1. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com1 Carolina Patent Trademark & Copyright Law Association The 2011 Patent Law Harold C. Wegner * Foley & Lardner LLP Isle of Palms, South Carolina September 23-24, 2011 *Biographical information at the last page

2. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com2 The 2011 Patent Law The New Substantive Patent Law of Leahy Smith America Invents Act: The New Substantive Patent Law of Leahy Smith America Invents Act: A Discussion of Substantive Patentability Requirements under the New Law

3. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com3 Six Goals from the Administration’s Viewpoint (1) First-to-File and Prior Art Harmonization (2) Cutting the Backlog (3) Quality Control:Procedures to Weed out Invalid Patents (4) Best Mode (5) Qui Tam False Marking Suits (6) Limiting Inequitable Conduct Claims

4. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com4 Six Goals (1) First-to-File and Prior Art Harmonization Patent law changes were the primary driving force at the start of the legislative process. (Because the substantive patent law changes are the most important ones for daily ex parte patent practice, they are the major focus of this presentation.)

5. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com5 Six Goals (2) Cutting the Backlog Administration’s major point pushing this bill has been the need to sharply cut into the backlog by gaining greater funding, including 100 % retention of “user fees”. Reality is that as a result of “debt ceiling” legislation, across the Board cuts will be made in funding for most government programs, including Patent Office.

6. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com6 Six Goals (2) Cutting the Backlog Even with unlimited funding, patent backlog of 1.2 million pending cases and 700,000-plus unexamined cases creates a “dead zone” where it is impossible to simply hire thousands of examiners because of high turnover rates, inexperienced examiners and “churning” of RCE/continuing application refilings.

7. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com7 Six Goals (2) Cutting the Backlog Only realistic solution is to find incentives to discourage (a) premature final rejections by examiners; and (b) refilings by applicants. Nothing in the new patent law deals with these solutions.

8. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com8 Six Goals (3) Weeding out Invalid Patents – Post-Grant a)Post Grant Review: Attacks possible on non- publication prior art; must be filed within 9 months from grant. b)Inter Partes Review – Enhancement of the current inter partes examination.

9. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com9 Six Goals (3) Weeding out Invalid Patents – Post-Grant “Patent Trial and Appeal Board” is the new name for the Board of Appeals which will continue to handle everything it has before, e.g., appeals from Examiners, but also the new post-grant load of proceedings.

10. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com10 Six Goals (3) Weeding out Invalid Patents – Post-Grant The Board has been unable to handle its current workload of appeals from the Examiners: Backlog in 2005, essentially zero backlog. Backlog in 2011, approaching 25,000 cases awaiting decision.

11. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com11 Six Goals (3) Weeding out Invalid Patents – Post-Grant Trial Board is charged with handling all post-grant reviews, but there is no capacity at the Board to do even its existing work of appeals from examiners. Backlogs in post-grant review procedures are expected.

12. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com12 Six Goals (3) Weeding out Invalid Patents – Post-Grant “inter partes review”  Petitioner may challenge validity on any ground of patentability (e.g. novelty, obviousness, lack of enablement, subject matter eligibility).  Must be filed within 9 months of patent issue, or reissue, or conclusion of post grant proceedings.  Evidence must demonstrate that it is more likely than not that at least one claim is unpatentable.

13. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com13 Six Goals (3)Weeding out Invalid Patents – Post-Grant “inter partes review”  Must be completed within 1 year (6 month extension for good cause).  Backlogs in post-grant review procedures are expected.  Petitioner and privies are barred in the future from raising issues that were “raised or reasonably could have been raised.”

14. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com14 Six Goals (3) Weeding out Invalid Patents – Pre-Grant Pre-issuance submission of prior art including comments is permitted and encouraged. If there is effective rulemaking, this could prove to be a major improvement in the system. This change is effective one year from enactment.

15. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com15 Six Goals (3) Weeding out Invalid Patents – Pre-Grant Submit patent documents or printed publications to USPTO within the later date of either: – The date the USPTO issues a notice of allowance. – Either six month after the date of pre-grant publication or the application, or date of first rejection of any claim by examiner. – Submission must include a concise description of the asserted relevance of each submitted document.

16. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com16 Six Goals (4) Best Mode Invalidity penalty for violation of “best mode” requirement is eliminated as of the date of enactment, retroactive for existing applications on file and granted patents. Exception: Change in the law does not apply to ongoing litigation.

17. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com17 Six Goals (5) Qui Tam False Marking Suits Qui tam false marking lawsuits are retroactively abolished. The change in the law “shall apply to all cases, without exception, that are pending on, or commenced on or after, the date of the enactment….” Leahy Smith Sec. 16(c)(4).

18. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com18 Six Goals (6) Supplemental Examination—Limiting Inequitable Conduct Claims  Patent owner may request a “supplemental examination” to consider, reconsider, or correct information believed to be relevant to the patent  USPTO Director must determine that the material raises a substantial new question of patentability

19. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com19 Six Goals (6) Supplemental Examination—Limiting Inequitable Conduct Claims (con’d) – Request and reexamination must occur prior to the start of litigation to obtain the benefit – Patent shall not be held unenforceable on basis of conduct relating to information if material is submitted during supplemental examination – Proceeding would allow a patent acquired through inequitable conduct to be rendered enforceable

20. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? Patent Defeating Events Substantive Expansion of Prior Art The major changes to the substantive patent law are found in the definition of prior art in 35 USC § 102 hwegner@foley.com20

21. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com21 Patent-Defeating Events New 35 USC § 102(a)(1) Replaces current §§ 102(a), 102(b) “A person shall be entitled to a patent unless… the claimed invention was patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention[.]”

22. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com22 Patent-Defeating Events – Printed Publication Current Law: “[P]rinted publication” is the principal patent-defeating category for any public dissemination of the invention encompassing, e.g., internet disclosure, posterboard at convention, etc.; with no geographic restriction. Change from Current Law: None. Grace Period: “[P]rinted publication” is a grace period “disclosure”

23. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com23 Patent-Defeating Events – Public Use New Law: “in public use … before the effective filing date of the claimed invention”. Current Law: “in public use …in this country, more than one year prior to the [filing] date”. “Public use” bar started with Pennock v. Dialogue, 27 U.S. (2 Pet.) 1 (1829).

24. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com24 Patent-Defeating Events – Public Use Changes: (1) immediate bar (vs. current one year) (2) no geographic limitation (vs. current domestic only) Grace Period: Is “public use” a grace period “disclosure”? Open Question!

25. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com25 Patent-Defeating Events – Public Use Secret Commercialization by the Inventor bars the Inventor:Secret commercialization anywhere in the world by the inventor is a patent-defeating event versus the inventor. Test case to determine continued viability of secret commercialization as prior art. Change from Current Law: Secret commercialization has no geographic limit (versus current domestic restriction)

26. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com26 Patent-Defeating Events – “On Sale” New Law: “on sale… before the effective filing date of the claimed invention” Current Law: on sale in this country, more than one year prior to [filing]” Changes: (1) immediate bar (vs. one year) (2) no geographic limitation (vs. domestic only) Grace Period: Is “on sale” a grace period “disclosure”?

27. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com27 Patent-Defeating Events – “On Sale” “On Sale” basis to deny patent started with 1837 law. Long history of case law which will be used to interpret meaning of “on sale” under the new law. “On Sale” does not require a sale; “on sale” bar requires only commercial offer of sale, not completed transaction.

28. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com28 Patent-Defeating Events – “On Sale” Invention can be “on sale” even before reduction to practice. Requires look at “totality of the circumstances.” Supreme Court has said bar happens if invention is “ready for patenting”. Pfaff v. Wells Elecs., Inc., 525 U.S. 55 (1998). “Ready for patenting” means sufficient disclosure, drawings, to write a valid patent for the invention.

29. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com29 Patent-Defeating Events – “Patented” Current Law: “[P]atented…in this or a foreign country….” Change from Current Law: None. Grace Period: “[P]atented” is a grace period “disclosure”

30. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com30 Patent-Defeating Events – “Patented” “Patented” is largely meaningless as a prior art category because any “patented” invention will also be prior art as a “printed publication”. “Patented” is narrower than “printed publication” because “patented” bar relates only to what is claimed (versus what is disclosed) in the document.

31. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com31 Patent-Defeating Events – “Otherwise Available” was…otherwise available to the public New Law bars patent if “claimed invention was…otherwise available to the publicbefore the effective filing date of the claimed invention.” No counterpart in current law.

32. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com32 Patent-Defeating Events – “Otherwise Available” This provision is largely redundant in view of broad interpretation given to “printed publication.” This provision is added as a safeguard against new forms of making invention available to the public.

33. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com33 Earlier Filed Application 35 USC § 102(a)(2) New Law: “described … in a [published] application … …nam[ing] another inventor” Current Law: ““described in…[a published] application… by another”

34. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com34 Earlier Filed Application Hilmer Overruled Patent-defeating date is foreign priority date under new law, 35 USC §102(d)(2). This legislatively overrules old law established in In re Hilmer, 359 F.2d 859 (CCPA 1966)(Rich, J.).

35. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com35 Earlier Filed Application Obviousness Effect In United States patent-defeating date as of the effective filing date is for novelty and obviousness determinations. In Europe ad Japan, patent-defeating date retroactive to filing date is only for novelty purposes.

36. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com36 Earlier Filed Application Six Exceptions No. (1): from the inventor No patent-defeating effect for prior-filed later- published application for disclosure “obtained directly or indirectly from the inventor.” § 102(b)(2)(A)

37. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com37 Earlier Filed Application Six Exceptions No. (2): from a joint inventor There is no patent-defeating effect for prior-filed later- published application for disclosure “obtained directly or indirectly from a joint inventor.” § 102(b)(2)(A)

38. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com38 Earlier Filed Application Six Exceptions No. (3): another who obtained the subject matter inventor There is no patent-defeating effect for prior-filed later-published application for disclosure “publicly disclosed by … another who obtained the subject matter disclosed directly or indirectly from the inventor.” § 102(b)(2)(B)

39. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com39 Earlier Filed Application Six Exceptions No. (4): another who obtained the subject matter joint inventor There is no patent-defeating effect for prior-filed later-published application for disclosure “publicly disclosed by … another who obtained the subject matter disclosed directly or indirectly from …a joint inventor.” § 102(b)(2)(B)

40. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com40 Earlier Filed Application Six Exceptions No. (5): owned by the same person There is no patent-defeating effect for prior-filed later-published application where “subject matter and the claimed invention, not later than the effective filing date of the claimed invention… [were] owned by the same person….” § 102(b)(2)(C)

41. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com41 Earlier Filed Application Six Exceptions No. (6): joint research agreement There is no patent-defeating effect for prior-filed later- published application where subject matter was “made by… parties to a joint research agreement … in effect [by] the effective filing date.”§ 102(c)(1)

42. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com42 “Joint Inventor” Status to Avoid Prior Art related The statute permits avoidance of prior art under 35 USC § 102(a)(1) if the inventor of relatedsubject matter is named as a “joint inventor.”

43. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com43 “Joint Inventor” Status to Avoid Prior Art If claims and disclosure of a second inventor are added to the application the second inventor becomes a “joint inventor” under the provisions of 35 USC §§ 100(f), 100(g), 116(a)(1), 116(a)(3). After initial filing without “joint inventor” continuation-in-part can be filed to combine full disclosures of both applications and claims of both applications and with inventor nomination of both.

44. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com44 “Joint Inventor” Status Four Definitions (1) “The term ‘inventor’ means the individual or, if a joint invention, the individuals collectively who invented or discovered the subject matter of the invention.” § 100(f) (2) “The terms ‘joint inventor’ and ‘coinventor’ mean any 1 of the individuals who invented or discovered the subject matter of a joint invention.” § 100(g)

45. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com45 “Joint Inventor” Status Four Definitions some quantum of collaboration Current law without definition of joint inventorship says joint inventors must have “some quantum of collaboration.” Kimberly-Clark Corp. v. Procter & Gamble Distributing Co., Inc., 973 F.2d 911, 917 (Fed. Cir. 1992)(Lourie, J.). “There is ‘no explicit lower limit on the quantum…’” Vanderbilt University v. ICOS Corp., 601 F.3d 1297, 610 (Fed. Cir. 2010)(Clevenger, J.).

46. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com46 “Joint Inventor” Status Four Definitions Current law (maintained in new law) (3) “Inventors may apply for a patent jointly even though … they did not physically work together or at the same time.” § 116(a)(1) (4) “Inventors may apply for a patent jointly even though …each did not make a contribution to the subject matter of every claim of the patent.” § 116(a)(3)

47. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? Impact on Patent Litigation Expands scope of patent defeating prior art. Eliminates litigation disputes (and resulting discovery and costs) over “who was first to invent” (except in cases of derivation). Provides alternative avenue to court to challenge patent validity with lesser burden of proof. Provides additional methods for submission of prior art to PTO prior to patent issuance. hwegner@foley.com47

48. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? hwegner@foley.com48 Acknowledgment: This presentation incorporates a modification of the “Six Goals” material jointly previously presented with Sharon R. Barner.

49. IP in the Reform Era 2011: Torrents of Change Under Way – How Can You Keep Your Equilibrium in Check? HAROLD C. WEGNER HAROLD C. WEGNER retains his affiliation with the George Washington University Law School where he had been Director of the Intellectual Property Law Program and Professor of Law. His patent career commenced with service at the U.S. Department of Commerce as a Patent Examiner. Prof. Wegner is a graduate of Northwestern University (B.A.) and the Georgetown University Law Center (J.D.), where he launched his teaching career as an Adjunct Professor of Law teaching International Licensing. The views expressed in this presentation are those of the author and do not necessarily reflect the views of any colleague, organization or client thereof. contact: hwegner@foley.com 49hwegner@foley.com