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1 Presenting a live 90-minute webinar with interactive Q&A Patent Due Diligence Post-AIA: Avoiding Dangers of Inadequate Investigation Evaluating Validity of Key Patents, Identifying Enforceability Issues, Addressing New Considerations Under the AIA WEDNESDAY, JUNE 4, pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Thomas L. Irving, Partner, Finnegan Henderson Farabow Garrett & Dunner, Washington, D.C. Donna M. Meuth, Associate General Counsel, Eisai, Andover, Mass. Lauren L. Stevens, Global Patent Group, San Francisco The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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4 AIA and Due Diligence June 4, 2014 for Strafford Donna Meuth Lauren Stevens, Ph.D. Tom Irving ATTORNEY-AT-LAW 4

5 Disclaimer These materials are public information and have been prepared solely for educational and entertainment purposes to contribute to the understanding of U.S. intellectual property law. These materials should not be taken as individualized legal advice and do not reflect the views of FINNEGAN, EISAI, or LAUREN L. STEVENS, PH.D., ATTORNEY-AT-LAW. It is understood that each case is fact-specific, and that the appropriate solution in any case will vary. Therefore, these materials may or may not be relevant to any particular situation. Thus, FINNEGAN or EISAI or the panelists cannot be bound either philosophically or as representatives of their various present and future clients to the comments expressed in these materials. The presentation of these materials does not establish any form of attorney-client relationship with FINNEGAN, EISAI, or the panelists. While every attempt was made to insure that these materials are accurate, errors or omissions may be contained therein, for which any liability is disclaimed. 5

6 IP Due Diligence Post-AIA Dangers in doing an inadequate investigation Increases in shareholder and antitrust lawsuits Buying an IP lawsuit Need to evaluate potential risk / reward of existing claims, threats or suits Was the right law applied? If an application is filed in the name of the applicant, was it perfected? If find a problem, is there any way out without scrapping the deal? Need to analyze possibilities for future claims Failure to recognize that transaction may impose IP obligations on suitor Examples: to pay royalties / to indemnify / to provide grant backs / to disclose / to keep secret 6

7 Biggest Impact of AIA on IP Due Diligence? May be the practical impact May need more time (and expense) but there is often A LOT of time pressure in an IP due diligence. May need to educate clients on variety of additional considerations in light of AIA. Aim for clear understanding of what will and will not be part of the due diligence investigation. 7

8 Three Basic Categories of IP Due Diligence 1. Ownership/Transferability Clear title to that IP Transferability or assignability of in-licensed technology 2. Freedom to operate ( FTO ) Freedom to use the target company s technology without infringing the IP rights of third parties 3. Validity/enforceability Determination of the validity and enforceability of the target s IP 8

9 Pre-AIA Diligence Inventorship correct? Any inventorship disputes? Assignments executed and recorded? Any liens? Any transfers of ownership? Any government funding? Small entity? 9

10 ALL of those issues Post-AIA Diligence AND New oath / declaration ADS-related issues Inventor vs. Applicant New formal requirements 10

11 Overview of Final Rules 11

12 Inventor s Oath / Declaration Pending US apps US 371 based on PCT with PCT filing date prior to 9/16 Old Law 9/16/2012 AIA New US apps (including cons/divs) US 371 based on PCT with PCT filing date after 9/16 12

13 Quick Reference U.S. Application filed up to September 15, 2012 (current rules) U.S. National Stage Application based on PCT application with a PCT filing date up to September 15, 2012 (current rules) U.S. Application on/after September 16, 2012 (new rules) U.S. National Stage Application based on PCT application with a PCT filing date of on/after September 16, 2012 (new rules) U.S. Continuation/Divisional application filed on/after September 16, 2012 (new rules) 13

14 Was Proper Inventor s Oath Used? AIA SEC. 4 ( shall apply to any patent application that is filed on or after [Sept. 16, 2012]) Compare old 115: The applicant shall make oath that he believes himself to be the original and first inventor of the process, machine, manufacture, or composition of matter, or improvement thereof, for which he solicits a patent; and shall state of what country he is a citizen. 14

15 Execution of the Declaration Can use legal name Can be signed by hand or can use electronic signature if inventor applies himself Date of execution is not relevant PTO will not review No requirement to name each inventor if all named in ADS can sign different papers 15

16 Execution of Oath / Declaration Did the inventors review the application? No longer required to state that inventor has reviewed and understands contents of application but rules still require that inventor review and understand application before execution Were changes made to the application after execution? 16

17 Was The Oath / Declaration Timely Filed? May be filed late if ADS is filed within the Missing Parts period indicating the name, residence and mailing address of each inventor and late surcharge is paid Deadline for submitting an executed Inventor s Oath/Declaration (or Substitute Statement) is no later than the date on which the issue fee for the patent is paid If filed with fees, surcharge fee for late filing of oath/dec, but no executed oath/dec then the PTO will not mail a Notice to File Missing Parts 17

18 Changing Inventorship Provisional A request signed by a party set forth in 1.33(b) identifying inventors by legal names and fee Non-provisional An ADS in accordance with 1.76 identifying inventors by legal name, fee, oath/declaration No longer required to aver lack of deceptive intent or explain correction Patent/Reissue Similar procedures as to old rules 18

19 Changing Inventor Information Corrections to the name of an inventor or changes to the order of the inventors can be effected via: ADS Fee No longer need petition under

20 Inventorship Under the AIA AIA did not amend 35 USC 116: When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent. 20

21 Combined Assignment/Declaration Must include required information/statements Assignment recordation transmittal must include conspicuous indication of an intent to utilize the assignment as required oath or declaration PTO will scan assignment into IFW before forwarding to recordation branch Assignment cannot be recorded until USSN is provided If filed in application, the Assignment/Declaration will not be recorded 21

22 Inconsistencies? Most recent submission of ADS or oath/declaration will govern except Most recent ADS will govern priority claim(s) Inventorship changes must comply with 1.48 If oath/declaration and ADS filed together, ADS will govern 22

23 Example - Correcting Nonprovisional Applications Executed oath/declaration is filed with the application naming A as an inventor A signed ADS is filed a week later naming A and B as the inventors Inventorship was set by the executed declaration (i.e., A) request under 1.48 is required to correct inventorship to A and B Same result if an executed declaration naming B as an inventor was filed a week after application was filed with oath naming A 23

24 Formal Documents in an AIA World Was the appropriate ADS submitted at the time of filing? Was it signed? Did it include correct priority information? Was an Applicant named? Or was the application filed in the name of the inventors? 24

25 ADS Option to name inventors (by legal name) and provide inventor mailing address Option to name Applicant Assignee, person to whom inventors are obligated to assign, other person with sufficient proprietary interest Can correct Applicant via new ADS To request change of applicant, file new ADS Consider carefully whether to name Applicant 25

