Patent Law Developments that Affect Water Treatment Technology (IWC 10-04)

Transcription

1 Patent Law Developments that Affect Water Treatment Technology (IWC 10-04) Clifton E. McCann and Lars H. Genieser, Ph.D. Venable LLP Washington, D.C.

2 The Purpose of Patents "The patent system... added the fuel of interest to the fire of genius." Abraham Lincoln, Feb. 22, 1860 (Lecture: Discoveries, Inventions and Improvements ) 2

3 Patent monopoly can provide Higher profits Royalty income Venture capital Also: Opportunities in new markets Cross-licensing and strategic relationships Badge of technological sophistication 3

4 U.S. Patent Applications Up 40% since 2000 Source: IPWatchdog Blog ( 4

5 Most Supreme Ct. cases since 1960s Unprecedented: 6 in 5 years EBay v. MercExchange (2006) Held that patentee is not automatically entitled to enjoin infringement Illinois Tool Works v. Independent Ink (2006) Delineated scope of illegal patent "tying" KSR v. Teleflex (2007) Imposed a generally tougher obviousness standard Microsoft v. AT&T (2007) Helped define international reach of U.S. patent rights Quanta v. LG Electronics (2008) Relaxed some patent owners concerns about patent exhaustion In re Bilski (2010) Held that business methods can constitute patentable subject matter Next Up: Microsoft v. I4I (pending) How much weight must be given to PTO s decision to grant patent? 5

6 Allowance Rate Rebound After Dip Source: Patently-O Blog ( 6

7 Acquiring & Enforcing Patents in 2010 New challenges and opportunities: Types of eligible subject matter How high is the bar for patenting in 2010? Requirement of novelty Requirement of nonobviousness Proactive patent management 7

8 Eligible Subject Matter (Sec. 101) Anything under the sun that is made by man. PRODUCTS & COMPOSITIONS METHODS & PROCESSES MACHINES & EQUIPMENT SOFTWARE & BUSINESS METHODS IMPROVEMENTS ON THE ABOVE EXCLUDED: ABSTRACT IDEA / LAW OF NATURE / NATURAL PHENOMENON 8

9 Many Patent Opportunities in Water Treatment New filtration materials Carbon nanotubes Biomimetic protein-based membranes New processes Forward osmosis New machines and apparatus Massively parallel microfluidics 9

10 SCWR PWR 650 C 330 C H 2 O H OH OOH OH µ ph 45% 32% 10

11 Patentability of Business Methods: Bilski, June 2010 Bilski claimed: Method for hedging risk in energy commodities trading U.S. Supreme Court surprisingly found (5-4): Business methods remain eligible for U.S. patent Guidance: Must be more than mere abstract idea (Bilski fails) OK: Idea + machine for performing method OK: Idea + method that transforms article to different state or thing Examples of eligible methods: US 5,960,411 Amazon.com s 1-Click Purchasing System US 6,070,147 Customer Identification & Marketing Analysis System Software systems that transform data 11

12 Novelty Requirement Section 102 An invention is novel if every claimed feature is not completely taught in a single piece of prior art. Prior art can be: Patent Publication Sale, offer for sale Public use, commercial use CAUTION: Prior art can be inventor s own! 12

13 Novelty - Example IF AN INVENTOR CLAIMS A 3-STEP PROCESS FILTER IER RO THE PROCESS IS NOVEL WHERE THE BEST PRIOR ART IS: PATENT #1: PATENT #2: FILTER IER IER RO PATENT #3: FILTER RO THE PROCESS IS NOT NOVEL WHERE PRIOR ART ALSO INCLUDES: PATENT #4: FILTER IER RO 13

14 Nonobviousness Requirement USPTO and courts can invalidate a claim by combining multiple pieces of prior art. Not obvious to person having ordinary skill in the art at the time the invention was made. Patentability shall not be negatived by the manner in which the invention was made. 14

15 Nonobviousness Requirement Courts more readily find nonobviousness inventions in unpredictable arts: than in predictable arts: Water chemistry is unpredictable! 15

16 Nonobviousness Requirement: P&G v. Teva Pharms. (2009) Teva challenged P&G claim to Compound A as obvious over structurally similar prior art Compound B. A: B: Federal Circuit: P&G claim nonobvious and valid Person of ordinary skill had no motivation to modify B to obtain A (unpredictable relationship between structure and activity). 16

17 Post-KSR: Sears Ecological v. MLI 2009 MLI challenged Sears claim to environmentally friendly chloride salt de-icing formulations as obvious over prior patent. District court found Sears claim nonobvious and valid: Prior patent taught away by emphasizing environmentally harmful effects of chloride salts. 17

18 Secondary Considerations as Indicia of Nonobviousness Supreme Court in Graham v. John Deere (1966): Secondary considerations help show nonobviousness: Teaching away from claimed invention in prior art (e.g., Sears Ecological v. MLI 2010) Failures of others to invent despite similar incentives and long, unsolved need for invention Commercial success of invention Accolades for invention Unexpected results 18

