Protecting Your Intellectual Property: Cost-Saving Techniques, Legal Updates & Best Practices for Obtaining and Managing Patents Worldwide (San Diego)

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ProtectingYour Intellectual Property
Cost Saving Techniques, Legal Updates & Best Practices
for Obtaining and Managing Patents Worldwide
February 28, 2017
Knobbe Martens
San Diego, CA

2©2017 Knobbe, Martens, Olson & Bear, LLP – All Rights Reserved.
About Us
• Seven offices nationwide, in CA (5), DC, and WA
• More than 300 attorneys and scientists representing the complete
spectrum of technologies and IP practice areas
• Highest number of registered patent attorneys in the United
States – more than 200
• Over 95% of attorneys hold technical degrees
• Global practice through large network of foreign IP firms
• Continuous team throughout lifecycle of patent portfolio,
spanning from development to litigation
• Compensation structure cultivates a collegial atmosphere focused
on high quality of service
• Attorneys motivated to match clients with an attorney/scientist
team custom built to deliver success

Our Advantages for Startups & Early Stage Co.’s
• The firm was founded in California and has more than a half century
experience representing local companies
• We recognize that different companies have different financial resources
and we can tailor our services and relationship accordingly
• Since there may be no in-house counsel we can be a team partner which
requires us to be flexible to adapt to rapid changes in the company and
communicate creative solutions and options as the company scales
• We have deep bench of professionals who offer a wide range of billing
rates and talents who can be accessed as issues arise with growth
• We will invest our own time to understand your business and the
competitive environment so that we better serve your legal needs
• Team approach allows much of the work to be done at lower billing
rates, while senior team members assure top quality and strategy
• We have existing IP information, materials and checklists on hand
• No charge for secretarial time, phone charges, travel to clients

Firm Practice – All Areas of IP
• IP Strategy
• Patents
• International IP
• IP Transactions & Agreements
• Trademarks and Brand Protection
• Litigation
• USPTO Trials and Post-Grant Proceedings
• Copyrights
List of representative clients available upon request

©2012 Knobbe Martens, Olson & Bear, LLP all rights reserved.©2017 Knobbe, Martens, Olson & Bear, LLP – All Rights Reserved. 5
Agenda
• GLOBAL UPDATES
• BEST PRACTICES: COST-SAVING
TECHNIQUES
• BEST PRACTICES: BEST DRAFTING &
PROSECUTION PRACTICES
Speakers
• Aki Ryuka, Ryuka IP, Japan
• Stephen Yang, Chofn IP, China
• Guido Quiram, Michalski Hüttermann, Germany
• Gavin Manning, Oyen Wiggs, Canada
• Kim Miller, Knobbe, USA

For copies of the Akihiro Ryuka’s slides (our
Japanese representative from Ryuka IP), please
contact info@ryuka.com directly.
Thank you.
www.ryuka.com 6

7
Current Situation
• Difficult to collect evidence
• Damages not high enough to create deterrence

• When infringement is found by court, but
• Evidence in possession of the alleged infringer, e.g.
accounting books and/or other information
• Court can ask the defendant to produce evidence
• Defendant not cooperative
– damages determined with reference to plaintiff’s claim
and evidence
• A good strategy to claim higher? 8
Daft 4th Amendment
- Evidence Collection by Courts

Daft 4th Amendment
- Punitive Damages Awarded by Court
• Introduction of the concept of willful infringement
• Up to 3 times of that of non-willful infringement
– Patentee’s loss
– Infringer’s gain
– Multiples of royalties
• Up to 5 million (US$769,000) RMB in the case of statutory
damages
• Current: limited to 1million RMB
9

Joint Infringement
• Introduction of the concept of joint infringement in the 4th
amendment
• Joint infringement:
– knowingly provide to infringer, raw materials, intermediate materials,
parts or equipments specially used to exploit a patent
– induces another party to conduct patent infringing acts
– an internet service provider knows or should have known or is notified
that its user infringes or passes off a patent using its internet service,
but does not take necessary measures to curb it
10

11
Design Patent
• Partial design currently not allowed
• Graphic User Interface (GUI) can be protected by design patent
– But only together with the complete product
– protection of GUI, independent of the product, currently not possible
• 4th amendment of the patent law to allow partial design
• 4th amendment of the patent law to extend design patent term
to 15 years

Business Methods – Proposed Change
12
Guidelines for Patent Examination, Part II, Chapter 1, Section 4.2
• If a claim related to business model has
• features of business rules and methods; and
• technical features
• Such a claim shall not be excluded from patentability under
Article 25.1(2)
• Not rules & methods for mental activities
• Practice tip:
• include “technical features” in a claim related to business
method
• claims need to have technical improvement

