PATENTS ARE BUSINESS TOOLS

Patents Are Business Tools

May 14, 2010

David A. Jones

Patents Are Business ToolsTopics:• GOALS• RISK MANAGEMENT• DEVELOPING A PATENT PROGRAM• PATENT PROCUREMENT OVERVIEW

Disclaimer: Many complicated legal issues are summarized herein in order to briefly present some fundamental strategies and principles. Moreover, many statements are fact specific. Therefore, consult your legal counsel with specific facts before assuming that any information herein is advisable in any particular case.

Business IP Goals• Protect IQ Biolabs’s Products, Services, and

Income• Generate Income by Assigning (Selling) or

Licensing (Renting) Patent Rights to Others• Protect Research and Development

Investments• Obtain a Legitimate Monopoly for Future

Exploitation• Create Bargaining Assets

Risk Management• Avoid Infringement of Patents of Others

a. Clearance Search for Products

b. Design/Invent Around a Competitor’s Patent

c. Avoid Treble Damagesi. Opinion of Non-Infringement

ii. Opinion of Invalidity

d. Invalidate Patents by Re-Examination

Risk Management - continued

a. Title Search

b. Title Opinion

c. Validity and Patentability Opinions

d. Scope of Patents and IP Audits

e. Infringement Opinions

f. Broadening of Patents?

g. Disclosure

h. Engineering Tests

i. Liens

j. Confidentiality Program

k. Enforcement

l. Revenue Enhancement

• Perform Due Diligence in Conjunction with Acquisitions

Risk Management - continued• Ensure that Title to New Developments is

Secured with IQ Biolabsa. Confidential Disclosure Agreements/NDAsb. Executed and Recorded Assignments Upon Filing of

Applicationsc. Agreements with Contractors, Consultants, Suppliers,

and third-party business associatesd. Agreements Divesting Any Part of the Businesse. Agreements Regarding Financing, Joint Ventures,

Settlementsf. Transferability

Risk Management - continued• Establish a Licensing Program

a. Obtain License for Technology Patentedby Others

b. Generate Income by Licensing IQ Biolabs Patented Technology

• Establish an Enforcement Program (Future)a. Monitor Market

b. Challenge Infringing Products and Services

c. Exclude Competitors

d. Negotiation/Litigation

Developing A Patent Program• Establish a Confidentiality Program

a. Signed confidentiality and non-competition agreements with all employees

b. Exit interviews with all departing employees reminding them of their post-employment confidentiality obligations

c. Review of all publications and speeches by company personnel before such presentations and speeches are made public

Developing A Patent Program - continued

• Establish a Confidentiality Program – continued

d. Use of dated laboratory books or research notes by all company technical personnel

e. Labeling of all trade secret documents as “confidential.” Use of measures, such as paper shredders, encryption, and passwords, to protect confidential information


• Obtain Disclosure of Inventionsa. Solicitation of Inventions

i. Scheduled Invention Disclosure Meetings with Technical People

1. Once a Month

2. Prior to Product Launch

ii. Patent Disclosure Form

iii. Incentives

b. Retention Policy of Invention Records

• Review Disclosed Inventionsa. Establish a Review Board –Technical and

Business People

b. Classify Ideas Based on Business Objectivesi. Important Patents to Company

ii. Important Patents to Competitors

iii. Product Coverage vs. Defensive Patents

iv. Abandoned Technology

c. Patentability Searchingi. Prior Art Database



• Determine in Which Foreign Jurisdictions to File Counterpart Patent Applicationsa. What Foreign Jurisdictions (if any) Will the

Product be Marketed or Manufactured?i. Specific Countries

ii. PCT (non-contracting countries)


• Monitor the Patent activities of othersa. Includes US and Foreign Competitors

b. Identify Technologies of Interest to Competitors


• Other IPa. Trademarks

b. Trade Secrets

c. Copyrights

U.S. Patent Rights• Right to EXCLUDE others from

a. Making

b. Importing

c. Using

d. Selling

the “invention”

U.S. Patent Rights• Limited to United States of America, its

possessions and territories.• Limited Duration

a. 20 years from the earliest effective filing date

• Does NOT guarantee patentee will be able to practice her or his own invention.