19 Preserving Rights Prior to Application Filing Secure agreement to assign inventor rights to employer. Establish invention report and evaluation system. Avoid premature publication, public use, sale, or offer for sale of patentable subject matter. 19

20 Experimental Public Use Limited exception: Certain experiments conducted in public are not prior art. Federal Circuit in Clock Spring v. Wrapmaster (2009) considered: Degree of control inventor retained? Experiment designed to test claimed features? Claim found invalid because public testing not performed for patent application. 20

21 Proving Invention U.S. has unique first to invent patent system. Establish notebook recordation system: Researchers regularly enter ideas and results. 21

22 Patent Claim Format Variety Claim types: Product Composition of matter Apparatus Method New use of something old Apparatus claims easier to enforce than method claims. 22

23 Accelerating Patent Application Examination for Green Technologies USPTO program for accelerated examination of green technology (e.g., pollution reduction, alternative energy, energy efficiency). AU, JP, KR, and UK have implemented or may implement accelerated examination for green technology. 23

24 Accurate Patent Marking Patentee can mark product, e.g. Pat. 9,999,999 : Deters potential infringers Can increase damages award Marketing advantage But patentee must mark & advertise accurately Fine for false marking was <$500 per run, etc. Now: Up to $500 for each mismarked item Forest Group v. Bon Tool, Dec Over 500 lawsuits filed in

25 Patent Clearance Studies When Warranted? No obligation to undertake but Consider infringement study of particular patent claim where: Someone else s similar product is marked with patent You ve been notified of infringement Consider freedom-to-operate study where: Heavy R&D, marketing, or licensing costs expected Heavy sales and/or profits expected Benefits: Avoid loss of investment, damages, attorney fees 25

26 Courts in 2010: Damages Must Have Factual Support Courts are requiring better supported damages claims: IP Innovation v. Red Hat (2010) Chief Judge of Fed. Cir.: Expert s blatant oversight caused bloated damages claim Worldtech Systems v. Integrated Networks (2010) Jury's 26% royalty was clearly unsupported by the evidence LaserDynamics v. Quanta Storage (2010) $57M jury verdict tossed. TX Judge: Evidence warrants only $6M. Make sure claims are within realm of reason! 26

27 Maintaining Objectivity When Asserting Patent Claims Assess and weigh possible outcomes Dollar amounts Chances of occurrence Sum up the amounts Assess and weigh risks of achieving outcomes Invalidity, non-infringement, unenforceability Apply risk factors to possible outcomes 27

28 Maintaining Objectivity When Asserting Patent Claims Reasonable royalty of $10M (100% chance) $10M Punitive damages due to willfulness (30% chance) $20M X 30% Total expected damages = $16M + $6M Probability patent will be found valid Probability patent will be found infringed 75% 75% X $16M = $12M 50% 50% X $12M = $6M Target settlement value = $6M 28

29 Effective Patent Program Checklist Know What Is and Isn t Patentable Require Employee Agreements Consider Idea Submission Program Have Meetings of Patent Team Be Diligent and Keep Ideas Secret Document Inventive Activity Monitor Competitors Activity 29

30 Conclusion The state of U.S. Patent Law in 2010: Improving environment for patentees in unpredictable areas of water treatment New opportunities for expedited examination Increased importance of accurate patent marking Increased scrutiny of patent damages claims 30

31 Clifton E. McCann As a partner in Venable LLP s Technology Division in Washington, DC, Mr. McCann helps clients plan effective patent strategies and resolve disputes. He has an undefeated record as lead trial and appellate counsel in patent litigation, resulting in awards and settlements reaching 8 figures in the water treatment field. Mr. McCann is a registered patent attorney, manages patent prosecution, and helps build patent portfolios in chemical and biological technologies, including water treatment methods and equipment, anti-corrosive materials, polymers, viscous building materials, alloys, and medical treatments and compositions. Mr. McCann has served as Chairman of both the Patent Section of the Bar Association of DC and the ABA s Committee on Intellectual Property Litigation. He is a member of the American Intellectual Property Law Association and the Licensing Executives Society, and speaks on patents with a focus on patent damages and dispute resolution. Mr. McCann received an LL.M. in Intellectual Property from George Washington University, a J.D. from Catholic University of America, and a bachelor s from Northern Illinois University, where he studied chemistry and biology. 31

32 Lars H. Genieser, Ph.D. As a registered patent attorney in Venable's Technology Division, Lars Genieser advises clients in managing complex international intellectual property portfolios, licensing intellectual property, and prosecuting patents before the USPTO. Dr. Genieser counsels clients in the chemical process, environmental remediation, and pharmaceutical sectors, and has prosecuted patents pertaining to, for example, high purity water electrodeionization treatment, protective polymer coatings, plasma processing, small molecule drug therapies, and quantum-dot-based medical and biological analysis. Dr. Genieser received a J.D. from Georgetown University, a Ph.D. in Chemical Engineering from the Massachusetts Institute of Technology, and a B.S.E. from Princeton University. He is a member of the American Intellectual Property Law Association, the ABA, the American Chemical Society, and the Sigma Xi Scientific Research Society. He writes articles on developments in patent law. 32