26 Filing By Other Than Inventor ( Assignee Filing ) AIA SEC. 4 ( shall apply to any patent application that is filed on or after [Sept. 16, 2012]) OLD 118. Filing by other than inventor. Whenever an inventor refuses to execute an application for patent, or cannot be found or reached after diligent effort, a person to whom the inventor has assigned or agreed in writing to assign the invention or who otherwise shows sufficient proprietary interest in the matter justifying such action, may make application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is necessary to preserve the rights of the parties or to prevent irreparable damage; and the Director may grant a patent to such inventor upon such notice to him as the Director deems sufficient, and on compliance with such regulations as he prescribes. NEW 118. Filing by other than inventor. A person to whom the inventor has assigned or is under an obligation to assign the invention may make an application for patent. A person who otherwise shows sufficient proprietary interest in the matter may make an application for patent on behalf of and as agent for the inventor on proof of the pertinent facts and a showing that such action is appropriate to preserve the rights of the parties. If the Director grants a patent on an application filed under this section by a person other than the inventor, the patent shall be granted to the real party in interest and upon such notice to the inventor as the Director considers to be sufficient. Still need to name inventor and provide 115 inventor documentation. 26

27 Non-Inventor Applicants AIA allows for three types of noninventor applicants: (1) assignee (2) the party to which the inventor(s) has an obligation to assign (3) a party that shows a sufficient proprietary interest 27

28 Non-Inventor Applicants Organizational entity must be represented by a registered practitioner Can only be designated through proper use of an Application Data Sheet (ADS). Is the assignee always the applicant? No, the assignee can choose to not be the applicant. So for some cases, the applicant will be the inventor or all of the joint inventors. (37 CFR 1.42) The applicant can also include, at least in part, a legal representative of the inventor if the inventor is deceased or under legal incapacity. (37 CFR 1.43) 28

29 What Does This Mean Right Now? Any application for patent filed after the effective date (Sept. 16, 2012) is subject to the new provisions of 115 and 118. effective filing date is not relevant to these transition provisions, just the actual filing date. 29

30 AIA Amendments to 35 USC 120 Continuing applications filed after March 16, 2013 based on applications filed before March 16 will be under the old version of 35 USC

31 Filing in the Name of the Applicant? USPTO is interpreting the "filed by" language in 35 USC 120 as simply requiring at least one common inventor PTO suggestion: (1) file the continuation application naming only the inventors (2) subsequently, file a new ADS naming the assignee as the Applicant, with a 3.73 certification and Power of Attorney from the assignee However, the USPTO will recognize priority claims in continuing applications regardless of who is named as the Applicant as long as the requirements of 37 CFR 1.78 are satisfied: In order for an application to claim the benefit of a prior-filed copending nonprovisional application or international application designating the United States of America, each prior-filed application must name as an inventor at least one inventor named in the later-filed application and disclose the named inventor's invention claimed in at least one claim of the later-filed application in the manner provided by the first paragraph of 35 U.S.C

32 Naming the Applicant? It is the nationality or residence of the applicants of a PCT application that determine which Receiving Offices are competent for filing the PCT As of September 16, if an assignment is in place, and the company is named as the applicant for all countries (and inventors are inventor only ), then the RO must be selected based on the nationality/residence of the company only inventor nationality/residents are irrelevant 32

33 Filing in the Name of the Applicant? Was the Applicant perfected? If ADS names Applicant, then Applicant must perfect rights to act before payment of issue fee Assignee must provide documentary evidence Record the assignment 33

34 The Applicant (cont d) If application is being prosecuted by Applicant, then Applicant should execute the power of attorney No requirement to satisfy 3.71 or 3.73 for Applicant who is initially named in ADS PTO will accept the signature of a practitioner of record on a 3.73(c) statement on behalf of the assignee without requiring further evidence of the practitioner s authority to act on behalf of the assignee 34

35 New Formalities: Statement for Transition Applications If a nonprovisional application filed after March 16 claims priority to a foreign, U.S. or PCT application filed before March 16 and contains or contained at any time a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date four months from the date of entry into the national stage sixteen months from the filing date of the prior-filed application the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the application 35

36 Examination Guidelines If a disagreement between the applicant and an examiner cannot be resolved informally and results in a rejection that would otherwise be inapplicable, the applicant may respond to the merits of the rejection with an explanation of why the Office s treatment of the application as a pre-aia application or an AIA application is improper. Appeal: If cannot be resolved, applicant would have to appeal See pp of Exam Guidelines (2/14/13) 36

37 New Formalities: Certified Copy of Foreign Priority Document Certified copy of any foreign priority application must be filed within the later of: 4 months from the actual filing date; or 16 months from the filing date of the prior foreign application Certified copy is needed prior to publication of application since U.S. patents and U.S. patent application publications have a prior art effect under the as of their earliest effective filing date, which might be the foreign priority date. Delayed submission of certified copy of foreign priority document must include petition showing good and sufficient cause for delay and petition fee 37

38 Ways to Satisfy Certified Copy Requirement Applicant files certified copy of foreign priority document with USPTO; or USPTO obtains certified copy of foreign priority document from foreign intellectual property office participating in priority document exchange agreement program (participating foreign office) upon request from applicant; or Applicant files interim copy of foreign priority document and subsequently files certified copy 38

39 Note of Caution: Preliminary Amendments For applications filed on or after September 21, 2004: Preliminary amendment that is present on the filing date of the application is part of the original disclosure of the application For applications filed before September 21, 2004: Preliminary amendment that is present on the filing date of the application is part of the original disclosure of the application if the preliminary amendment was referred to in the first executed oath or declaration under 37 CFR 1.63 filed in the application. See MPEP 602 and (b) 39

40 USPTO Guidelines re: Preliminary Amendments PTO makes distinction between claims added in a preliminary amendment filed on the same day as an application and claims presented at a later date [A]n amendment (other than a preliminary amendment filed on the same day as such application) seeking to add a claim to a claimed invention that is directed to new matter in an application filed on or after March 16, 2013, that, as originally filed, discloses and claims only subject matter also disclosed in a previously filed pre-aia application to which the application filed on or after March 16, 2013, is entitled to priority or benefit under 35 U.S.C. 119, 120, 121, or 365, would not change the application from a pre-aia application into an AIA application. 40

41 Ownership of Target s Patents: New Wrinkle Endo Pharmaceuticals Inc. v. Actavis, Inc., --F.3d (Fed. Cir. March 31, 2014) FC: Endo s settlement agree with the generic did not grant either an implied license or an explicit license. JMM based on a CIP not subject to an implied license? Flip side: As licensee, write the agreement to get an implied license. Note: in licensing, use unpatentable along with invalid or unenforceable, if the licensee wants to use an IPR ruling of unpatentability to terminate the license/payments; do not use it if the licensor does not want an IPR ruling of unpatentability to terminate the license/payments. 41

42 Thank You! Presenters Contact Information Lauren L. Stevens, Ph.D

43 Three Basic Categories of IP Due Diligence 1. Ownership/Transferability Clear title to that IP Transferability or assignability of in-licensed technology 2. Freedom to operate ( FTO ) Freedom to use the target company s technology without infringing the IP rights of third parties 3. Validity/enforceability Determination of the validity and enforceability of the target s IP 43

44 Overview of Types of FTO Searches Litigation search (of target and its IP) FTO search relating to products/services to be acquired/licensed and future products/services Validity of the key IP assets to be acquired/licensed Maintenance fees Ownership: obtain assignments at the PTO, considering possible inventors and their obligations (present and past) 44

