1. Federal Civil Practice Seminar Case Study – Multi Jurisdictional Patent Litigation Ronald A. Christaldi October 11, 2013 1

2. Introduction/Overview Welcome/Introduction Genesis of Cases Purpose of Discussion 2

3. Overview Background – Parties/Products/Patent Law Background – Jurisdictions/Procedural Posture Anatomy of Complex Patent Litigation Results/Status Lessons Learned 3

4. Background - Parties Alps South, LLC (“Alps”) is a small business located in St. Petersburg, Florida. For more than 18 years, Alps has manufactured and sold liners for use in the prosthetics field. General Counsel for about 12 years. 4

5. Background Continued - Parties The Ohio Willow Wood Company (“OWW”) is a larger company located in Mt. Sterling, Ohio. OWW is a competitor of Alps, and is also in the business of selling prosthetic products, including liners. 5

6. Background - Products A prosthetic liner a medical device worn by an amputee on a residual limb that serves as an interface with the socket of a prosthetic limb, such as an artificial arm or leg. 6 Residual Limb Alps Liner

7. Patents 101 Inventions must be novel and non-obvious All inventors must be listed/only inventors listed Patent prosecution done in writing/record called “file wrapper” Words used to limit scope of invention can be critical in litigation 7

8. Patents 101 (continued) 8 Patent Number Date Patent Issued Date Application was Filed Inventor Name of Invention

9. 9 Claims of a Patent

10. 10 Alps’ Patents at Issue

11. 11 OWW’s Patents at Issue

12. Federal Court Jurisdiction in Patent Cases 12 Subject matter jurisdiction – United States District Courts have original and exclusive jurisdiction over “any civil action arising under any act of congress relating to patents.” 28 USC § 1338 Personal jurisdiction – The tort of patent infringement occurs at the location where “the infringing activity directly impacts on the interests of the patentee.” Beverley Hills Fan. Co. v. Royal Sovereign Corp. 21F. 3d 1558, 1571 (Fed. Cir. 1994) Appeals heard by Federal Circuit

13. Main Issues in Federal Court Patent Cases Patent Infringement –Does the accused product fall within the scope of the patent –Willful Infringement Validity –Novelty –Obviousness Interpretation of Invention (Markman) Priority Date of Inventions Inequitable Conduct 13

14. 14 United States Patent & Trademark Office The USPTO is located in Washington, DC. Responsible examination and issuing patents. Also responsible for inventorship contests (interference) and reexaminations (challenges to patent validity).

15. 15 Filed with the USPTO. Can be filed at any time during the term of the patent. Can be filed by anyone. Asks the USPTO to review a registered patent and its validity in light of particular prior art not examined during the prosecution of the patent. If the USPTO determines that the request presents substantial new questions (SNQ) of patentability, it will reexamine the patent. See 35 U.S.C. §§ 302-304 Reexamination Before Patent Office

16. Reexamination (continued) Once SNQ found, USPTO decides again to accept or reject inventions (claims) If claims rejected, examination of patent essentially starts again Process is ex parte Appeals go to USPTO Board of Patent Appeals 16

17. PTO Actions Filed by Alps ‘237 Patent On October 5, 2006, Alps filed a request for reexamination. On September 2, 2008, an Ex Parte Reexamination Certificate was issued. On September 5, 2008, Alps filed a second request for reexamination. On November 29, 2011, an Ex Parte Reexamination Certificate was issued. ‘499 Patent On October 5, 2006, Alps filed a request for reexamination. On March 28, 2007, Alps filed a second request for reexamination. On May 19, 2009, an Ex Parte Reexamination Certificate was issued. On March 3, 2010, Alps filed a third request for reexamination. On June 7, 2011, an Ex Parte Reexamination Certificate was issued. 17

18. ‘688 Patent 18 On October 5, 2006, Alps filed its first request for reexamination. On April 4, 2007, Alps filed its second request for reexamination. On January 2, 2008, Alps filed its third request for reexamination. On May 9, 2008, Alps filed its fourth request for reexamination. On January 13, 2009, an Ex Parte Reexamination Certificate was issued. On January 20, 2009, Alps filed a fifth request for reexamination. On December 13, 2011, a second Ex Parte Reexamination Certificate was issued. ‘182 Patent On February 13, 2008, Alps filed a request for reexamination. On October 31, 2008, Alps filed a second request for reexamination.

19. 19 Cases Filed by OWW OWW filed its first suit for infringement of the ‘237 and ‘499 patents against Alps on December 27, 2004 in the Southern District of Ohio. OWW filed its second suit for infringement of the ‘688 patent against Alps on November 15, 2005 in the Southern District of Ohio. OWW filed its third suit for infringement of the ‘951 patent against Alps on September 3, 2013 in the Southern District of Ohio. OWW filed a Declaratory Judgment Action against Alps in the Middle District of Florida based on the ‘109 patent on May 13, 2013.

20. 20 PTO Requests Filed by OWW ‘109 Patent On September 19, 2009, OWW filed a request for reexamination. On July 5, 2011, an Ex Parte Reexamination Certificate was issued. On December 7, 2012, OWW filed a second request for reexamination. (Request was denied by the USPTO). ‘253 Patent On January 29, 2010, OWW filed a request for reexamination. (Request was denied by the USPTO) On May 28, 2010, OWW filed a second request for reexamination. On June 7, 2011, an Ex Parte Reexamination Certificate was issued. ‘568 Patent On November 13, 2009, OWW filed a request for reexamination. On August 9, 2001, an Ex Parte Reexamination Certificate was issued.

