IP Law Bulletin

1. Why do entrepreneurs need to protect their technical and scientific innovations?

If you start a grocery store, you probably are not selling a technical or scientific innovation, so your goal is to execute better than the grocery store down the street. You likely will compete on price, quality, and service. Businesses that develop technical and scientific innovations, such as Tesla, Apple, and Novartis, as well as startups, spend enormous sums of time and capital developing the next big thing. These companies directly capitalize on that innovation. Ideally, nobody other than the entrepreneur who developed that innovation can commercialize it, giving the entrepreneur the exclusive right to own and potentially build the protected market/product. Think of it another way—why spend all this time and effort to move the market forward just to let a competitor use it…and reap the benefits of your hard work!

Indeed, parties looking to acquire an innovative company (or analysts for an IPO) take a hard look at whether the technical and scientific innovation of that company is adequately protected. Unfortunately, poorly protected innovation can kill enterprise value and even kill a deal. Venture capitalists, private equity, angel investors, and others will make similar analyses because they strive for a positive return on their investments through an acquisition or IPO.

Late last week, the Federal Circuit issued Power Integrations, Inc. v. Semiconductor Components Indus., LLC and Regents of the Univ. of Minnesota v. LSI Corp. These two precedential decisions bring further clarity to who is subject to the time bar for filing petitions for inter partes review (“IPR) and whether sovereign immunity protects patents from being subject to IPR challenges. The key takeaways are:

1. Consider the impact of mergers and acquisitions on IPR petitions, including those that have already been filed; and
2. Patents owned by states (including, state universities and research institutions) can be challenged in an IPR.

Steve Saunders, co-chair of Nutter’s Intellectual Property Department, recently drafted a Nutter Insights on how patents should be drafted with an emphasis on technical problems and technical solutions delivered by the claims.

Steve Saunders, co-chair of Nutter’s Intellectual Property Department, recently contributed an article to IPWatchdog that analyzed how the pendulum continues to slowly drift toward patentees in this post-Alice world. In the article, “Ancora v HTC: Why You Should Draft Patents That Emphasize Technical Solutions,” Steve addressed the recent ruling Ancora Technologies v HTC America, in which the Federal Circuit reversed a lower court’s invalidity ruling under 35 USC §101 by concluding that Ancora’s claimed subject matter was concrete—not abstract—because it assigned specific functions to specific parts of a computer to improve computer security. According to Steve, this case is yet another in a string of post-Alice cases suggesting that patents should be drafted with an emphasis on the technical problem and technical solution delivered by the claims.