PATENT AND CONTRIBUTION: BRINGING THE QUID PRO QUO INTO EBAY V

INNOVATION AND LITIGATION: TENSIONS BETWEEN

UNIVERSITIES AND PATENTS AND HOW TO FIX THEM

Jacob H. Rooksby

*

15 YALE J.L. & TECH. 312 (2013)

ABSTRACT

Universities that own patents have a problem. While nearly

all are keen to enhance their revenue generated from patents, few

are eager or prepared to enforce them in court, alone or with their

exclusive licensees, should a third party deploy a product or

process covered by a university-owned patent. Yet strict prudential

standing requirements imposed by the United States Court of

Appeals for the Federal Circuit (“CAFC”) effectively require

university participation as plaintiffs in enforcement lawsuits over

their exclusively licensed patents, regardless of a university’s

effective ability or enthusiasm to participate in a given action.

Supported by forty years of lawsuit data and original survey and

interview data collected from high-level administrators at

universities that litigate patents, this Article explores in depth the

complicated legal and policy tensions presented by university

participation as plaintiffs in patent infringement litigation.

I offer two proposals for alleviating these tensions. The

first proposal urges universities to move toward a coherent

position on patent ownership and enforcement, particularly in light

of recent trends in higher education finance. The second proposal

outlines a potential legislative amendment to the Patent Act that

would allow universities to enjoy the revenue-generation aspect of

patent ownership while freeing them from the legal compulsion to

participate as co-plaintiffs with their exclusive licensees in

enforcement actions. This novel tweaking of the CAFC’s

prudential standing requirement would save universities untold

time and money that they currently spend pursuing litigation. By

permitting universities to focus more on innovation and less on

litigation, this proposal also would better align societal

*

Assistant Professor of Law, Duquesne University School of Law. A.B., summa

cum laude, College of William & Mary; M.Ed., J.D., Ph.D., University of

Virginia. Special thanks to Rebecca Eisenberg, Chris Holman, Kevin Outterson,

Yaniv Heled, Cynthia Ho, Benjamin Liu, Emily Morris, and Liza Vertinsky for

providing helpful feedback on this Article at the Junior Faculty Workshop on

Intellectual Property Issues in the Pharmaceutical Industry, held at Indiana

University McKinney School of Law in December of 2012. All errors are my

own.

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AND PATENTS AND HOW TO FIX THEM

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expectations for university commercialization efforts with the

public interest.

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TABLE OF CONTENTS

INTRODUCTION .............................................................................316

I. UNIVERSITY PARTICIPATION AS PLAINTIFFS IN PATENT

INFRINGEMENT LAWSUITS ................................................318

A. CAFC Case Law Affecting University Participation ...... 318

1. Legal Push or Market Pull? .......................................318

2. Patent Licenses, Patent Assignments, and the “All

Substantial Rights” Inquiry .......................................320

3. Asymmetric Results ....................................................324

B. Tensions Between Universities and Patents ................... 326

C. Data on Incidence of University Patent Enforcement .... 330

1. Previous Studies and Comments ................................330

2. University Experiences in Litigating Patents ............333

3. Lawsuits Filed, 1973 – 2012 ......................................335

II. A STUDY OF UNIVERSITIES THAT LITIGATE PATENTS ............340

A. Background and Methodology ........................................ 340

B. Summary of Results ......................................................... 345

1. Research Question 1 – Litigation Policies.................345

2. Research Question 2(a) – Considerations .................346

3. Research Question 2(b) – Likelihood to Litigate .......348

4. Research Question 2(c) – Litigation As Mission

Enhancing ..................................................................350

5. Research Question 3 – Public/Private Differences ...352

C. University Approaches to Patent Infringement Litigation ...

......................................................................................... 352

1. The Minority Approach: Willing Pursuers and

Prepared Participants ................................................352

2. The Majority Approach: Reluctant Pursuers and

Contingent Participants .............................................353

III. CHANGING POLICY: TOWARD A COHERENT POSITION ON

UNIVERSITY PATENT OWNERSHIP AND ENFORCEMENT ....353

A. Reframing University Understanding of Patents ............ 354

B. Inconsiderate Positions on Enforcement: What Universities

Don’t Do Can Hurt Them ..................................................... 359

C. Develop Decisional Infrastructures Concerning Patent

Enforcement .......................................................................... 361

1. Benefits .......................................................................362

2. Arguments Against Developing Decisional

Infrastructures Concerning Patent Infringement

Litigation Are Inapposite ...........................................364

3. Summary ....................................................................365

IV. CHANGING LAW: LET UNIVERSITIES INNOVATE WHILE

LICENSEES LITIGATE .........................................................366

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AND PATENTS AND HOW TO FIX THEM

315

A. Why Legislative Action Is Needed................................... 366

B. Proposal for Amending the Patent Act ........................... 368

C. Benefits to the Proposed Statutory Amendment .............. 371

D. Limitations to the Proposed Statutory Amendment ........ 373

E. Summary ......................................................................... 376

CONCLUSION .................................................................................377

APPENDIX A – SURVEY INSTRUMENT AND EXECUTIVE

SUMMARY .........................................................................379

APPENDIX B – ADDITIONAL INFORMATION ON UNIVERSITIES IN

DATASET ..........................................................................402

15 YALE J.L. & TECH. 312 (2013) 2012-2013

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INTRODUCTION

Universities that own patents have a problem. While nearly

all are keen to enhance their patent licensing activity and revenue

generated from patents, few are willing or prepared to enforce

them in court, alone or with their exclusive licensees, should a

third party deploy a product or process covered by a university-

owned patent. Yet strict prudential standing requirements imposed

by the United States Court of Appeals for the Federal Circuit

(“CAFC”) effectively require university participation as plaintiffs

in enforcement lawsuits over their exclusively licensed patents,

regardless of a university’s effective ability or enthusiasm to

participate in a given action.

Supported by forty years of lawsuit data and original

survey and interview data collected from high-level administrators

at universities that litigate patents, this article explores in depth the

complicated legal and policy tensions presented by university

participation as plaintiffs in patent infringement litigation. On the

one hand, universities understandably are hesitant to take assertive

postures in patent enforcement actions—given the financial and

reputational costs such activity often entails—yet prevailing law

conspicuously fails to account for this hesitancy. On the other

hand, a patent is a government-granted right to sue, and

universities’ reluctance to enforce their patents when warranted

risks disrupting incentives inherent in the technology transfer

system into which billions of federal research dollars are poured

annually.

The attendant policy quandaries for university

commercialization activities are many. How much involvement in

enforcement activity are universities willing to bear? How much

involvement in enforcement activity should a society intent on

encouraging university research and innovation want universities

to bear? The empirically supported answers to the first set of

questions (i.e., not much) are poles apart from what the patent law

requires of universities concerning enforcement activity (i.e.,

involvement as named plaintiffs in most instances). Meanwhile,

normative responses to the second question are potentially varied,

further challenging patent law’s capacity to reflect and encourage

policies that further innovation.

A few guiding words on what follows. Part I introduces the

relevant legal and policy tensions by first reviewing the judicial

development of a prudential standing requirement for owners of

exclusively licensed patents. I argue that the judicial rationale for

this restrictive standing requirement is poorly suited to university

patent owners, who suffer from the misfit. Part I then reviews legal

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AND PATENTS AND HOW TO FIX THEM

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data and information on the historical involvement of universities

as plaintiffs in patent infringement actions, and includes a

discussion of the activity’s unique consequences for universities.

Part II presents results from an original study conducted in

2011 of high-level administrators at universities that litigate

patents.

1

Drawing on survey and interview data, this Part

summarizes key findings as they relate to institutional policies and

beliefs concerning the enforcement of patents through

infringement litigation. Part II concludes with empirically based

descriptions of the two major university approaches to patent

infringement litigation. This schema—which describes most

universities as somewhat erratic in their approaches to patent

infringement litigation—provides footing for the policy and legal

proposals advanced in Parts III and IV.

Part III advances the broad policy proposal that universities

should move toward a coherent position concerning their

ownership and enforcement of patents. In addition to articulating

the adverse consequences of the current ad hoc approach toward

enforcement followed by most universities, this Part discusses the

imperative for universities to reframe their understanding of

patents, as well as how their development of appropriate decisional

infrastructures concerning patent enforcement could lead to

improvements in their enforcement behaviors.

Finally, Part IV proposes a legislative amendment to the

Patent Act that would allow universities to enjoy a principal upside

of patent ownership (i.e., revenue generation), while also enjoying

enhanced freedom to decline formal involvement in one of the

biggest downsides to patent ownership (i.e., occasional

involvement with exclusive licensees in enforcement actions). This

novel tweaking of the patent enforcement paradigm would save

universities untold time and money that they currently spend

pursuing litigation. By permitting universities to focus more on

innovation and less on litigation, this proposal would also better

align societal expectations for university commercialization efforts

with the public interest.

1

This study was undertaken for my Ph.D. dissertation. See Jacob H. Rooksby,

Universities That Litigate Patents (May 2012) (unpublished Ph.D. dissertation,

University of Virginia) (on file with author). This Article is the first publication

of the study’s findings. Portions of the Article are adapted from the dissertation.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

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I. UNIVERSITY PARTICIPATION AS PLAINTIFFS IN PATENT

INFRINGEMENT LAWSUITS

A. CAFC Case Law Affecting University Participation

1. Legal Push or Market Pull?

Patent infringement litigation is notoriously complex and

expensive.

2

Involvement in such litigation can cost universities

hundreds of thousands of dollars or more,

3

and is in some cases

correlated with a quantifiable decrease in the number of licensing

deals they enter into with industry.

4

University involvement as

plaintiffs in patent infringement lawsuits also has the potential to

alienate donors, upset politicians with ties to defendants, and

potentially cause universities to be seen as undermining their

public-service values.

5

In light of these potential concerns, one

might reasonably ask: What motivates universities to litigate their

patents? This seemingly simple question has a multitude of

potential answers. Universities might litigate to protect their

investments in patents, to support commercialization efforts by

2

See Colleen V. Chien, From Arms Race to Marketplace: The New Complex

Patent Ecosystem and Its Implications for the Patent System, 62 HASTINGS L.J.

297 (2010) (discussing new litigation complexities and increased costs in the

patent ecosystem).

3

A 2010 survey of U.S. law firms that specialize in intellectual property found

that for patent infringement lawsuits with less than $1 million at risk, the mean

cost for one party to take a case through the end of the pre-trial period was

$490,000; further, the total mean cost for one party to take its case through trial

and any appeal was $916,000. AMERICAN INTELLECTUAL PROPERTY LAW

ASSOCIATION, LAW PRACTICE MANAGEMENT COMMITTEE, REPORT OF THE

ECONOMIC SURVEY I-153 (2011) [hereinafter AIPLA]. For lawsuits with $1

million to $25 million at risk, the mean costs rose to $1,633,000 and $2,769,000,

respectively. Id. at I-154. For lawsuits with over $25 million at risk, the mean

costs were $3,553,000 and $6,018,000, respectively. Id.

4

Scott Shane & Deepak Somaya, The Effects of Patent Litigation on University

Licensing Efforts, 63 J. ECON. BEHAV. & ORG. 739 (2007) (reporting statistically

significant decrease in the number of new patent licenses executed by

universities in years following involvement in patent litigation).

5

See generally James J. Duderstadt, Delicate Balance: Market Forces Versus

the Public Interest, in BUYING IN OR SELLING OUT? THE COMMERCIALIZATION

OF THE AMERICAN RESEARCH UNIVERSITY 56-74 (Ronald G. Stein ed., 2004)

(noting the tension between universities’ historic commitment to the public good

and their growing embrace of market values and practices with patents); Mark

A. Lemley, Are Universities Patent Trolls?, 18 FORDHAM INTELL. PROP. MEDIA

& ENT. L.J. 611, 615-18 (2008) (noting industry sentiment that universities seem

greedy when it comes to patents, in part because of their emergent interest in

enforcing patents through infringement litigation).

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their licensees, or even—perhaps controversially—to generate

revenue.

While Part II of this Article empirically explores these and

other potential answers, perhaps the more important antecedent

question is a narrower, legal one: Must universities that own

patents litigate them? As with nearly every challenging legal

question, the answer is, “It depends.” In this instance, it depends

on what the university has done with the patent in question. If the

university has not licensed the patent, the university alone can

determine whether to bring an infringement lawsuit, and could

very well decide never to sue.

6

But most university-owned patents are licensed patents.

One of the primary goals of universities seeking patents is to

commercialize inventions that their patents describe through

negotiating advantageous agreements with industry. For

universities with licensed patents, the answer to the question,

“Must universities that own patents litigate them?” is complicated.

In these instances, in fact, the decision whether to participate as a

plaintiff in a patent infringement action does not rest with the

university alone, assuming the patent has been licensed

exclusively.

7

A university can be bound both by private law—

through contract with its exclusive licensee—and by public law—

through CAFC interpretation of patent law—to participate in any

enforcement action.

8

Presumably society should not care if a university contracts

to participate as a plaintiff with its licensee in any infringement

lawsuit and then is ordered by a court to uphold the contract by

participating in such an action. Freedom of contracting is generally

regarded as good for industry and competition, and university

technology transfer offices (“TTOs”) have demonstrated their

ability to enter into all varieties of arms-length agreements without

external intervention.

6

As further described in this Section, many universities that own unlicensed

patents choose to litigate them. The reasons can vary. Perhaps a would-be

licensee refuses to take a license to the patent, but decides to use technology

covered by the patent. Or perhaps the university decides to deploy an assertion

licensing strategy—sue first, license later—for fear of triggering a declaratory

judgment action brought by the would-be licensee (potentially in an unfavorable

jurisdiction) if the university sends it a letter suggesting that it might want to

license one of the university’s patent.

7

For patents licensed non-exclusively, only the university has standing to sue

for infringement. See Sicom Sys. Ltd., v. Agilent Techs., Inc., 427 F.3d 971, 976

(Fed. Cir. 2005) (“A nonexclusive license confers no constitutional standing on

the licensee to bring suit or even to join a suit with the patentee because a

nonexclusive licensee suffers no legal injury from infringement.”).

8

See Megan M. La Belle, Patent Law As Public Law, 20 GEO. MASON L. REV.

41 (2012) (describing the public ramifications of private rights granted through

patents).

15 YALE J.L. & TECH. 312 (2013) 2012-2013

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But what if a university does not contract to participate in

any infringement lawsuit brought by its exclusive licensee, and yet

is still required by law to participate? One might perceive little

societal justification for forcing universities to litigate their patents,

given the innovative research activities they are much better suited

and expected to undertake. Yet in fact, universities have far less

flexibility in this situation than one might expect. The explanation

for this incongruity involves restrictive judicial imposition of

standing rules in patent infringement cases.

2. Patent Licenses, Patent Assignments, and the “All

Substantial Rights” Inquiry

Determining who has standing to sue for infringement of a

patent, and which parties must participate in any such action,

requires identifying the patentee and discerning which rights the

patentee and others may have in the asserted patent, whether by

license or by assignment.

9

“Patentee” is simply the legal word for

patent owner, although the Patent Act rather circularly defines it as

“includ[ing] not only the patentee to whom the patent was issued

but also the successors in title to the patentee.”

10

According to the

Patent Act, a “patentee shall have remedy by civil action for

infringement of his patent.”

11

The U.S. Supreme Court has issued two decisions, both of

which substantially predate the current Patent Act, that provide the

framework by which the CAFC has interpreted and developed a

prudential standing requirement in lawsuits involving allegations

of patent infringement. In an 1891 case, Waterman v. Mackenzie,

12

the Court determined that if a patent owner licenses his patent,

the title remains in the owner of the patent;

and suit must be brought in his name, and

never in the name of the licensee alone,

unless that is necessary to prevent an

absolute failure of justice, as where the

patentee is the infringer, and cannot sue

himself. Any rights of the licensee must be

enforced through or in the name of the

owner of the patent, and perhaps, if

9

See Timothy Denny Greene, “All Substantial Rights”: Toward Sensible Patent

Licensee Standing, 22 FED. CIR. B.J. 1, 1 (2012) (calling this inquiry “easy to

state, but difficult to apply”).

10

35 U.S.C. § 100(d) (2006).

11

35 U.S.C. § 281 (2006).

12

138 U.S. 252 (1891).

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necessary to protect the rights of all parties,

joining the licensee with him as a plaintiff.

13

Over thirty years later, the Court had occasion to further

expound on competing interests in patent rights in Independent

Wireless Telephone Company v. Radio Corporation of America.

14

In that case, the Court explained its creation of a prudential

standing requirement that exclusive licensees may not sue for

infringement without joining the patent owner. It reasoned that

[t]he presence of the owner of the patent as a

party is indispensable not only to give

jurisdiction under the patent laws but also, in

most cases, to enable the alleged infringer to

respond in one action to all claims of

infringement for his act, and thus either to

defeat all claims in the one action, or by

satisfying one adverse decree to bar all

subsequent actions.

15

The CAFC further interpreted this prudential standing

requirement in a line of cases dating back to 1991. The relevant

inquiry typically concerns whether a given agreement is an

assignment of all substantial rights to a patent, or is instead an

exclusive license to less than all substantial rights to the patent.

16

In the first such case, Vaupel Textilmaschinen KG v. Meccanica

Euro Italia S.P.A., the defendant alleged in the district court that

plaintiffs were merely licensees of the patent in suit, and as such,

did not have standing to bring an infringement action without

joinder of the party to whom the patent in suit originally issued.

17

The district court concluded that plaintiffs were assignees of the

patent in suit, not licensees, and accordingly joinder of the party to

whom the patent in suit originally issued was not required. The

13

Id. at 255.

14

269 U.S. 459 (1926).

15

Id. at 468. The Court noted one exception to this rule: “If the owner of a

patent, being within the jurisdiction, refuses or is unable to join an exclusive

licensee as coplaintiff, the licensee may make him a party defendant by process,

and he will be lined up by the court in the party character which he should

assume.” Id. Before this exception can be applied, however, the patentee must

be given the opportunity to join the infringement action.

16

This Section reviews arguably the three most important of these cases. For a

more comprehensive review of relevant cases, see Greene, supra note 9; and

Jeffrey L. Newton, Assuring All Substantial Rights in Exclusive Patent Licenses,

44 LES NOUVELLES 235 (2009).

17

Vaupel Textilmaschinen v. Meccanica Euro Italia, 944 F.2d 870, 873 (Fed.

Cir. 1991).

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CAFC upheld this finding. Citing Waterman, the CAFC observed

that “To determine whether a provision in an agreement constitutes

an assignment or a license, one must ascertain the intention of the

parties and examine the substance of what was granted.”

18

In so

doing, the CAFC noted an edict from the Waterman case: that

“‘[w]hether a transfer of a particular right or interest under a patent

is an assignment or a license does not depend upon the name by

which it calls itself, but upon the legal effect of its provisions.’”

19

That is to say, calling an agreement a license or an assignment

does not make it one. The actual substance of the rights conveyed

is determinative. “All substantial rights” to the patent must be

conveyed, with surrounding circumstances indicating the intent to

do so.

20

In reviewing various contracts between plaintiffs and the

patentee to whom the patent originally issued, the Vaupel court

noted that the latter maintained the following rights: (1) a veto

right on any sublicensing by plaintiffs; (2) the right to seek patent

protection on the subject invention in countries outside the United

States; (3) a reversionary right to the patent in suit in the event

plaintiffs filed for bankruptcy protection or terminated production

of the product covered by the patent; and (4) the right to receive a

portion of any damages returned in an infringement lawsuit

brought by plaintiffs.

21

In reviewing these retained rights, the

CAFC concluded that none “was so substantial as to reduce the

transfer to a mere license or indicate an intent not to transfer all

substantial rights.”

22

The Vaupel court also inspected those rights that plaintiffs

obtained in the transfer. Notably, they received the right to sue for

any past, present, or future infringements of the patent, subject

only to the obligation to inform the original patentee of any lawsuit

they brought. The CAFC deemed the conveyed right to sue for

infringement “particularly dispositive.”

23

It reached this conclusion

by explaining the policy concern of a legal regime in which a

patent owner could decline to join its exclusive licensee in an

infringement action: in such a world, a single infringer unfairly

would be susceptible to two suits alleging infringement of the same

patent—precisely the prudential standing concern raised by the

Supreme Court in Independent Wireless.

24

Such would not be the

18

Id. at 874.

19

Id. at 875 (quoting Waterman v. Mackenzie, 138 U.S. 252, 256 (1891)).

20

Id. at 874.

21

Id. at 875.

22

Id.

23

Id.

24

Id.

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risk, the CAFC determined, based on the rights assigned between

the parties in Vaupel.

25

The CAFC further applied the tenets of the Vaupel decision

in a case it decided in 1995, Abbott Laboratories v. Diamedix

Corporation.

