Protecting Your Intellectual Property: Cost-Saving Techniques, Legal Updates & Best Practices for...

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Protecting Your Intellectual Property Cost Saving Techniques, Legal Updates & Best Practices for Obtaining and Managing Patents Worldwide

March 2, 2017

Plug and Play Tech CenterSunnyvale, CA

2©2017 Knobbe, Martens, Olson & Bear, LLP – All Rights Reserved.

About Us • Seven offices nationwide, in CA (5), DC, and WA• More than 300 attorneys and scientists representing the

complete spectrum of technologies and IP practice areas• Highest number of registered patent attorneys in the United

States – more than 200• Over 95% of attorneys hold technical degrees• Global practice through large network of foreign IP firms• Continuous team throughout lifecycle of patent portfolio,

spanning from development to litigation• Compensation structure cultivates a collegial atmosphere

focused on high quality of service• Attorneys motivated to match clients with an

attorney/scientist team custom built to deliver success


Our Advantages for Startups & Early Stage Co.’s

• The firm was founded in California and has more than a half century experience representing local companies

• We recognize that different companies have different financial resources and we can tailor our services and relationship accordingly

• Since there may be no in-house counsel we can be a team partner which requires us to be flexible to adapt to rapid changes in the company and communicate creative solutions and options as the company scales

• We have deep bench of professionals who offer a wide range of billing rates and talents who can be accessed as issues arise with growth

• We will invest our own time to understand your business and the competitive environment so that we better serve your legal needs

• Team approach allows much of the work to be done at lower billing rates, while senior team members assure top quality and strategy

• We have existing IP information, materials and checklists on hand

• No charge for secretarial time, phone charges, travel to clients


Firm Practice – All Areas of IP

• IP Strategy• Patents• International IP• IP Transactions & Agreements• Trademarks and Brand Protection• Litigation• USPTO Trials and Post-Grant Proceedings• Copyrights

List of representative clients available upon request

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved.©2017 Knobbe, Martens, Olson & Bear, LLP – All Rights Reserved.

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Agenda• GLOBAL UPDATES• BEST PRACTICES: COST-SAVING

TECHNIQUES• BEST PRACTICES: BEST DRAFTING

& PROSECUTION PRACTICESSpeakers• Aki Ryuka, Ryuka IP, Japan• Stephen Yang, Chofn IP, China• Guido Quiram, Michalski Hüttermann, Germany• Gavin Manning, Oyen Wiggs, Canada• John Carson and Andy Schwaab, Knobbe Martens, USA

For copies of the Akihiro Ryuka’s slides (our Japanese representative from Ryuka IP), please

contact [email protected] directly.

Thank you.

www.ryuka.com 6

mailto:[email protected]

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Current Situation

• Difficult to collect evidence

• Damages not high enough to create deterrence

• When infringement is found by court, but

• Evidence in possession of the alleged infringer, e.g. accounting books and/or other information

• Court can ask the defendant to produce evidence

• Defendant not cooperative– damages determined with reference to plaintiff’s claim

and evidence

• A good strategy to claim higher?8

Daft 4th Amendment- Evidence Collection by Courts

Daft 4th Amendment- Punitive Damages Awarded by Court

• Introduction of the concept of willful infringement

• Up to 3 times of that of non-willful infringement– Patentee’s loss– Infringer’s gain– Multiples of royalties

• Up to 5 million (US$769,000) RMB in the case of statutory damages• Current: limited to 1million RMB

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Joint Infringement

• Introduction of the concept of joint infringement in the 4th amendment

• Joint infringement:

– knowingly provide to infringer, raw materials, intermediate materials, parts or equipments specially used to exploit a patent

– induces another party to conduct patent infringing acts

– an internet service provider knows or should have known or is notified that its user infringes or passes off a patent using its internet service, but does not take necessary measures to curb it

