AMERICA INVENTS ACT: PATENT REFORM AND INVENTORSHIP STANDARDS

Carolina Innovations SeminarDecember 1, 2011

Mitchell S. BigelMyers Bigel Sibley & Sajovec, P.A.

Patent Lawyers919-854-1400

mbigel@myersbigel.comwww.myersbigel.com

ALSO KNOWN AS:

PATENT LAW IS HOT

PATENT LAW IS HOT

• Nortel Auctioned Patent Portfolio - $4.5B• Motorola Acquired by Google - $12.5B• Google Acquired Patents from IBM - $1B?• HP Acquired Palm - $1.2B• Kodak selling imaging patents to rescue itself• Pfizer facing massive losses as Lipitor patent set to

expire• America Invents Act – First Major Patent Reform Bill

Since 1952

AGENDA

1. Patents vs. Copyrights for Software2. America Invents Act

Patents vs. Copyrights for SoftwareCopyrights Patents

Subject Matter Tangible form of Expression:-Book-Art-Film-Song-Software

Invention:-Process-Machine-Product-Composition-Improvement

Basic Requirements for Protection

Original, tangible expression

-Useful-New-Non-obvious

Nature of Rights Prevent:-Copying-Distributing-Adapting-Displaying-Performing-Digital audio transmission

Prevent:-Making-Using -Selling-Offering for sale-Importing

Created by Fixation in tangible medium

Granting a patent by Patent Office

Duration Life plus 70 20 years from filing application

Is Software Copyrightable? Patentable?What’s the Difference?

Is Software Copyrightable?

• Yes in all forms:– Documentation– Packaging– Screens– Source Code– Object Code– User Interface

Is Software Patentable?

• Yes in almost all forms:– As a system– As a method– As a computer program product

Any software that has a practical application is potentially eligible for patent protection.

Abstract Idea

Laws of Nature

System

DiscoveryCopyright

10 0 010000011 SET TALK OFF111100100 *recvar=recno()110 PUSH MENU_MSYSMENU1100010 SET REPROCESS TO 0

Procedure

Idea

MethodPrinciple

Process

Patent

A Real World Example

1. A diagnostic/prognostic system for a physical system comprising: a plurality of sensors that are configured to repeatedly monitor variables of the

physical system during operation; a first associative memory; a novelty detection system that is responsive to the plurality of sensors and that is

configured to repeatedly observe into the first associative memory, states of associations among the variables that are repeatedly monitored during a learning phase, that is further configured to thereafter imagine at least one state of associations among the variables that are monitored relative to the states of associations that are observed in the first associative memory, to identify a novel state of associations among the variables, and that is further configured to determine whether the novel state is indicative of normal operation or of a potential abnormal operation;

a second associative memory that includes therein associations of attributes of failure modes of the physical system; and

a failure mode learning system that is responsive to the novelty detection system and to the second associative memory and that is configured to imagine attributes of the novel state relative to the associations of attributes of failure modes of the physical system to identify and/or predict a potential failure mode of the physical system.

CLAIM 1

Who is an Inventor? One who contributes to conception of claimed subject matter.

Who is an Author? One who translates an idea into a copyrightable expression.

Two Examples1. The “Real World” Example2. Biotech Example – “Inventorship Horrors”

Inventorship/Authorship Standards

Inventorship Horrors:

Shawna C. Lemon, Ph.D.

Inventorship Horrors

• If the inventive entity listed on an issued patent is incorrect and the patent cannot be corrected, the patent can be deemed invalid.

• If the patent is invalid, it cannot be enforced.

How Inventorship Problems Arise

Two scenarios:1. Naming a person who is not an inventor (misjoinder).2. Failing to name a person who is an inventor (nonjoinder).

Who Is An Inventor?

• One who contributes to conception of claimed subject matter.

• An exemplary case for how to determine inventorship:

Burroughs Wellcome Co. v. Barr Laboratories Inc., 40 F.3d 1223 (CAFC 1994)

Burroughs Wellcome (cont’d)

Facts:• BW tested AZT and several other compounds for antiretroviral activity in two

mouse retroviruses and subsequently prepared a draft patent application covering treatment of persons infected with HIV by using AZT.

• NIH scientists developed a test using live HIV through a line of T-cell clones that allowed the testing of compounds against HIV in humans.

• Two days prior to finalizing the draft patent application, BW sent a sample of AZT under a code number to the NIH for testing in its cell line noting BW’s results using the mouse retrovirus tests.

• The NIH found the sample (AZT) to be effective against HIV in its test and advised BW who soon thereafter filed the patent application in the UK naming the scientists at BW only as inventors.