26

The dispute involved an attempt by Diamedix, as

original patentee of the patents in suit, to intervene as a party

plaintiff in an infringement lawsuit brought by its exclusive

licensee Abbott against Ortho Diagnostic Systems, Inc. The district

court denied Diamedix’s motion to intervene, despite the

defendant’s support of the motion.

27

The CAFC reversed.

Examining the relevant documents between the parties, the

CAFC determined that Abbot was a licensee, not an assignee, of

the patents in suit—i.e., that less than “all substantial rights” to the

patents in suit had been transferred. Of particular relevance to the

court in making this determination were the facts that “Diamedix

retained a limited right to make, use, and sell products embodying

the patented inventions, a right to bring suit on the patents if

Abbott declined to do so, and the right to prevent Abbott from

assigning its rights under the license to any party other than a

successor in business.”

28

While Abbott enjoyed the right to bring

an infringement action under its agreement with Diamedix, the

court noted that, “it does not enjoy the right to indulge

infringements, which normally accompanies a complete

conveyance of the right to sue.”

29

Thus, in order not to expose the

defendant to “the risk of multiple litigation or obligations,”

30

and

so as not to prejudice Diamedix’s interest in its ownership of the

patents in suit, the court remanded the case for joinder of Diamedix

under Federal Rule of Civil Procedure 19(a) as a required party.

31

In a subsequent case, Speedplay, Inc. v. Bebop, Inc.,

32

the

CAFC made clear that simply retaining the right to sue for

infringement does not automatically mean that “all substantial

25

The court noted this outcome was consistent with Federal Rule of Civil

Procedure 19(a), which concerns joinder. Complete relief could be accorded

among those already parties to the case, and there was no risk of a party

incurring double obligations. Id. at 876.

26

47 F.3d 1128 (Fed. Cir. 1995).

27

Id. at 1130. Diamedix moved to intervene as a matter of right under Federal

Rule of Civil Procedure 24(a)(2) or, in the alternative, under FED. R. CIV. P.

24(b), which permits courts to allow permissive interventions. The defendant

noted that Diamedix may have been an indispensable party under FED. R. CIV. P.

19. Id.

28

Id. at 1132.

29

Id.

30

Id. at 1133.

31

FED. R. CIV. P. 19(a).

32

211 F.3d 1245 (Fed. Cir. 2000) (finding all substantial rights had been

transferred and that plaintiff had standing to sue without addition of original

patentees as co-plaintiffs).

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rights” to a patent have not been transferred.

33

The case involved a

purported transfer of patent rights between the original patentees

and the ultima te plaintiff (Speedplay) in an infringement lawsuit.

The original patentees retained the right to initiate an infringement

action in their own names if Speedplay declined to do so.

Distinguishing the facts in Abbott, the court determined that the

original patentees’ retained right was “illusory, because Speedplay

can render that right nugatory by granting the alleged infringer a

royalty-free sublicense.”

34

In Abbott, by comparison, the original

patentee was entitled to receive royalty payments on any

sublicense granted by the licensee.

35

Thus, while “the nature and

scope of the licensor’s retained right to sue accused infringers is

the most important factor in determining whether an exclusive

license transfers sufficient rights to render the licensee the owner

of the patent,”

36

Speedplay suggests that a retained right to sue

does not automatically mean that less than “all substantial rights”

to the patent have been conveyed.

3. Asymmetric Results

The CAFC’s decisions in Vaupel, Abbott, and Speedplay,

as well as several subsequent cases,

37

provide the underpinning for

33

Id. at 1251.

34

Id.

35

Additionally relevant were the facts that the original patent owners in

Speedplay did not enjoy the right to practice the patent or the right to participate

in any infringement action brought by Speedplay (nor could they help manage

any such action). Id.

36

Alfred E. Mann Found. for Sci. Research v. Cochlear Corp., 604 F.3d 1354,

1361 (Fed. Cir. 2010) (holding that the plaintiff’s exclusive license transferred

to licensee substantially less than the complete right to sue, that the plaintiff’s

retained right to sue was significant, and that the license agreement was

therefore not a virtual assignment).

37

See, e.g., Aspex Eyewear, Inc. v. Miracle Optics, Inc., 434 F.3d 1336, 1344

(Fed. Cir. 2006) (“For the same policy reasons that a patentee must be joined in

any lawsuit involving his or her patent, there must be joinder of any exclusive

licensee.”); Sicom Sys. Ltd., v. Agilent Techs., Inc., 427 F.3d 971, 979 (Fed.

Cir. 2005) (finding all substantial rights had not been transferred where licensee

could not “indulge infringers outside of the ‘commercial’ sphere,” i.e., where

licensor retained right to sue noncommercial infringers); Intellectual Prop. Dev.,

Inc. v. TCI Cablevision of Cal., Inc., 248 F.3d 1333, 1348 (Fed. Cir. 2004) (“As

a prudential principle, an exclusive licensee having fewer than all substantial

patent rights possesses standing under the Patent Act as long as it sues in the

name of, and jointly with, the patent owner and meets [Article III standing]

requirements.”); State Contracting & Eng’g Corp. v. Condotte Amer., Inc., 346

F.3d 1057 (Fed. Cir. 2003) (finding all substantial rights had been transferred,

even though contract conveyed right to sue for “past and present”—but did not

mention future—infringements); Prima Tek II, L.L.C. v. A-Roo Co., 222 F.3d

1372, 1377 (Fed. Cir. 2000) (“As a general rule, this court continues to adhere to

the principle set forth in Independent Wireless that a patentee should be joined,

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its decision in AsymmetRx, Inc. v. Biocare Medical, L.L.C.,

38

the

only CAFC decision to date involving the prudential standing

requirement as applied to a university patent owner. There the

CAFC vacated and remanded a lower court’s award of summary

judgment to a defendant in a patent infringement lawsuit because

the original patentee of the patents in suit (Harvard University) was

not included as a plaintiff in the action. AsymmetRx, Inc.,

Harvard’s exclusive licensee, brought an action for patent

infringement against Biocare Medical, LLC, which Harvard had

previously granted a commercial license to use certain antibodies

later the subject of patents licensed to AsymmetRx. Under its

license to the patents in suit with Harvard, AsymmetRx was to

“give careful consideration to the views of Harvard and to potential

effects on the public interest in making its decision whether or not

to sue” for patent infringement.

39

Harvard retained the right to join

any infringement action commenced by AsymmetRx and to jointly

control any such action it joined.

40

Whether it elected to join or

not, AsymmetRx could not enter into a settlement without

Harvard’s prior written consent.

41

If AsymmetRx elected not to

prosecute an infringement, Harvard retained the right to do so at its

own expense.

42

The parties on appeal focused their arguments on the

district court’s finding of non-infringement by Biocare. The

CAFC, however, raised what it called the “antecedent question:

whether AsymmetRx had the statutory right to bring an action for

infringement without joining the patent owner, Harvard.”

43

The

court held that it did not. Reviewing Harvard’s contractual

agreement with AsymmetRx, it found that Harvard had not

conveyed all substantial rights to the patents to AsymmetRx.

Comparing the facts sub judice with the facts presented in the

court’s previous decisions on point caused the court to deem the

case more similar to Abbott than Vaupel or Speedplay.

44

In

particular, the court noted that AsymmetRx lacked the ability to

either voluntarily or involuntarily, in any infringement suit brought by an

exclusive licensee. However, this general rule—which we recognize as being

prudential rather than constitutional in nature—is subject to an exception. The

exception is that, where the patentee makes an assignment of all substantial

rights under the patent, the assignee may be deemed the effective ‘patentee’

under 35 U.S.C. § 281 and thus may have standing to maintain an infringement

suit in its own name.”).

38

582 F.3d 1314 (Fed. Cir. 2009).

39

Id. at 1317.

40

Id.

41

Id.

42

Id.

43

Id. at 1318.

44

Id. at 1320.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

326

“indulge infringements” of the patents under its agreement with

Harvard, an ability typical of a patent assignee.

45

In one of the opinion’s concluding paragraphs, the court

noted its understanding of, but lack of sympathy for, universities

attempting to avoid involvement as plaintiffs in infringement

litigation involving their patents. The court stated:

The provisions of the AsymmetRx License

may all have met the respective needs of the

parties; after all, they negotiated and

executed the agreement. They may also

reflect the perceived needs of a university

attempting to balance the public interest

with commercializing the results of its

professors’ research. Be that as it may, in

attempting to meet these goals, the

contractual result is that Harvard retained

substantial control over the patent rights it

was exclusively licensing, such that its

agreement with AsymmetRx did not convey

all substantial rights under the patents and

thus did not make the license tantamount to

an assignment. AsymmetRx must therefore

be considered a licensee, not an assignee.

46

The court vacated the grant of summary judgment in favor

of BioCare and remanded, with the admonition that if Harvard

declined to join the suit voluntarily as a plaintiff it could be added

involuntarily as a plaintiff.

47

B. Tensions Between Universities and Patents

As review of the above cases makes clear, the prudential

standing requirement for owners of exclusively licensed patents

constrains the ability of such owners to avoid assertive

involvement in patent infringement lawsuits involving patents to

which they still maintain substantial rights. The CAFC’s rationale,

rooted in Supreme Court case law, is that if a licensor could

decline participation in an infringement lawsuit brought by an

exclusive licensee, defendants would be unfairly susceptible to

multiple lawsuits concerning the same alleged act of

45

Id. at 1321 (“indulge” in this context meaning “to permit”).

46

Id. (emphasis added).

47

Id. at 1322.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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327

infringement.

48

This rationale is readily justified from the

standpoint of concern for the potential behavior of for-profit

companies that own and license patents. Unscrupulous companies

might find incentives not to coordinate their litigation efforts

precisely for the reason the CAFC fears: the ability to stick the

same defendant with multiple lawsuits and perhaps multiple

judgments.

However, this rationale breaks down from the standpoint of

universities that own and license patents. Universities are different

than for-profit actors, or at least historically have held themselves

out, and sought to be viewed in court, as such.

49

They are not in the

business of commercializing their patents through direct

manufacturing, distribution, and marketing of any ultimate

48

Accord Greene, supra note 9, at 9-10 (identifying the general interests behind

the prudential standing requirement as ones of efficiency, economy, justice, and

uniformity).

49

See, e.g., DAVID L. KIRP, SHAKESPEARE, EINSTEIN, AND THE BOTTOM LINE:

THE MARKETING OF HIGHER EDUCATION 7 (2003) (“[E]mbedded in the very

idea of the university—not the storybook idea, but the university at its truest and

best—are values that the market does not honor: the belief in a community of

scholars and a not a confederacy of self-seekers; in the idea of openness and not

ownership; in the professor as a pursuer of truth and not an entrepreneur; in the

student as an acolyte whose preferences are to be formed, not a consumer whose

preferences are to be satisfied.”); SHEILA SLAUGHTER & GARY RHOADES,

ACADEMIC CAPITALISM AND THE NEW ECONOMY: MARKETS, STATE, AND

HIGHER EDUCATION 28-30 (2004) (describing the university’s historic

attachment to a Mertonian-influenced conception of science as a public good,

with “strong separation between public and private sectors”). But see DEREK

BOK, UNIVERSITIES IN THE MARKETPLACE: THE COMMERCIALIZATION OF

HIGHER EDUCATION 200 (2003) (lamenting the excessive commercialization of

higher education and noting that “making money in the world of commerce

often comes with a Faustian bargain in which universities have to compromise

their basic values—and thereby risk their very souls—in order to enjoy the

rewards of the marketplace”); ROGER GEIGER, KNOWLEDGE AND MONEY:

RESEARCH UNIVERSITIES AND THE PARADOX OF THE MARKETPLACE 181 (2004)

(“Large amounts of money are at stake, and universities, whether they wish to or

not, have become actors in the marketplace . . . .”); Duderstadt, supra note 5, at

61 (“There has been a shift in the priorities of the university: away from the

pursuit of knowledge and the education of the next generation toward the

commercial lure of the marketplace.”); Peter Lee, Patents and the University, 63

DUKE L.J. (forthcoming 2013), available at http;//ssrn.com/abstract=2217719.

Professor Lee notes that “[u]niversities have long played a rhetorically important

role in society as vanguards of disinterested academic inquiry,” but that “modern

courts view universities as much more akin to commercial entities.” Id.

(manuscript at 38-39) (on file with author). Accordingly, he argues, modern

courts are less likely to defer to unique academic norms, practices, and policies

that run counter to patent law, preferring instead to rely on and reinforce “a

conception of universities as integrated into the traditional commercial narrative

of patents.” Id. at 40. I do not dispute these trends; rather, the proposal I advance

in this Article is aimed at permitting universities to recapture some of the

academic exceptionalism that they have lost, whether due to judicial decision or

their own efforts to work more closely with the market.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

328

products or services their patents cover. Universities are non-

practicing entities (“NPEs”) whose main missions concern

teaching, research, and service to society. Society expects

universities to commercialize their patents through licensing deals

with industry, not to focus their energies on assertive involvement

in litigation.

50

Yet because the CAFC’s prudential standing

requirement does not differentiate between university patent

owners and other patent owners, a university with an exclusively

licensed patent ultimately may face an untenable choice: either

participate as a co-plaintiff in an enforcement action with an

exclusive licensee—likely costing the university valuable time and

money, if not image-related harms as well—or insist that the

licensee bring the action on its own, risking the university’s

ultimate forced involvement as a co-plaintiff, as well as potentially

harming its relationship with the licensee.

51

In short, what society

should expect from universities—a preference for their non-

involvement in assertive litigation—is at odds with what the law in

most instances requires of them.

A seemingly simple solution to this conundrum would be to

suggest that universities assign all substantial rights to their

patents, as opposed to licensing them, so as to rid themselves of

any obligation to litigate. But this suggestion falls short for several

reasons. First, universities are understandably reluctant to assign

their patent rights given the difficulty in determining the fair

market value of an invention in its early stages of development.

Better to license a patent of uncertain market potential (subject to

sales quotas or benchmarks) rather than selling it outright for

potentially less than its ultimate worth. Second, licenses allow

universities more flexibility in controlling the use of their patents

than do assignments. Commercial circumstances can change, and

these changes are more easily accounted for in licenses wherein

universities maintain ownership of their patents and more control

over their commercialization. Third, and perhaps most importantly,

legal and policy mandates imposed by the Bayh-Dole Act for

inventions that are developed, in whole or in part, with federal

funds strongly encourage universities to hold on to their patents

50

Cf. GARY W. MATKIN, TECHNOLOGY TRANSFER AND THE UNIVERSITY 104

(1990) (“When universities go into court on patent issues they are particularly

vulnerable to criticism, since they do not appear to be acting in accordance with

the public view that they should remain aloof from commercial concerns. . . .

[N]egative effects can be avoided if the university is not a primary party in a

suit.”).

51

Cf. Greene, supra note 9, at 4, 40 (noting that “[f]or optics reasons or

otherwise, patent owners—especially universities—may wish to keep their

names and influence away from patent infringement litigation” and that “one of

the goals patent owners have in licensing is extricating themselves from the

possibility of costly litigation”).

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

329

with a view toward furthering the long-term benefits to faculty

inventors and universities as institutions. Indeed, the Bayh-Dole

Act stipulates that universities may not assign their ownership of

patents developed with federal funds without the approval of the

federal agency that provided those funds, unless the “assignment is

made to an organization which has as one of its primary functions

the management of inventions.”

52

The legal and policy constraints discussed above inevitably

create tensions for universities in their ownership of patents. From

one perspective, litigating patents can advance a university’s

research interests and result in revenues that can be used to help

further those interests. These are public goods that contribute to

strengthening a research enterprise that fuels innovation and can

lead to economic development and job growth. Society

unquestionably benefits when university research lives up to its

promise to advance knowledge and improve lives. If litigation is

required to protect research investments, leading to more

investments and more research, then so be it.

But litigation is seldom without costs and consequences. In

addition to the typically significant financial burden

53

that directly

affects litigants, more indirectly, no one likes to be sued.

Legitimate concerns therefore exist that university participation as

plaintiffs in patent infringement lawsuits may negatively impact

universities in a variety of ways, from injuring graduates’ job

prospects at companies named as defendants, to diminishing the

likelihood that faculty will receive sponsored research funding

from those companies.

54

The ability of universities to successfully

solicit donations from employees and executives at such

companies may also be affected. Moreover, litigation activity—at

least by state-supported institutions—also could have a negative

impact on lawmakers already inclined to second-guess university

requests for increased appropriations in the face of state budget

deficits. For these reasons and more, universities might find that

the prospect of enforcing their patents through litigation strains

their commitment to innovation. American society, increasingly

52

35 U.S.C. § 202(c)(7)(A) (2006). The Bayh-Dole Act fails to clarify what is

meant by an organization that “has as one of its primary functions the

management of inventions.” Id. While this provision arguably was intended to

cover separately-incorporated research and patent foundations closely affiliated

with universities, it would not seem to prevent universities from assigning patent

rights to a special breed of NPE—patent assertion entities (“PAEs”)—created

for the sole purpose of bringing litigation. Indeed, several TTO directors have

acknowledged the existence of such a market. See Jacob H. Rooksby, When

Tigers Bare Teeth: A Qualitative Study of University Patent Enforcement, 46

AKRON L. REV. 169, 196-97 (2013).

53

See AIPLA, supra note 3.

54

See Jacob H. Rooksby, Sue U., ACADEME, Sept.-Oct. 2012, at 24, 27.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

330

dependent on universities for new discoveries that result in

commercialization, suffers as a result.

55

C. Data on Incidence of University Patent Enforcement

The above Sections describe the legal constraints that may

compel university patent owners to litigate their patents and the

tensions such compulsion creates for universities. This Section

examines the frequency of the activity, what types of institutions

engage in it, and the varying character of university participation

as plaintiffs in patent infringement litigation.

1. Previous Studies and Comments

Very few previous studies have set out to provide empirical

understanding of university participation in patent infringement

litigation. In 2009, Professor Chris Holman conducted perhaps the

first. He presented findings of a search to locate university

involvement as plaintiffs in patent infringement lawsuits filed

between January 1, 2000 and January 24, 2009.

56

He located 139

cases where a university joined with an exclusive licensee in

bringing suit, and another 51 cases where a university brought a

patent infringement lawsuit without the involvement of a co-

plaintiff.

57

Following up on Professor Holman’s work two years

later, I reported findings from a search for patent infringement

lawsuits filed by universities between January 1, 2009 and

December 31, 2010.

58

I found that 33 universities had filed 57

different patent infringement lawsuits during the studied time

period, often in conjunction with a licensee co-plaintiff.

59

55

Cf. Dennis Crouch, Although “Without Tact,” Micron’s Retaliatory Decision

to Stop Hiring University of Illinois Graduates Is Not Illegal, PATENTLY-O

(Apr. 11, 2013, 5:01 PM), http://www.patentlyo.com/patent/2013/04/although-

without-tact-microns-retaliatory-decision-to-stop-hiring-university-of-illinois-

graduates-is-not-illegal.html (reporting that a company sued by University of

Illinois for patent infringement wrote the university to state that it would no

longer recruit the university’s graduates for employment or fund faculty research

because of the pending lawsuit); Robin Feldman, Inappropriate Uses of

Intellectual Property – Intellectual Property Wrongs 68 (Aug. 10, 2012)

(unpublished manuscript), available at http://ssrn.com/abstract=2127558 (noting

“a general sense that the intellectual property system has lost its bearings,

developing into a multi-dimensional game of strategy in which litigation, rather

than innovation, is leading the way”).

56

Christopher M. Holman, Univ. Patent Litig., Presentation at Santa Clara and

School of Law Symposium (Jan. 30, 2009).

57

Id.

58

Jacob H. Rooksby, University Initiation of Patent Infringement Litigation, 10

J. MARSHALL REV. INTELL. PROP. L. 623 (2011).

59

Id. at 674-94.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

331

While empirical data on the incidence of university

initiation of patent infringement litigation is limited, many have

argued anecdotally in the past decade that the activity is not

infrequent, or from a normative perspective, only should occur

infrequently. For example, in 2005, Jennifer Washburn argued that

significant litigation outcomes for some universities—she cited

high-profile settlements in the hundreds of millions of dollars for

the University of California and the University of Minnesota—had

emboldened others to litigate.

60

A year later, Professor Margo

Bagley noted “the growth in patent-related litigation involving

universities” and criticized what she called the overzealous

initiation of patent infringement litigation by some universities.

61

Similarly, writing in 2004, Professor Arti Rai argued that

universities and their licensees had asserted their basic research

patents “in a manner that hinders rather than facilitates commercial

development.”

62

In 2008, Professor Mark Lemley questioned

whether universities are patent trolls.

