IPIC Annual Meeting Vancouver B.C. October 12, 2012 Alan J. Kasper Sughrue Mion PLLC Washington D.C. The AIA – One Year In 1

2012 © Intellectual Property Institute of Canada Patent Reform OVERVIEW 2

2012 © Intellectual Property Institute of Canada Patent Reform Success In Senate Passes Legislation (S 23) - March 8, 2011 House Passes Legislation (HR 1249) - June 23, 2011 Similar but NOT Identical Legislation Significant Issues Overcome Senate Accepts House Text - September 8, 2011 Final Steps President Signs – September 16, 2011 Law Provisions Become Effective on various dates Generally 1 year from signing Immediate or delayed - according to specific provisions 3

2012 © Intellectual Property Institute of Canada 4

Patent Reform Key Issues Addressed Filing Reforms  First Inventor to File (§3)  Repeal Hilmer  Assignee Filing (§4)  Penalty for Paper filing (§10)  Best Mode Requirement diluted (§15)  Human Organism Patents Prohibited (§33)  Examination Reforms  Definition of Prior Art (§3)  Inventor Grace Period – publication (§3)  Third Party Reforms  Expand Prior User Rights (§5)  University exceptions  Derivation Proceedings (§3)  Third Party Reforms (cont.)  Expand Post Grant Review (§6)  New Opposition System [56]  9 month window after grant  “more likely than not” std.  Any ground under §282(b) – §101, (§102 §103, §112  Estoppel “ raised or reasonably could have raised”  Inter Partes Review  After 9 month window  “Reasonable likelihood petitioner would prevail” std.  Only patented or published art (§102 §103)  Estoppel : raised or reasonably could have raised”  Third Party Submissions (§8)  Limit Use of Opinions (§17) 5

2012 © Intellectual Property Institute of Canada Issues Addressed, cont.  Additional Key Reforms  PTO Fee Setting (§10)  Discounts for Micro Entities [89]  Priority Examination Fee (§11)  Supplemental Examination – Curing Bases for Inequitable Conduct (§12)  15% Surcharge (§13)  PTO Revenue Diversion (§22)  Other Provisions  Restrict Tax Strategies (§14)  Virtual Marking and False Marking Limits (§16)  Covered Business Method Patent Opposition (§18)  Establishment of Satellite Offices (§23 and §24)- Detroit specified  Prioritize Examination of Important Inventions (§25)  Creation of Ombudsman (§28)  Others –Studies, etc.(§25-34) 6

2012 © Intellectual Property Institute of Canada EFFECTIVE DATES FOR VARIOUS SECTIONS §5 – Prior User Rights Patent issued on or after §6 – Post Grant Review New Interpartes reexam standard becomes effective §11 – Fees 15% Surcharge (after 10 days) Accelerated Exam fee (10 days) Paper Fee (60 days) §15 – Best Mode Suit started on or after §16 – Marking False Marking – cases pending on or started after Virtual Marking §22 – PTO Funding §4 – Oath or Declaration §6 – Post Grant Review Procedures New Opposition – limited number first 4 years New Inter partes Review – limited number - 4 years §8 – 3 rd Party Submissions §12 – Supplemental Exam §18 – Business Methods Patent Review §35 – General Effective Date One Year Act Signed 18 Months §3 – First Inventor to File New §102 and 103 applies Derivation Proceedings 7

2012 © Intellectual Property Institute of Canada USPTO Rulemaking Schedule 8

2012 © Intellectual Property Institute of Canada RULES NOW EFFECTIVE (Section of AIA) 1. Inventor’s oath / declaration (4) 2. Third party submission of prior art for a patent appl.(8) 3. Supplemental examination (12) 4. Citation of prior art in a patent file (6) 5. Umbrella set of rules for contested case procedure 6. Inter partes review (6) 7. Post grant review (6) 8. Transitional program for covered business methods (18) 9. Definition of technological invention (18) 9

2012 © Intellectual Property Institute of Canada RULES TO COME (Section of AIA) 1. First Inventor To File (3) 2. Derivation Proceedings (8) 3. FEES (10) 10

2012 © Intellectual Property Institute of Canada Fee Setting 17 Month Timeline 11

