Building an Effective IP Portfolio without Breaking the Bank - Presentation by John Sadler, Vice President, R&D, Cervel Neurotech delivered at the marcus evans Medical Device R&D Summit June 2014, held in Las Vegas

1. Managing an IP Portfolio
Without Breaking the Bank
John Sadler
June 2014

2. Before we beginBefore we begin…
I am not an attorneyI am not an attorney
I do have a great deal of relevant experience in multiple
markets
The ideas in this presentation should help you work
ff ti l ith IP l t l th tmore effectively with IP counsel – not replace that
interaction
When in doubt, consult your IP attorney

3. GoalsGoals
Improve patent portfolio cost-effectivenessImprove patent portfolio cost effectiveness
Evaluate and tune a patent portfolio
Manage an invention pipelineManage an invention pipeline

4. Review: What is Intellectual Property?Review: What is Intellectual Property?
Patents Trademarks Copyrights Trade SecretsPatents, Trademarks, Copyrights, Trade Secrets
Not just patents! You have options.
The Patent Bargain:
Disclose your invention in exchange for a limited monopoly
IP is an offensive weapon
A Sword, not a Shield
If you rest on your rights, you may lose them
IP d t di tl t t f l it ll ti fIP does not directly protect you from lawsuits or allegations of
infringement

5. More ReviewMore Review
P t t t ifiPatents are country-specific
Patent Cooperation Treaty provides some commonality
“Defensive value”
If there is a credible threat of countersuit or invalidationIf there is a credible threat of countersuit or invalidation
A filed patent or portfolio has some deterrent value
In a crowded field, claim scope and validity tend to suffer
Some industries thrive on cross-licensing

6. What makes a patent valuable?What makes a patent valuable?
V lid l iValid claims
…that result in a working invention,g
…that have (or will have) market value somewhere,
…that are not easy to work around,
for which infringement can be detected…for which infringement can be detected

7. What makes a claim valid?What makes a claim valid?
S t d b th t hiSupported by the teachings
Clearly states the nature of the inventiony
Not anticipated by prior art
Not previously published or disclosed
Equitable conduct on the part of the claimantsEquitable conduct on the part of the claimants
Note: SCOTUS has been active on this topic lately

8. Patent / App EvaluationPatent / App Evaluation
Criterion RatingCriterion Rating
Do we practice this invention?
How likely are we to practice in future?y
Does a competitor practice this invention?
How likely is a competitor to practice in future?
How easy is it to detect infringement?
How sure are we that the claimed invention works?
How hard is it to work around the claims?
How broad are the claims?
H h d l d h f thi ?How much coverage do we already have for this?
(Issued patent) Is the patent valid?
(Issued patent) How long until expiration?(Issued patent) How long until expiration?

9. Where to FileWhere to File
Where the markets areWhere the markets are
Market = Need + Ability to Pay
Where competitors have a marketp
Where competitors manufacture or have filed
Where investors are located or want you to fileWhere investors are located or want you to file
File your best patents more broadly than the weaker
onesones
Only the US and AU allow “method of treating
patient” claims

10. When to FileWhen to File
When potential claims have valueWhen potential claims have value
Be cautious about speculative claiming – invest in doing the
research insteadresearch instead
Prior to public disclosure or offer for sale
In the US you have 1 year grace Not so OUSIn the US, you have 1 year grace. Not so OUS.
File provisional apps early and update them!

11. Alternative to Filing PublishAlternative to Filing - Publish
Consider publication when:Consider publication when:
You need freedom to operate
It’s difficult to detect infringementg
Claim space is crowded (potential claims are narrow)
PS: Cheapest way to establish a priority date!

12. Alternative to Filing – Trade SecretAlternative to Filing – Trade Secret
Consider keeping secret if:Consider keeping secret if:
Infringement is hard to detect
Invention is difficult to claim in desired locales
Desired locales do not respect IP law
Invention is hard to reverse-engineer
Notes
M t b t hMust be secret everywhere
For trade secret protection to apply, you must have
supporting evidence of efforts to control the secretpp g

13. Prosecution CostProsecution Cost
US utility filing typically costs $30K-$50K to issueUS utility filing typically costs $30K $50K to issue
Much less if you write and prosecute yourself
More if you are a “large entity”y g y
And then there are maintenance fees…
Foreign filings may cost 2x more
“Method of treating human patient” claims are not
i d t id th US d AUrecognized outside the US and AU