63

While he persuasively

answered the question in the negative, others—such as Professor

Jay Kesan—have advised universities to take great care in

pursuing enforcement activity, lest they invite the perception that

their litigation behavior is troll-like.

64

Perhaps with some of these arguments in mind, leading

universities generally have cautioned against initiating patent

infringement litigation for the purpose of extracting licensing

revenues. Most notably, in 2006, Stanford University and ten other

top-tier research universities released a white paper in which they

urged that universities carefully consider any involvement as

plaintiffs in patent infringement litigation.

65

The authors stressed

that universities should be mindful of their primary mission to use

patents to promote technology development for the benefit of

society. To that end, the authors argued that litigation is “seldom

the preferred option for resolving disputes” and should be initiated

by the university only if there is a “mission-oriented rationale for

60

JENNIFER WASHBURN, UNIVERSITY, INC.: THE CORPORATE CORRUPTION OF

AMERICAN HIGHER EDUCATION 161 (2005).

61

Margo A. Bagley, Academic Discourse and Proprietary Rights: Putting

Patents in Their Proper Place, 47 B.C. L. REV. 217, 218-19 (2006).

62

Arti K. Rai, The Increasingly Proprietary Nature of Publicly Funded

Biomedical Research: Benefits and Threats, in BUYING IN OR SELLING OUT?

THE COMMERCIALIZATION OF THE AMERICAN RESEARCH UNIVERSITY 117, 119

(Ronald G. Stein ed., 2004).

63

See Lemley, supra note 5.

64

Jay P. Kesan, Transferring Innovation, 77 FORDHAM L. REV. 2169, 2193

(2009).

65

In the Public Interest: Nine Points to Consider in Licensing University

Technology, STANFORD UNIVERSITY 6 (2007), www-

leland.stanford.edu/group/OTL/documents/whitepaper-10.pdf.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

332

doing so” that can be clearly articulated to the university and the

public.

66

A committee of the National Academy of Sciences

studying university technology transfer endorsed these

recommendations in 2010, adding that “enforcement of IP rights

against suspected infringers should be approached carefully to

protect the institution’s resources and reputation.”

67

The committee

concluded that while universities should be reluctant to resolve

patent disputes through litigation, “it is an option important for

universities to retain.”

68

Taking a different stance on the issue, a patent attorney

argued in 2009 that universities seldom enforce their patents and

should be more aggressive in doing so.

69

In a provocatively

entitled article in University Business magazine, Alexander

Poltorak urged universities not to overlook the value of using their

patents as sticks to seek licenses from companies already using

technology covered by their patents, recognizing that such activity

often leads to infringement lawsuits. Believing that much of the

value of any patent derives from the unspoken threat of litigation,

Poltorak rejected the notion that aggressive enforcement of patents

is “beneath” universities or undermines their missions “to serve the

public and the greater good.”

70

Citing university bureaucracies and

red tape that he views as slowing institutional decision-making,

Poltorak concluded “It’s no wonder that relatively few [patent

infringement lawsuits] are ever filed by higher ed institutions.”

71

He suggested that universities should be more open to enforcing

their patents through litigation, as doing so could generate revenue

“with minimal effort, modest costs, very little risk, and some old-

fashioned gumption.”

72

66

Id.

67

NAT’L RESEARCH COUNCIL OF THE NAT’L ACADS., MANAGING UNIVERSITY

INTELLECTUAL PROPERTY IN THE PUBLIC INTEREST: COMMITTEE ON

MANAGEMENT OF UNIVERSITY INTELLECTUAL PROPERTY: LESSONS FROM A

GENERATION OF EXPERIENCE, RESEARCH, AND DIALOGUE 7 (Stephen A. Merrill

& Anne-Marie Mazza eds., 2011) [hereinafter NRC].

68

Id. at 73.

69

Alexander Poltorak, Thar’s Gold in Them Thar Patents: Why It Pays to

Protect Patent Portfolios, U. BUS., Oct. 2009, at 18,

http://www.universitybusiness.com/article/thars-gold-them-thar-patents.

70

Id. at 23.

71

Id.

72

Id. Poltorak’s potential interest in drawing these conclusions should not be

overlooked. He is CEO of General Patent Corporation, a company that

specializes in enforcing university patents through creating “special-purpose”

legal entities that obtain assignments of university patents for the exclusive

purpose of litigating them. See GEN. PATENT CORP.,

http://university.generalpatent.com/ (last visited Apr. 14, 2013). This

arrangement removes university ownership over the patent in exchange for a

contractual right to a portion of any proceeds generated by the “special-purpose”

entity that subsequently litigates the patent the university once owned. One

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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333

Recent research shows that some universities appear open

to using their patents in new ways, aside from pursuing classical

licensing relationships with companies in industry. Professor

Robin Feldman and Tom Ewing found that nearly fifty universities

have contractual arrangements with Intellectual Ventures (“IV”),

73

perhaps the most preeminent NPE and patent aggregator to emerge

in the new complex patent ecosystem.

74

Ewing and Feldman found

that some of these universities have sold or licensed their patents

(or future patent rights) to IV, while others have invested outright

in IV’s business model, which generally involves using shell

companies to monetize acquired patents through asserting

infringement claims against others. The authors noted that the

University of California, San Diego has agreements with five such

shell companies.

75

2. University Experiences in Litigating Patents

Some universities have scored decisive victories from their

past involvements as plaintiffs in patent infringement lawsuits. For

example, in 2008 a jury awarded Cornell University $184 million

in damages in a patent infringement lawsuit it brought against

Hewlett-Packard.

76

The trial judge later reduced the damages

award to $71.3 million, and the parties subsequently settled the

case on confidential terms while appeals were pending.

77

In 2007,

the University of California received $30.4 million as part of a

settlement of a lawsuit it brought with its licensee, Eolas

attribute of this arrangement is that it removes the need for universities to

participate as named plaintiffs in infringement actions. Another is that it requires

no out-of-pocket costs to universities, as the entire enforcement activity is

structured on a contingency fee basis. Some view these attributes as advantages

to universities, while others see them as proof of the inappropriateness of the

underlying activity.

73

Tom Ewing & Robin Feldman, The Giants Among Us, 2012 STAN. TECH. L.

REV. 1, 8.

74

See Chien, supra note 2, at 312.

75

Ewing & Feldman, supra note 73, at 6. Eight other universities located in their

research (the University of Alabama, Brigham Young University, California

Institute of Technology, Duke University, University of Florida, University of

New Mexico, the University of Rochester, and the University of Texas system)

also are universities that have litigated their patents. See discussion infra

Subsection I.C.3.

76

Bill Steele, Cornell Wins $184 Million Award from Hewlett-Packard for

Patent Infringement, CORNELL CHRON. (June 6, 2008),

http://www.news.cornell.edu/stories/June08/HPpatent.ws.html.

77

Susan Kelley, Hewlett-Packard, Cornell Reach Settlement in Patent Case,

CORNELL CHRON. (June 9, 2010),

http://www.news.cornell.edu/stories/June10/HPCaseClosed.html.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

334

Technologies, in 1999 against Microsoft.

78

The plaintiffs had won

a $521 million jury verdict earlier in the case in 2003.

79

The case

settled while on appeal.

More recently, in spring of 2012, a judge awarded the

University of Pittsburgh $73.6 million in a case against Varian

Medical Systems, Inc.

80

Later that year, Pitt’s cross-town

competitor, Carnegie Mellon University, scored a $1.17 billion

damages award—one of the top three largest damages awards ever

in a patent infringement case—in a lawsuit it brought against

Marvell Technology Group Ltd.

81

Both lawsuits are currently on

appeal to the CAFC.

Another notable outcome for a university in a patent

infringement lawsuit dates back to 1998, when the University of

Minnesota filed suit against a predecessor to the pharmaceutical

company GlaxoSmithKline. The university claimed it owned

patents that covered a blockbuster HIV drug that GlaxoSmithKline

eventually marketed as Ziagen®. The parties subsequently settled

the dispute on financial terms quite favorable to the university after

a year of intense litigation. As part of a license deal, the university

eventually received more than $350 million in running royalties

from GlaxoSmithKline’s sales of the drug. These royalties

represented as much as 90% of the university’s revenue from

technology transfer.

82

Of course, not all patent infringement lawsuits end

favorably for the universities that bring them. For example, in a

patent infringement lawsuit brought by the University of Rochester

in 2000, the CAFC upheld a district court decision that a patent,

claimed by the university as covering a blockbuster arthritis drug,

78

Todd Bishop, Microsoft’s Eolas Settlement: UC Gets $30.4M, SEATTLE POST-

INTELLIGENCER: MICROSOFT BLOG (Oct. 10, 2007, 5:02 PM),

http://blog.seattlepi.com/microsoft/2007/10/10/microsofts-eolas-settlement-uc-

gets-30-4m/.

79

Andy Patrizio, Microsoft Settles Eolas Suit, INTERNETNEWS.COM (Aug. 30,

2007), http://www.internetnews.com/dev-

news/article.php/3697341/Microsoft+Settles+Eolas+Suit.htm.

80

Tom Fontaine, Pitt Awarded $73.6 Million in Patent Case, PITTSBURGH

TRIBUNE-REVIEW, Apr. 25, 2012, http://triblive.com/news/adminpage/1125208-

74/patent-varian-pitt-million-universities-court-university-percent-sales-award.

81

Rich Lord, Carnegie Mellon Wins $1.17 Billion in Patent Case, PITTSBURGH

POST-GAZETTE, Dec. 27, 2012, http://www.post-

gazette.com/stories/local/neighborhoods-city/carnegie-mellon-wins-117-billion-

in-patent-case-668013/; see also Ben Kersey, Marvell Hit with $1.17 Billion

Damages Verdict in Patent Infringement Case, VERGE (Dec. 27, 2012, 8:56

AM) (characterizing damages as “one of the largest patent verdicts in history,”

exceeded only by Microsoft v. Lucent Technologies ($1.52 billion) and Abbott

Laboratories v. Centocor Ortho Biotech ($1.67 billion)).

82

Katherine Lymn, U Heads for ‘Patent Cliff’, MINNESOTA DAILY, Oct. 6,

2011, http:// http://www.mndaily.com\/print/67409.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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335

was invalid.

83

The university allegedly had established an eight-

figure legal fund to support its lawsuit against the company it

believed was infringing.

84

In a different case, the CAFC overturned

a $1.67 billion jury award in a patent infringement lawsuit brought

by New York University and its licensee over patents co-owned by

the university.

85

The significant damages award is still the largest

ever achieved in a patent infringement case.

86

More recently, in February 2012, a jury in the Eastern

District of Texas invalidated a patent owned by the University of

California in a subsequent lawsuit with its licensee Eolas

Technologies against twenty-three different companies, including

Apple, Google, Amazon.com, and Sun Microsystems.

87

The

university’s patent was described as covering the interactive Web,

particularly as it relates to plug-ins for Web browsers.

88

World

Wide Web inventor Tim Berners-Lee, who testified at trial in favor

of the defendants, tweeted that the verdict was a “good thing.”

89

3. Lawsuits Filed, 1973 – 2012

Building on the two previous empirical studies described

above, I set out to identify every patent infringement lawsuit in

which a university had participated as a plaintiff, going back as far

as historical records allowed.

90

Westlaw maintains records of

patent infringement lawsuits in a database called Derwent LitAlert.

83

See Univ. of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916 (Fed. Cir.

2004).

84

Goldie Blumenstyk, Taking on Goliath: U. of Rochester Risks Millions in

Patent Fight with Pharmaceutical Giants, CHRON. OF HIGHER EDUC., Sept. 20,

2002, at A27.

85

See Centocor Ortho Biotech, Inc. v. Abbott Labs., 636 F.3d 1341 (Fed. Cir.

2011).

86

See Kersey, supra note 81.

87

Steven E.F. Brown, Eolas Sues 23 Companies After Beating Microsoft in

Patent Fight, SAN FRANCISCO BUS. TIMES (Oct. 6, 2009, 2:57 PM),

http://www.bizjournals.com/sanfrancisco/stories/2009/10/05/daily33.html; Marc

Parry, Jury Decides Against U. of California in Major Patent Fight Over the

Interactive Web, CHRON. OF HIGHER EDUC.: WIRED CAMPUS (Feb. 10, 2012,

12:56 PM), http://chronicle.com/blogs/wiredcampus/jury-decides-against-u-of-

california-in-major-patent-fight-over-the-interactive-web/35353.

88

John Ribeiro, Eolas Loses in Web Patents Claim Against Google and Others,

PCWORLD (Feb. 9, 2012, 10:00 PM),

http://www.pcworld.com/businesscenter/article/249695/eolas_loses_in_web_pat

ents_claim_against_google_and_others.html.

89

Id.

90

I conducted the majority of this research of historical lawsuit filings in the fall

of 2011 for my doctoral dissertation. See generally Rooksby, supra note 1

(describing study of universities that litigate patents). The resulting population

was subsequently surveyed, as further described in infra Section II.A. Lawsuit

filings for years 2011 and 2012 were compiled using the same methods

described in this Section. See infra note 92.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

336

The database relies on reports of patent infringement lawsuit

filings with the Commissioner of the United States Patent and

Trademark Office, as is required of federal district courts at the

time such cases are filed. While coverage of cases dates back to

January 1, 1973, significant gaps in reporting exist, particularly in

early years.

91

With this limitation in mind, I searched the Derwent

LitAlert database for every patent infringement lawsuit containing

a university as a plaintiff, using LexMachina and PACER to assist

in verifying that returned cases met the inclusion criteria.

92

My

initial search, conducted in July of 2011, returned 6,091 records. I

reviewed these records to determine which potentially

corresponded to (1) patent infringement lawsuits that (2) had at

least one university as a plaintiff.

93

Fewer than ten percent (N =

516) of the returned records appeared to meet the inclusion

criteria.

94

Of the records that appeared to meet the inclusion criteria, I

conducted detailed follow-up searches to confirm that the returned

records corresponded to cases that actually met the criteria. By

reviewing case information contained in LexMachina and PACER,

I determined that many records appearing to meet the inclusion

91

Other resources exist for researching patent infringement filings, although

these, too, have limitations. For example, the LexMachina database is very

comprehensive, but only for cases filed in the year 2000 or later. The Public

Access to Court Electronic Records (“PACER”) system maintained by the

federal government also is a good resource, but searching in it is costly and

tedious, as only court-specific searches in each of the 94 federal district courts

are possible.

92

My exact search language was: plf(trustee* universit! college* institute*

board* regent* research technolog! educat!) ow(trustee* universit! college*

institute* board* regent* research technolog! educat!) pas(trustee* universit!

college* institute* board* regent* research technolog! educat!) & da(aft

12/31/1972 & bef 01/01/2011). I defined university as, regardless of name, any

non-profit, public or private, undergraduate- and graduate-degree granting

institution located in the United States that engages in patenting and technology

transfer. I included separately incorporated entities controlled by or closely

affiliated with universities—such as research or patent foundations—within the

meaning of the term university. I did not include institutions that grant only

undergraduate or graduate degrees.

93

December 31, 2010 was the effective end date for the initial search. I followed

this same process in April of 2012 and January of 2013 to identify all cases

meeting the inclusion criteria for the years 2011 and 2012, respectively.

94

The majority of the returned records were false positives, consisting of

information about patent infringement lawsuits brought by companies with the

word technology or research in their corporate name. Additional false positives

included records corresponding to patent infringement lawsuits brought by

foreign universities or non-profit entities not meeting my definition of

university; university actions to challenge patent ownership or inventorship; and

trademark infringement lawsuits brought by universities. The incidence of false

negatives is unknown but believed to be de minimis, if existent at all.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

337

criteria in fact did not (e.g., the corresponding case did not have a

university as a plaintiff, or even if it did, did not involve claims of

patent infringement).

95

Of the records that appeared to meet the

inclusion criteria, 284 corresponded to cases that were confirmed

as meeting the criteria.

96

I made two categorical exclusions in

deciding which cases met the inclusion criteria. First, I excluded

any case where a university was added as a plaintiff after

commencement of the action. Operating under the assumption that

a party’s decision to sue is a meaningful one,

97

I wanted to know

how many lawsuits contained universities from the outset of the

case.

98

Second, I excluded cases in which universities levied

infringement allegations from a defensive posture (such as in

response to a declaratory judgment action). These two exclusions

were reasonable but arbitrary. I made them because my preference

was to under-report, as opposed to over-report, the number of

universities that have litigated patents and the number of patent

infringement lawsuits with universities as plaintiffs.

Table 1 displays the number of confirmed patent

infringement lawsuits involving universities as plaintiffs, as well as

the number of universities participating in those lawsuits, during

the studied time period. Graph 1 displays these data graphically;

Table 2 provides descriptive statistics.

95

Records for cases filed between 1973 and 1990 were the most difficult to

confirm as meeting the inclusion criteria, as information about these cases could

not be found in LexMachina or through PACER. Fortunately, search results

obtained in the ALLFEDS database in Westlaw confirmed many of these cases.

I considered a case confirmed if a judicial opinion provided enough information

to verify the case style, court in which it was brought, case number, and that the

dispute involved an allegation of patent infringement by the university plaintiff.

Several judicial opinions also revealed that records believed to meet the

inclusion criteria did not in fact correspond to a case involving an allegation of

patent infringement by the university plaintiff. Internet searches were conducted

for those records corresponding to cases filed between 1973 and 1990 for which

no judicial opinion could be located. Several cases were confirmed in this

manner. Sources of confirmation included the following: dated journal articles

subsequently made available online that discussed the litigation; biographies of

attorneys that listed their involvement in previous cases; and 10-K filings made

electronic by the Securities and Exchange Commission in which a company

discussed significant litigation involvements.

96

Only sixteen records contained information about cases that could not be

confirmed as meeting the inclusion criteria. All other cases identified in the

returned records were confirmed as not meeting the inclusion criteria.

97

Plaintiffs are commonly referred to as masters of the complaint. See, e.g.,

Garbie v. DaimlerChrysler Corp., 211 F.3d 407, 410 (7th Cir. 2000)

(“[P]laintiffs as masters of the complaint may include (or omit) claims or parties

. . . .”). This mastery entails a strategic advantage that permits them to decide not

only whom to sue and where, but which parties to include as fellow plaintiffs at

the outset of the litigation.

98

Strict adherence to this rule led to my including in the dataset a case in which

Drexel University was named as an involuntary plaintiff.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

338

Table 1

Number of University-Initiated Patent Infringement Lawsuits

and Number of Universities Participating per Year

Year

Number of

Lawsuits

Filed by

Universities

Number of

Universities

Participating

1973

0

1974

0

1975

1

1976

1

1977

0

1978

0

1979

1

1980

0

1981

0

1982

1

1983

0

1984

0

1985

0

1986

2

1987

0

1988

0

1989

7

4

1990

7

5

1991

3

4

1992

2

1993

4

1994

8

1995

3

1996

6

1997

7

4

1998

7

6

1999

4

3

2000

11

8

2001

10

7

2002

15

13

2003

10

7

2004

14

7

2005

7

5

2006

15

10

2007

20

19

2008

25

18

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

339

2009

32

22

2010

24

16

2011

37

18

2012

43

22

Graph 1

Number of University-Initiated Patent Infringement Lawsuits

and Number of Universities Participating per Year

Table 2

Descriptive Statistics for Dataset of Confirmed Cases

99

Minimum

Filed per

Year

Maximum

Filed per

Year

Sum

of

All

Years

Mean

No. of

Cases

Filed

per

Year

Standard

Deviation

Confirmed

cases

0

43

327

8.18

10.66

As noted in Graph 1, the number of patent infringement

lawsuits with universities as plaintiffs has not increased each year

over time, nor has the number of individual universities that have

participated as plaintiffs in such lawsuits increased each year over

time. However, both metrics are trending upward, with significant

99

For a listing of the case styles for all cases in the dataset except those filed in

2011 and 2012, see Rooksby, supra note 1, at 224-50. Copies of the complaints

of lawsuits filed in years 2009 through 2012 are on file with the author.

0

5

10

15

20

25

30

35

40

45

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Number

Year

Lawsuits Filed Universities Participating

15 YALE J.L. & TECH. 312 (2013) 2012-2013

340

growth noted beginning in the year 2000.

100

Some of this increase

may be attributable to increased accuracy of the database around

this time, meaning that pre-2000 results are particularly under-

inclusive. Regardless, university involvement as plaintiffs in patent

infringement litigation was at least as prevalent as indicated in

Table 1 and Graph 1 over the past forty years.

101

Appendix B

contains further description of the universities in the dataset across

a variety of metrics.