2012 © Intellectual Property Institute of Canada Patent Reform KEY PROSECUTION PROVISIONS 12

2012 © Intellectual Property Institute of Canada Applicant/Oath & Declaration Right to File an Application ( Section 4 ) After September 16, 2012: Applicant Can, but Need NOT be the Inventor Applicant May be - Assignee – by specific assignment Obligated Assignee – by employee agreement, operation of law, etc. Otherwise Shows a Proprietary Interest Legal Representative – deceased or incapacitated inventor Remaining Joint inventors BUT – Application MUST Name All Inventors Via Oath or Dec OR Via Application Data Sheet (ADS) APPLIES TO ALL APPLICATIONS INCLUDING CONTINUATIONS - EXCEPT National Stage of an International Filing pre 9/16/

2012 © Intellectual Property Institute of Canada Applicant/Oath & Declaration Statement of Inventorship Required (§4(a)) Oath or Declaration – 4 basic requirements (35 USC 115) (1) Application “was made” or "authorized" by Executing Party (2) Signer believes – is the “original inventor” of claimed invention (3) ID of application (attached/filing date) and name of Signer (4) Jail clause NO Other Required Statements Best Practice??? – "duty of disclosure" and "reviewed/understands" statements See USPTO website ( for sample formswww.uspto.gov/forms Dual Language forms in preparation Substitute Statement Permitted ( § 4(a)) Where deceased, incapacitated or cannot be found Where refusal to sign but obligation to assign NO PROOF REQUIRED – only attestation Combined Oath/Dec and Assignment Permitted Must include required statements (1)-(3) Copy of Assignment must be recorded with USPTO 14

2012 © Intellectual Property Institute of Canada Applicant/Oath & Declaration Third Person Can Execute and File ( § 4(b)) Assignee - Inventor assigned or has obligation to assign Interested Person - Sufficient proprietary interest Representative - Applying on behalf of and as agent for inventor Patent Granted to the real party in interest Timing for Oath/Dec or Substitute Statement Best At Filing Failure to file with application – late fee is payable AT LATEST - Needed before providing Notice of Allowance BEST PRACTICE – file as early as possible Unavailability of inventors Non-extendable 3 month period after Allowance Loss of PTA 15

2012 © Intellectual Property Institute of Canada Application Data Sheet ALL Relevant Data NOW Provided by the Application Data Sheet (ADS): Names of ALL Inventors Correspondence Address and Residence ALL Foreign Priority Claims Will not be recognized if only in Oath/Dec Exception – national stage applications ALL Domestic Benefit Claims Will not be recognized if only in Oath/Dec MUST BE SIGNED – by attorney or applicant REVISED ADS Used to Make Any Corrections or Changes BEST PRACTICE File ADS with or before Oath/Dec All data taken from ADS 16

2012 © Intellectual Property Institute of Canada Power of Attorney Named Applicant Should Give Power of Attorney If Applicant is Inventor – may be in oath/dec If Applicant is Assignee – should NOT be in oath/dec signed by inventor Concern for conflict of interest POA needed to sign terminal disclaimer or abandon application HOWEVER Registered Attorney/Agent represents power exists when executing and submitting a paper to the USPTO Formal Power Not Needed Best Practice General Power from Assignee/Obligated Assignee Specific Power from Assignee/Obligated Assignee Separate from Oath/Dec or Substitute Statement Power from Inventor only as needed 17

2012 © Intellectual Property Institute of Canada Right to File Application: What You Should be Doing Now! Oath or Declaration Confirm your current “standard form” declarations comply with new statutory requirements and amend as necessary Customize your forms as long as 4 basic requirements are met Substitute Statement Modify assignment documents to include necessary dec. statements Third Person Filing Modify Invention Disclosure documents to include a current assignment (“I do hereby assign”) and necessary dec. statements Modify Assignments to be consistent ADS Use ADS as Basic Form for providing Key Data to the USPTO Always file with the Application POA Develop forms to obtain POA from the real party in interest 18

