Conducting and Analyzing Prior Art SearchesStrategies for Validity, Patentability, Infringement, FTO and State-of-the-Art Searches

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WEDNESDAY, FEBRUARY 27, 2019

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Thomas L. Irving, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

Christopher C. Johns, Esq., Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C.

Stephanie Curcio, Esq., Co-founder, Legalicity, Toronto, Canada

Kim Jordahl, Esq., Founder, KSJLaw, Signal Mountain, Tenn.

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Outline

I. Prior art searches

A. Patentability

B. Validity

C. FTO(infringement)/clearance/due diligence

D. State of the art

E. Assignment/Inventorship/Ownership

II. Structuring and conducting the search

A. Purpose

B. Timing

C. Scope

D. Searching non-English language patents/applications

E. Using AI tools such as Natural Language Processing and Machine Learning

III. Analyzing and presenting search results

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Key Questions For Today’s Discussion

• What are the critical considerations when determining what,

when and where to search?

• What are the critical components of an effective search

strategy, analytical process and follow-up steps to ensure a

successful patent application?

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Enactment: Sept. 16, 2011

PCT Filing

First to Invent System Applies

Prior Art Search Under the Correct Law

“First To Invent” System or “First Inventor to File” System? (see SEC. 3(n)(1)(A))

PCT Filing

Priority Date

Enactment: Sept. 16, 2011

Effective Date: March 16, 2013

Priority Date

“First Inventor to File” System AppliesPCT Filing

Enactment: Sept. 16, 2011

Scenario 1: no claims entitled to priority dateScenario 2: all claims entitled to priority dateScenario: 3: at least 1 claim not entitled to priority date

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Prior Art Searches: Why?

1. Patentability (AIA’s post-grant proceedings);• Patentee

• Petitioner

2. Validity (U.S. district court or International Trade

Commission investigation);

3. Freedom to operate (infringement);

4. Patenting process (state of the art); and

5. Due diligence related to patent licensing or patent

acquisition opportunities.

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Patentability

• Prior art that raises “substantial likelihood” that one or

more claims are unpatentable under a Phillips claim

construction, no presumption of validity, and

preponderance of evidence standard.

• Direct search to begin at a time before the first priority

application for potential priority chain breakers.

• Searcher needs to know proper choice of law: pre-AIA and

AIA prior art.

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Validity

• Identify prior art that could be used against target patents in

litigation.

• Identify prior art that potentially invalidates one or more

claims are invalid under a Markman/Phillips claim construction

standard, presumption of validity, and clear and convincing

evidence standard.

• Direct search to begin at a time before the first priority

application for potential priority chain breakers.

• Searcher needs to know proper choice of law: pre-AIA and AIA

prior art.

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Freedom to Operate (Infringement)

• Prior art that raises issue for either an AIA post-

grant proceeding or district court litigation.• Searcher needs to know proper choice of law: pre-AIA and

AIA prior art.

‒ Identify patent roadblocks.

‒ Identify potential competitors.

‒ Seek out licensing or partnership opportunities.‒ Consider JRA possibilities under AIA (in place by effective

filing date).

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Patenting Process

• Information needed:

• Good summary of invention disclosure;

• Draft patent claims;

• Prior art aware of (?); and

• Inventor(s) name(s).

• Searcher needs to know proper choice of law: pre-AIA and

AIA prior art.

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Due Diligence

• Freedom to operate

• Scope/Validity/Patentability/Enforce-

ability

• Inventorship/Ownership/Transferability

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Freedom-to-Operate• Purpose

– Identify patent roadblocks– Identify potential competitors– Seek out licensing or

partnership opportunities

• Coverage– Patent documents

• Focus on claims

– Countries where company intends to practice (sales or manufacturing)

– Limited to non-expired patents or pending applications

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Due Diligence: Freedom to Operate

and Validity/Patentability Searches

Validity• Purpose

– Evaluate strength of target patents– Identify prior art that could be used

against target patents in litigation

• Coverage– Patent documents

• Entire disclosure– Non-patent publications

• Scientific articles• Theses• Conference abstracts

– Worldwide– Documents published or filed before

relevant priority date(s) of target patents

– Acts– Internet documents

Due Diligence: Ownership

• Inventorship also has ownership implications because in the U.S., the

inventor is the first owner of a patent.

