How the Sovereign Immunity Defense Could Change Tech Transfer Patent Ownership Structures

An important driver for an economy includes technology start-ups, many of which get their start at universities. Recent cases at the US Patent and Trademark Patent Trial and Appeal Board have confirmed a unique benefit to certain University-owned IP - it is immune from challenge at the PTAB, a forum that has earned the "Patent Death Squad" label (whether right or wrong). This development should significantly impact how patent ownership and licenses are structured, particular at state university technology licensing offices throughout the United States.

Traditionally, the spin-out company had some sort of license from the University, but then endeavored to develop its own internally-owned IP so that it could build value and attract investment. Now, it may actually be more beneficial for the spin-off to give that IP back to the university and take an exclusive license so that the new IP can be immune from a PTAB challenge.

The value of PTAB immunity is massive - even leading well-established companies like Allergan to transfer patents to an Indian Tribe. Given the new reality of patent-value loss at the PTAB, university spin-offs and universities may consider working together to make a plan for new IP ownership that benefits both the spin-off and the university.