Maximizing Value and Minimizing Risk Three New Intellectual by zyv69684

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									     Maximizing Value and
       Minimizing Risk:
Three New Intellectual Property
 Developments That Will Affect
    Your Business in 2007
     Corporate Counsel Series
          February 2007
“One Of The Most Important Intellectual
   Property Cases In A Generation”

        Pending Supreme Court
      Patent Case On Obviousness

        Challenge to the Federal Circuit‟s
  “Teaching-Suggestion-Motivation” (TSM) Test
             Presented by Rick Fladung,
          Partner, Strasburger & Price, LLP
                    Background
Before October 1, 1982   Supreme Court had “original” jurisdiction
                         of patent cases
October 1, 1982          Federal Circuit formed and heard patent
                         appeals from all U.S. District Courts
1982-2005                Supreme Court granted certiorari in an
                         average of one Federal Circuit case a year

2005-2006                Supreme Court granted certiorari in four
                         Federal Circuit cases
2006-2007                Supreme Court granted certiorari in at
                         least two Federal Circuit cases


Since the Federal Circuit was formed over 24 years ago, the
Supreme Court has never heard an “obvious” case until now.
Supreme Court vs Federal Circuit
   Using 1960’s to 1980’s Supreme Court precedent,
   patents will be harder to obtain from U.S. Patent Office
   and harder to uphold in litigation.
                     ______________

   Federal Circuit’s “teaching-suggestion-motivation” test
   (not found in statute or Supreme Court’s decisions) has
   been described a “one-way rachet in favor of
   patentability”.
                             or

                 “SHOW ME”
   Effects Of Negative Decision On
Teaching-Suggestion-Motivation (TSM)
   Could reduce the value of patent
   portfolios

   A new “obvious” test could open the
                                             $
   door for litigation of millions of U.S.
   patents that were obtained or upheld      January   December
   under the old TSM standard for the         2007       2007

   past 20 years.
   Effects Of Negative Decision On
Teaching-Suggestion-Motivation (TSM)
     MedImmune v. Genentech ― 8-1 Supreme
     Court decision issued January 9, 2007.
     Patent licensee’s can now challenge the scope,
     infringement, validity and enforceability of a
     patent licensed from a third party even when
     the licensee continues to pay royalties on the
     license.           Licensee
                      Protected         Licensor Attack
                                           Thwarted
                         By
                       Paying
                      Royalties
 Known “Adjustable Pedal Assembly”
               and
 Known “Electronic Throttle Control”
              equals
The „565 Teleflex Invention?
Proceedings In The Trial Court
   And The Federal Circuit
• Trial Court: Granted summary              U.S.
  judgment of obviousness of claim         Patent
  based on combination of Asano with
  known electronic control references.
• Fed. Cir.: In an unpublished opinion
  vacated & remanded. “The correct
  standard requires a court to make         U.S.
  specific findings showing a teaching,    Patent
  suggestion or motivation to combine        ?
  prior art teachings in the particular
  manner claimed by the patent at issue”
KSR‟s Attack On Teaching-
Suggestion-Motivation Test
• Contrary to Supreme Court precedents and
  Sec. 103
   – Hotchkiss (1890); Great A & P (1950); Graham
     (1966); Andersons Black Rock (1969); Sakraida
     (1976)

• Teaching-Suggestion-Motivation allows
  patenting of inventions that would be obvious
  under Supreme Court precedents
Brief of U.S. Government
• Supports alleged infringer KSR on
  generally the same grounds asserted by
  KSR


• Adds suggestion that an invention needs
  to be “extraordinary” to qualify for a
  patent
Amicus Briefs Against Teaching-
 Suggestion-Motivation (TSM)
  • TSM permits too easy patenting of inventions in
    fields where there is little publication of
    innovations. E.E. Frontier Foundation
  • TSM can impact generic drug prices. AARP
  • Tests should be “common sense, case specific”.
    Business Software Alliance
  • Rearrangement of old elements into new
    combinations should require “synergy”. Econ.
  • TSM test should not supplant Sec. 103.
    Intel/Micron
  Patent Owner Teleflex: In Favor Of
Teaching-Suggestion-Motivation (TSM)
   • TSM is not restricted to express suggestions in
     the art
      – Can use what is implicit or within skill of the art

   • TSM is critical to restrain effect of hindsight
     warned against in 1966 Supreme Court Graham
     case
   • To discard TSM after 20 years invites chaos
Amicus Briefs Pro Teaching-
Suggestion-Motivation (TSM)
• Fed. Cir.’s post cert opinions in other cases
  expounding on motivation
   – Alza (9-06); Dystar (10-06); Optivus (11-06)

• All major patent groups favor TSM : AIPLA,
  ABA-IPL, IPO
   – Losing TSM test would weaken patent protection
   – TSM test focuses on the “time the invention was
     made” to offset hindsight
   – TSM test is deeply rooted and losing it would
     significantly weaken patent system
Supreme Court Justices Hearing
     Comments Critical Of
Teaching-Suggestion-Motivation
 • Justice Scalia:
   “Three imponderable nouns”
   “I would say its [Federal Circuit’s] test is meaningless”
   “…this is gobbledygook…”


 • Chief Justice Roberts:
   “Federal Circuit jargon that is inflexible”.
   “…it’s worse than meaningless because it complicates
   the inquiry rather than focusing on the statute.”
   Supreme Court Justices:
Milder Hearing Comments (1)
• Chief Justice Roberts:
  “In hindsight everybody says, I could of thought
  of that; and you need – if you don’t have the sort
  of constraint that their test imposes, its going to
  be too easy to say that everything was obvious.”


