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No Sovereign Immunity: Targeting University Patents in Inter Partes Review

According to recent statistics from the USPTO, there were over 600 petitions for Inter Partes Review filed in the first five months of 2014, which is 100 more petitions than were filed in all of 2013. Although many petitions are directed to patents held by non-practicing entities, universities and their technology commercialization offices are a frequent target of IPR petitions.

To date, there have been 30 different IPR proceedings involving universities or their technology commercialization offices. These 30 proceedings, some of which are related, involve 13 different universities. The University of Illinois and Boston University have each been involved in 5 proceedings. Other targets include: The University of North Carolina-Chapel Hill, Duke University, University of Nebraska, Stanford University, Columbia University, University of Alabama-Birmingham, University of Washington, University of Rochester, New York University, University of Michigan, and the Hebrew University of Jerusalem. Of the 30 different petitions filed, 2 were filed in 2012, and 18 were filed in 2013. The trend of challenging university patents is continuing to angle upward as 10 petitions have been filed against universities so far in 2014. In all of these proceedings, the university’s patent was under attack from a petitioner. There have been no petitions for Covered Business Method reviews targeting patents owned by universities.

Most of the university IPR proceedings involve the university and its licensee. These proceedings likely resulted from the university and its licensee attempting to enforce their IP rights against the petitioner. However, some of the challenges to university patents do not seem to involve existing licensees. In these instances, the university is defending a challenge to its patent alone. It is difficult to tell from the context of the petitions, but this could be a negotiation strategy for potential licensees—particularly those who feel that a challenge to the patent is cheaper than paying a license.

These post grant proceedings also present a unique challenge for universities as they craft their license agreements. A typical university license agreement will state that the university has full and complete control over filing and prosecuting patent applications related to the technology. However, the agreements also typically state that the licensee has the right (or obligation) to enforce the licensed patent rights, usually at its own expense. That said, the typical university agreement is unclear as to who controls, and pays for, post grant proceedings. Moreover, if a licensee and a university are put into a post grant proceeding by a potential infringer, how can the university ensure its interests are aligned with the licensee? Depending on the situation, a university licensee may not mind if a challenger invalidates a university patent because it would release the licensee from royalty payments. Going forward, as university patents continue to be targeted in post grant proceedings, they should take steps now to craft their license agreements in a way that maximizes control of their patents—particularly in situations where university interests may not align with a licensee.  

© Copyright 2020 Armstrong Teasdale LLP. All rights reserved National Law Review, Volume IV, Number 174

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