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Patent Validity To be valid, a patent must contain patentable subject matter, have utility, have

novelty, be nonobvious, and must adequately describe and enable the invention. Whoever invents or discovers any new and useful process, machine, manufacture,

composition of matter or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of 35 USC.

Patentable Subject Mattero A process is an act or series of acts/steps. o A machine is a concrete thing, consisting of parts, or of certain devices and

combination of devices. o A composition of matter combination of two more substances, which can

include living things under Chakrabarty.o A manufacture is a catch all for the rest that are man-made assemblies of

previously separated components. o Laws of nature, natural phenomena, and abstract ideas are not patentable.

However, claims that are mathematical formulas combined with a physical component to create a “new machine” have been allowed.

However, claims that are diagnostic tests measuring correlations of principles of nature have been allowed.

However, derivatives of naturally occurring items are possibly patentable. The key is that the invention must be distinct in some manner from the natural item; mere isolation of a unit of matter in nature is not enough. cDNA is because the inactive portions were removed and it does not exist in nature.

For combinations of naturally occurring items, there must be a synergistic effect that results in an increased/different functionality.

There may be an issue for purified forms of naturally occurring items; the focus is that there must be some modification.

Business method patents as a category is not precluded from patentability and furthermore, the machine and transformation test is not the sole test for determining its patentability, but a factor. They can’t be pure algorithms, essentially mathematical formulas.

Distinguishing points from abstract idea: Real world linkages or inputs, real world impacts or outputs, and real world products or downstream real world products or changes.

Utilityo Operational - described to be operated as claimedo Beneficial – some lawful useo Practical – useful to the public as disclosed in its current form

Noveltyo Pre-AIA

(a) First to invent A patent is precluded if the invention was known or used in

this country OR patented or described in a printed publication anywhere by another prior to the inventor’s conception date.

(e) Temp. secret PA A patent is also precluded if the invention was described in a

patent/application that was later published filed by another before the applicant’s invention date.

(f) Derivation inventor must not have derived the claimed invention from

another source Could utilize part of interference proceedings

Co-inventor? A party must contribute to the conception of an

invention in order to be a co-inventor Sufficient that a co-inventor contributed to only one

version of the claimed invention Co-inventors must be working collaboratively on a

single project rather than sequentially on independent projects. Insufficient:

o Testing of design features specified by anothero Creation of a reduction to practice in

accordance with an invention design specified by another

o Management of resources or processes used in developing an invention design or example

(g) By another

A patent is also precluded if the invention was made by another before applicant’s invention date and was not abandoned, suppressed, or concealed.

First to reduce to practice is the first to invento Exception: where party is first to conceive and

second to reduce to practice, that party will be first to invent if he/she can show:

Diligent effort to reduce to practice Extending from before the other party’s

invention through RTP Interference proceedings: triggered by two parties each

claiming the same or substantially the same invention (does not apply to obvious inventions)

(b) Excessive delay A patent is precluded if, more than 12 months before the U.S.

filing, the same or obvious invention was patented or described in a printed publication anywhere or in public use or on sale in the US.

o Post-AIA (a)(1) First to file

A patent is precluded if the invention was patented or described in a printed publication, in public use, on sale, or otherwise available to the public anywhere before the inventor's patent application filing date.

(a)(2) Temp secret PA A patent is also precluded if the invention was described in a

patent or published patent application filed by another before the applicant’s filing date.

(b)(1) Grace period A patent is also precluded if, more than 12 months before the

U.S. filing, the same or obvious invention was disclosed by the inventor or someone who obtained the subject matter from the inventor.

Disclosure is anything that would have be considered prior art in novelty and nonobviousness analysis

135 Derivation Proceedings or 291 Derivation Civil Actions

DP – allowed a party filing a later patent application to prove that earlier applicant derived the invention from another

Must be initiated w/in 1 year of issuance of patent or publication of application

Derivative proceedings now only account for substantially similar

Without 102(f), now there may be an issue with deriving and then making an obvious variant

o Definitions: Known

If the invention was already in the hands of the public in that the invention was known in a way likely to come to broader public attention

Pre-AIAo Public knowledge in a foreign country was not

considered prior art (in contrast to foreign patents and foreign printed publications)

o Foreign knowledge did not become prior art even when brought to this country (Westinghouse)

Post-AIAo Public knowledge anywhere is sufficient

Used If the invention was a method that was being practice and it

was being practiced openly and in the ordinary course of the activities of the employer and was in a manner not subject to legal or physical confidentiality constraints.