45 Searches: General Considerations Consider both in-house search resources and outside searchers Technology specific searchers or preferred searchers having multitechnical capability? Contact preferred outside searchers (especially patent searchers) in advance to make sure that deadlines can be met Consider having 2-3 searchers available: reduce possibility of scheduling conflicts or workload causing delay Which is more important: budget or time? Establish initial search budget parameters Confirm a time frame and have searcher commit to it Rolling basis for results Reduces delay in analysis of search results 45

46 Obvious reasons to check this: Litigation Search IS THE CLIENT BUYING A LAWSUIT? How does it affect the deal? What are the chances of success? Other reasons May have duty of disclosure in pending related applications (MPEP (c)) Do you mention to target, if there is a related litigation, and substantive material allegations have not been brought to attention of USPTO? Broader issue: this concept can apply to any issues discovered that might affect the value of the portfolio If the problem is correctable, do you wait until the deal goes through? What if deal is almost certain to go through? 46

47 Litigation Search (cont.) Litigation existence and status Potential (U.S. and abroad) Pre-data room searches might not detect Actual (U.S. and abroad) Including ITC Previous litigations If settled, ask for settlement agreement (need to know rights and obligations imposed by agreement and its limits) Administrative proceedings US PTO (ex parte reexams, IPRs, reissues, interferences/derivation proceedings, CBMPGRs) Oppositions 47

48 Overview of Freedom to Operate Analysis: Will Third Party Patents Impact Business Objectives? FTO Search: Identify potentially relevant third party patents/applications Emphasis on competitors patents and patents relating to key technology Determine scope of third party patents Claim interpretation claim language/specification/file history Comparison of construed claims to: products/services to be acquired/licensed future products/services How to manage risk associated with FTO Issues? Validity analysis Design-around License/common ownership-joint research agreement options, pre-aia, or as broadened under AIA for patents/applications with at least one claim with an effective filing date after March 15,

49 Freedom to Operate Search Gather information from Target Company on its products, processes, and services sufficient to initiate FTO search Confidentiality agreements should be in place with Target Consider pros and cons of buyer s personnel (e.g., engineers) having access to confidential information. (If the deal does not close, could there be a future allegation of breaching the confidentiality agreement?) Initiate the FTO search as soon as possible Search will take some time Work on other aspect of FTO while waiting for search results evaluate third party patents and applications cited in file histories of key Target patents and applications Consider providing useful information to help focus the searcher What does client want to do with the technology? Make sure the searcher understands key technology What are the immediate and long term objectives of client? What is the competitive landscape? Provide the FTO searcher with a listing of known competitors 49

50 Objective: Identify FTO Show Stopper US Patents Before Investing Too Much What is and what is not an FTO show stopper Considerations when third party patent appears to be infringed: Who is patentee (major competitor v. non-player in market)? Patentee s enforcement history (i.e. license, litigate, etc.) Does target company know of show stopper? Is it truly infringed (claim construction, prosecution disclaimers)? Design-around possibilities? Potential damages/injunction relief Is patent valid and enforceable? Has license already been obtained? Can patent be bought? What if the show stoppers are applications? Check foreign file histories (may be more advanced) Does target company have patent leverage? 50

51 FTO Analysis Analyze results from the FTO search to determine if there are any issues with 3rd party U.S. patents or pending applications For each patent identified during the FTO search, compare claims to target company s technology (current and future) Consider specifications of the third party patents and, if needed, file histories Categorize as relevant or not Assess validity of third-party patent claims reading on target company s technology Identify technical questions for subsequent discussions with key technical personnel of target Query target company Did it know of patent? Does it have an opinion of counsel on the infringement and validity of the patent? May not want to see it, but good to know if exists Does it have a license to practice the patented invention covering the relevant field of use? 51

52 FTO: Pending Applications Source of pending patent applications Directly from search: published patent applications Close calls on issued patents and check for related continuing cases Monitoring competitors pending patent applications What to do: Pending claims are broad and could cover current or future products Are they patentable? Should a patentability analysis be undertaken? Claims could be in state of flux No enforceable right yet Closely monitor yes Should you submit art to the PTO or to applicant? PTO: Very risky; not recommended, though expanded prior art submission provisions under AIA Applicant: risky also, puts burden on applicant to submit Should a license be sought? Common ownership pursued? 52

53 Data Gathered (Still Pre-Data Room) In light of what has been learned so far, develop plan for data room Provide target with an updated list of information being sought from data room and interviews with Target personnel Request inventory of information in data room Plan how much time and person power will be needed 53

54 Interviews at Target Company People to be interviewed: Inventors on key patents Attorneys who prosecuted target s key patents Maybe opinion counsel Attorneys who furnished Orange Book listing opinions, if any Declarant(s) (if a declaration submitted during prosecution of patents at issue) Technical people from target with knowledge of technical aspects of products and services and subject matter patented in key patents or relevant third party patents Target personnel with knowledge of existing or potential IP disputes An objective: what patents (third parties or Novaline s) were the subject of existing or potential disputes 54

55 Freedom to Operate Likely to know at least some of the problematic third party patent(s) from pre-data room investigation and initial FTO searching Identify existing or threatened claims of infringement based on 3rd party IP Request target to identify any existing or threatened claims of infringement based on a third party s IP, including what action, if any, the target has taken regarding those claims. Licenses? Opinions? If threats, basis for DJ? 55

56 FTO: Threat of a Patent Infringement Action Legal options Seek possible redress in reps and warranties, e.g., indemnification Assess liability exposure Business method patent Patent troll (only monetary damages, not injunction) ebay case: injunctions not automatic; court applies equitable considerations Offensive options Declaratory judgment litigation case or controversy (MedImmune, Inc. v. Genentech, Inc., 127 S.Ct. 764, 166 L.Ed.2d 604 (2007)) Reexamination - risks and limits Ex parte Inter partes review Post-grant review (PGR for business method claims as of September 16, 2012; PGR for all other claims with effective filing date on or after March 16, 2013) 56

57 How To Deal With Gaps In Information After reviewing information in the data room and comparing it to information disclosed in interviews with the Target s representatives and publicly available information, determine where there are gaps in the data room information Do any of the gaps relate to critical issues? Ask the target to provide missing information If the target is unwilling, is that a red flag? Could the requested information be highly confidential or privileged? If the target updates the data room to add documents that the buyer did not request, what could this indicate? Consider conducting additional discussions with Target s representatives or other relevant personnel Can representations and warranties address topics relating to missing/incomplete information? Also consider requiring the target to schedule specific items and referring to the schedules in the reps and warranties 57

58 Freedom to Operate Often FTO is the deal maker or deal breaker Significant factor to be taken into account in assessing value and structure of deal Providing an FTO analysis in a timely and thorough manner permits the client to make an informed decision about whether and how to proceed with the transaction Could be determining factor in evaluating whether current and future business objectives can be met 58

59 Freedom to Operate - Reporting The report to the client should address both the risks associated with third party IP and means of managing the risks, including: Status and potential outcomes (upside/downside) of any current IP litigation involving the target Likelihood of future IP litigation Address any infringement allegations made by or to third parties Provide an overview of the competitive landscape and how the deal might alter the landscape Scope of identified third-party patents presenting actual or potential blocking issues for current or future products Client might have a particular interest in patents involving particular technologies and/or patents assigned to particular competitors Potential risks associated with any identified third party patent applications 59

