Patent Law Practice Center

Patented University Technology Creates Jobs

On Monday, August 5, 2013, the Association of University Technology Managers (AUTM) released the highlights of the AUTM U.S. Licensing Activity Survey: FY2012. The full results of the survey won’t be available until later this year, but the “highlights” release does provide some interesting quantitative information about licensing activities at U.S. universities, hospitals and research institutions.

Institutions responding to the survey reported startup companies formed by 70 institutions employed 15,741 full-time employees. The survey also showed:

• 22,150 total U.S. patent applications filed (+11.3%)
• 14,224 new patent applications filed (+7.2%)
• 5,145 issued U.S. patents (+9.5%)
• 5,130 licenses executed (+4.7%)
• 1,242 options executed (+7%)
• 483 executed licenses containing equity (+16.1%)
• Total license income: $2.6 billion (+6.8%)
• 705 startup companies formed (+5.1%)
• 4,002 startups still operating as of the end of FY2012 (+1.9%)

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Litigation Abuse: The “Problem” of Patent Trolls

The term “patent troll” conjures up all kinds of images and ideas, but what is a patent troll?  The answer is that there is really no universally accepted definition of what a patent troll is.  In the most common sense of the term, it is usually reserved for those who acquire patents from inventors or companies, perhaps through bankruptcy, auction or otherwise, and then turn around and sue giants of industry for patent infringement.  In this situation, patent trolls are typically extremely well funded, they are not engaging in any commerce, so they do not fear a patent infringement counter-claim because they are not infringing, or doing, anything.

Over time, however, as the debate has matured and many with a patent reform agenda seek to weaken patent rights in hopes of solving their short-term litigation concerns, the term patent troll has morphed to mean any non-practicing entity. Such a definition of patent troll is overly broad, though, because it collects many entities that are simply not doing anything other than pursuing the American dream. These individuals and entities include universities, independent inventors, research & development companies, and federal laboratories. Indeed, such a list of innovators has typically been one that has been celebrated, not reviled.

But there are, of course, bad actors.

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Problem Child – A Third-Grade Approach to Patent Owners

Last week on IPWatchdog.com, I published a five-part series that debunked many prevalent myths about patent trolls. See A Fractured Fairy Tale: Separating Fact and Fiction on Patent Trolls, written by Steve Moore of Kelley Drye. While a bit long, it should be considered mandatory reading if you want to understand the underlying facts instead of just buying into the hype and hyperbole associated with the so-called “patent troll problem.”

Moore, with co-authors Marvin Wachs and Timothy Moore, concludes that when you really look at the facts and underlying dynamics of patents and patent litigation, there really isn’t a problem at all. Perhaps there is litigation mischief in some cases, but overall what you see in the hard, factual data is not at all surprising. There really is no patent troll problem at all, and despite what many charge, the quality of the patents asserted by non-practicing entities is quite high, at least if you remove from consideration patents asserted by independent inventors.

But is there a problem? Yes. I think there is clearly litigation abuse, and some of that abuse probably does rise to the level of patent misuse. But we have laws on the books to handle that kind of litigation misconduct, which is exactly what it is — litigation misconduct. To try and sweep an entire class of patent owners together in a pile in order to address the few, easily identifiable miscreants is just plain stupid. We all knew that it was wrong when we were in third grade and the teacher punished everyone because one or two kids didn’t follow the rules.

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Top 5 Patent Law Blog Posts of the Week

Today we continue our weekly installment highlighting the best of the patent blogosphere from the past week. Highlights include a patent application for dispersing riots with sound, a new database for chemical patents, and an update on the delayed ITC decision. If there are any patent blogs you think should be highlighted by our Top 5, please comment on this post and we’ll check them out!

1) Patently-O: Design Patent Pendency – This post was selected because, although it’s just a paragraph long, it shares the blogging spotlight on the design patent. Design patents don’t get press like utility patents do. This post provides a chart on the progress design patent filings have taken over the years, and explains that the majority of design patent applications get filed within the year.

2) New Scientist: Riot Shields Could Scatter Crowds with a ‘Wall of Sound’ – A Massachusetts defense firm applied for a patent for a “man-portable non-lethal pressure shield” that would emit sounds causing people to disperse due to their physical inability to withstand the sounds. The article reports on how the patent works and how it differentiates from other sound emitting crowd control devices. You can view the patent here.

3) Tech Crunch: Apple Made a Deal with The Devil (No, Worse: A Patent Troll) – The interwebs have been a flutter about this post’s explanation of how Digitude Innovations partnered with Apple and has since been actively suing companies like RIM, HTC, LG, Motorola, Samsung, Sony, Amazon, and Nokia. The article reports that Apple has transferred about a dozen of its patents in a patent litigation offensive strategy.

4) Bloomberg: HTC Says Decision in U.S. Patent Dispute With Apple Delayed – This post provides a quick  summary of how and why the hotly anticipated ITC ruling was delayed to early next week, and reiterates the impact the decision will have on all parties involved.

5) SiNApSE: New Chemical Database For Patent Search – This post explains the recent announcement that IBM launched of a new database which will provide access to more than 2.4 million chemical compounds extracted from about 4.7 million patents and 11 million biomedical journal abstracts from 1976 to 2000. The new venture is in collaboration with Bristol-Myers Squibb, DuPont and Pfizer.

Fighting Fire With Fire: Strategies for Controlling Patent Troll Defense Costs

R. David Donoghue, Partner at Holland & Knight and Practice Center Contributor, passed along this post he wrote for his Retail Patent Litigation blog that discusses the patent troll litigation phenomenon and offers four ways to defend against patent trolls more effectively and more cost efficiently.

Patent troll litigation has received some excellent media exposure this summer.  First, Chicago’s Ira Glass and his This American Life team put together a phenomenal hour-long program dissecting the patent troll phenomenon – if you have not listened yet make the time, it is very well done.  More recently, Santa Clara University Professor Colleen Chien wrote an article for Forbes discussing ideas for “turning the tables” on patent trolls.  Chien calls trolls “modern-day robber barons” and troll investors “suckers.”  Chien then points out that traditional patent trolls have found ways to overcome the traditional barriers to suit – legal fees and countersuits.  It is generally difficult to file substantive counterclaims against trolls and trolls routinely use contingent fees to avoid up-front costs, while suing multiple entities to increase the size of recovery.  Chien then suggests some strategies for defending against trolls and removing the defense-side barriers:  a) alternative fees; b) shared defensive efforts; and c) creating non-profit trolls.

At a basic level, Chien makes good points, but she does not offer concrete proposals to advance your troll defense efforts.  Here are four ways to defend against patent trolls more effectively and more cost efficiently: (more…)