Described in printed publication If the alleged prior art was a printed publication, meaning that

it was recorded in a stable, retrievable form and it was sufficiently available/accessible to the public of interest.

Patent application/patent US patents or applications are prior art as of their filing date. International patents are considered prior art as of the earliest

publication date.

However, if the alleged prior art was an unpublished patent, then it only anticipates as the subject matter covered by the claims and it is considered prior art as of the date the patent was obtained.

On sale An invention is considered on sale if there was an offer to sell

and the invention was reduced to practice. Secret commercial use by others would not be

considered on sale. Confidential offers to assign/license would not either. Experimental use would not be considered if the use

was for testing function features of the invention with a good faith goal of improvement and control over the circumstances of use and feedback to the inventor on the results of the functions. Any sales must only be incidental and must assist in placing the invention in a typical use environment.

o It cannot be used to test against rivals or test desirability in the market.

o 1-to-1 Anticipation Analysis Anticipation occurs when any single enabling prior art reference

discloses each and every claim limitation of the invetion. Determine prior art elements

A prior art item is deemed to disclose: Features described or illustrated in the item so as to

enable a POSITA to recreate the features Additional features which a POSITA would see are

necessarily present (“inherent”) in the prior art item A prior art item is not deemed to disclose:

Features that are present (e.g., visible) but not understood

Features that are necessarily present but so rarely or insubstantially as to be effectively imperceptible

Disclosure of a single species anticipates a claimed genus however disclosure of genus does not automatically anticipate a single species because the species may have properties not shared by the rest of the class

Determine patent elements: claim interpretation Claims are interpreted how a POSITA would’ve understood it A means-plus-function claim presumes that the element

includes both the structure and the intended means for accomplishing something

Compare Nonobviousness

o Even if a single prior art reference does not disclose every element of a claimed invention, it may still be unpatentable if it is obvious in light of the prior art. An invention is obvious when the claimed invention, as a while, would have been obviousness to a POSITA at the time the invention was made. This obviousness standard is to prevent trivial advances in the art.

o Graham factors Scope of prior art

Prior art that qualifies under novelty analysis also qualify under the nonobviousness analysis.

However, the field must have been considered pertinent to the problem being solved by a POSITA.

Content of prior art/invention What each has, element-wise

Difference between prior art and invention Level of POSITA

Education level; type of technology Missing element as improvement that would have been

obvious to a POSITA? Combining elements of different prior art would have been

obvious to a POSITA? A rational account of why POSITA would predict success is

sufficient to establish obviousness Could POSITA perform the analyses needed to

transform the prior art into the claimed invention?

Approaches yield unexpected or previously unpredictable results are more likely to be nonobvious

Not obvious to try Secondary considerations

Commercial success Long-felt need Failure of others Prior teaching-away

Enablemento The invention must be described so that a POSITA could have full use of the

invention without substantial experimentation. A POSITA must understand the elements of the invention and their interrelationships as well as how to make and use the invention.

o Without substantial experimentation looks at the Wand factors: Predictability of the art Skill of POSITA Quantity of the experimentation required Guidance given Presence of working examples Inherent complexities of the invention Information provided by prior art Breath of claims and relativity to the expressed enablement

o The enablement of a particular species of a genus is not enough to claim the entire genus.

Written Description/Definite Claimso Specification must relate the invention content and structure to its function.

The written description should help clarify the claims when the scope of the claims are vague.

o Terms should either have an established meaning or given a meaning in the specifications. So long as a POSITA could have easily understood the claims, they are considered definite.

Statutory barso Abandonment/Suppression

To be abandon, the party must have given no attention to efforts to develop or complete the invention for a substantial amount of time.

To suppress, the party has taken affirmative steps to conceal the invention for a substantial period.

o Prosecution Laches If there was an unreasonable and unexplained delay in prosecution,

even if the applicant had complied with the rules and statutes, prosecution laches is still a viable defense for patent validity for patent infringement claims.