21. 21 Federal Cases Filed by Alps Alps filed its first suit for infringement of the ‘109, ‘253 and ‘286 patents against OWW on September 23, 2008 in the Middle District of Florida. Alps filed its second suit for infringement of the ‘568 patent against OWW on May 3, 2009 in the Middle District of Florida. Alps filed its third suit for antitrust against OWW on May 13, 2009 in the Southern District of Ohio. Alps filed a Declaratory Judgment Action against OWW based on the ‘182 patent on November 13, 2007 in the Middle District of Florida.

22. Post Trial Motions 22 MOTIONSTATUS Alps’ Motion for Permanent InjunctionGRANTED Alps’ Motion for Reconsideration of Absolute Intervening RightsDENIED Alps’ Motion to Strike OWW’s Exhibits to Permanent InjunctionDENIED Alps’ Motion for Enhanced DamagesGRANTED OWW’s Motion to Tax CostsDENIED OWW’s Motion for Equitable Intervening RightsDENIED Alps’ Motion to Register JudgmentGRANTED OWW’s Motion for Relief from JudgmentPENDING Alps’ Emergency Motion for Contempt of May 9,2013 Injunction OrderPENDING OWW’s Motion for Reconsideration of Order on Motion for Permanent Injunction PENDING OWW’s Motion to Stay Execution of Damages Pending Appeal and Resolution of OWW’s Motion for Relief from Judgment PENDING Alps’ Brief/Motion for Attorneys FeesPENDING Alp’s Motion to provide additional information concerning potential post- trial infringement PENDING

23. 23 Case Management Protective Orders Disclosure of Expert Testimony Claims Charts Claim Construction (Markman) Summary Judgment Trial

24. Markman 24 Markman v. Westview Instruments, Inc., 517 U.S. 370, 372 (1996) Few points on Markman –Plain meaning –Intrinsic/extrinsic evidence –Purpose to define words in claim language and to aid jury –Hearing or no hearing As example “coated on only one side”

25. ‘109/’253/’286 Case 25 Alps filed suit against OWW for infringement of 3 patents that Alps is the exclusive licensee. During the course of discovery Alps learned the ‘286 patent was not being infringed and dropped it from the suit. Over 35,000 documents produced by parties. 36 depositions were taken.

26. Plaintiff’s Case Infringement Willful infringement Damages 26

27. Defendant’s Case 27 Inequitable conduct by Inventor Invalidity Obviousness Intervening Rights Nominal Damages

28. ‘109/’253/’286 Case 28 The case went to trial on April 20, 2012, before the Honorable Mary S. Scriven. During the course of the trial the ‘253 patent dropped from the case. The trial lasted 9 days and consisted of: –8 Jurors –9 Witnesses –4 Expert witnesses Jury returned verdict in favor of Alps for $3,983,512 –Found OWW to willfully infringe patent OWW filed appeal (Dismissed/not Ripe)

29. Effect of Post Trial Orders to Date Additional Damages post verdict (about $3-4 million) Double Damages Awarded (about $7-8 million) Attorney Fees awarded ($1.9 million under court review) Costs and interest awarded Final Judgment may be in $18 million range 29

30. ‘568 Case 30 The ‘568 case was scheduled for trial beginning November 5, 2012, before the Honorable Elizabeth A. Kovachevich. 30 days prior to the scheduled trial date, the case was stayed. Stay lifted on September 20, 2013 Summary Judgment motions filed on September 30, 2013 Antitrust Case Alps’ antitrust case was consolidated with OWW’s ‘688 case. The Court has since bifurcated the antitrust claims and stayed that portion of the case.

31. OWW ‘182 Case On November 7, 2007, OWW filed suit for infringement of the ‘182 patent against Thermo-Ply, Inc., in the Eastern District of Texas. Alps presumed that infringement litigation on the ‘182 Patent with OWW was inevitable, Alps filed its declaratory judgment action in MD Florida on November 13, 2007. This matter is currently stayed. Summary Judgment was granted in favor of Thermo-Ply on November 20, 2009, invalidating the ‘182 patent due to obviousness. OWW appealed ruling to Federal Circuit Court of Appeals. Thereafter, Thermo-Ply and OWW reached a tentative settlement, where the judgment would be vacated. Alps filed a motion to intervene, which prevented the judgment from being vacated. Thereafter, oral argument took place and the Federal Circuit affirmed the order (OWW Patent invalid). 31

32. OWW ‘237/’499 Case 32 During Reexamination of the ‘499 Patent, the claims were amended so that they no longer applied to Alps; therefore OWW dropped the patent from the suit. Alps moved for summary judgment based on collateral estoppel and obviousness, which was granted on August 10, 2012. OWW’ moved for summary judgment based on Alps’ claim of inequitable conduct. OWW’s motion was granted. Both parties appealed the respective rulings to Federal Circuit. Oral argument took place on May 7, 2013. An order from the court is pending.

33. ‘688 Case 33 Reexamination of the patent lead to amendments to the patent. The additional amendments have lead to the need for claim construction of various terms. Markman briefs were filed in March/April, 2013. Case is pending. ‘109 Dec Action and ‘951 Case Both cases are in the beginning stages of litigation.

34. Timeline of Cases 34

35. Lesson’s Learned Intensive Expensive Setting Client’s Expectations –Timing –Costs –Fees Efficient Communication Choice of Experts About 9 mediations (4 different mediators) 35