Preparing for Changes in the Treatment of US Patents

1. Preparing for Changes in the Treatment of US Patents Chinh H. Pham Greenberg Traurig Thomas A. Turano K&L Gates MassMedic March 6, 2008

2. Response to Judicial holdings • Reduced requirements for obviousness • Result: • May wish to do more extensive searches prior to filing to be prepared for rejections • May wish to review current portfolio in light of the new standard • May wish to review competitors’ portfolio in view of new standard

3. Response to Judicial holdings • Increase in limitations on patentable subject matter • Result: • Need varied claiming strategy (method, apparatus, means plus function) • If you intend to push the envelope you will need to have conservative claims in place that will survive challenge in the PTO or the courts

4. Response to Judicial holdings • Increased difficulty in proving intentional infringement • Result: • Need to have a realistic sense of probability of success in proving intentional infringement • Need to evaluate actual value of the case without enhanced damages

5. Response to Judicial holdings • Increasing limitations on patentability • Result: • Assume software and business method claims will face greater difficulty in being allowed and surviving challenges • Software and business method should now have at least some claims with the methods coupled to hardware implementation

6. Response to Judicial holdings • Increased freedom to challenge validity and little risk of losing license • Review existing license agreements todetermine susceptibility to challenge validity • Ability to terminate • Designated forum for any validity charge • Possibility of renegotiation • Costs/risks of litigation • Suggest higher royalty payment • Suggest up front payment to offset risks of future suit

7. Proposed new PTO regulations • Reduced the number of continuations in one family • 2 continuations or continuations-in-part • 1 RCE • Additional continuations or RCEs require petition and showing • A divisional may be filed if application subject to restriction • Results • Need to have claiming strategy in place at the start • Need not to claim overly broadly

8. New PTO rules continued • 5 independent claims and 25 total claims without ESD • Applicant may suggest restriction requirement • Results: • Need to have claimed invention as broadly claimed as permitted by prior art • May not want to suggest restriction requirement • Potentially asking for restriction acts as admission that claims are patentably distinct

9. New PTO rules continued • You Should Consider: • File patent applications with an understanding of the new rules to increase your options and flexibility • File patent applications before any public disclosure is made • Audit patent portfolios to ensure patent strategy adapts to changes in legal landscape and marketplace

10. New PTO rules continued • When prosecuting applications, you should: • Remember that each family of applications will have a finite life span (two continuations and one RCE). • Exercise great care in filing RCEs and/or continuation applications. • Consider filing continuation-in-part applications as “stand alone” applications. • Consider filing an SRR and an election without traverse to avoid the requirement for an ESD in applications that do not comply with the 5/25 rule.

11. New PTO rules continued • When prosecuting applications, you should remember that: • Applications directed to similar technology (and having at least one common inventor) may be dispersed amongst a number of law firms. • The different law firms may not be aware of the related applications. • Late disclosure of related applications after a first office action on the merits can result in the issuance of a final rejection. • Failure to disclose related applications may result in enforceability issues at a later date.

12. Significant Changes in the Law According to Senate Bill • First to file • Removal of interference proceedings • New proceeding available to determine true inventor • Geographic limitations on prior art removed • Result: • Need to file sooner than you might have normally • Still need to maintain evidentiary trail of inventorship • Assume there will still be issues as to whether two inventions are the same for the purposes of first to file

13. Legislative Changes continued • Application may be filed and prosecuted by assignees • Result: • Need to make sure documentation is in place to give you the right to prosecute (e.g. employment agreements) • Changes to damages calculations and willful infringement • This attempts to codify some of the case law

14. Legislative Changes continued • Post grant review to replace inter partes reexamination • Challenge windows • 1st year post issue no presumption of validity • Remainder of patent life • Results • Need to place as much relevant prior art before the examiner as possible • Need to assume that important patents will be faced with challenges during the 1st window

15. Legislative Changes continued • All patent applications are to be published • Third parties may submit information affecting patentability of application after publication • Result • Preemptive searches should be performed to reduce the amount of material that may be submitted by third parties • Should monitor competitors’ applications to determine if a submission should be made

16. Legislative Changes continued • Unintentionally delayed filings may be accepted • Result: • Don’t rely on this provision • Certain patents (Check 21 patents) will result in limited liability to the infringer • Result: • Keep this in mind for your potential infringement,; you too may lobby to change the law

17. Contact Information Chinh H. Pham Greenberg Traurig Phone: 617-310-6239 PHAMC@GTLAW.COM Thomas A. Turano K&L Gates Phone: 617-261-3148 THOMAS.TURANO@KLGATES.COM