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Design Patent

• Partial design currently not allowed

• Graphic User Interface (GUI) can be protected by design patent– But only together with the complete product– protection of GUI, independent of the product,

currently not possible

• 4th amendment of the patent law to allow partial design

• 4th amendment of the patent law to extend design patent term to 15 years

Business Methods

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Guidelines for Patent Examination, Part II, Chapter 1, Section 4.2, effective as of April 1, 2017

• If a claim related to business model has • features of business rules and methods; and• technical features

• Such a claim shall not be excluded from patentability under Article 25.1(2)• Not rules & methods for mental activities

• Practice tip: • include “technical features” in a claim related to business

method• claims need to have technical improvement

Computer Program Related Claims

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• Part II, Chapter 9, Sections 2, effective as of April 1, 2017

• “Computer readable medium + computer program” format will be allowed• A computer readable medium, with computer program/instruction

stored therein, wherein the program/instruction performs the following steps when executed by a processor…

• Computer program related claims will be allowed to have both hardware features and software features.• A communication system comprises a memory and a processor

configured to execute the instructions stored in the memory, wherein said instructions comprise ...

• Becomes same as the US practice

Chemical Inventions – Supplement Data

• Part II, Chapter 10, Section 3.5, effective as of April 1, 2017

• Supplemented experimental data after filing data– allowed– cannot be used to fulfil sufficiency requirement – can be used to prove technical effect and thus support inventive step

• Technical effects must be present in/obtainable from the original disclosure

• Practice tips:– Include as many technical effects as possible in the original disclosure

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M I C H A L S K I H Ü T T E R M A N N

P A T E N T A T T O R N E Y S

Community Trademark and Design- Centralized and efficient

examination at EUIPO- Protection in all 28 EU

member states- Attractive pricing (similar to

US/twice DE trademark)- Brexit presumably results in

transformation of UK part



National Patents in DEOpposition Nullity ActionDE examination

@GPTO @GPTO

@FederalPatent Court

Appeal Appeal

@FederalCourt of Justice



Appeal



European Patents

Opposition Nullity ActionDE examination

@GPTO @GPTO


Appeal Appeal



@local office (38 + 6 states)

e.g. UKe.g. DE


Appeal

EP examination

@EPO

Opposition

@EPO

@EPO BoA

AppealAppeal

@EPO BoA

Centralized examination and opposition Protection in up to 44 states, including

Marocco, Hong Kong and Cambodia



N

N

NEW: Unitary Patent and Unified Patent Court (UPC)

Opposition Nullity ActionDE examination

@GPTO @GPTO


Appeal Appeal



EP examination

@EPO

Opposition

@EPO

Validation

@local office (38 + 6 states)

@EPO BoAAppeal

e.g. UKe.g. DE

@EPO (25 states)EU (ex ES)

Nullity Action

@UnifiedPatent Court

Appeal

@UnifiedPatent Court

Newto be implemented

1 December 2017

Appeal


Appeal

@EPO BoA



Brexit

- Brexit implications unclear

• UPC bound to Court of Justice of the EU (CJEU)

• #2 goal of Brexit is to get rid of CJEU

• UPC schedule optimistic

• Dr. Aloys Hüttermann:

• Unitary Patent and Unified Patent Court

• 452 pages, published 1/2017

patentable.com20 Protecting your Intellectual Property

Canada is a Good Place to File Patent Applications


Canadian trade with the United States is Huge – Integrated Market• >$2 billion a day in goods and

services• NAFTA Member• Relatively large economy

Among the least expensive countries to file and prosecute patent applications

Sometimes Canada is one of the only places you can file:• 12 month grace period• 42 months for PCT national phase

entry

Canadian prosecution can be deferred and is often smooth


RECENT DEVELOPMENTS

CIPO is relaxing its position regarding patentability of computer-based inventions.

