A Publication of Volpe and Koenig, P.C.

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1 Fall 2011 The Intellectual Property ins i d e r A Publication of Volpe and Koenig, P.C. Inside this Issue Practice Pointers for Dealing with the New Patent Reform Bill Choose Your Own Adventure: Why Litigating in the ITC May be Beneficial over the Federal Court System...4 Firm News...6 Volpe and Koenig Teams Up for Community Service...6 Volpe and Koenig in the News...7 Volpe and Koenig Announces 2011 Giving Fund Recipients...8 Practice Pointers for Dealing with the New Patent Reform Bill By: Melissa D. Doogan, Jonathan G. Lombardo, Joseph E. McNamara, Turhan F. Sarwar, Linda X. Shi and Anthony L. Venezia The Leahy-Smith America Invents Act ( AIA ) was signed into law on September 16, The overall intent of the AIA is to more closely align U.S. Patent Law with that of other industrial nations, as well as to improve the quality of patents, and reduce the current backlog. The new law will certainly have an impact on patent strategies for most companies, inventors, and litigants. Everyone with an interest in intellectual property law should be mindful of the following current and future changes in patent law as a result of the AIA. First-Inventor-to-File System The AIA eliminates the First-to-Invent filing system and establishes a First-Inventorto-File system. The new filing system applies to any patent having an effective filing date on or after March 16, Because the first to invent system is being abolished, any consideration of conception, diligence, and reduction to practice will be irrelevant to patentability. Abandonment, suppression, and concealment will also no longer be relevant. And, the new system does not provide an ability to overcome prior art by swearing behind it. It is more important than ever for inventors to file as early as possible in order to establish the earliest possible effective filing date. Filing early mitigates the risk that a competitor with substantially the same invention might establish an earlier effective filing date. The new system is likely to increase the use of provisional patent applications, particularly for inventors that cannot afford the cost of a regular (non-provisional) patent application.

2 It is important for a patent practitioner to discuss with a client at the very onset of an attorney-client relationship a time frame for filing applications and to document the cause of any delay that may occur to avoid any future misunderstanding. Derived Inventions The AIA modifies the existing law governing interferences, where an inventor named in a patent or application is alleged to have copied the invention from another inventor who has patented or is attempting to patent the same invention. The current interference proceedings will be replaced with derivation proceedings. The current Board of Patent Appeals and Interferences ( BPAI ) will be replaced by the Patent Trial and Appeal Board ( PTAB ). These changes are effective on March 16, Patent applicants and owners should monitor competitors recently published and issued applications and patents for similar or identical claims that may have been derived. Post-Grant Review The AIA provides a person who is not the owner of a patent an opportunity to file a petition to institute a post-grant review of the patent on any ground of invalidity (such as 101, 102, 103, 112). The petition must (a) must include information demonstrating that at least one claim in the patent is more likely than not unpatentable, or (b) must raise a novel or unsettled legal question important to other patents or patent applications. The PTAB conducts the post-grant review and must render a decision within an 18-month period. The patent owner may amend one or more of the patent claims by cancelling claims or proposing substitute claims with narrowing scope. This provision is effective on September 16, The post-grant review provides a means for attacking a competitor s new patent similar to post-grant opposition proceedings in other countries. In order to meet the 9-month time limit, clients should be vigilant in tracking progress of competitor patent applications in the pipeline to spot a patent ripe for postgrant review. Compared to reexamination, the post-grant review encompasses a larger scope of review and lower burden of proof. The post-grant review petition can be supported by patents, printed publications, as well as supporting factual or expert opinion evidence. In contrast, reexamination is limited to consider only patents and printed publications. The post-grant review may consider a claim deemed invalid for unpatentable subject matter (i.e., 35 U.S.C. 101) and as being indefinite (i.e., 35 U.S.C. 112), unlike reexamination which can only be performed in view of prior art. The post-grant review need only meet a standard that one claim more likely than not is unpatentable, while a reexamination request must raise a substantial new question of patentability. Third-Party Submissions The AIA provides new rules allowing third-parties to submit materials to the United States Patent and Trademark Office ( USPTO ) to be considered in pending applications or placed in the record of issued patents. These changes are effective on September 16, Patent owners should be cautious when making statements regarding claim scope in USPTO and court proceedings. Those statements and additional related documents may be submitted by a third-party and used by the USPTO 2 Fall 2011 Insider Volpe and Koenig, P.C.

