Impact of US AIA: What Really Changed? 1 © AIPLA 2015

2 Disclaimer The purpose of this presentation is to provide educational and informational content and is not intended to provide legal services or advice. The opinions, views and other statements expressed by the presenter are solely those of the presenter and do not necessarily represent those of AIPLA or Eli Lilly and Company.

 America Invents Act – AIA Sept 15, 2011  Fully implemented March 16, 2013  Major revision of the US patent law  Goals 1) Transparent 2) Objective 3) Predictable 4) Simple  So what really changed? Particularly from a Chinese practitioner’s perspective? © AIPLA

 Who can file?  Still the Inventor, agent or assignee:  Entity must have an assignment / obligation to assign  (Chinese law allows an Entity with rights to a service invention – no agreement necessary)  No more concern for when invented/reduced to practice/diligence in filing: All concern for filing date!  Inventorship error should no longer trouble invalidity  Easier for joint invention by collaborators from different Entities: Joint Research Agreement protects against self collision better. From “First to Invent” to “First Inventor to File” 4 © AIPLA 2015

What is Art Under Old Law?  Anything published before invention date  Anything used in USA before invention date  Anything published >1 year before invention  Anything used or ‘on sale’ in USA >1 year  Anything in a patent application filed before invention date that later publishes (Secret Art)  Can also dispute who invented first???  Trouble with collaborations – Self collision Agreement must be before invention date or not insulated from 102(f) “invented by another” 5 © AIPLA 2015 From “First to Invent” to “First Inventor to File”

What is Art Now?  Anything published before filing date  Anything used or ‘on sale’ before filing date  Art in a patent publication effective for novelty and obviousness as of earliest priority date (Still Secret Art)  Exceptions:  “The 1 year grace period”... Not art if it is your publication/obtained from you, or you published 1st  (But not applicable in rest of world)  Patent publication not secret art if ‘same owner’ as of filing date 6 © AIPLA 2015 From “First to Invent” to “First Inventor to File”

Practice Tips:  Prior art publications and uses are no longer limited by geography – effective as art if anywhere in world  Patent publications are effective as art against novelty and obviousness from earliest priority date (secret art still an issue & now includes US provisional)  Always have employment agreements / Joint Research Agreements in place before the inventing begins. (Absolutely before filing!!)  Agreement should state:  Who owns the IP (obligations to assign in place?)  What is the scope of the research  Be sure the scope is well understood and is amended if the actual work changes 7 © AIPLA 2015 From “First to Invent” to “First Inventor to File”

 Old law: Must disclose the best mode or patent is invalid for failure to comply with the description requirement  New law: Specifically states that ‘best mode’ can not be used as a basis for invalidation/unenforceability Practice Tip:  Still do good faith effort to disclose the best mode of how to carry out the invention (Don’t try to hide the ball)  This assures good description for support of specific claims to most important embodiments. 8 © AIPLA 2015 Best Mode Requirement

Old Law:  Many potential problems could not be fixed by Applicants, even when owner ‘innocent’  Public could submit art to an examiner or challenge a patent post grant, but  Provisions were not very effective  Would-be challengers feared barring claims from later court proceedings  Perceived better chances of winning in court.  Procedures slow & could be expensive 9 © AIPLA 2015 Reexamination: Fixing Problems or Challenging Validity

New Law: Applicants can reliably fix issues from original examination prior to enforcement:  Supplemental Examination followed by Reexamination  Inventorship  Submission of missed references  Correction of errant statements  Public can more effectively submit art to an examiner or challenge a patent post grant  Post Grant Review  Inter partes Review 10 © AIPLA 2015 Reexamination: Fixing Problems or Challenging Validity

 Anyone can petition for PGR  Only on Applications subject to First Inventor to File (Generally post March 16, 2013, so not many patents subject to PGR yet)  Grounds: Any grounds that can be brought in defense of infringement or any defects in the application or its examination  Timing: must petition within 9 months of Grant/reissue  Estoppel: Patentee estopped from action inconsistent with final judgment  Petitioner estopped from asserting in court any claims raised or that could have been raised. 11 © AIPLA 2015 Post Grant Review

 Anyone can petition for Inter Partes Review of any patent (But must name real party in interest)  Review can only be based on grounds of invalidity under 35 USC 102/103: Alleged lack of novelty or obviousness  Timing:  Any time after 9 months from grant, reissue, or termination of post grant review  Defendant in an infringement action must file IPR petition within one year of being served with complaint for infringement 12 © AIPLA 2015 Inters Partes Review

 IPR uses lower standard of review vs court proceeding:  Claims given the broadest reasonable construction  Evidentiary burden on petitioner –  Preponderance vs Clear & Convincing  < 3 Months after petition/response, PTAB determines : Is there a reasonable likelihood the petitioner would prevail?.... Institute or Dismiss  Decision to institute or not is final and not appealable  Final Decisions < 1 year (extendable 6 months for good cause)  Parties may file request for rehearing and appeal to CAFC. 13 © AIPLA 2015 Inters Partes Review

Estoppel:  After final PTAB decision, can’t further challenge a patent on any ground that was raised or reasonably could have been raised in the IPR in another IPR or in a court proceeding  Patent owner is estopped from taking any action inconsistent with an adverse judgment, including obtaining any patent claim that is not patentably distinct from a finally refused or cancelled claim.  PTO invalidation is given statutory preclusive effect against owner in subsequent court litigation  But a district court finding of invalidity has no preclusive effect in subsequent post-grant proceedings until appeals are exhausted  No estoppel effects if settlement terminates IPR proceedings without a final decision 14 © AIPLA 2015 Inters Partes Review

Practice Tips:  Monitor published application that might be relevant to your business so you know when they grant and consider if granted claims should be timely challenged in PGR or IPR – you only have 9 months to challenge on grounds such as written description or patentability of subject matter  Carefully consider whether your case is best fought in PGR/IPR or in Court – you’ll get ‘one bite at apple’ for any grounds raised or that could have reasonably been raised  If you’re going to settle in an IPR, do so early because PTAB does not have to stop proceedings if close to a decision  Fully prepare your case and present it focused and succinctly from the very start 15 © AIPLA 2015 Post Grant & Inters Partes Review

Questions? 16 © AIPLA 2015