2012 © Intellectual Property Institute of Canada Third Party Submissions ( Section 8 ) What Applications – any pending or abandoned application No issued patents, reissue applications or reexamination proceedings What Material - Any printed publication of relevance Patent, published application or publication Need not be prior art – i.e., office action or reply in another country Who Can Submit Any third party – no duty of disclosure ID of real party not required – ID of submitter is required When – Before earlier of: (1) Allowance and (2) Later of: (A) 6 months after publication or (B) first rejection What Content Copies (non-USPTO documents) and translations Concise description of asserted relevance of each document Fee (first 3 or fewer free; every 10 documents $180) Statement of Compliance Listing (PTO/SB/429) NO service on applicant required 19

2012 © Intellectual Property Institute of Canada Submission Considered by Examiner USPTO Reviews Submission for Compliance with 35 U.S.C. § 122(e) and 37 C.F.R. § Submission Made of Record and Applicant Notified if E-Office Action Participant Submission Discarded Non-compliant Compliant Processing Third Party Submissions Third Party Notified if Address Provided with Request for Notification 20

2012 © Intellectual Property Institute of Canada Third Party Submissions: What You Should be Doing Now! Establishing Procedures and Protocols For monitoring and reviewing published applications of competitors that may merit prior art searching and submissions For searching or identifying prior art relevant to target applications For timely submission of prior art and other relevant documents to the USPTO Establishing Teams Staff or vendors that can provide the necessary functions Establishing Necessary Budget 21

2012 © Intellectual Property Institute of Canada New Standards For Filing Right of First Inventor to File ( Section 3 ) Inventor must be an individual who invents or discovers (§3(a)) and must be named (§4(a)) Effective Filing Date includes domestic and foreign priority dates – where Section 112 disclosure is satisfied (§3(a)) filed beforeInterferences are eliminated except for applications filed before the effective date (§3(j) and §3(n)) Derivation Investigation Proceeding is created (§3(i)) May be instituted only within 1 year after first publication Modified Interference-type proceeding Corroborated proof of (1) prior conception, and (2) communication to the deriver sufficient to enable actual reduction to practice of claimed invention 22

2012 © Intellectual Property Institute of Canada First-to-Invent vs. First-Inventor-to-File X CONCEIVEDX FILED Y CONCEIVED X RTP Y RTP Y FILED First-to-Invent: X Can Win First-Inventor-to-File: Y Wins (If Independent Inventor) 23

2012 © Intellectual Property Institute of Canada Right of First Inventor to File : What You Should be doing Now! Inventor Identification – maintain current practices and records of invention to comply with old and new law Effective Filing Date – establish guidelines to ensure that all application filings in all countries comply with 35 USC 112 Interferences – should still be considered part of a competitive strategy for several years Derivation Investigation Proceeding – establish systems for (1) keeping records of disclosures (private and public) by inventors and (2) independent development of inventions 24

2012 © Intellectual Property Institute of Canada New Standards for Novelty Revised Definition of Prior Art (Section 3(b)) Eliminates Content of Original Sections 102(a) and (c) – (g) New Section 102(a)(1) and Old Section 102(b) standards Keeps "On Sale" & "Public Use" Outstanding Issue – excludes confidential offers of sale?? Keeps "Published and Patented" Adds “otherwise available to public” New Section 102(b) excludes from "prior art" public disclosures by inventor less than 1 year Outstanding Issue – Must prior disclosure be Identical?? New Section 102(a)(2) includes earlier filed application naming another inventor ( substitute for old 102(e)) Excludes inventor-derived information or public disclosure Excludes commonly owned patents and applications Excludes joint research agreements (CRADA) 25

2012 © Intellectual Property Institute of Canada New 35 U.S.C. § 102(a) Defines Prior Art Under the AIA §102 Conditions for patentability (a) NOVELTY; PRIOR ART. A person shall be entitled to a patent unless— (1) the claimed invention was - patented [anywhere in the world], - described in a printed publication [anywhere in the world], or - in public use [anywhere in the world], on sale [anywhere in the world], or otherwise available to the public [anywhere in the world] before the effective filing date of the claimed invention; ~ OR … ~ 26