II. A STUDY OF UNIVERSITIES THAT LITIGATE PATENTS

A. Background and Methodology

Targeting largely the population of universities identified in

Table 4 in Appendix B, I set out to better understand university

decision-making and structural frameworks concerning

involvement as plaintiffs in patent infringement litigation. Three

general research questions drove my inquiry:

100

Some of this growth may be consistent with, or even explained in part by, a

general increase in patent litigation in the past decade. See Terry Ludlow, U.S.

Patent Litigations Reach All Time High in 2011, CHIPWORKS (Mar. 8, 2012),

http://www.chipworks.com/blog/technologyblog/2012/03/08/u-s-patent-

litigations-reach-all-time-high-in-2011/ (noting growth in patent litigation);

Gene Quinn, The Rise of Patent Litigation in America: 1980-2012,

IPWATCHDOG (Apr. 9, 2013), http://www.ipwatchdog.com/2013/04/09/the-rise-

of-patent-litigation-in-america-1980-2012/id=38910/ (same). But regardless of

general trends in patent litigation, or university involvement in patent litigation

as a percentage of total infringement lawsuits brought each year, my argument is

that university involvement in patent litigation is significant enough in real

numbers (as indicated in Graph 1), and qualitatively different than patent

litigation brought solely by for-profit actors, to merit its own individualized

attention.

101

Again, limitations inherent in the searched database affected these results,

unquestionably causing them to be underinclusive. For example, two patent

infringement lawsuits brought by the University of Michigan before 2010 were

not returned in my initial search, despite their meeting the search criteria. See

Complaint, Repligen Corp. v. Bristol-Myers Squibb Co., No. 2:06-CV-00004-

TJW-CE (E.D. Tex. Jan. 5, 2006) (No. 1); Complaint, Reagents [sic] of the

University of Michigan v. GeneSearch, L.L.C., No. 5:00-CV-60250-MOB (E.D.

Mich. May 10, 2000) (No. 1) (filed in conjunction with Michigan State

University). Although University of Michigan appears in Table 4 (in Appendix

B) due to its participation in a lawsuit brought in 2012, for whatever reason,

records for the two earlier cases simply do not exist within the Derwent LitAlert

database. Because this fact was not discovered until after data collection for the

survey described in Section II.A was completed, the survey did not include the

University of Michigan in the targeted population. Unknown is the number of

other universities or lawsuits involving universities as plaintiffs that should have

been captured by the search methodology but were not.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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1. Do these universities report having institutional policies

that address their potential involvement as plaintiffs in

patent infringement litigation?

2. What do their chief research officers (“CROs”)

102

indicate they believe concerning:

a. the considerations important to their universities in

deciding whether to initiate patent infringement

litigation,

b. the likelihood that their universities would initiate

patent infringement litigation again in the future,

and

c. the extent to which their universities’ research

missions are furthered through initiation of patent

infringement litigation?

3. Finally, do significant differences exist between public

and private universities in the conclusions reached in

answering the aforementioned questions?

I structured the study as an explanatory mixed-methods

design, meaning I gathered survey data to analyze quantitatively,

then used select qualitative follow-up interviews to help analyze

and interpret that data.

103

As my study was the first to examine the

opinions of university decision-makers on these topics in

comprehensive fashion, no survey instrument existed that could be

drawn upon or used. Accordingly, I created an instrument

containing twenty closed-ended questions for online use via a

102

I selected CROs (typically called vice presidents for research, or vice

provosts for research) for participation for several reasons. First, technology

transfer activities generally fall under the purview of CROs at research

universities. See MATKIN, supra note 50, at 108. Therefore, CROs are likely to

be involved in university decisions to litigate patents and are likely to be

familiar with, or have ready access to information about, past patent

infringement lawsuits brought by their university. Second, CROs typically are

tenured faculty members who have assumed a senior-level administrative

position. Therefore, unlike directors of TTOs or university attorneys (both of

whom usually do not have faculty appointments), CROs are uniquely situated to

opine on institutional policies and practices concerning the university’s research

operation. Finally, their opinions and beliefs about the studied activity also are

particularly relevant, as they are charged with directing policy for their

universities with respect to research-related activities.

103

See JOHN W. CRESWELL, EDUCATIONAL RESEARCH: PLANNING,

CONDUCTING, AND EVALUATING QUANTITATIVE AND QUALITATIVE RESEARCH

560 (3d ed. 2008) (describing an explanatory study design).

15 YALE J.L. & TECH. 312 (2013) 2012-2013

342

survey administration website.

104

I drew on pilot interviews of

TTO directors at the 2011 annual meeting of the Association of

University Technology Managers (“AUTM”) and existing

literature to draft relevant questions.

105

These questions were then

pre-tested for content appropriateness and relevancy and refined as

a result of close consultation with an in-house counsel and TTO

director at a university in the population, as well as a survey design

expert.

106

On August 1, 2011, I sent a letter to the CRO

107

at 63 of the

universities in the population, inviting their participation.

108

The

letters expressly asked recipients to identify an alternate person

within their university to complete the survey if they felt they had

been misidentified or preferred that someone else complete it.

109

104

Appendix A contains a complete copy of the survey instrument and also

presents an executive summary of data for each question. The survey questions

were divided into the following three categories: background information,

institutional policies, and professional beliefs. The background information

section contained a question asking whether the participant’s university is public

or private. Responses to that question allowed for stratification by university

funding source (public or private). Questions concerning institutional policies

were yes/no questions, whereas questions concerning professional beliefs held

by the participants had a mixture of Likert-scale, best-choice, and rank-order

response choices. At their option, participants were permitted to enter comments

in dialogue boxes after 17 of the 20 questions (the other three questions, such as

“Is your university public or private?”, did not lend themselves to comments).

105

See generally Rooksby, supra note 52 (describing qualitative study of TTO

directors concerning patent infringement litigation).

106

See generally RONALD CZAJA & JOHNNY BLAIR, DESIGNING SURVEYS: A

GUIDE TO DECISIONS AND PROCEDURES (2d ed. 2005) (describing the

appropriateness of these steps in creating a survey instrument).

107

I identified these individuals and their addresses by visiting each university’s

website. For those universities in the population that are university systems—for

example, the University of California, which has ten campuses—I sent the

introductory letter to the CRO or individual at the system level who appeared to

be responsible for research and technology transfer activities within the system.

Six university systems had an identifiable system-level CRO, whereas another

six did not. Universities in the population that are part of university systems, but

nevertheless litigated in their own name, received a letter directly (for example, I

sent the CRO at the University of Wisconsin-Madison a letter, but did not send

one to the system-level CRO or equivalent).

108

Because I collected lawsuit data for the years 2011 and 2012 after I

conducted the survey described in this section, invitations were not sent to the

six universities that filed their first patent infringement lawsuit in 2011

(University of Arizona, Brandeis University, and Rensselaer Polytechnic

Institute) or 2012 (Florida Atlantic University, University of South Alabama,

and University of South Florida). In addition, as mentioned supra, no invitation

was sent to the University of Michigan.

109

Eleven CROs responded with such information, mostly asking that the survey

be sent to their university’s TTO director. Two additional CROs responded to

notify me that their university would not participate in the survey. One other

participant dropped out after seeking and receiving a complete copy of the

survey instrument to review with his university’s general counsel.

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On August 22, I sent emails to the amended list of participants that

contained a link to the online survey.

110

Given the perceived

sensitivity of the topic, I decided to collect the survey data

anonymously, without requiring participants to identify themselves

or their institution.

111

The survey closed on September 19 (four

weeks after it opened), after two reminder emails had been sent.

Twenty-two of 63 universities initially targeted completed the

survey for a response rate of 36.7%.

112

Of the 22 universities that completed the survey, 13 were

public and 9 were private. The array of university participants

included universities new to the activity (such as Catholic

University and Michigan Technological University) and others

more experienced (such as Johns Hopkins University,

Massachusetts Institute of Technology, and the University of

California). Table 3 lists all the universities that completed the

survey. The actual participants at these universities consisted

mostly of TTO directors (n = 10, or 45.5%) and CROs (n = 6, or

27.3%), as indicated by anonymized data from the survey

concerning job titles.

Table 3

Universities That Completed the Survey

Brigham Young University

Catholic University

Iowa State University

Johns Hopkins University

Massachusetts Institute of Technology

Michigan Technological University

North Carolina State University

Northwestern University

Rutgers, the State University of New Jersey

Saint Louis University

Temple University

Tufts University

110

The survey was administered online through QuestionPro, an online survey

administration tool.

111

Participants were notified at every solicitation contact that their responses to

the survey would be anonymous. I also stressed that the survey did not concern

the details of any specific past, pending, or contemplated litigation, and was

instead only intended to solicit information concerning institutional policies and

each participant’s individual opinion concerning their institution’s decision-

making with respect to assertive patent enforcement.

112

This percentage is drawn from 60 universities, not 63, given that three

targeted participants never received links to the online survey in light of their

responses to my introductory letter. See supra note 109.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

344

Tulane University

University of Alabama at Birmingham

University of California

University of Maryland-College Park

University of Massachusetts

University of Rochester

University of Utah

University of Virginia

University of Washington

Virginia Commonwealth University

The survey questions were grouped into four categories for

purposes of data analysis: those aimed at obtaining data to answer

research question 1, research question 2(a), research question 2(b),

and research question 2(c). Survey response data were segregated

into these four categories, stratified by public and private

universities so as to answer research question 3. Descriptive and

non-parametric statistics were used to analyze results and answer

the relevant research questions.

113

The last item on the survey allowed participants to leave

their email address if they were willing to participate in a follow-

up phone interview with me.

114

Ultimately three participant

interviews were conducted in November of 2011, in tape-recorded

sessions lasting 20 to 30 minutes.

115

The purpose of these

interviews was to gain deeper understanding into some of the

patterns that emerged from the survey data and to aid in

meaningfully interpreting and contextualizing the survey’s key

113

Both Mann-Whitney’s U test and the chi-square test for independence were

used to test for statistically significant differences between the responses of

public and private universities, depending on question design (i.e., whether the

question permitted collection of ordinal or nominal data). The null hypothesis

for each question stated that there was no statistical difference between

responses to the question by respondents at public and private universities. The

null hypothesis was retained for all but one answer choice on the survey.

Cohen’s conventions were followed for analyzing the strength of the effect size.

See JACOB COHEN, STATISTICAL POWER ANALYSIS FOR THE BEHAVIORAL

SCIENCES (2d ed. 1988). As recommended in the non-parametric statistics

literature, Fisher’s Exact Test was used to provide p-values for 2 x 2

contingency tables and when returned scores for 2 x 3 contingency tables

effectively rendered them 2 x 2. For more information on these tests, see

GREGORY W. CORDER & DALE I. FOREMAN, NONPARAMETRIC STATISTICS FOR

NON-STATISTICIANS: A STEP-BY-STEP APPROACH 179-85 (2009); and JAMES J.

HIGGINS, AN INTRODUCTION TO MODERN NONPARAMETRIC STATISTICS 172-75

(2004).

114

These e-mail addresses were reported to me apart from the survey data,

therefore the solicitation of this information did not compromise the anonymity

of the survey data.

115

Interviews were transcribed to aid analysis.

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findings. Several comments from the interviewees are quoted in

the sections below.

B. Summary of Results

This Section details the study’s general findings as they

relate to the four research questions.

1. Research Question 1 – Litigation Policies

Data from the study indicate that universities generally

have not established formal institutional policies or frameworks

intended to address their potential involvement as plaintiffs in

patent infringement litigation. This finding challenged my

assumption that universities that had litigated patents in the past

would have established institutional policies or frameworks to

facilitate their involvement in the activity again in the future. For

example, I expected respondents to indicate that their universities

had established affiliated patent or research foundations partly so

that those entities could participate in litigation in place of the

university proper.

116

In fact, very few (n = 3, or 13.6%) indicated

that their universities had done so.

I also expected respondents to indicate that their

universities have a formal policy or set of guidelines to follow in

determining whether to participate as a plaintiff in patent

infringement litigation. Again, few (n = 2, or 9.1%) said that they

do.

117

Equally surprising to me were responses to a question asking

whether respondents’ universities set aside money each year in a

budget for potential use as a plaintiff in patent infringement

litigation. Given the high cost of participating in infringement

litigation, particularly if pursued without a licensee, I expected

many to indicate that they accounted for their occasional

involvement in the activity in a budget. However, only one

respondent indicated that his university does so. Interviewees were

less surprised by this finding. While they uniformly agreed that

universities should be more proactive in planning for the costs of

patent infringement litigation, practical realities prevent it, they

said.

116

Matkin makes this suggestion, calling such entities “buffer organizations.”

See MATKIN, supra note 50, at 171-72.

117

This finding, however, did not surprise interviewees. One told me that “The

decision process of litigation is so dynamic and so organic that it does not lend

itself to policy.” Rooksby, supra note 1, at 140 (all interviews conducted for the

study were confidential, and therefore names and positions of interviewees are

not provided in this or subsequent citations to interviewees). Another described

it “a complicated enough business” that it “defies policies that would be

helpful.” Id. at 141.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

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In short, few universities in the study reported having

established institutional policies or frameworks to address their

potential involvement as plaintiffs in patent infringement litigation,

and some university decision-makers I spoke with indicated they

saw no need for such policies or frameworks. While some

university decision-makers perceive value in budgeting for patent

infringement litigation, very few universities actually do so.

Finally, even though university-affiliated patent or research

foundations can preclude the need for direct university

involvement as plaintiffs in patent infringement litigation, few

universities in the study reported having established an affiliated

patent or research foundation for that reason.

2. Research Question 2(a) – Considerations

I expected survey respondents to indicate that

considerations with direct financial implications—such as who

pays for litigation, the beliefs held by licensees, and a lawsuit’s

potential impact on donations to the university or private-sector

funding of faculty research—are important to university decisions

whether to initiate patent infringement litigation. Considerations

with attenuated financial implications—such as concerns for views

held by the public, the potential ideological opposition of students

and non-inventor faculty, and perceived ethical or professional

obligations—seemed less likely to be cited as influencing decision-

making, even though some commentators had suggested their

importance.

118

The data largely proved these hypotheses correct. Over

81% of respondents (n = 18) indicated that the potential monetary

returns to their university from suing for patent infringement are

typically highly relevant to their decision whether to bring suit.

Fewer (n = 14, or 63.6%) indicated that indirect costs (in the form

of diverted attention from faculty and professionals, emotional

strain caused by the litigation, and public relations concerns) are

highly relevant. At the same time, many respondents indicated that

they are sensitive to the high costs of legal fees. Over 63% of

respondents (n = 14) indicated that their university is more likely

to favor bringing an infringement lawsuit if a licensee pays for

some of the university’s legal fees.

One question on the survey concerned the identity of a

prospective infringer. Respondents were sharply divided as to

whether defendant identity influences their institution’s decision-

making. Nearly 41% of respondents (n = 9) indicated a potential

118

See NRC, supra note 67, at 7 (citing “disregard by infringer of scientific or

professional norms and standards” as potential reason for asserting patent

rights).

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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347

defendant’s identity is irrelevant to their university’s decision-

making. However, the same amount indicated that a defendant’s

political influence and its financial contributions to the university

are considerations that their university weighs heavily in deciding

whether to participate as a plaintiff in patent infringement

litigation. Presumably concerned for potential financial retribution

in state budgeting processes, respondents at public universities are

more sensitive to a defendant’s political influence than are

respondents at private universities, to a statistically significant

degree.

119

Respondents also frequently cited a prospective

defendant’s financial and litigation resources (n = 7, or 31.8%), as

well as its prominence in the community (n = 6, or 27.3%), as

considerations heavily weighed at their universities.

Another question concerned whose opinions hold the most

influence in university decisions to litigate patents. Responses

indicated that the opinions of university in-house counsels are the

most prioritized, but most respondents (n = 14, or 63.6%) also

indicated that the actual or anticipated opinion of their university’s

licensee(s) weighs heavily. In fact, more respondents cited the

licensee’s opinion as weighing heavily than cited the opinion of

their university’s president (n = 10, or 45.5%) or governing board

(n = 8, or 36.4%). No respondent indicated that the actual or

anticipated views of the public, students, or faculty (other than

those who invented the patents being infringed) weigh heavily in

their university’s decision-making.

Interviewees attributed many respondents’ deference to the

opinions of licensees as reflecting confidence in their greater

understanding of the market and the nature of patent infringement

litigation. As one interviewee explained, “Our governing board or

our president, or whatever internal decision-making structures we

have, are not likely to be knowledgeable about the specific

dynamics of the licensee’s industry, or knowledgeable enough to

be the primary decision-maker about the litigation.”

120

Another

saw university deference to licensees in matters of infringement as

“part and parcel [of] what we have empowered the licensee to do

when we give them the commercial right to use our patent.”

121

This sentiment also was expressed in response to a survey

question concerning motivating factors to litigate. The majority of

respondents (n = 15, or 68.2%) cited the university’s contractual

obligation to protect the rights of existing licensees as weighing

heavily in university decision-making. Fewer expressed that

litigating could further the university’s public-serving mission (n =

119

χ

2

= 5.594, p = 0.025,



= 0.504.

120

Rooksby, supra note 1, at 151.

121

Id.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

348

7, or 31.8%) or generate revenue through a damages award (n = 8,

or 36.4%) or out-of-court settlement (n = 6, or 27.3%).

Interviewees interpreted the strong concern for the

university’s contractual obligations to licensees as entirely

appropriate given the important role licensees play in university

technology transfer. All referred to licensees as university

“partners” and expressed bewilderment at the notion that any

university might place primacy on other interests with respect to

decision-making about patent infringement litigation. As one

interviewee stated:

We have to abide by the contract. So if we

have a contract that obliges us to participate

in litigation, even just in name, then we have

to honor that contract. . . . [Universities] also

have relationships with their licensees. It’s

not a naked transaction. And so the licensees

are business partners with the institution.

And so they are going to have influence on

how the institution makes business

decisions.

122

Another interviewee explained the importance of honoring

contracts with licensees concerning infringement litigation in terms

of what disregarding a contract with a licensee could do to the

university’s further licensing efforts. This interviewee noted, “If it

got out that we exclusively licensed a technology to a company,

and were not willing to stand behind that company in a patent

enforcement proceeding, we would do very few licenses after that.

And justifiably so.”

123

3. Research Question 2(b) – Likelihood to Litigate

Several questions on the survey were designed to elicit data

concerning the likelihood that respondents’ universities would

initiate patent infringement litigation again in the future. While

specific predictions were not sought, the data allowed for a general

conclusion that the studied universities are open to litigating their

patents again in the future. In fact, decision-makers at most (n =

14, or 63.6%) of the surveyed universities feel that it is inevitable

that their university will do so again, given the number of patents

in their portfolio. Many (n = 16, or 72.7%) also indicated that they

viewed participating as a plaintiff in patent infringement litigation

122

Id. at 155.

123

Id. at 156.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

349

to be an unavoidable consequence of engaging in patenting and

technology transfer.

Whether to assert a patent by filing a lawsuit is not an

infrequent topic of discussion at many of the studied universities.

Fifteen respondents (68.2%) indicated that they had discussed with

a colleague at their university one or more times in the past year

whether their university should participate as a plaintiff in patent

infringement litigation against an infringer of one of the

university’s patents. Two (9.1%) respondents reported having had

these discussions more than 10 times in the preceding year.

A question on the survey concerning projected monetary

returns from engaging in patent infringement litigation generated a

variety of responses. The question asked respondents to indicate

the lowest range of projected monetary returns to their university

over which the institution would consider litigating. Five

respondents (22.7%) indicated that projected monetary returns do

not factor into their university’s decision-making; presumably

these universities are willing to defend their patents through

litigation on principle. For the remaining respondents, $250,000 to

$499,000 was the average range of projected monetary returns to

their university that in their opinion would make the lawsuit worth

pursuing. Several respondents (n = 5, or 22.7%) indicated that they

would bring suit for less than that range, including one respondent

who selected $0 to $999 as the lowest range. Six respondents

(27.3%) selected $1 million to $9 million as the lowest projected

range. No respondent selected a range above $10 million to $49

million (that range was selected by one respondent).

Interviewees saw the variety of responses to this question

as emblematic of a larger tension within the industry between

principled stances on enforcement and realistic approaches to

enforcement in light of resource constraints. As one interviewee

put it:

The philosophical dilemma is, do you

litigate because you’re protecting your asset,

or do you litigate for the homerun? So [the

results to this question reflect] a difference

of opinions about why you litigate. Those

that litigate because it’s the responsible

thing to do to protect the asset care less

about the likelihood of award, and those that

are doing it just for the money, you see it’s

just a philosophical divide is my sense.

124

Id. at 162.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

350

Another interviewee echoed these sentiments, noting that

what universities view as ideal behavior can be tempered by

business realities:

It’s a question of being idealistic versus

practical. I don’t think universities want to

feel like they make decisions on licensing or

enforcing patents that are based on monetary

return. What you want to do is get your

technology used for the benefit of society

and money shouldn’t come into play. So

that’s the idealistic approach. As a practical

matter, if you’re spending a million to get

half a million, that’s not a very good

business decision. And although we’re not-

for-profits, we’re still businesses.

