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The University of California Hastings College of Law issued a press release on Wednesday focusing on some quotes and thoughts from faculty member Professor Robin Feldman on how the work she has done on “patent trolls” is influencing events at the Supreme Court, the Federal Trade Commission and in Congress. And it is certainly true that Feldman, working with others including Tom Ewing (who coined the term patent privateer in a contribution to the IAM blog a few years back), has produced some important scholarship in the NPE space.
Something that seems to be catching Feldman’s attention currently is what she believes are the growing number of hook-ups between US universities and NPEs. The press release states:
"Evidence continues to emerge on the wide reach of trolling activities - even into universities and tax-payer funded research," says Feldman. "As universities struggle to find revenue sources, one might worry that the monetization industry will be very tempting." As noted in the Nature article, there are indications that this may already be happening. In her research, Feldman listed nearly 50 universities that appear to have signed deals with Intellectual Ventures, a prominent patent aggregation firm. "Some deals may involve sale or licensing of a few patents, some may involve investment by the university in Intellectual Ventures, and some may involve wholesale assignment of future innovation," notes Feldman.
Off the bat, I’d say it is very unfortunate that Feldman – a distinguished academic – conflates trolling with patent aggregation. She must know that the two are not the same thing. Clearly it’s been done to generate interest in the press release and to get as much coverage as possible, but as this blog has stated before doing it really isn’t helpful to the debate over trolls/PAEs/NPEs etc, as such equivalence could lead to very poor decision-making. Many seem to do it (especially those who can generally be described as anti-troll and NPE-sceptic), but that really isn’t an excuse.
In the Nature article in which Feldman is featured, there is a sentence which states: “…patent-assertion entities, sometimes called aggregators, monetizers or ‘patent trolls’, are questionable homes for university inventions”. And that seems to be the premise behind the whole article. As can be seen above it is an issue that Feldman raises, too, in the Hastings press release. From where I sit, though, I am not sure that certain types of NPE – such as IV, for example – are necessarily “questionable homes” for anyone’s inventions. In fact, maybe universities and others should be using certain kinds of NPE a lot more than they do at the moment.
What successful NPEs are very good at is getting licencees. And when it comes to the patents they own that is what universities are after. So why not partner with experts, save a lot of time and money, and leave technology managers to do what they do best - working with faculty to identify and capture patentable inventions? What’s more, NPEs have no interest in blocking anyone from any market – there’s no exclusivity for them, they will license to whoever wants to take a licence (as well as to whoever they feel should do so), so that fits a basic objective of what university IP licensing should be all about. Let’s not forget, we are talking about a partnership here: no-one puts a gun to tech officers’ heads and tells them they have to work with NPEs; instead, they do so by choice. Thus, they are perfectly within their rights to dictate certain terms before selling IP or handing over licensing rights. If they don’t, that’s not the fault of NPEs.
In fact, you could go so far as to say that, in fact, the optimal route for the licensing of university-generated patents is privateering via NPEs. They know what they are doing, terms of operation can be agreed with them in advance, they bear all the risks and have every incentive to make the patent as widely available as possible, so securing universities regular income without all the hassle involved in licensing negotiations, let alone litigation. What’s not to like? Obviously, it would not be a simple as that in practice, but you get the point.
Note that I have deliberately talked about “certain types of NPE”. Bottom feeding trolls are not a solution; they never are. But neither should they be confused with all, or even close to all, NPEs or patent aggregators; which takes us back to dodgy definitions leading to poor decision making …
Licensing, IP litigation, Patents, IP business
As always, Joff, very sensible points...
It scarcely goes without saying that academia is, nearly always, nothing but a producer of IP as opposed to products and, if I well remember the figures from the old TTO of the Universities of California in Oakland, they had something like 10,000 patents, 1,000 of which were licensed of which only 100 brought in any revenue at all and one of them brought in something like 50% of all the cash.
When you think about the kind of effort that went into producing and managing this mass of IP it seems clear to me that any assistance they can get in monetizing this in some way can only be good for the university, for the inventors and, if you wish to couch this in some kind of moral terms, if that revenue comes from active infringers of the patents, then it is a way of handling theft, often by major corporations.Stephen Potter, Iprova Sàrl on 16 Oct 2013 @ 15:06