1. 2015 AIPLA Annual Meeting Chemical Practice Committee October 23, 2015 Patent Opinions Edwin (Ted) V. Merkel LeClairRyan, A Professional Corporation 70 Linden Oaks, Suite 210 Rochester, New York 14625 Phone: 585.270.2104 edwin.merkel@leclairryan.com edwin.merkel@leclairryan.com J. Scott Larson Braskem 550 Technology Drive Pittsburgh, PA 15219 Phone: 412.208.8141 jon.larson@braskem.com jon.larson@braskem.com 1

2. Overview Why request a formal [external] patent opinion? What is the goal? Types of patent opinons Process (client to counsel) Communication Risk Mitigation 2

3. Why Request a Formal [external] Patent Opinion? Identification of issues pertaining to ◦ Patentability ◦ 3rd party rights ◦ Variations among national laws ◦ IP strategy 3

4. Why Obtain an Opinion? Patentability and Freedom-to-Operate Opinions ◦ Understand your investment in a highly patented technology area ◦ Create an awareness of the patent landscape to guide decision-making ◦ Design-around before launching product 4

5. Why Obtain an Opinion? (cont.) Non-Infringement and Invalidity Opinions ◦ In re Seagate, 497 F.3d 1360 (Fed. Cir. 2007): “[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.” ◦ Competent opinion is a strong defense to willful infringement; evidence that alleged infringement was not willful Avoidance of enhanced damages under 35 U.S.C. § 284 ◦ Supreme Court to review willful patent infringement test this term (under context of § 284) Halo Elecs., Inc. v. Pulse Elecs., Inc., No. 14-1513 (cert. granted Oct. 19, 2015) Stryker Corp. v. Zimmer, No. 14-1520 (cert. granted Oct. 19, 2015) 5

6. Why Obtain an Opinion? (cont.) Non-Infringement and Invalidity Opinions (cont.) ◦ Failure to obtain an opinion may not be used to prove willful infringement (35 U.S.C. § 298) ◦ Induced infringement requires knowledge that the induced acts constitute infringement. Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754 (2011). Non-infringement opinion should be effective to negate knowledge requirement Invalidity opinion, however, is ineffective to negate the knowledge requirement. Commil USA, LLC v. Cisco Systems Inc., __ U.S. ___, 135 S. Ct. 1920 (2015). 6

7. What is the goal? Identification of patentable features over the known art Mitigate infringement risks ◦ Known or unknown patents Evaluation of position (defensive or offensive) ◦ Non-Infringement vs. Infringement ◦ Invalidity vs. Validity ◦ Unenforceability vs. Enforceability 7

8. Types of Opinions Patentability Freedom-to-Operate (FTO) Defensive/Offensive Opinions ◦ Non-Infringement/Infringement ◦ Invalidity/Validity ◦ Unenforceability/Enforceablity 8

9. Types of Opinions (cont.) Patentability Opinion ◦ Should we try to patent a new technology? ◦ Search for published prior art Institutional knowledge of the subject matter Professional search agencies ◦ Review public use/sale ◦ Caveat: non-published (secret) prior art will not come up in a search 9

10. Types of Opinions (cont.) FTO Opinion ◦ Can I practice my invention or sell my products without a high risk of patent infringement? ◦ Before making a significant investment in the technology ◦ Need a clear and detailed description of the technology ◦ Search for enforceable issued patents in jurisdiction ◦ Analyze issued claims against the technology ◦ Update the opinion as technology changes during development ◦ Only need to address independent (broadest) claims 10

11. Types of Opinions (cont.) FTO Opinion (cont.) ◦ May also search for pending patent applications Published patent applications Identify in an opinion and, if relevant, monitor prosecution Update opinion as new patents issue 11

12. Types of Opinions (cont.) Non-Infringement Opinion ◦ Often, but not always, in response to a legal threat of infringement ◦ Used to provide assurance to a company that their product/technology does not infringe ◦ Similar to FTO, but may not require a search ◦ Only need to address independent (broadest) claims ◦ May be combined with an invalidity/unenforceability opinion 12

13. Types of Opinions (cont.) Invalidity Opinion ◦ Is an issued patent valid? For a patent you may want to purchase/license For a patent that is (or may be) asserted against you ◦ Requires a prior art search ◦ Every claim of a patent should be addressed ◦ Conclusion may be that some or none of the issued claims are invalid 13

14. Types of Opinions (cont.) Unenforceability Opinion ◦ Evidence of fraud/inequitable conduct during prosecution ◦ Much less likely to be aware of this prior to litigation/discovery If closely monitoring competitor patents (U.S. and foreign), then perhaps you may uncover something before litigation commences ◦ Taints the whole patent; no claims are enforceable ◦ BUT: could be curable (before litigation commences) using supplemental examination 14

15. Types of Opinions (cont.) Offensive/Defensive Usage ◦ Offensive: Infringement, Validity, Enforceability Meet a Rule 11 obligation Provide a roadmap for litigation Due diligence ◦ Defensive: Non-infringement, Invalidity, Unenforceability Establish the state of mind of an accused infringer (to avoid willfulness) Provide a roadmap for product development, i.e., design-around 15

16. Timing: When to Obtain an Opinion Obtain an opinion as early as possible ◦ Patentability and FTO opinions As soon as the technology is adequately defined that a meaningful search can be conducted Before a significant investment in resources ◦ Validity and Non-Infringement Opinions Soon after receiving notice or discovery of patent Before litigation begins Post-Seagate: There is no affirmative duty to obtain a competent opinion If it is a close call, get an opinion 16

17. Communication: Flow of Information Attorney provided all details (scenarios, formulations, known-art, etc.) Patent and/or Literature Searches Analysis and Risk Assesment Communication to appropriate team(s) with issue management 17

18. Communication: Opinion Format Oral/Written ◦ An Oral Opinion  Could be used as a “preliminary” opinion  Valuable for helping make a quick decision  Follow-up with written opinion ◦ A Written Opinion  Greater evidentiary value  More expensive  Requires more time 18

19. Can Risk be Mitigated? Are there pending patent applications that could improve IP position? Potential for future commercially relevant patent applications Can granted IP be improved? (laws vary by nation) Orange book Leverage in deal structures (options, royalties, etc.) 19

20. Opinion Standards: What is a Competent Opinion? Thorough ◦ Reviews prosecution history and cited art ◦ Construes the claims ◦ Is well-reasoned; not conclusory ◦ Cites to relevant, up-to-date law and applies the law to the facts ◦ Addresses doctrine of equivalents without being conclusory Honest ◦ More likely to speak in probabilities than certainties ◦ Does not need to be accurate to be competent By whom? ◦ Attorney, all types; agent, only patentability 20

21. Issues of Privilege, Immunity, and Waiver An opinion may be protected by attorney-client privilege ◦ The privilege is waived once a party announces it will rely on an opinion of counsel ◦ Waiver applies to all other communications relating to the same subject matter ◦ No waiver for separate trial counsel Opinion Counsel = business decisions; accused party’s state of mind Trial Counsel = strategic litigation matters ◦ Accidental loss of confidentiality to 3rd parties Showing the opinion to a 3 rd party during licensing deal Unintentional waiver 21

22. Thank you 22