LexisNexis Confidential

Improving “Freedom to Operate” Analysis via Comprehensive Risk Assessment

Assessing your competitive landscape using targeted prior art search techniques and focused market analysis

Managing your information resources to cost effectively increase the quality of your searches

Applying search and market information to assess freedom to operate in your key markets

Caterina Dauvergne

LexisNexis Europe

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A Highlight: IP Sources and Solutions

Technical IP Sources & Solutions :

Patent Information and

NPL

IP Patent Data Delivery

for intranet patent archives

Non Patent Literature

IP.com , Research and Disclosure & Elsevier

Technical reviews through Lexis .com

Totalpatent

IP Research and Analysis Workflow solution

96 Patent Authorities

(22 FT and MAT )

IPR Information & Solutions

Global IP Law Service

Legislation Practise and

Proceedings in the all the different IP domains

• 235 countries coverage

Baxter World Patent Law

Case Law for US and UK

Patent Optimizer :

IP Solution for Optimising the Drafting ,Litigation & the

Analysis of US Patent Applications

Analytical IP Content for M&A , Litigation and

Analytical information

Nimmer, Baxter, Chisum..

CourtLink information

US patent Infringement related decisions –docket

Related Business Information

•Updated Company Profiles , SEC,DCA …

• International as well as National Sources

LexisNexis Confidential

Agenda

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Agenda

A highlight of LexisNexis® Intellectual Property Services A Brief Overview of FTO related climate and trends

– Trends in Patent Filing and Litigation– IPR in force world wide – Recent Cases

Freedom to Operate: Theory and Practice

Properly Weighing Risk A business case studyIn Practice:Diligent Claim Interpretation

Improving your FTO analysis using PatentOptimizer™ and Lexis.com ™

Conclusion

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The importance of Freedom to Operate Strategy

What risks do companies take when deciding to commercialize a new product or process?

How concerned should companies be about patent litigation?

Planning for the development, production and launch of a new product is as much a matter of forecasting future market developments as it is of minimizing risks.

Patent litigation can be an expensive, uncertain and risky affair, and, as the saying goes, an ounce of prevention is worth a pound of cure.

Freedom-to-operate (FTO) opinions provide risk assessments relating to infringement of granted patents and the possibility of future infringements of any pending patent application which maybe issued.

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Facts and Figures: Patent Filing evolution

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IPR: Global Patent Litigation

UNITED STATES

Under United States law, an infringement may occur where the defendant has made, used, sold, offered to sell, or imported an infringing device or its equivalents.

EUROPE European patents are enforced at a national level, i.e. on a per-country basis.

Under Article 64 (3) European Patent Convention "any infringement of a European patent shall be dealt with by national law," with the European Patent Office having no legal competence to deal with and to decide on patent infringements in the contracting States of the EPO

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Patent Litigation in Europe

Average life of European Patents

DE UK 8 years FR NL DK SE 6 years ES BE GR 5 years AT 4 years

Highlights :

GERMANY : Highest number of litigation averageFrom 300 000 EP patents per year designating DE: litigation 1 out of 600 - the ratio of Germany is the highest one.The number of litigation doubled in the past decades The number of actions commenced: 500per year was in 2006 the highest in Europe

UK : Highest cost of patent action in comparison to the other EU States

Costs •650, 000 Euros as Plaintiff•500, 000 Euros as Defendant•430, 00 Euros on First Appeal

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Patent Litigation in Europe

In 2004, 90%of patent litigation in the European Community took place before the tribunals of four Member States (Germany, France, UK and the Netherlands)1 500 to 2 000 patent infringement and invalidity actions per year60 to 70% concern European Patents

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Patent Litigation in the US

Patent Infringement Suits originate in US Federal District Courts

2753 US Patent Infringement Suits filed in 2008

For infringement cases with more than $25 million at stake , the average cost of patent litigation is $3.2 million through the end of discovery and $5,2 million through trial (only 2,5%of the cases)

PATENTS SUITS FILED

*

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Patent Litigation in the US

Infringement issues

Literal direct infringement P:15 I: 30

Doctrine of equivalents direct infringement P: 1 I: 3

Inducing infringement P: 3 I: 1

Contributory infringement P: 1 I: 1

Selling or importing product of patented process P: I: 1

Shipping abroad § 271(f) or (g) P: 1 I: 1

License defence P: I: 2

Exhaustion defence P: 1 I: 6

Exemption under § 271(e) P: I:

Exemption for other experiments P: I:

*

TOP 5 Litigation Verdicts in the US since 2005

Amount $ 1,672,594,000

Centocor vs Abbott Lab (June 2009 )

Amount : $ 1, 500, 000 000

Alcatel Lucent vs Microsoft (March 2007)

Amount: $ 431,867 ,351

Saffran vs Boston Scientific (February 2008)

Amount: $ 388,000, 000

Uniloc vs Microsoft Corporation (April 2009)

Amount $ 368,043 ,056

Alcatel Lucent vs Microsoft( April 2008)

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Trends of Patent Litigation in Asia

CHINA Patent Filing in China according to statistics of 2007 over 250000 /Utility Models

175000. Increase of the total number of new patent application is of 20% p.a Significant IP litigation in China, mostly between and among Chinese parties. Between 2001 and 2007: 77,000 IP court cases were filed, of which 18,521 involved

patent litigations . 1634 cases involving foreign IP Owners

WORLD WIDE TRENDS

Patent Litigations are on rise, especially in the US and in developing economies like CHINA and INDIA.

