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Colorado Bar Association IP Fall Update 2010After All the Waiting, What Exactly Did Bilski Do?… and Other Patent Updates : 

San Francisco | Palo Alto | Walnut Creek | San Diego | Seattle | Denver | Washington, DC | Tokyo | www.townsend.com Intellectual Property Acquisition, Litigation and Counseling | Technology Transactions | Antitrust and Unfair Competition Colorado Bar Association IP Fall Update 2010After All the Waiting, What Exactly Did Bilski Do?… and Other Patent Updates October 7, 2010 Presented by Thomas Franklin, PartnerElectronics & Software Practice GroupDenver & San Diego Offices

Important Patent Decisions in 2010 : 

2 Important Patent Decisions in 2010 Bilski v. Kappos | Patentable Subject Matter Association for Molecular Pathology v. USPTO | Patentable Subject Matter Princo, Corp. v. Int’l Trade Comm’n | Patent Misuse Stauffer v. Brooks Brothers | Standing for qui tam Plaintiff Pequinot v. Solo Cup | False Marking Intent Ariad Pharms., Inc. v. Eli Lilly & Co. | Written Description Wyeth and Elan Pharma v. Kappos | Patent Term Extension Boehringer Ingelheim Int’l v. Barr Labs | Terminal Disclaimers SEB S.A. v. Montgomery Ward & Co. | Inducement Therasense, Inc. v. Becton, Dickinson & Co. | Inequitable Conduct

Bilski v. KapposPatentable Subject Matter : 

3 Bilski v. KapposPatentable Subject Matter (U.S., No. 08-964, June 28, 2010) The invention – commodity hedging with countervailing futures Patent Office rejected as too abstract Federal Circuit rejected for failure to meet the “machine and transformation” test Supreme Court ruling: Patents cannot be granted if innovation is abstract Some business method patents are abstract and unpatentable, some are not abstract and are patentable This one is too abstract – you can tell.

Bilski Claim : 

4 Bilski Claim

Bilski Ruling : 

5 Bilski Ruling Business methods are still patentable No bright line test is available to detect when an invention is too abstract “Machine or transformation” test helps identify when something is not too abstract For now, only reliable test is whether J. Kennedy recognizes the invention as abstract There is much law still to be made

Bilski Practical Considerations : 

6 Bilski Practical Considerations No bright line test The Federal Circuit’s test is watered down But the Federal Circuit’s test is still relevant and the “abstract idea” defense is strengthened Look at indemnification language – is it drafted to fit method/process claim scenarios? Examine subject matter being licensed out, licensed in – is there a Bilski problem? Are new patent claims being drafted with Bilski in mind? Raise Bilski issues in litigation

Association for Molecular Pathology v. USPTOPatentable Subject Matter : 

7 Association for Molecular Pathology v. USPTOPatentable Subject Matter No. 09 Civ. 4515 2010 WL 1233416 | (S.D.N.Y., Mar. 29, 2010) BRCA1 and BRCA2 isolated gene sequences patented by Myriad along with diagnostic methods Diagnostic tests to asses breast and ovarian cancer are widespread AMP challenging gene patents for not being patentable subject matter

AMP Ruling : 

8 AMP Ruling Isolated gene sequences are just a purified product of nature and not patentable Discovering the correlation between gene structure and function does not render the gene patentable The method claims were found to not meet the machine or transformation test that has been now clarified by the Supreme Court to be not the exclusive test

AMP Practical Considerations : 

9 AMP Practical Considerations This district court decision has been briefed on appeal to the Federal Circuit Game changing decision for gene patents unless overturned May have implications to other naturally occurring substances and chemicals

Princo, Corp. v. Int’l Trade Comm’nPatent Misuse : 

10 Princo, Corp. v. Int’l Trade Comm’nPatent Misuse 2010 WL 3385953 | (Fed. Cir., Aug. 30, 2010) Princo worked with Philips and Sony to develop the recordable CD standard Princo stopped paying the required licensing fees Philips sued for patent infringement Princo asserted the defense of patent misuse Princo alleged that Philips used a side agreement with Sony to suppress Sony’s competitive technology