Burroughs Wellcome (cont’d)

• In an infringement action, Barr Labs argued that the invention was not made until the NIH testing was done and that the NIH scientists who performed the tests were co-inventors. In Barr’s view, up to that point, conception of the invention was not complete.

• The court stated that each inventor had to contribute to the conception of the invention and this was complete when only ordinary skill is necessary to reduce the invention to practice without extensive research or experimentation-- The draft patent application was found to be ample evidence that the invention had been made without the contribution of the NIH.

• If an omission had been made with deceptive intent, the patents in question could have been invalidated.

Chou v. Univ. of Chicago254 F.3d 1347 (CAFC 2001)

• An exemplary case of failing to name a person who is an inventor (nonjoinder).

Facts:

• A graduate student and later post-doctoral research assistant informed her supervisor that her discoveries should be patented.

• The supervisor had already filed a patent application directed to the subject matter, began prosecuting the same and subsequently licensed an issued patent without disclosing any of these actions to Chou.

• The University did not follow up on its conclusions and statements to Chou regarding its inventorship analysis.

Nonjoinder—Chou (Cont’d)

• On appeal, Chou was found to have standing to sue for correction of inventorship.

• The court also reversed the dismissal of her claims of fraudulent concealment, breach of fiduciary duty, unjust enrichment and breach of implied contract against her supervisor as well as fraudulent concealment and breach of an express contract against the University.

Take Home Tips

1. Inventorship is not authorship.

2. Inventorship does not necessarily equate to ownership.

3. Take the time to assess inventorship early.

4. Assess inventorship when filing a continuation application, divisional application or canceling claims upon amendment.

5. Document, Document, Document!• Lab notebooks, witnesses

Hurdles in Obtaining a Patent

• Legal Standard– Utility/Patentable Subject Matter– Novelty - later– Non-obviousness - later

Novelty

• Not in the public domain (“prior art”)• Prior art can be patents, publications, grant

proposals, prior products, or any publicly disclosed devices or processes

• Prior art can be your work or someone else’s work

• An old idea, whose time has come, is not patentable

Nonobviousness• Not suggested by a prior art item or a combination of prior art

items to “one skilled in the art”• Prior art can be patents, publications, prior products, or any

other publicly disclosed devices or processes

Invention

Difference: Obvious to oneskilled in the art?

Prior Art Prior Art Prior Art Prior Art

Software IP at UNC

• Patent Rights are Generally Owned by the University• Copyrights are Generally Owned by the Author• Works Subject to Both Copyright and Patent Protection (e.g., much software)

– if OTD determines to retain title to patent rights, the copyright also is assigned to the university

• OTD works with Office of University Counsel to determine ownership of software

• See the OTD Website http://research.unc.edu/otd_policies.html• Ask OTD

America Invents Act (AIA)

• First Major Patent Reform Bill Since 1952– Far reaching– Balanced between patentees and defendants

AIA – The Big Changes• Switches to First-to-File System - later• Expands Scope of Prior Art - later• Expands Post-Grant Review of Issued Patents in

Patent Office• Allows Third Party Submission of Prior Art• Increases Patent Office Fees

Switch to First-to-File Patent System

to the

Effective March 16, 2013

First-to-Invent vs. First-to File

• First-to-Invent – X Wins Patent Rights – Must prove diligence

• First-to-File – Y Wins Patent Rights – Assumes no exception applies

X Conceives

Y Conceives

X Files Application

Y Files Application

X Reduces to Practice

January

March August

NovemberJuly

Impact of First-to-File

• Race to Patent Office• Harmonizes Law with Other Countries• Less Uncertainty Regarding Priority• Eliminates Interference Practice• Adds Derivation Proceedings• Increases Scope of Prior Art

Impact of First-to-File• Change Less Significant than Touted

– Foreign patents already governed by first-to-file– Not a true first-to-file system

Practice Changes Based on Switch to First-to-File System

• Expedite Invention Disclosures – Quicker submissions, approvals, and assignment to

outside counsel• Quickly File Provisional Application • Immediately Work to Prepare and File Regular

Application

Changes to What Qualifies as Prior Art

Effective March 16, 2013

Expansion of Prior Art

• Three Significant Expansions of the Prior Art– Temporal– Geographic– Foreign Patents

Prior Art

Temporal Expansion of Prior Art• First-to-Invent – Prior Art Based on Conception or 1-Year Before Filing Date

• First-to-File – Prior Art Based on Filing Date

Conception Filing

Prior Art

1-YearFiling

Filing

Prior Art

Reduction to Practice

Prior Art

Exceptions May Reduce Impact

• 1-Year Grace Period for Inventor Disclosures• Exceptions for Commonly Owned Patents and

