1. Challenges Associated With, And Strategies For, U.S. Patent Litigation Russell E. Levine, P.C. Kirkland & Ellis LLP russell.levine@kirkland.com LES Asia Pacific Regional Conference Hangzhou, China October 16, 2013

2. Disclaimer The views expressed herein are my personal views and are not those of Kirkland & Ellis LLP or any of its clients Slide 2

3. There’s A Jury Slide 3 A Challenge

4. Jury Decides Infringement Validity Damages Slide 4

5. Average Jury Profile - Age Slide 5

6. Average Jury Profile - Education Slide 6

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16. U.S. Patent Litigation Can Be A Lengthy Process Slide 16 Another Challenge

17. Typical Litigation Time Line Slide 17

18. ITC Time Line Slide 18

19. U.S. Patent Litigation Is Expensive Slide 19 Yet Another Challenge

20. Why Is U.S. Patent Litigation Expensive? Numerous experts needed Extensive discovery Documents Interrogatories Depositions Claim construction hearings Can be like a mini-trial Often combined with technology tutorial Often combined with hearing on summary judgment motions There’s a need for demonstratives and animations Slide 20

21. The Loser Doesn’t Have to Pay Your Attorney Fees Section 285 of the Patent Act states: “The Court in exceptional cases may award reasonable attorney fees to the prevailing party.” “Exceptional cases usually feature some material, inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Federal Rule of Civil Procedure 11, or like infractions.” Serio-US Industries, Inc. v. Plastic Recovery Technologies Corp., 459 F.3d 1311, 1321-1322 (Fed. Cir. 2006) “Absent misconduct in the litigation or in securing the patent, a trial court may only sanction the patentee if both the litigation is brought in subjective bad faith and the litigation is objectively baseless. Id. at 1322 An award of attorneys’ fees under Section 285 is available in “limited circumstances” and “is an exception to the American Rule.” Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329 (Fed. Cir. 2003); Id. at 1322 Slide 21

22. Utilize A Post Grant Challenge Under the AIA Slide 22 A Strategic Option

23. Background of the America Invents Act (AIA) Signed into law on September 16, 2011. Many provisions took effect right away. Others became effective on September 16, 2012. All provisions effective by March 16, 2013. Slide 23

24. Post-Grant Challenges under the AIA Three primary types of post-grant challenges: A.Post Grant Review (“PGR”) B.Inter Partes Review (“IPR”) C. Covered Business Method Patent Review (“CBM”) PGR, IPR, and CBM are “trials” before the PTAB. The PTAB is staffed by Administrative Patent Judges (“APJ”). Employs 163 APJs as of January 28, 2013. Plans to hire another 60 APJs during FY2013. New hires are coming from PTO Examining Corp, ITC, DOJ. Each AIA challenge is decided by a 3-APJ panel. Trials allow for limited discovery, not available in ex parte or former inter partes reexaminations. Slide 24

25. Benefits Lower burden of proof for invalidity “Preponderance of the evidence” vs. “clear and convincing” “Broadest reasonable” claim construction standard Complicated issues handled by “expert” APJ panel Possibility of two bites at the apple PTAB’s constructions may influence district court Generally faster than district court Lower cost Slide 25

26. Drawbacks Estoppel IPR is limited to §§ 102, 103 grounds on patents & printed publications Patent Owner may amend or present new claims Fact discovery much narrower than civil litigation Timing and limits (e.g., page limit) per petition If challenge is unsuccessful, increased risk before the jury and enhanced presumption of validity Slide 26

27. Use an Alternate Dispute Resolution (“ADR”) Mechanism Slide 27 Another Strategic Option

28. ADR Mechanisms Mediation Non-Binding Expert Determination Arbitration Slide 28