Update on International Utility and Design Patents

1. Update on International Utility and Design Patents LAIPLA SPRING SEMINAR 2013 Las Vegas

2. Agenda • Vanessa Owen (Seyfarth Shaw LLP) • “Trends & Developments in Foreign Patent Filing 2013” • Alex Zhang (King & Wood Mallesons) • “Patent Filing in China, What Should You Know?” • Alexander Schlee (Schlee IP) • “The EU Patent, the Unified Patent Court and its implications for the EPCPatent” • Scott Hansen (Fulwider Patton LLP) • “Cutting Costs: A Quick Look at the Hague System for Design Patents”

3. Trends &Developments in Foreign Patent Filing 2013 Vanessa Owen, Esq. Seyfarth Shaw LLP Los Angeles

4. 2013 U.S. Global Patent & IP Trends Survey of 125 US companies and universities - Conducted by Inovia: foreign filing company - Annual survey for past 4 years, identify trends - Survey conducted January 2013

5. Foreign Filing Patterns • Foreign filing becoming more important • 50% of respondents file more ½ of their patent applications overseas • Up 20% since 2011 • 70% file in 4 or more countries (up 11% since 2012)

6. PCT v. Paris Convention (Direct) Filing • 99% of respondents used PCT for some or all of their foreign filings in 2012 • When foreign filing in 4 or 5 countries or more, PCT makes financial sense • BUT filing in just 1-3 foreign countries, direct filing under Paris Convention may be more cost efficient • Also, for non-PCTcountries (e.g. Taiwan) – PCT isn’t an option

7. PCT v. Paris Convention (Cont.) • PCT International Preliminary Examination Report assists in deciding whether/where to file national stage applications • PCT provides delay to make better informed decisions at a later time

8. Specific Country/Regional Trends • Some companies cut back on filing in European Patent Office • High cost • Value of patents should justify the high cost of current EPO system • Filings in China continue to increase • Less concern about enforceability • South America, India getting more attention • Big potential markets • Patent systems still developing

9. Most Important Overseas Countries (for US Patent Filers) • Respondents ranked foreign countries most important for 10 year patent strategy • Europe • China • Japan • India • Brazil • South Korea

10. Big Issue: Cost Containment • Large-scale foreign filing programs are expensive • Measures to Cut Costs • Majority (57%) of respondents bringing some FF steps in-house • Negotiating with foreign counsel to lower what they charge • Using non-law firm FFproviders • Some companies specialize in foreign filings, not law firms • Filing in fewer countries • Using lower-cost translation services

11. Cost Containment (Cont.) • Reduce # of claims in expensive foreign countries (EPO, Japan, etc.) • Consolidate claims to create claims having multiple dependencies • Delete claims that are not likely to be allowed • Amend claims to track already-allowed claims in another country (e.g. claims allowed in the US case) • Odds of allowance increase when claims have already been allowed in a major patent country

12. Miscellaneous Developments • Keep up w/ changes to patent law in important countries • Example: Australia • “Raising The Bar” Act of 2012 • Makes Australian patent law more like UK patent law • Intend to use UK patent case law as authority on some issues • Expanded definition of prior art – • not just what is known in Australia, but what is known elsewhere in the world • Enablement requirement added • Written description must be more thorough • No more post-filing amendments to Spec that add “new matter”

13. Miscellaneous: Saudi Arabia • Saudi Arabia has joined PCT • Takes effect August 3, 2013 • Country Code will be “SA”

14. FUN FACTS • Technological Field with Most PCT Applications in 2012 • Electronic Machinery • Just beats out Digital Communications for #1 • Companies Filing Largest Number of PCT Apps in 2012 • ZTE Corporation (China) – 3,906 published applications • Panasonic (Japan) – 2,951 published applications • PCT National Phase entries in 2011: 507,400 • 146 Member States • Applications filed in 120 of the member states in 2012 • For More Fun Facts, see the PCT Yearly Review from WIPO

15. Contact Information Vanessa J. Owen, Esq. Seyfarth Shaw LLP One Century Plaza, Suite 3500 2029 Century Park East Los Angeles, CA 90067-3021 Phone: (310) 277-7200 Email: VOwen@seyfarth.com

16. Patent Filing in China, What Should You Know? June 8, 2013 Alex Zhang | KING & WOOD MALLESONSPrepared for LAIPLA Spring Seminar

17. Type of Patents and Terms Invention a product, a process or improvement thereof - 20 years Utility Model: shape, structure, or their combination of a product - 10 years Design: a new design of the shape, the pattern or their combination which creates an aesthetic feeling - 10 years