14. Prosecution CostProsecution Cost
Consider preparing and filing your own provisionalConsider preparing and filing your own provisional
application ($100 plus your time)
Many countries allow cost to be deferred
US provisional application – 1 year, no examinationp pp y
Utility model (many countries including CN, EC, Australia)
One way to defer cost in US and get a filing date:
US Provisional PCT national phase

15. Ways to Waste MoneyWays to Waste Money
Prosecuting low-value claimsProsecuting low value claims
Inventor too hands-off
Prosecution delays caused by:
Fail re to search prior art diligentlFailure to search prior art diligently
Speculative claiming – not enough research to know what is
critical to making it work
Failure to grasp and clearly describe what is novel
Filing in the wrong localesFiling in the wrong locales
Where there is no market for the invention
Where IP law is not enforced vigorously

16. More Ways to Waste MoneyMore Ways to Waste Money
Inequitable conductInequitable conduct
Omitting inventors
Failing to notify PTO of relevantg y
prior art
P fid ti litPoor confidentiality
practices
Disclosing invention withoutDisclosing invention without
NDA protection
Poor NDA hygiene
Review marketing materials!

17. Summary: Patent Portfolio ManagementSummary: Patent Portfolio Management
Evaluate patents and applications as a groupEvaluate patents and applications as a group
Rank according to value criteria
Review periodicallyp y
Defer prosecution to give lower value ideas time to mature
Always look at new opportunities in portfolio context
Focus money and effort on the most valuable applications
Minimize costMinimize cost
Use provisional or utility model apps where possible
Have inventor write as much of the disclosure as possibleHave inventor write as much of the disclosure as possible
Keep inventor involved in utility app drafting process
Choose foreign filing locales carefully

18. What is an invention pipeline?What is an invention pipeline?
A deliberate way to foster inventions leading toA deliberate way to foster inventions leading to
valuable patents
Relies on two-way communication:
What fields are under-claimed
What ideas fit into valuable fields
P i it b i i htf l b tPrerequisite: be insightful about
The needs and problems of the market
Your own and your competitors’ patent positionsYour own and your competitors patent positions
Technical capabilities of your organization

19. Invention PipelineInvention Pipeline

20. Invention Pipeline – how it worksInvention Pipeline – how it works
Analyze market needsAnalyze market needs
Identify key problems and opportunities
How could the existing market be disrupted?g p
These should be focus areas for inventing and patenting
Understand competitive IP
Over-claimed areas – concentrate on freedom to operate
Under-claimed areas – invent here if possible
Id tif i tf liIdentify gaps in your portfolio
Discuss opportunity areas and rationale with team
M k i t f d titi IPMake inventors aware of own and competitive IP
Give filing priority to high-value disclosures

21. Invention Pipeline NotesInvention Pipeline Notes
Look for claims in Review periodically:Look for claims in
supporting technologies!
Safety
Review periodically:
Your portfolio status
Competitive IPy
Usability
Calibration / accuracy
Competitive IP
FTO threats
Inventions in process
Energy management
Manufacturing
Accessories
Lab notebooks
Accessories
Patient Compliance

22. Best practicesBest practices
A patent portfolio is an investment portfolioA patent portfolio is an investment portfolio
Compare alternatives
Re-evaluate periodically
Be aware of competitive IP, Freedom To Operate
Search periodically (this has gotten easier)
Maintain a tracking sheet with your attorneyMaintain a tracking sheet with your attorney
Use the attorney-client privilege correctly
Good discoverable document hygieneGood discoverable document hygiene
Good NDA hygiene
Good lab notebook practicesp
Have a document retention policy
And audit periodically

23. Final ThoughtsFinal Thoughts
A patent portfolio is mainly a business tool, not anA patent portfolio is mainly a business tool, not an
inventor recognition tool
Maintain a tracking sheet
l l t di l i t tAlways evaluate disclosures in context
If you sit on your rights you may lose themIf you sit on your rights, you may lose them
Label your product with applicable patent numbers
If you are sure of infringement, you must act
“Just because you’re paranoid doesn’t mean they
aren’t after you”aren t after you
A strong portfolio doesn’t mean that you won’t get sued
Maintain current FTO arguments