• If invention can be characterized as addressing a “computer problem” vs. merely doing business using a computer

Methods for diagnostic medical testing are still facing serious obstacles

Note: Methods of medical treatment are NOT patentable in Canada (this is not new)


Subject Matter Eligible For Patenting• Section 101 – Broadly defines what is patentable

– “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor….”

• U.S. Supreme Court – Some subject matter is not patentable under section 101– Mayo Collaborative Services v. Prometheus Laboratories,

Inc. (2012): Natural Laws– Association for Molecular Pathology v. Myriad Genetics,

Inc. (2013): Natural Phenomena– Alice Corporation Pty. Ltd. v. CLS Bank International

(2014): Abstract Ideas (see also Bilski (2010))


What’s the Law?• Test:

1. Is the claim directed to a judicial exception (Natural Law, Product of Nature or Abstract Idea)?

2. Is there something more to transform the judicial exception into patentable subject matter?

• The precise boundaries of the recent Alice Supreme Court decision are still be determined.


Natural Laws: Mayo v. Prometheus

• Prometheus held that a correlation between a marker in the body and a specific medical condition is a natural law

• Most medical diagnostic tests incorporate such a natural law


All Medical Diagnostic Claims Patent-Ineligible?

• No! Many claims recite “significantly more”– “Unconventional” steps in the assay itself– Use of “unconventional” equipment

• But, many diagnostic methods do not involve “unconventional” steps or equipment

• Alternative strategy: omit diagnosis from claim, but remainder of claim must be novel and nonobvious


Natural Products: AMP v. Myriad Genetics• Supreme Court held isolated DNA was not significantly

different from a “product of nature”• cDNA was held to be patent-eligible

– Man-made counterpart to mRNA– Same genetic information, but chemical structure has

minor difference


USPTO Implementation• Reciting “isolated” not sufficient to make patent-

eligible• But, any products not actually found in nature are

patent-eligible


Abstract Ideas

Section 101 – Alice


What’s the Law?• Supreme Court did not define Abstract Idea

– Alice: “we need not labor to delimit the precise contours of the ‘abstract ideas’ category in this case”

– Compare claims to those already found to be directed to an abstract idea

– Fundamental economic and conventional business practices are likely abstract ideas even if performed on a computer

• What are the precise boundaries?– Courts and Patent Examiners are presently

applying section 101 inconsistently


Strategies for Patent Eligibility• Focus the claims and the specification on technical

improvements to computer technology or another field of technology– Ideally, patent is a ‘technical solution’ to a ‘technical

problem’ – Federal Circuit decisions DDR Holdings, Enfish, Bascom,

and McRO found claims to be eligible• Analogize the claims to eligible claims in the Patent

Office Examples– PTO Guidelines

• Avoid Technology Center (TC) 3600, which examines “business method” cases– Amend Title, Abstract, Field of Invention and Claim

Preambles to present technical aspect of invention– If the application is in TC 3600, always interview (may

require amending the claims)


Conclusion• Patent-eligibility in US has gone from very broad

to rather constrained in less than four years• For most inventions, there is a way to claim

– Requires careful application and claim drafting– Critical to have support for back-up positions in

specification– Applications without support for back-up

positions may have no way forward to grant• Law evolving—these are still early days.


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QUESTIONS?


35

BEST PRACTICES: COST-SAVING TECHNIQUES



Thank you.

www.ryuka.com 36


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PCT National Phase Entry

• 30 months from the earliest priority date

• 2 months extension available– no action needed by the end of 30 months– extra fees required - please decide early

• Translation must be filed upon national phase entry– Prepare translation early to avoid rush fee

