Intellectual Property for Project Development

Dr. Terry Mazanec

Justin Krieger, Esq.

By Dr. Terry Mazanec and Justin Krieger, Esq.
Special to The Digest

Early movers in a new field can make audacious claims and often become incredibly wealthy. In 1612, some of the first English settlers in America were able to persuade King James I to grant the “Virginia Company” a Charter to a huge portion of North America spanning the entire coast from New York City to Savannah, Georgia, and inland from “sea to sea,” i.e., from the Atlantic to the Pacific Ocean!  In addition, they were granted any islands up to 300 leagues offshore (~1,000 miles) so they could claim title to Bermuda, which was later sold for profit.  Unfortunately for the Virginia Company, in 1624 their Charter was not renewed and the lands in which they had invested were converted to a ‘royal’ colony, without compensation for their investors, not to mention for the Native Americans inhabiting them.

Embarking on a new technical field can progress similarly, but without the complication of sovereign whim.  Obtaining a patent may be considered a bit like obtaining a Charter in some area of technology for a finite length of time, typically expiring 20 years from filing. A patent allows one to exclude others from making, using, selling, offering for sale, or importing the claimed invention (like the land granted to the Virginia Company) without the owner’s permission.  Careful and thoughtful planning for obtaining intellectual property protection can be crucial to the success of a company.  Without such protection it is possible for another to take advantage of your hard work developing a process or product and jumping right in as a competitor.  Your ‘first mover’s advantage’ will then turn into a disadvantage as your competition avoids the sometimes costly research and development process.

Development of intellectual property (IP) naturally follows the development of the technology and the business.  Delaying the development and implementation of an effective intellectual property policy until one approaches potential funding sources is often too late. Investors need to understand whether intellectual property protection is in place, or at least applied for, before making an investment.

IP development needs to be viewed from two parallel perspectives: internal and external.

Internal development of IP starts with the evaluation of where you are and where you see yourself going.  A handy way to estimate where you are on the development curve is the Technology Readiness Level (TRL) scale, originally created in the 1950’s by NASA and subsequently modified by the US Departments of Energy and Defense to fit their needs.  The first article in this series, Expanded Technology Readiness Level (TRL) Definitions for the Bioeconomyby Dave Humbird, adapts the concept for bioeconomy projects.  The TRL scale starts at 1, defined as “Basic principles observed and reported,” and proceeds through to 9, “Full commercial deployment.”  The intermediate steps proceed along the familiar path of fundamental studies, feasibility studies, pilot plant, demonstration plant, and commercial plant.

Even in the earliest days of fundamental research – TRL 1 – it is important to start developing an IP strategy since patents are granted to the ‘first to file’ at the US Patent & Trademark Office (USPTO).  Like the Virginia Company, an early inventor may be able to lay claim to a vast expanse of the technology landscape, much of it unexplored.  This is particularly important since it is often difficult to determine what part of that landscape will be the most valuable until much later. Brainstorming or ideation sessions are commonly used techniques to expand and articulate the breadth of the invention. Involvement of a team of participants with diverse viewpoints or experiences provides for more flexibility of the patent’s future value, since both the path and the destination are likely to be modified as new information is developed.  Conversely, a poorly conceived and written early patent can become a barrier to obtaining more complete protection of an invention at a later date.

During the feasibility studies that are conducted at the lab bench or with computer simulations, when the technology is at TRL 3 or 4, new insights are typically gathered that may be worth protecting with patents.  While data is not required to obtain a patent, it can be extremely helpful in determining the most valuable aspects of an invention and accurately specifying the scope of the invention in a Patent Application. (This is a bit like Thomas Jefferson sending Lewis and Clark into the newly acquired Louisiana Territory to evaluate what had been purchased.)  In addition, if (read: when) an Examiner initially rejects a patent filing based on information that was available to the public at the time of filing (“prior art” in patent-speak), the data can be used to support patentability arguments made by the Applicant to the Examiner during prosecution.  In other words, data can be used to demonstrate that the invention is not-obvious and a true advance over the state of the art, which can be extremely helpful in convincing the Examiner to allow the application to grant as a patent.

In addition, the process of navigating a patent application through the US and foreign patent offices is complex.  As a result, retaining the services of an experienced patent attorney having the appropriate technical background is essential to ensuring that your patent rights are broad and fully protected.  Early participation of a talented patent attorney helps the technical team sharpen their skills at identifying patentable inventions within their activities and expand their horizons beyond what is on the bench (or computer monitor) before them.  Strong, clear communication between the scientists/engineers and the IP attorney will also permit patent applications to be drafted with more precision and clarity. Many “do-it-yourselfers” regret having undertaken the process alone and later seek the services of a patent attorney to try and salvage whatever they can from an inadequate patent filing.  But with a poorly drafted application, there may be little that can be done to protect the invention(s).  In the end, it’s almost always better to spend a little up front to obtain a solid patent filing rather than having to pay even more later on trying to clean up a sloppy filing.

Concurrent with the internal development of inventions and patents, technological advancements and commercialization continue to change the IP landscape worldwide.  Keeping abreast of these external developments through comprehensive competitive intelligence monitoring  may reveal current technical boundaries and can expose additional areas for exploitation.

Competitive intelligence is best accomplished by professionals who have been following the development of the technology and closely related technologies.  It requires knowledge of patents, academic publications, industrial developments, and grey literature, e.g., government reports and conference proceedings.  IP professionals who have access to additional data resources can greatly enhance the effectiveness of technical experts. Searches done by machine methods and reviewed by non-experts frequently miss key references or fail to make significant connections.

