A Start-up Company’s Perspective on Patent Prosecution

1. A Start-up Company’s Perspective on Patent Prosecution Carolina Innovations Seminar January 8, 2009

2. Overview: A Start-up’s Perspective on Patent Prosecution • Overview of Liquidia’s Technology • Intellectual Property Perspective of Liquidia • At conception • Today • Start-up Patent Strategy Considerations • Prosecution Activities • Enforcement / Defense Considerations

3. 2 μm Pattern Replication In Non-wetting Templates (PRINT®) Fluorocur® Mold Master Template or Replicate “High Resolution Soft Lithography: Enabling Materials for Nano-Technologies”; Rolland, J. P.; Hagberg, E. C.; Denison, G. M.; Carter, K. R.; DeSimone, J. M. Angew. Chem. Int. Ed. 2004, 43, 5796-5799 .

4. PRINT® Film Fabrication

5. PRINT® Particle Fabrication Apply liquid to be molded Form Fluorocur® mold

6. Control of Particle Size and Shape at the Nanoscale d = 95 nm, h = 280 nm d = 113 nm, h = 36 nm d = 200 nm, L = 200 nm Worm-like Flexible PRINT™ Particles: 80 nm x 2000 nm

7. PRINT® Particle Therapeutics 200 nm degradable particles with siRNA 3 μm drug particles for pulmonary delivery 2 μm vaccine particles 80 x 5000 nm particles for enhanced circulation

8. History of Liquidia – an IP Perspective

9. Liquidia Today – an IP Perspective Films & Membranes Applications Particle Applications Films & Membranes Particles PRINT® Process Fluorocur® Material Foundation

10. Liquidia Today – an IP Perspective Fluorocur® Material Foundation Fluoropolymer Compositions of Matter Trademarks Trade Secrets

11. Liquidia Today – an IP Perspective PRINT® Process Manufacturing tools and techniques Methods of making and using Mold materials Methods of making and using Compositions of Matter Methods of using Trade Secrets

12. Liquidia Today – an IP Perspective Films & Membranes Micro & Nano-Patterned Films Micro & Nano Arrays Microfluidic Devices Photovoltaic Devices Molds Medical Devices Including: Methods of Making and Using

13. Liquidia Today – an IP Perspective Particles Micro & Nano-Particles Harvesting, Collecting, & Purifying Particles Molds Including: Methods of Making and Using

14. Liquidia Today – an IP Perspective Films & Membranes Applications Applications: Optical Films, Nano Wire Grid Polarizer, Liquid Crystal Alignment Layer, Alternative Energy, Photovoltaic Device Patterned Layers, Fuel Cell Membrane, Patterned Membrane Including: Methods of making and using

15. Liquidia Today – an IP Perspective Particle Applications Applications: Drug Delivery Particles, Inhalation Particles, Protein Particles, Targeted Particles, Specific Particle Compositions, Size and/or Shape Specific Particles Including: Methods of making and using, Treating a patient, Dosages, etc.

16. Choosing a Law Firm / Representation • Considerations: • Location • Local can visit and become more comfortable and familiar with your technology, know reputation • Experience • Technical alignment • Legal expertise • Cost • Size • Some law firms and/or groups are more tailored to working with small start-ups • Larger firms typically offer more full service • Corporate, licensing, employment…

17. Initial Patent Filings • Highly Important • Creation of value • Establishes initial footprint of company • Priority date for your technology • Timing • File early • File prior to any disclosure to potential investors, collaborators, and any third-party

18. Initial Patent Filings: Disclosure

19. Follow on Filings • Protect ongoing technical developments • Create value • Increase your licensing position • Foresee where customers / competitors are and how your technology may apply in their field • Create layers of IP protection around your core background • Enforceability • Strategize to enforce your follow-on filings rather than most core filings whenever possible • If lose a follow on filing less damaging to the company

20. Route of Patent Filings • Timing • Provisional application • 12 months • Very low filing fees • No prosecution • Must be converted • Patent Cooperation Treaty (PCT) application • 30 months • Limited prosecution • Relatively low filing fees • U.S. non-provisional application • Prosecution begins as soon as filed • Filing fees can be high

21. Route of Patent Filings • Timing Example 1: Provisional PCT Non-Provisional Filing Date Issuance 12 mo. 30 mo. Time spent in Provisional and PCT status will delay time before issuance. Example 2: Non-Provisional 36-48 mo. Filing Date Issuance By not entering Provisional or PCT national stage, applications should issue quicker, however, larger fees will be incurred earlier.

22. Route of Patent Filing • Strategy • Cash is king in a start-up • Filing provisional allows you to push off costs • Provisional applications enable dynamic entrepreneurial environment by quickly and efficiently creating value • Caution – filing excessive cases without considering long term costs • Abandonment of non-provisional cases results in the subject matter in that patent application being dedicated to the public if it’s not covered in another filing • Maintain confidentiality • File provisional application – if not converted to PCT or non-provisional you can retain confidentiality • Potential trap • An incomplete provisional application can not be completed / updated upon conversion to Non-provisional or PCT without risking new-matter rejections / challenges

23. Budget Sample budget for 1 patent filing Note: Translation fees and Prosecution costs are NOT included

24. Prosecution Activities • Working with Counsel • In-house counsel v outside counsel

25. Prosecution Activities: Working with the University • A positive University representative can be your best asset • Different models • UNC: very collaborative with company, helps nurture technology • Other Universities: different / less collaborative models • Control prosecution • University concerned with early stage companies • Gain trust and common goal of commercial development as company matures • Interactions with University’s counsel • Remember they do not represent the company • Direct requests and comments through your University representative

26. Prosecution Activities • File History Watch • Prosecution History Estoppel • Leading countries • US • Europe • Leading claims • Cover products • Quick issuance • Continue to pursue broader claims: costs, law changes • Estoppel • Information Disclosure Statements • Across family members • Watch examiner cited cases – cross-reference • Policy with scientists: centralize all research materials

27. Enforcement / Defense • Caution when asserting key background cases • Serious blow to company • Family of patents might fall victim • Layered Portfolio • Build cases beyond core background that are independent of the core background and can be asserted • Costs • Patent litigation is very costly