• Ownership may have standing implications.

• Initially, check USPTO assignment records.

• Assignment Division page of website.

• Order copies of recorded assignments.

• For all patents and applications, not just key ones.

• Review recorded assignments and confirm that all named inventors have

assigned all rights to Target.

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• There might be “hidden“ co-owners among the

inventors.―Especially co-inventors from academic institutes or

those who were not employees of the Target company!

• If the original inventorship designation does not

correspond to the final designation, compare the

original set of claims with those finally granted.―Could be a change of inventorship due to the filing a

divisional application.

Ownership: Potential Pitfalls

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• What else to look for?

― Determine whether march-in rights might be lurking.

― Arises frequently in federal government-funded research

(e.g., NIH, DOE, USDA).

― Bayh-Dole Act – 35 USC §§ 201-212 (esp. § 203); 37 CFR § 401 ― Inventions must be reported to U.S. Government.

― Must affirmatively elect to retain title.

― Failure to properly report and elect can result in loss of rights.

Campbell Plastics Engineering & Mfg, Inc. v. Brownlee, 389 F.3d

1243 (Fed. Cir. 2004).

― Must grant U.S. government an irrevocable, nontransferrable,

royalty-free, nonexclusive license.

Due Diligence: Ownership

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STRUCTURING AND CONDUCTING A SEARCH:

Tips For Cost-Effectively Finding The Most Pertinent Information

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The Objective Dictates the Timing

• State of the Art: Before undertaking a resource intensive

development program – or never?

• Patentability: Before a specification and claims are drafted.

• Freedom to Operate: Before significant funds are invested.

• Ownership: When considering entering into an agreement or filing

a lawsuit.

• Invalidity: After a patent of concern issues.

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The Objective Can Also Dictate the Scope

• State of the Art: Any evidence, including publications of any

kind, commercially available products, public use, etc.

• Patentability: Ibid, publicly available prior to the earliest

priority date of the claimed invention.

• Freedom to Operate: Issued and in force patents in the

jurisdictions of interest.

• Ownership: Assignment/inventorship investigations.

• Invalidity: Depends on the forum/audience – some post grant

proceedings require printed publications.

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Where To Look?

• US Patents and Applications• USPTO.gov, Google patents, freepatentsonline.com

• Foreign Patents and Applications• Espace.net, WIPO’s patentscope

(https://patentscope.wipo.int/search/en/search.jsf)

• AU, CA, UK, IN, IL, KR, and NZ have searchable databases with

varying amounts of information/documents accessible.

• Publications• Dialog, websites of publishers, dissertation.com, IEEE

• Chemical Structures and DNA Sequences• CAS, PUBCHEM, ChemSpider.com, chemnavigator.com

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https://www.youtube.com/watch?v=kFBDn5PiL00

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Be Careful when Relying on Translations

• Ether and Ester are apparently interchangeable in

CN.

• “There is no corresponding word for distal in

Japanese.”

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≠

Where to Look?The most likely places, first…

• Your client/inventor

• They know their corporate and individual competitors.

• They know what they themselves have published/patented.

• They are often aware of what others in the field have published.

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Where to Look? There is more than 1 way to invalidate a patent

• Cover page issues.

• Incorrect inventorship.

• Nonassigning inventor.

• Validity of priority claim.

• References.

― Were all cited considered?

― Did Applicant cite any?

• Declarations on file that construe the art, data, or

priority claim.

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How?

• Name and Assignee searches

• Keyword searches

• Structure or sequence searches

• Class searching

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How?

• Class Searching

• Manual of Patent Classification

https://www.uspto.gov/web/patents/classification/selectnumwithtitle.htm

• Classes/subclasses identified on the target patent

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How?

• Once you’ve narrowed in on your target, refine your

search strategies according to your best hits.

• Forward and back citations.

• Additional names or assignees not previously searched.

• Synonyms.

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How Long?

• If you find nothing, you are looking in the wrong places or using

the wrong terms.

• When you start coming across the same relevant documents from

a variety of directions, you have exhausted your current

strategies.

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Managing Expectations -Nebraska Senator Ernie Chambers sued

God in 2007

• Suit alleged that the Defendant “directly and proximately has

caused, inter alia, fearsome floods, egregious earthquakes,

horrendous hurricanes, terrifying tornados, pestilential

plagues….”

