issuance Disputes

Before AIA After AIA
• Inter Partes Reexam • Post-Grant Review
• Ex Parte Reexam • Inter Partes Review
• Interferences • Derivation Proceedings
• Ex Parte Reexam
• Interferences (Legacy)
• Transitional Program for
Covered Business
Method Patents


Summary of Post Issuance Review

Post-Grant Review Inter Partes Review
Basis Any basis used in litigation Only patents and printed
publications
When Within 9 months of grant After 9 months from grant or end
of Post Grant review or within 12
+ before civil action filed month of civil action
Targets Priority on/after 3/16/2013 Any
Effective 3/16/2013 9/16/2012
Discovery Yes Yes – including depositions
Bar Yes Yes
Estoppel Yes Yes


Trial Proceedings Timeline
PO Petitioner PO
discovery discovery discovery
period period period

Petitioner
PO
reply
response
PO to PO’s
to decision PO Oral Written
Petition prelim. Decision response
reply hearing decision
response
motion
opp’n to
to amend
motion

3 mo. ≤ 3 mo. 3 mo. 3 mo. 1 mo.
Trial begins ≤ 1 year

Post-Issuance Review, Questions
• When should I use post-grant review or inter partes review rather
than litigation?
• How should I decide between post-grant review and inter partes
review?
• If you settle during post-grant proceedings, what happens?
• Is there anything I can do to prevent post-grant review or inter
partes review of my company’s patents?
• If I have been sued for infringement of one patent by a competitor
and see that a second patent might be coming, should I challenge
it using post-grant review or just wait and challenge it in the
litigation?


Advantages of Inter Partes Review vs. Litigation

• Lower Burden of Proof (preponderance of the evidence)
• Lower Cost (FRCP do not apply)
– Limited discovery
– Professionalism strictly enforced
– Fewer “ancillary” battles (venue, jurisdiction, discovery, etc.)
• Quicker (1-2 years)
• Better informed decision maker (both technical & legal)


Advantages of Litigation vs. Inter Partes Review

• Infringement can be adjudicated
• Full scope of claims and defenses
• Full discovery opportunities
• Estoppel effect of USPTO Inter Partes proceedings
• More expensive to opponent
• Jury presents potentially more risk to opponent


Take Home Points

• Consider Post-Grant Review and Inter Partes Review as less
expensive alternatives to litigation
• Monitor competitors’ pending applications if Post-Grant
Procedures are a possibility
• Assess risk of potential Post-Grant Procedures against your
patents by third parties
– Set aside budget
– Keep continuation pending
– File many/quality dependent claims
– If post-grant challenge is likely and prior art is known, consider
strengthening patent via supplemental examination


Derivation
Proceedings


Derivation Proceedings
• Address “stolen” inventions
– Eventually will replace interferences
• Requires petition to explain facts surrounding “theft”
• Two options
– Civil action b/w 2 patents
• Filed w/in 1 year of issuance of derived patent
– Derivation proceeding at PTO b/w 2 pending apps
• Filed w/in 1 year of publication of the derived application

• Remedy
– Cancelation of claims
– Inventor name corrections


Take Home Points

• Invention documentation is still important – lab
notebooks, etc.
• Important to monitor IP of competitors and potential
competitors
• Keep good records of what you disclose to
collaborators


Supplemental Exam


Supplemental Examination
• Patent owner may request supplemental examination of a patent to
consider, reconsider, or correct information believed to be
relevant to the patent
• PTO decides if information raises a substantial new question of
patentability
– May result in ex parte reexamination
• Request may address any condition for patentability (patentable
subject matter, anticipation, obviousness, double patenting,
definiteness, etc.)
– Information is not limited to patents and printed publications
• No third party involvement


Benefit and Exceptions
• Patent cannot be held unenforceable on information
considered
• Benefit does not apply to:
– Allegations pled in a civil action prior to date of supplemental
examination request
– Notice (for abbreviated drug application) received by
patentee prior to date of supplemental examination request
– Defenses to patent infringement, unless supplemental
examination and any resulting ex parte reexamination are
completed before civil action is brought


Costs – Proposed Sept. 10, 2012
• PTO Filing Fees

Large Small Micro
$18,000 $9,000 $4,500

• Refund if ex parte reexamination not ordered
Large Small Micro
$13,600 $6,800 $3,400


Supplemental Examination Questions
• When should I consider using supplemental examination?
• What are the risks?
• Are there specific circumstances when I definitely should NOT use
supplemental examination?


Take Home Points
• Therasense decision likely decreased the importance of
supplemental examination
• Declaratory Judgment (DJ) Actions
– If aware of possible DJ against patent, consider filing supplemental
examination before DJ is filed
• ANDA Litigation
– If patent will be listed in Orange Book, consider filing supplemental
examination as part of due diligence, or at a minimum, prior to
receiving notice
• Enforcement
– If planning to enforce the patent, consider filing supplemental
examination with sufficient time to complete any ex parte
reexamination before filing suit


Action Item List


Action Item List
 Consider prioritized examination  Keep post-grant challenges in
mind when preparing patent
 Consider whether micro-entity applications. Keep continuations
status applies pending and consider setting
 Evaluate current invention aside funds for defending.
harvesting procedures for speed  Consider supplemental exam for
and efficiency strengthening patents
 Consider filing more/faster  Obtain assignments of
provisional applications provisional applications before
 Implement patent/publication filing
monitors for possible prior art  Continue documenting
submissions and post-grant inventions and developments
action
 Consider implementing virtual
 Consider using new procedures marking program
to challenge pending
applications and issued patents


Dealing Strategically with the America Invents Act

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