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Sovereign immunity growing as inter partes defense, effect on licensing terms unclear


By Jesse Schwartz
Published: July 19th, 2017

The University of Florida’s successful use of sovereign immunity to end an inter partes challenge was no fluke, as two other schools are using the same defense and legal analysts say it will become a reliable strategy for some universities. The security offered by having that defense available could lead those universities to be more bullish with their royalty rates and IP terms, but that does not appear to be happening just yet, experts say.

The interest in sovereign immunity took off when the Patent Trial and Appeal Board (PTAB) accepted it in Covidien LP v. University of Florida Research Foundation Inc. [IPR2016-01274, -01275, -01276], dismissing three petitions challenging the claims of a patent owned by the UFRF. The foundation is an arm of the State of Florida by way of the University of Florida, the PTAB noted, so the foundation is entitled to a sovereign immunity defense for an inter partes review (IPR) of the challenged patent.

More recently the PTAB dismissed an IPR for the second time based on an assertion of 11th Amendment sovereign immunity made by the University Maryland in Baltimore. This is a significant confirmation of the validity of the sovereign immunity defense, says Stephen J. Gardner, JD, partner with the law firm of Quarles and Brady in Madison, WI.

The latest decision came in the case of NeoChord, Inc. v. Univ. of Md., Baltimore [Case No. IPR2016-00208, Paper 28 (PTAB, May 23, 2017)], in which the PTAB dismissed NeoChord’s IPR proceeding based on the sovereign immunity defense.

In the UMB case, the petitioner NeoChord asserted that a patent directed to cardiac valve repair and owned by UMB was unpatentable. In its decision ultimately dismissing the case, the PTAB largely followed the same rationale as the UFRF opinion, though the PTAB panel went out of its way to note that the UFRF decision was not binding precedent, Gardner notes.

The PTAB found that UMB was an arm of the State of Maryland, and that IPRs are adversarial, contested proceedings appropriate for an assertion of sovereign immunity. NeoChord’s argument that UMB’s voluntary participation in a briefing in the case amounted to a waiver of sovereign immunity by conduct was found unpersuasive by the board. The PTAB noted that UMB had not “delayed for any tactical reasons,” and thus the PTAB followed precedent holding that “mere participation in judicial proceedings does not create a waiver unless the State has taken affirmative steps to invoke federal jurisdiction.”

The UMB case could take another turn, however. Because the UMB decision was issued after the IPR had been instituted, the chances of an appeal and eventual precedential ruling by the Federal Circuit are significantly greater than was the case with the UFRF proceeding, Gardner says.

The decision strengthens the growing perception that patents owned by governmental entities like public universities and research hospitals are less susceptible to invalidity challenges, Gardner says. TTOs at state universities will benefit in several ways, he says. Improved negotiating power for royalty rates is one likely result. Patents that can be shown to less susceptible to challenge can command higher royalty rates, and license agreements commonly have a royalty escalation clause that increases the royalty rate in the event the licensed patent survives a validity challenge, Gardner notes. If sovereign immunity can be used by public universities to avoid IPR challenges, Gardner says it follows that they can charge more for those licenses.

In addition, public universities and their licensees may soon start seeing fewer IPR challenges as a result of these rulings, so they also could benefit from lower litigation costs, he says.

Research sponsors also may stop demanding full ownership of patents resulting from sponsored research and clinical studies, opting for joint ownership to try to benefit from the university’s sovereign immunity. Though the theory has not been tested yet, Gardner says it is possible that the sovereign immunity would extend to all of the joint owners of a patent.

A detailed article examining the sovereign immunity defense and the latest decisions addressing it appears in the July issue of Technology Transfer Tactics. To subscribe and access the entire article, as well as the publication’s rich 10-year archive of best practices and success strategies for TTOs, CLICK HERE.

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Florida commercialization institute is seeing the effects of recent funding cuts from the state


By Jesse Schwartz
Published: July 19th, 2017

A recent veto of funding for a leading Florida commercialization group is beginning to show its damaging effects within the South Florida tech community. continue reading »

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Opportunities and Pitfalls in Joint Development and Patent Licensing under the AIA


By Jesse Schwartz
Published: July 19th, 2017

The America Invents Act created new benefits — but also some unexpected traps — in the patent laws surrounding university-industry collaborations. One key change involves carve-outs for “prior art” that would otherwise invalidate a patent. For example, the work of a “joint inventor” will be disregarded as prior art in certain circumstances. Likewise, an earlier-filed application does not count as prior art against a later-filed application if both applications were commonly owned (e.g., through a joint venture or partnership) at the time the second application was filed. This same prior-art avoidance can be achieved by entering into a “joint research agreement” without formally assigning ownership of the patent.

On the other hand, applicants must be aware of some traps in the law that can jeopardize the validity of patents. Filing an application in the name of the owner (as opposed to the inventor) may forfeit priority rights to a provisional application. Also, the Patent Office and the courts disagree whether a secret offer to sell the invention will be treated as prior art against the patent.

There’s much to consider, and Tech Transfer Central’s Distance Learning Division has scheduled a practical webinar will clarify the risks and benefits facing universities and their industry partners seeking to license jointly developed innovations. Join us on August 3rd for Opportunities and Pitfalls in Joint Development and Patent Licensing under the AIA.

For complete program and faculty details, CLICK HERE.

