The Electronic Frontier Foundation, a nonprofit organization focused on defending civil liberties in the digital world and a proponent of anti-troll patent reform, said more than 1,720 people have signed its Public Interest Patent Pledge to persuade universities not to sell or license their patents to patent assertion entities, though not a single university has taken the pledge.
“The Public Interest Patent Pledge is a promise that before selling or licensing its patents to a third party, a university will assess the business practices of that party and make sure that it will use those patents responsibly,” EFF says on its website.
According to the pledge, patent assertion entities undermine the purpose of the U.S. patent system, which the foundation says is to promote innovation.
“Patent trolls don’t innovate; they use the threat of patent litigation to extract funds from innovators who developed similar products independently. Governments and educational institutions alike should embrace patent policies that help bring inventions to the public at large, not those that reward a business model of simply suing others.
“Even more than other patent owners, the university community has a responsibility to use its patents on behalf of public good. Our inventions represent the trust of the public in the form of donations, grants, government funding, and tuition fees. We should honor that trust by working to protect our patents from bad actors. University research should fuel the creation of new products, new services, and new jobs. It should never become a tax on the innovation and investment of others.”
The EFF’s pledge comes as a growing number of universities has been teaming with patent assertion entities in the U.S. and Canada.
To be sure, Marathon Patent Group (MARA) teamed up with Rensselaer Polytechnic Institute to win a $24.9 million settlement from Apple Inc.
RPI isn’t the only university to align itself with a patent assertion entity. The University of Waterloo and the University of Saskatchewan’s Industry Liaison Office earlier this year announced agreements with WiLAN Inc. (WILN) to assist in their licensing efforts.
To be sure, several universities continue to maintain distance from patent assertion entities including the University of Minnesota, which filed an enforcement action against Gilead Sciences Inc. Harvard University also filed its own enforcement actions against GlobalFoundries and Micron Corp.
aIn the meantime, the $750 million settlement Carnegie Mellon University won from Marvell Technology Group and the $234 million award the Wisconsin Alumni Research Foundation won from Apple continue to be the marks by which other cases are measured.
The EFF’s pledge betrays a fundamental misunderstanding of the U.S. patent system, according to Erich Spangenberg, the founder and owner of IP Navigation Group and director of enforcement and licensing at Marathon.
The EFF’s pledge “sounds very noble, unless you have some basic understanding of how the patent system works,” Spangenberg wrote in an Aug. 30 post on his Spangenblog.
Spangenberg explained that while the EFF wants universities to “partner with those who are actively working to bring new technologies and ideas to market,” that’s not what patents actually do.
“A patent doesn’t grant a company the right to bring a new technology to market. It grants the owner/licensee of the patent the right to stop others from using that technology,” he said.
Moreover, he asserted that because of changes to the patent system, which include the U.S. Supreme Court’s restrictions on the ability to get injunctions, many large companies now believe it a good business practice to infringe and their chances in litigation.
Efficient infringement as this trend has become known, means litigation is the only way to stop other from infringing, Spangenberg said.
“If universities don’t sue companies that are infringing their patents, those patents are meaningless and have no value. So should universities not enforce their own patents?”
Spangenberg criticized the EFF for asserting that universities shouldn’t seek out the expertise of patent assertion entities.
“That would be like saying ‘don’t use FedEx to deliver your packages, you should deliver them yourselves, because we don’t like FedEx’s business model since they use big trucks and not a Prius.’ Apparently it is acceptable to outsource HR, accounting and legal functions, but outsourcing licensing is not permitted. Got it.”
For his part, Spangenberg said most universities are ill-equipped to enforce their own patents.
Indeed, he said their focus, rightly, is on innovation and research.
“Patents are a way for universities to both foster new businesses through licensing their technology to startups, and for the universities themselves to generate revenue that can, in turn, be used to generate more research and innovation.
“But if universities don’t enforce their patents, they have no value. No one will license a patent if anyone can use it simply by infringing the patent with impunity. If everyone knew that a university was highly unlikely to enforce, why would anyone take a license? Tech transfer and the board of trustees at most universities have other priorities, so why does the EFF want them to become experts at enforcement?
“Bringing a lawsuit for patent infringement in the US generally costs well over $1 million—and likely much more. And it’s money at risk – you might not win the lawsuit. Most universities are not set up in a way that encourages them to take risks with such large sums of money.
“Given that enforcing patents is a core competency for most universities, isn’t the more financially responsible thing to do to outsource to an expert and minimize financial exposure and maximize the return?
“Consequently, the best way for universities to protect their patents is often by teaming up with a patent assertion entity (PAE). PAEs have the expertise, the financial resources available for litigation, and the stomach for risk that is generally absent in the university world.
“Telling universities not to work with PAEs is asking them to unilaterally disarm in the face of giant corporations that have no qualms about using technology covered by someone else’s patents until they are sued and forced to stop.
Spangenberg conceded that when universities work with PAEs, they should discourage unethical behavior, such as using a patent likely to be invalidated to extort nuisance fee settlements from small businesses.
“No doubt Google – and many other ‘big tech’ firms – would love it if universities gave up the strongest tool at their disposal to enforce their patents. We doubt – we hope – most universities aren’t that dumb.”
Corynne McSherry, the legal director of the EFF in San Francisco, declined to comment on Spangenberg’s remarks.
—To reach the reporter responsible for this story please contact Dan Lonkevich at 707 318-7899 or at firstname.lastname@example.org