protecting your intellectual property: cost-saving techniques, legal updates & best practices...

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Protecting Your Intellectual Property Cost Saving Techniques, Legal Updates & Best Practices

for Obtaining and Managing Patents Worldwide

February 28, 2017

Knobbe Martens

San Diego, CA

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

About Us

• Seven offices nationwide, in CA (5), DC, and WA

• More than 300 attorneys and scientists representing the complete spectrum of technologies and IP practice areas

• Highest number of registered patent attorneys in the United States – more than 200

• Over 95% of attorneys hold technical degrees

• Global practice through large network of foreign IP firms

• Continuous team throughout lifecycle of patent portfolio, spanning from development to litigation

• Compensation structure cultivates a collegial atmosphere focused on high quality of service

• Attorneys motivated to match clients with an attorney/scientist team custom built to deliver success


Our Advantages for Startups & Early Stage Co.’s

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

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

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

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

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

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

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

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


Firm Practice – All Areas of IP

• IP Strategy

• Patents

• International IP

• IP Transactions & Agreements

• Trademarks and Brand Protection

• Litigation

• USPTO Trials and Post-Grant Proceedings

• Copyrights

List of representative clients available upon request

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved. ©2017 Knobbe, Martens, Olson & Bear, LLP – All Rights Reserved. 5

Agenda

• GLOBAL UPDATES

• BEST PRACTICES: COST-SAVING TECHNIQUES

• BEST PRACTICES: BEST DRAFTING & PROSECUTION PRACTICES

Speakers • Aki Ryuka, Ryuka IP, Japan

• Stephen Yang, Chofn IP, China

• Guido Quiram, Michalski Hüttermann, Germany

• Gavin Manning, Oyen Wiggs, Canada

• Kim Miller, Knobbe, USA

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

contact [email protected] directly.

Thank you.

www.ryuka.com 6

mailto:[email protected]

7

Current Situation

• Difficult to collect evidence

• Damages not high enough to create deterrence

• When infringement is found by court, but

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

• Court can ask the defendant to produce evidence

• Defendant not cooperative

– damages determined with reference to plaintiff’s claim and evidence

• A good strategy to claim higher?

8

Daft 4th Amendment - Evidence Collection by Courts

Daft 4th Amendment - Punitive Damages Awarded by Court

• Introduction of the concept of willful infringement

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

– Infringer’s gain

– Multiples of royalties

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

9

Joint Infringement

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

• Joint infringement:

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

– induces another party to conduct patent infringing acts

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

10

11

Design Patent

• Partial design currently not allowed

• Graphic User Interface (GUI) can be protected by design patent

– But only together with the complete product

– protection of GUI, independent of the product, currently not possible

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

to 15 years

Business Methods – Proposed Change

12

Guidelines for Patent Examination, Part II, Chapter 1, Section 4.2 • If a claim related to business model has

• features of business rules and methods; and • technical features

• Such a claim shall not be excluded from patentability under

Article 25.1(2) • Not rules & methods for mental activities

• Practice tip:

• include “technical features” in a claim related to business method

• claims need to have technical improvement

Computer Program Related Claims

13

• Part II, Chapter 9, Sections 2

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

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

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

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

• Becomes same as the US practice

Chemical Inventions – Supplement Data

• Supplemented experimental data after filing data – allowed

– cannot be used to fulfil sufficiency requirement

– can be used to prove technical effect and thus support inventive step

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

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

14

M I C H A L S K I H Ü T T E R M A N N

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

A new (Pharma) Patent Troll in the EP System



Art 56 EPC: “If the state of the art also includes documents within the

meaning of Art 54 (3) EPC, these documents shall not be considered in

deciding whether there has been an inventive step”

Art 54 (3) EPC documents are pre-filed, post-published EP applications

(“published on or after that date”)

Applicant A

files International

Application A

International Application A

is published (morning hours)

Troll downloads application A,

copy-pastes it, adds trivial

novelty features and files 2nd gen.

EP application B the same day

18 months

Patent A granted

(novel & inventive)

2nd gen. EP application B

automatically novel and inventive

(for EP, application A does

not count for inventiveness)



Case Study

- WO 2013/016155 with pending EP regional phase assigned to

ChemoCentryx, Mountain View, published on 31 January 2013

- Title and claims: „Polymorphic forms of the sodium salt of 4-tert-

butyl-n-[4-chloro-2-(1-oxy-pyridine-4-carbonyl)-phenyl]-

benzenesulfonamide“

- Discloses tablets, vials, etc., but no packaging unit

- EP 2740458 B1 of troll with (latest) priority date 31 January 2013

and granted claim 1:

• A packaging comprising a multitude of at least 2 administration units

comprising polymorphic trihydrated, solvated or desolvated form of

sodium salt of 4-tert-butyl-N-[4-chloro-2-(1-oxy-pyridine-4-carbonyl)-

phenyl]-benzenesulfonamide, or …

- Incorporates WO 2013/016156 (and 15 APIs of further WOs)



„Directed“ against Pfizer, Roche, Novartis, Merck etc.