Applications

Geographic Change to Prior Art

• Foreign Public Uses and Sales Now Prior Art– Old Law New Law

• Limited Impact as Use/Sale Art Hard to Find• Most Likely to Come Into Play in Litigation Against

Foreign Corporations

Expansion of Foreign Patent Art

• Foreign Priority Dates Now Considered in Determining if U.S. Patents are Prior Art

• Significantly Expands Universe of Prior Art• First-to-File Magnifies Effect

– Cannot prove earlier invention

Expansion of Prior Art

• Three Significant Expansions of the Prior Art– Temporal– Geographic– Foreign Patents

America Invents Act – Impact on Universities

• Universities Rock!• 75% Fee Discount for Micro Entities

– University Exception• Prior Use Defense Expanded

– University Exception

Prior Use Defense Expanded

• Old Rule -- Secret Uses Not Prior Art– Exception for business method patents

• Exception Expanded to Cover All Secret Uses

Practice Changes

• Expedite Invention Disclosure Process– Submission, approvals, assignment to law firms

• Routinely File Quick Provisional– Follow-up (3-months) with regular application– Remember my “real world example”?– Easier said than done for “unpredictable

technologies”

How to Handle the“Unpredictable Technologies”

Karen A. Magri, Ph.D.

Unpredictable Technologies

• In general, chemical (pharmaceutical) and biotechnology inventions are considered more unpredictable and therefore more disclosure is required in the patent application.

• Patent office may request evidence that invention works as claimed.

• Provisional applications: disclosure can be critical– Determines priority date for claimed invention– Heightened importance under the AIA (first to file, expansion of prior

art)

Disclosure Requirements

• Policy: the patent right should be commensurate in scope with what the inventor has given to the public

Must describe the invention: – So that others can make and use– To show that the inventors had “possession” of

the claimed invention– Cannot patent a “mere wish or plan”

The Enablement Requirement

• Enablement: application must provide enough guidance so that others skilled in the art can make and use the invention

• Test: Can one skilled in the art practice the invention without “undue experimentation”?

What is an Enabling Disclosure?

• Method of producing live nonpathogenic vaccines against any RNA virus or retrovirus. Evidence presented with one retrovirus (In re Wright)– Court held the claims were not enabled. Disclosure not

commensurate in scope with claims.

• Invention directed to compounds for treating tumors. Applicant presented evidence of anti-tumor activity in two animal models. – Court held that the claims were enabled. The animal models were

recognized as relevant tumor models. Clinical testing in humans not required (In re Brana).

Written Description • The application must provide a clear written

description of the invention so that those skilled in the art will appreciate that, at the time of filing the application, the inventor had possession of the claimed invention.

• Can be difficult for unpredictable arts: heightened disclosure requirement acts to limit claim scope.

U. of California vs. Eli Lilly, 119 F.3d 1559 (CAFC 1997)

• Patent claimed a cDNA encoding human insulin

• Application disclosed cDNA for rat insulin and a method of identifying human cDNA based on rat cDNA.

• Court invalidated claims on the basis of no written description of the claimed human cDNA.– Patent only described a “mere wish or plan”– Cannot claim something by what it “does” rather than by

what it “is.”

Disclosure Take Home Tips

1. Brainstorm your invention prior to filing

2. Describe as many ways of practicing your invention as you can conceive in a concrete way

3. Describe broad, intermediate and narrow ways of practicing invention

4. Describe “back up” positions in the application

Take Home Tips (cont’d)

5. Provide more disclosure for unpredictable aspects

6. Describe structural and functional characterization of claimed compounds, nucleic acids, proteins and other reagents

7. Disclose representative number of examples

8. Data in relevant animal models for claims to therapeutic and diagnostic methods

AIA – The Big Changes• Switches to First-to-File System• Expands Scope of Prior Art• Expands Post-Grant Review of Issued Patents in

Patent Office• Allows Third Party Submission of Prior Art• Increases Patent Office Fees

You may be thinking…

• How will AIA help American entrepreneurs and businesses?

• How will AIA create new business and new jobs?

• Who will benefit?– Multinationals– Patent lawyers

A great summary of AIA

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Myers Bigel Newsletter on the Leahy-Smith America Invents Act

AMERICA INVENTS ACT: PATENT REFORM AND INVENTORSHIP STANDARDS

Carolina Innovations SeminarDecember 1, 2011

Mitchell S. BigelMyers Bigel Sibley & Sajovec, P.A.

Patent Lawyers919-854-1400

mbigel@myersbigel.comwww.myersbigel.com