Why patents DO matter to YOUR business Dr Simone Mitchell & Alexandra Chubb DLA Piper 19 March 2015 Overview This session will cover: how to identify when patent protection should be obtained to protect your business assets how to identify when a third party patent may pose a risk to your business activities getting the best outcome in contractual negotiations involving patented (or potentially patentable) subject matter responding to third party patent infringement allegations navigating patent litigation In-House Counsel Day 2015 2 1
Introduction Intellectual property (IP) is relevant to all businesses in all industries and fields better products and processes reduced overheads royalties and licensing fees IP is also an increasingly significant asset line on the balance sheets of most companies If IP is protected adequately and effectively used, you can ensure market exclusivity and add millions in income If IP is not protected, you may be handing years of R&D to your competitors In-House Counsel Day 2015 3 What is patentable? A patent is an exclusive right granted by the State to exploit an invention Confers a temporary statutory monopoly on the patentee in exchange for public disclosure of the invention Almost everything is patentable so long as it is new and inventive: products processes methods There are very few exclusions: human beings, and the biological processes for their generation are not patentable (eg. IVF) In-House Counsel Day 2015 4 2
Essential features of patents Two types of patents in Australia: standard patents 20 year monopoly innovation patents 8 year monopoly Must: be novel compared with the prior art base involve an inventive step (standard patent) or an innovative step (innovation patent) compared with the prior art base be useful Innovation patents have a much lower threshold for patentability Provide protection even if a competing product is independently created or reverse engineered In-House Counsel Day 2015 5 Third party patents risks and mitigation strategies Your suppliers, customers and competitors may each have patents which will create challenges for you: Suppliers can lock you into supply and further goods or services Customers can take the invention to a competitor or demand you take a licence Competitors have exclusivity and can allege infringement How can you mitigate the risk? Record the development of IP in your organisation and patent early! Conduct searches for third party patents Carefully draft IP clauses in your agreements Incorporate appropriate indemnities Schedule of IP In-House Counsel Day 2015 6 3
Responding to allegations of patent infringement Allegations of infringement can take a variety of forms: cease and desist letter informally by email casual conversation How should you respond? do not ignore it acknowledge receipt of the notice ask for extra information if necessary be cautious in providing information in respect of your products or services In-House Counsel Day 2015 7 What should you do internally? Check there is a relevant patent in force and when it expires Determine whether your product or service infringes the patent Consider the validity of the patent Take a pragmatic commercial approach - for example, can you: cease selling your product? modify your product so it no longer infringes? obtain a licence or buy the IP? buy the entity that owns the IP? Make sure you notify: your insurer all third parties who may assume some of the exposure contractually (eg. vendors, suppliers) In-House Counsel Day 2015 8 4
Navigating patent litigation Patent litigation is commenced in the Federal Court of Australia Infringement proceedings are typically coupled with a crossclaim for revocation (or vice versa) Typically takes a year or more from filing to hearing Interlocutory injunctions are not uncommon Prepare for your business to be diverted in pursuing the litigation Evidence Discovery In-House Counsel Day 2015 9 Key contacts Simone Mitchell Partner T: +61 2 9286 8484 E: Simone.Mitchell@dlapiper.com Alexandra Chubb Senior Associate T: +61 2 9286 8262 E: Alexandra.Chubb@dlapiper.com In-House Counsel Day 2015 10 5