2012 © Intellectual Property Institute of Canada 35 U.S.C. § 102(a) – Cont’d (2) the claimed invention was - described in a [US] patent issued under section 151, or - in an application for [US or PCT application designating the US ( § 374)] patent published or deemed published under Section 122(b) [US or PCT designating the US], in which the [US] patent or [US or PCT designating the US] application, as the case may be, names another inventor and was effectively filed before the effective filing date* of the claimed invention. *[Effective filing date can be earliest foreign priority document - §102(d) next slide] [ § 102(a)(2) is somewhat like old § 102(e); filed before effective filing date but not disclosed before effective filing date, otherwise would be under § 102(a)(1)] 27

2012 © Intellectual Property Institute of Canada § 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- ‘‘(1) if paragraph (2) does not apply, as of the actual filing date of the patent or the application for patent” or “(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 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.” [“describes” requires disclosure sufficient for enablement and written description?] COMMENT: - Earlier-Filed but Later-Published [US] Patent Documents - Somewhat like old § 102(e) - but cannot be antedated by earlier invention. - Following publication, the disclosure has retroactive availability as prior art as of effective filing date -Available as prior art for novelty and obviousness purposes 28

2012 © Intellectual Property Institute of Canada Hilmer Doctrine Abolished by §102(d) §102(d) eliminates need for foreign applicants to file provisional applications by establishing that an application is “effectively filed” on the date an application was filed under §119 or § 365. Hilmer Doctrine evidenced bias of U.S. law against inventions originating outside the U.S. Based on two U.S. litigations (Hilmer I and II) that held that the foreign right of priority of a U.S. patent does not provide a prior art effect under § 102(e) as of that foreign priority date, nor does inventive work outside the U.S. have a prior art effect under § 102(g). Rather, one needed a U.S. filing date to have a prior art effect. Created “shield vs. sword” distinction Foreign applicant needed to file in the U.S. to get a § 102(e) or § 102(g) prior art effect date. Current foreign applicant practice: file U.S. provisional at the same time as foreign priority application to get earliest § 102(e) date. 29

2012 © Intellectual Property Institute of Canada U.S. Prov. Appl. Canada U.S. Appl. Non-Prov. PCT (U.S.) English USPAT FR PCT (U.S.) USPAT Pub. Appl. Pub. Appl. Pub. Appl. French English NO geographical or language distinction – assuming priority is OK Impact of § 102(d)(2) – Prior Art Date Prior art date 30

2012 © Intellectual Property Institute of Canada Definition of Prior Art: Scenario 1 Old: Y Could Antedate X with evidence of earlier invention. New: Since X filed first, X is Prior Art to Y (for § § 102 and 103 purposes) Assuming § 102(b)(2) exceptions do not apply. X FILEDX PUBLISHED IN US Y FILED 31

2012 © Intellectual Property Institute of Canada Definition of Prior Art: Scenario 2 X SOLD IN EUROPE (impact of confidentiality uncertain) Y FILED Old: Sale of X Not Prior Art to Y because not in US. New: Sale of X Is Prior Art to Y. [ § 102(a)(1) only] Consider if 102(b)(1) exception applies. 32

2012 © Intellectual Property Institute of Canada Definition of Prior Art: Scenario 3 Y FILEDY INVENTED X PUBLICLY USED: ex US Old: Public use outside US was not prior art. New: X’s use outside the 1-year period is prior art to Y wherever it occurred; exception under § 102(b)(2) cannot apply because no patent or patent application. > 1 Year 33

2012 © Intellectual Property Institute of Canada Definition of Prior Art: Scenario 4 Y FILEDY INVENTED X PUBLICLY USED Old: Y could antedate X’s use. New: X’s use inside the 1-year period may be prior art to Y wherever it occurred: grace period exception under 102(b)(1) may apply. < 1 Year 34

2012 © Intellectual Property Institute of Canada New Definition of the Grace Period More Limited Grace Period (Section 3(b)) Absolute Bar if More than One Year before Effective Filing Date for All Persons Bar if Less than One Year with Exception for Inventor and Assignee Only for Public Disclosure by or derived from the Inventor Only for Commonly Owned Inventions Owned or subject to duty to assign ISSUE: can disclosure have more than insignificant difference?? 35

