1. What Every Paralegal Should Know About Patents S. Kameron Parvin Perkins Coie LLP 1201 Third Avenue, Suite 4800 Seattle, WA 98101 (206) 359-6111 KParvin@perkinscoie.com 16968588 October 23, 2009

2. About Patents Applying for Patents Defending Patent Cases Enforcing Patents Recent Developments 16968588 October 23, 2009 Presentation Topics

3. 3 How to Read a Patent

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9. 9 Amazon's 1-Click Patent

10. 10 Amazon's 1-Click Patent

11. 11 Amazon's 1-Click Patent

12. 12 Amazon's 1-Click Patent

13. 13 Types of Patents  Utility Patents – Novel, non-obvious device and method  Design Patents – 35 U.S.C. § 171 (novel, non-obvious, ornamental design)  Plant Patents – 35 U.S.C. § 161 (asexually reproduced varieties)  Plant Variety Protection Act (sexually reproduced plants)

14. 14 Patent Strategy Considerations 1.Expensive and time-consuming to get  Design patents on nonfunctional designs are exception 2.Cannot file patent application on invention that was disclosed (unless in confidence) or commercially exploited more than a year before  Some foreign countries do not allow filing after any commercial exploitation

15. 15 Patent Strategy Considerations 3.No rights until and unless patent issues  "Patent Pending" provides no substantive rights  Limited right to damages if notice of application provided to potential infringer and claims do not change 4.No copying necessary to prove infringement 5.Patents can be invalidated through administrative proceedings in the Patent and Trademark Office or in court

16. Applying for Patents October 23, 2009

17. 17 Basics of Patent Applications  No search currently required  Prior art search may, however, avoid waste of time or help determine potential scope of claims  Any prior art must be disclosed by applicant and attorney  Failure to do so may result in finding of unenforceability of patent and related patents

18. 18 Basics of Patent Applications  Patent applications can be filed pro se, but technical nature generally requires patent agent or patent attorney  A special license required (including technical background or apprenticeship)  Primary skill is in claims drafting

19. 19 Basics of Patent Applications  Provisional applications are relatively cheap "placeholders"  No claims necessary  Non-provisional must be filed within one year  Good option for applicant who is unsure whether to invest in full-blown application  Can help preserve foreign rights

20. 20 Basics of Patent Applications see 35 U.S.C. § 112  Patent applications must generally enable a person of ordinary skill in the art to practice invention, describe invention, and have claims "particularly pointing out" the invention (see 35 U.S.C. § 112)  Patents last 20 years from date of filing

21. Defending Patent Cases October 23, 2009

22. 22 Attributes of Patent Cases  Often in Texas  Often with multiple defendants  Interpretation of claims ("Markman hearing") often dispositive  Use of experts  Expensive to litigate

23. 23 First Steps  Get preliminary understanding of nature of claim and what is at risk  Initial review of patent  May need to ask plaintiff for theory of infringement  Consider whether indemnitor exists  Find out what plaintiff is seeking  Document hold notice  Select counsel  Agree upon budget and approach

24. 24 First Steps— Preliminary Infringement Analysis

25. 25 First Steps— Preliminary Infringement Analysis

26. 26 First Steps— Preliminary Infringement Analysis

27. 27 First Steps— Preliminary Infringement Analysis

28. 28 First Steps— Preliminary Infringement Analysis

29. 29 First Steps— Preliminary Infringement Analysis

30. 30 First Steps – Preliminary Infringement Analysis

31. 31 First Steps – Preliminary Infringement Analysis

32. 32 First Steps – Preliminary Infringement Analysis

33. 33 First Steps – Preliminary Infringement Analysis

34. 34 First Steps – Preliminary Infringement Analysis  Prior art includes publication anywhere in the world or anything in public use or on sale in the United States more than one year prior to the filing date of the first application that led to the patent  If accused product was in the prior art, defendant wins!  Consider conducting early prior art search  Employees and/or other defendants may know of prior art  Prior art search organizations will do searches that typically cost $1,000-$10,000 (more for more in-depth searches) (defendants often share costs of search)

35. 35  Factors to weigh  Comfort with approach  Use by other defendants  Location of office(s)  Commitment to involvement and lean team  Billing rates  Experience with judge First Steps — Selection of Counsel

36. 36  Balance costs with risks  Identify past and future revenue at risk  Identify re-design costs  Lean team  Use in-house resources wisely  Focus on best defenses  Focus discovery  Limit e-discovery First Steps — Budget and Approach

37. 37 Next Steps  Consider re-examination  Work with joint defense group  Consider counterclaims  Consider motion to transfer  Develop defenses and claim construction  Identify key documents and witnesses

38. 38  Any party may file a re-examination (whether being sued or not)  Must show a substantial new question of patentability (even if based on prior art previously before the Patent Office)  Must be based on patents or publications (not public use or sale)  Have become more popular, presumably because Patent Office has been applying heightened scrutiny in re-examinations 38 Next Steps— Consider Re-Examination

39. 39  Two types of re-examinations: ex parte and inter partes (see 35 U.S.C. §§ 302-318)  Inter partes allows requester to provide responses to any responses provided by the patent owner  Inter partes precludes requester from asserting invalidity in later litigation on any ground that was "raised or could have been raised" but does "not prevent the assertion of invalidity based on newly-discovered prior art …." (35 U.S.C. § 315(c)) Next Steps— Consider Re-Examination

