IP Advisor - May 2012 May 01, 2012
In This Issue

New Privacy Developments Have Implications for Mobile App Developers, Distributors and Marketers

In recent months, there have been notable developments involving privacy for mobile applications (“apps”), a number of which have important implications for app developers, distributors and marketers. On February 22, the California Attorney General announced an agreement, developed with Apple, Google, Microsoft and three other mobile platform companies, that effectively establishes nationwide, enforceable standard privacy policies for mobile apps. A day later, the White House announced its proposal for a Consumer Privacy Bill of Rights as part of a framework for regulating how private-sector entities handle personal data in commercial transactions involving networked technology.[1]

Both of these initiatives are intended to strengthen consumer data privacy protections in Internet and mobile device commercial transactions. The California AG’s agreement with the mobile platform companies is particularly timely. In recent weeks, the app industry has faced significant criticism over its handling of consumer privacy.  First, a blogger discovered that an app for the social network Path had uploaded his contacts from his mobile phone without his permission.  Shortly thereafter, photo-sharing service Hipster admitted uploading users’ contacts and then Twitter acknowledged copying the content of users’ address books from their mobile phones and storing the information on its servers.

In a digital economy where mobile apps are downloaded at a rate of two billion per month, where, according to the research company Gartner, worldwide mobile app sales are expected to grow to at least $25 billion by 2015, and where most apps available today do not even have privacy policies, these recent developments will certainly have an effect on future legislation and industry standards.  

Consumer Privacy Bill of Rights

The Obama administration’s proposal for a Consumer Privacy Bill of Rights (“CPBR”), which was released as part of  its white paper, “Consumer Data Privacy in a Networked World: A Framework for Protecting Privacy and Promoting Innovation in the Global Digital Economy,” is intended to give users more control over how their personal information is used in commercial transactions. This framework is directed, among other technologies, at mobile apps, which are capable of copying sensitive information from mobile devices, including device identification numbers, email addresses, location, personal contacts, texts, calendar entries and photos.

The CPBR contains seven core principles relating to all commercial uses of personal data. Under the CPBR, “personal data” is defined broadly as any data, including aggregations of data, that can be linked to a specific individual or specific device.  As an example, the CPBR provides that  “an identifier on a smartphone or family computer that is used to build a usage profile is personal data.”

Seven Principles of the Consumer Privacy Bill of Rights

The CPBR adopts seven general principles as a guide for future rule-making and legislation. These principles are summarized below:

  1. “Individual Control:  Consumers have a right to exercise control over what personal data companies collect from them and how they use it.” When companies collect personal data from consumers, they should present choices to the consumer “about data sharing, collection, use, and disclosure that are appropriate for the scale, scope, and sensitivity of personal data in question,” including the ability to withdraw or to limit consent to share and collect such data.
  1. “Transparency: Consumers have a right to easily understandable and accessible information about privacy and security practices.” Mobile apps, which are accessed on mobile devices, will need to present mobile consumers with the most relevant information about what personal data is shared, used and collected in a way that takes into account the small screens and privacy risks that are specific to mobile devices.
  1. “Respect for Context: Consumers have a right to expect that companies will collect, use, and disclose personal data in ways that are consistent with the context in which consumers provide the data.”  If companies will use or disclose personal data for purposes other than those that are consistent with their relationship with the consumer or for which the information was originally disclosed, then they should inform consumers and get their consent before the personal data is collected or before the company seeks to use already-collected data for different purposes.
  1. “Security: Consumers have a right to secure and responsible handling of personal data.” Companies that collect and keep personal data are required to keep such data secure. For example, data should be encrypted when moving data between a mobile phone and server.
  1. “Access and Accuracy: Consumers have a right to access and correct personal data in usable formats, in a manner that is appropriate to the sensitivity of the data and the risk of adverse consequences to consumers if the data is inaccurate.” Not only should companies that handle personal data ensure that the consumer data that they maintain is current and accurate, but they should give consumers reasonable access to the data collected about them and the ability and opportunity to correct inaccurate data or request its deletion or limitation of use. 
  1. “Focused Collection: Consumers have a right to reasonable limits on the personal data that companies collect and retain.” Companies should only collect personal data that they need in order to accomplish the specific purpose for which the data was originally collected. App developers should take into account data and features unique to mobile devices, such as location data and the contents and metadata from phone calls and text messages, and limit access to only the data that is relevant for the app’s intended functionality.
  1. “Accountability: Consumers have a right to have personal data handled by companies with appropriate measures in place to assure they adhere to the Consumer Privacy Bill of Rights.” Companies should train employees to handle personal data appropriately; evaluate and, if appropriate, audit companies’ treatment of personal data; and enter into contracts or other legally enforceable instruments requiring third parties to handle personal data appropriately.