Computer Program Related Claims
13
• Part II, Chapter 9, Sections 2
• “Computer readable medium + computer program” format
will be allowed
• A computer readable medium, with computer program/instruction
stored therein, wherein the program/instruction performs the
following steps when executed by a processor…
• Computer program related claims will be allowed to have both
hardware features and software features.
• A communication system comprises a memory and a processor
configured to execute the instructions stored in the memory, wherein
said instructions comprise ...
• Becomes same as the US practice

Chemical Inventions – Supplement Data
• Supplemented experimental data after filing data
– allowed
– cannot be used to fulfil sufficiency requirement
– can be used to prove technical effect and thus support inventive step
• Technical effects must be present in/obtainable from the
original disclosure
• Practice tips:
– Include as many technical effects as possible in the original disclosure
14

M I C H A L S K I H Ü T T E R M A N N
P A T E N T A T T O R N E Y S
A new (Pharma) Patent Troll in the EP System

Art 56 EPC: “If the state of the art also includes documents within the
meaning of Art 54 (3) EPC, these documents shall not be considered in
deciding whether there has been an inventive step”
Art 54 (3) EPC documents are pre-filed, post-published EP applications
(“published on or after that date”)
Applicant A
files International
Application A
International Application A
is published (morning hours)
Troll downloads application A,
copy-pastes it, adds trivial
novelty features and files 2nd gen.
EP application B the same day
18 months
Patent A granted
(novel & inventive)
2nd gen. EP application B
automatically novel and inventive
(for EP, application A does
not count for inventiveness)

Case Study
- WO 2013/016155 with pending EP regional phase assigned to
ChemoCentryx, Mountain View, published on 31 January 2013
- Title and claims: „Polymorphic forms of the sodium salt of 4-tert-
butyl-n-[4-chloro-2-(1-oxy-pyridine-4-carbonyl)-phenyl]-
benzenesulfonamide“
- Discloses tablets, vials, etc., but no packaging unit
- EP 2740458 B1 of troll with (latest) priority date 31 January 2013
and granted claim 1:
• A packaging comprising a multitude of at least 2 administration units
comprising polymorphic trihydrated, solvated or desolvated form of
sodium salt of 4-tert-butyl-N-[4-chloro-2-(1-oxy-pyridine-4-carbonyl)-
phenyl]-benzenesulfonamide, or …
- Incorporates WO 2013/016156 (and 15 APIs of further WOs)

„Directed“ against Pfizer, Roche, Novartis, Merck etc.
The pipeline:

Light at the end of the tunnel

Remedies
- Art 54 (3) EPC could be amended to “state of the art shall …
comprise everything made available to the public … before or on
the date of filing of the European patent application” - unlikely
- Rule 64 PCT has a similar regulation (“prior to the filing date of the
international application”)
- WIPO could publish in the evening hours instead of morning hours
- EP opposition unlikely to be successful (illegitimate ownership or
“bad faith” is not a ground for opposition in EP)
- Entitlement can be clarified on national basis (action for vindication)

Further Remedies and other Jurisdictions
- Add omnibus clauses covering trivial 2nd generation embodiments to
the application (may end up in a „cat-and-mouse game“ with troll)
- Publish application one day prior to WIPO, e.g. on internet platform
or in a publicly accessible room, and care for proper documentation
- In US, troll approach does not work: Under § 102 (a) (2) post AIA,
pre-filed, post-published patent applications qualify as fully
applicable prior art, even for questions of inventive step
- In DE, troll approach would work: Under § 3 (2) PatG pre-filed,
post-published (…) applications only count for novelty
- So, is troll‘s behavior illegitimate or simply exploiting possibilities law
provides?

patentable.com
22 Protecting your Intellectual Property
Canada is a Good Place to File Patent
Applications

patentable.com
Canadian trade with the United States
is Huge – Integrated Market
• >$2 billion a day in goods and
services
• NAFTA Member
• Relatively large economy
Among the least expensive countries
to file and prosecute patent
applications
Sometimes Canada is one of the only
places you can file:
• 12 month grace period
• 42 months for PCT national phase
entry

patentable.com
RECENT DEVELOPMENTS
CIPO is relaxing its position regarding
patentability of computer-based
inventions.
• If invention can be characterized
as addressing a “computer
problem” vs. merely doing
business using a computer
Methods for diagnostic medical
testing are still facing serious obstacles
Note: Methods of medical treatment
are NOT patentable in Canada (this is
not new)