2012 © Intellectual Property Institute of Canada New 35 U.S.C. § 102 (b) – Exceptions to Prior Art §102 (b) EXCEPTIONS. (1) Disclosures [anywhere in the world] made 1 year or less before the effective filing date [anywhere in the world; see § 100(i)(1)] of the claimed invention shall not be prior art under (a)(1)* if: (A) made by an inventor or by another who obtained the subject matter directly or indirectly from an inventor, or (B) if the subject matter had been previously publicly disclosed by an inventor or one who obtained it from an inventor; *Provision twins with § 102 (a)(1) ISSUE: can disclosure have more than insignificant difference?? 36

2012 © Intellectual Property Institute of Canada New 35 U.S.C. § 102(b) – Cont’d §102 (b) EXCEPTIONS – … (2) Disclosures appearing in [US or PCT designating the US] applications and [US] patents are not prior art under (a)(2)* if: (A) obtained directly/indirectly from an inventor; (B) the subject matter was publicly disclosed before filing by an inventor or one obtained it directly or indirectly from an 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. *Provision twins with § 102 (a)(2) NOTE: NO RECITATION OF “ONE YEAR OR LESS” 37

2012 © Intellectual Property Institute of Canada Public use 12 mos. U.S. Patent Effective Filing Date Public use Grace Period?? How the NEW U.S. Grace Period Will Work: § 102(b)(1)(A) and (B) Respectively Apply Disclosure “by or obtained from” an INVENTOR Disclosure by ANYONE § 102(b)(1)(A) § 102(b)(1)(B) 38

2012 © Intellectual Property Institute of Canada A Pat. App. Filed 12 mos. B’s U.S. Patent B's Public use How the NEW U.S. Prior Art Provisions Will Work: A Sword and A Shield Disclosure “by or obtained from” Inventor B Filing by independent inventor A § 102(b)(1)(A) § 102(b)(2)(B) A’s US application published B avoids public use through §102(b)(1)(A); B’s public use avoids A’s publication through §102(b)(2)(B) and defeats A through § 102(a)(1); First inventor to file loses because other inventor disclosed first. § 102(a)(1) Effective Filing Date of B’s Patent App. 39

2012 © Intellectual Property Institute of Canada New law modifies §103 to read: 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… Present §103 reads: would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains Hence, the new US law switches from “at the time the invention was made” to the time “before the effective filing date of the claimed invention” Generally broadens the scope and content of the prior art in the U.S. – primarily based on elimination of the Hilmer Rule Effective date March 16, 2013 (same as for §102). US Patent Reform: Effect on §103 40

2012 © Intellectual Property Institute of Canada Effect on §103 and §104 Additional Changes to Section 103 and Deletion of Section 104 ( Section 3(c) and (d)) Section 103 also revised to eliminate exceptions Common assignment provisions are now in Section 102 Section 103(b) on non-obviousness of biotech processes is deleted Section 104 is deleted 41

2012 © Intellectual Property Institute of Canada New Filing of regular, provisional, PCT or foreign application to get old law grace period Act Signed Section 3(n)(1)(A) provides an 18 month window before new §102 applies to new applications Applications claiming priority from applications filed in the Window may have old law grace period 18 -month Window Closes Continuation, Divisional and CIP Filing to get old law grace period – no claim with effective filing date (Section 101(i)) after the window closes Strategy for Filing New Applications: 42

2012 © Intellectual Property Institute of Canada Enactment: Sept. 16, 2011 PCT Filing First to Invent System Applies Straddling the Effective Date: Double Trouble “First To Invent” System or “First Inventor to File” System? (see SEC. 3(n)(1)(A)) PCT Filing Priority Date Effective Date: March 16, 2013 Priority Date “First Inventor to File” System Applies PCT Filing Enactment: Sept. 16, 2011 Scenario 1: no claims entitled to priority date: first-to-file Scenario 2: all claims entitled to priority date: first-to-invent Scenario:3: at least 1 claim not entitled to priority date: first-to-file Assumes “priority date” is ex-US 43