Modern data methods can be used to analyze the resulting materials to generate maps showing key areas of overlap and gaps that are opportunities for IP development. Some technology may be open art due to patent expiration or abandonment.  Patent searches with the guidance of IP professionals and technical experts can serve as a critical strategic tool to advance a project.

It is a common misconception that having a patent gives its owner the right to freely operate within the scope of his or her patent.  That notion is wrong because there may be an earlier, broader, patent that dominates a later issuing patent—preventing the later patent owner from operating under their own patent! Recall: a patent only grants the right to excludeothers from operating within the scope of the patent—it does not grant the affirmative right to the patent owner to operate within its scope.

So how do you know if you have the ability to operate your current or planned commercial process?  A comprehensive freedom to operate (FTO) analysis should be performed involving a skilled patent attorney and technical experts.  Conducting an FTO study early in the development can be important in order to avoid investing money and resources in a process that cannot legally be commercialized without infringing another’s patent.  FTO studies involve: (1) carefully defining the scope of the contemplated process, (2) conducting patentability searches for all “living” patents (patents that have not expired) in all relevant jurisdictions based on the scope of the contemplated process; (3) having a patent attorney work with a technical team to review all of the search results to ensure that none of the prior art patents present a potential FTO issue; and (4) if possible, obtaining a written opinion from the patent attorney documenting that the company has freedom-to-operate the process.  The written opinion of counsel demonstrates that the company has taken appropriate reasonable steps in defending its investment.  More importantly, in the unfortunate event that a company is later found liable for patent infringement, the written opinion can help to significantly limit the amount of recoverable damages.  Here too, it’s typically better to pay a little up front rather than pay much more down the road!

If one or more problem patents are uncovered in the study, that may not be the end of the road.  It may be possible, for example, to conduct a separate invalidity study to see if there is any prior art that the examiner may have missed that invalidates the problem patent.  In fact, there are proceedings in most patent offices to challenge granted patents based on newly discovered prior art.  Alternatively, in some cases, it may be possible to modify the contemplated process to avoid infringing an issued patent.  If neither option is feasible, it might be worth reaching out to the owner of the problem patent and try to obtain a license to their IP.  Of course, seeking a license should be considered a last resort, since it necessarily involves tipping off the patent owner of your commercial plans and could increase the risk of litigation should licensing discussions stall.

Before making a significant commitment, investors should require that a technology developer have an effective IP policy in place in order to capture all the value of the creative process and potential products that arise.  The plan should include:

• Technology development companies should have an internal process to stimulate, identify, and evaluate new inventions. An IP development process will not only ensure continued flow of potential IP but also encourage communication among employees, often leading to more valuable inventions and better business decisions.  The process should also involve critically analyzing any new inventions to decide which should be moved to the “drafting queue” for preparation of a new patent application and which should be retained as trade secrets.
• An active competitive intelligence (CI) program should be implemented employing periodic literature and patent searches. Coupled with analytics, a robust CI program will provide key insights by identifying new developments of competitors in the same space as your potential investments. CI programs can help to benchmark technology, spur new ideas, identify potential infringements, and prevent duplication of effort.
• Evaluation of the competitive patent landscape of the technical field should be undertaken prior to starting projects. As discussed above, an early FTO analysis may avoid the inconvenience (and cost!) of learning that a “new invention” needs to be evaluated in light of a competitor’s existing patent.  It is also advisable to update the FTO analysis at each stage of development to ensure that no later-issuing patents present a barrier to commercialization.

Conclusions

As the British began to develop their American colonies they knew they had to make an effort to properly define the extent and quality of their property to evaluate and substantiate their claims.  One of the key participants in that endeavor was a young surveyor by the name of George Washington.

Just as in surveying and developing a new continent, IP evaluation and development are critical to the advancement at the frontiers of the bioeconomy.  Technical expertise and legal know-how are required to work in unison to properly compile and evaluate technical information to be successful obtaining patents.  At Lee Enterprises we have a number of highly qualified experts with substantial IP experience who are well positioned to perform IP reviews for due diligence evaluations as well as for ongoing investment purposes.  The attorneys at the law firm Kilpatrick Townsend & Stockton, LLP, are highly experienced in all intellectual property fields, including patent procurement, due diligence and IP litigation.

About the Authors

Terry Mazanec, Ph.D., is an Executive Vice for Lee Enterprises Consulting. Dr. Mazanec has been involved in the renewable fuels and chemicals area for much of his 35 years in R&D.  Terry worked 21 years at BP in alternate energy R&D, and then as Chief Scientist at Velocys for 9 years where he led the team developing microchannel processes for natural gas upgrading and chemicals production, including catalyst development, corrosion resistance, and metals coating.  He has been an independent consultant for the past 8 years serving clients in the USA, Europe, and Asia.  He has authored 20 refereed publications and has been granted more than 65 US patents as well as numerous international patents.  He has experience in biomass upgrading, natural gas conversion, solid oxide fuel cells, algae production, chemicals process development, homogeneous and heterogeneous catalysis, FEMA/risk analysis, and intellectual property protection.

Justin Krieger is a Partner and registered patent attorney at the international law firm Kilpatrick Townsend & Stockton, LLP. With an technical background in fuel technology, chemistry and chemical engineering, Mr. Krieger has nearly 20 years of experience practicing before the US Patent & Trademark Office, having prosecuted hundreds of patent applications to issuance. He lectures frequently on US patent law and trade secret law and has authored many publications in the field. He also has a highly successful track record challenging the validity of patents before the USPTO’s Patent Trial and Appeal Board (PTAB) through Inter PartesReview (IPR) proceedings.