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Oxford researchers advance technology that tests blood vessels for signs of heart disease


By Jesse Schwartz
Published: July 19th, 2017

Oxford University researchers have created a blood vessel test to identify people at high risk of a heart attack or stroke. continue reading »

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How developing a business model canvas can help your start-up


By Jesse Schwartz
Published: July 19th, 2017

In his recent article for the Huffington Post, start-up mentor and investor Martin Zwilling outlines a “model canvas” than can spur a start-up’s fundraising. The canvas is a visual chart describing a company’s value proposition, structure, finances and customers. According to Zwilling, this process can be applied within the start-up team to show how each member works in synergy. “In my experience as a new business advisor, a business is nothing until people are aligned and in sync,” writes Zwilling. Here are the nine major elements of the model canvas and how they apply to companies: continue reading »

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Johns Hopkins helps launch “vertical” accelerator focused on health and fitness innovations


By Jesse Schwartz
Published: July 19th, 2017

Johns Hopkins University and a team of partner organizations are launching a start-up accelerator focused on health and fitness technologies. continue reading »

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8th edition of Drafting Patent License Agreements now available


By Jesse Schwartz
Published: July 19th, 2017

The 8th edition of Drafting Patent License Agreements has been completely revised and expanded. In concise chapters, it tracks and discusses — clause by clause — all the critical components of a license agreement. This updated reference provides you with a current overview of all legal issues surrounding licensing, addressing every typical provision used in patent and know-how licenses. Sample provisions are provided in the 675-page guidebook with references to applicable legal and practical consequences.

Also new to this edition is a link that provides access to a set of form paragraphs and clauses you can incorporate into your license agreements. Form paragraphs are indexed to the text, and each one includes the rationale and legal support so you can determine whether or not a particular form paragraph is appropriate for accomplishing your specific goals. This valuable online access also includes the form agreements contained in the appendices. For complete details and to order, CLICK HERE.

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Lancaster U spinoff uses atomic-scale technology to combat counterfeiting


By Jesse Schwartz
Published: July 19th, 2017

Lancaster University researchers have developed a technology that uses an atomic-scale “fingerprint” that enables a smartphone camera to check the authenticity of items, from money to medicines. continue reading »

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Clarkson U researcher is converting waste from dairy production into carbons for energy storage


By Jesse Schwartz
Published: July 19th, 2017

A researcher at Clarkson University in New York is commercializing a method that uses waste from dairy production to create carbons used for energy storage, CO2 capture and other applications. continue reading »

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UT-Austin’s start-up ‘studios’ make valuable connections for faculty innovators


By Jesse Schwartz
Published: July 12th, 2017

The University of Texas at Austin’s Innovation Center — housed at the Cockrell School of Engineering — is hosting monthly get-togethers where faculty inventors present their discoveries, inventions and start-ups to small, informal groups of local industry experts and entrepreneurs. The gatherings are called UTAustinstARTup Studios, and the clever use of capitalization is intentional, according to Louise Epstein, the center’s managing director. “It’s called a studio because start-ups are an art and a science,” she says, “and art is crafted in a studio.”

Attendance at the studio is by invitation only. “The ideal professor candidate for participation has a start-up or a proto-startup,” Epstein explains. “Normally, they have the IP and they are either thinking of starting a company or have started a company.” Even though the engineering school hosts the Innovation Center, “we work with professors across campus,” she adds.

Sometimes the Center contacts the professors, sometimes it works the other way. And the experts invited to hear the faculty presentation are carefully chosen as well. “Every guest at the studio is handpicked,” Epstein explains, by her and by Robert Metcalfe, PhD, who’s officially a professor of innovation and the center’s faculty director, but who’s better known as the inventor of the Ethernet.

“It’s our intention that attendees be resources for our professors,” she says. “We may have a professor presenting on medical devices, so we invite people from the medical device and health industries and Food and Drug Administration experts.” The entrepreneurs she and Metcalfe invite are often looking for their next opportunity, she adds. “They know our start-ups are usually looking for CEOs and business people.”

The center hosts nine Studio sessions each school year, September through May, and each features presentations from three faculty members. Each presentation features 15 minutes from the professor and 15 minutes of Q&A. “We fondly call the Studios ‘Shark Tank,’ but they’re not sharky at all. They’re a wonderful opportunity to be helpful to — and an evangelist for — the start-ups,” Epstein says.

A detailed article on the UT-Austin program appears in the June issue of Technology Transfer Tactics. To subscribe and access the full article, along with the publication’s 10-year archive of best practices and success strategies for TTOs, CLICK HERE.

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Marketing Strategies that Attract and Engage Industry Partners


By Jesse Schwartz
Published: July 12th, 2017

If your TTO is like most these days, you are working hard to adapt and thrive in a more partnership-driven world, and your marketing efforts are shape-shifting to meet those demands. One thing should be clear by now: Seeking out and establishing industry partnerships shouldn’t wait until an innovation is patented — it should start at disclosure, and the marketing opportunities and efforts must continue to evolve with the technology through the pipeline.

By constantly re-evaluating the market space and involving multiple parties, you dramatically increase your chances of getting your innovations to the marketplace. But it requires not only the right strategies, but also diligence, dedication, and a healthy dose of hard work. That’s why our Distance Learning Division has scheduled a targeted webinar program that will provide you with a wealth of how-to advice on developing your marketing strategies to attract and secure solid, long-term industry partnerships. Join us on August 10 for Marketing Strategies that Attract and Engage Industry Partners.

For complete program and faculty details and to register, CLICK HERE.

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Recro Pharma licenses novel neuromuscular pain drugs from Cornell


By Jesse Schwartz
Published: July 12th, 2017

Recro Pharma, a developer of therapeutics for hospital settings, has acquired exclusive global rights to two neuromuscular blocking agents (NMBs) and a chemical reversal agent from Cornell University. continue reading »

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