60 Freedom to Operate Reporting (cont.) The report to the client should address both the risks associated with third party IP and means of managing the risks, including: Ways of mitigating risks associated with third party patents/applications Design-around possibilities Invalidity positions Attacks Declaratory Judgment Action Ex parte reexamination IPR/PGR Smoke Bomb Through Transom: providing the patent applicant with prior art and a claim chart Interference/Derivation IP rights licensed-in by the target Provide an overview of licensed-in IP rights and extent to which there might not be a full transfer Significant limitations on term or scope of licenses 60

61 FTO-Related Representations and Warranties Examples of topics to cover in FTO-related representations and warranties Infringement by Target: No action, suit, proceeding, or investigation is pending or threatened against the Target Target has not received any communication alleging that the target has violated or would violate any third party IP rights Target s business and its products and services do not directly or indirectly infringe any third party IP or violate any contract or license with any third party Target has not infringed any third party IP in the course of developing any product or service, etc. Note: Target s counsel might consider limits, such as knowledge and best efforts to prosecute AIA applications in light of uncertainty of new law. 61

62 Overview of Analysis of Target Company s Patents and Applications Objectives: 1) Will the Target s patents and applications adequately protect key products and services? 2) Will they be valid and enforceable? Does pre-aia or AIA law apply? Process Identify Target s IP and focus on the key patents and applications; Assess scope of key patents/applications (and relevant claims); and Identify relevant prior art (either from search, file histories, or any other sources). 62

63 Detailed Evaluation of Target s Patents Coverage/protection: and Applications Do products fall within literal scope of claims of key patents? Do the claims provide adequate scope of protection to prevent designarounds? Are these claims likely to be found valid and enforceable? Technical information Review technical information available for current products and services of the target (short term) and for future products and services (long term) Where are the gaps in the technical information? Has the target merely provided publicly available information? Is more needed? Identify further information to request and key Target personnel that might be able to discuss technical details (see above) 63

64 Evaluation of Target s Patents: Scope Claim construction is fundamental building block for scope of protection and validity analysis; must be done first Focus on key patents and relevant claims within those patents Flag potential claim construction issues, such as: Narrow construction of claim term Current noninfringement position Future vulnerability to design-around claims Broad construction Problems with prior art Ambiguity (defective claim drafting) Indefiniteness issues (35 U.S.C. 112(b) may be approached differently depending on if claims in patent ( insolubly ambiguous ) or application ( unclear ). See In re Packard, --F.3d (Fed. Cir. May 6, 2014)) Consider foreign counterparts for consistency in claim interpretation positions 64

65 Evaluation of Target s Patents: Scope Framework for claim construction = Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) The specification is always highly relevant to claim construction and is the single best guide to the meaning of a claim term in dispute. The specification necessarily informs the correct construction of the claim. special definition given to a claim term by the patentee intentional disclaimer, or disavowal, of claim scope by the inventor It is appropriate to rely heavily on the written description for guidance as to the meaning of the claims. Importantly, the person of ordinary skill is deemed to have read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification. 65

66 Arguments in Related Cases May Affect Scope Consider related U.S. patents and applications and any available foreign patents and applications, including their file histories Microsoft Corp. v. Multi-Tech Systems, Inc., 357 F.3d 1340 (Fed. Cir. 2004): Statement in prosecution of one patent to construe a claim term in three patents sharing a common specification Hakim v. Cannon Avent Gp., plc, 479 F.3d 1313 (Fed. Cir. 2007): Narrowing arguments in a parent case that were not expressly rescinded in prosecution of continuation application, operated to narrow the claim. Although a disclaimer made during prosecution can be rescinded, permitting recapture of the disclaimed scope, the prosecution history must be sufficiently clear to inform the examiner that the previous disclaimer, and the prior art... may need to be re-visited. See also, Heuft Systemtechnik GmbH v. Industrial Dynamics Co, Ltd WL (Fed. Cir. June 25, 2008)(unpublished). 66

67 Arguments Made In Corresponding Foreign Patent Applications May Affect Scope In evaluating infringement under the doctrine of equivalents, representation[s] to foreign patent offices should be considered... when [they] comprise relevant evidence. [citing Caterpillar]. Representations made to foreign patent offices are relevant. Tanabe v. US ITC, 109 F.3d 726 (Fed. Cir. 1997) 67

68 More on Arguments In Corresponding Foreign Patent Applications Caterpillar Tractor Co. v. Berco, S.p.A., 714 F.2d 1110, 1116, 219 U.S.P.Q. 185, 188 (Fed. Cir. 1983) Alleged infringer raised Caterpillar s instructions to foreign counsel indicating that Berco's equivalent embodiment was not contemplated Though no authority is cited for the proposition that instructions to foreign counsel and a representation to foreign patent offices should be considered, and the varying legal and procedural requirements for obtaining patent protection in foreign countries might render consideration of certain types of representations inappropriate, there is ample such authority in decisions of other courts and when such matters comprise relevant evidence they must be considered. Stratoflex, Inc. v. Aeroquip Corp., (Fed. Cir. 1983). [found insufficient in this case infringement judgment affirmed]. See also, discussion of Therasense in validity/enforceability slides, infra. 68

69 Review Specification and Prosecution History for Special Definition and/or Language of Clear Disavowal Language that one of ordinary skill in the art would understand to change or narrow the ordinary meaning of the claim terms Computer Docking Station Corp. v. Dell, Inc., 519 F.3d 1366 (Fed. Cir. 2008). Bayer v. Elan, 212 F.3d 1241 (Fed. Cir. 2000). Alloc Inc. v. ITC, 342 F.3d 1361 (Fed. Cir. 2004). SciMed Life Systems, Inc. v. ACS, Inc. (Fed. Cir. 2001). 69

70 Evaluation of Target s Patents: Technical Information Compare the construed claims to available technical information relating to the target s current products/services, future targets/services, and likely design-arounds Reevaluate gaps in available technical information Identify further information to request from target Based on the evaluation, prioritize claims for validity studies 70

71 Thank You! Presenters Contact Information Donna Meuth Associate General Counsel Eisai Inc. Tel:

72 Three Basic Categories of IP Due Diligence 1. Ownership/Transferability Clear title to that IP Transferability or assignability of in-licensed technology 2. Freedom to operate ( FTO ) Freedom to use the target company s technology without infringing the IP rights of third parties 3. Validity/enforceability Determination of the validity and enforceability of the target s IP 72

73 Courts Will Ultimately Interpret the AIA USPTO recognizes also: The Office appreciates that the courts may ultimately address questions concerning the meaning of AIA 35 U.S.C. 102 and 103. However, as a practical matter, the Office needs to provide examination guidelines so that the public is aware of how the Office will apply AIA 35 U.S.C. 102 and 103. The Office considers its interpretation of AIA 35 U.S.C. 102 and 103 as set forth in these examination guidelines to be the correct interpretation of AIA 35 U.S.C. 102 and 103 based upon the statutory language of the AIA and its legislative history. See Examination Guidelines, 78 Fed.Reg. 11,061 (Feb. 14, 2013) 73

74 effective filing date is the key to navigating the roadmap of the AIA and considering March 15/16 issues! 74