• Extra claim fees– calculated on the basis of the WO publication– reduce no. of claims at national phase entry

will NOT reduce cost– include a small number of claims upon filing

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Voluntary Amendment

• Only two chances of filing voluntary amendment– at the time of request for substantive

examination– 3 months from receipt of Notification of

Entering Substantive Examination Procedure

• No voluntary amendment allowed in response to OA– only to address issues raised in the OA– If different claims are to be pursued at this

stage, only option is to file divisional applications - more costly

• Don’t miss the chances

• For Paris Convention applications or first filings– file a small number of claims– use voluntary amendment to change the

claims to be examined– need to ensure literal support to the

amended claims

Office Actions - Interviews

• Not possible before 1st OA

• In person interview rarely granted

• Telephone interviews often used

• Useful to sound out examiner’s opinions, to reduce office actions

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Second Tier Patent Rights

• Utility Model Patent and Design Patent– Shorter term: 10 years vs 20 years (invention:

equivalent to utility patent)– No substantive examination– Faster and cheaper to obtain– Equally effective in enforcement– Ideal for protecting products with shorter

lifecycle

• Utility model Lower threshold on inventive step– Easier to get, more difficult to invalidate– Limited to products only

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Financial Incentive Program• Available to Chinese individual or entity, including Chinese

subsidiaries of foreign companies– applications must be filed in the name of the business entity

established in China, i.e. Chinese subsidiary

• Central government subsidies– National patents: covering official fees, possibly attorney

fees;– PCT and Paris Convention applications: Covering official

fees and attorney fees for up to 5 countries with a limit of RMB100,000 (USD15,000) per country

• Local governments / high tech parks have additional programs

• High tech company status– Must have certain number of patents as one of the criteria– Enjoy preferred tax rate



Best Practices – Current Cost-Saving Techniques - Complying with EP (and DE) practice often #1 cost saver

• EP is a very formalistic system and in various aspects different to other jurisdictions

- EP allows protection in three continents (EP, Hong Kong, Morocco and Cambodia) – national filing e.g. DE is cheaper

• Will your competitors have different products for different European countries?

- Expedite EP proceedings

• Early entry, waive Rule 161 EPC, PACE or PPH requests (each at no official fees)

• Avoid (heavy) EP claim fee by amending claims prior to EP filing

• File EP application with at least „novel“ independent claims



Best Practices – Future Cost-Saving Techniques

- Unitary Patent and Unified Patent Court about to start 12.2017• Gives you protection in ≥ 14 countries at the (annual) cost of

4 countries- Will you opt-out your EP patents?

• If not, (maximum) cost re-imbursement in litigation:

0 €

200,000 €

400,000 €

600,000 €

800,000 €

1,000,000 €

1,200,000 €

Vertretungskosten DE

erstattbare Kosten UPCDEUPC

Value at dispute


Cost-Saving Techniques• File a high quality application in the first place

• Know the prior art;• Avoid drafting errors;• Good drawings;• This applies to ALL jurisdictions.

• Defer Examination• Can wait up to 5 years from Canadian filing date• Amend claims based on prosecution in other places

• Pay multiple maintenance fees at once• Claim “small entity” status (but be VERY careful)

• < 50 employees or university or non-profit entity• Patent invalid if wrong fees paid• Recent case – wrong fee paid during prosecution did not invalidate patent (do not rely on this).

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

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Criteria for Reaching Patent Filing Decisions What to file

– Multiple applications, e.g., those that cover the commercial product, the entire relevant market, both?

Who should participate in the filing decisions– R&D, C-level, Marketing, IP Counsel, and

Regulatory Where to file

– Where there is present or potential need (direct markets, manufacturing locations, shipping destinations)


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How to Streamline Costs You might determine “standard” countries to

pursue– Sets expectations for costs and timing

(translations, local requirements, etc.)– Sets needs and requirements for drafting

Preferred claim/support for jurisdictions Restriction/lack of unity approaches

Consider taking advantage of international and regional conventions (PCT, EPO, etc.)

Consider broader set of countries for key technologies


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QUESTIONS?


48

BEST PRACTICES: BEST DRAFTING & PROSECUTION PRACTICES



Thank you.

www.ryuka.com 49


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Novelty

• Absolute novelty– worldwide disclosure is novelty destroying– Publication, public use, etc.

