December 8, 2014
Traditionally, to the extent that universities have attempted to commercialize the research and technologies they develop, they have done so in a relatively passive manner. Universities have generally let commercial companies take the lead in the development efforts, opting to pursue relatively liberal licensing practices for the research and technology developed by faculty and students. Current litigation suggests that this traditional commercialization strategy may be changing.
Recently, the University of Minnesota sued four of the leading mobile communications service providers, AT&T, Verizon, T-Mobile, and Sprint, for patent infringement. The University alleges that the mobile carriers infringed on four University patents for technology which improves the reliability and speed of mobile communications networks.
The University appears to be following a more aggressive patent enforcement strategy similar to that now being employed by other schools. For example, Carnegie Mellon University won a recent judgment in excess of one billion dollars as compensation for infringement on some of its computer technology patents.
Some critics of the non-practicing patent entities which are sometimes referred to as patent trolls, suggest that a growing number of universities may now be stepping into the shoes of the trolls. As more universities obtain and aggressively enforce through litigation a variety of patents, the universities may begin to function, in effect, as patent holding organizations that rely on licensing revenues and patent litigation awards as important sources of revenue.
If the University of Minnesota is successful in its mobile patent action, the school could gain a windfall valued in excess of one billion dollars. Enforcement of the patents could also have a noteworthy impact on the mobile communications industry.
In the current environment in which universities, particularly public universities, are desperate for funding, there will almost certainly be continuing and expanding pressure for more aggressive patent enforcement, with the substantial potential payoffs that litigation brings. There is increasing pressure on universities to derive greater revenue from the fruits of their research activities. University patent portfolios are now widely viewed as important sources of cash necessary to support university operations. Funding shortfalls in higher education are virtually driving academic institutions to function as patent trolls.
It is a fair and important question as to whether the patent troll function is truly consistent with the fundamental mission and objectives of higher education. Yet regardless of whether aggressive patent enforcement is fully consistent with the critical goals of academic institutions, the current economics of higher education make the potential gains associated with the patent troll strategy enticing for our colleges and universities. Academic institutions adopting the patent troll strategy will likely be a fact of life in the near future.