3 for claim construction if the patent is later subjected to reexamination under 35 U.S.C. 304, inter partes review under 314, or post-grant review under 324. Businesses may wish to monitor competitors pending applications and issued patents to submit prior art as an offensive strategy, especially if it is foreseeable that those patents may be asserted against one in the future. However, note that confidential submissions are not permitted for pending applications. They are only permitted for issued patents. Prioritized Examination The AIA has created a Prioritized Examination procedure, which provides for the expedited review of patent applications for an additional fee. New applications that are filed with a Request for Prioritized Examination and a request fee are entered into the Prioritized Examination procedure. The goal of the USPTO is to provide final disposition (e.g., allowance or final rejection) for prioritized applications within one year. Prioritized Examination went into effect on September 26, If an applicant wishes to expedite the prosecution of an application, the applicant should consider the Prioritized Examination process. While the fee for Prioritized Examination is steep, Prioritized Examination has a number of advantages versus the other mechanisms that are available for expediting prosecution. In many circumstances, Prioritized Examination may prove to be a smart option for quickly obtaining patent protection. Applicants seeking to take advantage of Prioritized Examination should act quickly, before the initial limit of 10,000 applications is reached. Changes in Fees The AIA granted the USPTO with authority for 7 years to set or adjust its own fees, subject to Congressional oversight. The AIA also created Public Advisory Committees to review USPTO fee reductions and established a new micro entity status for which reduced fees apply. Additional fees changes were made to incentivize electronic filing and provide for prioritized examination. Individual inventors and smaller companies should determine if they qualify as a micro entity under the new laws, which could greatly decrease the cost of official fees. Patent Marking The AIA amends patent marking requirements to allow for virtual marking, and places significant limitations on false marking actions brought under 35 U.S.C These changes came into effect on September 16, Manufacturers and distributors should take advantage of the new virtual marking provision, especially for products covered by multiple patents. However, the website should be carefully monitored to ensure that the proper patent numbers are associated with the patented articles. The changes to the law governing false marking should drastically reduce the number of false marking claims, and defendants of pending false marking cases should move for dismissal. Best Mode Requirement The AIA changes how the best mode requirement can be used in litigation. These changes came into effect on September 16, Although disclosure of the best mode remains a patentability requirement under 35 U.S.C. 112, the failure to disclose the best mode is no longer a basis for patent invalidity. Conclusion The AIA ultimately implicates significant changes to U.S. patent law. Some of these changes are already in effect. New legal wrinkles must be anticipated and dealt with appropriately in order to ensure that strategies used during patent prosecution and litigation are adapted to protect client interests. For more detailed information on the new patent law and its impacts including analysis of derivation proceedings, inter partes and post-grant review, third party submissions, fee changes, the new prioritize examination procedure, and altered patent marking requirements see Volpe and Koenig s full article on the changes, at Volpe Volpe and Koenig, and Koenig, P.C. P.C vklaw.com vklaw.com 3 3

4 Choose Your Own Adventure: Why Litigating in the ITC May be Beneficial over the Federal Court System By: Thomas P. Gushue and Linda X. Shi During the past few decades, more intellectual property (IP) owners have been turning to non-traditional methods to settle international infringement disputes. As companies continue to broaden their consumer base and reach emerging markets in foreign countries, the international exchange of products has led to an increase in issues regarding IP protection. The international flow of products has grown exponentially over recent years as domestic companies began moving production facilities offshore due to cost savings. Additionally, foreign companies have become more aggressive in attempting to tap into the American consumer market. This growth in the worldwide exchange of products has resulted in a corresponding increase in IP disputes, with additional concerns of jurisdiction, conflict of laws, and enforcement of judgments overseas. Although a variety of dispute resolutions are available, U.S. IP holders typically have two primary methods of enforcing their rights against alleged infringers. The first option includes filing an infringement suit in federal court. However, obtaining personal jurisdiction with this option is often difficult when one or more of the alleged infringers are foreign entities. Additionally, federal courts are not exclusively IP adjudicating bodies, which often involves complex issues including highly technical patents being decided by a judge with limited knowledge of the technical field. These drawbacks present unique and substantial difficulties for companies that deal primarily in complex technical products and are active in the global marketplace. 4 Fall 2011 Insider Volpe and Koenig, P.C.