• Suit requested a “permanent injunction ordering Defendant to

cease harmful activities and the making of terroristic threats.”

• Though Plaintiff argued that God is omnipresent, the suit was

dismissed after it could not be proven that God had been

afforded effective service of process “because of his unlisted

home address.”

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USING AI TOOLS SUCH AS NATURAL LANGUAGE

PROCESSING AND MACHINE LEARNING

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presented by

What Makes Prior Art Search Difficult?

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Too much jargon

VOLUME COMPLEXITY

Too many patents

What Makes Prior Art Search Difficult?

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WIPO’s Director General on AI and IP (video):

“[W]e are not going to be able to deal, as a

world, with this volume of data and this

complexity of data without applications based

on Artificial Intelligence.”

List of AI initiatives in IP offices around the globe

What Makes Prior Art Search Difficult?

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USPTO’s Request for Information (September 2018):

“Search has become an increasingly challenging aspect of patent examination”

“There is an exponential growth of information for search and the examiner may be

searching for related information to something that does not exist during patent

prosecution.”\

“Language matters and terms evolve. Patent prior art search needs categorization and

context. Synonyms for keywords are technology specific.”

“Applicants can be their own lexicographer, defining terms used within the application.

Innovation often spurs new words and phrases beyond common vocabulary.”

Challenge to Improve Patent Search With Artificial Intelligence

Can We Use AI To Improve Prior Art Search?

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Yes! It can help with categorization and context (linguistic nuance)

But what do we mean by Artificial Intelligence?

Machine Learning (ML)

Learning and improving based on real-world examples

Natural Language Processing (NLP)

Understanding and interpreting human language

Can We Use AI To Improve Prior Art Search?

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AI can learn the semantics of patent-specific language from millions

of examples.

This produces word representations

in a vector space.

(source)

(source)

Can We Use AI To Improve Prior Art Search?

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These word vectors make it possible to account for technology-specific

language variation.

Can We Use AI To Improve Prior Art Search?

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The word vectors also make it possible to handle new words not found

in the current patent vocabulary.

bed-shaped(not found)

rectangular-shaped(found)

Example of an AI Patent Search Tool

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The motivation for our product, NLPatent, one of several commercially available semantic search tools,is best described in USPTO’s RFI:

Patent examiner time is limited, so they need better results, not more results.

The components of a better prior art search include classification, ranking or

relevancy, combined with context to help examiners make their determination of

non-obviousness and novelty.

(1) CPC Classification

(2) Prior Art Search

(3) Prediction of Patentability

What Is the Value of AI, Exactly?

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Importantly, it does not replace a human searcher!

semantic

search

traditional

search

all relevant prior art

What Is the Value of AI, Exactly?

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Stories from real users about the efficacy of semantic search:

It helped me find a knockout reference I would have

otherwise missed.

I’ve been using it as a “sanity check” to validate searches I’ve outsourced.

I like to start my searches with AI because it gets me more than halfway

there very quickly.

What Is the Value of AI, Exactly?

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A B C D E F G H

Top 50 avg % 32.0 28.5 26.7 44.5 38.0 28.4 28.6 24.8 31.4%% at

least 1 37.0 33.0 38.0 28.0 42.0 36.0 32.0 29.0 34.4%

% all 28.0 24.0 19.0 26.0 34.0 22.0 25.0 21.0 24.9%

Top 100 avg % 45.4 36.0 33.7 53.6 43.0 31.2 31.9 28.2 37.9%% at

least 1 53.0 43.0 44.0 35.0 48.0 40.0 36.0 33.0 41.5%

% all 39.0 30.0 27.0 30.0 38.0 24.0 28.0 23.0 29.9%

Top 200 avg % 59.0 44.0 39.1 60.7 58.6 44.4 45.4 38.2 48.7%% at

least 1 65.0 51.0 49.0 39.0 65.0 53.0 51.0 45.0 52.3%

% all 53.0 38.0 31.0 34.0 53.0 37.0 40.0 31.0 39.6%

Results of empirical study on semantic patent search

What Is the Value of AI, Exactly?