125

I also sought to understand to what extent a university’s

past involvement in patent infringement litigation might influence

its future involvement. The majority of respondents (n = 12, or

54.6%) indicated that their university’s past experience as a

plaintiff was not likely to influence its future participation as a

plaintiff. As one respondent in the majority on this question wrote

in an open-ended textual submission, “Our past experience has

added more wisdom to how we make such a decision but has not

influenced what that decision might be.” Fewer than half of the

respondents (n = 9, or 40.9%) indicated that their university’s past

experience as a plaintiff in patent infringement litigation made

their university’s future participation as a plaintiff somewhat

likely, likely, or extremely likely.

126

4. Research Question 2(c) – Litigation As Mission

Enhancing

Two questions on the survey were designed to solicit data

concerning the extent to which respondents believe their

universities’ research missions are furthered through enforcing

patents in infringement litigation. One survey question addressed

this issue directly while another approached it indirectly. When

asked about the issue directly, respondents were sharply divided on

125

Id.

126

I also asked respondents about the potential impact of past patent

infringement lawsuits where their university had been named as a defendant.

Most either were unaware of any such lawsuit (n = 16, or 72.7%) or indicated

any such lawsuit had no impact on future participation as a plaintiff (n = 6, or

27.3%).

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

351

whether their universities’ research missions are furthered through

participation as plaintiffs in patent infringement litigation. Slightly

over half of respondents (n = 12, or 54.6%) disagreed with the

proposition that participating as a plaintiff in patent infringement

litigation furthers their university’s mission as a research

institution. However, when initiation of patent infringement

litigation was framed as an extension of investment in research and

obtaining patents, the overwhelming majority of respondents (n =

20, or 90.9%) had no difficulty reconciling the activity on those

terms (i.e., they agreed with the statement “If we are willing to

invest in research and incur costs to obtain patents, we must be

willing to sue infringers of our patents”).

This finding suggests that while most universities see

infringement litigation as a logical continuation of investments in

research and patenting, many are quite hesitant to announce that

the activity furthers their research missions, believing the two

unrelated or even at odds. Indeed, only one respondent (4.5%) felt

strongly that the activity furthers his university’s research mission,

compared to four (18.2%) who felt strongly that it does not.

Interviewees expounded further on these tensions and

differences of viewpoint. All believed that no university views

patent infringement litigation as an activity in which it actively

hopes to engage. At the same time, they recognized that the

activity can further goals that are intimately tied to a university’s

research agenda. As an interviewee put it:

Is the act of litigation itself furthering a

mission? No, I mean litigation never furthers

a mission in terms of it being something you

ever aspire to do, or a real objective of the

university . . . . Litigation is not one of them.

But if you think about it in terms of whether

it is a necessary part of protecting and

advancing our research, then you come up

with a different answer. . . . To me it’s a

necessary evil—I’ll go ahead and use that

word. If you’re going to go forward and

protect patents, the necessary follow-on to

that is that you have to be willing to enforce

them.

127

Another interviewee further parsed the tricky relationship

between research mission and patent enforcement in terms of

universities’ mandates to disseminate technology:

127

Rooksby, supra note 1, at 166.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

352

I believe litigation is not inconsistent with

our research mission, because our research

mission is to disseminate, and dissemination

requires investment, which requires return,

which requires protection. And if you’re not

willing to protect technology, that inhibits

its dissemination more broadly and more

generally. . . . I can’t imagine how you could

be in the business of licensing and not view

litigation as critical to your strategy. Why

have this asset if you’re not willing to

defend it?

128

5. Research Question 3 – Public/Private Differences

No statistically significant differences existed in the

answers that decision-makers at public and private universities

provided in this study’s survey, with one exception: decision-

makers at public universities are more sensitive than decision-

makers at private ones to the perceived political influence of a

potential defendant.

C. University Approaches to Patent Infringement

Litigation

The data from the study reported above show a division in

approaches to patent infringement litigation among universities

that have litigated their patents before. While some universities

that have litigated their patents in the past appear to be willing

pursuers of infringers and prepared participants in assertive patent

infringement litigation, many are not so committed. By empirically

identifying these varying approaches to the activity, this study

contributes to growing understanding of complex decision-making

about university efforts to protect and enforce institution-owned

intellectual property.

1. The Minority Approach: Willing Pursuers

and Prepared Participants

A minority of universities that litigate patents are

comfortable with the concept of enforcing patent rights. At these

universities, decision-makers have accepted that ownership and

enforcement of patents are intimately tied. Pursuing infringement

litigation helps protect institutional investments into research and

128

Id. at 167.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

353

patenting. These universities are committed to litigating their

patents if the facts warrant, regardless of the infringer’s identity

and, while cost conscious, without undue concern for the activity’s

revenue-generating potential. These universities fairly might be

regarded as willing to enforce their patent rights on principle.

While most such universities are unlikely to have policies to guide

their involvement in patent infringement litigation, they have given

the issue substantial thought and thus feel prepared to pursue

infringers when warranted.

2. The Majority Approach: Reluctant Pursuers and

Contingent Participants

Most universities that litigate patents are conflicted about

the activity. For these universities, a potential defendant’s identity,

low projected monetary returns, and high legal costs may dampen

their enthusiasm for pursuing an infringement action. These

universities are likely to see the activity as ancillary to, or even in

direct conflict with, their mission as a research university, which

causes them to be exceedingly cautious and reluctant actors when

issues of infringement arise. Concerns for how others will view

their involvement as plaintiffs in patent infringement litigation may

hamper these universities’ ability to effectively pursue the activity

when the facts otherwise support their participation. Unwilling to

take a uniformly strong stance against all infringers, the majority

of universities that litigate patents are erratic in their decisions

concerning patent enforcement, often hinging their approaches to

patent infringement litigation on any number of idiosyncratic

contingencies.

129

III. CHANGING POLICY: TOWARD A COHERENT POSITION ON

UNIVERSITY PATENT OWNERSHIP AND ENFORCEMENT

The findings from the study reported in this Article provide

empirical support for several policy recommendations that could

help further university enforcement of patents in the public

interest. One way to reconcile the legal/policy tensions identified

in Parts I and II is to adapt university cultures, dispositions, and

decisional infrastructures concerning patent enforcement to better

129

The majority approach contrasts with prevalent patent litigation strategy for

patent licensors more generally. Best practices dictate suing in clear instances of

infringement, “even if the cost of the specific litigation outweighs the likely

recovery from the infringer,” as “[a] company that develops a reputation for

vigorously protecting its rights [. . .] may reap long-term intangible benefits.”

ABA SECTION OF INTELLECTUAL PROP. LAW, PATENT LITIGATION STRATEGIES

HANDBOOK 5-6 (Barry L. Grossman & Gary M. Hoffman eds., 3d ed. 2010).

15 YALE J.L. & TECH. 312 (2013) 2012-2013

354

align with restrictive requirements imposed by patent law. This

Part describes how.

A. Reframing University Understanding of Patents

Today’s universities face a financing crisis. Increasingly

the victims of diminishing and highly volatile state support,

institutions of higher education must seek additional sources of

funding to support their operations. Many see this paradigm as the

“new normal” of higher education finance.

130

As the influential and

well-known president of Ohio State University, E. Gordon Gee,

recently argued, universities “must seek fundamentally new ways

to fund our core purposes”

131

—not as a strategy for weathering a

temporary recession, but rather out of necessity for sustaining

activities and furthering excellence into the future. As a starting

point, he suggests “finding innovative ways to leverage the

market” and “commercializing technological innovations.”

132

The study described in this Article reveals why Gee and

other university leaders who share his financial prognosis might

view increasing patent licensing revenue as an essential way to

diversify revenue streams. In turn, they also might see the initiation

of subsequent patent infringement litigation as an acceptable

method of simultaneously protecting patents and licensees,

supporting research, leveraging the market, and commercializing

technological innovations.

However, as this study’s findings show, many universities

that litigate patents do not yet know how to fit patent infringement

litigation within their stated missions, perhaps because they view

the activity as too infrequent or too ancillary to core pursuits to

warrant much critical analysis. University technology transfer

efforts historically have been directed to the confined and easily

quantified concepts of patenting and licensing.

133

130

See Paul J. Yakoboski, Introduction to SMART LEADERSHIP FOR HIGHER

EDUCATION IN DIFFICULT TIMES 1, 1-12 (David W. Breneman & Paul J.

Yakoboski eds., 2011); William R. Doyle & Jennifer A. Delaney, Higher

Education Funding: The New Normal, CHANGE: THE MAGAZINE OF HIGHER

LEARNING, July-Aug. 2009, at 60-62.

131

E. Gordon Gee, Colleges Must Find Innovative Ways to Finance Their

Missions, CHRON. OF HIGHER EDUC. (Oct. 30, 2011),

http://chronicle.com/article/Colleges-Must-Find-Innovative/129568/.

132

Id.

133

See DAVID C. MOWERY ET AL., IVORY TOWER AND INDUSTRIAL INNOVATION:

UNIVERSITY-INDUSTRY TECHNOLOGY TRANSFER BEFORE AND AFTER THE

BAYH-DOLE ACT IN THE UNITED STATES 84 (2004) (describing the historical

primacy of these metrics in evaluating the success of technology transfer).

Indeed, the metrics on which technology transfer has been built and judged by

AUTM and others focus predominantly on matters pertaining to patenting (e.g.,

the number of new patent applications filed, the number of patents issued, etc.)

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

355

But as institutional goals such as cultivating innovation

ecosystems, commercialization, and entrepreneurship replace first-

generation constructions of technology transfer as predominantly

focused on patenting and licensing,

134

so might institutional

attitudes and cultures evolve to better accommodate patent

enforcement activity. Instead of viewing patent infringement

litigation as a source of conflict, embarrassment, or even shame

(i.e., a breakdown of a TTO’s core patenting and licensing

activities), the activity stands ripe for reconstruction as an integral

part of the university’s expanding commitment to fostering

innovation, spurring commercialization, and reflecting institutional

entrepreneurship. These three loosely defined concepts—very

much in vogue among university administrators and technology

transfer professionals—each have room to embrace an activity that

many within and outside the university traditionally have viewed

in a puzzled, if not negative, light.

Increasingly seen as significant agents of economic

development and instruments of national wealth creation,

135

universities of the future are unlikely to be halting in their

approaches to patent enforcement, as many of them are today.

Policymakers and entrepreneurial faculty will not permit them such

indecision. What some currently may view as an uncomfortable

truth about universities that litigate patents—that relationships with

industry and concerns related to revenue drive the majority of

university decisions involving patent enforcement—stands to

become an accepted and even celebrated reality, evidence of an

entrepreneurial university’s commitment to develop state and

regional economies through fierce protection of intellectual

property. While never likely to turn into the preferred mode of

and licensing (e.g., the number of exclusive licenses executed, the number of

options executed, etc.). See, e.g., Gary Rhoades, Housing the Measurement of

University Innovations’ Social Value: Organizational Site, Professional

Perspective, Institutional Outlook, in ADVANCES IN THE STUDY OF

ENTREPRENEURSHIP, INNOVATION & ECONOMIC GROWTH 237, 237-67 (2009).

Of course, other metrics are given some consideration. In particular, the number

of new companies formed and jobs created through technology transfer are

being discussed. This emphasis likely only will grow in importance as

policymakers place more attention on the capacity of university research to drive

economic development.

134

See Letter from Mary Sue Coleman, Co-Chair, Nat’l Advisory Council on

Innovation & Entrepreneurship, to Hon. Gary Locke, Sec’y of Commerce (Apr.

19, 2011), available at www.aau.edu/WorkArea/DownloadAsset.aspx?id=12084

1-2; see also HOLDEN THORP & BUCK GOLDSTEIN, ENGINES OF INNOVATION:

THE ENTREPRENEURIAL UNIVERSITY IN THE TWENTY-FIRST CENTURY (2010)

(describing universities’ shift in focus in TTO activity from patenting and

licensing to spurring entrepreneurial behavior).

135

SHEILA SLAUGHTER & LARRY L. LESLIE, ACADEMIC CAPITALISM: POLITICS,

POLICIES, AND THE ENTREPRENEURIAL UNIVERSITY 39-40 (1997).

15 YALE J.L. & TECH. 312 (2013) 2012-2013

356

TTO operation, unabashed and unapologetic patent enforcement

could soon be championed as an important tool among others for

universities seeking to commercialize technologies as they strive to

accommodate new financing and economic development

imperatives. In short, what I describe as the minority approach to

patent enforcement (i.e., universities as “willing pursuers and

prepared participants”) could become the majority approach as

universities continue their reorientation of priorities and

allegiances.

Mounting economic pressures cast doubt on any optimism

for a decrease in university participation as plaintiffs in patent

infringement litigation in years to come. Most likely the

traditional—and some have argued elitist

136

—conception of

universities as socially detached and disinterested bastions of

general and specialized knowledge increasingly will be

supplemented or even wholly supplanted with a conception of the

American research university as firmly market-situated by design.

Many signs indicate that such reconstruction of the modern

research university is well underway. No longer indifferent to the

concerns of society’s markets, the socially embedded modern

university is very much a part of them.

137

With respect to state-

funded universities, gone are the days of automatic earmarks with

wide deference given by the state to university spending priorities.

Public financial support of higher education as a percentage of

total operating budgets is unlikely to return to pre-2000 levels.

138

Indeed, such support is shifting and will continue to flow only in

exchange for specific commitments and undertakings, most of

them market-driven. Progressively more private donors as well are

no longer content to make substantial unrestricted donations to

university endowments, which many view as “lazy money.”

139

136

See, e.g., Michael M. Crow, Beyond the “New Normal” in American Higher

Education: Toward Perpetual Innovation, in SMART LEADERSHIP FOR HIGHER

EDUCATION IN DIFFICULT TIMES 50-69 (David W. Breneman & Paul J.

Yakoboski eds., 2011); Michael M. Crow, The Research University As

Comprehensive Knowledge Enterprise: A Prototype for a New American

University, in UNIVERSITY RESEARCH FOR INNOVATION 211-26 (Luc E. Weber

& James J. Duderstadt eds., 2010).

137

See generally BOK, supra note 49 (describing the rising influence of markets

in higher education); DUDERSTADT, supra note 5 (noting the market-driven

restructuring of higher education); KIRP, supra note 49 (lamenting the

ascendance of entrepreneurialism in higher education); SLAUGHTER &

RHOADES, supra note 49 (describing the ascendance of the academic capitalist

knowledge/learning regime in higher education).

138

See BURTON ALLEN WEISBROD, JEFFREY P. BALLOU & EVELYN DIANE ASCH,

MISSION AND MONEY: UNDERSTANDING THE UNIVERSITY 298-99 (2008) (data

showing nearly 50% decline in state and local appropriations for higher

education as a percentage of total revenue from 1985 through 2006).

139

THORP & GOLDSTEIN, supra note 134, at 145.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

357

Instead, many of the wealthiest of donors demand active use of

their largesse through the creation of interdisciplinary ventures and

private sector collaborations that marshal resources and expertise

toward confronting any number of difficult problems facing

society.

While widespread knowledge dissemination is still a

university mission, and will be into the future, universities can no

longer pursue that mission without fastidious regard for cost and

the increasingly proprietary nature of knowledge.

140

These

concerns simultaneously are changing the guiding philosophy of

technology transfer from one of university-centered technology

push to industry-driven market pull, a natural outgrowth of

research universities seeking to “increase the presence of industries

on campus.”

141

Enticing industry with more favorable licensing

terms while reducing encumbrances to their ownership of

patents,

142

launching new degree programs to provide “the kind of

education industry is seeking,”

143

and constructing and updating

buildings in which companies can set up research wings on

campus

144

are just a few of the many ways in which universities

are realigning their priorities in response to new financial

realities.

145

140

SLAUGHTER & LESLIE, supra note 135, at 215-16; SLAUGHTER & RHOADES,

supra note 49, at 29.

141

See Letter from Mary Sue Coleman to Hon. Gary Locke, supra note 134, at

4; see also Paul Basken, With Federal Support Uncertain, University

Researchers Look to Industry, CHRON. OF HIGHER EDUC. (July 24, 2011),

http://chronicle.com/article/With-Federal-Support/128378/ (describing efforts by

universities to attract more sponsored research funding). A product of the

National Advisory Council on Innovation and Entrepreneurship, the April 2011

letter to the U.S. Secretary of Commerce penned by University of Michigan

president Mary Sue Coleman provides various suggestions and commitments for

improving university commercialization. The AAU, the Association of Public

and Land-grant Universities, and over 130 presidents of universities and

university systems—including the majority of universities in my study’s

population—endorsed the letter.

142

Jenna Ross, U of M Announces Simplified Contract Approach for Industry

Research Partnerships, GRAND FORKS HERALD (North Dakota), Dec. 10, 2011,

http://www.grandforksherald.com/event/article/id/223598/; Paul Basken, Penn

State Ends Licensing Fees on Industry-Sponsored Research, CHRON. OF HIGHER

EDUC. (Dec. 19, 2011), http://chronicle.com/article/Penn-State-Ends-Licensing-

Fees/130126/.

143

Jennifer Donovan, Michigan Tech Board of Control Approves New Degree

Programs, MICH. TECH NEWS (Dec. 9, 2011),

http://www.mtu.edu/news/stories/2011/december/story58568.html.

144

Casey Ross, MIT Begins Building Pfizer Facility; Research at Kendall

Square Site Will Focus on Drugs for Diabetes, Alzheimer’s, BOSTON GLOBE,

Nov. 19, 2011, at B5.

145

In addition to furthering university research missions, these activities also

may be emblematic of universities’ expanding conceptions of their service

missions.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

358

Even the phrase technology transfer—which to some

harkens an outdated image of tripartite, arms-length relations

between government, academia, and industry—is gradually

becoming passé as universities seek to brand their TTOs and

research activities as firmly situated in the market.

146

Entrepreneurialism, job creation, revenue generation, interwoven

industry collaborations, market consciousness, and market-facing,

self-sustaining university endeavors are the selling points of the

reconstructed research university. These attributes and pressures

may soon make university hesitancy to litigate patents seem not

only unreasonable from the standpoint of protecting the patent

premium, but quaint and outmoded from the perspective of the

university’s changing priorities. The new model requires

universities to innovate and differentiate in order to survive in their

developing role as comprehensive knowledge enterprises.

147

In

light of these prevailing forces, increased incidence of university

initiation of patent infringement litigation may come to be

described as an accepted externality of society’s new expectations

from higher education—a “necessary evil,” as one of my study’s

interviewees put it.

In view of these forces and pending realities, universities

must begin to reframe their understanding of patents should they

wish to fully engage as market-facing enterprises in the changing

paradigm of higher education finance. Universities’ Cold War

approach of stockpiling patents in the hopes that licensees will

come calling (while would-be infringers retreat) is rightfully on the

decline. In the reconstructed university, meaningful accolades are

unlikely to flow to institutions based substantially on how

successful they are in obtaining and accumulating patents. While

patents always will serve as useful proxies for research

achievement and bring commendation to universities successful in

obtaining them, the more significant industry attention and desired

research investment will go to those universities savvy enough to

know how best to use their patents to further the commercial goals

of their industry partners. Furthering those goals necessarily

requires universities to acknowledge unequivocally what a patent

is: authorization to sue for infringement.

146

The recently reformulated names of Columbia University’s, Arizona State

University’s, University of New Mexico’s, University of Nebraska’s, and

University of Arkansas-Fayetteville’s TTOs are emblematic of this shift:

Columbia Technology Ventures, AzTE, STC.UNM, NUtech Ventures, and

Technology Ventures, respectively. See http://www.techventures.columbia.edu/,

http://www.azte.com/, https://stc.unm.edu/, http://www.nutechventures.org/, &

http://techventures.uark.edu/ for more information.

147

See Crow, supra note 136, at 65.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

359

At first glance, university hesitancy to litigate patents is

understandable, given the costs and reputational risks associated

with the activity. Indeed, universities are not alone in exhibiting

this tendency.

148

But universities must confront this hesitancy if

they wish to become rational owners and enforcers of patents—in

short, attractive partners to the companies whose favor and

research support they increasingly curry.

Rational patent owners understand that patents are limited

monopolies to exclude and government-granted rights to sue.

149

Limited monopolies have no value unless owners of them seek to

enforce the monopolies. For university patent owners, historical

focus has been on exploiting their patent monopolies through

licensing.

150

This approach is preferable for university patent

owners and should continue. However, rational patent owners

understand that a patent license is built on the implicit promise not

to sue for infringement.