2012 © Intellectual Property Institute of Canada What You Should be doing Now File before 18 months after enactment (on or before March 15, 2013) New applications; CIPs; New claims (disclosed but not previously claimed)? Develop a strategy for using pre-deadline filed applications as a basis for interferences (§2(n)(2)) 44

2012 © Intellectual Property Institute of Canada Fees Director Sets Fees – general power (Section 10) New Procedures Provide Director Sets Fees Fees may determine degree of use – incenting behavior Reduced: Filing (-26%), Prioritized Examination (-17%), Issue (-45%) Increased: Examination (+188%), Extensions (+33%), RCEs (+29%), Appeals (+142%), Maintenance (+42%) Stays same: Search New: Ex Parte Reexam ($15,000); PGR ($12,000/$18,000); IPR ($9,000/$14,000) Fees reasonably related to aggregate costs for services provided Reduced Fees Small Entity – 50% Micro Entity – 75% (includes universities)- delayed New or Future Fees Current fees – are temporary New fees – in Rule Making – likely to be adjusted above, at or below cost recovery based on public comments 45

2012 © Intellectual Property Institute of Canada FEES Adjust budgets for Significant Increases ASSIGNEE FILING Redraft Employee Agreements and Disclosure Forms to: Provide clear obligation to assign all rights Authorize preparation of Application Include required statements (belief to be original inventor) DERIVATION, GRACE PERIOD AND PRIOR RIGHTS Maintain records of invention activity Maintain records of public disclosure Key Actions to be Taken-Prosecution 46

2012 © Intellectual Property Institute of Canada NEW PRIOR ART DEFINITIONS – March 16, 2013 Develop a Filing Schedule and Strategy for Using Old Law Evaluate Possibility of Interferences Under Old Law THIRD PARTY SUBMISSIONS Develop a Policy and Strategy for identifying competitor published applications and possibly relevant prior art and submitting art to the USPTO Budget for New Expenses Key Actions to be Taken-Prosecution 47

2012 © Intellectual Property Institute of Canada PRIORITIZED EXAMINATION Discuss and Develop a Strategy for use of Enhanced Examination Develop a System to Review filed and unfiled applications and invention disclosures for qualification for Enhanced Examination Budget for New Expenses Key Actions to be Taken-Prosecution 48

2012 © Intellectual Property Institute of Canada Patent Reform KEY POST GRANT PROVISIONS 49

2012 © Intellectual Property Institute of Canada Post Grant Review ( Section 6 (d)) Post Grant Review - Initiation of Proceedings Petition to cancel any claim – stated standard is “more likely than not unpatentable.” – better than [58] Grounds - any related to invalidity ( § § , 102, 103, 112, DP) [56] Real Parties in interest identified. [58] Forum - Patent Trial and Appeal Board to Conduct [66] Timing ONLY ONE Window - at 9 months from issuance [57] Fee - currently proposed by Director at $12,000 petition and $18,000 institution Civil Action - None pending involving the patent 50

2012 © Intellectual Property Institute of Canada Post Grant Review (cont.) Post Grant Review - Conduct of Proceedings Amendments - permitted – no enlargement [66] Intervening Rights if Amended [69] Discovery – limited discovery, sanctions and protective orders ( § 326 ) [66] Burden of Proof – preponderance – no presumption of validity ( § 326 ) [67] Stay - Automatic Stay of Civil Actions [66] Deadline - One year to decision (extendable by 6 months) ( § 326 ) [65] Appeal - only to CAFC – no Section 145 action [70] Estoppel – for litigation and other proceedings (ITC) [63] same grounds actually raised or could have been raised) Effective Date – applies to all patents issued 1 year after enactment [74] 51

2012 © Intellectual Property Institute of Canada Director Initiates Proceeding Discovery and Prosecution At least 1 chance for Petitioner to reply One Year Patent Issues 6 Months Maximum Extension for Good Cause Decision by Director 3 months after Owner Reply No appeal Preliminary Reply by Patent Owner Period to be set by Director Petition to cancel claim(s) In 9 months after grant Copies of patents and pubs Declarations and Expert Opinions Fee Maximum Time to Decision Petition Filed 9 Months Max Preliminary Activity Time Line for PGR 52