Princo Ruling : 

11 Princo Ruling No misuse found because the misconduct didn’t arise from the situation where the conditions placed upon the licensees would require agreement to anticompetitive terms There was no connection between the now infringed licensed patents and the misconduct The court did not rule on whether the agreement between Sony and Philips was lawful, but left the question to be determined under antitrust law

Princo Practical Considerations : 

12 Princo Practical Considerations Courts are loathe to extend patent misuse A direct connection between the patents in suit and the anticompetitive misconduct is required Consider filing antitrust claims as a countersuit Collaboration is rife with antitrust dangers En banc question to the level of scrutiny and burden of proof and production for misuse in an antitrust context currently being considered

Stauffer v. Brooks BrothersStanding for qui tam Plaintiff : 

13 Stauffer v. Brooks BrothersStanding for qui tam Plaintiff 2010 U.S. App. LEXIS 18144 | (Fed. Cir., 2010) Stauffer made a false marking claim against Brooks Bros 35 U.S.C. § 292 is a qui tam statute because it allows “[a]ny person” to bring suit under the statute for violation of the provision Brooks Bros challenged standing

Stauffer Ruling : 

14 Stauffer Ruling For standing a plaintiff must show: (1) that she has suffered an injury in fact; (2) a causal connection between the injury and the conduct complained of; and (3) that the injury is likely to be redressed by a favorable decision. A qui tam plaintiff must allege that the United States has suffered an injury in fact causally connected to the defendant’s conduct that is likely to be redressed by the court Since the government would have standing to enforce the law, it was found that Stauffer also has standing Stauffer need not allege individual or public harm

Stauffer Practical Considerations : 

15 Stauffer Practical Considerations Standing likely to be unassailable Marking suits are not going away Consider constitutional challenge to 35 U.S.C. § 292 as the government is not in charge of executing the laws

Pequinot v. Solo CupFalse Marking Intent : 

16 Pequinot v. Solo CupFalse Marking Intent No. 2009-1547 | (Fed. Cir., June 10, 2010) Defendant marked with expired patents Solo argued no intent for false marking since done under the advice of counsel Marking indicated that the product “may be covered” by certain patents

Pequinot Ruling : 

17 Pequinot Ruling False marking offense consists of two prongs: 1) a false mark and 2) intent to deceive A defendant must have acted with the specific intent to deceive the public – not merely intent to falsely mark Mere knowledge that a patent had expired is not sufficient Plaintiffs must now demonstrate that the defendant marked products with an expired or non-applicable patent with the specific intent to deceive the public

Pequinot Practical Considerations : 

18 Pequinot Practical Considerations A plausible defense exists for defendants who, in good faith, relied on the advice of counsel or implemented cost-effective measures to slowly remove non-applicable patent numbers from products Check your products and packaging to ensure none are marked with expired patents; alter markings to remove any expired patents. If your company disclaims or sells a patent or discontinues paying maintenance fees, or a license to the patent expires, remove the patent number from products. Remove markings of patents that have been declared invalid or unenforceable by any competent authority. Avoid marking your products with a long list of patents that may or may not cover your products. Instead, consider obtaining an opinion as to whether the patents indeed cover the product. If your products are redesigned or change in any meaningful way, ensure that the patent marking on the product is still appropriate. It might be necessary to obtain an updated opinion from your counsel. When licensing patents, if the licensor demands products be marked, shift the risk of a false marking suit onto the licensor.

Ariad Pharms., Inc. v. Eli Lilly & Co.Enablement v Written Description : 

19 Ariad Pharms., Inc. v. Eli Lilly & Co.Enablement v Written Description 2010 WL 1007369 (Fed. Cir., Mar. 22, 2010) Claims at issue are to methods of reducing Nuclear Factor Kappa B activity in eukaryotic cells The Fed. Cir. panel reversed denial of Lilly’s JMOL and ruled claims were invalid over written description The Fed. Cir. decided en banc

Ariad Ruling : 

20 Ariad Ruling Patent law contains a written description requirement separate from the enablement requirement “[A]lthough written description and enablement often rise and fall together, requiring a written description of the invention plays a vital role in curtailing claims that do not require undue experimentation to make and use, and thus satisfy enablement, but that have not been invented, and thus cannot be described.” “[T]he test for sufficiency is whether the disclosure of the application relied upon reasonably conveys to those skilled in the art that the inventor had POSSESSION of the claimed subject matter as of the filing date.”