151

If the owner of a patent declines to

project that the failure to take a license to its patent will result in an

infringement lawsuit, the owner’s patent is nothing more than a

valueless piece of paper, despite all the financial and institutional

investments into research that it represents.

Universities must come to embrace these understandings of

patents and their place in the changing marketplace of higher

education finance. Anything less may result in deepening tension

for universities between their mandate to innovate and their

compulsion to litigate.

B. Inconsiderate Positions on Enforcement: What

Universities Don’t Do Can Hurt Them

While some universities are rational patent owners and

enforcers, findings from the study reported in this article show that

many are not. Unfortunately, universities’ disinclinations to

enforce their patents through infringement litigation only serve to

undermine their research missions in several important ways.

148

See PATENT LITIGATION STRATEGIES HANDBOOK, supra note 129, at 6

(noting that “many businesses are averse to litigation, except in the most

compelling of circumstances”).

149

See ADAM B. JAFFE & JOSH LERNER, INNOVATION AND ITS DISCONTENTS:

HOW OUR BROKEN PATENT SYSTEM IS ENDANGERING INNOVATION AND

PROGRESS, AND WHAT TO DO ABOUT IT (2004).

150

See MOWERY ET AL., supra note 133, at 35-57 (providing historical overview

of university patent practices in the United States prior to 1980).

151

James Bessen & Michael J. Meurer, Lessons for Patent Policy from

Empirical Research on Patent Litigation, in INTELLECTUAL PROPERTY AND

INFORMATION WEALTH: ISSUES AND PRACTICES IN THE DIGITAL AGE 199 (Peter

K. Yu ed., 2007); Poltorak, supra note 69, at 18, 23; Ted Sichelman & Stuart

J.H. Graham, Patenting by Entrepreneurs: An Empirical Study, 17 MICH.

TELECOMM. & TECH. L. REV. 111, 118-19 (2010).

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First, universities that are ambivalent about enforcing their

patents waste valuable resources that have been invested into

research and patenting. A patent issued to a university represents

years of costly research investment by taxpayers and faculty, and

thousands of dollars of human capital by the university’s TTO and

patent counsel. Failure to enforce the patent in court when

warranted undermines the commercialization system in which

universities have decided to play. If universities are uncomfortable

defending their patent rights through assertive litigation then they

should stop seeking patents. As a respondent interviewed in the

study reported in this Article noted, “If a university’s research

mission is to disseminate technological advances, dissemination

requires investment, which requires return, which requires

protection. If you’re not willing to protect technology, that stance

inhibits its dissemination more broadly and more generally.”

Second, universities that are ambivalent about enforcing

their patents only undermine their own attempts to establish

productive commercial relationships and license other patents in

ways that generate revenue for the university. A university’s

failure to enforce one patent when warranted sends a signal to

industry that it may not be willing to enforce other patents it owns.

Many - if not most - companies will feel no obligation to take a

license to a university’s patent when they perceive no consequence

for declining to take a license. As Howard Bremer, one of the

architects of the Bayh-Dole Act, has remarked, “Universities are

generally not inclined to litigate. . . . A lot of private sector

companies, the big ones, look at universities as toothless tigers,

because they are not going to assert their patent rights.”

152

If

universities expect to generate revenues through their patents (i.e.,

behave like tigers), they must be willing to bare their teeth. A

respondent interviewed in the study reported in this Article voiced

this concern quite succinctly with the comment, “If it got out that

we exclusively licensed a technology to a company, and were not

willing to stand behind that technology in a patent enforcement

proceeding, we would do very few licenses after that. And

justifiably so.”

153

Third, universities that are ambivalent about enforcing their

patents jeopardize their relationships with faculty inventors, on

whom they depend for invention disclosures that can lead to

patents. Faculty inventors understand the technology transfer

system and the recognition and riches it can bring them.

154

Universities owe it to these faculty members to enforce the patents

whose ownership they enjoy through institutional policies that

152

Rooksby, supra note 52, at 172.

153

Rooksby, supra note 1, at 156.

154

See SLAUGHTER & RHOADES, supra note 49, at 113-29.

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require faculty inventors to assign their inventions to the

university.

155

A university’s consistent timorousness with respect

to patent enforcement could cause faculty inventors to lose faith in

their employer’s ability to monetize their inventions, ultimately

leading to a decrease in invention disclosures and the departure of

entrepreneurial faculty to universities more protective of their

patents.

156

In short, findings from the study reported in this Article

allow for a convincing argument that institutions waste time,

money, and other resources amassing expensive patent portfolios

that they are not willing to defend categorically. Just as universities

do not tolerate flagrant defacement or disregard of their real

property without recompense, and in fact take steps to deter such

activity, they also must be willing to pursue those that infringe

their intangible property. Their relationships with industry,

including any hopes they have of being seen as heeding innovation

and commercialization mandates, will suffer if they do not.

C. Develop Decisional Infrastructures Concerning Patent

Enforcement

Universities famously have policies or guidelines that cover

almost every activity in which they engage. However, as findings

from the study reported in this Article reveal, few universities that

litigate patents have policies or guidelines concerning their

participation as plaintiffs in patent infringement litigation, and only

one indicated that it budgets for the activity. At the same time,

decision-makers at most of the surveyed universities believe that it

155

Margaret T. Stopp & G. Harry Stopp, Jr., The Enforcement of University

Patent Policies: A Legal Perspective, 24 J. RES. ADMIN. 5 (1992) (describing

how institutional intellectual property policies often require faculty to assign

ownership of any patentable discovery made during the course of their

employment to their university employer).

156

Incidentally, these potential consequences provide support for the open

source or faculty free agency model of technology transfer advocated for by the

Kauffman Foundation and others, whereby inventor faculty dissatisfied with

how their university chooses to commercialize and enforce the patents it owns

could elect to use a different university’s TTO to commercialize their

inventions. See Robert E. Litan & Robert Cook-Deegan, Universities and

Economic Growth: The Importance of Academic Entrepreneurship, in RULES

FOR GROWTH: PROMOTING INNOVATION AND GROWTH THROUGH LEGAL

REFORM 55, 55-82 (2011); see also PRESIDENT’S COUNCIL ON JOBS AND

COMPETITIVENESS, TAKING ACTION, BUILDING CONFIDENCE: FIVE COMMON-

SENSE INITIATIVES TO BOOST JOBS AND COMPETITIVENESS (2011) (endorsing

faculty free agency); Press Release, Sen. Jerry Moran, Sens. Moran and Warner

Offer Bipartisan Job Creation Plan (Dec. 8, 2011), available at

http://moran.senate.gov/public/index.cfm/2011/12/sens-moran-and-warner-offer

(proposing funding for universities that allow faculty free agency). I take no

position here on the merits of the free agency proposal.

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is inevitable that their university will serve as a plaintiff in a patent

infringement lawsuit again in the future. These findings, coupled

with most universities’ ambivalent stance on patent enforcement,

suggest an opportunity for universities to develop appropriate

decisional infrastructures that could encourage their thinking about

potential involvement as plaintiffs in patent infringement litigation.

1. Benefits

In order to be better prepared for pursuing patent infringers

when warranted, and to facilitate more thoughtful institutional

planning and decision-making about the activity, universities

should develop decisional infrastructures concerning assertive

involvement in patent infringement litigation.

157

The precise form

and formality of such infrastructures would vary depending on the

needs and culture of a particular university, but a respected

membership group like AUTM could help influence this discussion

by providing guidelines that would lead to the development of

industry norms. At a minimum, such infrastructures should entail

careful elaboration and stakeholder consensus concerning why

enforcement litigation is occasionally necessary, identification of

the appropriate chain-of-command structure and key decision-

makers to be involved in any decision to sue for patent

infringement, and articulation of the non-exhaustive factors the

university should consider and actions it should consider taking

before embarking on any enforcement action.

As part of this undertaking, universities should establish

plans for budgeting for patent infringement litigation—for

example, by setting aside X% of university patent royalties each

year into a reserve fund only to be used for funding patent

infringement litigation. Budgeting for patent infringement

litigation necessarily would require that universities proactively

consider a range of issues affecting litigation finances, many of

which could be considered in the development of a decisional

infrastructure. As one interviewee from the study reported in this

Article pointed out, a policy decision to set aside a portion of

licensing revenue for use in potential pursuit of patent

infringement litigation necessarily entails having less money to

allocate toward other routine budgetary line items, such as filing

patent applications. While true, this fact is insufficient reason not

to allocate the money. Universities and other complex

organizations commonly view certain expenditures as essential,

regardless of their impact on cash flow. Just as a university is

unlikely to regard the yearly purchase of liability insurance as

157

Cf. LEE G. BOLMAN & TERRENCE E. DEAL, REFRAMING ORGANIZATIONS:

ARTISTRY, CHOICE, AND LEADERSHIP (4th ed. 2008).

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optional, the yearly set-aside of X% of university patent royalties

for use in potential pursuit of patent infringement litigation could

come to be viewed as obligatory, and should.

Decisional infrastructures concerning patent infringement

litigation could also help improve universities’ relationships with

current and prospective licensees, as well as serving to strengthen

their image with any would-be infringers in industry. Current and

prospective licensees might regard a university’s proactive

thoughtfulness concerning patent infringement litigation as

additional indication that the university is adequately prepared to

join in litigation with a licensee if necessary. A university’s

cultural understanding that patent ownership occasionally may

involve patent enforcement through litigation could convey an

important signal to companies interested not just in licensing a

given technology, but in teaming with an adroit university partner.

Given a choice between partnering with a university perceived as

prepared to engage in patent infringement litigation if appropriate

and one whose level of thoughtfulness concerning the activity can

only be speculated, a conscientious company might prefer the

former. For universities, developing decisional infrastructures

concerning patent infringement litigation might also send an

important message to companies considering using technologies

covered by university patents without licensing them—i.e., that the

university is strategically and internally prepared to pursue

infringers if necessary.

Of course, decisional infrastructures of the sort envisioned

should not be seen as a threat, nor would attempting to wield them

as such be effective or advisable. Private universities in particular

may have other ways of instilling fear in would-be infringers, to

the extent they wish to do so. As one of the interviewees from the

study reported in this Article commented:

We do use subtle threats. If I get a really

recalcitrant guy, I say to him, “Hey pal, do

you really want the full wrath of [our

university] to come down on you? Do you

want to be the guy to be sued by [our

university] because you stole stuff from us?

Do you know how many resources we have?

Do you know how big we are? Do you know

who our general counsel is?” You use things

like that when you try to convince people

that it would not be in their best interest to

[force us to litigate].

158

Rooksby, supra note 1, at 195.

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In addition to these threats, this same interviewee mentioned that

the interviewee’s university has a “hard and fast rule”: “[I]f you

screw [our university], you never, ever again can do any business

with [us]. You go on a list, and you can never, ever again do

business with [our university], ever. That is the biggest threat we

offer to people.”

159

Finally, cultivating decisional infrastructures concerning

patent infringement litigation also would provide the opportunity

for universities to consider proactively the litigation-related

language contained in their licensing agreements. While the

content of such agreements varies widely, some have suggested

that licensing terms often are silent on key issues concerning

infringement litigation, or even contain provisions that are

inconsistent with requirements imposed by patent law.

160

It would

seem prudent for universities to implement standard language

about patent infringement litigation to use in their licensing

agreements as part of their institutional development of appropriate

frameworks and modalities concerning the activity. Such language

could include the process by which agreements will be reached

concerning whether to litigate; the process by which outside

counsel will be selected and supervised; details concerning

responsibilities for payment of litigation fees and costs, as well as

how proceeds from settlements or damages awards will be

distributed; and what assistance or other resources the university

will provide to its licensee in any patent infringement lawsuit

brought in conjunction with the licensee. While some universities

already may have adopted standardized language to address these

issues, many undoubtedly have not.

2. Arguments Against Developing Decisional

Infrastructures Concerning Patent Infringement

Litigation Are Inapposite

Some may argue that establishing institutional policies on

patent infringement litigation would not be a helpful undertaking,

on the belief that universities’ lack of policies, guidelines, and

budgetary set-asides for patent infringement litigation do not

indicate that universities are insufficiently prepared to engage in

the activity when warranted. Indeed, interviewees cited the

idiosyncratic, fact-specific nature of litigation, as well as their

belief that university general counsel offices typically do not have

policies on when to engage in any other variety of litigation, as

reasons for maintaining the status quo.

159

Id.

160

See Newton, supra note 16, at 235-54.

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These arguments overlook several important

considerations. For one, many universities may not have developed

mature decisional infrastructures concerning their assertive

engagement in garden-variety litigation (e.g., breach of contract

actions) because the instances of such litigation, as well as the

institution’s reputational and financial stakes in such litigation

when it does occur, typically are de minimis. By comparison,

future assertive involvement in patent infringement litigation is a

near certainty for most of the universities in my study’s population,

and any such involvement brings with it significant reputational

and financial risks. Development of the decisional infrastructures

advocated here could help universities prepare for these risks and

approach all decisions whether to litigate patents in an informed

and systematic fashion.

Also misplaced is the assumption that any organized

thinking on patent infringement litigation necessarily would result

in a stifling policy that would risk committing universities to

predetermined courses of action without accounting for the

particular facts at hand. To the contrary, to be useful and effective,

decisional infrastructures concerning patent enforcement should

not lead to the creation of guidelines aimed at predicting behavior

or committing the university to future action (e.g., “We always will

sue for patent infringement in the following situations: . . .”).

Instead, decisional infrastructures would advance institutional

thinking concerning patent infringement litigation by establishing

frameworks and modalities that could increase the chances that

university decisions to litigate or not litigate are fully informed by

all appropriate factors and relevant viewpoints.

3. Summary

When events are rare or perceived as rare, decision-makers

may feel less urgency to plan for them.

161

For many universities,

patent enforcement may be perceived from the standpoint of rarity

and the inability to plan, despite what data from the study reported

in this Article indicate concerning universities’ likely future

involvement in the activity, and despite the same set of broad

factors and considerations potentially relevant to any university

plaintiff in any patent infringement lawsuit. Just as universities

seldom resist developing decisional infrastructures to help frame

institutional responses to unanticipated but likely occurrences

affecting their human capital and real property (e.g., student

suicides, natural disasters, and other threats to campus safety), so,

too, should they consider preparing themselves for crises involving

161

See James G. March, Lee S. Sproull & Michal Tamuz, Learning from

Samples of One or Fewer, 2 ORG. SCI. 1 (1991).

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their intangible property. Developing decisional infrastructures

concerning patent infringement litigation would not end university

involvement in the activity; rather, such infrastructures would

facilitate thoughtful and prepared decision-making by universities

when faced with an infringer.

IV. CHANGING LAW: LET UNIVERSITIES INNOVATE WHILE

LICENSEES LITIGATE

Findings from the study reported in this Article, when

viewed in light of the CAFC’s prudential standing requirement for

owners of exclusively licensed patents, illuminate the legal and

policy tensions universities face when confronted with infringers

of their patents. An additional method of reconciling these

tensions—instead of or in conjunction with the policy changes

proposed in Part III above, and likely of more appeal to

universities whose TTO operations are less established—involves

amending the Patent Act so as to permit universities more freedom

to innovate instead of forcing them to litigate. This Part describes

how.

A. Why Legislative Action Is Needed

The CAFC’s rationale for its prudential standing

requirement in cases involving exclusively licensed patents lacks

justification when applied to university patent owners. Universities

are unlikely entities to seek out enforcement opportunities, and

indeed, findings from the study reported in this Article show that

most are reluctant participants in infringement lawsuits.

Universities primarily are in the business of innovating, not

litigating, and most would like to keep it that way.

But under prevailing CAFC interpretation of patent law,

universities often have no choice but to litigate.

162

As discussed

162

It is important to note that, for a variety of reasons, university patent owners

are not always made co-plaintiffs in enforcement actions, either at the outset of

the case, or ever. Some university TTO personnel, university licensees, and their

counsel may be unaware of the prudential standing requirement. Also, because it

does not lead to automatic dismissal of the case and because most cases settle

early in the life cycle of a lawsuit, conceivably a university and its licensee

reasonably could decide to leave the university out of the lawsuit until the court

orders its inclusion (or hope that the case settles before anyone raises the issue).

See PATENT LITIGATION STRATEGIES HANDBOOK, supra note 129, at 168. Of

course, some opposing parties fail to raise the issue in a timely manner, so a case

may proceed after filing without the university patent owner as plaintiff. Even

for those cases that do proceed, some federal district court judges may fail to

raise the issue on their own if one of the parties does not. Indeed, many of these

scenarios appear to have played out in the AsymmetRx case (discussed supra

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earlier in this Article, this unfortunate necessity is problematic for

many universities. Whenever a university joins a lawsuit with a

licensee co-plaintiff (either at the outset of the case, or later,

whether by decision or compulsion), issues surrounding the

university’s involvement may strain the university-licensee

relationship, as each party’s goals and ideas about how best to

pursue the lawsuit may differ as the case develops.

163

The

university’s involvement in such litigation may impact the

university in other noticeable ways as well. Patent infringement

litigation is a costly undertaking for any party,

164

even for

universities that are paying only a portion of the total cost, whether

out-of-pocket or set-off against future royalties. The activity also

has a tendency to drain TTO productivity

165

and, as findings from

the study reported in this Article indicate, often brings with it

delicate political issues that can impact university relationships

with important funders or supporters (whether public or private),

not to mention damage the public’s image of universities as

purveyors of undifferentiated knowledge.

166

For at least these reasons, serious consideration should be

given to the potential for Congressional action that would allow

universities to continue to enjoy the upsides of patent ownership

(i.e., licensing revenues) without the pronounced downside of

occasionally having to assertively pursue infringers in court.

167

Part I), where the CAFC raised the prudential standing requirement sua sponte

on appeal.

163

Universities typically are highly risk-averse entities, so a licensee in a given

lawsuit with a university co-plaintiff may have more tolerance than the

university for pursuing a lawsuit past the initial stages of pleadings and

discovery. Also, licensees have more to gain financially through lawsuits than

do university patent-owners, and for that reason alone their orientation to any

litigated dispute is likely to differ from that of universities.

164

See supra note 3 (discussing AIPLA data on litigation costs).

165

See Shane & Somaya, supra note 4.

166

While respondents in the study summarized in Part II did not report being

driven by concern for the public’s reaction to their university’s potential

involvement in assertive patent litigation, these data do not mean that others

within or outside universities are not concerned by the activity. Indeed, the

commentators cited in Subsection I.C.1 suggest that such concern abounds.

167

My proposal in many ways picks up where the CAFC leaves off. Unwilling

to loosen the strictures of patent law as they apply to universities, the CAFC, as

early as 1987, noted efforts by at least one prominent university (Cornell) “to

have its cake and eat it too, i.e., to act in a noncommercial manner and yet

preserve the pecuniary rewards of commercial exploitation for itself.” Griffith v.

Kanamaru, 816 F.2d 624, 628 (Fed. Cir. 1987) (declining Cornell’s invitation to

relax CAFC requirements for diligence in reducing to practice due to

peculiarities of the university research environment). Professor Lee views this

tension as part of a mounting rejection by patent courts of academic

exceptionalism. See Lee, supra note 49, at 39 (“Whereas uniquely ‘academic’

norms, practices, and policies justified exceptional treatment of universities in

earlier generations, modern courts view universities as much more akin to

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That most universities defer substantially to the opinions of their

licensees concerning litigation—often expecting them to pay some

or all of the university’s legal costs in pursuing such actions, as

found in the study reported in this Article—only further supports

this proposal. Even more importantly for society, the proposal is

consistent with a growing conception of patent law as public law

and a concern for the collective hazards of the rising incidence of

patent litigation, particularly when it involves universities.

168

B. Proposal for Amending the Patent Act

Legislative change to the Patent Act could offer universities

a way out of assertive infringement litigation without upsetting

other important balances struck in the technology transfer system.

Under my proposal, in exchange for ceding enforcement authority

to their exclusive patent licensees, universities would not be

required to join as plaintiffs in infringement actions involving

those patents. If a university declined to join its exclusive licensee

in a given lawsuit against a given defendant, the university would

be prohibited from suing the same defendant for the same alleged

act of patent infringement at a later time. Universities would retain

the option to join infringement lawsuits brought by their exclusive

licensees, but avoid the obligation.

Section 281 of the Patent Act, which concerns “remedy for

infringement of patent,” would be the logical section of the Patent

Act in which to codify my proposal. The language of the proposal

could follow the existing text, with the additions indicated below

in italics:

A patentee shall have remedy by civil action for

infringement of his patent, provided:

(1) No university shall be made to assert a

patent it owns, in whole or in part, if that

university files with the court on the day any

infringement allegation is brought by a

licensee or co-owner concerning the patent

an affidavit that states for each such patent:

commercial entities.”); id. at 40 (“[C]ontemporary courts have routinely rejected

academic exceptionalism. In so doing, courts have relied on (and reinforced) a

conception of universities as integrated into the traditional commercial narrative

of patents.”).