LexisNexis Confidential

Freedom to Operate: Theory and Practice

Properly Weighing Risk

A business case study

In Practice: Diligent Claim Interpretation

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Freedom to Operate Analysis : Risks Factors

PATENT PROTECTION IS TERRITORIAL

Patents are limited by geographical boundaries. There is no such thing as a “global” patent.

PATENTS HAVE LIMITED DURATION

When properly “maintained”, patents are generally enforceable for a period of 20 years.

PATENTS ARE LIMITED IN SCOPE

The claims of a patent dictate the scope of the inventor’s enforceable rights.

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Freedom to Operate Analysis: From Weighing Risks to Building your strategy

FREEDOM TO

OPERATE

CROSS-LICENSING

ACQUISITION

INVALIDATION

AMOUNT of MONEY INVESTED

in PRODUCT DEVELOPMENT

LICENSING

MANUFACTURE

PRODUCT and COMMERCIALIZATION

LexisNexis Confidential

Freedom to Operate Search

Identify potential patent barriers to the commercialization of products or technologies.

Search the claims language of third-party in-force patents to determine if the claims of any prior art read on aspects of the technology that is to enter the marketplace

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A business case study

THE CASE : A hypothetical client intends to produce vehicle fuel tanks by blow polyethylene and related copolymers Manufactures and Sales Plans are limited to North America .

THE PROBLEM TO BE SOLVED:The polymer could be ethylene homopolymer or copolymer comprising ethylene and not more than 10% by weight of an alpha-olefin having from three to 20 carbon atoms.The polymer has a density of 0.945 to 0.970 g/cm3 , thus falling in the range of high density polyethylene (HDPE) characterized as having a density greater than or equal to 0.941 g/cm3 . In addition, the polymer has intrinsic viscosity of 2 to 6 dL/g. It may be prepared by classic Ziegler-Natta catalysts, i.e., titanium chloride (TiCI3, TiCl4) catalyst and alkylaluminum (AIEt3, Et2AICI, EtAICI2, etc.) co-catalysts with or without supports or modifiers.The client has provided a known patent on "Ethylene Polymer and Fuel Tank Comprising the Same" (US 5547722, published Aug. 20, 1996) from Mitsubishi Chemical Industries.

Used with the kind permission of the author: Thomas E. Wolff, Ph.D.

“Freedom-to-Operate Patent Searching. My Six Basic Rules.“ Searcher. The Magazine for Database

Professionals, 16 (5) (May 2008): pp. 34-39.

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A business case study

Initial Definition

• Ethylene Copolymer or Polyethylene

• Density :0,945 -0,970 gr/cc

• Intrinsic viscosity: 2-6 dl/g

• Ziegler Natta Catalysis

• Fuel Tank

• US and Europe

Search Scope

• C2 homopolymer, C2/C3+ olefin copolymers

• High Density, HDPE; 0,94, 0,95, 0,96, 0,97, 0,98 g/cm3

• Intrinsic viscosity but values in the post search

• Post Search consideration only

• Vehicle or fuel tanks, drums, reservoirs; blow-molded or hollow articles

• EP , US and WO patents and applications published since 1985

LexisNexis Confidential

In Practice

Diligent Claim Interpretation

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Improved Patent and NPL Searches with Semantic Technology in PatentOptimiser

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Improved Patent and NPL Searches with Semantic Technology in Patentoptimiser

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Improved Patent and NPL Searches with Semantic Technology in Patentoptimiser

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Improved Patent Searches with Semantic Technology in Totalpatent

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Gathering effectively Company Information

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Conclusion

FTO search and analysis is necessary endeavour to avoid litigation and infringement costs .

Evaluating systematically your freedom to operate prior to launching a new product is, therefore, a way of minimizing (but not eliminating) the risk of your product infringing the patents owned by others

New Technologies applied to patent searches ,such as semantic query expansion and the growing availability of patent data from Asia with machine translation enables :

Improved search precision and recallEffective way the claims analysisReasonable Fostering of Asian concerns

You take the blue pill - the story ends, you wake up in your bed and believe

whatever you want to believe. You take the red pill - you stay in Wonderland and I show you how deep the rabbit-hole goes.

- The Matrix ( 1999)-

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The Rabbit Hole

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References used for this presentation

STATISTICS :

Patent Litigation Insurance – a Study for the European Commission on the feasibility of possible insurance risks

CJA consultants LTD PH7 Bickenhall Street LondomnWIPO & OECD statistics on Patent Application from 20062008 Perspective - China Trends. Mondaq Business Briefing November 26, 2008 in Lexis Nexis, Mr Robert Grantstein University of Houston Law Center : www.patstats.org

BUSINESS CASE AND INITIAL REFERENCE PAGE 1 CITED FROM

“Freedom-to-Operate Patent Searching. My Six Basic Rules.“ Searcher. The Magazine for Database Professionals, 16, no. 5 (May 2008): pp. 34-39. Used with the kind permission of the author: Dr. Thomas E. Wolff, Ph.D., webmaster and wikimaster of the Patent Information User Group, http://www.piug.org, http://wiki.piug.org http://www.wolffinfo.com/docs/FTO_Patent_Searching_Wolff_in_Searcher_Magazine.pdf