Patent Infringement Literal Infringement

o Whoever without authority, makes, uses offers to sell, or sells any patented invention, within the US or imports into the US any patented invention during the term of the patent is directly infringing the patent.

o 1-to-1 analysis between claims and allegedly infringing item/process Construe the claims

Use both intrinsic (claims, specification, and prosecution history) and extrinsic evidence (dictionary and expert testimony)

First courts look at the claims themselves and decide whether its plain meaning can be discerned from the claim language. If not, we would turn to other intrinsic evidence, such as specification and prosecution history. An infringer can overcome the presumption of the ordinary and customary meaning if he can show the patentee was his own lexicographer and distinguishes.

Apply the construed claims to the accused device or method. Go element by element and only if every element of the properly construed claim is found in the accused device or method (either literally or by the DoE) may infringement exist.

Doctrine of Equivalence An accused item is equivalent to claimed invention and

infringing if each element of the claimed invention has an identical/equivalent element

Elements are equivalent if it performs substantially the same function, in substantially the same way, with substantially the same result

Limiting by Prosecution History Estoppel (PHE):

PHE indicates what the applicant gave up in prosecution and generally cannot assert that via DOE unless patentee can show:

o At the time of patentingo If it was an inadvertently giving something

while trying to narrow something else that a POSITA could not have realized to avoid giving up, the Supreme Court has allowed that be a defense against PHE

o Reverse Doctrine of Equivalence Even when a complete match of claim elements of accused item

features is found, there is no infringement if the item involved is so far changed in principle from a patented article that it performs the same or similar function in a substantially different way.

Contributory Infringemento When someone offers to sell, sells, imports in the US

a component of something patented, knowing that it was especially made for use in the infringement of such a patent and also is not a staple article suitable for substantial non-infringing use.

o Overseas – Supplies from the US, intending the use of component to be infringing if undertaking in US

a component of something patented, knowing that it was especially made for use in the infringement of such a patent and also is not a staple article suitable for substantial non-infringing use.

Inducing Infringemento Party directly encouraged infringement knowing the likelihood of

infringement and infringement resultedo Party supplies all or substantial portion of the patented invention in

uncombined form from the US in a manner as to actively induce the combination outside the US that would have infringed if the combination were in the US.

o Party imports in the US or offers to sell, sells or uses within the US a product which is made by a process patented in the US. However, if the use was noncommercial (unless there is not other adequate remedy), materially changed by subsequent process, or because a trivial component of another product.

Willful Infringemento Requires that the there was an objectively high likelihood that the infringer’s

actions would constitute infringement and that the high risk was known or should have been known to the infringer

o However if there is a showing of good faith belief of non-infringement based on reliance of an opinion of counsel that the paten was invalid or their actions wouldn’t be infringing, it is a defense. However, it cannot be reliance on a non-patent specialist or reliance on opinion based on projected conduct and not actual conduct. Also, once that defense is invoked, defendant has waived privilege regarding legal advice of opinion counsel. If they don’t even get counsel, the question is if that was reckless.

Damageso Assuming there was infringement, the plaintiff is entitled to damages, either

in an injunction, lost profits, or reasonable royalty.o Equity

Preliminary injunction The party filing a patent infringement suit must show (1) a

reasonable likelihood of success on the merits, (2) irreparable harm if the injunction is not granted, (3) a balance of the hardships tipping in the favor of the party filing, and (4) a favorable impact on the public interest.

Permanent injunction Granted in light of (1) irreparable injury to patentee that is not

purely monetary, (2) inadequacy of remedies at law (such as monetary damages) and the willingness to negotiate without coming to a licensing fee does not mean monetary damages are enough, (3) balance of hardships favoring patentee, and (4) public interest is not disserved by the injunction

Even if denied injunction, the patent holder is still entitled to at least royalty payments for continued infringement and the royalty would be either based on a reasonably royalty determination or he would be forced to sue periodically to college past damages

o Lost Profits Lost profits are what the court finds that the patent holder would

have made “but for” the infringement. Must prove Panduit factors:

The extent of demand for the patented product The absence of noninfringing substitutes from that product The patentee’s ability to meet the additional demand by

expanding manufacturing capacity The extent of profit the patentee would have made

Must be able to separate from/calculate fixed costs Once proven, the scope is rather expansive, lost profits from:

Defendant’s sales of competing unpatented goods Get the entire value of sales of the an entire product if

can prove that the single patented component is what caused the sale = entire market rule

Offset lowered prices resulting from infringing sales Lost “tag along” sales

o Market-share Damages If absence of acceptable, non-infringing substitutes is overly

burdensome A patent owner may show the market share held by each competitor

and content that but for the infringement, each competitor would have sold its market-share of the infringer’s sales.

o Reasonable Royalty Reasonable royalty inquires into what the marketplace would actually

have paid for rights to the technology, bearing in mind that the licensee has to make a profit as well.