40. 40  Request for re-examination granted approximately 90% of the time, but majority of proceedings result in issued claims  25% result in all claims confirmed, 11% result in all claims cancelled, and 64% result in changes to claims  Higher percentage of cancellation when third party or or Commissioner requested  Most inter partes proceedings have resulted in rejection of all claims  Courts often stay litigation pending re-examination, but may depend on predilection of judge and time when re-examination was filed Next Steps— Consider Re-Examination

41. 41  Declaratory judgment of noninfringement, invalidity and/or unenforceability  Unenforceability must be pled with specificity  Antitrust or patent misuse  Patent infringement or unfair competition  More difficult when dealing with NPE Next Steps— Consider Counterclaims

42. 42 Next Steps— Consider Motion to Transfer  May want to leave Eastern District of Texas  Recent decisions have forced Eastern District to transfer cases (In re Genentech, Inc., 566 F.3d 1338 (Fed. Cir. 2009))  Focus on location of witnesses  More difficult in multi-defendant cases and where plaintiff is headquartered in Texas

43. 43 Next Steps— Special Considerations When Nonpracticing Entity Is Plaintiff  Increasingly common  Creates imbalance in discovery leverage  Key witnesses, e.g. inventors, are third parties  Plaintiff's case might have less appeal to jury  May be able to use its purchase price or diligence in connection with damages

44. 44 Next Steps— Developing Noninfringement and Invalidity Defenses  Focus first on noninfringement (plaintiff's burden)  Direct infringement must be established before there is liability for indirect infringement  Method claims typically are directly infringed only by customer  Indirect infringement requires proof of knowledge of patent  Inducement under 35 U.S.C. § 271(d) requires specific intent to cause infringement (DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006))

45. 45  Contributory infringement (35 U.S.C. § 271(c)) requires that there be no substantial noninfringing use for the product;  Infringement typically requires a single entity to direct or control all the infringing components or steps  Recent line of cases find no infringement for independent steps carried out over the Internet (see Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) Next Steps— Developing Noninfringement and Invalidity Defenses

46. 46  Nonenablement  Becoming stronger defense where claims are interpreted broadly  Lack of written description  Inequitable conduct  Renders unenforceable all claims of patent  Can put the inventor and its counsel on the defensive Next Steps— Other Defenses

47. 47 Discovery  Take inventors' depositions early  Try to identify co-inventors  Identify nondisclosed prior art  Develop nonenablement defense  Identify and authenticate prior art  Public uses and sales are prior art, but must be sufficiently corroborated  Articles and publications must be authenticated  Identify evidence relevant to damages  Other licensing activity  Noninfringing alternatives  Try to limit e-discovery

48. 48 Summary Judgment Strategy  Narrow issues for trial  Willfulness now more subject to summary judgment (In re Seagate Technology, 497 F.3d 1360 (Fed. Cir. 2007)  If there is no dispute concerning accused products, summary judgment is appropriate on issue of literal infringement

49. Enforcing Your Patent October 23, 2009

50. 50 Enforcing Your Patent  Federal court only  Many enforcers are non-practicing entities (trolls)  Eastern District of Texas has busiest patent docket  Became popular because of fast track and favorable jury pools  Has slowed down considerably, but still quite busy  Fifth and Federal Circuit have recently required district court to transfer where insufficient nexus to district (but difficult with multi-defendant cases)

51. 51 Enforcing Your Patent  Cases characterized by use of experts and special process for disclosing contentions and construing claims Markman  Famous Markman case requires judges to interpret claims  Many courts (including W.D. Wash.) have instituted special patent rules

52. 52 Enforcing Your Patent  Claim construction often resolves dispute though jury can determine disputed issues of fact with respect to infringement  Infringement can be literal or under doctrine of equivalents

53. 53 Enforcing Your Patent  Also direct and indirect infringement  Contributory infringement  Indirect means contributory or inducement (both require knowledge of patent)  Damages are lost profits or a reasonable royalty (not defendant's profits)  Injunctive relief if competitors; otherwise compulsory royalty

54. Recent Developments in Patent Law October 23, 2009

55. 55 Recent Developments in Patent Law  More open market for purchases of patents  More NPEs and licensing organizations  Tension between pro-patent bio-pharma and anti-patent software and technology companies in connection with proposed patent reform  Patent reform relating to first-to-file approach, re-examination/oppositions, venue restrictions, damages restrictions

56. 56 Recent Developments in Patent Law  Most significant decisions in past years have reduced patentee's rights  eBay, Inc. v. MercExchange, L.L.C., 126 S. Ct. 1837 (2006) (eliminating automatic right to injunctions to patentees)  KSR Int'l Co. v. Teleflex, Inc., 127 S. Ct. 1727 (2007) (making it easier to prove obviousness of patents)  MedImmune, Inc. v. Genentech, Inc., 127 S. Ct. 764 (2007) (easier to challenge patents)

57. 57 Recent Developments in Patent Law  Quanta Computer, Inc. v. LG Elecs. Inc., 128 S. Ct. 2122 (2008) (reducing ability of patentee to separately license different tiers)  In re Bilski, 545 F.3d 943, 88 U.S.P.Q.2d 1385 (Fed. Cir. 2008) (cutting back on patentable subject matter, particularly with respect to business method patents)  Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) (making it more difficult to prove infringement where various entities involved)

58. 58 Recent Developments in Patent Law  Recent Microsoft v. Alcatel-Lucent decision vacated $500 million damages award

59. 59QUESTIONS