• Enforcement is Not Automatic• Public Policy

i. Full Disclosure of Technologyii. Dedicated to Public After Expiration

Anatomy of a Patent• Bibliographic Section

a. Issue Dateb. Filing Datec. Related Patentsd. Inventorse. Assignee of Patent

Rightsf. Prior Art Considered by

the Patent Examinerg. Abstract of the Invention

Anatomy of a Patent• Background Section

a. Overview of prior art

b. Problems Addressed by Patent

• Summary of the Inventiona. “Executive Summary”

• Detailed Description of Embodiments of the Invention

i. Drawings

ii. Written Description

Anatomy of a Patent• Patent Claims

a. Numbered paragraphs at the end of the specification

b. Define the scope of protection afforded by the patent

c. Objective is to obtain the “broadest” claims possible in light of the prior art

What Can be Patented?(Patentable Subject Matter -- 35 U.S.C. § 101)

• Any NEW and USEFULa. Process

b. Machine

c. Manufacture

d. Composition of Matter

• Any new and useful improvement thereof

Patentable Subject Matter35 U.S.C. § 101

• Computer Softwarea. Specific type of “process” (i.e., computer

implemented process)

• Business Methoda. Provided it produces a “concrete, tangible and

useful result”

Standards for Patentability 35 U.S.C. §§ 102 and 103

• Novelty• Non-obvious

Novelty 35 U.S.C. § 102(a)

A person shall be entitled to a patent unless . . . the invention was

i. known or used by others in this country

ii. patented or described in a printed publication in this or a foreign country

prior to the invention thereof by the applicant.

U.S. Patent System based on “First-to-Invent”

• Section 102(a) focuses on date of invention• Invention – requires completion of two steps:

a. Conceptionb. Reduction to Practice

i. Actual Reduction to Practiceii. Constructive Reduction to Practice

1. Filing a Patent Application

• Diligencea. First to Conceiveb. Last to Reduce to Practice

• Priority Contesta. Proof of Earliest Possible Invention Dateb. Importance of Good Record Keeping

Novelty 35 U.S.C. § 102(b)

A person shall be entitled to a patent unless . . . the invention was

i. patented or described in a printed publication in this or a foreign country; or

ii. in public use or on sale in this country

more than one year prior to the date of application for patent in the United States.

Section 102(b)First Public Use, Disclosure, Sale or Offer for Sale

6/6/01

6/5/02Statutory Bar Date/Deadline

One Year Grace Period

to file U.S. patent

application

Section 102(b) Scenarios• Public Disclosures

a. Trade Shows

b. Beta Tests

• Publication in Trade Literaturea. by Client, Inc.

b. by Competitor

• Sale or Offer for Sale

Novelty• Determination made by Patent Examiner• Evaluation is based on the patent claims• Claim is rejected if Examiner finds a single

prior art reference (e.g., patent, printed publication, etc.) that discloses every element of the claim

• Applicant can amend claims to overcome rejection

Non-obviousness• Examiner can rely upon two or more prior art

references to reject a claim as “obvious”• There must be some teaching/suggestion in

the prior art references that would provide the motivation to combine them

• Evaluation is through the eyes of one having “ordinary skill in the art”

• Applicant can amend claims, and/or offer arguments to overcome rejection

Adequate Disclosure• “Written Description”

a. The patent specification must contain a full description of the invention that is claimed in the claims.i. Drawings

ii. Detailed description of the technology shown in the drawings

Adequate Disclosure - continued

• “Enablement”a. The patent specification must teach one skilled

in the art to make and use the invention

b. TEST: whether one skilled in the art could make or use the claimed invention from the specification along with information known in the art without undue experimentation

