best patent practices in a transforming environment...– stays pending ipr or other post grant...

© 2017 ROBINS KAPLAN LLP; SCHWEGMAN LUNDBERG & WOESSNER, PA

BEST PATENT PRACTICES IN A TRANSFORMING ENVIRONMENT

PART 2:EVOLVING STRATEGIES FOR PATENT ENFORCEMENT AND LICENSING

© 2017 ROBINS KAPLAN LLP; SCHWEGMAN LUNDBERG & WOESSNER, PA 2

MEET THE PRESENTERS

Christopher LarusChair, IP & Technology Litigation Practice

Robins Kaplan LLP

Timothy BianchiPrincipal

Schwegman Lundberg & Woessner


A TRANSFORMING RISK ENVIRONMENT

IPRs and Other Post Grant Proceedings Challenges to patent eligible subject matter Definiteness Changes in law governing patent damages Increased difficulty in obtaining injunctive relief

W H AT H A S C H A N G E D I N E N F O R C E M E N T A N D L I C E N S I N G ?


EVOLVING STRATEGIES

Clarity of claims and description Demonstrable infringement No apparent validity flaws (especially § 101) Portfolio size Open prosecution

S E L E C T I N G PAT E N T S F O R E N F O R C E M E N T


EVOLVING STRATEGIES

High-value infringing market Credible damages calculation Geographic scope

W H E R E M O N E T I Z AT I O N I S F O C U S


EVOLVING STRATEGIES

A sustainable damages theory requires proof of three elements:

W H E R E M O N E T I Z AT I O N I S F O C U S

TechnicalImprovement

QuantifiedEconomic

Benefit

RoyaltyRate


EVOLVING STRATEGIES

Reduced risk of non-infringement finding SEPs enable broad-based enforcement and potentially

large damages base Allow economies of scale when pursuing enforcement Enable straightforward pre-suit infringement assessment

based upon publicly available information Licensing market for standards essential patents continues

to mature as the standard becomes increasingly implemented

S TA N D A R D E S S E N T I A L PAT E N T S


EVOLVING STRATEGIES

Law regarding valuation of SEPs remains unsettled

1. Valuation not based on necessity to practice standard

2. Where valuation is based on premiums associated with standard, additional burdens to show value relative to other SEPs

3. Targets often raise burdens of royalty stack to limit exposure

SSO efforts alters risks associated with assessing validity

S TA N D A R D E S S E N T I A L PAT E N T S


EVOLVING STRATEGIES

Data analytics increasingly used in enforcement– Selection of venue– Assessment of licensing/enforcement targets– Predicting motion and case outcomes– Evaluating outside counsel performance

Analytics can also provide powerful tools in evaluating patents for licensing/enforcement

I N C R E A S E D U S E O F D ATA A N A LY T I C S


-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

1600 2100 2400 2600 3600 3700 1700 2800

Relative Institution Rate by Tech Center, 2012-16By Proceeding Basis, p-value < 0.05; 95% confidence

EVOLVING STRATEGIESU S I N G A N A LY T I C S T O I D E N T I F Y PAT E N T S

TC Technology Center Name

1600 Biotech/O Chem

1700 Chem/Mats Eng

2100 Comp Arch/Software

2400 Comp Networks/Multiplexing/Video

2600 Communications

2800 Semiconductors/Electrical/Optical Sys

3600 Transportation/Construction/E-Commerce

3700 ME/Mfg


-175%

-150%

-125%

-100%

-75%

-50%

-25%

0%

25%

50%

75%

100%

125%

150%

175%

1600 2400 3600 2100 2600 3700 2800 1700

Relative Survival Rate of at Least 1 Claim Tech Center, 2012-16By Proceeding Basis, p-value <0.05; 95% confidence


TC Technology Center Name

1600 Biotech/O Chem

1700 Chem/Mats Eng

2100 Comp Arch/Software

2400 Comp Networks/Multiplexing/Video

2600 Communications

2800 Semiconductors/Electrical/Optical Sys

3600 Transportation/Construction/E-Commerce

3700 ME/Mfg


Pat

ent T

erm

Rem

aini

ng (Y

rs)

Percentile for forward references

Feature Represents

Size of circle

Size of patent family

Red dot

No open continuations

Green dot Open continuations



Family ID

# U.S.Family Members

RepresentativePatent in Family Patent Title

A 6 7465348 Nanosized particles of monoazo laked pigment

B 4 7058661 System and method for electronically managing discovery pleading information

C 5 7282733 Polythiophenes and devices thereof

D 4 7118205 Heater and drip plate for ink loader melt assembly

E 13 7356183 Segmentation method and system for multiple raster content (MRC) representation of documents