75 35 U.S.C. 100(i)(1): Effective Filing Date for Claimed Invention 100(i)(1) The term effective filing date for a claimed invention in a patent or application for patent means (B) the filing date of the earliest application for which the patent or application is entitled, as to such invention, to a right of priority under section 119, 365(a), or 365(b) or to the benefit of an earlier filing date under section 120, 121, or 365(c). (A) if subparagraph (B) does not apply, the actual filing date of the patent or the application for the patent containing a claim to the invention; or Entitlement does not necessarily require best mode (AIA SEC. 15(b)) 75

76 For Analyzing Validity/Patentability in a Due Diligence What law was the patent examined under? Was that correct? What law are current patent applications being examined under? Is it correct? Worth moving pre-aia claims to a mixed application (JMM)? 76

77 Old 102 and 103: All Claims EFD Before 3/15/13 Pre-AIA 102(a)-(g) seven subsections Could apply to certain patents until at least through March 15, 2034! 102(a): known or used by others; 102 (b): statutory bar sale, offer for sale, patented, published by anyone; 102 (c): abandoned; 102 (d): first patented elsewhere; 102(e): prior patents & published applications of others; 102(f): derivation; 102(g): first to invent; combination of both the novelty requirement and a set of loss of right to patent provisions; no clear delineation between the two, or so it is argued by some. Pre-AIA 103 three subsections (a) non-obviousness requirement from 1952 Patent Act; (b) amendments in light of Biotechnology Process Patent Act of 1995; and (c) provisions relating to commonly assigned patents and patents developed pursuant to Joint Research Agreements. 77

78 Prior Art Under the AIA New 35 U.S.C. 102: All Claims EFD After 3/15/13 and JMM s (At Least One Claim with EFD Before 3/16/13 and At Least One Claim with EFD After 3/15/13) (a)(1): A public disclosure ANYWHERE in the world before the EFD of the claimed invention; OR (a)(2): Patent filing disclosures (in the U.S. or PCT designating the U.S.) that later become public, that name another inventor, and were effectively filed before the EFD of the claimed invention. b) Exceptions from prior art c) Expands exceptions subject to CREATE Act (joint research agreements/mergers); and d) new definition of effectively filed for 102(a)(2) (sort of like old 102(e)) 78

79 Prior Art Under the AIA New 35 U.S.C. 102 What is prior art under the new law, absent a Nomiya type admission, must either form a 102(a)(1) public disclosure something made available to the public in the new words found in AIA 102(a)(1); or an effectively filed AIA 102(a)(2) patent filing disclosure. Effectively filed AIA 102(a)(2) art requires that ultimately at least one of the following three documents publish ( special publications ): a U.S. patent; a U.S. patent application, or a U.S. designating PCT application. Note: Office does not view the AIA as changing the status quo with respect to the use of admissions as prior art. Examination Guidelines pp and

80 First AIA Transition Provision: EFD after 3/15/13 SEC. 3(n)(1) Except as otherwise provided in this section, the amendments made by this section shall take effect upon the expiration of the 18-month period beginning on the date of the enactment of this Act, [March 16, 2013] and shall apply to any application for patent that contains or contained at any time: A. a claim to a claimed invention that has an effective filing date as defined in section 100(i) [remember: entitled to ], that is on or after the effective date described in this paragraph [March 16, 2013]; or B. a specific reference under 120, 121, 365(c) to any patent or application that contains or contained at any time such claim. [antecedent for such claim has to be sub.para. (A)?] 80

81 Second Transition Provision: EFD Before 3/16/13 and After 3/15/13!! SEC. 3(n)(2): The provisions of sections 102(g), 135, and 291 of title 35, United States Code, as in effect on [March 15, 2013], shall apply to each claim of an application for patent, and any patent issued thereon, for which the amendments made by this section also apply, if such application or patent contains or contained at any time (A) a claim to an invention having an EFD as defined in section 100(i) of title 35, United States Code, that occurs before [March 16, 2013]; or (B) a specific reference under section 120, 121, or 365(c) of title 35, United States Code, to any patent or application that contains or contained at any time such a claim. 81

82 FITF Examination Guidelines: SEC. 3(n)(2) section 3(n)(2) does indicate that the provisions of 35 U.S.C. 102(g), 135, and 291 as in effect on March 15, 2013, shall apply to each claim of an application for patent, and not simply the claim or claims having an EFD that occurs before March 16, 2013, if the condition specified in section 3(n)(2) occurs. Therefore, each claim of an application presenting a claim to a claimed invention that has an effective filing date before March 16, 2013, but also presenting claims to a claimed invention that has an effective filing date on or after March 16, 2013, is subject to AIA 35 U.S.C. 102 and 103 and is also subject to the provisions of 35 U.S.C. 102(g), 135, and 291 as in effect on March 15, See pp , of Examination Guidelines (2/14/13) 82

83 SEC. 3(n)(2): the Mixer! Some may seek out SEC.3(n)(2), owing to advantages of AIA. Elimination of Metallizing Engineering forfeiture (according to USPTO); liberalization of the CREATE ACT and common ownership in 102(c); possible elimination of pre-aia statutory bars that are not AIA prior art!!! 83

84 If You Find a Potential Issue in a Due Diligence, Can You Change or Correct Claim to Priority? A B X March 16, 2013 add claim only entitled to C filing date C X D abandoned Date Z at Date Z, D can t disclaim priority claim to C and replace it with a priority claim to X to get back to pre-aia 84

85 Entitled to priority vs. Entitled to claim priority AIA 100(i)(1) relating to entitlement to benefit or priority, entitled to priority/benefit Corresponding language in AIA 102(d) defining when subject matter found in a patent filing is to be regarded as having been effectively filed, entitled to claim the priority/benefit 85

86 FITF Examination Guidelines: Entitled to and Entitled to Claim The AIA draws a distinction between actually being entitled to priority to, or the benefit of, a prior-filed application in the definition of effective filing date of a claimed invention in AIA 35 U.S.C. 100(i)(1)(B), and merely being entitled to claim priority to, or the benefit of, a prior-filed application in the definition of effectively filed in AIA 35 U.S.C. 102(d). Entitled to priority/benefit of prior-filed app Definition of effective filing date (EFD) v. Merely entitled to claim priority/benefit of prior-filed app Definition of effectively filed See pp of Examination Guidelines (2/14/13). 86

87 More Effectively Filed for US patents and US/PCT-designating US applications ( 102(a)(2)): 102(d) 102(d) PATENTS AND PUBLISHED APPLICATIONS EFFECTIVE AS PRIOR ART. For purposes of determining whether a patent or application for patent is prior art to a claimed invention under subsection (a)(2), such patent or application shall be considered to have been effectively filed, with respect to any subject matter described in the [US] patent or [US or PCT designating the US] application- (2) if the patent or application for patent is entitled to claim a right of priority under section 119, 365(a), or 365(b), or [entitled] to claim the benefit of an earlier filing date under section 120, 121, or 365(c), based upon 1 or more prior filed applications for patent, as of the filing date of the earliest such application that describes the subject matter. [ entitlement trumps describes - therefore enablement is required?] (1) if paragraph (2) does not apply, as of the actual filing date of the patent or the application for patent 87

88 Effectively Filed v. EFD Generally, the EFD is the actual patent application filing date in the case of a still-pending application, unless the claimed invention is entitled to priority/benefit of an earlier patent filing. EFD has nothing to do with 102(a)(2) but rather with assessing the validity/patentability of a claimed invention in view of 102(a)(1) and (2). Effectively filed has everything to do with 102(a)(2) as prior art. 88

