C3Nano IP Positioning Statement

C3Nano Inc., the performance leader in next-generation, transparent conductive inks and films, would like to set the record straight with regard to recent IP developments in China. While the PRB upheld C3nano’s key fusing technology, some claims were invalidated but were not critical for protection of C3Nano’s technology, especially in view of its strong international patent coverage, which C3Nano continues to expand and fortify including in China.  C3Nano has more than 75 issued and pending patents with substantial patent claims to protect its commercial products and global partners.  C3Nano’s overall IP position in China and beyond remains strong and ever expanding. C3Nano can assure its partners and customers that its intellectual property covers its products, technology and use of our transparent conducting materials.

C3nano has deep roots in China and throughout Asia and any attempts to misappropriate our fundamental technology by competitors will be fought vigorously.  While we deeply respect the PRBs efforts at evaluating this complex technology, we are not able to agree on the merits of their decisions, as explained further below.  C3Nano is considering all options for mitigation in view of the PRB decisions.

In patent law, there is a fundamental distinction between having patent protection and having freedom to operate.  A valid patent provides a right to exclude others from practicing the claimed invention during the life of the patent.  A valid patent does not provide a right to actually practice the claimed invention if the invention is dominated by older patents.  With this in mind, the recent PRB decisions relating to two C3Nano patents have no direct effect on C3nano’s freedom to operate. Thus, our commercial relationships and ability to provide customers with the highest performing transparent conductive inks and films protected by our IP remains unchanged.

For the reasons described below, C3Nano respectfully disagrees with the recent PRB decisions.  But as discussed above, the basis for these decisions does not cause broader concerns.  With respect to the PRB decision for ZL201480018734.0 (the 3490 patent), the Board relied upon a patent from Inktec Company of Korea.  Since there are no basis for infringement of the Inktec patents and since the Inktec technologies are very different from any patents that could be asserted against the C3Nano technology, the PRB decision related to the 7340 patent does not cast any doubt on C3Nano’s freedom to operate.

The Board’s decision rendered for the 7340 patent was substantially based on a claim construction issue that avoided construing aspects of C3Nano’s disruptive technology advance involving the formation of a fused metal nanostructured network.  The Board’s decision surprisingly refused to accept the authenticity of a Declaration of a famous Chinese scientist, Professor Cui, as well as from the lead inventor Dr. Ajay Virkar.  Significant amounts of technical material show that these expert Declarations are scientific and professional.

The 7340 patent was a national stage filing related to international application PCT/US2013/046866 (WO 2013/192,437).  Related patents have issued in the U.S. (US 10,020,807), Japan (6387021B and 6657336), South Korea (10-1888734) and Taiwan (I624357).  While obtaining these patents, a broad range of references were considered, and the claims proceeded to allowance.  A challenge to later priority C3Nano patent at the U.S. Patent Trial and Appeal Board reviewed two C3Nano patents and considered the Inktec patent.  The US PTAB denied the institution of a so called Inter Partes Review at an early stage to deny a challenge from Taicai parent company, Cambrios Film Solutions Corporation of the British Virgin Islands.  A significant issue of the two PTAB IPR decisions denying institution of the proceedings was an evaluation of the claim scope very similar to the PRB decision that came to a different conclusion.  Thus, the PRB decision involving the 7340 patent was contrary to extensive proceedings in other jurisdictions.  C3Nano has studied these issues with great intensity and has consulted world experts in order to ensure that their patent coverage is focused on the true inventive nature of their technology with an appropriate scope.  These two PRB decisions are the only official decision contrary to C3Nano’s well-studied position.

A second PRB decision involved Chinese patent ZL 201380033141.7.  The PRB decision in this case was based on an assertion of a lack of support for the claims that were found invalid.  This decision certainly causes no cloud whatsoever on the issue of freedom to operate since the basis of the PRB decision has no relevance in any way to freedom to operate issues.  The basis for the PRB decision is certainly surprising since related patents have issued in the U.S. (9,920,207 and 10,029,916), Japan (6392213), South Korea (10-2027623), Europe (2864990B), and Taiwan (I627640)  The PRB panel did not find reasons based on earlier references to assert that the C3Nano claims were not inventive.  This decision seems to be based on an application of claim requirements that are not well defined or generally applied.  The highly capable Chinese patent Examiner that granted this patent did not sense any of these concerns.

With respect to Cambrios’ propensity of to count patents and attempts to convince everyone that volume alone connotes value, anyone schooled in the art knows that patent values are very disproportionate in terms of their scope based on the coverage of the claims and the validity of the patents.  Patents that are not relevant to commercial products or are easy to design around or are clearly invalid can have effectively zero value.  On the other hand, just one critical patent with solid validity that is needed to practice products incorporating the technology can have a value that is on par with the total asset value of the companies operating in the technology.  Thus, having an early priority date with patents that are not needed to work in the technology is of little consequence.  Similarly, having large numbers of low value or no value patents can be of little consequence.  Counting numbers can make nice colorful figures and give comfort to those who collect patents, but counting numbers is not a way to determine the actual value of patents.  C3Nano has focused on directing their IP resources to efficiently building a very strong and formidable IP portfolio which covers fusing, fused structures, and by resolving key technical hurdles which precluded the adoption of AgNW based conductors are replacements to Indium Tin Oxide (ITO).

In summary, the PRB decisions provide no implications regarding C3nano’s freedom to operate.  As explained, C3Nano maintains a robust wall of patent protection around their technology. Furthermore, it is worth noting that TPK/Cambrios continued attempts to muddy the water and undermines our collective efforts to expand this industry sector.  Eventually TPK must realize they need to develop their own technology and stop wasting resources trying to chisel away at C3Nano IP in their misguided campaign to misappropriate valuable technology.

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