Why patents DO matter to YOUR business Robynne Sanders & Eliza Mallon DLA Piper 18 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 IP is also an increasingly significant asset line on the balance sheets of most companies If IP is protected adequately and effectively used, then you can ensure market exclusivity and add millions in income. If not you may be handing years of R&D to competitors In-House Counsel Day 2015 3 What is patentable? A patent is an exclusive right granted by the Government 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 exceptions: human beings, and the biological processes for their generation are not patentable (e.g. embryonic stem cells) In-House Counsel Day 2015 4 2
Patents Essential Features Protects functionality - what a product or process does X copyright X tm X design In-House Counsel Day 2015 5 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) 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 6 3
How can Third Party Patents Pose a Risk to Your Business If your business does not patent KEEP LISTENING as:- suppliers customers competitors are obtaining patents and they each create different challenges Suppliers with patents can lock you into supply and further services Customers with patents can negotiate more favourable terms, take the development to a competitor or demand you take a licence Competitors with patents have exclusivity and can allege infringement In-House Counsel Day 2015 7 Identifying when a third party may have a patent Common strategy with suppliers and customers not to disclose existence of patents failure to identify risk in contracting agreement to inappropriate clauses in contracts What to look out for broadly drafted definitions in contracts and complex IP clauses evasive responses to queries on nature of IP avoidance of providing substantiating documents What can you do to mitigate the risk patent search simplify and limit IP clauses (usually results in disclosure of IP) schedule registered IP In-House Counsel Day 2015 8 4
And when your business may develop one Research Contracts where patent outcome not foreseen joint ownership of IP failure to address costs and management failure to address termination and effect on IP What to look out for broad descriptions of research and outcomes lack of understanding of research Mitigating the risk assume it is always patentable consider in advance your desire for the IP and draft accordingly In-House Counsel Day 2015 9 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 ask for extra information if necessary do not provide information in respect of your business products or services In-House Counsel Day 2015 10 5
What should you do? Check there is a relevant patent in force and when it expires Determine whether your product or process infringes the patent Consider the validity of the patent Respond challenging validity of the patent and infringement Unjustified threat? If you are at risk, consider a commercial resolution: how critical is product/process to your business? can the product or process be modified? can you obtain a licence or purchase the IP? In-House Counsel Day 2015 11 Navigating patent litigation Patent litigation is commenced in the Federal Court of Australia before specialist judges Infringement proceedings are typically heard together with cross-claim for revocation (and vice versa) Timeline of proceedings: pleadings mediation expert evidence trial - judgment appeal? In-House Counsel Day 2015 12 6
Key contacts Robynne Sanders Partner T: 03 9274 5539 E: Robynne.Sanders@dlapiper.com Eliza J Mallon Senior Associate T: 03 9274 5291 E: Eliza.Mallon@dlapiper.com In-House Counsel Day 2015 13 7