© 2011 Baker & Hostetler LLP

BRAVE NEW WORLD OF PATENTSplus Case Law Updates

& IP TrendsASQ Quality

Peter J. Gluck, (PGluck@bakerlaw.com)

authored by Kenneth J. Sheehan

September 13, 2011

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• Baker & Hostetler, LLP (Costa Mesa Office)

• ORANGE COUNTY’S FINEST:– TAX and Estate Planning;– Related litigation;– Intellectual Property Procurement &– Enforcement– 600 Anton Boulevard, Suite 900, Costa Mesa

California 92626-7221

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First To File is major change in patents need to update process• Quality and Patents both require proper

documentation - process is key.• Old Paradigm in Patent Disclosures - “

save it for later” NO LONGER APPLIES• Which steps can your Company take to

address this set of issues?• Is Technology important to your future

success, if so, attention is required.

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America Invents Act

• Senate bill S.23 (passed March 8, 2011 in 95-5 vote)

• Key provisions– First-inventor-to-file system

• Expands prior art to include foreign uses• Limits one year grace period for filing

– Creates pre-issuance submission procedure for third parties

• Third party can submit prior art within the earlier of– 6 months from publication– Before first office action– Notice of allowance

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America Invents Act

– S.23 key provisions (Cont’d)– Transitional post-grant review of

covered business method patents• Can only be used by parties sued

on a business method patent

– Limits false marking claims to: • Claims by U.S. Government • Claims by competitors

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America Invents Act

• Senate bill S.23 (cont’d)• Key provisions

– Creates post grant review procedure• Can be filed within 9-months of grant• Can include any basis for invalidity• Can be terminated by settlement

– Eliminates best mode defense (requirement remains)

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America Invents Act

– S.23 key provisions (Cont’d)– Modifies inter partes reexaminations

• Changes standard for grant to "a reasonablelikelihood that the petitioner will prevail withregard to at least one claim“

• Cannot file if litigation filed more than 6-months earlier

• Prosecuted before Administrative Judge

• Can be settled

– Creates supplemental examination proceeding– Similar to reissue

– Allows patent owner to correct inequitable conduct

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America Invents Act

• House bill H.1249 (Passed in modified form now with Executive Brand to ratify/expected 2012)

• Introduced March 30, 2011• Differences from S.23

– 12-month post grant review period instead of 9-month – Standard for post grant review “a novel legal question

that is important to other patents or patent applications”

– Gives court more discretion regarding staying litigation where post grant or inter partes review ongoing

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Design Patents

• Egyptian Goddess, Inc. v. Swisa, Inc.• 2008 Federal Circuit En Banc decision

– Only test for infringement is ordinary observer• Ordinary observer taking into account prior art

– Point of novelty test abolished

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Design Patents

• International Seaway Trading Corp. v. Walgreens Corp.– 2009 Federal Circuit decision– Only test for invalidity is also

ordinary observer test

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Business Methods

• In re Bilski• 2008 Federal Circuit En Banc decision• Patent application claimed method of

hedging risk in commodities trading• Did not satisfy “machine or transformation test”

– Non-transformative process that encompasses purely mental process performed without the aid of a computer or any other device

– Does not transform article into different state or thing

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Business Methods

• In re Bilski (cont’d)

• A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:

– (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

– (b) identifying market participants for said commodity having a counter-risk position to said consumers; and

• (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions

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Opinions and Willful Infringement

• In re Seagate• 2007 Federal Circuit En Banc decision• Seagate sought Writ of Mandamus on issue of

waiver of attorney client privilege• No waiver of privilege for litigation counsel

communications • But wait, there’s more…

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Opinions and Willful Infringement

• In re Seagate (cont’d)• Affirmative duty of care test eliminated• Willfulness requires clear and convincing

evidence of “objective recklessness”– infringer acted despite an objectively high likelihood

that its actions constituted infringement of a valid patent, and

– this objectively-defined risk was either known or so obvious that it should have been known to the accused infringer

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Agreements

• IP Ownership– University Research Agreements

• Publication Rights

– Joint Ventures• Derivatives and Improvements

– Consultants/Contractors• Works for hire - Photographers/Graphic Designers

– Distributors• Trademarks

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Agreements

• Costs and Control– Prosecution

• Claim scope• Continuations

– Licensing– Litigation

• Who can sue for damages

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Agreements

• Transfer Rights– Assignment

• Exclusive license• Non-exclusive license

– Licensing• Sub-licensing

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Questions