Enforcement of the Consumer Privacy Bill of Rights

For now, the CPBR is a framework and does not include enforceable rules, but the Obama administration is pursuing implementation through legislation and a multi-stakeholder rule-making process and is seeking enforcement through the Federal Trade Commission (“FTC”).

The administration’s intent of legislating the CPBR is to provide a comprehensive federal standard applicable to all personal data used or disclosed in private sector commercial transactions. Currently, much of the personal data used, shared and collected on the Internet or through mobile devices and technology are subject to federal privacy statutes that regulate specific sectors, such as healthcare, education, communications, financial services and data collection involving children. In implementing the CPBR through legislation, the Obama administration does not intend to modify these existing federal privacy statutes, but instead intends to supplement them with the CPBR legislation and extend privacy regulations to those entities not covered by the existing statutes.

The multi-stakeholder process, intended to include such players as state Attorneys General, law enforcement representatives, individual companies, industry groups, privacy advocates, international partners and other groups, is expected to ultimately produce codes of conduct that implement the seven principles of the CPBR, which companies may choose to adopt voluntarily. It is expected that a company’s public commitment to adhere to a code of conduct will become enforceable under Section 5 of the Federal Trade Commission Act (prevention of deceptive acts or practices), similar to how companies are bound to follow their privacy policies.

In addition, the Obama administration supports further legislation that provides the FTC (and state Attorneys General) with specific authority to enforce the CPBR. It supports giving the FTC explicit authority to review companies’ codes of conduct against the CPBR legislation and to grant a safe harbor from enforcement of the CPBR legislation to companies that follow a code of conduct that the FTC has reviewed and approved.  If a company does not adopt a code of conduct, or chooses not to seek FTC review of a code that it chooses to adopt, then it will be subject to the requirements of the legislatively adopted CPBR.

California Online Privacy Protection Act

The recent joint statement of principles (“Joint Statement”) issued by the California AG along with Amazon, Apple, Google, Hewlett-Packard, Microsoft and RIM (collectively, the “Mobile Apps Market Companies”) is significant for stakeholders in the app industry. It requires the Mobile Apps Market Companies to conspicuously post, for mobile apps available in their stores, a privacy policy describing the app’s privacy practices and how personal data is collected, used and shared.  It also commits the Mobile Apps Market Companies to bring the industry in line with the Business and Professions Code Section 22575 of the California Online Privacy Protection Act (“CalOPPA”).

This section of CalOPPA, operative since July 2004,  requires that “an operator of a commercial web site or online service that collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial web site or online service shall conspicuously post its privacy policy.” Under CalOPPA, the operator, as defined above, must detail the categories of information collected by the online service, the dates the policy takes effect, how the website will notify users about changes to the policy, and what processes a user has to review or request changes to any of his or her personally identifiable information that is collected through the website or online service.

The California AG believes, regardless of the Joint Statement, that this section of CalOPPA applies to mobile apps and requires them to have privacy policies.  The majority of mobile apps do not. In fact, a TrustE and Harris Interactive study found that only 5% percent of all mobile apps have privacy policies. With the requirements of CalOPPA applicable to mobile apps, it appears, given the virtual nature of the product and the technology, that all mobile app providers will have to comply with CalOPPA, with the Joint Statement effectively establishing a nationwide standard for mobile app privacy policies.

