July 15, 2013
Recently, Boston University filed a lawsuit against Apple for patent infringement. The University reportedly seeks $75 million in royalties. The case highlights what appears to be growing activism on the part of academic institutions as they attempt to transform their patent portfolios into revenue.
The patent at issue is based on research conducted by a Boston University professor. It involves a method of generating blue lasers inexpensively through use of gallium nitride film semiconductors.
The technology is reportedly used widely in many Apple products, including the “iPhone5”, the “iPad”, and the “MacBook Air”. The University is apparently not seeking an injunction to stop the sale of the products. Instead, it has asked the court to require Apple to pay royalties on all sales of the products using the technology.
Many academic institutions are currently facing difficult economic conditions. Those that have established patent portfolios have significant incentive to try to use those patents to derive additional revenue.
Commercialization of patents forms a useful potential source of funding for universities. It is important to recognize, however, that only a relatively small number of academic institutions possess patents that can generate significant revenue.
For most schools, it is a mistake to assume that aggressive patent commercialization efforts will effectively generate substantial revenue. Only a small number of technologies can command significant commercial interest.
Additionally, the patent management process can be fairly costly. It can be expensive to obtain, maintain, license, and enforce large patent portfolios. The cost of establishing and operating aggressive commercialization efforts can be substantial.
Research commercialization programs provide an important tool for universities to use as they attempt to expand their revenue sources. They are, however, not the only methods for generating value from research activities.
Many universities make effective use of active sponsored and collaborative research programs with industry. These joint efforts with commercial enterprises generate value for universities by providing them with research funds, access to high quality researchers and research facilities in corporate laboratories, and career opportunities for students.
Each report of a large potential patent claim from an academic institution attracts significant attention to the possible commercial value of the patent portfolios created by universities. Those reports should not, however, obscure the fact that there are a variety of methods through which universities can build upon their research to generate value and that the patent-based commercialization process is not necessarily the most effective value-generating process for the majority of academic institutions.