Ariad Practical Considerations : 

21 Ariad Practical Considerations Invention is not a “wish” or a “plan” For predictable sciences, written description need not go much beyond enablement For the chemical arts, written description needs to avoid undue experimentation If you don’t possess the invention in the unpredictable arts, consider waiting for more vetting of the idea

Wyeth and Elan Pharma v. KapposPatent Term Extension : 

22 Wyeth and Elan Pharma v. KapposPatent Term Extension No. 2009-1120, 2010 WL 27184 | Fed. Cir., Jan 7, 2010 Patent term calculations by the patent office took the longer of A time or B time Wyeth challenged the PTO interpretation of the statute

Wyeth Ruling : 

23 Wyeth Ruling The Federal Circuit agreed with Wyeth, noting that the statutory “language is clear, unambiguous, and intolerant of the PTO’s suggested interpretation.” A time and B time are additive, minus the overlap of actual calendar days Double counting is allowed and Wyeth received addition days of patent term adjustment

Wyeth Practical Considerations : 

24 Wyeth Practical Considerations The "A" time (prosecution history) is calculated after receipt of the Notice of Allowance.  If there are any errors in "A" time, a request for reconsideration must be filed with the USPTO by the time the issue fee is paid.  The "B" time (Wyeth - issuance taking place after 3 years) is calculated after receipt of the Issue Notification or patent.  If there are any errors in "B" time, a request for reconsideration must be filed with the USPTO within 2 months of issuance of the patent.

Boehringer Ingelheim Int’l v. Barr LabsTerminal Disclaimer Timing : 

25 Boehringer Ingelheim Int’l v. Barr LabsTerminal Disclaimer Timing 592 F.3d 1340 | (Fed. Cir., Jan. 25, 2010) Litigation of Parkinson drug patent from a family of other patents Patent asserted was challenged for obviousness-type double patenting Boehringer filed terminal disclaimer during litigation after related case was expired Patent in suit had over 4 years of patent term adjustment

Boehringer Ruling : 

26 Boehringer Ruling The ‘812 patent was found invalid because the terminal disclaimer could not cure the invalidity “By permitting the later patent to remain in force beyond the date of the earlier patent’s expiration, the patentee wrongly purports to inform the public that it is precluded from making, using, selling, offering for sale, or importing the claimed invention during a period after the expiration of the earlier patent.” 592 F.3d 1348 (Fed. Cir., Jan. 25, 2010) Retroactive disclaimer is not proper after enjoyment of the rights sought to be disclaimed

Boehringer Practical Considerations : 

27 Boehringer Practical Considerations Consider terminal disclaimers during prosecution as a matter of course for similar claim sets Do not pursue patent term adjust where a terminal disclaimer is present or needed Where there is a Examiner-precipitated divisional, a terminal disclaimer may not be needed

SEB S.A. v. Montgomery Ward & Co.Inducement : 

28 SEB S.A. v. Montgomery Ward & Co.Inducement Nos. 2009-1099, 2009-1108, 2009-1119, 2010 WL 398118 | Fed. Cir., Feb. 5, 2010 In developing its accused deep fryer, Pentalpha purchased an SEB deep fryer in Hong Kong and copied its patented "cool touch" features. In allowing SEB's inducement claim to reach the jury, the district court agreed with SEB that one could infer Pentalpha's specific intent to encourage infringement based on the allegation that Pentalpha failed to disclose to its attorney the fact that it copied SEB's product. The jury found that Pentalpha induced infringement and willfully infringed SEB's patent. Pentalpha moved for JMOL and a new trial, arguing that SEB did not adequately prove inducement under § 271(b).