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Methodology

800 random samples

100 from each CPC section (A to H)

US patents issued in 2017

Looked for prior art cited for s. 102

Noted whether documents were found in

top 50/100/200 AI results

Measured % of Examiner’s references

found by AI

We compared our AI’s output with prior art cited by a USPTO

patent examiner to see if there was any overlap. (learn more)

Results

30-50% of prior art found

At least one document found

34-52% of the time

Every single document found

25-40% of the time

Specific Challenges for AI in Patent Search

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(1) Database coverage

• How to combine prior art from multiple jurisdictions,

not just the US but also EP, CA, etc.

(2) Foreign prior art

• How to capture the semantics of prior art written in a

language other than English

(3) Non-patent literature

• How to incorporate text that lacks the characteristics of

patents, e.g. a consistent format & CPC classifications

Working with large collections of complex textual data:

Specific Challenges for AI in Patent Search

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(1) Validity

(2) Freedom to operate

(3) State of the art

(4) Due diligence

Making the product useful for different purposes, not only for

assessing patentability:

What’s Next?

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Going beyond prior art search to predicting patentability.

We work with researchers at the University of Toronto

to predict the likelihood of a patent application being

rejected on various grounds.

Our AI can already predict the likelihood of a s. 101 rejection

(non-patentable subject matter) with up to 89% accuracy.

Analysis of Search Results

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Patentability: Analyzing the Search Results

• Patentee

• Will the claims under a Phillips construction stand up against the

prior art found in the search?

― Anticipation;

― Nonobviousness;

― Consider whether §112 chain of reference solid;

― §112 issues for PGRs.

• If there is a problem,

― Can a narrower claim could be presented?

― Ex parte reexam?

― Reissue?

― Pending continuation application?

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• Petitioner

• Other side of the coin – substantial likelihood of

unpatentability.

― At present, IPR has been a petitioner-friendly forum.

― Even if cannot knock out all claims, can you knock out enough

claims to eliminate any FTO problem for the Petitioner?

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Patentability: Analyzing the Search Results

Source: Excerpt from DocketNavigator 2018 Year in Review: Patent Litigation Special Report, p. 4.

AIA Post-Grant Proceedings Reality

Many Will Face

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5456

6103

5018

5786

4514

4027

3599

111

792

1677 1798 1758 1799 1718

0

1000

2000

3000

4000

5000

6000

7000

2012 2013 2014 2015 2016 2017 2018

District court patent litigation cases filed PTAB petitions filed

IPR Institution Rate is Nearly 60%

Granted5801058%

Denied4250642%

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Source: Excerpt from DocketNavigator 2018 Year in Review: Patent Litigation Special Report, p. 41.

IPR Claim Cancellation Rate is High

Source: https://www.finnegan.com/en/insights/blogs/america-invents-act/special-report-ptab-ipr-stats-over-time-q4-2013-q3-2018.html 53

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Validity: Analyzing the Search Results

• Consider results under standard of Phillips claim construction,

clear and convincing evidence of invalidity, and presumption of

validity.

• Plethora of CCPA/Federal Circuit case law to guide the

analysis with respect to search results uncovered.

• Consider noninfringement, obviousness-type double

patenting, substantive §112 indefiniteness/written

description/enablement attacks, subject matter eligibility

attacks.

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FTO: Analyzing the Search Results

• Is there a way around prior art that raises issue for either an

AIA post-grant proceeding or district court litigation?

‒ Is there a way to clear potential competitors?

‒ Are there licensing or partnership opportunities?‒ Consider JRA possibilities under AIA (in place by effective

filing date).

• If there is an issue that can be resolved by:

• Ex parte eexam?

• Reissue?

• Pending continuation application?

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• Identify and characterize material IP issues for each product.

• Determine scope of protection by closest competitor IP.

• Evaluate, manage, and reduce risks.

• Take appropriate actions at the legal, business, and R&D

levels.

• Deal with small problems before they grow big and with big

problems immediately.

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FTO: Analyzing the Search Results

• Does the search result affect your monetization program?

• Is it truly infringed (claim construction, prosecution disclaimers)?

• Design-around possibilities?

• Is patent valid/patentable and enforceable?

• Was ID’d patent known to company seeking to monetize?• Does the company have a license or has it obtained an opinion?