Adequate Disclosure - continued

• Disclosure of “Best Mode”a. The specification must describe the best

mode, contemplated by the inventor at the time of filing, for carrying out the invention

• Do Not Withhold Information as a “Trade Secret”

Patent Application Process• Identify Inventions

a. Patent Review Board

b. Prior Art Search

• Prepare Written Invention Disclosurea. Assists in evaluating whether patent should

be pursued

b. Assists in conducting a prior art search

c. Assists in preparing the patent applicationi. Drawings, technical information, literature, documentation

(disclosure requirements)

ii. Educates patent attorney

Invention Disclosure Form• Descriptive Title of Invention• List of Inventors• List of Important Invention Dates and Events• Technological Background of the Invention

a. Problems to be solved

b. Prior attempts of others

• Description of the Invention• Related Products and Strategic Value• Signatures of the Inventors and Witnesses

Patent Application Process - continued

• Invention Disclosure Meeting With Attorneya. Additional technical information, documentation

• Prepare Draft of Patent Applicationa. Review processb. Confirm inventorship

• File Application with USPTOa. “Patent Pending” status

• Prosecution of Application at the USPTOa. Assigned to Patent Examinerb. Examiner conducts search of prior artc. Office Actions issued regarding patentability of invention

(typical 16-18 months)i. Claim rejections typical


• Respond to Office Action Rejections/Objectionsa. Amend Claims

b. Legal/Technical arguments

c. Personal hearing before Examiner(s)

• Patent Approvala. Notice of Allowance

b. Improvements/Proper claim coverage?i. Continuation applications advisable

c. Payment of Issue Fee

d. Publication of Patenti. Patent Marking on corresponding products


• “Duty of Candor”• Ongoing Duty to Disclose Known Relevant Prior Art

to the USPTOa. Any person (attorneys, inventors etc.) involved in process

of preparing and prosecuting application must disclose existence of any relevant prior art (patents, publications, sales, public uses, etc.) that is known to the person

b. An active search of the prior art is not required

U.S. vs. Foreign Patent Systems

U.S. Patent System• First-to-Invent

a. Importance of Good Record Keeping

• One Year Grace Period to file application

U.S. vs. Foreign Patent Systems

U.S. Patent System• First-to-Invent

a. Importance of Good Record Keeping

• One Year Grace Period to file application

Foreign Patent Systems• First-to-File

a. Importance of Early Filing Date

• Absolute Novelty -- NO Grace Period for filing patent application

Paris Convention• File application in “home” country• File corresponding foreign applications in other

Paris Convention member countries within 12 months after filing date of home country applicationa. Corresponding foreign applications deemed to have

been filed as of the date of the filing date of the “home” country application

b. Effective Filing Date of Foreign Applications = Actual Filing Date of “Home” Application

Paris ConventionFiling Date of Home Country Application6/6/01

6/5/02Paris Convention Filing Deadline

One Year Grace Period to file foreign

applications

Paris Convention -- Example 11/1/9

8

A invents in US and files US application (same day)


8

7/1/98


B invents and files application in Germany


8

7/1/98



12/31/98

A files German application, claiming benefit of US filing date


8

7/1/98



12/31/98

A files German application, claiming benefit of US filing date

6/31/99

B files US application, claiming benefit of German filing date


8A invents in US


8

7/1/98

A invents in US



8

7/1/98

A invents in US


8/1/98

A files US application


8

7/1/98

A invents in US


6/31/99


8/1/98



8

7/1/98

A invents in US


7/31/99A filed German application, claiming benefit of US filing date

6/31/99


8/1/98



8A invents in US


8

7/1/98

A invents in US

B invents and publishes details of invention via the internet (same day)