Guidelines on Subject Matter Eligibility
• Claims must be given broadest reasonable interpretation.
– Step 1: Is the claim related to a statutory category (i.e., a process,
machine, manufacture or composition of matter?)
• NO – claims is not eligible subject matter
• YES – Proceed to Step 2A
– Step 2A: Is the claim directed to a law of nature, a natural
phenomenon, or an abstract idea (judicial exceptions)?
• NO – claim qualifies as eligible subject matter
• YES – Proceed to Step 2B
– Step 2B: Does the claim recite additional elements that amount to
significantly more than the judicial exception?
• NO - claims is not eligible subject matter
• YES - claim qualifies as eligible subject matter

Life Science Subject Matter Eligibility Updates
• 2016 USPTO Subject Matter Eligibility Guideline - Natural Product
– Compare:
• (Ineligible) A vaccine comprising: Peptide F (a natural product),
and a pharmaceutically acceptable carrier.
• (Eligible) A vaccine comprising: Peptide F, and a
pharmaceutically acceptable carrier selected from the group
consisting of a cream, emulsion, gel, liposome, nanoparticle, or
ointment.
• (Eligible) A vaccine delivery device comprising a microneedle
array that is coated with a vaccine comprising Peptide F.
– Take Home: claimed nature-based products have markedly different
characteristics from what exits in nature; or recites an unconventional
device that amounts to significantly more than the exception.

Life Science Subject Matter Eligibility Updates
• 2016 USPTO Subject Matter Eligibility Guideline - Diagnosis and Treatment
– (Eligible) A method of detecting JUL-1 in a patient, said method comprising:
a. obtaining a plasma sample from a human patient; and
b. detecting whether JUL-1 is present in the plasma sample by
contacting the plasma sample with an anti-JUL-1 antibody and
detecting binding between JUL-1 and the antibody.
– (Ineligible) A method of diagnosing julitis in a patient, said method
comprising:
a. obtaining a plasma sample from a human patient;
b. detecting whether JUL-1 is present in the plasma sample by
contacting the plasma sample with an anti-JUL-1 antibody and
detecting binding between JUL-1 and the antibody; and
c. diagnosing the patient with julitis when the presence of JUL-1 in the
plasma sample is detected.
• Take Home: Process claims that touch upon a natural law or phenomenon may
avoid invoking Step 2A analysis if "the end result of the process, the essence of the
whole” is not directed to the law of nature or natural phenomenon.

QUESTIONS?

BEST PRACTICES: COST-SAVING
TECHNIQUES

Thank you.
www.ryuka.com 31

32
PCT National Phase Entry
• 30 months from the earliest priority date
• 2 months extension available
– no action needed by the end of 30 months
– extra fees required - please decide early
• Translation must be filed upon national phase entry
– Prepare translation early to avoid rush fee
• Extra claim fees
– calculated on the basis of the WO publication
– reduce no. of claims at national phase entry will NOT reduce cost
– include a small number of claims upon filing

33
Voluntary Amendment
• Only two chances of filing voluntary amendment
– at the time of request for substantive examination
– 3 months from receipt of Notification of Entering Substantive
Examination Procedure
• No voluntary amendment allowed in response to OA
– only to address issues raised in the OA
– If different claims are to be pursued at this stage, only option is to
file divisional applications - more costly
• Don’t miss the chances
• For Paris Convention applications or first filings
– file a small number of claims
– use voluntary amendment to change the claims to be examined
– need to ensure literal support to the amended claims

Office Actions - Interviews
• Not possible before 1st OA
• In person interview rarely granted
• Telephone interviews often used
• Useful to sound out examiner’s opinions, to reduce office
actions
34

35
Second Tier Patent Rights
• Utility Model Patent and Design Patent
– Shorter term: 10 years vs 20 years (invention: equivalent to utility
patent)
– No substantive examination
– Faster and cheaper to obtain
– Equally effective in enforcement
– Ideal for protecting products with shorter lifecycle
• Utility model Lower threshold on inventive step
– Easier to get, more difficult to invalidate
– Limited to products only

36
Financial Incentive Program
• Available to Chinese individual or entity, including Chinese
subsidiaries of foreign companies
– applications must be filed in the name of the business entity
established in China, i.e. Chinese subsidiary
• Central government subsidies
– National patents: covering official fees, possibly attorney fees;
– PCT and Paris Convention applications: Covering official fees and
attorney fees for up to 5 countries with a limit of RMB100,000
(USD15,000) per country
• Local governments / high tech parks have additional programs
• High tech company status
– Must have certain number of patents as one of the criteria
– Enjoy preferred tax rate