2012 © Intellectual Property Institute of Canada Inter partes Review (Section 6(a)) [40] Inter partes Review - Initiation of Proceedings Petition - to cancel any claim – stated standard is “reasonable likelihood that petitioner would prevail” as to one challenged claim 50:50 or less [43] Grounds - Limited to those related to invalidity ( §§ 102 and 103 only) [41] Parties - Real Parties in interest identified. [41] Preclusion - if more than 1 year after patentee sues [45] Forum - Patent Trial and Appeal Board to Conduct [49] Timing Any time more than 9 months from grant [41] And after Completion of any Opposition 53

2012 © Intellectual Property Institute of Canada Inter Partes Review Inter partes Review - Conduct of Proceedings Amendments - permitted – no enlargement [49] Intervening Rights if Amended [52] Discovery – limited discovery, Sanctions and Protective Orders Provided ( § 316 ) [47] Burden of Proof – preponderance – no presumption of validity ( § 316 ) [50] Stay - Automatic Stay of Civil Actions [44] Deadline - One year to decision (extendable by 6 months) ( § 316 ) [48] Appeal - only to CAFC – no Section 145 action [53] Estoppel – for litigation and other proceedings (ITC) [46] same grounds actually raised or could have been raised) Effective Date – applies to all patents issued 1 year after enactment [74] 54

2012 © Intellectual Property Institute of Canada Director Initiates Proceeding Discovery and Prosecution At least 1 chance for Petitioner to reply and amend One Year 9 Months Minimum after Patent Issues 6 Months Maximum Extension for Good Cause Decision by Director 3 months after Owner Reply No appeal Preliminary Reply by Patent Owner Period to be set by Director Petition to cancel claim(s) More than 9 months after grant Copies of patents and pubs Declarations and Expert Opinions Fee Maximum Time to Decision Time for Inter Partes Review 55

2012 © Intellectual Property Institute of Canada Supplemental Examination (Section 12) Supp Exam – Initiation of Proceedings Patentee intending to enforce in litigation can correct errors and omissions that may be: (1) a basis for an inequitable conduct defense Missing Prior Art Erroneous Declarations Erroneous Argument (2) a basis for substantive defense Sections 101, 102, 103, 112, etc. ONLY Patentee Can File for Supplemental Exam [109] Test - Substantial New Question of Patentablilty (SNQ) [110] Fee has 2 parts – petition and reexamination [112] Fraud, if discovered, is referred to Attorney General [112] 56

2012 © Intellectual Property Institute of Canada Supplemental Examination Supp Exam – Conduct of Proceedings USPTO Conducts Supplemental Examination USPTO has 3 months to decide whether or not submitted information raises a SNQ of patentability USPTO Issues a Certificate of SNQ [110] If SNQ, Director Orders Ex-parte reexamination Patentee cannot file a statement under 304 (art or claims) before first Office Action [110] All SNQ addressed – including 101, 102, 103, 112, etc. No time limit specified Inequitable conduct defense in litigation precluded for submitted information [110] If no SNQ on the information or If reexam successfully concluded 57

2012 © Intellectual Property Institute of Canada Fees for Supplemental Examination ServiceCost Filing fee (for processing and treating a request for supplemental examination) Plus any applicable document size fees $ 5140 Reexamination fee (for ex parte reexamination ordered as a result of supplemental examination) $16,120 TOTAL$21,260 REFUND (if the Office decides not to order an ex parte reexamination proceeding) $16,120 58

2012 © Intellectual Property Institute of Canada Director concludes supplemental examination to determine SNQ Certificate issued re SNQ If SNQ, Director Orders Ex-parte Reexamination Proceeding Address each SNQ If No SNQ – no unenforceability for reviewed conduct Petition Filed Ex-parte Reexamination Conducted 3 months to decide if SNQ Patentee files request to consider, reconsider or correct information believed relevant to patent Supplemental Examination conducted – does information raise a substantial new question (SNQ) of patentability? Issued Patent is being considered for enforcement Review of file history or negotiations raise concern about omissions or errors in submitted art, declarations or argument Suit has not yet been filed Patent not Unenforceable for reviewed conduct Supp Exam Finished Re exam Finished Litigation Time Line for Supplemental Examination 59