• Who is patentee (major competitor v. non-player in market)?• Patentee’s enforcement history (i.e. license, litigate, etc.).

• Potential damages/injunction relief?

• Can patent be licensed or purchased?

• What if top art is an Application? • Check foreign file histories (may be farther along).

• Does company have patent leverage?

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FTO: Analyzing the Search Results

Patenting Process: Analyzing the Search Results

• Analysis of patentability search results.

• Novelty;

• Nonobviousness.

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Due Diligence: Analyzing the Search Results

▪ Evaluate strength/weaknesses of target patents.▪ Analyze search results for FTO, inventorship/ownership, and

invalidity/unpatentability.

▪ Assess and manage risks.

▪ Identify value and expose overvalued/undervalued assets.

▪ Provide information to those responsible for valuing the IP,

which could impact the transaction in terms of both price

and structure.▪ If search results tend to be negative, consider reduction in

acquisition price.

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• For each patent identified during FTO search, compare claims

to:

• Products/services to be acquired/licensed

• Future products/services

• Questions for target:

• Any technical clarifications

• Did they know of relevant patent? Opinions?

• Licenses to relevant patent?

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Due Diligence for FTO: Analyzing the Search

Results

• Assess Risk Posed by Identified 3rd Party IP

• How easy is it for competitor to identify potential infringement?

― Obvious feature of product versus step in secret manufacturing process

• How clear is the infringement of the construed claims?

― Literal infringement

― Doctrine of equivalents

• Who is patent owner?

― Major competitor versus non-player in market

― Patent enforcement history (litigation, granting licenses)

― Small start-up versus large established company

• What is duration of potential infringement?

― Patent term versus launch or start date of your infringing product or activity

• What are expected costs of infringement?

― Legal costs for litigation (including damages), settlement or licensing61

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Due Diligence for FTO: Analyzing the Search

Results

• Will the patent cover the product?

• Are the patents valid and enforceable?

• Analyze search results:

• Assess scope

• Assess prior art

• Assess disclosure

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Due Diligence for

Scope/Validity/Enforceability:

Analyzing the Search Results

• Issues to look for:

• Narrow claims

― May not cover products;

― Vulnerable to design arounds.

• Broad claims

― Potential prior-art issues;

― Enablement issues.

• Ambiguous claims

― Indefiniteness;

― Noninfringment positions.

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Due Diligence for

Scope/Validity/Enforceability:

Analyzing the Search Results

• Now that you understand the scope of the target claims,

compare the claims to the current and future

products/services and likely design-arounds.

• Identify any additional information needed.

• Assess who will infringe the claims.

• A single entity?

• A competitor or a customer?

• Would you even know?

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Due Diligence for

Scope/Validity/Enforceability:

Analyzing the Search Results

• Prior art known to those with duty of candor;

• Failure to cite related applications;

• Gaps in citation of prior art between U.S. and foreign applications ;

• Declarations or data submitted in prosecution;

• Inconsistent materials/arguments in co-pending applications, other

proceedings, or litigations; and

• Examples in past tense.

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Due Diligence for

Scope/Validity/Enforceability:

Analyzing the Search Results

• Has anyone else weighed in?

• Has anyone challenged validity/patentability/enforceability?

― Check prior court rulings;

― Settlement agreements;

― Administrative proceedings; and

― Existence of opinions.

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Due Diligence for

Scope/Validity/Enforceability:

Analyzing the Search Results

• Watch for issues under 35 U.S.C. §262:

“In the absence of any agreement to the contrary,

each of the joint owners of a patent may make,

use, offer to sell, or sell the patented invention

within the United States, or import the patented

invention into the United States, without the

consent of and without accounting to the other

owners.”

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Due Diligence for Ownership:

Analyzing the Search Results

• Administrative proceedings at USPTO.• Pre-issuance submission

• Certificate of Correction

• Continuation application

• Narrowing reissue

• Broadening reissue

• Ex parte reexamination

• Inter partes review (IPR)

• Post-grant review

• Litigation?

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Due Diligence: Analyzing the Search Results

Remedial Action?

Thank you!

Kim Jordahl Stephanie CurcioKim@ksjlaw.com stephanie@legalicity.net

Tom Irving Christopher Johnstom.irving@finnegan.com christopher.johns@finnegan.com

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