Best Practices – Current Cost-Saving Techniques
- Complying with EP (and DE) practice often #1 cost saver
• EP is a very formalistic system and in various aspects
different to other jurisdictions
- EP allows protection in three continents (EP, Hong Kong,
Morocco and Cambodia) – national filing e.g. DE is cheaper
• Will your competitors have different products for different
European countries?
- Expedite EP proceedings
• Early entry, waive Rule 161 EPC, PACE or PPH requests
(each at no official fees)
• Avoid (heavy) EP claim fee by amending claims prior to
EP filing
• File EP application with at least „novel“ independent claims

Best Practices – Future Cost-Saving Techniques
- Unitary Patent and Unified Patent Court about to start 12.2017
• Gives you protection in ≥ 14 countries at the (annual) cost of
4 countries
- Will you opt-out your EP patents?
• If not, (maximum) cost re-imbursement in litigation:
0 €
200,000 €
400,000 €
600,000 €
800,000 €
1,000,000 €
1,200,000 €
Vertretungskosten DE
erstattbare Kosten UPC
DE
UPC
Value at dispute

patentable.com
Cost-Saving Techniques
• File a high quality application in the first place
• Know the prior art;
• Avoid drafting errors;
• Good drawings;
• This applies to ALL jurisdictions.
• Defer Examination
• Can wait up to 5 years from Canadian filing
date
• Amend claims based on prosecution in other
places
• Pay multiple maintenance fees at once
• Claim “small entity” status (but be VERY careful)
• < 50 employees or university or non-profit entity
• Patent invalid if wrong fees paid
• Recent case – wrong fee paid during
prosecution did not invalidate patent (do not
rely on this).

Strategies for “Cost-Effective” Patents
• Identify the role of this IP
• Coverage for that role
• Cost shifting vs. Streamlining costs

High Level Cost Considerations
• What’s the role of the patent?
– A single patent covering commercial product
– Overlapping scope with relevant market
– A practical multiple approaches: multiple patents
that covers both the commercial product and also
the entire relevant market
• Coordinate IP strategy with C-level, R&D, Marketing,
IP Counsel, Regulatory, and Protects/Websites
• File where there is present or potential need

Cost Shifting vs. Cost Savings
• Reducing vs. Delaying Costs over the 3 stages
– Pre-PCT filing (first year)
– Prosecution Term (1 year to 5 years)
– Post Issuance (5-20+ years)
• Less ability to “fix” issues as time progresses
• Cheaper to address, in long run, if handled earlier
• Risk/added cost of changing the approach

How to Streamline Costs
• Invention disclosure forms
• Internally, companies can provide:
– Description of the invention and market
– Description of possible modifications and design
around
– Examples
– Figures (no text, no color)
– Initial assignment and/or declaration
– Collection of references

How to Streamline Costs
• Have “standard” countries to pursue
– Sets expectations for costs and timing (translations, local
requirements, etc.)
– Sets needs and requirements for drafting
• Preferred claim/support for jurisdictions
• Restriction/lack of unity approaches
• Use “role” of the IP to help determine where to file
– Geographical - where is there a need (& surroundings)?
– Where is it made or performed?
– Exit strategy/license
– Enforcement

QUESTIONS?

BEST PRACTICES: BEST DRAFTING &
PROSECUTION PRACTICES

Thank you.
www.ryuka.com 47

48
Novelty
• Absolute novelty
– worldwide disclosure is novelty destroying
– Publication, public use, etc.
• Definition of ‘disclosure’ different from U.S.
– technical solution must be in public domain
– sale, lease, exhibition (public use) not necessarily disclosure
– must be approached case by case
– the technical solution must be in a state accessible to the public
– no on sale bar
• Your application may lost novelty by US standard but it may
still be good for China

49
Divisional Application (1)
• No restriction on:
– number of divisional apps
– number of generations of divisional apps
– what can be claimed in a divisional
• No divisional can be filed, if
– parent application is issued, rejected or withdrawn
• Deadline for filing divisional apps
– within 2 months from receipt of Notice of Grant for parent
application

50
Divisional Application (2)
• Divisional from divisional
– voluntarily filing, deadline counted on the basis of parent
application (very first generation)
– Divisional lack of unity, deadline counted on the basis of the
previous generation divisional
• Practice Tip:
– always deliberately make divisional lack of unity, keep option open

Office Actions - Common Knowledge
• Examiners often regard distinguishing features as common
knowledge
• Possible solution
– Request examiner to provide evidence (examiners often not
cooperative)
– Argue that the distinguishing features have different object, solve
different problem and/or have different function
– Argue that the reference teaches away from the present invention
– Argue that one skilled in the art could use the distinguishing features
but would not do so
• Could- Would, no motivation
51