Reasonable royalty is = Royalty Base ($) x Royalty Rate (%) ] Royalty base = total sales value Royalty rate is a reasonable royalty rate calculated using G-P

Georgia-Pacific factors Other royalties patentee has received Rate other licensees have paid for comparable patents Nature/scope of the license of exclusivity and restrictions Licensor’s establish licensing policy of how many licensees and

conditions Commercial relationship of licensor/licensee The effect selling one patented product that especially

promotes other non-patented products Duration of patent

Established profitability; commercial success; current popularity

Use after hypothetical negotiation is important too Nature, character, benefits of patent

If only a minor part of the product Extent that infringer had benefitted Customary profit margin Realizable profit distinguished from other factors such as

business risks, non-patented elements, improvements by infringer

Expert testimony The logic that all the infringing sales should be accounted for one way

or another is that the defendant could have been enjoined day 1 and it would serve as a deterrent as well.

o Willful Infringement Punitive damages Up to treble (x3) damages

o Patent Marking No damages awarded for infringement of product patents without

notice of patent to infringer Notice may be via:

Patent notice on product (patent marking) or Actual notice to infringer

Not required for process patentso Attorneys Fees

Award of attorney fees to prevailing party available in "exceptional cases"

Cases deemed exceptional where: Patent holder in either patent prosecution or later patent

enforcement takes an action in bad faith that extends legal proceedings and wastes attorney fees or

Defendant takes an action in bad faith that extends legal proceedings and waste attorney fees

Licensing/Assignment/Ownership/Right to Sue Issues

An assignment is a transfer of ownership of a patent that effective transfer control of the bundle of rights. However an insufficient transfer may leave the patent rights with the inventor because title vests with the inventor first. Giving pitches does not relinquish rights and is neither an assignment nor a sale.

A license only gives permission to do something that would otherwise be infringing. A licensee, notwithstanding language in a license agreement, does not have standing to sue on its own. For exclusive licensees can sue provided that have all the substantial rights of the patent. A licensee is also free to challenge the validity of the patents under which they are licensed.

Non-Suit Validity Challenges Ex Parte Reexaminations

o Can be initiated by anyone demonstrating a substantial new question of patentability regarding an issued patent based on patents or printed publications. However, the initiating party cannot really participate and can only reply to the applicant’s opening statement. However, it’s cheap.

Pre-AIA Inter Parte Reexaminationso For 3rd parties to challenge the validity of a patent based on patents or

printed publications and could get more involved in the proceeding. Post-AIA Post Grant Review

o Established to provide a meaningful administrative means to challenge validity of issues patents. They are only allowed 9 months after the patent issues. PGR allows any party to challenge the patent based on any claims that could be raised in a DC proceeding. The proceeding would be in front of the Patent and Trademark Appeal Board and any parallel civil suit would be stayed.

Post-AIA Inter Parties Reviewo For challenges limited to arguments based on patents or printed publications

and party must show that there is a reasonable likelihood that the request would prevail with respect to at least one claim. The IRP includes expanded involvement of complaining parties with limited discovery, declarations, and hearings.

International Patents Inbounding - Paris Convention requires signatory countries to recognize first filing

date in a signatory country as effective filing date for other applications in signatory countries within a year

Outbounding - Effectively establish a one year buffer period for US inventors to make decision on where to file a second wave of applications and for drafting and filing those applications

o PCT streamlining multi-country applications Shared search results Shared search results and partial examination results

o European Patent Application Unified multi-country examination; country-specific enforcement

o European Union Unitary Patent New; single patent enforced by single Unitary Patent Court

Patent Strategies Broadest claims have the most commercial value however are harder to patentable

since there is more prior art they might intersect Also, if the claims are too broad, they may not be completely enabled Even the narrowest claims however should address commercially significant features

12/8/13 10:28 PM

12/8/13 10:28 PM