The Joint Statement sets forth additional principles. It requires the Mobile Apps Market Companies to include in their application submission process for new or updated apps either a hyperlink to the app’s privacy policy or the text of the app’s privacy policy. Also, the Mobile Apps Market Companies are required to put in place a process for users to report to them if apps on their platform do not comply with applicable terms of service and/or laws, as well as a process for responding to reported instances of non-compliance.  Finally, the Mobile App Market Companies must continue to work with the California Attorney General to develop best practices for mobile privacy and model privacy policies, and meet within six months to evaluate privacy in the mobile space and educational programs regarding mobile privacy.

Conclusion

The proposal for a Consumer Privacy Bill of Rights and the developments involving CalOPPA present legal and commercial implications for all companies involved in the mobile app industry, as well as for consumers who download or use apps. All stakeholders in the industry should consider the privacy ramifications of the technology involved and proactively incorporate privacy protections into the design and use of apps.



[1] The FTC also recently issued a report on mobile apps for children, a topic covered in our March 27, 2012 Client Alert.

Implementation of the Biologics Price Competition and Innovation Act

A statutory and regulatory scheme to encourage the development of “biologics,” drug products made in living organisms, has been a goal for more than a decade, and the Biologics Price Competition and Innovation Act (“BPCIA”) was enacted on March 23, 2010.  The U.S. Food and Drug Administration (“FDA”) is working to implement the BPCIA and published draft guidelines for the industry on February 7, 2012.

The policy rationale of the BPCIA, similar to that of the 1984 Hatch-Waxman Act for pharmaceutical compounds, is to reduce the cost of biologics through increased innovation and increased entry by generics into the biologics market by creating data and market exclusivities for innovators, reliance for generics on the already-submitted data of innovators, generic market exclusivity and a structured mechanism for generic challenge of innovator patents.  Unlike small-molecule drugs, however, there is heightened concern that biologics might perform differently than the innovator product because biologics have greater molecular complexity and their safety and efficacy might be affected by the use of different molecular clones, cell banks or fermentation or purification processes.  Consequently, approval of generic biologics will require more stringent analysis than small-molecule generic drugs and likely will include clinical testing of efficacy.

Innovators warned Congress that a Hatch-Waxman approach to biologics would cause a loss of market share due to the speedy entry of generic biologics and, therefore, reduce interest in the development of new biologics.  To provide incentives for innovators and compensate for instances in which the remaining term of relevant patents at the time of market entry is short, Congress provided four years of data exclusivity between FDA approval and an abbreviated filing for a generic biologic relying on the innovator’s data and market exclusivity.  This prevents approval of a generic biologic until 12 years after approval of the innovator product.  The 12-year market exclusivity is more than twice as long as the five years provided under the Hatch-Waxman Act for new chemical entities, but does not apply to new indications, routes of administration, dosing schedules, dosage forms, delivery systems, delivery devices, or strengths of the innovator biologic, or to a modification of the structure of the biologic that does not result in a change in safety, purity or potency.  

To be approved for marketing, the abbreviated application must demonstrate that the generic biologic is either “biosimilar” to or “interchangeable” with the already-approved innovator product.  To be biosimilar, a generic biologic must utilize the same mechanism of action and have the same administration, potency, dosage form and strength, and have “no clinically meaningful differences” from the innovator product.  There is substantial uncertainty about what effects will be “clinically meaningful differences” and how the generic manufacturer will establish their absence.

