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

knobbe.com
Protecting Your Intellectual Property
Cost Saving Techniques, Legal Updates & Best Practices
for Obtaining and Managing Patents Worldwide
March 2, 2017
Plug and Play Tech Center
Sunnyvale, 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
• John Carson and Andy Schwaab, Knobbe Martens, 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
12
Guidelines for Patent Examination, Part II, Chapter 1, Section 4.2, effective as
of April 1, 2017
• 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, effective as of April 1, 2017
• “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
• Part II, Chapter 10, Section 3.5, effective as of April 1, 2017
• 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
Community Trademark and Design
- Centralized and efficient
examination at EUIPO
- Protection in all 28 EU
member states
- Attractive pricing (similar to
US/twice DE trademark)
- Brexit presumably results in
transformation of UK part

National Patents in DE
Opposition Nullity ActionDE examination
@GPTO @GPTO
@Federal
Patent Court
Appeal Appeal
@Federal
Court of Justice
@Federal
Patent Court
@Federal
Patent Court
Appeal

European Patents
@GPTO @GPTO
@Federal
Patent Court
Appeal Appeal
@Federal
Court of Justice
@Federal
Patent Court
@local office
(38 + 6 states)
e.g. UK
e.g. DE
@Federal
Patent Court
Appeal
EP examination
@EPO
Opposition
@EPO
@EPO BoA
AppealAppeal
@EPO BoA
 Centralized examination and opposition
 Protection in up to 44 states, including
Marocco, Hong Kong and Cambodia

N
N
NEW: Unitary Patent and Unified Patent Court (UPC)
@GPTO @GPTO
@Federal
Patent Court
Appeal Appeal
@Federal
Court of Justice
@Federal
Patent Court
EP examination
@EPO
Opposition
@EPO
Validation
@local office
(38 + 6 states)
@EPO BoA
Appeal
e.g. UK
e.g. DE
@EPO (25 states)
EU (ex ES)
Nullity Action
@Unified
Patent Court
Appeal
@Unified
Patent Court
New
to be implemented
1 December 2017
Appeal
@Federal
Patent Court
Appeal
@EPO BoA

Brexit
- Brexit implications unclear
• UPC bound to Court of
Justice of the EU (CJEU)
• #2 goal of Brexit is to get rid
of CJEU
• UPC schedule optimistic
• Dr. Aloys Hüttermann:
• Unitary Patent and
Unified Patent Court
• 452 pages,
published 1/2017

patentable.com
20 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
Canadian prosecution can be deferred
and is often smooth

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)

Subject Matter Eligible For Patenting
• Section 101 – Broadly defines what is patentable
– “Whoever invents or discovers any new and useful process, machine,
manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefor….”
• U.S. Supreme Court – Some subject matter is not patentable under section
101
– Mayo Collaborative Services v. Prometheus Laboratories, Inc.
(2012): Natural Laws
– Association for Molecular Pathology v. Myriad Genetics, Inc. (2013):
Natural Phenomena
– Alice Corporation Pty. Ltd. v. CLS Bank International (2014): Abstract
Ideas (see also Bilski (2010))

What’s the Law?
• Test:
1. Is the claim directed to a judicial exception (Natural Law, Product of
Nature or Abstract Idea)?
2. Is there something more to transform the judicial exception into
patentable subject matter?
• The precise boundaries of the recent Alice Supreme Court decision are still
be determined.

Natural Laws: Mayo v. Prometheus
• Prometheus held that a correlation between a marker in the body and a
specific medical condition is a natural law
• Most medical diagnostic tests incorporate such a natural law

All Medical Diagnostic Claims Patent-Ineligible?
• No! Many claims recite “significantly more”
– “Unconventional” steps in the assay itself
– Use of “unconventional” equipment
• But, many diagnostic methods do not involve “unconventional” steps or
equipment
• Alternative strategy: omit diagnosis from claim, but remainder of claim
must be novel and nonobvious

Natural Products: AMP v. Myriad Genetics
• Supreme Court held isolated DNA was not significantly different from a
“product of nature”
• cDNA was held to be patent-eligible
– Man-made counterpart to mRNA
– Same genetic information, but chemical structure has minor difference

USPTO Implementation
• Reciting “isolated” not sufficient to make patent-eligible
• But, any products not actually found in nature are patent-eligible

Abstract Ideas
Section 101 – Alice

What’s the Law?
• Supreme Court did not define Abstract Idea
– Alice: “we need not labor to delimit the precise contours
of the ‘abstract ideas’ category in this case”
– Compare claims to those already found to be directed to
an abstract idea
– Fundamental economic and conventional business
practices are likely abstract ideas even if performed on a
computer
• What are the precise boundaries?
– Courts and Patent Examiners are presently applying
section 101 inconsistently

Strategies for Patent Eligibility
• Focus the claims and the specification on technical improvements to
computer technology or another field of technology
– Ideally, patent is a ‘technical solution’ to a ‘technical problem’
– Federal Circuit decisions DDR Holdings, Enfish, Bascom, and McRO
found claims to be eligible
• Analogize the claims to eligible claims in the Patent Office Examples
– PTO Guidelines
• Avoid Technology Center (TC) 3600, which examines “business
method” cases
– Amend Title, Abstract, Field of Invention and Claim Preambles to present
technical aspect of invention
– If the application is in TC 3600, always interview (may require amending
the claims)

Conclusion
• Patent-eligibility in US has gone from very broad to rather
constrained in less than four years
• For most inventions, there is a way to claim
– Requires careful application and claim drafting
– Critical to have support for back-up positions in
specification
– Applications without support for back-up positions may
have no way forward to grant
• Law evolving—these are still early days.

QUESTIONS?

BEST PRACTICES: COST-SAVING
TECHNIQUES

Thank you.
www.ryuka.com 36

37
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

38
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
39

40
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

41
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).

© 2012 Knobbe, Martens, Olson & Bear, LLP all rights reserved. 45
Criteria for Reaching Patent Filing Decisions
 What to file
– Multiple applications, e.g., those that cover the commercial
product, the entire relevant market, both?
 Who should participate in the filing decisions
– R&D, C-level, Marketing, IP Counsel, and Regulatory
 Where to file
– Where there is present or potential need (direct markets,
manufacturing locations, shipping destinations)

How to Streamline Costs
 You might determine “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
 Consider taking advantage of international and regional
conventions (PCT, EPO, etc.)
 Consider broader set of countries for key technologies

QUESTIONS?

BEST PRACTICES: BEST DRAFTING &
PROSECUTION PRACTICES

Thank you.
www.ryuka.com 49

50
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

51
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

52
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
53

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
54

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

Drafting Applications with Global Focus
• Provide support for US and foreign claims
• Recite several fall back (narrower) positions for all important
claim elements
• Provide support for all combinations of elements
• Consider patent-eligible subject matter in all jurisdictions
• US has three judicial exceptions
• Other jurisdictions’ exclusions are different (e.g., medical
treatment methods, biological organisms, and others)

QUESTIONS?

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

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