The pipeline:



Light at the end of the tunnel



Remedies

- Art 54 (3) EPC could be amended to “state of the art shall …

comprise everything made available to the public … before or on

the date of filing of the European patent application” - unlikely

- Rule 64 PCT has a similar regulation (“prior to the filing date of the

international application”)

- WIPO could publish in the evening hours instead of morning hours

- EP opposition unlikely to be successful (illegitimate ownership or

“bad faith” is not a ground for opposition in EP)

- Entitlement can be clarified on national basis (action for vindication)



Further Remedies and other Jurisdictions

- Add omnibus clauses covering trivial 2nd generation embodiments to

the application (may end up in a „cat-and-mouse game“ with troll)

- Publish application one day prior to WIPO, e.g. on internet platform

or in a publicly accessible room, and care for proper documentation

- In US, troll approach does not work: Under § 102 (a) (2) post AIA,

pre-filed, post-published patent applications qualify as fully

applicable prior art, even for questions of inventive step

- In DE, troll approach would work: Under § 3 (2) PatG pre-filed,

post-published (…) applications only count for novelty

- So, is troll‘s behavior illegitimate or simply exploiting possibilities law

provides?

patentable.com

22 Protecting your Intellectual Property

Canada is a Good Place to File Patent Applications

patentable.com


Canadian trade with the United States

is Huge – Integrated Market • >$2 billion a day in goods and

services

• NAFTA Member

• Relatively large economy

Among the least expensive countries

to file and prosecute patent

applications

Sometimes Canada is one of the only

places you can file: • 12 month grace period

• 42 months for PCT national phase

entry

Canadian prosecution can be

deferred and is often smooth

patentable.com


RECENT DEVELOPMENTS

CIPO is relaxing its position regarding

patentability of computer-based

inventions.

• If invention can be characterized

as addressing a “computer

problem” vs. merely doing

business using a computer

Methods for diagnostic medical

testing are still facing serious obstacles

Note: Methods of medical treatment

are NOT patentable in Canada (this is

not new)


Guidelines on Subject Matter Eligibility

• Claims must be given broadest reasonable interpretation.

– Step 1: Is the claim related to a statutory category (i.e., a process, machine, manufacture or composition of matter?)

• NO – claims is not eligible subject matter

• YES – Proceed to Step 2A

– Step 2A: Is the claim directed to a law of nature, a natural phenomenon, or an abstract idea (judicial exceptions)?

• NO – claim qualifies as eligible subject matter

• YES – Proceed to Step 2B

– Step 2B: Does the claim recite additional elements that amount to significantly more than the judicial exception?

• NO - claims is not eligible subject matter

• YES - claim qualifies as eligible subject matter


Life Science Subject Matter Eligibility Updates

• 2016 USPTO Subject Matter Eligibility Guideline - Natural Product

– Compare:

• (Ineligible) A vaccine comprising: Peptide F (a natural product), and a pharmaceutically acceptable carrier.

• (Eligible) A vaccine comprising: Peptide F, and a pharmaceutically acceptable carrier selected from the group consisting of a cream, emulsion, gel, liposome, nanoparticle, or ointment.

• (Eligible) A vaccine delivery device comprising a microneedle array that is coated with a vaccine comprising Peptide F.

– Take Home: claimed nature-based products have markedly different characteristics from what exits in nature; or recites an unconventional device that amounts to significantly more than the exception.


Life Science Subject Matter Eligibility Updates

• 2016 USPTO Subject Matter Eligibility Guideline - Diagnosis and Treatment

– (Eligible) A method of detecting JUL-1 in a patient, said method comprising:

a. obtaining a plasma sample from a human patient; and

b. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody.

– (Ineligible) A method of diagnosing julitis in a patient, said method comprising:

a. obtaining a plasma sample from a human patient;

b. detecting whether JUL-1 is present in the plasma sample by contacting the plasma sample with an anti-JUL-1 antibody and detecting binding between JUL-1 and the antibody; and

c. diagnosing the patient with julitis when the presence of JUL-1 in the plasma sample is detected.

• Take Home: Process claims that touch upon a natural law or phenomenon may avoid invoking Step 2A analysis if "the end result of the process, the essence of the whole” is not directed to the law of nature or natural phenomenon.


QUESTIONS?