Generic biologics categorized as biosimilar will be considered an alternate therapy with a different active ingredient from that of the innovator product.  Consequently, pharmacies and hospitals will not be permitted to substitute a biosimilar product for the innovator drug.  The first biosimilar to enter the market will not be entitled to a period of exclusivity from competition from other biosimilar or interchangeable products.
A designation of interchangeability will be necessary for the generic biologic to be substituted for the innovator by a pharmacy or hospital.  The first licensed interchangeable product will be awarded exclusivity as to other interchangeable biologics for at least one year, but will not enjoy exclusivity as to other generic products that are merely biosimilar.  Moreover, it will be difficult, if not impossible, to achieve “interchangeability” because it must be shown that the risk in terms of safety or efficacy of alternating or switching between the use of the generic product and the innovator product is not greater than without the alternation or switch.

The BPCIA does not require innovators to list the patents that cover their products as is done in the “Orange Book” for pharmaceutical compounds.  The generic applicant is required to submit its application to the innovator.  The innovator can use that application only to determine whether a claim of patent infringement can be reasonably asserted.  The innovator then must provide a list of all patents owned or licensed by it that cover its product including those directed to methods or processes.  The biologics applicant then must identify the patents that it challenges as invalid, not infringed or unenforceable, provide a detailed statement in support for each assertion, and also identify the patents for whose expiration it will wait before marketing its product.  
The FDA’s draft guidelines represent its “current thinking” on approval of generic biologics.  The guidelines only discuss biosimilarity for therapeutic protein products – there is no analysis of interchangeability, or of biologics other than proteins produced from a cloned gene. 

Generic manufacturers are to take a step-by-step approach to demonstrate biosimilarity in which they evaluate, at each step, the extent of remaining uncertainty and “consult extensively” with the agency.  

The steps for establishing biosimilarity are to provide (i) extensive structural and functional characterization of both the innovator and biosimilar products, which for proteins is a functional analysis of primary, secondary and tertiary structure; (ii) toxicity, pharmacokinetics, pharmacodynamics and immunogenicity data from studies in animals; (iii) comparative pharmacokinetic and pharmacodynamic data from studies in humans; and (iv) clinical data of immunogenicity in humans.  A fifth step of comparative clinical data of safety and efficacy in humans will be necessary if uncertainties remain after steps one through four.  

It is not clear that manufacturers of generic biologics will utilize the statutory and regulatory mechanism in view of the relatively long market exclusivity for innovators and the expected difficulty of establishing interchangeability to claim generic exclusivity.
There are additional uncertainties about the BPCIA.  The BPCIA is part of the Patient Protection and Affordable Care Act (“PPACA”), which requires individuals not covered by employer- or government-sponsored health insurance plans to maintain minimal essential health insurance coverage or pay a penalty, often referred to as the “individual mandate.”  The individual mandate has been challenged as unconstitutional.  The PPACA does not contain an express “severability” clause stating that if one provision of the Act is struck down as unconstitutional, the remaining provisions of the Act shall remain in effect, which increases the likelihood that if the individual mandate is struck down, the entire Act including the BPCIA will be struck down.  The U.S. Supreme Court heard oral argument on the constitutionality of the individual mandate and severability on March 26 through 28.  The Court’s decision is expected in late June.  There is a chance that the BPCIA will be struck down by the Court.

There also is a possibility, depending on the outcome of the 2012 elections, that Congress will repeal the PPACA or amend the BPCIA.  For example, the Obama Administration’s budget proposal for 2013 proposes to amend the BPCIA to reduce market exclusivity from 12 to seven years.

John P. Hanish, Ph.D., will speak at the April 26, 2012 meeting of the New York Chapter of the Licensing Executives Society regarding “Medical Devices – New Rules, New Opportunities”: http://lesusacanada.org/chapters/usa/new-york-city-chapter/april-26-2012-new-york-city-chapter

When Complying With HIPAA Is Not Enough: Tough New Medical Privacy Laws Are in Effect in Texas

While many covered entities and business associates are still adjusting to the changes to the Health Insurance Portability and Accountability Act (“HIPAA”) ushered in by the Health Information Technology for Economic and Clinical Health Act, new privacy requirements that are more stringent than HIPAA recently entered into force in Texas.  Last June, Governor Rick Perry signed into law Texas House Bill 300 (HB 300), a measure that amends the state’s medical records privacy laws by strengthening privacy protection for protected health information (“PHI”) and increasing penalties for violations.  The amendments, which took effect September 1, 2011, provide for health privacy protections in addition to and more stringent than those protections offered HIPAA.