Functional Limitation
• Avoid functional limitations in your claim
– in prosecution, considered as covering all possible manners
– more vulnerable to novelty objections
– In litigation, possible narrower interpretation
52

Added Subject matter
• Chinese practice extremely strict regarding making
amendments
– Change of typo: from 1,000℃ to 100 ℃ --- NOT allowed
• Avoid using very generic term and very specific terms in
description
• Add intermediate generalization terms
• Include as many technical effects as possible
– Supplement data to support inventive step
– Technical effects must be present in the original disclosure

Best Practices - Best drafting & Prosecution practices
- Have a thoroughly drafted application, prepared for EP filing
• Use clear, concise terms; no alternate expressions
• Have a “general” description instead of describing single
embodiments
• Only one independent claim per category
- Make amendments compliant to EP requirements
• Ideally have a literal disclosure basis for your amendment
and provide disclosure basis
• No intermediate generalizations
• Be careful with deletion of features in independent claims
• File main and auxiliary requests, call the examiner
- Sent instructions early ahead of the deadline, such that EP
counsel can review and propose alternatives

patentable.com
Sound Prediction
• For ‘unpredictable’ technologies
(e.g. bugs / drugs) must disclose in
the patent application a factual
basis for predicting utility (i.e. that
the invention will work) and also a
sound line of reasoning supporting
the prediction.
• This has even been applied in a
mechanical case.
• Solution: include data and
reasoning in appropriate cases.

patentable.com
“Promise” Doctrine
• A Canadian patent may be
invalidated if:
• The patent contains a ‘promise’
regarding the utility of the
invention; and
• The promise is not fulfilled.
e.g. patents for Eli Lily’s drugs
Zyprexa and Strattera invalidated
for failing to provide promised
utility resulting in NAFTA
challenge.
• Solution: avoid ‘promises’.

patentable.com
Double Patenting
• Prohibition on two patents for the
‘same’ invention.
• No good way to fix.
• Can be an issue where:
• Parent and C-I-P filed in US and
applications corresponding to
both are filed in Canada
• Two or more applications
directed to different but related
inventions are filed in Canada
for some strategic reason
• Solution: assert all related claims in
one application, avoid filing
separate overlapping applications
where possible.

patentable.com
Claiming Styles
Canada allows:
• US-style claims
• European-style claims
• Multiply-dependent claims
• No government fees for excess
claims

Domestic Drafting & Prosecution Practices
• Provisional application
– Sufficient disclosure to support the priority date
– Consider filing rolling provisional(s) if new invention disclosure are
made available within 1 year from filing
– Execute assignment to ensure entitlement of priority
– Be mindful of possible public disclosure prior to provisional filing
date
• conferences, scientific publications, clinical trials, etc.
• no grace period in most of the world, including EPO
• Grace period is available in certain countries (such as JP and KR)
but requires advance notice
• Non-provisional application
– Consider contacting your outside patent counsel in advance to
update the application if improvements are made
– Execute assignment and inventor declaration sooner than later

International Drafting & Prosecution Practices
• PCT
– Currently has 151 contracting states (as of February 2017)
– Delay the cost and decision for national phase filing to up
30/31 months (or to up 18/19 months if claim priority to a
provisional application)
– Consider prosecution at the PCT stage to streamline/expedite
national phase prosecution
• Direct Filing
– Non-PCT contracting states: Taiwan, South America
(Argentina, Bolivia, Paraguay, Uruguay, Venezuela), and
Middle Eastern (GCC)
– Upfront costs including translation and other formality
requirements

Tools for Accelerating Patent Procurement
• Track One Request (Prioritized Examination)
– Average pendency from filing to allowance = 6.5 months
– Cumulative allowance rate (through 01/17) = 44.9%
• First Action Interview Pilot (FAIP)
– FAIP first action allowance rate = 31.1% (versus 17.6% in new-
continuing application)
• After-Final Consideration Pilot Program 2.0 (AFCP 2.0)
– Must submit an amendment to at least one independent claim that
does not broaden the scope of the independent claim
• Pre-Appeal Brief Conference Pilot Program
• Patent Prosecution Highway Program (PPH)
• Cancer Immunotherapy Pilot Program (Patents 4 Patients)

QUESTIONS?

Protecting Your Intellectual Property: Cost-Saving Techniques, Legal Updates & Best Practices for Obtaining and Managing Patents Worldwide (San Diego)

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