F 6 6905633 Compounds of formula (3) to stabilize liquid crystal domains

G 4 6987882 Separation system for Multiple Raster Content (MRC) representation of documents

H 16 8799037 Computer-implemented system and method for managing motor vehicle parking reservations

Increasing average family percentile for Forward References

Pat

ent T

erm

Rem

aini

ng (Y

rs)

50 10060 70 80 906

12

14

16

10

8



Single page views of key attributes of patents and file history allows for quick triage Including comparative

information showing how patent compares to patents of similar age and technology


Expiration Date: 12/5/2021

Issue Date: 08/09/2005

Filing Date: 12/5/2001

Claimed Priority Date: 08/13/2001

Office Actions: 5

Independent Claims (total): 4

Independent Method Claims: 4

Independent ApparatusClaims: 0

“Means for” or “Step for” Independent Claims: 0

Dependent Claims (total): 19

Family Size (U.S.): 9

Open Continuations: No

Stats:


Top 3 Citing Entitiess (# Times):

1) EMC (7)

2) Google (5)

3) Microsoft Technology Licensing (2)


Exemplary claim term(s) absent from specification (red text):

Claim(s) in which it appears:

…of the identified entitles that exist in…

Claims 1, 14, 18, 21-(all independent)

…document accessed that cites a plurality of authorities…

Claim 2-(dependent)

…a symmetry metric with identical…

Claim 2-(dependent)


Box Plots: Percentage of Patent Compared to the Field

99th Percentile for Specification Length

80th Percentile for Cited Refs.

97th Percentile for Forward Refs.

~

100

90 88Forward refs.

1280(Max Value In peer group)

~

1300

~~

21cited refs.

~~455

455(Max Value In peer group)