The Texas Attorney General will be responsible for enforcing the new requirements and may seek injunctive relief and civil penalties up to $1.5 million annually for violations. Because of the broad scope of Texas health privacy laws, these changes are likely to have significant reach, impacting not only HIPAA-covered entities in Texas, but also governmental entities, schools and universities and other entities in Texas that process PHI.

REQUIREMENTS AND LIMITATIONS IMPOSED ON COVERED ENTITIES.

HB 300 will primarily impact “covered entities.”  However, while the definition of covered entity under HIPAA is limited to health care providers, physicians, health insurers and health care clearinghouses, existing Texas law defines covered entity more broadly as any entity that engages in “assembling, collecting, analyzing, using, evaluating, storing, or transmitting protected health information,” or that “comes into possession of” or “obtains or stores” PHI. This means that the new requirements of HB 300 could impact a broad group of entities – beyond those subject to HIPAA.

 The key new obligations imposed on covered entities are discussed further below:

A covered entity is required to develop and administer a training program for its employees that covers the details of both the state and federal laws concerning PHI.  The training session should specifically be geared towards how these laws relate to (i) the nature of such covered entity’s business and (ii) each employee’s scope of employment.  There is no explicit language exempting from this training those employees of a covered entity that do not come into contact with PHI in the scope of their employment. An employee of a covered entity must receive such training within 60 days of such employee’s date of hire, and on a continual basis, no less than once every two years.  Each employee who attends a training session must sign in (electronically or in writing) to verify their attendance at such training and the covered entity must maintain records of such attendance.

Subject to limited exceptions, a covered entity may not indirectly or directly sell an individual’s PHI.  The new measures will generally restrict covered entities from selling PHI.  However, a covered entity is permitted to receive a payment or fees from another covered entity in exchange for access to an individual’s PHI solely for the purposes of treatment, payment, health care operations, the performance of an insurance or health maintenance organization function or as otherwise authorized or required by state or federal law.  The payment or fees obtained in exchange for the PHI may not exceed reasonable costs of preparing or transmitting the PHI to such covered entity. 

A covered entity is required to (i) provide notice to an individual (for whom such covered entity creates or receives PHI) when such individual’s PHI is subject to electronic disclosure and (ii) obtain prior (written or orally documented) authorization for such electronic disclosure from the individual.  The form of notice is up to the covered entity, as long as the individual is likely to see it (e.g., written notice at place of business, posting on Internet website, or both, etc.).  The prior authorization requirement is not applicable if the disclosure is made to another covered entity for the same purposes as outlined above relating to the sale of PHI (e.g., treatment, payment, health care operations, etc.).  The new law indicates that the Attorney General will adopt a standard authorization form, which will comply with HIPAA standards.

ENHANCED ENFORCEMENT MECHANISMS AND PENALTIES.

The new law places its enforcement authority in the hands of the Texas Attorney General, who may pursue an injunction, monetary penalties and disciplinary actions against covered entities that are in violation.    In addition to injunctive relief, the Texas Attorney General may institute an action for civil penalties ranging from $5,000 for each negligent violation that occurs in a given year up to maximum of $1.5 million annually.  The penalties increase when the acts are deemed intentional and for financial gain.  If a covered entity is deemed in violation of the new law and is licensed by a state agency, a disciplinary action may include revocation of the covered entity’s license.  HB 300 also provides that the state may conduct audits of a covered entity to determine its compliance with the state’s health privacy requirements.

Covered entities and other entities processing the PHI of Texas residents should take note that the new far-reaching obligations have recently entered into force in Texas. Because the law goes beyond the requirements of HIPAA in a number of significant ways, even entities that have very well developed HIPAA compliance programs will likely need to make changes to comply with the Texas law.

