The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution ACC Quick Hits June 13, 2012 Dr. John K. McDonald Dr. Michael Schiff Kilpatrick Townsend & Stockton

2 Question: Have you faced these situations? Your Experience

3 Why Accelerate Prosecution? Reasons to accelerate examination Decrease prosecution costs and duration – streamline world-wide budget Products with a short life cycle Infringing products already on the market Validate technology for partnering Increase IP portfolio value for investment Add value to goods & services

4 Tactics to Expedite Prosecution Tactics for expediting prosecution world-wide Patent Prosecution Highway (PPH) PCT - PPH Prioritized examination in the U.S. Expediting U.S. prosecution in regular track Accelerated exam in other jurisdictions such as PACE in the European Patent Office

5 Patent Prosecution Highway (PPH) TOPIC 1: Patent Prosecution Highway What is the PPH? A rapidly expanding multinational program with major implications for accelerating patent grants Claims determined as allowable in 1st country undergo expedited search and examination in 2nd country Examination in second country still done according to national criteria

6 Patent Prosecution Highway (PPH)

7 Mottainai agreement US; Japan; Canada; Australia; Russia EPO; UK; Finland; Spain  “Country of First Filing” rule no longer applies (can run PPH either way) Works as a two way street: Expedite foreign applications with U.S. allowance Expedite U.S. applications with foreign allowance

8 Patent Prosecution Highway (PPH) Other PPH countries of commercial interest Mexico; China; Taiwan; Israel; Korea; Singapore (Country of 1 st filing rule still applies)

9 PCT - PPH TOPIC 2: PPH from a PCT application Between U.S. and: Australia; China; Japan; Korea; Russia EPO; Austria; Finland; Norway; Spain; Sweden Step 1: IPRP or Written Opinion indicating claims are patentable Step 2: PCT-PPH in National Stage with those claims and claim correspondence table

10 PCT - PPH To obtain indication of patentability in the PCT Stage: Present patentable claims File a Chapter II Demand for a round of prosecution in the International Stage Choose a timely and competent search and examining authority: e.g., IP Australia or EPO

11 PCT - PPH PCT-PPH can be used to expedite in the U.S. and foreign countries simultaneously

12 Expediting U.S. Examination TOPIC 3: Prioritized examination program in the U.S. Cost = $5,100 ($2,700 for small entity)  30 claims; 4 independent claims 10,000 maximum per fiscal year Objective: allowance or final rejection in 12 months

13 Expediting U.S. Examination TOPIC 4: Expediting U.S. applications in the normal track Start with patentable claims First Full Action Interview Program Interview after each Office Action In-person interviews After-final practice (avoid RCE & potential delay of months) Current USPTO emphasis on “compact prosecution”

14 Options Abroad TOPIC 5: Options in foreign jurisdictions PACE program in Europe Expedited exam programs in Canada, the U.K. and Australia Special programs: e.g., green technology in Canada and Korea Modified examination (based on allowance in first country): Australia; Singapore; Israel; South America; Malaysia

15 Coordination of Global Patent Strategy – Example 1 Pending Issued/Allowed Expired Text Colors Australia Canada US Japan Korea PCT Application Europe

16 Coordination of Global Patent Strategy – Example 1 Pending Issued/Allowed Expired Text Colors Australia Canada 1 st US Regular exam with broader claim scope. Japan Korea PCT Application Europe Accelerated exam. 2 nd US Filed Prioritized exam with narrow claim scope.

17 Coordination of Global Patent Strategy – Example 1 Pending Issued/Allowed Expired Text Colors Australia No PPH as examination has begun Canada 1 st US Regular exam with broader claim scope Japan Korea PCT Application Europe 2 nd US Allowed/Issued Enter PPH

18 Coordination of Global Patent Strategy – Example 2 Europe Pending Issued/Allowed Expired Text Colors US Accelerated exam. US Europe OR

19 Coordination of Global Patent Strategy – Example 2 Pending Issued/Allowed Expired Text Colors Accelerated exam. Europe Accelerate with PACE US Europe OR US Accelerated exam.

20 Coordination of Global Patent Strategy – Example 2 Pending Issued/Allowed Expired Text Colors Enter PPH Europe Allowed Claims US Allowed Claims Europe OR

WAR STORI Client wanted to launch a filter product in Japan with a premium price. We filed US and PCT applications Aggressively prosecuted the US application to allowance Requested examination and entered the PPH in Japan with the allowed US claims Received allowance from JPO in 6 months (saved 2-4 years and $$$). Product launched with desired price 21 War Stories #1

Client required patent in Japan. PCT and US apps were filed Filed European application early, used PACE procedure to expedite. Upon European allowance, filed request for examination and entered PPH in Japan Received allowance in 3 weeks! (saved 2-4 years and $$$) US app was then allowed with broader claims Option to file divisional app in Japan to pursue broader claims 22 War Stories #2

23 Patent Strategy and your Business Objectives Strategic Overview Benefits of expediting exam: Decrease prosecution costs and duration (e.g., Japan) Speed to obtaining the first patent, exclusivity Eliminate or reduce competition Enhance ability to eliminate or reduce competition Faster market entry at a premium Increase licensing value Enhance company and patent portfolio valuation – added shareholder value

24 Patent Strategy and your Business Objectives Disadvantages of expediting exam: Up-front costs are greater PPH 2 nd country constrained by claims allowed in 1 st country Extra time needed for R&D? Extra time needed to generate funds for prosecution?

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26 Patent Strategy and your Business Objectives Business Considerations: Is the perception of potential broad claim coverage more valuable than the reality of narrowed actual claim coverage? Early stage start-ups in the process of raising financing Newly public, pre-revenue companies

27 Patent Strategy and your Business Objectives Define Business Concerns: Are the business objectives clearly defined? Don’t expedite exam as an academic exercise Dangers of saying too much too early on the record Wasting scarce resources pursuing claims which don’t cover the core products and services

28 Patent Strategy and your Business Objectives Develop realistic international plans: Overly optimistic projections may place greater emphasis on foreign jurisdictions than warranted Important to allocate legal resources in line with realistic operational plans –Location of markets –Location of competitors –Your manufacturing locations

29 Global Patent Strategy – Business Considerations It is strategically important to implement and coordinate a global patent strategy Work with patent counsel who understands the PPH and has close ties to competent and responsive foreign counsel who use the PPH Consider importance of invention and claim coverage to business Consider the activity of competitors (e.g., sales, manufacturing, market) Consider coordinated strategy to take advantage of accelerated examination in different jurisdictions and the PPH. Each country is different

THANK YOU The Patent Prosecution Highway: Strategic Considerations in Accelerating U.S. and Foreign Patent Prosecution ACC Quick Hits June 13, 2012 Dr. John K. McDonald Dr. Michael Schiff Kilpatrick Townsend & Stockton