89 Effectively Filed v. EFD This entitlement to priority/benefit exists where (1) a claim for priority/benefit is made, and (2) the earlier patent filing contains written description and enablement support of the claimed invention, as the AIA expressly removed the requirement of disclosing the best mode in an earlier application for the purposes of showing entitlement to priority/benefit. Best Mode: Note that the best mode requirement still exists at least for all US nonprovisional patent filings because it remains in 35 U.S.C. 112(a). 89

90 FITF Examination Guidelines: Requirements for 112 Support v. Requirements for Anticipatory or Obviousness Prior Art Under 102(a)(1) and (2)/ 103 To provide support for a claim under 35 U.S.C. 112(a), it is necessary that the specification describe and enable the entire scope of the claimed invention. [...continued...] Emphasis added See pp of Examination Guidelines (2/14/13) However, in order for a prior art document to describe a claimed invention under AIA 35 U.S.C. 102(a)(1) or (a)(2), the prior art document need only describe and enable one skilled in the art to make a single species or embodiment of the claimed invention the disclosure may be cited for all that it would reasonably have made known to a person of ordinary skill the description requirement of AIA 35 U.S.C. 102(a)(1) and (a)(2) does not preclude an examiner from applying a disclosure in an obviousness rejection under AIA 35 U.S.C. 103 simply because the disclosure is not adequate to anticipate the claimed invention under AIA 35 U.S.C. 102(a)(1) or (a)(2). 90

91 FITF Examination Guidelines: Requirements for 112 Support v. Requirements for Anticipatory or Obviousness Prior Art Under 102(a)(1) and (2)/ 103 AIA 35 U.S.C. 102(d) requires that a prior-filed application to which a priority or benefit claim is made must describe the subject matter from the U.S. patent, U.S. patent application publication, or WIPO published application relied upon in a rejection. Emphasis added However, AIA 35 U.S.C. 102(d) does not require that this description meet the requirements of 35 U.S.C. 112(a). See pp of Examination Guidelines (2/14/13) 91

92 Hilmer Doctrine Abolished by 102(d) For claims with an effective filing date after March 15, 2013 (and all claims in a JMM application), a foreign priority date can be used offensively as prior art under AIA s 35 U.S.C. 102(a)(2) against the patent claims of others, as long as the subject matter in one of the three special publications was at least described in a foreign priority document which was effectively filed relative to the relevant subject matter. (See 35 U.S.C. 102(a)(2) and 102(d)). 92

93 Hypothetical on 001 and 002 Patents: Pre-AIA Pre-AIA, the 001 US application because of Hilmer, was not 102(e)/103 prior art against the claims of the 002 patent because 001 priority was irrelevant foreign priority appln filed 002 foreign priority appln filed 002 US appln filed 001 US appln filed 001 issue 002 Issue 93 93

94 Hypothetical on 001 and 002 Patents: AIA - Possible Game Changer If the 001 patent was effectively filed (relevant disclosure of 001 patent at least described in the 001 foreign application) on , then the 001 patent is 102(a)(2) prior art as of against the claims of the 002 patent, whether the effective filing date of the relevant claims of the 002 patent is or foreign priority appln filed 002 foreign priority appln filed 002 US appln filed 001 US appln filed 001 issue 002 Issue 94

95 Hypothetical on 001 and 002 Patents: AIA - Is it a Game Changer? Is there a 102(b)(2) exception to remove the (a)(2) prior art against the 002 patent claims? Whatever the effective filing date of the 002 claim, 102(b)(2) could apply to remove the 102(a)(2) prior art if the requirements of either 102(b)(2)(A) or 102(b)(2)(B) can be met foreign priority appln filed 002 foreign priority appln filed 002 US appln filed 001 US appln filed 001 issue 002 Issue 95 95

96 Impact of 102(d)(2) Prior Art Date Following publication, disclosure has retroactive availability as prior art as of the date effectively filed for novelty and obviousness purposes. Prior art date Pub. Appl. U.S. Prov. Appl. U.S. Appl. Non-Prov. English USPAT Prior art date Pub. PCT Appl. CN Prior art date PCT (des. U.S.) Chinese Pub. PCT Appl. USPAT FR PCT (des. U.S.) French USPAT NO geographical or language distinction Entitlement to claim priority/benefit of US Prov App., CN app., and FR app. Important date is when effectively filed not when published. Hilmer doctrine abolished. 96

97 New 35 U.S.C. 102(b) Defines Exceptions to Prior Art 102 (b)(1) EXCEPTIONS. grace period (1) DISCLOSURES MADE 1 YEAR OR LESS BEFORE THE EFFECTIVE FILING DATE OF THE CLAIMED INVENTION. A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (B) the subject matter [independently?] disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor. 97

98 Exception ONLY Good For Exact Subject Matter Described: Before or After? 102(b)(1) Exception ONLY for the same subject matter earlier disclosed; related subject matter could still be used against the patentee under 103 and MIGHT even preclude the claimed invention from being patentable at all because of 103!!! What if inventor discloses X and the disclosee discloses X and Y? See pp of Examination Guidelines (2/14/13). The same argument regarding disclosed vs. related subject matter is also made regarding 102(b)(2), which is the exception to 102(a)(2). Notably, 102(b)(2) does not include a grace period and includes three classes of exceptions, whereas 102(b)(1) includes only two classes of exceptions. 98

99 New 35 U.S.C. 102(b) (con't) 102 (b)(2) EXCEPTIONS (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS. A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if- (A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor; (B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or (C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person. No grace period 99

100 FITF Examination Guidelines 102(b)(2) Example if the inventor or a joint inventor had publicly disclosed elements A, B, and C, and a subsequent intervening U.S. patent, U.S. patent application publication, or WIPO published application discloses elements A, B, C, and D, then only element D of the intervening U.S. patent, U.S. patent application publication, or WIPO published application is available as prior art under AIA 35 U.S.C. 102(a)(2). Must mean all requirements met for a 102(b)(2) exception. See pp of Examination Guidelines (2/14/13). See slides on Rule 130 declarations, infra. 100

101 FITF USPTO Examiner Guidelines: Same Required for 102(b)(1)(B) and 102(b)(2)(B) No requirement that the mode of disclosure be the same; No requirement that the disclosure be a verbatim or ipsissimis verbis disclosure of the intervening disclosure. [I]f subject matter of the intervening disclosure is simply a more general description of the subject matter previously publicly disclosed by the inventor or a joint inventor, the exception in AIA 35 U.S.C. 102(b)(1)(B) applies to such subject matter of the intervening disclosure. See pp of Examination Guidelines (2/14/13). Judgment call for the practitioner analyzing validity in a due diligence? 101