Impact of Post-Grant Review Proceedings on Patent Owners and Petitioners Under the PTO’s Proposed Rules

One of the objectives of the recently enacted America Invents Act (“AIA”) is to broaden the opportunity to challenge the validity of patents with quick and effective alternatives to district court litigation.  Toward this end, Congress has created four new procedures for challenging the validity of patents: inter partes review proceedings (“IPR”), post-grant review proceedings (“PGR”), the transitional program for covered business method patents (“CBM”), and derivation proceedings.  In February, the U.S. Patent & Trademark Office (“PTO”) issued proposed rules governing these four new proceedings.  The PTO stated that fashioning the rules required a delicate balance of competing interests: the public’s interest in ridding the patent landscape of invalid patents on the one hand, and patent owners’ interests in protecting the value of their inventions and not being unfairly harassed, on the other.  Although the PTO will not finalize these rules until the end of July, the PTO’s statements at recent cross country “road shows” indicate that these rules likely serve as a good preview of the final rules the PTO will ultimately issue. 

To achieve the goals of a streamlined patent review process, the PTO’s proposed rules use the same procedural structure for the four new proceedings.  All of the new proceedings will be reviewed before the newly created Patent Trial and Appeal Board (“PTAB”).  The common procedural framework seeks to allow judges of the PTAB to seamlessly transition between proceedings and handle an increased caseload.  This procedural framework, however, applies only to the newly created proceedings; the current procedures for ex parte reexamination will remain intact.     

Initiation of Post-Grant Review Proceedings

Generally, the new procedures begin with the filing of a petition that identifies all of the claims challenged.  For each claim, the petitioner must also identify the grounds and supporting evidence for review.  The patent owner will then have an opportunity to file a preliminary response to the petition, providing any reasons why the proceeding should not be instituted.    

After the patent owner files a preliminary response, the PTAB will determine whether to go forward with a trial, and if so, whether to narrow the claims and issues for review.  The PTO has explained that reducing the claims and issues for review will ensure the completion of the trial within 12 months.    

Conduct of Post-Grant Review Proceedings

After the PTAB has determined whether to institute a proceeding, it will issue a scheduling order setting the deadlines for responses, oppositions and discovery – a new feature to post-grant patent review.  Under the proposed rules, parties will have the opportunity to conduct much more rigorous discovery than was allowed in prior reexamination proceedings.
According to a template scheduling order issued by the PTAB, discovery between the parties will be sequenced, such that each party will take a turn conducting discovery before submitting a motion or opposition.  The scope of allowable discovery is divided into two categories: routine discovery and additional discovery.  Routine discovery is generally the same across PGRs, IPRs and CBMs, and includes (i) the production of any exhibit cited in a paper or testimony, (ii) the cross-examination of declarants and (iii) the disclosure of any information that is inconsistent with a position advanced during the proceeding.  The scope of “additional discovery” allowed depends on the type of proceeding.  Parties seeking additional discovery in IPRs must demonstrate that the additional discovery is in the “interest of justice,” while parties seeking additional discovery in a PGR or CBM must demonstrate only “good cause,” a slightly lower standard.  
With IPRs, PGRs and CBMs sharing many of the same procedures, the different standards for discovery are one of the many factors that are sure to play a role in a petitioner’s decision on which form of proceeding to initiate.  In addition to the differences in the standards for discovery for each proceeding, petitioners will also look to the differences in the requirements for satisfying the burden of proof and standing to decide which proceeding to initiate.

One of the first differences petitioners must consider is the burden of proof required for each proceeding.  For PGRs, petitioners must demonstrate that they are “more likely than not” to prevail on at least one challenged claim.  That is, if there is more than a 50% likelihood that a petitioner will prevail on at least one challenged claim, the threshold is met.  In contrast, IPRs can only be instituted if a petitioner demonstrates a “reasonable likelihood” that the petitioner will prevail on at least one claim challenged.  While this standard represents a lower standard than the “more likely than not” standard, a petitioner’s chances of prevailing must nevertheless be reasonable.  That is, whereas a petitioner with a 49% likelihood of prevailing will probably meet the threshold, a petitioner with only a 20% likelihood of prevailing will most likely not meet this threshold. 