18. Filing an Application in China • First Filing in China • Filing an Application under Paris Convention • 12 months from the priority date • No grace period • Entering the Chinese National Stage of a PCT Application 30 months from the priority date Another 2 months grace period

19. Foreign Filing License • Any entity or individual may file an application in a foreign country for an invention or utility model completed in China, subject to a prior secrecy review by SIPO • Violation: loss of patent rights in China • Ways to obtain a foreign filing license

20. Consider Utility Model Patents • Only Formality review, no substantive examination • Normally granted within one year • Same protection as that of an invention patent • Only product can get a patent protection for Utility Model • The product shall be objects manufactured by industrial methods • having definite shape and structure • No method claim allowed

21. Same Invention Double Filing • Applying patent for utility model and patent for invention • Indicating double filing when submitting applications • Granting utility model patent within one year from filing date • Granting patent for invention • Abandoning utility model patent

22. Duty of Information Disclosure • The Examiner can ask for any search reports and examination results from a foreign patent office, such as USPTO and EPO • The applicant has no duty to disclose all known prior art references that would be material to the patent application • Inform your Chinese applicant and/or attorney you have the duty to disclose information material to patentability in the U.S.

23. Formality Examination and Substantive Examination • Formality Examination • Checking the formality-related issues, e.g. missing of drawings, assignment, etc. • Substantive Examination • Within 3 years from the filing date or priority date • A request and possible amendments (if any) • Voluntary amendments: • when requesting substantive examination • within 3 months after receiving a Notification of entry of substantive examination

24. No novelty Lack of inventive step Amendment exceeds the original disclosure scope The textual content of the original written description and claims Any content that can be directly and unambiguously determined from the original disclosure Opinion of Supreme Court on Seiko v. PRB Overcoming Rejections

25. A narrow claim can be easily designed around A broad claim may be invalid or unpatentable over the prior art It’s not allowed to introduce elements from the spec to a claim during an invalidation proceeding Independent claims with reasonable protection scope Dependent claims correspond to preferred embodiments or having meaningful features Reasonable Scope of Claim

26. Amendment during prosecution is not allowed to go beyond the origin discourse Translation A precise Chinese translation of the documents is of most importance Can’t correct the translation error based on the original English version Post-grant Amendment Is generally not allowed Corrections of clerical errors such as a typo is okay Only deletion of claims is allowed in an invalidation proceeding Amendment and translation

27. Divisional Application • Time: • Any time before the deadline of the Notice of Allowance • Can’t be based on a divisional application • No Continuation • No Continuation in Part • No Substitute • No CPA • No Reissue

28. Anyone, including patent owner, may request invalidation No need to disclose the identity of the true party in interest Grounds for filing an invalidation request novelty, inventiveness, and practical applicability enablement and written description amendments that go beyond the scope of the patent application’s original disclosure whether the subject matter is patentable; formal matters, etc Much broader than those available in the United States A substantial new question of patentability based on any patent or printed publications qualifying as prior art Post- Grant Patent Invalidation

29. Thank You Alex Zhang alex.zhang@cn.kwm.com | Tel: 650 858 1285

30. The EU Patent, the Unified Patent Court and its implications for the EPC Patent (European Patent Convention) Alexander R. Schlee E-mail: alex@schleeip.com Web: www.schleeip.com Schlee IP International, P.C. Viering, Jentschura & Partner “VJP” Manhattan Beach, CA Tel: 310 545 9851

31. The Unitary Patent Package - Regulation on the European patent with unitary effect (Unitary Patent, UP Regulation) (In the following named EU Patent) - Agreement on a Unified Patent Court for litigation on infringements and revocation of European and unitary patents (UPCt Agreement)

32. The ultimate goal of the EU Patent The goal is to eventually cover the entire European Union (EU) (Currently 27 countries) by one single patent that is centrally • granted for the entire EU • invalidated for the entire EU • enforced for the entire EU

33. 24 EU countries to ratify the entire Unitary Patent Package Austria, Belgium, Bulgaria, Czech Republic, Cyprus, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Portugal, Romania, Slovakia, Slovenia, Sweden, UK

34. 3 EU member countries that have currently opted not to ratify the Unitary Patent Package in part or in its entirety Italy (signed UPCt Agreement only, not UP regulation) Spain (strongly adverse if Spanish not official language) Poland (signed UP regulation but wait-and-see approach on UPCt)

35. 11 Non-EU countries that are members to the EPC These countries cannot join the Unitary Patent unless joining the EU: Switzerland, Norway, Albania, Croatia, The Former Yugoslav Republic of Macedonia, Iceland, Lichtenstein, Monaco, San Marino, Serbia, Turkey

36. Map Unitary Patent Countries

37. Hurdles to clear for achieving the ultimate goal of a truly unitary patent system (1) • Italy and Spain have currently not joined the UP Regulation and it is not certain whether they will and if so when. For now, this leaves just 25 EU countries. • The agreement will enter into force when 13 of the remaining 25 countries have ratified the Agreement (Including France, Germany and the U.K.), but at the earliest on January 1, 2014. Some speculations say that ratification by 13 countries will more likely be completed by end of 2014 or early 2015.

