U.S. Patent Developments & EU Patent Rights

1. U.S. Patent Developments & EU Patent Rights William N. Hulsey III, Esq. Principal, HULSEY, P.C. Intellectual Property Lawyers Thursday, February 24th 2011 2011 Intellectual Property & Innovation Presentation Series • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

2. U.S. Patent Developments & EU Patent RightsAgenda • Developments in U.S. IP Rights & Effective International Cooperation • David Kappos, U.S. Under-Secretary of Commerce for Intellectual Property • James Pooley, Deputy Director General for Innovation & Technology, World Intellectual Property Organization • U.S. Supreme Court decides Bilski v. Kappos & Other Software & Business Method Patent Developments • Paul Allen, Microsoft Co-Founder sues “The Internet” for patent infringement • U.S. Supreme Court to hear February 28, 2011 the case Stanford University v. Roche Molecular Systems • Patent Reform Legislation making genuine progress in U.S. Congress • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

3. Importance of Bilski Case • The Bilski decision, both Supreme Court and Federal Circuit decisions, addressed the validity of many already issued Internet business methods • U.S. Supreme Court Justice Kennedy ‘s Balance:“ . . . . [T]he patent law faces a great challenge in striking the balance between protecting inventors and not granting monopolies over procedures that others would discover by independent, creative application of general principles.”(S.Ct. Bilski Majority Decision) • James Pooley, Dep. Dir. Gen. of the World IP Organization, “[IP rights provide “the package in which technology travels,” [and are] essential for the commercialisation of innovation.” • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

4. U.S. SUPREME COURTBILSKI DECISION • The Court in the majority opinion authored by Justice Kennedy held as follows: • While the claims at issue in Bilski were not patent-eligible subject matter, it was because “they are attempts to patent abstract ideas”, not because they failed to meet some categorical rule formulated to address inventions from a prior century. • Left open the opportunity for the Federal Circuit to carve out new boundaries to patent-eligible subject matter in the future which are consistent with the purposes of the Patent Act and are not inconsistent with its text. Anthony M. Kennedy Associate Justice • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

5. U.S. SUPREME COURTBILSKI DECISION • The Court in the majority opinion authored by Justice Kennedy further held: • The notion that the “machine-or-transformation” test applied by Federal Circuit was the “exclusive” test is rejected. • That the statutory definition of “process” found in 35 U.S.C. § 100(b), not some judicially grafted definition, should govern what constitutes patent-eligible processes is confirmed. • The Patent Act specifically provides for special defenses for patents which cover “a method of doing or conducting business” (35 U.S.C. § 273(b)(1) & (a)(3)). • So, “business method” patents cannot be per se unpatentable subject matter. Anthony M. Kennedy Associate Justice • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

6. U.S. SUPREME COURTBILSKI DECISION • Justice Kennedy held further that: • The statutory text of § 101 and the definition of “process” in § 100(d) do not limit processes to those that pass the Federal Circuit’s machine-or-transformation test. • Endorsed Judge Rader’s opinion from the Federal Circuit, that the Bilski patent claims are unpatentable simply because they are directed to “abstract ideas.” • Provided no additional guidance as to how to determine patent eligibility. • Emphasized traditional holdings that “laws of nature, physical phenomena, and abstract ideas” are expressly prohibited by Supreme Court precedent. Anthony M. Kennedy Associate Justice • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

7. Interval Licensing, LLC v. AOL, INC. et al. • On August 27, 2010, Interval Licensing, LLC (“Interval”) filed a complaint in the U.S. District Court of the Western District of Washington against 11 major internet search and e-commerce companies. • Interval Licensing holds patents of Interval Research, the former company founded by Paul Allen and David Liddle in 1992 to perform advanced research and development in the areas of information systems, communications, and computer science. • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

8. Who Are the Defendants? • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

9. Stanford University v. RocheFacts of the Case • This case concerns the ownership of three patents for monitoring the effectiveness of treatments for human immunodeficiency virus (HIV). • The patented process was developed by researchers at the Leland Stanford Junior University (Stanford) using federal funds. • One of those scientists—Dr. Mark Holodniy—performed research both at Stanford and at Cetus Corporation (Cetus). • Holodniy executed agreements with both Stanford and Cetus regarding rights in his inventions, and a dispute subsequently arose about the ownership of the patents at issue here. • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

10. Stanford University v. RocheU.S. Federal District Court Case U.S. District Court for The Northern District of California • In 2005, Stanford filed suit, alleging that Roche et al. was marketing HIV detection kits that infringed its patents. • Roche et al. counterclaimed, contending that they possessed ownership interests in the patents because of Holodniy’s agreement with Cetus. • The District Court rejected Roche’s claim of ownership on several grounds. • That Holodniy’s assignment to Cetus was ineffective to convey an interest in the patents because, under the Bayh-Dole Act, he lacked any such interest to convey. • The Court explained that when “the individual inventor is not a contracting party,” “the Bayh-Dole Act provides that the individual inventor may obtain title only after the government and the contracting party have declined to do so.” • Because “Stanford exercised its right and obtained title in the patents” under the Bayh-Dole Act, the Court concluded, Holodniy “had no interest to assign to Cetus.” • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

11. Stanford University v. RocheU.S. CAFC Case The United States Court of Appeals for The Federal Circuit 2009 • The Court of Appeals affirmed in part, vacated in part, and remanded. • As relevant here, the Court held that Stanford had obtained no ownership interests in the patents from Holodniy because Holodniy had assigned his patent rights to Cetus, leaving nothing for him to assign to Stanford. • The Court explained that the agreement between Holodniy and Stanford, in which Holodniy “agree[d] to assign or confirm in writing” any invention he conceived or reduced to practice while at Stanford, was merely a promise to assign his rights “to Stanford at an undetermined time.” • By contrast, the Court viewed Holodniy’s agreement with Cetus—in which Holodniy stated that he “will assign and do[es] hereby assign to CETUS” his interest in inventions conceived as a consequence of his access to Cetus facilities and information—as “effect[ing] a present assignment” to Cetus of his future inventions. • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

12. PETITION FOR A WRIT OF CERTIORARI • Whether a federal contractor university's statutory right under the Bayh-Dole Act, 35 U.S.C. §§ 200-212, in inventions arising from federally funded research can be terminated unilaterally by an individual inventor through a separate agreement purporting to assign the inventor's rights to a third party. QUESTION PRESENTED • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

13. Amicus Briefs before U.S. Supreme Court • U.S. Solicitor General, essentially all U.S. Universities, and former Senator Birch Baye: Federal contractor university's statutory right under the Bayh-Dole Act, in inventions arising from federally funded research cannot be terminated unilaterally by an individual inventor through a separate agreement • American Intellectual Property Law Association representing a membership of 16,000+ intellectual property attorneys: The statutory language of the Act and its implementing regulations do not support an interpretation that title is transferred automatically or by operation of law from inventors simply because an invention arose under Federal funding. • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

14. Patent Reform Act of 2011: An Overview • First-Inventor-to-File • Damages • Enhanced Damages • Third-Party Challenges to Patent Rights • False Marking • Oath • Best Mode • Fee Setting Authority • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−

15. U.S. Patent Developments & EU Patent Rights William N. Hulsey III, Esq. Principal, HULSEY, P.C. Intellectual Property Lawyers Thursday, February 24th 2011 2011 Intellectual Property & Innovation Presentation Series • HULSEYIP • Intellectual Property Lawyers • −IP Professionals for Entrepreneurship’s New Golden AgeTM−