1. PatentEng-Berkeley-Lavian Week 4: The Patent Process 1 Patent Engineering IEOR 190G CET: Center for Entrepreneurship &Technology Week 4 Dr. Tal Lavian (408) 209-9112 Tlavian@cs.berkeley.edu 321 Haviland Mondays 4:00-6:00

2. How Patents Are Used Corporate Product protection Corporate Value Defensive portfolio Licensing Consultant Entrepreneurial Professional credibility PatentEng-Berkeley-Lavian 2 Week 4: The Patent Process

3. PatentEng-Berkeley-Lavian Week 4: The Patent Process 3 Recent Patent Verdicts & Settlements Or – Why it is really important? Alcatel/ Lucent v. Microsoft. - (2007) - $1.5 Billion NTP – Settled with RIM for $612M (plus $53M litigation plus verdict) Intergraph – over $880M in settlement from patent litigation with Intel, HP and others Eolas v. Microsoft (2003). $506M Jury verdict Immersion v. Sony (2004). $82M jury verdict plus royalties –increased (2007) to $150M –vibration game controller - Microsoft settlement on $26 Freedom Wireless v. BCGI (2005) $128 jury verdict Finisar v DirectTV (2006). 103M (79+24)Jury verdict plus injunction Tivo v. EchoStar (2006). $74M jury verdict plus injunction Acacia - $60M in licensing revenue (2004-2006) Forgent - $100M in licensing revenue 2004-2006

4. PatentEng-Berkeley-Lavian 4 Who is an Inventor? A person who alone or in conjunction with others makes a material contribution to the conception of an invention (conceived the idea) A person who reduces the conception to practice if it requires extraordinary skill Non-Inventors: –Persons who implement the ideas of others –Persons who have obtained the entire idea of an invention from another are not inventors –Persons who suggest concepts without contributing to the means for carrying out the suggestion (“Wouldn’t it be nice if….”) Week 4: The Patent Process

5. PatentEng-Berkeley-Lavian Week 4: The Patent Process 5 What can be patented? “Everything under the sun made by man.” –Products: things –Processes: ways to make things –Methods: ways to do things –Improvements: better things Defined Classes – Article of Manufacture – Machine – Composition – Process Some more: –Business Methods –Services –Software

6. PatentEng-Berkeley-Lavian Week 4: The Patent Process 6 What Is Not Patentable Laws of nature (wind, gravity) Physical phenomena (sand, water) Abstract ideas (mathematics, a philosophy) –Algorithms per se Anything not useful, Novel and Non- Obvious (perpetual motion machine) Inventions which are offensive to public morality or designed for an illegal activity

7. PatentEng-Berkeley-Lavian Week 4: The Patent Process 7 Criteria – Legal Standards Novelty – Does not exist in the prior art – Not previously disclosed to public – OK if Modification/Improvement of an existing product/process, or use of something “old” in new/different way Usefulness - Utility - Performs a useful function Non-obviousness – Non-trivial - It would not have been obvious to one skilled in the art to combine multiple items in the public domain to arrive at or show the invention – Not Engineer’s normal sense of “obviousness”! Enabled

8. Patents Must Be Novel Must be new - No “Prior Art” Not done before in substantially the same way Not known to the public before it was “invented” Not described in a publication (*)‏ Not used or offered for sale publicly (*)‏ * more than one year before filing patent PatentEng-Berkeley-Lavian 8 Week 4: The Patent Process

9. PatentEng-Berkeley-Lavian Week 4: The Patent Process 9 Novelty First to invent (vs. first to file) Conception –the conceiving of the idea of the invention Reduction to Practice –the construction or testing of the invention (actual) –or the filing of a patent application (constructive)

10. PatentEng-Berkeley-Lavian Week 4: The Patent Process 10 Statutory Bars Patent rights to an invention will be lost if: –The invention is used publicly –The invention is sold or offered for sale –The invention is published in a printed publication or a patent –Before the filing of a patent application (more than one year in U.S.)

11. PatentEng-Berkeley-Lavian Week 4: The Patent Process 11 Prior Art Information prior to the date of a patent application Existing relevant technology Can be your own technology or acts

12. PatentEng-Berkeley-Lavian Week 4: The Patent Process 12 Foreign Standards for Prior Art “Absolute novelty” The invention must not have been disclosed or available to the public at any time before the filing of the application

13. PatentEng-Berkeley-Lavian Week 4: The Patent Process 13 Obviousness A patent may not be obtained if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art The obviousness standard prevents the patenting of relatively insignificant differences between the invention and the prior art Is this really true?