2012 © Intellectual Property Institute of Canada Covered Business Methods Must be a Covered Business Method (CBM) patent Generally defined in the AIA as a method or corresponding apparatus for performing data processing or other operations for financial product or service Definition excludes patents for technological inventions Employ the PGR standards and procedures subject to certain exceptions Some differences with PGR: Cannot file CBM petition during time a PGR petition could be filed, i.e., 9 months after issuance of a patent Petitioner must be sued or charged with infringement Petitioner has burden of establishing that patent is eligible for CBM review Prior art is limited when challenging a first-to-invent patent 60

2012 © Intellectual Property Institute of Canada Covered Business Methods CBM Review Patent is not for a technological invention Patent must be a covered business method patent Petitioner must be sued or charged with infringement 61

2012 © Intellectual Property Institute of Canada Derivation Purpose – Determine that an inventor named in an earlier application or patent derived the claimed invention Who May File - Only a patent applicant When Filed - within 1 year of the date of the first publication of a claim to an invention that is the same or substantially the same as the earlier application’s claim to the invention “The first publication” means either a patent or an application publication under 35 U.S.C. 122(b), including a publication of an international application designating the U.S. as provided by 35 U.S.C. 374 Claim Correspondence - Must have a claim that is the same or substantially the same as a respondent’s claim, and the same or substantially the same as the invention disclosed to the respondent 62

2012 © Intellectual Property Institute of Canada Trial Rules Inter Partes Review §§ – Post-Grant Review §§ – Covered Business Method Patent Review §§ – Derivation Proceeding §§ – Umbrella Trial Rules §§ 42.1 –

2012 © Intellectual Property Institute of Canada Trial Structure Same basic structure for all the proceedings Reduction of burdens on the parties via: Streamlining and converging issues for decision; Use of page limits and electronic filing; Use of conference calls; and Institution of a trial on a claim-by-claim, ground-by-ground basis 64

2012 © Intellectual Property Institute of Canada Umbrella Rules: Discovery AIA authorizes the Office to set standards and procedures for the taking of discovery Discovery rules allow parties to agree to discovery between themselves Final rules provide for: mandatory initial disclosures; routine discovery; and additional discovery 65

2012 © Intellectual Property Institute of Canada Protection of Third Parties Prior User Rights (Section 5(b) and 5(c)) Significantly extends prior user rights beyond business methods Includes any process, machine, manufacture or composition of matter Subject matter would have infringed if used at least 1 year before patentee filing date or date disclosed to the public for prior art exception under new Section 102(b) PTO must report to Congress on rights in other countries 66

2012 © Intellectual Property Institute of Canada PGR and IPR Plan a System to Monitor currently published applications for possible PGR Develop a Strategy for use of Inter Partes Review Budget for New Expenses ENFORCEMENT Develop a Strategy for Reviewing Patents and Curing Errors or Omissions that may be a basis for Inequitable Conduct Prior to Enforcement using Supplemental Examination Possible Company Action 67

2012 © Intellectual Property Institute of Canada Alan J. Kasper is a senior partner in the International IP law firm Sughrue Mion, PLLC, where he has been practicing law since Alan’s practice focuses on patent matters and consists primarily of prosecution, litigation, licensing, opinions and counseling on patent strategies for a wide variety of clients in the advanced electrical, optical, semiconductor, computer-based and mechanical technologies, and he presently manages the firm’s International Department. He graduated from the State University of New York with a B.S. in Electrical Engineering and obtained a JD at the Georgetown University Law Center. He initially worked as an Examiner in the U.S. Patent and Trademark Office and later served as Assistant General Counsel and head of the corporation's Patent Department for the internationally known telecommunications satellite company, COMSAT. Alan is active in several professional associations, including A.I.P.P.I., F.I.C.P.I., ABA, IPO and A.I.P.L.A, where he served recently as President and a member of the Board of Directors. He also is a Vice President of AIPPI-US. Alan has lectured internationally on U.S. patent and commercial matters, and has authored numerous articles published in the U.S. and elsewhere in the world. He can be reached by at 68