102 FITF Examination Guidelines: 102(b)(2)(C) is Exception to 102(a)(2) Only and Applies to Novelty and Nonobviousness AIA 35 U.S.C. 102(b)(2)(C) provides that certain prior patents and published patent applications of co-workers and collaborators are not prior art either for purposes of determining novelty (35 U.S.C. 102) or nonobviousness (35 U.S.C. 103). This exception, however, applies only to prior art under AIA 35 U.S.C. 102(a)(2), namely, U.S. patents, U.S. patent application publications, or WIPO published applications effectively filed, but not published, before the effective filing date of the claimed invention. This exception does not apply to prior art that is available under 35 U.S.C. 102(a)(1). A prior disclosure, as defined in AIA 35 U.S.C. 102(a)(1), by a co-worker or collaborator is prior art under AIA 35 U.S.C. 102(a)(1) unless it falls within an exception under AIA 35 U.S.C. 102(b)(1), regardless of whether the subject matter of the prior disclosure and the claimed invention was commonly owned not later than the effective filing date of the claimed invention. See pp of Examination Guidelines (2/14/13). 102

103 FITF Examination Guidelines: Don t Remove ODP,DP, or Non-Enablement With 102(b)(2)(C) 102(b)(2)(C) exception does not remove a 102(a)(1) prior art, OR a double-patenting rejection, or a lack of enablement rejection - a document need not qualify as prior art to be applied in the context of double patenting or enablement. See pp of Examination Guidelines (2/14/13). 103

104 CREATE Act Now In 102(c): Will It Help Cure a Potential Issue Discovered in Due Diligence? Proactively take care of potential 102(a)(2) or 102(a)(2) /103 problem? 102(c) COMMON OWNERSHIP UNDER JOINT RESEARCH AGREEMENTS. Subject matter disclosed and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person in applying the provisions of subsection (b)(2)(c) if 1) the subject matter disclosed was developed and the claimed invention was made by, or on behalf of, 1 or more parties to a joint research agreement that was in effect on or before the effective filing date of the claimed invention; 2) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and 3) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. 104

105 Can You Eliminate Prior Art Under The New Statute By Buying It? 102(c) says it shall be deemed to be owned by the same person or subject to an obligation of assignment if the subject matter claimed was developed under a JRA before the effective filing date of the claimed invention. See also 102(b)(2)(c) (common ownership exception to 102(a)(2)) and 102(c) allows folding JRA into 102(b)(2)(C) 105

106 Pre-AIA or AIA Obviousness Standard Apply? New 103: A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains.... [see 125 STAT. 287] Big change!! Old law was at the time the invention was made. Usually, EFD is later in time; maybe more prior art under all of 102 (a)(1), (a)(2) and 103!! 106

107 Straddling the Effective Date PCT Filing First to Invent System Applies Enactment: Sept. 16, 2011 Priority Date PCT Filing First To Invent System or FITF System? (see SEC. 3(n)(1)(A) and (n)(2)) (Even if one claim not supported at priority date is eventually canceled, still in FITF.) Enactment: Sept. 16, 2011 Scenario 1: no claims entitled to priority date: FITF Scenario 2: all claims entitled to priority date: first-to-invent Scenario:3: at least 1 claim not entitled to priority date: mixed Priority Date PCT Filing FITF System Applies Enactment: Sept. 16, 2011 Effective Date: March 16, 2013 Assumes priority date is ex-us 107

108 FITF USPTO FINAL RULES: Statement Required for Mixed Applications If JMM patent/application in due diligence, was statement filed? If filing JMM to address potential issue, will need to file statement 37 CFR 1.55(j) Requirements for certain applications filed on or after March 16, If a nonprovisional application filed on or after March 16, 2013, claims priority to a foreign application filed prior to March 16, 2013, and also contains, or contained at any time, a claim to a claimed invention that has an effective filing date on or after March 16, 2013, the applicant must provide a statement to that effect within the later of four months from the actual filing date of the nonprovisional application, four months from the date of entry into the national stage as set forth in in an international application, sixteen months from the filing date of the prior-filed foreign application, or the date that a first claim to a claimed invention that has an effective filing date on or after March 16, 2013, is presented in the nonprovisional application. 108

109 FITF USPTO FINAL RULES: Statement Required for Mixed Applications - Considerations Do not have to identify how many or which claims have EFD after March 15, Do not have to identify subject matter disclosed that is not also disclosed in the prior-filed application. Statement only for mixed applications ( transition applications ). No statement required if claim only subject matter filed before March 16 or after March 15? See pp , of Examination Guidelines (2/14/13). pp 11030, Rules, Fed. Reg. v. 78, No. 31 (2/14/13). 109

110 FITF USPTO FINAL RULES: Statement Required for Mixed Applications - Considerations Statement does not require applicant to do further investigation. No statement required if the applicant reasonably believes on the basis of information already known that there was no claim with EFD after March 15, Presenters Comment: Appears as if PTO working in Therasense standard because if no statement is filed based on the applicant s reasonable belief, the single most reasonable inference cannot be an intent to deceive. See pp , 11,030 of Rules (2/14/13). 110

111 Examination Guidelines pp : when subject matter is claimed in an application having priority to or the benefit of a prior-filed application (e.g., under 35 U.S.C. 120, 121, or 365(c)), care must be taken to accurately determine whether AIA or pre-aia 35 U.S.C. 102 and 103 applies to the application. Or both, of course, in the transitional/jmm application. 111

112 Prior art sources Detailed Review of the Validity of the Target IP Art available in files (U.S. and foreign) public accessibility issue? Art identified in validity and FTO searches May still be waiting for some search results (requested on a rolling basis) Inventors publications and presentations pre-filing With smaller, less patent-sophisticated businesses, this can often be a fertile ground for finding very relevant prior art 112

113 Detailed Review of the Validity of the Target IP Must consider any IPR/PGR proceedings pending or terminated because of estoppel implications to subsequent litigation. 113

114 Novelty Evaluation of Validity of Key Patents: Novelty Straight-forward anticipation? See Net MoneyIN, Inc. v. VeriSign, Inc., 545 F.3d 1359 (Fed. Cir. 2008)(arranged and combined in the prior art in the same way as claimed) But don t forget inherency Can arise with so-called improvement patents or selection inventions Not easy to establish inherency, however. Standard is high: necessarily and inevitably 114

115 Evaluation of Validity of Key Patents: Obviousness Obviousness Separate patents into categories Allowed pre-ksr (may need to closely reevaluate) Allowed post-ksr Under KSR Intern. Co. v. Teleflex, Inc., 127 S.Ct (2007), obviousness not determined by a strict application of the teachingsuggestion-motivation ( T-S-M ) test, but rather by analyzing the factors set forth in Graham v. John Deere): the scope and content of the prior art; differences between the prior art and the claims at issue; and the level of ordinary skill in the pertinent art. And [s]uch secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., may have relevancy. 115

116 Evaluation of Validity of Key Patents: More on Obviousness Obviousness: Post-KSR era Generally, more difficult to establish nonobviousness Ordinarily creative skilled artisan Use of known elements for known function to yield expected results Look for evidence of unexpected benefit or result (e.g., synergism) Obviousness to try: finite v. very large number of possibilities Look for teachings away or disincentive to make a modification to arrive at claimed invention (But see, In re Kubin, quasi-agnostic ) KSR addressed motivation Obviousness still requires reasonable expectation of success For predictable technologies (mechanical and electrical) could be easier to establish reasonable expectation Chemistry and biology are well recognized as unpredictable technologies; reasonable expectation of success remains a viable argument in addressing obviousness issues. 116