168

See Feldman, supra note 55, at 2, 88 (noting “the locus of creative thought,

all too often, has shifted from the R&D department to the legal department” and

that society’s creative resources are moving “from building a better mousetrap

and towards building better legal traps”); La Belle, supra note 8, at 50 (noting

that the purpose of the patent system is public-serving in nature).

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(A) that the university has ceded all

past, present, and future enforcement

control over the patent to the licensee or co-

owner, and

(B) that the university releases from

liability any party that the licensee or co-

owner has accused or may accuse of

infringement in the present action, and will

not seek civil remedy for infringement from

any such party or parties in any action for

any past, present, or future acts of

infringement of the patent asserted in the

pending lawsuit.

(2) Nothing in this provision shall be

deemed to provide standing to sue for

infringement of a patent to a bare or non-

exclusive licensee.

(3) For purposes of this provision,

“university” shall mean an institution of

higher education as defined in section

101(a) of the Higher Education Act of 1965

(20 U.S.C. 1001(a)), or a technology

transfer organization whose primary

purpose is to facilitate the

commercialization of technologies

developed by one or more such institutions

of higher education.

Various portions of the proposed statutory language merit

elaboration. First, the language is flexible enough to recognize the

complex realities of patent litigation—for example, that

universities often co-own patents (with the federal government,

other universities, or for-profit companies), that multiple patents

often are asserted in litigation (often at different times in the

litigation), that additional defendants can be added later on in

litigation, and that allegations of infringement can be levied as

counterclaims by defendants. Second, the proposed language

breaks no new ground in its definition of a university. Indeed,

paragraph 3 of the proposed amendment to Section 281 mimics the

language in the Patent Act (as amended in 2011 by the Leahy-

Smith America Invents Act) that provides an exception to

universities to the prior user rights defense.

169

Third, the proposed

169

See 35 U.S.C. § 273(e)(5)(A) (2006). In this sense, the proposed law would

not be the first to offer universities a privileged position in patent litigation. See

Arti K. Rai & Bhaven N. Sampat, Accountability in Patenting of Federally

Funded Research, 30 NATURE BIOTECH. 953, 953 (2012) (noting that the

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language does nothing to unsettle the CAFC’s or the Supreme

Court’s longstanding recognition that non-exclusive licensees lack

standing to sue for patent infringement. Thus, the proposed

statutory amendment in paragraph 2 would not absolve universities

of the obligation to participate as plaintiffs in lawsuits against

parties they believe to have infringed a patent they have licensed

non-exclusively (or not licensed at all).

Fairness considerations also are not upset by the statutory

proposal. Importantly, the proposed amendment neither promotes

nor disrupts a university’s ownership interest in its patents. Under

the proposed amendment, a determination in a lawsuit that one or

more claims of a litigated patent are invalid would have the same

effect on the university as owner of the patent as it does now under

prevailing law.

170

Should the university ever attempt to assert the

invalidated claims against the same or a different defendant in a

new lawsuit, collateral estoppel would apply.

171

Further to the concern for fairness, by requiring that

universities file an affidavit with the court on the day any

infringement allegation is waged by a licensee or co-owner,

adverse parties (be they defendants or plaintiffs) effectively would

be put on notice at the outset of the case of a university’s decision

not to participate in the enforcement proceeding. Thus, in order to

take advantage of the provisions of the proposed amendment,

universities would have to act quickly. Those that do not would be

prevented from taking advantage of the amended statute and could

be compelled to join the case if they are otherwise not already a

party to it.

172

exception to prior user rights affords universities and their assignees and/or

licensees a privileged position in patent infringement litigation).

170

However, Section IV.D, infra, discusses the potential limitations to having a

university not participate—at least as a named party—in a lawsuit concerning

the validity of one or more of its patents.

171

While law on the matter varies by appellate circuit, collateral estoppel

typically applies when there is a showing that:

(1) the issue at stake was identical to the one involved in the

prior litigation; (2) the issue had been actually litigated in the

prior suit; (3) the determination of the issue in the prior

litigation was a critical and necessary part of the judgment in

that action; and (4) the party against whom the earlier decision

is asserted had a full and fair opportunity to litigate the issue

in the earlier proceeding.

Bayer AG v. Biovail Corp., 279 F.3d 1340, 1345 (Fed. Cir. 2002) (quoting In re

McWhorter, 887 F.2d 1564, 1566 (11th Cir. 1989)) (applying Eleventh Circuit

law). The application of these factors would prevent a university from asserting

claims of a patent previously held invalid in federal court litigation.

172

Occasionally, a licensee may allege infringement of a university-owned

patent without the university’s knowledge. In such situations, the university

taken by surprise by its licensee’s action might be unable to timely file the

affidavit, and therefore be unable to take advantage of the proposed statutory

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The statutory proposal also would help conserve judicial

resources. By offering universities an early exit from patent

litigation, parties would be relieved of the discovery burdens and

motions disputes associated with determining whether a university

owns substantial rights to an asserted patent, such that its

involvement in the case is legally required. Freed from these

evidentiary and legal inquiries, courts and litigants would be able

to more quickly and efficiently address the core issue of any patent

infringement case: whether the asserted patent or patents are valid

and have been infringed.

Finally, it bears noting that the language of the proposal

does not address the “all substantial rights” inquiry that is central

to the underlying question of whether a given university must

participate in asserting infringement of its patent. Importantly, it

need not do so. As written, the proposed statutory amendment

would accommodate the scenario where a university owns

substantial rights to its exclusively licensed patent, as well as the

scenario where an exclusive licensee owns all substantial rights to

the patent (in which case the university effectively has assigned the

patent). In either scenario, the concerns that given rise to the

CAFC’s prudential standing requirement would be muted by a

university’s filing of the affidavit—i.e., whether the CAFC would

view the university as the patent owner becomes irrelevant once

the university takes advantage of the statute’s provision.

173

C. Benefits to the Proposed Statutory Amendment

The legislative proposal presented above recognizes several

important premises. First, many universities—which, unlike for-

amendment. This possibility is no reason to discredit the proposed amendment,

as it would leave the university in no worse of a legal position than it would

otherwise confront under prevailing law. This hypothetical scenario also

highlights one of the statutory proposal’s likely consequences: it may encourage

improved communications between universities and licensees concerning issues

of infringement litigation.

173

This feature of the proposal is also one of its strengths. Before a lawsuit is

even filed, universities and their exclusive licensees could forego painstaking

legal inquiry into whether their licensing agreements conveyed all, or less than

all, substantial rights to the patent. Should the university decide it does not want

to participate, and will take advantage of the proposed statutory amendment, it

will not matter how the court would actually rule in determining who owns

substantial rights to the patent. This is no trifling attribute, for as the cases

reviewed supra in Subsection I.A.2 make clear, determining through litigation

who enjoys substantial rights to the patent can consume significant litigant and

judicial resources. Cf. Greene, supra note 9, at 29-30 (“The Federal Circuit’s

decisions in this [‘all substantial rights’] line of cases tend toward semantic

mush rather than functional or pragmatic analysis, which tends only to muddy

the standard, confusing courts and litigants and injecting uncertainty into the

litigation process.”).

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profit companies, primarily owe allegiance to taxpayers when it

comes to their research activities—do not want to litigate their

patents, yet the CAFC’s imposition of a prudential standing

requirement on owners of exclusively licensed patents effectively

mandates their eventual involvement in patent infringement

lawsuits, no different than it would any for-profit enterprise.

Second, as a matter of policy, most universities are poorly suited to

litigate their patents, no matter their motivation for doing so, and

both universities (as owners and licensors of patents) and society

(as funders of universities and university research activities) suffer

as a result of this inefficiency. Third, shifting the legal burden of

patent enforcement to exclusive licensees in most instances would

do little to disrupt the current relationship between exclusive

licensees and university patent owners with respect to patent

infringement litigation.

As the entities (other than universities) most affected by

this proposal, exclusive licensees would have no legitimate

grounds for rejecting it. Companies that license patents typically

are more accustomed to assertive litigation than universities.

Regardless of any actual past experience in court, commercial

licensees as a sector are better situated—financially and

strategically—to pursue litigation. The deference they currently

receive from universities with respect to matters of patent

infringement would in a sense be codified. University-owned

patents still would be litigated, but without the mandated

involvement of universities, which would be freed to pursue more

classically defined activities that further their research missions.

Those who might argue that the proposed statutory amendment

would expose universities to risks with exclusive licensees running

enforcement litigation would have difficulty establishing that such

a future would differ substantially from the current reality, as

revealed by the findings from the study reported in this Article.

At its core, the legislative proposal would allow

universities to enjoy the upside of patent ownership while limiting

their involvement in one of the major downsides. Relieved of the

expense and distraction of having to pursue infringers in court,

universities could redouble their traditional research and

commercialization efforts and focus more energy on their

mandates to innovate. The proposal thus better aligns university

activities with traditional societal expectations for university

research. It also does so without compromising universities’

increasing focus on market partnerships or undermining their

innovation mandates. In short, the proposal recognizes that letting

exclusive licensees litigate while universities innovate better serves

the public good.

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D. Limitations to the Proposed Statutory Amendment

Admittedly, the proposed statutory amendment only

addresses those instances when a university is faced with joining

an exclusive licensee (or co-owner) as co-plaintiff in bringing an

enforcement action. It would not benefit a university in instances

of infringement of patents the university either has not licensed or

has licensed non-exclusively. However, as the research in

Subsection I.C.3 of this Article reveals, instances of universities

bringing suit as co-plaintiffs with their exclusive licensees

represent the majority (n = 221, or 67.6%) of all patent

infringement lawsuits brought by universities from 1973 through

2012.

The limitation with respect to the proposal’s scope of

application is also one of its strengths. If universities faced more

freedom of choice as to whether to join an enforcement action

brought in conjunction with an exclusive licensee, the nature of

any university patent infringement action that gets brought after

passage of the proposed amendment would be painted in high

relief. Three scenarios seem possible: (1) the university, for

whatever reason, deemed it preferable to participate as a plaintiff

in an enforcement action with its exclusive licensee; (2) the

university felt compelled to sue on its own—for example, because

the alleged infringer refused to take a license to the university’s

patent, or because the university licensed the patent non-

exclusively;

174

or (3) the university decided to engage in assertion

licensing, i.e., patent hold-up. Whatever the scenario, the rarity of

the occasion likely would ensure that the university is prepared to

defend its action in the court of public opinion. At the very least,

any of these envisioned scenarios necessarily would result from a

thoughtful and intentional university decision to litigate, not a

capitulation to an exclusive licensee bullishly cognizant of the

legal regime that compels university involvement in patent

infringement lawsuits without regard for underlying motivations or

aptitudes.

While not the intended effect of the proposal, universities

could use the provisions of the proposed statutory amendment to

mask speculative or troll-like enforcement by PAEs created

specifically for the litigation, which obviously is an important and

additional limitation. In a sense, the proposal could be seen as

174

Non-exclusive licensees do not have standing to sue for patent infringement,

whether by themselves or in conjunction with the patent owner. See Sicom Sys.

Ltd., v. Agilent Techs., Inc., 427 F.3d 971, 976 (Fed. Cir. 2005) (“A

nonexclusive license confers no constitutional standing on the licensee to bring

suit or even to join a suit with the patentee because a nonexclusive licensee

suffers no legal injury from infringement.”).

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permissively encouraging an activity in which some universities

already engage through assigning all substantial rights to a patent

they own to a PAE created to enforce the patent.

175

As with any

PAE litigation, however, examining the nature of the entity

alleging infringement would be revealing. Moreover, by filing a

publicly viewable affidavit with a court, universities that use the

proposed statutory amendment to effectively confirm their

involvement with a PAE (their licensee) would not escape public

scrutiny, and might even invite it. The same is not true for

universities that currently traffic with PAEs by assigning all

substantial patent rights to them. These deals typically escape

detection in that the university undeniably no longer owns the

patent the PAE asserts, so the nature of its beneficial interest in the

outcome of the lawsuit is obscured.

176

Another of the proposal’s limitations is that it could lead to

a marginal decrease in the licensing fees companies would be

willing to accept from universities. From the perspective of

exclusive licensees, the proposed statutory amendment would

introduce a new element of uncertainty in their relationship with

universities, as it would allow universities the freedom to decline

to participate as a co-plaintiff in any enforcement action, both at

the point of contracting and at the point an infringer is identified

and the exclusive licensee prepares to sue. Exclusive licensees

would be likely to view a university’s refusal to commit to a

contract term requiring the university to participate as a plaintiff

with the licensee in any enforcement action as tantamount to a

decision at a future date, when a specific infringer is identified, not

to participate. This reasonable assumption presumably would lead

universities to receive a lower licensing fee than they would if their

exclusive licensees enjoyed contractual assurances of university

participation in any enforcement lawsuit. However, in exchange

for these arguably lower returns, universities would gain a freedom

of choice they do not currently enjoy under prevailing law.

177

175

See Jacob H. Rooksby, University Involvement in Patent Infringement

Litigation, 47 LES NOUVELLES 8, 15 (2012), for a description of these

arrangements and their usage. See also Ewing & Feldman, supra note 73, at 12-

15 (describing the practice of patent privateering by Intellectual Ventures);

Steven Seidenberg, Private Profits, INSIDE COUNSEL, Mar. 2013, at 20-22

(describing the practice of patent privateering).

176

Of course, the proposed statutory amendment would not forbid these

arrangements from continuing, and universities intent on pursuing yet masking

their involvement in speculative enforcement activity likely would continue to

prefer these arrangements.

177

To this point, universities that primarily view patent licensing as a means of

generating revenue could bargain for a higher licensing fee in exchange for

contracting to participate as a plaintiff in any enforcement action. Thus, all

universities with licensed patents potentially could face a choice: receive more

licensing revenue but bear some of the risk of an enforcement lawsuit, or receive

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Perhaps the best argument against the proposed statutory

amendment is that it does nothing to diminish universities’

involvement in litigation to the extent an opposing party alleges

that the university’s patent is invalid. After all, alleged infringers

routinely challenge the validity of patents they are accused of

infringing.

178

However, arguably any university involvement in the

litigation as a result of an invalidity contention is more likely to

entail university inventors and perhaps university patent counsel

than it is CROs or directors of TTOs. Contested matters of

inventorship, prior art, and claim interpretation—the typical points

of contention in validity inquiries—are more within their purview

than they are that of university administrators, whose time is better

spent promoting innovation rather than managing litigation. More

to the point, to the extent that any of these individuals would be

subjected to depositions or live testimony at trial, their posture

would be more analogous to that of a defendant or expert witness

than it would a plaintiff. For universities understandably concerned

about the reputational risks unique to their involvement as

plaintiffs in patent infringement lawsuits, the likelihood of

involvement in a defensive-seeming posture would appear less

onerous and more in line with most universities’ hesitancy to

litigate in the first instance.

179

Lastly, proposing any type of legislative action often runs

the risk of becoming an exercise in wishful thinking, whatever the

political climate. With respect to this Article’s proposal, detractors

could argue that Congress never would give serious consideration

to a proposal that might at most benefit 160 institutions in higher

education (i.e., all those that engage in patenting), and even then

only in a narrowly defined and relatively infrequent situation.

180

less licensing revenue but maintain complete freedom over whether to

participate in any enforcement activity. A university’s decision in this realm

would speak to its balance of mission and money through patents.

178

Cf. PATENT LITIGATION HANDBOOK, supra note 129, at 154 (noting that

alleged infringers are “well advised to file counterclaims seeking declaratory

judgment of patent noninfringement, invalidity, and/or unenforceability [. . .]

where they apply”).

179

To be sure, hesitancy to litigate is not limited to universities. However,

financial rather than reputational concerns likely account for most hesitancy

exhibited by for-profit actors. The reputation of small- to mid-sized companies

is unlikely to be blemished through asserting non-frivolous patent infringement

lawsuits. In fact, such activity can enhance their reputation within industries as

strong protectors of intellectual and financial investments. The same benefits

also may flow to large companies, except if such companies routinely bring suits

against smaller companies in an attempt to squelch lawful competition.

180

While the number of patent infringement lawsuits brought by universities, as

well as the number of universities participating in such lawsuits, both have

increased over time, these phenomena are negligible when viewed from the

perspective of the total number of patent infringement lawsuits filed each year

15 YALE J.L. & TECH. 312 (2013) 2012-2013

376

However, the recent passage of the Leahy-Smith America Invents

Act, which was driven in part by concerns over the impact on

innovation caused by patent infringement lawsuits, as well as

subsequent amendments to the law, gives hope that a proposal

aimed at limiting university involvement in patent infringement

lawsuits could find support in Congress. At the very least,

influential groups within higher education would seem to be

natural supporters of the proposal. The AAU—more than half of

whose members were in the population of the study reported in this

Article—vigorously backed the Leahy-Smith America Invents Act,

as did other interested organizations such as AUTM, the

Association of Public and Land-grant Universities, the American

Council on Education, the Council on Governmental Relations,

and the Association of American Medical Colleges.

181

All of the

aforementioned organizations, in addition to the federal

government and important advisory groups such as the National

Advisory Council on Innovation and Entrepreneurship and the

National Academy of Sciences, would seem like logical supporters

of the proposal and its aim.

182

E. Summary

Data from the study reported in this Article suggest that

many universities are hesitant to assert their patents through

infringement litigation, even though CAFC interpretation of patent

law requires their participation. Their hesitancy to sue is

understandable, although it may only hurt their research missions

in the long term, as suggested in Part III. Regardless of a particular

university’s disposition toward litigating its patents, all

universities—and particularly ones less adept at, or with fewer

resources to devote to, technology transfer—likely would welcome

more degrees of freedom in deciding whether to participate as

plaintiffs in patent enforcement actions with their exclusive

licensees. The legislative proposal introduced here could enable

by NPEs. See Sara Jeruss, Robin Feldman & Joshua Walker, The America

Invents Act 500: Effects of Patent Monetization Entities on US Litigation, 11

DUKE L. & TECH. REV. 357, 361 (2012) (noting that universities participated as

plaintiffs in fewer than 1% of a sample of patent infringement lawsuits brought

by NPEs from 2007 through 2011).

181

See Letter from Hunter R. Rawlings III, President, Ass’n of Am. Univs. et al.

(June 15, 2011), available at

www.aau.edu/WorkArea/DownloadAsset.aspx?id=12258 (indicating support for

the Leahy-Smith America Invents Act).

182

President Obama’s National Advisory Council on Innovation and

Entrepreneurship has indicated its support for a host of proposals aimed at

improving universities’ freedom to innovate, as has the National Academy of

Sciences in its 2011 committee report on management of university intellectual

property. See Letter from Mary Sue Coleman, supra note 134, at 59-82.

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

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this autonomy without diminishing the mutually beneficial

relationship between universities and exclusive licensees.

Freed from legal coercion to participate in the most

common type of enforcement action, universities instead could

focus their energies and resources on doing what they do best:

innovate. Policymakers’ recent and significant attention to the

effects of patent law, as well as their interest in improving

university responses to innovation and commercialization

mandates, combine to make enacting this proposal both timely and

feasible. At the very least, the proposed statutory amendment could

invite an overdue dialogue on the appropriate balance between

innovation and litigation in universities’ expanding pursuit of

patents and commercial collaborations.

CONCLUSION

University enforcement of patents involves complex

institutional decision-making in the face of increased pressures on

universities to closely control the knowledge they are charged with

creating and disseminating. Prior to this Article’s empirical report,

little was known about universities that litigate patents, both in

terms of data on enforcement actions involving universities as

plaintiffs, as well as the policies, factors, considerations, and

motivations that drive university decision-makers to pursue the

activity.

With empirical data now in hand, this Article describes the

many legal and policy tensions that confront universities

attempting to reconcile their admirable devotion to innovation with

an inflexible legal regime that often compels them to litigate. The

data provide footing for two proposals. First, from a policy

perspective, universities must move toward a coherent position on

patent ownership and enforcement, otherwise they are wasting

their valuable resources seeking patents they are unwilling to

defend categorically. Part of this transformation will require

developing the necessary decisional infrastructures to approach the

activity of patent enforcement in a comprehensive and prepared

fashion. Second, from a legal perspective, university owners of

exclusively licensed patents are hampered by a restrictive

prudential standing doctrine that could be alleviated through

legislative action, allowing universities the freedom to devote more

resources to innovation and less to litigation. While the legal

proposal has its limitations, its strengths lie in recognizing and

plausibly alleviating the complexities and conflicts that often befall

universities as they increasingly seek commercialization successes.