• Definition of ‘disclosure’ different from U.S.– technical solution must be in public domain– sale, lease, exhibition (public use) not

necessarily disclosure– must be approached case by case– the technical solution must be in a state

accessible to the public– no on sale bar

• Your application may lost novelty by US standard but it may still be good for China

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Divisional Application (1)

• No restriction on:– number of divisional apps– number of generations of divisional apps– what can be claimed in a divisional

• No divisional can be filed, if– parent application is issued, rejected or

withdrawn

• Deadline for filing divisional apps – within 2 months from receipt of Notice of

Grant for parent application

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Divisional Application (2)• Divisional from divisional

– voluntarily filing, deadline counted on the basis of parent application (very first generation)

– Divisional lack of unity, deadline counted on the basis of the previous generation divisional

• Practice Tip:– always deliberately make divisional lack of

unity, keep option open

Office Actions - Common Knowledge

• Examiners often regard distinguishing features as common knowledge

• Possible solution– Request examiner to provide evidence (examiners often not

cooperative)– Argue that the distinguishing features have different object, solve

different problem and/or have different function– Argue that the reference teaches away from the present invention– Argue that one skilled in the art could use the distinguishing features

but would not do so• Could- Would, no motivation

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Functional Limitation

• Avoid functional limitations in your claim– in prosecution, considered as covering all possible manners– more vulnerable to novelty objections– In litigation, possible narrower interpretation

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Added Subject matter• Chinese practice extremely strict regarding making

amendments– Change of typo: from 1,000 to 100 --- ℃ ℃ NOT allowed

• Avoid using very generic term and very specific terms in description

• Add intermediate generalization terms

• Include as many technical effects as possible– Supplement data to support inventive step– Technical effects must be present in the original disclosure



Best Practices - Best drafting & Prosecution practices - Have a thoroughly drafted application, prepared for EP filing

• Use clear, concise terms; no alternate expressions• Have a “general” description instead of describing single

embodiments • Only one independent claim per category

- Make amendments compliant to EP requirements• Ideally have a literal disclosure basis for your amendment

and provide disclosure basis• No intermediate generalizations• Be careful with deletion of features in independent claims• File main and auxiliary requests, call the examiner

- Sent instructions early ahead of the deadline, such that EP counsel can review and propose alternatives


Sound Prediction

• For ‘unpredictable’ technologies (e.g. bugs / drugs) must disclose in the patent application a factual basis for predicting utility (i.e. that the invention will work) and also a sound line of reasoning supporting the prediction.

• This has even been applied in a mechanical case.

• Solution: include data and reasoning in appropriate cases.


“Promise” Doctrine

• A Canadian patent may be invalidated if:

• The patent contains a ‘promise’ regarding the utility of the invention; and

• The promise is not fulfilled.e.g. patents for Eli Lily’s drugs Zyprexa and Strattera invalidated for failing to provide promised utility resulting in NAFTA challenge.

• Solution: avoid ‘promises’.


Double Patenting• Prohibition on two patents for the ‘same’ invention.

• No good way to fix.• Can be an issue where:

• Parent and C-I-P filed in US and applications corresponding to both are filed in Canada

• Two or more applications directed to different but related inventions are filed in Canada for some strategic reason

• Solution: assert all related claims in one application, avoid filing separate overlapping applications where possible.


Claiming Styles

Canada allows:• US-style claims• European-style claims• Multiply-dependent claims• No government fees for excess claims


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Drafting Applications with Global Focus• Provide support for US and foreign claims• Recite several fall back (narrower) positions for all

important claim elements• Provide support for all combinations of elements• Consider patent-eligible subject matter in all

jurisdictions• US has three judicial exceptions• Other jurisdictions’ exclusions are different

(e.g., medical treatment methods, biological organisms, and others)


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QUESTIONS?

Protecting Your Intellectual Property: Cost-Saving Techniques, Legal Updates & Best Practices for...

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