BEST PRACTICES: COST-SAVING TECHNIQUES



Thank you.

www.ryuka.com 31


32

PCT National Phase Entry

• 30 months from the earliest priority date

• 2 months extension available – no action needed by the end of 30 months

– extra fees required - please decide early

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

• Extra claim fees – calculated on the basis of the WO publication

– reduce no. of claims at national phase entry will NOT reduce cost

– include a small number of claims upon filing

33

Voluntary Amendment

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

– 3 months from receipt of Notification of Entering Substantive Examination Procedure

• No voluntary amendment allowed in response to OA – only to address issues raised in the OA

– If different claims are to be pursued at this stage, only option is to file divisional applications - more costly

• Don’t miss the chances

• For Paris Convention applications or first filings – file a small number of claims

– use voluntary amendment to change the claims to be examined

– need to ensure literal support to the amended claims

Office Actions - Interviews

• Not possible before 1st OA

• In person interview rarely granted

• Telephone interviews often used

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

34

35

Second Tier Patent Rights

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

patent)

– No substantive examination

– Faster and cheaper to obtain

– Equally effective in enforcement

– Ideal for protecting products with shorter lifecycle

• Utility model Lower threshold on inventive step

– Easier to get, more difficult to invalidate

– Limited to products only

36

Financial Incentive Program

• Available to Chinese individual or entity, including Chinese subsidiaries of foreign companies – applications must be filed in the name of the business entity

established in China, i.e. Chinese subsidiary

• Central government subsidies – National patents: covering official fees, possibly attorney fees; – PCT and Paris Convention applications: Covering official fees and

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

• Local governments / high tech parks have additional programs

• High tech company status

– Must have certain number of patents as one of the criteria – Enjoy preferred tax rate



Best Practices – Current Cost-Saving Techniques

- Complying with EP (and DE) practice often #1 cost saver

• EP is a very formalistic system and in various aspects

different to other jurisdictions

- EP allows protection in three continents (EP, Hong Kong,

Morocco and Cambodia) – national filing e.g. DE is cheaper

• Will your competitors have different products for different

European countries?

- Expedite EP proceedings

• Early entry, waive Rule 161 EPC, PACE or PPH requests

(each at no official fees)

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

EP filing

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



Best Practices – Future Cost-Saving Techniques

- Unitary Patent and Unified Patent Court about to start 12.2017

• Gives you protection in ≥ 14 countries at the (annual) cost of

4 countries

- Will you opt-out your EP patents?

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

0 €

200,000 €

400,000 €

600,000 €

800,000 €

1,000,000 €

1,200,000 €

Vertretungskosten DE

erstattbare Kosten UPC

DE

UPC

Value at dispute

patentable.com


Cost-Saving Techniques

• File a high quality application in the first place • Know the prior art; • Avoid drafting errors; • Good drawings; • This applies to ALL jurisdictions.

• Defer Examination • Can wait up to 5 years from Canadian filing

date • Amend claims based on prosecution in other

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

• < 50 employees or university or non-profit entity • Patent invalid if wrong fees paid • Recent case – wrong fee paid during

prosecution did not invalidate patent (do not rely on this).


Strategies for “Cost-Effective” Patents

• Identify the role of this IP

• Coverage for that role

• Cost shifting vs. Streamlining costs


High Level Cost Considerations

• What’s the role of the patent?

– A single patent covering commercial product

– Overlapping scope with relevant market

– A practical multiple approaches: multiple patents that covers both the commercial product and also the entire relevant market

• Coordinate IP strategy with C-level, R&D, Marketing, IP Counsel, Regulatory, and Protects/Websites

• File where there is present or potential need


Cost Shifting vs. Cost Savings

• Reducing vs. Delaying Costs over the 3 stages

– Pre-PCT filing (first year)

– Prosecution Term (1 year to 5 years)

– Post Issuance (5-20+ years)

• Less ability to “fix” issues as time progresses

• Cheaper to address, in long run, if handled earlier

• Risk/added cost of changing the approach


How to Streamline Costs

• Invention disclosure forms

• Internally, companies can provide:

– Description of the invention and market

– Description of possible modifications and design around

– Examples

– Figures (no text, no color)

– Initial assignment and/or declaration

– Collection of references


How to Streamline Costs

• Have “standard” countries to pursue

– Sets expectations for costs and timing (translations, local requirements, etc.)

– Sets needs and requirements for drafting

• Preferred claim/support for jurisdictions

• Restriction/lack of unity approaches

• Use “role” of the IP to help determine where to file

– Geographical - where is there a need (& surroundings)?

– Where is it made or performed?

– Exit strategy/license

– Enforcement


QUESTIONS?


