The Electronic Frontier Foundation (EFF) wants universities to roll over and play dead when giant corporations steal their intellectual property.
Displaying a shocking level of ignorance about how the patent system works, the EFF has called on universities to sign a “Public Interest Patent Pledge,” calling on universities to promise the following:
[School name] pledges not to knowingly license or sell the rights of inventions, research, or innovation made possible by this institution to patent assertion entities, or patent trolls.
The EFF claims that
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.
It all sounds very noble, unless you have some basic understanding of how the patent system works.
Patents are a “right to exclude.” The EFF wants universities to “partner with those who are actively working to bring new technologies and ideas to market.” But 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. And as a result of many large companies in the US adopting “efficient infringement” operating strategies, there’s only one way to stop others from using your patents: through litigation.
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?
Now the EFF may say, no, it’s fine for universities to enforce their own patents. They just shouldn’t hire patent assertion entities to do it for them.
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.
Most universities are ill-equipped to enforce their own patents. Their focus, rightly, is on innovation. On R&D. On coming up with important and valuable new contributions to the body of knowledge. 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.
There’s nothing wrong with universities making sure that when they work with PAEs, the PAEs do not engage in unethical behavior, such as using a patent likely to be invalidated to extort nuisance fee settlements from small businesses. But there are ways to guard against such bad behavior (such as review the track record of any PAEs you work with) without “throwing out the baby with the bathwater” and banning working with any PAEs at all.
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.