Next, petitioners must consider whether they have standing to bring a challenge.  To establish standing under the rules, petitioners must be capable of demonstrating that the patent is available for review and that the petitioner is not barred or estopped from requesting a review.

Determining whether a patent is available for review depends on the date the patent is filed, the date the petitioner files for review and the grounds for invalidity.  As to the date the patent is filed, PGRs are limited to patents issuing from a first-inventor-to-file system, while IPRs are available for any patents (i.e., patents issued both before the enactment of the AIA and after the enactment of the AIA).  As to the date the petitioner files for review, IPRs allow petitioners to file any time after the later of (i) nine months after the grant of a patent or reissuance of a patent or (ii) the date of termination of any post-grant review of the patent.  In contrast, PGRs are available only during the first nine months from the issuance or reissuance of a patent.  CBMs have the same requirements as PGRs, and additionally require petitioners to establish that they have been sued or charged with infringement.  Finally, as to the grounds of invalidity, petitioners are only allowed to bring IPRs on the basis of prior patents and printed publications, while PGR petitioners may additionally challenge patents on any form of prior art recognized in the statute, as well as the additional bases of subject matter ineligibility, inadequate written description, lack of enablement and claim indefiniteness.  

The difference in the available grounds to review a patent will undoubtedly be central to a petitioner’s decision as to which proceeding to utilize.  Significantly, PGRs offer petitioners a new opportunity to challenge patents on additional bases, which was not possible before the enactment of the AIA.  Petitioners who could show that patents were invalid for prior use by demonstrating that products existed more than a year before the filing date of the patent were often limited to relying on printed publications such as product manuals.  Under the new PGRs, petitioners will now have the opportunity to demonstrate prior use without being confined to printed publications.    
Another critical factor in a petitioner’s decision-making will be the costs for bringing each proceeding.  Under the proposed rules, the average filing fee for IPRs is estimated to be $35,800, while the average fee for PGRs and CBMs is estimated to be $47,100.  Although the new fees are a dramatic increase from prior reexamination proceedings, they may still present a cost effective alternative to litigation.   However, the estimated costs for post-grant review proceedings are still higher than the proposed fees for ex parte reexaminations, which under the AIA will increase to $17,750.

Conclusion

The new opportunities to challenge patents for subject matter ineligibility, inadequate written description, lack of enablement or claim indefiniteness, along with the ability to conduct rigorous discovery, has broadened the opportunity to challenge the validity of issued patents.  Petitioners seeking to maximize the opportunities offered by the new rules should closely watch for newly issued patents that may be important to their business, as the first opportunity to challenge patents expires nine months after the patent is granted.  With petitioners closely watching for issued patents to challenge, patent owners should similarly prepare for the possibility they may have to defend against invalidity challenges shortly after a patent is granted.

Publications and Events

Publications

"Issues to Consider Before Committing to Cloud Computing"
Mass Lawyers Weekly
April 23, 2012
Author: Robert S. Blasi

"Kids' Apps: Privacy Disclosures Are Not Child's Play"
Law360
April 5, 2012
Authors: Stephen G. Charkoudian, Jacqueline Klosek

"Mayo v. Prometheus: Supreme Court Reverses Federal Circuit Again"
New York Law Journal
March 28, 2012
Author: Parker H. Bagley

"For Trademark Licensors, Quality-Control Provisions Can Prove Risky"
National Law Journal
January 30, 2012
Author: Ira Levy

"Building Judicial Capital in Patent Adjudication"
New York Law Journal
January 25, 2012
Author: Parker H. Bagley

"Patents and the lessons learned from Web 2.0"
Computerworld
January 4, 2012
Author: Robert S. Blasi

