1. How To Defend A U.S. Patent Litigation Presented at: Patentgruppen Århus, Denmark Date: October 26, 2011 Presented by: Richard J. Basile Member St. Onge Steward Johnston & Reens LLC Stamford, Connecticut, U.S. rbasile@ssjr.com

2. Patent Litigation Outline  Why to Avoid Litigation  How to Avoid  Anticipate Litigation  Prepare for Litigation  Defending Litigation  Trends in US Patent Litigation

3. Why Avoid U.S. Patent Litigation  Legal Costs Average for One Patent $6M  Business Disruption/Internal Costs  3-5 Years Uncertainty  Damages Could be Entire Profit Not Just Royalty, Injunction (no longer automatic)  The Certainty of Settlement Has Value

4. Patent Litigation Game  30% Change of Unimaginable  Judges Political, No Tech or Patent Experience  Trial Judges Getting Added Burden  More de novo Review on Appeal  Gridlock as Parties Bash Each Other  Patent Scope Legal, Not Technical Question  Courts Pick Most Reasonable Construction

5.  Build Offensive Portfolio  Less of target if you can counterclaim  Nuclear Deterrent, mutual destruction  Clear Products  New products cleared in light of competitors patents  Patent Design Arounds  Good as non-infringement and DOE defenses  Less space for other competitors to operate  Need To Do All 3 Of Above How To Avoid U.S. Patent Litigation

6.  Claim What Sells  Claim Who You Would Sue  Claim What you Can Prove Infringes  Claim Maximum Damages Build Offensive Patent Portfolio

7.  Claim Multiple Points of Novelty  Use All Your Free Independent Claims  Restrictions 1)AB, 8)ACD, 15)ABCD  Elections 1)AB, 8)ABC, 15)ABD  Fig. 1 Shows All Features To Be Claimed Build Offensive Patent Portfolio

8.  Watch Competitors Products  Watch Customer/Vendor Patents-Natural Expansion  Search Multiple Jurisdictions  Where is product made, used or sold  Location of particular industries  Get an Opinion Clear New Products For No Infringement

9.  Strengthens No Infringement Argument  Limits Competitors Options  Systems/Software  Application Engineering  Customer Requirements  Light weight carbon fiber  What is competitive commercial advantage  Be Careful What You Say In Specification Patent Your Design Arounds

10. Anticipate Litigation  Portfolio Imbalance with Competitor  Drop in Competitor’s Market Share  Drop in Overall Market/Economy  Business Phase for Product  Watch Competitor Marketing  new “must have” feature, pushes competitors  Weak No Infringement Argument  Invalidity defense is not sufficient

11. Prepare For Litigation  Build No Infringement Argument  Invalidity Search as Necessary  Informed Decision, Attorney/Expert Opinion  Preserve Documents  Identify Witnesses  Have a Plan

12. Defending Patent Litigation  Claim Construction Based on Specification  No Literal Infringement Is Not Enough, DOE  Own Patent on Modified Feature  Negate Novelty For Invalidity  Practice the Prior Art  Hire Good Experts  Corporate Commitment

13. Defending Patent Litigation (cont.)  Set A Budget  Notify All Departments  Same Argument at Trial as Opinion  Pick Your Battles (claim construction)  Be Ready To Look More For Prior Art  Establish And Maintain Credibility With Court

14. Patent Litigation Trends  Seagate- Objective Recklessness, Piracy  KSR-Nonobviousness  eBay- Right to Enjoin Not Automatic  E-discovery Rules  New Judges Pilot Program  New Patent Statute

16. CONCLUSION  Involve Lawyers Early in Process  Expect The Unexpected  There is Value in the Certainty of Settlement