14. PatentEng-Berkeley-Lavian Week 4: The Patent Process 14 Obviousness (cont’d) Prior art can be combined in an obviousness determination, that is, more than one reference can be cited by the examiner as showing different features of the invention which, taken together, render the invention obvious Obviousness is inherently a subjective determination, as the examiner cannot be, or know the mind of, the hypothetical “one skilled in the art.”

15. Patents Must be Useful Useful – process, method Meets a need or solves a problem Current or anticipated Can be “reduced to practice” operated or enabled (e.g. can be built and function)‏ Can be an improvement (better mousetrap)‏ PatentEng-Berkeley-Lavian 15 Week 4: The Patent Process

16. PatentEng-Berkeley-Lavian Week 4: The Patent Process 16 Utility The invention must satisfy the “useful” requirement of the patent laws This is easy requirement for high-tech inventions The patent system was created as a reward for inventive contributions to society, not for merely creative ideas that have no application

17. PatentEng-Berkeley-Lavian Week 4: The Patent Process 17 Utility Patent Types Two types of US Utility Patents –Provisional application –Non-Provisional application Continuation Divisional CIP PCT International

18. PatentEng-Berkeley-Lavian Week 4: The Patent Process 18 Other Types of Patents Design Patents – Novel, non-obvious –Ornamental design in an article of manufacture In other words, for its appearance –The term of a design patent is 14 years from the date of grant Plant Patent –new or discovered a sexually reproduced plant

19. Design Patent Example PatentEng-Berkeley-Lavian 19 Week 4: The Patent Process

20. PatentEng-Berkeley-Lavian Week 4: The Patent Process 20 Types of Patents TypeIs for Term#s Utility Function, use20 years6,214,874 Design Appearance14 yearsD202,331 Plant Asexually reproduced 20 yearsPP10123

21. The Patent Process Application Preparation Application Patent Office Rejections Patent Granting Patent Challenges PatentEng-Berkeley-Lavian 21 Week 4: The Patent Process

22. Application Preparation Loop until perfect (order may vary): Clarify the invention Draft Claims Prior Art Search & Review Describe Preferred Embodiment Rough drawings Prepare Final Drawings Prepare Application forms & fees “package” PatentEng-Berkeley-Lavian 22 Week 4: The Patent Process

23. Application Submission Submit “package” by certified mail Get return receipt & acknowledgement from PTO The long wait, at least a year, maybe two Depends on “art unit” work load and other factors Protected from date of filing: maybe Easier for an application to be challenged than after patent that has been granted. Application can be contested by evil-doer PatentEng-Berkeley-Lavian 23 Week 4: The Patent Process

24. Application Rejections The patent examiner will review the patent according to PTO rules, often consults with other examiners and supervisor Patents are almost always rejected at first Need to respond by “overcoming” the rejection with: Explain why rejection is invalid Prior art cited does not apply Why it would not be obvious to one skilled in the art Modify, add or delete claims Possible to talk with examiner, best done with attorney or patent agent (keep record of what was agreed to & copy examiner) May loop through this process until patent granted or limit on number of “office actions” PatentEng-Berkeley-Lavian 24 Week 4: The Patent Process

25. Patent Granted - Hooray!! Once notified that the patent is granted Legal protection begins Presumed to be a valid invention Patent and “history file” becomes publicly available Individual inventors deluged with sales offers: Buy engraved plaques, mugs, etc Sign up with companies to market your invention (for a fee)‏ PatentEng-Berkeley-Lavian 25 Week 4: The Patent Process

26. The Issued Patent Takes 1½ to 5+ years for a patent to issue from time of original application filing Is effective as a property right from date of issuance Confers exclusive right to owner to make, have made, use, sell, offer for sale or import patented invention or products/services incorporating invention (i.e., right to exclude others from doing such things) Typically, patents endure for 20 years from the date of earliest application filing Copyright © 2008 Duane R Valz. All Rights Reserved PatentEng-Berkeley-Lavian 26

27. The Patent Challenge When the patent is “asserted” against a product, the accused company will usually challenge the patent. Review the patent and history file Look for prior art that would invalidate the patent Challenge PTO finding on obviousness or other errors Can patent be implemented by one skilled in the art If they can find something, they may: use this to repel assertion ask PTO to “re-examine” the patent May occur during negotiations or after a lawsuit is filed. A patent that survives a “legal” challenge becomes more valuable because it has been “tested” But very expensive and risky. PatentEng-Berkeley-Lavian 27 Week 4: The Patent Process