320,300 characters

350000

~~~~

1650000 1,654,363(Max Value In peer group)


ENFORCEMENT IN LIGHT OF AIA REVIEWS


PATENT GENERATION CYCLE (PRE-AIA)

Assert Them

Litigate

Procure Patents

20


PATENT GENERATION CYCLE (POST-AIA)

Assert

Hurdle 1PTAB

Hurdle 2Litigate

Procure Patents

21


PTAB STATISTICS


PTAB DATA (AS OF 2 /28 /2017)S O U R C E : U S P T O . G O V


IPR AND CBM PETIT IONS 2012-16C O U R T E S Y T E R R Y M C N E I L - L E X M A C H I N A


IPR PETIT IONS F ILED FROM 2012-2016 AND TERMINATED BY 2016C O U R T E S Y T E R R Y M C N E I L - L E X M A C H I N A


ANOTHER SNAPSHOT FROM 2015 . . .C O U R T E S Y T E R R Y M C N E I L - L E X M A C H I N A


PTAB OBSERVATIONS IPR filings remain robust (~160/mo)

– CBMR filings dropping (~7/mo)– PGR filings tepid (~2/mo)

Pre-Institution Patent Owner testimonial evidence– Jury is still out on whether it helps PO

Patent Friendly Decisions on the Rise– Institution is not cancellation

Claim amendments still elusive

Estoppel– No decisive guidelines yet

28


PETITIONER TIPS Haste makes waste: quickly drafted petitions can miss the best prior art and the

clearest arguments

Great prior art makes petition drafting easier and less costly

Claims which you do not successfully cancel are made stronger

Petitioners have to work hard to make clear arguments for the Board– Ensure your IPR team is at least as technical as the Board

Claim Constructions are one way to establish veracity, or destroy it

29


PATENT OWNER TIPS

The best review is no review

Winning on institution is the next best thing

If instituted for trial, statistics are more favorable for Patent Owner than before

Avoid waiver of defenses for possible appeal

Challenge old ways of thinking about prior art searching and disclosure

30


PATENT ENFORCEMENT

31


EVOLVING STRATEGIES IN LICENSING AND ENFORCEMENT


PRACTICAL IMPACTS

1. Changes have generally increased risks for patent holders– Risk of adverse court result– Risk that targets will refuse licensing overtures

Mitigating the Risk:– Careful asset selection– Focus on curation of diverse portfolio– Numerosity – size matters, but quality remains key– Concurrent enforcement – not serial targeting– Focus remains on credibility of enforcement risk

A D A P T I N G T O C H A N G I N G E N V I R O N M E N T


PRACTICAL IMPACTS

2. Licensing and enforcement takes longer– Stays pending IPR or other post grant review

– Increased motion practice leads to delays in schedule

– Licensing targets less likely to pursue early stage resolution



PRACTICAL IMPACTS

2. Enforcement and licensing takes longer– Stays pending IPR or other post grant review

– Increased motion practice leads to delays in schedule

– Licensing targets less likely to pursue early stage resolution

Mitigating the Risk:

– Take risk of delay head on when setting case schedule

– Upfront planning helps minimize delay

– Not all PTAB activity is viewed the same



PRACTICAL IMPACTS

3. Changes increase market inefficiencies– More difficult to predict outcomes based on public data

– Increases value of technical and strategic expertise

But, licensing and enforcement remains highly active– Reduced enforcement is primarily at bottom end of market

– 14 of top 100 verdicts last year involved patents or licensing

– WIPO and other economic studies show continued growth in licensing revenue



EARLY SETTLEMENT OF IPRS


PETIT IONER PSYCHOLOGY

Patent has every appearance of being invalid

– Known publication prior art “data points”

– Concern about certain dependent claims?

Nonpublication Prior Art also Known

– Non-publication prior art can be useful in patent litigation if IPR not successful

IPRs are statistically successful, but if I don’t win on institution of IPR on at least the relevant claims it will be harder to defend against this patent

Petitioner Concludes:

– Patent Owner isn’t reasonable

– Company Will Not Pay For License/Patent

– As long as institution and final written decision against patent is likely, Petitioner will forge ahead

38


PETIT IONER WANTS TO KNOW

Will the IPR be successful?

– Against all relevant claims?

• Are there relevant dependent claims that are likely to survive the IPR?

– Partial institution and/or partial invalidity is not a full solution

Can I get a claim construction that will resolve issues for me in a parallel litigation?

Does the Patent Owner have a right to file continuations?

Will this challenge of the patent help me or help my competition or both?

39


PSYCHOLOGY OF PATENT OWNER

My claims were allowed for a reason

– The Patent Office issued the claimed invention

– Want to tell my story of why my claims are patentable over the prior art

The petition is flawed

– It has defects

– The cited prior art is not on point

• Or: prior art is analogous, but I have dependent claims that should survive the IPR

If my patent claims are instituted for trial, it could ruin my chances to enforce patent against Petitioner and against otherdefendants

Patent Owner wants to fight the IPR, but institution is a serious threat

40


PATENT OWNER WANTS TO

Tell a consistent story with its patents

– How can that be done with BRI v. Phillips claim constructions?

Use the IPR to strengthen its patent(s)

– That which does not kill my patents, only makes them stronger

– But avoid joinder opportunities for other potential petitioner defendants

Educate other infringers about the strength if its portfolio

41


IPR T IMELINE (EARLY STAGES)

42


IPR T IMELINE (CONT’D)

43


HOW PETIT IONER-DEFENDANTS ENCOURAGE EARLY SETTLEMENT

Develop case against the patent up-front, thoroughly– Need best prior art and arguments to play before the Patent Owner

Know how you stand compared to other defendants/potential defendants– Relative magnitude of liability– Timing of suits/bars– IPR team factors– Complicating factors

• e.g. real party in interest

Communicate the strengths of Petitioner’s IPR without undermining it– Petitioner needs to show that it understands the target patent, its technology, the prior art, and the process better than Patent Owner

understands it

Sometimes filing the petition is the only way to resolve the conflict

44


HOW PATENT OWNERS ENCOURAGE EARLY SETTLEMENT

Analyze patent at issue promptly in either case:– Upon a threat of IPR (no petition filed)

• Communicated by potential petitioner or litigation team

– After IPR petition is filed

Critical to get as much information as possible and review the assertions using experience and an open mind

If a petition is filed, and negotiation is not a likely option, prepare a strong Patent Owner’s Preliminary Response– With testimonial evidence?

Be realistic about the prior art and amendments– Broadest reasonable interpretation

Use other incentives

45


HIGHER POTENTIAL FOR SETTLEMENT BEFORETHE INST ITUT ION DECIS ION WHEN . . .

Petitioner Defendant is not the Patent Owner’s main target– And moreso if:

• Petitioner has a strong litigation team and strong IPR petition• Other Defendants are barred under the 315(b) for failure to timely file an IPR petition

– Joinder is their only entry to IPR

46


HIGHER POTENTIAL FOR SETTLEMENT AFTER INSTITUTION DECISION WHEN . . .

Partial Institution of Claims– Especially when Petitioner is barred or effectively barred from future IPR filings

Multiple Patent Cases with Many Petitions– Especially with partial institution of patents/claims

47


QUESTIONS?

Christopher [email protected](612) 349-0116

Timothy [email protected](612) 373-6912

best patent practices in a transforming environment...– stays pending ipr or other post grant...

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