5 In recent years, IP holders have been increasingly turning to an alternate method of addressing infringement by filing a complaint with the International Trade Commission (ITC). The ITC is an independent federal agency that responds to complaints alleging unfair importation practices, including IP violations. Unlike federal courts, the ITC can only issue injunctive relief and cannot award monetary damages. Injunctive relief, such as a ban on the importation of a product, is often the preferred remedy for IP holders seeking to stop infringing products from entering the United States. To file a complaint, the complainant must show an unfair act by the respondent, such as patent infringement, and a resulting economic detriment. Once a complaint is filed, an administrative law judge makes a decision within 30 days determining whether the complaint warrants an investigation. The judge then presides over an evidentiary trial, wherein the complainant and the respondent represent their respective interests. An attorney from the ITC also participates in the trial and represents the public interest in the dispute. After the close of trial, the judge issues an initial determination, which ultimately is reviewed by a panel of commissioners at the ITC, who may adopt, modify, or reject the judge s initial order. This entire process generally spans months, as compared to 2-3 years or more in federal district courts. For many U.S. businesses, the ITC is a more attractive route than federal court for enforcing IP rights. Many experts emphasize that litigation before the ITC is often cheaper and faster than federal court due to the ITC s tighter time schedules. The ITC also allows for broader discovery with nationwide subpoena power. Further, the ITC is commonly perceived as having deeper technical expertise and a more robust grasp on commonly litigated patent issues. Critics of the ITC argue that the lack of monetary damages as a remedy should be determinative in deciding whether to pursue a claim in federal court rather than the ITC. Ultimately, many companies do not have to make this decision as it has become increasingly common to pursue infringement claims in both federal court and the ITC. However, this solution is not universally adopted, as an adverse decision in the ITC proceeding could be used by the alleged infringer in defending the federal court proceeding. The number of claims filed in the ITC has doubled over the past two decades. A review of the ITC complaints filed within recent years indicates the ITC is becoming the favored venue for litigating highly technical patents. Over the past two years, approximately 75% of ITC complaints involved electrical, telecommunication, satellite, or computer patents. Each of these areas requires a high level of understanding and familiarity with the dynamic subject matter in order to analyze the patents and allegedly infringing practices. Patent holders are likely to feel more comfortable with infringement analysis occurring in the ITC instead of federal court because of the ITC s frequency of litigating these cases. Large technologydriven companies, including Apple, LG, Motorola, Samsung, and Sony, account for most of the surge in recent ITC filings and will likely continue to utilize the ITC as either their exclusive remedy against importation of infringing products or at least as a component of their IP protection strategy. For IP holders seeking to enforce their rights, the potential advantages and disadvantages of pursing a claim in either the ITC or federal court should be carefully considered. In view of the potential for patent disputes in federal court to last years and cost millions of dollars, companies have become more conscious of the ITC as an alternative forum for litigation. Additionally, the trend of litigating highly technical patents in the ITC is likely to continue as large technology companies can take advantage of the faster trial schedules and typically well-versed judges available at the ITC. Volpe and Koenig, P.C vklaw.com 5

6 f i r m ne w s Volpe and Koenig Welcomes: Marina Sigareva Marina Sigareva, Ph.D., has joined the Firm as an Associate in the Firm s Princeton office. Marina counsels clients in the preparation and prosecution of patent applications, specializing in the areas of biotechnology, molecular biology genetics, and pharmaceuticals. Her pharmaceutical experience includes prosecuting new generation diagnostic and therapeutic drugs and nanomolecules for delivery of these drugs and therapeutic agents. Marina has extensive industrial experience in the fields of agricultural biotechnology and genetic modification of plants. She has co-authored numerous scientific publications and is a co-inventor on several patent applications. Marina is admitted to practice before the US Patent and Trademark Office and is a member of the Massachusetts Bar. She earned her J.D. cum laude from Suffolk University Law School, a Ph.D. and M.S. in Genetics from the Institute of Cell Biology & Genetic Engineering, and an M.S. in Genetics and Molecular Biology from Kiev State University. Volpe and Koenig Teams Up for Community Service Volpe and Koenig s Habitat for Humanity team members (l-r): Scott Wolinsky, Mike Smith, Joe Boos, Christina Walsh, Randy Huis, Dan Calder, Carey Kulp The annual Volpe and Koenig attorney retreat is traditionally focused on team building. In past years, we ve built towers, held scavenger hunts, protected falling eggs from breaking, hosted game shows, and last year: filmed and starred in movie previews. This year, the retreat committee decided to send out teams to give back to the community. Each of our eight teams was given a budget to donate or spend buying supplies. Teams then spent eight hours in the community working on projects like organizing a charity run, introducing children to the Philadelphia Zoo s primate house, building homes with Habitat for Humanity, and working at a local animal shelter. In total, this year s teams donated 500 hours of time and nearly $10,000 to their projects. Great work was accomplished by all the teams! 6 Fall 2011 Insider Volpe and Koenig, P.C.