117 Validity of the Key Patents of the Target Company Sufficiency of the specification First paragraph of 35 U.S.C. 112 (must be satisfied at time of filing): Written description of invention Enablement: sufficient information to enable one skilled in the art to make and use the invention without undue experimentation Best mode contemplated by the inventor(s) for carrying out the invention (still a statutory requirement!) Second paragraph of 35 U.S.C. 112 Distinctly claiming what the inventors consider as their invention 117

118 Validity: Double Patenting Double patenting: unjust extension of patent term for same or obvious variant of earlier patent Two types: same invention and obviousness-type double patenting Hot button defense of generic companies challenging validity of patents of pharmaceutical company Generic companies call it evergreening Innovative pharmaceutical companies call it life cycle management Doctrine recently expanded by Gilead Sciences, Inc. v. Natco Pharma Ltd., - -F.3d (Fed. Cir. April 22, 2014) (later issued, earlier-expiring patent qualified as an obviousness-type double patenting reference) Ways to address obviousness-type double patenting Protection of 121 prevents double patenting in later patent if issued from a divisional application resulting from a restriction requirement issued in a parent application Terminal disclaimer: disclaiming terminal portion of second patent that extends beyond the expiration date of the earlier patent and maintaining common ownership Cannot file a terminal disclaimer after expiration of earlier patent 118

119 Validity: Double Patenting Check families of patents Terminal disclaimers must have been filed before expiration of first patent. Boehringer Ingelheim Int l GmbH v. Barr Laboratories, Inc., 592 F.3d 1340 (Fed. Cir. 2010) DC: Patent invalid for obviousness-type double patenting Terminal disclaimer ineffective because filed after first patent expired. Safe-harbor provision of 35 U.S.C. 121 precluded the use of the 086 patent as an invalidating reference. FC: Reverse and remand. Terminal disclaimer filed too late, but district court erred in determining safe harbor provision of 121 did not apply. 121 applicable to divisional of a divisional application as long as applications in a divisional chain honor[ed]... the lines of demarcation drawn by the examiner... in the restriction requirement. 119

120 Identification of Potential Enforceability Issues Pertaining to Key Patents of Target Inequitable conduct renders all claims unenforceable under the present law Flag potential enforceability issues Prior art from related cases in portfolio not cited Non citation of related patent applications (could be the basis of double patenting rejection) Non citation of office actions from related U.S. application What about foreign applications? Patentee papers filed in foreign applications Are the examples written in the past tense? Follow up with Target once in data room Is there activity data reported for the invention in the specification or relied on during the prosecution history Any declarations? Check if declarant s association with assignee disclosed (Ferring, Nilssen cases) Any inconsistent data or arguments 120

121 Enforceability Issues? Arguments made in corresponding foreign patent applications conflict with those made in US prosecution Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc) but for materiality standard single most reasonable inference intent standard No balancing 121

122 Enforceability: Disclosure of Related Proceedings Dayco Products, Inc. v. Total Containment, Inc., 66 U.S.P.Q.2d 1801 (Fed. Cir. 2003) DC granted summary judgment that 4 Dayco patents were unenforceable for inequitable conduct Failed to disclose co-pending application with substantially similar technology Failed to disclose prior art patent cited in a co-pending application Failed to disclose rejection (by a different examiner) of substantially similar claims in co-pending application FC overturned and remanded for district court to consider intent to deceive. McKesson Information Solutions, Inc. v. Bridge Medical, Inc., 487 F.3d 897 ( 2007 Cir. (Fed. DC: patents unenforceable for inequitable conduct Failed to disclose rejections (by a different examiner) in co-pending application Failed to disclose allowance of CIP patent (that might have been basis for double patenting rejection) Failed to disclose prior art Baker patent that was disclosed in co-pending application FC: Affirmed 122

123 And ED Va Said Failure to Mention IPR Was Grounds for Breach of Duty of Candor to Court! Virginia Innovation Sciences, Inc. v. Samsung Electronics Co., Ltd., 2-12-cv (ED Va May 2, 2014) Parties' breached duty of candor by failing to inform court of pending IPR for six months. By failing to advise this Court of the existence of the IPR proceedings, [the parties] in effect had two bites at the apple regarding the validity of the disputed claims. Moreover, they deprived this Court of the opportunity to inquire of the parties and decide for itself whether to await a ruling from the PTAB on that issue.... However, in light of the undeveloped state of the law on this relatively new PTO review procedure, this Court's admonition of all counsel involved in this case falls short of a formal reprimand of any of the individual lawyers. That said, the issuance of this Opinion is more than sufficient to place all patent practitioners on notice that future failures to disclose to the Court any concurrent inter partes review proceedings will be met with far sharper consequences. 123

124 Evaluation of Target s Patents: Enforceability Examples Note tense used in examples Later consider whether there is support for those examples written in past tense or in present tense but accompanied by reported properties or results Prepare list of questions related to the examples, such as: Were all of the experiments described in the patents performed as they were described? Are there experiments that were not included in the specification? If so, what were those results and why were they not included? Are there examples in related patents that should have been, but were not, included in the other? Why not? Flag for verification in data room Accuracy of the reported examples, any representations of fact, and any statement of advantageous properties for the claimed invention, even if not relied on expressly during prosecution 124

125 Evaluation of Target s Patents: Enforceability Prepare to look for data in the target s internal files that is inconsistent with data submitted to the US PTO Prepare to look for prior art in the target s internal files that was not submitted to the US PTO 125

126 Omitted Data? Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir. 2007) Applicant distinguished claimed canola oil from prior art on the basis of oxidative stability. Examiner rejected claims as anticipated by Wong. Applicant submitted tests showing the claimed oil and another oil have similar fatty acid compositions, but different oxidative stabilities. Applicant failed to disclose 2 tests showing the reference oil to have same or even superior oxidative stability. Applicant explained that the withheld tests either: Were performed under unusual conditions and therefore aren t comparable to the data given to PTO. Did not set forth test conditions and likewise are not comparable. 126

127 Omitted Data? Cargill (con't) FC: Affirmed unenforceable for inequitable conduct. Materiality Even if performed under different conditions, the omitted tests were still material. Examiner would want to see the tests and the explanation. Intent Repeated nature of the omission and motive to conceal. High materiality coupled with evidence that applicant should have known of materiality, creates strong inference of intent to deceive. Close cases should be resolved by disclosure, not unilaterally by the applicant. 127

128 Inequitable Conduct: Duty to Disclose Related Litigation MPEP (c) Information From Related Litigation Where the subject matter for which a patent is being sought is or has been involved in litigation, the existence of such litigation and any other material information arising therefrom must be brought to the attention of the U.S. Patent and Trademark Office. Examples of such material information include evidence of possible prior public use or sales, questions of inventorship, prior art, allegations of "fraud," "inequitable conduct," and "violation of duty of disclosure." Another example of such material information is any assertion that is made during litigation which is contradictory to assertions made to the examiner. [citation omitted] Such information might arise during litigation in, for example, pleadings, admissions, discovery including interrogatories, depositions, and other documents and testimony. At a minimum, [e]nough information should be submitted to clearly inform the Office of the nature of these issues so that the Office can intelligently evaluate the need for asking for further materials in the litigation. See MPEP

129 Evaluation of Target s Patents: Enforceability Get ready for entering the data room: prepare a list of questions for interviews with inventors and patent agents based on all flagged issues. 129