The New Patent Law: What Should Management Do Now?
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Transcript of The New Patent Law: What Should Management Do Now?
February 1, 2012NOT LEGAL ADVICE
(C) 2012 Ted Sabety All Rights Reserved
“The New Patent Law: What Should Management Do Now ?"
Ted Sabety (Moderator)
February 1, 2012NOT LEGAL ADVICE
(C) 2012 Ted Sabety All Rights Reserved
• Fundamentally Changed the U.S. Patent Statute.
• Enacted September 16, 2011• Effective Dates are Staged• These changes have business strategic
implications for technology companies.
“American Invents Act”
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Focus on Four Aspects• First to File Wins the Race
• Trade Secret Dynamic Changes
• Some Inventions Ineligible
• More Third Party Involvement in Prosecution Process
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First Inventor to File• The First Inventor to File a Patent
Application on an Invention gets the Patent over the earlier inventor who files later.
• Getting a Filing Date becomes even more critical.
• Effective March 16, 2013.
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First to File Moves Up Prior Art• Any public use, sale or disclosure of the
Invention before the filing date is prior art. • Or described in a competing patent
application filed before the filing date.• Expands prior art to anything around the
world, not just the US.
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What’s Left of the One Year Grace Period?
• Exception: Inventor has a one year grace period for “disclosures” either “made by the inventor” or “another who obtained the subject matter ... from the inventor....”
• OPEN LEGAL QUESTION: does “disclosures” include “public use” or “sale” ?– “Textualist” Supreme Court might say “no.”– House Report doesn’t say. (See pg. 40-43).– Orrin Hatch cryptically said yes.
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Trade Secrets in Balance with Patents
• Always a strategic tension between maintaining a trade secret and filing for a patent:– Disclosure to the public with the risk of either
no patent issuing or patent invalidity vs:– Risk of reverse engineering or independent
invention.
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Prior User Defense• “Prior User” refers to a trade secret user who
decided not to file a patent.• The “Prior User” cannot be liable if a first filer
obtains a patent over the same invention.• Caveats:
– Use must be over 1 year prior to the later filing date.– On going, bona fide use in the United States.– Personal to the entity practicing.– Doesn’t apply to University or Federally funded
inventions.
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Lack of “Best Mode” will not Invalidate
• The “best mode” is typically the valuable trade secret: the “secret sauce.”
• The patent disclosure must include a description of the “best mode” of practicing the invention.
• Now, there is no basis to bring an invalidity claim for failure to disclose the “best mode.”
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Some Inventions Ineligible:• Tax preparation or tax strategy patents• Patents encompassing a human organism• Limitations on “business method” patents.
– Precludes financial transaction inventions– It may also preclude other computer related
inventions.
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Third Party Involvement• Third party submission of prior art during
prosecution is now permitted and the art will be considered.
• Post Grant Review proceedings:– Post Grant Review (estoppel applies)– Inter Partes Review (estoppel applies)– Ex Parte Reexam
• Supplemental Examination– Permits attorney to repair prosecution problems.
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Strategic Concerns• How will IP management practices change?• How will product announcement, beta-testing or product
roll-out timing change ?• Are there things small companies should be doing that
are different from large companies ?• How much more should companies expand their
involvement in their competitor’s patent prosecution processes?
• Can we expect new kinds of contractual terms in licenses?
• How will this affect risk allocation in acquisitions?• What new things should small companies be doing to
maintain their IP attractiveness to larger companies?
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Our Panel
• Manny W. SchecterChief Patent CounselIBM Corporation
• Peter C. Schechter PartnerEdwards Wildman Palmer LLP
• Ted Sabety (moderator)PrincipalSabety +associates, PLLC
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