38. Hurdles to clear for achieving the ultimate goal of a truly unitary patent system (2) • At the time the Agreement will enter into force, it seems unlikely that all 25 countries will have ratified, so the Unitary Patent might not be all that unitary for quite some time in the future. • The Unified Patent Court has not been established yet. Further, for EPC Patents a transitional period of 7 years extendable by another 7 years applies, allowing transitionally to opt out of the Unified Court System

39. Procedure of the EU Patent • The prosecution of an EU Patent is identical to an EPC patent including the post-grant opposition and is hosted by the European Patent Office (EPO). • Opting for a unitary EU Patent is simply an option that can be exercised within 1 month from the issue date. • Opting for an EU Patent does not preclude validation of the patent in non-EU countries.

40. Language of the EU Patent • For the EU patent, the same choice between the same 3 official languages English, French, German as for EPC patents applies. • Pursuant to EPC procedure, the allowed claims need to be translated into the 2 remaining EPO languages for the patent to issue. • Eventually no further translations will be required, but for some transitional provisions apply.

41. Transitional translation requirements for the EU Patent Until the EPO has developed a high-quality machine translation tool for machine translating into all EU languages: • Translation into English if filed in German or French required. • If filed in English, translation into any EU member country language required.

42. Renewal Fees Only 1 renewal fee needs to be paid for an EU Patent, but will be probably set to an amount that is the equivalent amount of average renewal fees to be paid for 3-4 countries.

43. Basic structure of the Unified Court System (First Instance) • Central Division: Seat in Paris (default for all classes if not handled by London or Munich sections), sections in London (Human Necessities, Chemistry and Metallurgy) and Munich (Mechanical Engineering, Lighting, Heating, Weapons, Blasting) • Local Divisions (Up to four in countries having over 100 cases a year) • Regional Divisions (For groups of countries with fewer than 100 cases per year)

44. Jurisdiction of Court of First Instance • Local/Regional Division where alleged infringement has occurred • Local/Regional Division where the Defendant is domiciled or established • Central Division if no Local/Regional Division has jurisdiction • If infringement in 3 or more Local/Regional Division territories and the Defendant has no residency or place of business in the EU, the Plaintiff has the choice of Central Division

45. Possible referral by Local/Regional Division to Central Division - Upon invalidity counter-claim by the Defendant: the Local/Regional Divisions can opt to refer the entire case or the invalidity portion only (bifurcate) to the Central Division. - The Defendant can demand referral to the Central Division if the law suit is pending before the Regional Division but infringement has occurred in the territories of three or more Local/Regional Divisions.

46. Jurisdiction for EPC Patents under the Unified Court system For UPCt member countries, EPC patents (upcoming and existing) can be litigated either in the Unified Court system or in National Courts for a transitional period of 7 years that may be extended by another 7 years. Opting out of the Unified Court System is possible up to 1 month prior to the expiration of the transitional period for the remainder of the patent term (opting back in possible later)

47. Appellate Court A central Appellate Court has jurisdiction for all decisions from the Courts of First Instance. This central Appellate Court will be located in Luxemburg

48. European Court of Justice (ECJ) This court has jurisdiction over legal matters involving European Union Law and its equal application across all EU member states. The Courts of First Instance and the Appellate Court can refer cases of legal importance under the EU contract to the ECJ.

49. Competence of UPC for UP and EP • Infringement proceedings • Declaratoryjudgment Actions ofnon-infringement • Preliminaryinjunctionsbased on patents • Invalidityproceedings • Prior userightsclaims • Compulsorylicenseactions Competence for both UPs and EPs thatarevalidated in theparticipating Member States, but opting out of UPC System for at least 7 yearspossible.

50. Practical considerations • Nothing is happening very soon and nothing for all EU countries at once since the ratification process first needs to be completed. At least 13 countries need to ratify and the Unitary Patent does not come into force before January 1, 2014, but 2015 is more likely. • Neither the procedure, nor the Authority EPO will change. • Unitary Patent will just be an option after the European Patent/Unitary Patent issues, and when it comes to this point this option can be easily exercised without requiring further preparations. • Eventually, patents will cover all of the EU and will become more affordable and centrally enforceable.