BEST PRACTICES: BEST DRAFTING & PROSECUTION PRACTICES



Thank you.

www.ryuka.com 47


48

Novelty

• Absolute novelty – worldwide disclosure is novelty destroying

– Publication, public use, etc.

• Definition of ‘disclosure’ different from U.S. – technical solution must be in public domain

– sale, lease, exhibition (public use) not necessarily disclosure

– must be approached case by case

– the technical solution must be in a state accessible to the public

– no on sale bar

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

49

Divisional Application (1)

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

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

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

application

50

Divisional Application (2)

• Divisional from divisional – voluntarily filing, deadline counted on the basis of parent

application (very first generation) – Divisional lack of unity, deadline counted on the basis of the

previous generation divisional

• Practice Tip: – always deliberately make divisional lack of unity, keep option open

Office Actions - Common Knowledge

• Examiners often regard distinguishing features as common knowledge

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

cooperative)

– Argue that the distinguishing features have different object, solve different problem and/or have different function

– Argue that the reference teaches away from the present invention

– Argue that one skilled in the art could use the distinguishing features but would not do so

• Could- Would, no motivation

51

Functional Limitation

• Avoid functional limitations in your claim – in prosecution, considered as covering all possible manners

– more vulnerable to novelty objections

– In litigation, possible narrower interpretation

52

Added Subject matter

• Chinese practice extremely strict regarding making amendments – Change of typo: from 1,000℃ to 100 ℃ --- NOT allowed

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

• Add intermediate generalization terms

• Include as many technical effects as possible

– Supplement data to support inventive step

– Technical effects must be present in the original disclosure



Best Practices - Best drafting & Prosecution practices

- Have a thoroughly drafted application, prepared for EP filing

• Use clear, concise terms; no alternate expressions

• Have a “general” description instead of describing single

embodiments

• Only one independent claim per category

- Make amendments compliant to EP requirements

• Ideally have a literal disclosure basis for your amendment

and provide disclosure basis

• No intermediate generalizations

• Be careful with deletion of features in independent claims

• File main and auxiliary requests, call the examiner

- Sent instructions early ahead of the deadline, such that EP

counsel can review and propose alternatives

patentable.com


Sound Prediction

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

• This has even been applied in a mechanical case.

• Solution: include data and reasoning in appropriate cases.

patentable.com


“Promise” Doctrine

• A Canadian patent may be invalidated if:

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

• The promise is not fulfilled.

e.g. patents for Eli Lily’s drugs Zyprexa and Strattera invalidated for failing to provide promised utility resulting in NAFTA challenge.

• Solution: avoid ‘promises’.

patentable.com


Double Patenting

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

• No good way to fix.

• Can be an issue where:

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

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

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

patentable.com


Claiming Styles

Canada allows:

• US-style claims

• European-style claims

• Multiply-dependent claims

• No government fees for excess claims


Domestic Drafting & Prosecution Practices

• Provisional application

– Sufficient disclosure to support the priority date

– Consider filing rolling provisional(s) if new invention disclosure are made available within 1 year from filing

– Execute assignment to ensure entitlement of priority

– Be mindful of possible public disclosure prior to provisional filing date

• conferences, scientific publications, clinical trials, etc.

• no grace period in most of the world, including EPO

• Grace period is available in certain countries (such as JP and KR) but requires advance notice

• Non-provisional application

– Consider contacting your outside patent counsel in advance to update the application if improvements are made

– Execute assignment and inventor declaration sooner than later


International Drafting & Prosecution Practices

• PCT

– Currently has 151 contracting states (as of February 2017)

– Delay the cost and decision for national phase filing to up 30/31 months (or to up 18/19 months if claim priority to a provisional application)

– Consider prosecution at the PCT stage to streamline/expedite national phase prosecution

• Direct Filing

– Non-PCT contracting states: Taiwan, South America (Argentina, Bolivia, Paraguay, Uruguay, Venezuela), and Middle Eastern (GCC)

– Upfront costs including translation and other formality requirements


Tools for Accelerating Patent Procurement

• Track One Request (Prioritized Examination)

– Average pendency from filing to allowance = 6.5 months

– Cumulative allowance rate (through 01/17) = 44.9%

• First Action Interview Pilot (FAIP)

– FAIP first action allowance rate = 31.1% (versus 17.6% in new-continuing application)

• After-Final Consideration Pilot Program 2.0 (AFCP 2.0)

– Must submit an amendment to at least one independent claim that does not broaden the scope of the independent claim

• Pre-Appeal Brief Conference Pilot Program

• Patent Prosecution Highway Program (PPH)

• Cancer Immunotherapy Pilot Program (Patents 4 Patients)


QUESTIONS?

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