"The ITC as an Indicator of China's Potential for Innovation"
IP Today
January 2012
Authors: Benjamin A. Keller, Charles H. Sanders and David T. Xue

"Preparing for changes under new America Invents Act"
New England In-House
December 7, 2011
Authors: Theresa C. Kavanaugh and Michael G. Strapp

Upcoming Events

Prometheus in the Post-Bilski Age: Patentable Subject Matter Under Continued Attack
May 1, 2012
Webinar

This CLE webinar, hosted by Strafford Publications, will prepare patent counsel to argue patentability under 35 U.S.C. Section 101, discuss the impact of recent Federal Circuit and ITC decisions—including the Supreme Court's Prometheus ruling, and offer best practices for patent seekers to meet subject matter eligibility requirements. Steve Schreiner is a featured speaker.

Two Great Jurisdictions Divided By the Same Law?
May 8, 2012
New York, NY

The New York and London Commercial Litigators Forums will be hosting a panel discussion, Two Great Jurisdictions Divided By The Same Law? The panel will cover topics including the differences in English and U.S. approaches to key litigation issues (such as privilege and witness preparation) for practitioners. The panel will be chaired by David Hashmall. The guest of hono(u)r will be U.S. Bankruptcy Judge Allan L. Gropper.

Patent Infringement Claims and Opinions of Counsel: Leveraging Opinion Letters to Reduce the Risks of Liability and Enhanced Damages
May 16, 2012
Webinar

Tom Scott will be a speaker for this CLE webinar on Patent Infringement Claims and Opinions of Counsel: Leveraging Opinion Letters to Reduce the Risks of Liability and Enhanced Damages. There will be two or three presenters, who will be followed by 20 minutes of live, interactive Q&A with the audience.

PLI's IP Monetization 2012: Maximize the Value of Your IP Assets
May 9, 2012
New York, NY

At IP Monetization 2012, organized by PLI, leading players from operating companies, investment firms and consulting firms will explain the latest IP monetization techniques, review key trends and developments, and discuss and analyze important recent transactions, as well as other market developments.  Additionally, attendees will learn the latest developments in IP valuation, and receive valuable practical insights from both in-house and IP marketplace participants who discuss their IP monetization experiences and strategies. Ira Levy will present the "Impact of the America Invents Act and Other Patent Law Developments on IP Monetization" session.

Computer World Open Source Business Conference
May 21-22, 2012
San Francisco, CA

This conference, hosted by Computer World, offers attendees the chance to connect with the developers, users and companies behind the most significant open-source Big Data technologies. Rob Blasi will lead the patent session.

PLI: Fundamentals of Patent Prosecution 2012: A Boot Camp for Claim Drafting & Amendment Writing
June 13, 2012
New York, NY

This program is directed to patent attorneys, litigation attorneys and patent agents with or without a Patent Office registration number, or with little patent experience. It will focus on teaching the basics of claim drafting and patent application preparation and prosecution, as well as a review of recent developments in the law. A litigator’s perspective will also be presented to show how drafting and prosecution can influence the development, and often the outcome, of subsequent patent litigation. The clinics offer a unique supplement to the kind of hands-on mentoring that senior attorneys are hard-pressed to provide to less-experienced attorneys and agents. Marta Delsignore will be a speaker on litigation issues.

PLI's Understanding Patent Law 2012
June 29, 2012
New York, NY

This is a basic patent program to help in-house counsel whose responsibilities include managing patent portfolios, patent litigation and patent licensing, especially for mid-size companies that don’t have full-time IP counsel and whose General Counsel must handle these issues. It will be of interest to corporate attorneys and business managers who need a basic overview of patent law for issue spotting in contexts such as board meetings and executive briefings, etc, as well as to general practitioners who encounter patents in their practices and litigators seeking to build patent litigation capabilities.  Non-attorneys seeking an introduction to patents will also benefit. Marta Gross, program chair, and Sarah Solomon will speak on patent strategies and transactions.