SEB Ruling : 

29 SEB Ruling The Federal Circuit distinguished the "should have known" standard and the "deliberate indifference" standard: "Should have known" implies a solely objective test, whereas "deliberate indifference" may require a subjective determination that the defendant knew of and disregarded the overt risk that an element of the offense existed. "As courts have observed in a variety of settings, the standard of deliberate indifference of a known risk is not different from actual knowledge, but is a form of actual knowledge.“ A failure to inform one's counsel of copying would be highly suggestive of deliberate indifference in most circumstances Pentalpha did not produce any exculpatory evidence

SEB Practical Considerations : 

30 SEB Practical Considerations Deliberate indifference of a known risk is not different actual knowledge Make counsel aware of design around efforts Consider opinion on infringement where design around is happening

Therasense, Inc. v. Becton, Dickinson & Co.Inequitable Conduct : 

31 Therasense, Inc. v. Becton, Dickinson & Co.Inequitable Conduct 593 F.3d 1289 | Fed. Cir., Jan. 25, 2010 Patent for disposable blood glucose test strip Statements were made at the EPO inconsistent with interpretation of claim elements in at the PTO Expert signed a declaration for the PTO taking the inconsistent position

Therasense Ruling : 

32 Therasense Ruling Deceptive intent can be inferred where inconsistent information was known and withheld from the PTO Patent found invalid for inequitable conduct

Therasense Practical Considerations : 

33 Therasense Practical Considerations Coordinate foreign with domestic prosecution to avoid inconsistent argument Consider inconsistency of positions taken outside the US when prosecuting domestically Declarations filed in US should be done with great care to avoid inconsistencies

Thomas Franklin, Partnertdfranklin@townsend.com : 

34 Thomas Franklin, Partnertdfranklin@townsend.com Tom Franklin is a partner in the full service intellectual property (IP) firm of Townsend and Townsend and Crew ("Townsend"). Townsend is one of the largest firms specializing in IP with a 150 year history and nearly 200 lawyers in eight different offices. Mr. Franklin supports a national practice where he splits his time between the Townsend offices in Denver and San Diego. Tom Franklin uses IP protection to assist large companies maintaining their dominance and assist startups vying to dominate. With over a dozen years in private practice, Mr. Franklin specializes in strong patent protection for high tech companies in the electronic and software fields. He regularly performs due diligence, patent portfolio development, expedited patent protection, and other techniques to efficiently achieve his clients goals. Mr. Franklin received his law degree from University of San Diego after a B.S. in Electrical and Computer Engineering from San Diego State University (Class of 1990), summa cum laude. Prior to practicing law, Mr. Franklin spent eight years as an engineer with Hughes Electronics and a senior engineer with L3 Communications and Lockheed Martin. Practice Area Electronics & Software Denver Office 1200 Seventeenth Street Suite 2700 Denver, CO 80202 tel 303.571.4000 fax 303.571.4321 San Diego Office 12730 High Bluff Drive Suite 400 San Diego, CA 92130 tel: 858.350.6100 fax: 858.350.6111

Firm Profilewww.townsend.com : 

35 Firm Profilewww.townsend.com Townsend is among the largest firms specializing in patents, trademarks, and copyrights in the United States. As a full-service IP firm, we have the legal and technical expertise to handle every IP need. Most of our attorneys have technical degrees to complement their legal education, and many have advanced degrees and/or industry experience. Townsend has a 150 year history in focused on IP alone. The firm has 210 lawyers that all practice in the IP area. Offices in Denver, Palo Alto, San Diego, San Francisco, Seattle, Tokyo, Washington DC, and Walnut Creek.

Patent Web Resources : 

36 Patent Web Resources Patent and Trademark Offices Searchable databases of patents, publications, and trade/service marks US: www.uspto.gov or google.com/patents Europe: ep.espacenet.com Japan: www.jpo.go.jp Townsend and Townsend and Crew http://www.townsend.com

Questions… : 

37 Questions…

Thank you. : 

38 w w w . t o w n s e n d . c o m Thank you. San Francisco | Palo Alto | Walnut Creek | San Diego | Seattle | Denver | Washington, DC | Tokyo | www.townsend.com Intellectual Property Acquisition, Litigation and Counseling | Technology Transactions | Antitrust and Unfair Competition

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