The research and commercialization activities of

universities nationwide have received immense academic,

15 YALE J.L. & TECH. 312 (2013) 2012-2013

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governmental, and popular attention in recent years. Perhaps not

since the passage of the Bayh-Dole Act over 30 years ago have as

many segments of society influenced by technology been so

engaged in debating policy issues concerning patents, innovation,

and commercialization. Universities—as significant generators of

intellectual property and drivers of economic development—

inevitably are at the center of this dialogue, which cannot be

separated from a larger conversation concerning the evolving

missions, cultures, and funding models of universities amidst

arguably the most unstable economic climate since the Great

Depression.

For these reasons, the time has arrived for concerted

attention and sustained dialogue around the often-overlooked

underbelly of university patent commercialization. If we as a

society are serious about universities being in the business of

innovating, we must rethink the business of their litigating.

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APPENDIX A – SURVEY INSTRUMENT AND EXECUTIVE SUMMARY

The survey on university patent litigation was fielded from

August through September 2011. The survey opened on August

22, 2011 and closed four weeks later, on September 19, 2011.

Twenty-two completed responses were received, representing a

36.7% completion rate.

Chief research officers at 63 institutions (universities and

university systems) were targeted for participation based on their

oversight of technology transfer operations. The 63 institutions

constitute those universities and university systems identified as

having participated as a plaintiff in one or more patent

infringement lawsuits filed between January 1, 1973 (the date for

which searchable legal records are first available) and December

31, 2010.

The chief research officers at these 63 institutions were sent

introductory letters on August 1, 2011, inviting their participation

in the study. Several responded by indicating that a different

person within their institution was better positioned to complete

the survey, given their job duties. An email invitation to take the

survey was sent out on August 22, 2011 to the amended list of

participants, which totaled 60 (for unstated reasons, two members

of the population declined to participate after receiving the

introductory letter; an additional member was removed due to

professed lack of knowledge about the survey’s subject matter). To

appropriately limit responses, the email invitations contained a

unique password-protected link to the survey, which was

administered online using QuestionPro survey software. Responses

were collected anonymously. Reminder emails were sent to

participants on September 1 and September 15, 2011.

Listed below are the aggregate survey response data. Four

questions on the survey received more than 22 responses, as

respondents either were permitted to select more than one response

to the question (for questions 1 and 14) or were required to select

three answer choices (for questions 19 and 20). Descriptive

statistics are provided for questions with Likert-style response

choices, which were treated as interval data. The most frequently

selected response to each question is bolded.

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1. What is your job title? Select all that apply.

[NB: The percentages listed in the accompanying table represent

the percentage of total respondents who selected any given answer

choice. Because multiple selections were possible, percentages do

not sum to 100%.]

Answer

Count

Percent

1. Vice President

6

27.27%

2. Assistant or Associate Vice

President

2

9.09%

3. Director of Technology

Transfer

10

45.45%

4. Director of Affiliated Patent or

Research Entity

0

0.00%

5. Other*

5

22.73%

* Answers included Attorney, Associate Director, Chief Executive

Officer, General Counsel, and Counsel.

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2. Is your university public or private?

Answer

Count

Percent

1. Public

13

59.09%

2. Private

9

40.91%

Total

22

100%

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382

3. How many times in the past year did you discuss with others

at your university whether the university should participate as

a plaintiff in patent infringement litigation against an infringer

of one of your university’s patents?

Answer

Count

Percent

1. Never

7

31.82%

2. 1-3 Times

10

45.45%

3. 4-6 Times

3

13.64%

4. 7-10 Times

0

0.00%

5. >10 Times

2

9.09%

Total

22

100%

Mean: 2.09

Std. Deviation:

1.15

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4. Our university has established an affiliated patent or

research foundation partly so that entity can participate as a

plaintiff in patent infringement litigation in place of the

university.

Answer

Count

Percent

1. Yes

3

13.64%

2. No

19

83.36%

3. I Don’t Know

0

0.00%

Total

22

100%

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384

5. Our university has a formal policy or set of guidelines to

follow in determining whether to participate as a plaintiff in

patent infringement litigation.

Answer

Count

Percent

1. Yes

2

9.09%

2. No

20

90.91%

3. I Don’t Know

0

0.00%

Total

22

100%

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6. Our university sets aside money in a budget each year for

our potential use if we decide to participate as a plaintiff in

patent infringement litigation.

Answer

Count

Percent

1. Yes

1

4.55%

2. No

21

95.45%

3. I Don’t Know

0

0.00%

Total

22

100%

15 YALE J.L. & TECH. 312 (2013) 2012-2013

386

7. Participating as a plaintiff in patent infringement litigation

is an inevitable occurrence for our university because we own a

number of patents.

Answer

Count

Percent

1. Strongly Agree

5

22.73%

2. Somewhat Agree

9

40.91%

3. Somewhat

Disagree

7

31.82%

4. Strongly Disagree

1

4.55%

Total

22

100%

Mean: 2.18

Std. Deviation:

0.85

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8. If appropriately conducted, participating as a plaintiff in

patent infringement litigation is one way for our university to

further the public interest under the Bayh-Dole Act.

Answer

Count

Percent

1. Strongly Agree

5

22.73%

2. Somewhat Agree

13

59.09%

3. Somewhat

Disagree

4

18.18%

4. Strongly Disagree

0

0.00%

Total

22

100%

Mean: 1.95

Std. Deviation:

0.65

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9. Our university takes the position that if we are willing to

invest in research and incur costs to obtain patents, we must be

willing to sue infringers of our patents.

Answer

Count

Percent

1. Strongly Agree

10

45.45%

2. Somewhat Agree

10

45.45%

3. Somewhat

Disagree

2

9.09%

4. Strongly Disagree

0

0.00%

Total

22

100%

Mean: 1.64

Std. Deviation:

0.66

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10. Our university takes the position that participating as a

plaintiff in patent infringement litigation is an unavoidable

consequence of engaging in patenting and technology transfer.

Answer

Count

Percent

1. Strongly Agree

4

18.18%

2. Somewhat Agree

12

54.55%

3. Somewhat Disagree

5

22.73%

4. Strongly Disagree

1

4.55%

Total

22

100%

Mean: 2.14

Std. Deviation:

0.77

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11. Participating as a plaintiff in patent infringement litigation

furthers our university’s mission as a research institution.

Answer

Count

Percent

1. Strongly Agree

1

4.55%

2. Somewhat Agree

9

40.91%

3. Somewhat

Disagree

8

36.36%

4. Strongly Disagree

4

18.18%

Total

22

100%

Mean: 2.68

Std. Deviation:

0.84

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12. In considering whether the university should participate as

a plaintiff in patent infringement litigation, the potential

monetary returns to our university—in the form of a favorable

verdict or out-of-court settlement—are typically highly

relevant to our decision-making.

Answer

Count

Percent

1. Strongly Agree

7

31.82%

2. Somewhat Agree

11

50.00%

3. Somewhat

Disagree

3

13.64%

4. Strongly Disagree

1

4.55%

Total

22

100%

Mean: 1.91

Std. Deviation:

0.81

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13. In considering whether the university should participate as

a plaintiff in patent infringement litigation, the potential

indirect costs to our university—in the form of diverted

attention of faculty and professionals, emotional strain caused

by the litigation, and public relations concerns—are typically

highly relevant to our decision-making.

Answer

Count

Percent

1. Strongly Agree

8

36.36%

2. Somewhat Agree

6

27.27%

3. Somewhat

Disagree

7

31.82%

4. Strongly Disagree

1

4.55%

Total

22

100%

Mean: 2.05

Std. Deviation:

0.95

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14. In considering whether your university should participate

as a plaintiff in patent infringement litigation, which aspects, if

any, of a potential defendant’s identity are most likely to weigh

heavily in your university’s decision-making? Select all that

apply.

[NB: The percentages listed in the accompanying table represent

the percentage of total respondents who selected any given answer

choice. Because multiple selections were possible, percentages do

not sum to 100%. Respondents selecting answer choice 8 or 9 were

not permitted to select any other answer choice.]

Answer

Count

Percent

1. Defendant’s financial and litigation

resources

7

31.82%

2. Defendant’s political influence

9

40.91%

3. Defendant’s geographic proximity to our

university

3

13.64%

4. Defendant’s prominence in the community

6

27.27%

5. Defendant’s financial contributions to

our university

9

40.91%

6. Defendant’s substantial employment of

workers in our state

5

22.73%

7. Defendant’s good reputation in our

community

3

13.64%

8. None of the above

3

13.64%

9. Defendant’s identity is irrelevant to our

decision to bring suit

9

40.91%

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15. Which of the following statements best describes how your

university considers legal fees in cases it contemplates bringing

with one or more licensee(s)?

[NB: Respondents were asked to assume that the likelihood of

success in obtaining a favorable verdict or out-of-court settlement

was 70% or greater.]

Answer

Count

Percent

1. We are more likely to favor bringing

suit if the licensee pays for some of our

legal fees

14

63.64%

2. We are unlikely to favor bringing the suit

unless we do not have to pay any out-of-

pocket legal fees

6

27.27%

3. The amount of legal fees we would have

to pay is unlikely to influence our decision

whether to participate in the suit

2

9.09%

Total

22

100%

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16. What is the lowest range of projected monetary returns to

your university (after accounting for legal fees and costs) over

which your university would consider litigating?

[NB: Respondents were asked to assume that the likelihood of

success in obtaining a favorable verdict or out-of-court settlement

was 70% or greater.]

Answer

Count

Percent

1. $0 - $999

1

4.55%

2. $1k - $9k

0

0.00%

3. $10k - $49k

1

4.55%

4. $50k - $99k

1

4.55%

5. $100k - $249k

2

9.09%

6. $250k - $499k

4

18.18%

7. $500k - $999k

1

4.55%

8. $1M - $9M

6

27.27%

9. $10M - $49M

1

4.55%

10. $50M - $99M

0

0.00%

11. $100M - $249M

0

0.00%

12. $250M - $499M

0

0.00%

13. $500M+

0

0.00%

14. Monetary returns are not something our

university considers when deciding whether

to litigate

5

22.73%

Total

22

100%

15 YALE J.L. & TECH. 312 (2013) 2012-2013

396

17. What impact, if any, has your university’s past experience

as a plaintiff in patent infringement litigation generally had on

your university’s likelihood to participate as a plaintiff in such

litigation again?

Answer

Count

Percent

1. Past experience has made future

participation extremely likely

3

13.64%

2. Past experience has made future

participation likely

2

9.09%

3. Past experience has made future

participation somewhat likely

4

18.18%

4. Past experience has made future

participation NOT likely

1

4.55%

5. Past experience not likely to influence

future participation

12

54.55%

Total

22

100%

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397

18. What impact, if any, has your university’s past experience

as a defendant in patent infringement litigation generally had

on your university’s likelihood to participate as a plaintiff in

patent infringement litigation?

Answer

Count

Percent

1. Past experience as defendant encouraged

future participation as a plaintiff

0

0.00%

2. Past experience as defendant discouraged

future participation as a plaintiff

0

0.00%

3. Past experience as defendant had no

impact on future participation as a plaintiff

6

27.27%

4. Not aware of our university ever being a

defendant in a patent infringement action

16

72.73%

Total

22

100%

15 YALE J.L. & TECH. 312 (2013) 2012-2013

398

19. Of the following individuals and groups, whose actual or

anticipated opinions are most likely to weigh heavily in your

university’s decision whether to participate as a plaintiff in a

patent infringement lawsuit?

[NB: Respondents were asked to pick the top three relevant

choices and rank them in order of priority (1 = highest priority).

The first table shows the count, average rank, and percentage of

respondents selecting the various answer choices. The second

table shows the number and percentage of respondents who

indicated any given answer choice was their institution’s highest-

priority concern.]

Answer

Count

Percent

Avg.

Rank

1. The public

0

0.00%

0.00

2. Members of our university’s

governing board

8

36.36%

2.25

3. Our university’s president

10

45.45%

1.50

4. Our university’s in-house

attorneys

13

59.09%

1.77

5. Outside attorneys retained by

our university

12

54.55%

2.08

6. Faculty who invented the

patents being infringed

9

40.91%

2.56

7. Faculty other than those who

invented the patents being

infringed

0

0.00%

0.00

8. Licensee(s) of the patents

being infringed

14

63.64%

2.00

9. Students at our university

0

0.00%

0.00

Answer

Number

Indicating

Highest-

Priority

Concern

Percent

1. The public

0

0.00%

2. Members of our university’s

governing board

2

9.09%

3. Our university’s president

5

22.73%

4. Our university’s in-house attorneys

6

27.27%

5. Outside attorneys retained by our

university

4

18.18%

6. Faculty who invented the patents

2

9.09%

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

399

being infringed

7. Faculty other than those who

invented the patents being infringed

0

0.00%

8. Licensee(s) of the patents being

infringed

3

13.64%

9. Students at our university

0

0.00%

15 YALE J.L. & TECH. 312 (2013) 2012-2013

400

20. In deciding whether to participate as a plaintiff in a patent

infringement lawsuit, which of the following factors are most

likely to weigh heavily in your university’s decision-making?

[NB: Respondents were asked to pick the top three relevant

choices and rank them in order of priority (1 = highest priority).

The first table shows the count, average rank, and percentage of

respondents selecting the various answer choices. The second

table shows the number and percentage of respondents who

indicated any given answer choice was their institution’s most

important consideration.]

Answer

Count

Percent

Avg.

Rank

1. Belief that initiating the

lawsuit would further the

university’s public-serving

mission

7

31.82%

2.14

2. Belief that initiating the

lawsuit would be essential or

important for other than revenue-

generating purposes

5

22.73%

1.60

3. University’s contractual

obligation to protect the rights

of existing licensee(s)

15

68.18%

1.40

4. University’s ethical obligation

to protect the rights of existing

licensee(s)

6

27.27%

2.17

5. Potential revenue generation

through damages award

8

36.36%

2.25

6. Potential revenue generation

through out-of-court settlement

6

27.27%

3.00

7. Likelihood that infringer will

not pay fair license price without

litigation threat

5

22.73%

2.20

8. Infringer’s disregard for

scientific norms and standards

0

0.00%

0.00

9. Infringer’s disregard for

professional norms and standards

2

9.09%

2.50

10. Likelihood that university

will be viewed as a sympathetic

litigant

1

4.55%

3.00

11. Groundbreaking nature of the

infringed patent

1

4.55%

1.00

12. Infringer’s disregard for the

10

45.45%

1.90

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

401

university’s legitimate rights

Answer

Number

Indicating

Most

Important

Considerat

ion

Percent

1. Belief that initiating the lawsuit

would further the university’s public-

serving mission

2

9.09%

2. Belief that initiating the lawsuit

would be essential or important for

other than revenue-generating

purposes

2

9.09%

3. University’s contractual

obligation to protect the rights of

existing licensee(s)

10

45.45%

4. University’s ethical obligation to

protect the rights of existing

licensee(s)

1

27.27%

5. Potential revenue generation

through damages award

1

4.55%

6. Potential revenue generation

through out-of-court settlement

0

0.00%

7. Likelihood that infringer will not

pay fair license price without

litigation threat

1

4.55%

8. Infringer’s disregard for scientific

norms and standards

0

0.00%

9. Infringer’s disregard for

professional norms and standards

0

0.00%

10. Likelihood that university will be

viewed as a sympathetic litigant

0

0.00%

11. Groundbreaking nature of the

infringed patent

1

4.55%

12. Infringer’s disregard for the

university’s legitimate rights

4

18.18%

15 YALE J.L. & TECH. 312 (2013) 2012-2013

402

APPENDIX B – ADDITIONAL INFORMATION ON UNIVERSITIES IN

DATASET

Performing the research described in Subsection I.C.3.

naturally allowed for the identification of the various universities

that participated as plaintiffs in the located cases. Slightly more

public universities than private ones have participated as plaintiffs

in patent infringement litigation. Table 4 lists by funding source

the 70 universities that were identified in my research.

Table 4

Universities That Litigate Patents,

Listed by Institutional Funding Source

Public Universities (n = 41)

Private Universities (n = 29)

Auburn University

Boston University

Florida Atlantic University

Brandeis University

Iowa State University

Brigham Young University

Kansas State University

California Institute of

Technology

Michigan State University

Carnegie Mellon

Michigan Technological

University

Catholic University

North Carolina State University

Columbia University

North Dakota State University

Cornell University

Temple University

Dartmouth College

Texas A&M University

Drexel University

Rutgers, the State University of

New Jersey

Duke University

SUNY

Emory University

University of Alabama at

Birmingham

Harvard University

University of Arizona

Johns Hopkins University

University of Arkansas

Massachusetts Institute of

Technology

University of California

New York University

University of Central Florida

Northwestern University

University of Colorado

Princeton University

University of Delaware

Rensselaer Polytechnic

Institute

University of Florida

Saint Louis University

University of Illinois

Stanford University

University of Iowa

Tufts University

INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES

AND PATENTS AND HOW TO FIX THEM

403

University of Kansas

Tulane University

University of Kentucky

University of Miami

University of Maryland-College

Park

University of Rochester

University of Massachusetts

Vanderbilt University

University of Michigan

Wake Forest University

University of Minnesota

Washington University in St.

Louis

University of Missouri

Yale University

University of Nebraska

University of New Mexico

University of Pittsburgh

University of South Alabama

University of South Florida

University of Tennessee

University of Texas

University of Utah

University of Virginia

University of Washington

University of Wisconsin-

Madison

Virginia Commonwealth

University

Of the 70 institutions represented in Table 4, over half (n =

38, or 54.3%) have participated as a plaintiff in more than one

patent infringement lawsuit.

183

Over 84% (n = 59) are classified

(or, in the case of university systems, have at least one campus

within the system classified) as doctorate-granting research

universities with very high research activity by the Carnegie

Foundation for the Advancement of Teaching.

184

Also, many of the

universities are elite, at least as judged by their membership in the

183

Few were the universities that participated as a plaintiff in a patent

infringement lawsuit decades ago, never to do so since then. Two such examples

include Kansas State University and Tufts University, both of which were

plaintiffs in lawsuits filed over 20 years ago.

184

The remaining 11 institutions—Auburn University, Brigham Young

University, Catholic University, Drexel University, Florida Atlantic University,

Kansas State University, Michigan Technological University, Saint Louis

University, Temple University, University of South Alabama, and Wake Forest

University—are classified as doctorate-granting research universities with high

research activity. More information about the Carnegie system of classifications

can be located at http://classifications.carnegiefoundation.org.

15 YALE J.L. & TECH. 312 (2013) 2012-2013

404

prestigious Association of American Universities (“AAU”).

185

Indeed, over half (n = 40, or 57.1%) are AAU members.

As for relative wealth, half (n = 35, or 50.0%) of the

universities had an approximate endowment size in 2012 of over

$1 billion, placing them among the top 75 richest institutions in the

United States based on this metric.

186

Of course, the investment

returns from these funds are unlikely to be used to fund patent

infringement litigation. A university’s licensing revenue is a more

probable proxy for institutional freedom to engage in patent

infringement litigation. In that regard, and perhaps unsurprisingly,

most universities in Table 4 generated at least $1 million in

licensing revenue in 2011, with 26 universities (37.1%) generating

tens of millions of dollars in licensing revenue.

187

185

The AAU is a nonprofit association of 59 U.S. and two Canadian

universities. Founded in 1900, the AAU is widely considered as including some

of the most preeminent public and private research universities in its

membership. Membership is by invitation only. The organization frequently

opines on policy issues in higher education, including issues involving

intellectual property law and university commercialization.

186

See College and University Endowments, 2011-2012, CHRON. OF HIGHER

EDUC. (Feb. 1, 2013), http://chronicle.com/article/CollegeUniversity/136933/.

The remaining institutions in Table 4 are by no means without their own

impressive endowments. Only one had an approximate endowment size of less

than $100 million, and even that institution (Michigan Technological

University) is among approximately the top half of all institutions whose

endowment sizes were ranked in 2012.

187

See Sortable Table: Universities With the Most Licensing Revenue, FY 2011,

CHRON. OF HIGHER EDUC. (Aug. 27, 2012),

http://chronicle.com/article/Sortable-Table-Universities/133964/. Only two

institutions in the top 25 based on licensing revenue are not accounted for in

Table 4. Of those two, one (Mount Sinai School of Medicine) is not a university

as defined in this Article. See supra note 92. Four institutions in Table 4 did not

report 2011 licensing data. They are Brandeis University, Catholic University,

Florida Atlantic University, and Saint Louis University. While Catholic

University never has reported data to AUTM, Brandeis, Florida Atlantic, and

Saint Louis University have. Saint Louis University reported $2.0 million in

licensing revenue in its last reporting year (2004); Florida Atlantic reported

$87,950 in 2002, while Brandeis reported $631,100 in 2005.