What are the Options When the Big Bad Wolf Comes Knocking Demanding a Patent License? (1 of 2)

By Paul A. Durdik of Haynes Beffel & Wolfeld LLP posted in patent law on Tuesday, October 3, 2017.

Your successful startup has caught the attention of an established company brandishing a bunch of patents and asking you to take a license. How will you explain the complexities of this to your company’s leadership?

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Estimating an IP Budget Based on Business Goals

Establishing an IP budget for an enterprise is an important task for decision makers to undertake. In the article, “Rethinking the Annual Patent Application Filing Target,” recently published by IPWatchdog (http://www.ipwatchdog.com/2017/04/11/rethinking-the-annual-patent-application-filing-target/id=81911/), Raymond Millien & Stephen Glazier discuss considerations for establishing an IP budget for an enterprise.

Typically, the number of patent applications to be filed in the next year is estimated, and the budget is based on the cost of filing the estimated number of applications.

A common way to establish patent application filing targets is to start with the number of patents filed during the previous year, and adjust that number based on the current health and financial success of the company. The article provides these example adjustments:

Is has been a ______ year financially for the company.

A. Good (add 5%)

B. Great (add 10%)

C. Bad (subtract 5%)

D. Really Bad (subtract 15%)

The benefit of this approach is that it is generates a number, as is often required by a “C-suite executive,” that is grounded based on historical information. However, drawbacks of this approach include the:

· Level of innovation during the previous year might not be a good predictor of the future level of innovation

· Generated number of patent applications will guide employee behavior even though the number is arbitrary and derived without considering business goals.

Employees who are measured based on the target will be rewarded to innovate to the level of the target even when such behavior is not beneficial to the enterprise. Filing fewer patent applications than the targeted number may result in losing a bonus or having the following year’s budget cut. If actual innovation is less than predicted, an employee is likely to submit “junk” invention disclosures. Conversely, if the actual innovation is more than predicted, some important inventions will not be pursued for lack of funding.

The article suggests estimating the patent application filing target more accurately by tying the target estimate to business goals and metrics and provides ideas and examples to use. For example, the amount of the IP budget may be tied to the amount of investment in R&D. Tying the estimated budget to business goals leads to more strategic targeting of patent application filings.

For large enterprises, specific metrics are proposed that include benchmarking IP portfolios against competitors and other companies of similar size and industry. Two specific suggestions include benchmarking the number of PCT applications filed and the number of U.S./European patent application filings per $1M in domestic R&D expenditure. Goals regarding the desired position in the ranking can indicate the number of patent applications needed, and that number can be factored into the target.

Enterprises of any size can consider the percentage of an enterprise’s sales or profits that are actually covered by one or more issued patents and increasing the percentage of coverage using targeted brainstorm or patent harvesting. Similarly, the percentage of new product (or technology) introduction projects that are covered by patent applications or a patent can identify areas where IP investment can be targeted.

In conclusion, we like Millien & Glazier’s framework for establishing budgets. While practices differ greatly among organizations, this approach serves as a reasonable starting point.

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Responding to Statutory Double Patenting Rejections

By Andrew Dunlap of Haynes Beffel & Wolfeld LLP posted in patent law on Tuesday, August 22, 2017.

When was the last time you received a rejection of patent claims from the U.S. Patent Office that left you scratching your head… so much so, that you had to look up some law to figure out how to handle it? Recently, I had to respond to a

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Top 5 Tips for Young Lawyers in Private Practice Today

By James F. Hann of Haynes Beffel & Wolfeld LLP posted in patent law  on Thursday, July 27, 2017.

Recently, we sat down with Jim Hann, one of HBW’s most senior and experienced intellectual property lawyers, to discuss what it takes for young associates to succeed within the commercial law firm environment today.

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Korea Aligns Patent Law with International Community, Effective March 1, 2017

ALERT: Korea Aligns Patent Laws with International Community, Effective March 1, 2017

Korea recently aligned its patent laws to be more in line with the international community. A variety of changes to the law in Korea are now in effect as of March 1, 2017, including:

  • The period for filing a request for an examination is shortened to 3 years.
  • Korean law has introduced the use of a patent cancellation proceeding.
  • The law includes an introduction of an ex officio reexamination.
  • It also includes revisions to the ex officio amendment.
  • The law covers what constitutes the period of request for correction of claims and withdrawal of claims in a patent invalidation proceeding.
  • The law also covers the submission of examination results from foreign countries.

We see the new Korean law as implementing changes that, in our opinion, will result in greater conformity of the Korean Patent Law with the patent laws of other countries in the international patent community. We also believe this change will result in additional focus on the integrity of patents being registered in Korea by providing increased ability to other parties to challenge potentially invalid patents under the new patent cancellation procedure. We think these changes will achieve the following desired goals:

  • Shortening the time period to request examination will bring Korean practice into conformity with other countries’ practices.
  • The provisions granting ex officio powers of reexamination are based on prior art grounds only, and will alleviate the problem of patents being  granted when the examiner has uncovered new art after issuing a Notice of  Allowancebut prior to payment of the issue fee by the applicant.
  • The new procedure to challenge validity of a granted patent before the patent office is similar to the ex parte reexamination in the United States and, if used in place of court proceedings, presents an avenue for third parties to subject a granted patent to reexamination before the patent office.
  •  Finally, submission of examination results for a foreign filed counterpart  application from which priority of the Korean application is derived provides  to the examiner disclosure of any art and arguments made during  prosecuting the counterpart application.

We are less confident about the new provision granting ex officio rights to examiners to correct a patent application. In the U.S., by contrast, the examiner can raise objections or rejections for lack of enablement or written description, but amendment of the application’s specification, drawings or claims requires concurrence by the applicant.

For more information on this topic, visit a recent posting entitled the “Revision of the Korean Patent Act & Trade Mark Act” at the International Federation of Intellectual Property Attorneys. Korea Aligns Patent Law with International Community, Effective March 1, 2017

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