8

7/1/98

A invents in US


8/1/98



8

7/1/98

A invents in US


7/31/99A files German application, claiming benefit of US filing date

8/1/98


Recap – Preserve Your Right to Obtain a Patent

• Preserve Evidence of: a. Earliest Possible Invention Dates

i. Conception

ii. Reduction to Practice

b. Diligence


• Early U.S. Filing Datea. Initiate application process early


• Anticipate Potential Statutory Barsa. Trade Shows

b. Scholarly Publications

c. Large Sale Beta Tests

d. Anticipated Sales or Offers for Sale


• Use Confidentiality Agreements


• Watch for Publication or other Public Disclosures by Competitors


• One Year Grace Period in U.S.a. Not applicable in most foreign countries

b. File U.S. application prior to any disclosure to preserve opportunity to file foreign applications later

Documenting Your Inventions• Classic Example – Lab Notebooks

a. Bound

b. Written in Ink

c. Religiously Dated

d. Periodically reviewed and witnessed

• Electronic Lab Notebooka. “Save As”

b. Periodically produce hard copies, which are reviewed, dated and signed by witnesses, and systematically stored

c. Periodic Electronic Backup

Patent Claims• Patent Claims

a. Like property description in a Deedi. Described “metes and bounds” of the invention -- what

you claim as your exclusive property

Patent Claims• Claims drafted in “comprising” format are

“open-ended”

Patent Claims• Claims drafted in “comprising” format are

“open-ended”

Claimed Invention

A widget comprising:

Element A;

Element B; and

Element C.

Patent Claims• Patentability vs. Infringement

a. Claims must distinguish over the prior art (Sections 102 and 103)



Prior Art


Element A; and

Element B.

Claimed Invention


Element A;

Element B; and

Element C.



b. However, unnecessary limitations limit scope of claim for infringement purposes

Patent Claims• Unnecessary limitations limit scope of

claim for infringement purposes

Claimed Invention


Element A;

Element B; and

Element C.

Patent Claims• Unnecessary limitations limit scope of claim

for infringement purposesa. Think in terms of the “least common denominator”



b. “Less is More”



b. “Less is More”

c. But, remember, you still have to distinguish over the prior art to get the claim allowed in the first instance

Claim Drafting Example

Invention

Claim Drafting Example

1. A chair comprising:

a generally flat seat member; and

means for supporting said seat member in a generally horizontal fashion so that a person may be seated thereon.

Invention

First Office Action

1. A chair comprising:

a generally flat seat member; and

means for supporting said seat member in a generally horizontal fashion so that a person may be seated thereon.

Cited Prior Art

Response to First Office Action

Cited Prior ArtInvention


1a. (Amended) A chair comprising:

a generally flat, polygonally shaped seat member; and

[means for supporting] a vertical post attached at each corner of the polygonally shaped seat member so as to support said seat member in a generally horizontal fashion so that a person may be seated thereon.

Cited Prior ArtInvention


1b. (Amended) A chair comprising:

a generally flat seat member; [and]

means for supporting said seat member in a generally horizontal fashion so that a person may be seated thereon; and

means for providing a back rest attached to said seat member.

Cited Prior Art

Invention

Infringement Analysis

Accused Device

Infringement Analysis – Claim 1a1a. A chair comprising:


a vertical post attached at each corner of the polygonally shaped seat member so as to support said seat member in a generally horizontal fashion so that a person may be seated thereon.

Accused Device

Infringement Analysis – Claim 1b1b. A chair comprising:

a generally flat seat member;



Accused Device

How Important is Claim Scope?

1a. A chair comprising:


a vertical post attached at each corner of the polygonally shaped seat member so as to support said seat member in a generally horizontal fashion so that a person may be seated thereon.

How Important is Claim Scope?

1b. A chair comprising:

a generally flat seat member;



Corporate IP Protection• Record Keeping

a. Guidelines for memorializing R&D work

• Invention Submissions/Disclosuresa. Invention Disclosure Form

• Periodic Review of Invention Submissions• Preparation of Patent Application

PATENTS ARE BUSINESS TOOLS

Documents

confidentiality program

licensing program

risk management continued

competitors patent

patent disclosure form

infringement of patents

enforcement program

disclosure of inventions