2015 AIPLA Annual MeetingChemical Practice Committee

October 23, 2015

Patent Opinions

Edwin (Ted) V. MerkelLeClairRyan, A Professional Corporation70 Linden Oaks, Suite 210Rochester, New York 14625 Phone:  585.270.2104edwin.merkel@leclairryan.com

J. Scott LarsonBraskem550 Technology Drive Pittsburgh, PA 15219 Phone:  412.208.8141 jon.larson@braskem.com

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Overview

Why request a formal [external] patent opinion?

What is the goal?Types of patent opinonsProcess (client to counsel)Communication Risk Mitigation

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Why Request a Formal [external] Patent Opinion?Identification of issues pertaining

to◦Patentability◦3rd party rights◦Variations among national laws◦IP strategy

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Why Obtain an Opinion?

Patentability and Freedom-to-Operate Opinions◦Understand your investment in a

highly patented technology area◦Create an awareness of the patent

landscape to guide decision-making ◦Design-around before launching

product

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Why Obtain an Opinion? (cont.)

Non-Infringement and Invalidity Opinions ◦ In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007):

“[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”

◦ Competent opinion is a strong defense to willful infringement; evidence that alleged infringement was not willful • Avoidance of enhanced damages under 35 U.S.C. § 284

◦ Supreme Court to review willful patent infringement test this term (under context of § 284)• Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 14-1513 (cert. granted

Oct. 19, 2015)

• Stryker Corp. v. Zimmer, No. 14-1520 (cert. granted Oct. 19, 2015)

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Why Obtain an Opinion? (cont.)

Non-Infringement and Invalidity Opinions (cont.)◦ Failure to obtain an opinion may not be used to

prove willful infringement (35 U.S.C. § 298)◦ Induced infringement requires knowledge that

the induced acts constitute infringement. Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011).• Non-infringement opinion should be effective to

negate knowledge requirement• Invalidity opinion, however, is ineffective to negate

the knowledge requirement. Commil USA, LLC v. Cisco Systems Inc., __ U.S. ___, 135 S. Ct. 1920 (2015).

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What is the goal?

Identification of patentable features over the known art

Mitigate infringement risks◦Known or unknown patents

Evaluation of position (defensive or offensive)◦Non-Infringement vs. Infringement◦Invalidity vs. Validity◦Unenforceability vs. Enforceability

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Types of Opinions

PatentabilityFreedom-to-Operate (FTO)Defensive/Offensive

Opinions◦Non-Infringement/Infringement

◦Invalidity/Validity

◦Unenforceability/Enforceablity

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Types of Opinions (cont.)

Patentability Opinion

◦Should we try to patent a new technology?

◦Search for published prior art• Institutional knowledge of the subject matter• Professional search agencies

◦Review public use/sale◦Caveat: non-published (secret) prior

art will not come up in a search

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Types of Opinions (cont.)

FTO Opinion ◦ Can I practice my invention or sell my

products without a high risk of patent infringement?

◦ Before making a significant investment in the technology

◦ Need a clear and detailed description of the technology

◦ Search for enforceable issued patents in jurisdiction

◦ Analyze issued claims against the technology◦ Update the opinion as technology changes

during development◦ Only need to address independent (broadest)

claims

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Types of Opinions (cont.)

FTO Opinion (cont.)◦ May also search for pending patent

applications• Published patent applications• Identify in an opinion and, if relevant,

monitor prosecution• Update opinion as new patents issue

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Types of Opinions (cont.)

Non-Infringement Opinion◦ Often, but not always, in response to a

legal threat of infringement◦ Used to provide assurance to a company

that their product/technology does not infringe

◦ Similar to FTO, but may not require a search

◦ Only need to address independent (broadest) claims

◦ May be combined with an invalidity/unenforceability opinion

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Types of Opinions (cont.)

Invalidity Opinion◦ Is an issued patent valid? • For a patent you may want to

purchase/license

• For a patent that is (or may be) asserted against you

◦ Requires a prior art search◦ Every claim of a patent should be addressed◦ Conclusion may be that some or none of the

issued claims are invalid

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Types of Opinions (cont.)

Unenforceability Opinion◦ Evidence of fraud/inequitable conduct during

prosecution◦ Much less likely to be aware of this prior to

litigation/discovery• If closely monitoring competitor patents (U.S. and

foreign), then perhaps you may uncover something before litigation commences

◦ Taints the whole patent; no claims are enforceable

◦ BUT: could be curable (before litigation commences) using supplemental examination

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Types of Opinions (cont.)

Offensive/Defensive Usage◦ Offensive: Infringement, Validity, Enforceability• Meet a Rule 11 obligation• Provide a roadmap for litigation• Due diligence

◦ Defensive: Non-infringement, Invalidity,

Unenforceability• Establish the state of mind of an accused

infringer (to avoid willfulness)• Provide a roadmap for product development,

i.e., design-around

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Timing: When to Obtain an OpinionObtain an opinion as early as possible

◦ Patentability and FTO opinions• As soon as the technology is adequately defined that a

meaningful search can be conducted• Before a significant investment in resources

◦ Validity and Non-Infringement Opinions• Soon after receiving notice or discovery of patent• Before litigation begins• Post-Seagate: There is no affirmative duty to obtain a

competent opinion

If it is a close call, get an opinion

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Communication: Flow of Information

Attorney provided all details (scenarios, formulations, known-art, etc.)

Patent and/or Literature Searches

Analysis and Risk Assesment

Communication to appropriate team(s) with issue management

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Communication: Opinion FormatOral/Written

◦ An Oral Opinion Could be used as a “preliminary” opinion Valuable for helping make a quick

decision Follow-up with written opinion

◦ A Written Opinion Greater evidentiary value More expensive Requires more time

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Can Risk be Mitigated?

Are there pending patent applications that could improve IP position?

Potential for future commercially relevant patent applications

Can granted IP be improved? (laws vary by nation)

Orange bookLeverage in deal structures (options,

royalties, etc.)

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Opinion Standards: What is a Competent Opinion?Thorough

◦ Reviews prosecution history and cited art

◦ Construes the claims

◦ Is well-reasoned; not conclusory

◦ Cites to relevant, up-to-date law and applies the law to the facts

◦ Addresses doctrine of equivalents without being conclusory

Honest◦ More likely to speak in probabilities than certainties

◦ Does not need to be accurate to be competent

By whom?◦ Attorney, all types; agent, only patentability

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Issues of Privilege, Immunity, and WaiverAn opinion may be protected by

attorney-client privilege◦ The privilege is waived once a party announces it will rely

on an opinion of counsel

◦ Waiver applies to all other communications relating to the same subject matter

◦ No waiver for separate trial counsel• Opinion Counsel = business decisions; accused party’s state of

mind• Trial Counsel = strategic litigation matters

◦ Accidental loss of confidentiality to 3rd parties• Showing the opinion to a 3rd party during licensing deal• Unintentional waiver

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Thank you

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