7 Volpe and Koenig in the News Philadelphia Business Journal Recognizes Volpe and Koenig as a Top IP Law Firm Volpe and Koenig has been ranked number two out of the 25 top companies on the Philadelphia Business Journal s list of Intellectual Property Law Firms for the year This year s ranking marks a jump from number three on the 2009 list. Rankings are based upon number of local IP attorneys. Four Volpe and Koenig Attorneys Recognized in 2012 Edition of Best Lawyers We are pleased to announce that Anthony S. Volpe, C. Frederick Koenig III, John J. O Malley and Randolph J. Huis have all been recognized in the practice area of Intellectual Property Law. Best Lawyers is the oldest and most respected peer-review publication in the legal profession which compiles lists of outstanding attorneys by conducting exhaustive peer-review surveys, where thousands of leading lawyers evaluate their professional peers. For additional information about the publication, please visit Volpe and Koenig Listed as Best Law Firm by U.S. News & World Report and Best Lawyers We are happy to announce that Volpe and Koenig, P.C. was ranked as a Best Law Firm by U.S. News and World Report and Best Lawyers. The Firm is ranked Tier 1 for Copyright Law and Patent Law. Volpe and Koenig s profile is displayed at Kristine Butler Appointed to Chair of the Jefferson Medal Committee Kristine L. Butler, Associate, has been appointed Chair of the Jefferson Medal Committee by the New Jersey Intellectual Property Law Association ( NJIPLA ). Butler, who has been actively involved with the NJIPLA for over 10 years, will guide the committee through the process of selecting the recipient of the Jefferson Medal, which is awarded annually to a person who has made exceptional contributions to the field of patents, trademarks and copyrights. As Chair of the Committee, Butler will also oversee the coordination of the annual Jefferson Medal Dinner where the prestigious award is presented. Said Butler, I am honored to be named as Chair of the Jefferson Medal Committee and to continue my work with the NJIPLA. Volpe and Koenig, P.C vklaw.com 7

8 Volpe and Koenig Announces 2011 Giving Fund Recipients We are happy to announce Last Chance Ranch Animal Rescue and Urban Tree Connection as the 2011 recipients of the Volpe and Koenig Giving Fund! Each organization will receive a $20,000 grant from Volpe and Koenig. Philadelphia Police Department s mounted patrol units, rescued and rehabilitated by Last Chance Ranch Animal Rescue Last Chance Ranch (LCR) is a non-profit, all volunteer animal rescue group located in Quakertown, PA, that focuses on rescuing and rehabilitating horses and domestic companion animals. The Giving Fund will benefit the LCR s partnership with the Philadelphia Police Department s Mounted Patrol Program, in which the organization supplies rescued and rehabilitated horses. Funds will allow the organization to purchase horses at auction and then train the horses for their new jobs. LCR will be able to supply the Philadelphia Mounted Patrol program with seven horses by the end of the Said Lori McCutcheon, President, Last Chance Ranch, The Giving Fund will help horses in need find their new niche in life to give back to the community that loves them. Urban Tree Connection (UTC), located in Philadelphia, PA, partners with low-income communities in the City of Philadelphia to revitalize neighborhoods through urban greening. The Giving Fund grant will benefit the development of an open-space initiative in the Haddington section of West Philadelphia (52nd Street, 63rd Street, Market Street and Girard Avenue). Each rehabilitated lot brings UTC neighborhoods closer to reaching a larger goal: to build and sustain a community-driven land use model that provides residents with safe, productive and beautiful green spaces that promote positive human interaction. Said Skip Weiner, UTC s Founder and Executive Director, I am extremely pleased and honored to have been selected for Volpe and Koenig s Giving Fund grant for this year. The grant will help expand our farming and community revitalization footprint in Haddington, transforming additional land for farming, training and employing more community residents. Urban Tree Connection s Neighborhood Foods Farm in Philadelphia For more information on the Giving Fund and this year s recipients, visit Volpe and Koenig s homepage: The Intellectual Property Insider is a quarterly publication from Volpe and Koenig, P.C. For a complimentary subscription, please your contact information to info@vklaw.com or visit our web site at vklaw.com. To opt-out of an subscription, please send your name and address, with unsubscribe in the subject line, to info@vklaw.com. This publication is intended for informational purposes only and should not be considered legal advice. Please consult an attorney regarding your specific situation. Receipt of this newsletter does not constitute an attorney-client relationship Volpe and Koenig, P.C. 8 Fall 2011 Insider Volpe and Koenig, P.C. News Credits Editor Daniel N. Calder Contributing Authors Melissa D. Doogan Thomas P. Gushue Jonathan G. Lombardo Joseph E. McNamara Turhan F. Sarwar Linda X. Shi Anthony L. Venezia