• Justice Souter:
  “And, to tip it over now is going to produce
  chaos. What’s the answer to that?”
              Crystal Ball
• The Teaching-Suggestion-Motivation test may
  not survive at all, in light of the most critical
  judicial views expressed.
• Even if the Teaching-Suggestion-Motivation test
  survives, it is likely to be in the watered down
  state in view of the recent post certiorari
  Federal Circuit cases.
• Or none of the above may happen.
Sarbanes-Oxley and
  IP Management
     Presented by Alan Thiele,
 Partner, Strasburger & Price, LLP
Who Will Have the Keys to
    Your Invention?
Justice Breyer on Supreme
      Court Analysis
1. Text of the law itself
2. History of the language in the law
3. Tradition
4. Precedent
5. Impact on a party of not ruling as argued
6. Impact on those similarly situated
            What If?
 U.S.
Patent   ATTENTION OF:       ACTION BY:
           –   Shareholder     – Executives
           –   Directors       – IP Managers
           –   SEC
           –   Investors

 U.S.
Patent
  ?
          Action Plan
WHO      – INSIDE/OUTSIDE COUNSEL and
           I.P. MANAGERS
WHAT     – SCREEN PORTFOLIO
WHERE    – INTERNAL/EXTERNAL
WHEN     – NEXT MAJOR FINANCIAL
           STATEMENT (10k/10Q)
WHY      – SARBOX PENALTIES
HOW MUCH – HAS VALUE BEEN AFFECTED
          Going Forward
STEP 1.   Recognize/evaluate ideas
STEP 2.   Protection plan
STEP 3.   Recognize changes in value
         Biggest Mistakes
• Allow internal politics to determine
  value
• Mislead owners on activity
• Not appreciate impact of changes
                      Tools
• Quick reference to all I.P. assets
• Way to monitor importance
• Vehicle to report changes
VALUE

   X           X        X

   X           X

   X




                                                    IDEAS

Comm’l     Future     Related    Great   Manufacturing
Products   Products   Products   Ideas   or Business
or         or         or                 Methods
Services   Services   Services
“Choosing Your Words Carefully:”
  Search Engines, Trademarks,
           and…YOU
      Presented by Charles M. Hosch,
     Partner, Strasburger & Price, LLP
      How Search Engine
      Advertising Works
• Advertiser buys “keywords” by
  “bid”
   – Google, Yahoo, etc. then use the
     keywords to find the advertiser‟s
     site and present it
   – How? Proprietary, secret
     algorithms no one sees
   – Site placement = function of (bid
     $ + ad quality)
   – Usually, advertiser pays “per
     click” by user.
      Better Keywords =
        Better Results
• …but how to pick “keywords?”
    (alone, or in bundles)
• The Right Way:
  – Know your customers and what they associate
    with your product or service
  – Search engines offer help
    (automated “tools” – plug in URL,
    engine suggests keywords; or personalized
    advice)
  OR…..
What If a Competitor Buys
Your Trademark as One of
    Its “Keywords?”
• Search engines‟ policies decry it, but
  so what?
• Search engines won‟t show your
  trademark in the course of the search
  (use secret, proprietary algorithms)
• The Problem: since user doesn‟t see
  the mark, is this actionable “use” in
  commerce?
 If a Trademark Falls in the Forest
  and No One Sees It, Is It “Use?”
• Circuits Are Divided:
  – Ninth Circuit
     • Yes: Search engines‟ use of trademarks as “keywords” =
       “use in commerce,” potentially likely to cause confusion
       (Playboy case)
  – Second Circuit
     • No: search engines‟ “use” in a way that doesn‟t
       communicate the mark to the public is [like] “an
       individual‟s private thoughts about a trademark”
       (WhenU case)
  – W.D. Texas
     • Maybe: purchase of plaintiff‟s trademarks as Keywords
       may constitute “initial interest confusion” (Bluesky case)
   What If a Competitor
    Pulls This on Me?
• An ounce of prevention:
  – Keep promoting distinctive marks, rather than
    merely “descriptive” ones

• If necessary, cure:
  – Focus on Section 43(a) (federal law of unfair
    competition)
  – Argue “use in commerce” means using the wires,
    not so much “use” as will support a trademark
    registration
  – Consider state causes of action
    (e.g., tortious interference)

								
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