Here are five ways to use a patent:
- Nonuse Don’t practice the claimed invention and exclude all others
- Troll Don’t practice, demand payment if others practice the claimed invention
- Flip Don’t practice, and exclusively license, assign, or sell the patent
- Practice Practice the claimed invention while excluding all others
- Share Practice and allow others to practice the claimed invention
Each of these methods has its own variations–some with significantly varied effects. Let’s look at each of these approaches and consider university patent management practices. The first three patent uses involve non-practice. Consider nonuse as a licensing strategy and outcome.
In nonuse, the patent owner doesn’t use the invention and uses the patent to prevent everyone else from using the invention. Why? There can be a number of motivations. One is that the invention represents a product or product feature that would compete with or degrade a company’s current products or product features. Another is that the invention represents a potential product or product improvement for some other company–and the patent owner can disrupt that product pathway. A company might consider holding an invention for possible later use without any clear intention to develop it at present. One later use involves trading patents–cross-licensing, say, or contributing to a standard. Or a company believes that by puffing up its patent portfolio it will look impressive to investors or competitors or potential acquirers. That is, the patent has more apparent value than the use of the invention.
That was a bunch of reasons for patented invention nonuse. But we’re not done with nonuse, yet. A company can obtain ten, twenty, or thirty patents around a single technology–even thirty patents a year–each covering variations on the theme, associated technology, possible applications. There’s no way to use them all, but if one can claim them, then the thinking goes, one should just in case a product pathway ends up passing through one claim or another. A related idea is that of the “patent thicket”–create so many patent rights that a competitor is bound to cross at least one claim of one of the patents. The invention in such a case serves as an excuse, as it were, for broader claim construction–claim all variations, all functional equivalents, all possible applications (and continue the prosecution to all allow for new patents that rewrite the claims to reflect changes in terminology and to add new material). There’s no particular interest in practicing the invention that starts it all. One uses the invention to get to a broad set of claims, and it is the patent claims that carry the value, not the results of invention use.
There is also a subtle form of nonuse. A patent typically consists of multiple claims–sometimes 10, or 20, or 30 or more claims. Each claim represents a different aspect of the invention. To practice an invention under one set of claims does not mean that all the other claims also must be practiced. If one set of claims identifies using calcium carbonates and another identifies using magnesium oxides, a patent owner might practice only the calcium carbonate pathway and not use the magnesium oxide pathway–again, resulting in nonuse of portions of the claimed invention. The patent owner does not use the invention described by these claims, and does not permit others to do so either.
Finally, nonuse can come about because of the patent system itself. A patent does not grant the right to practice the invention. A patent grants the right to exclude others from practicing the invention. Thus, if an invention requires access to prior inventions patented by others, then one can practice the invention only with permission of those other patent owners (or find a country where those other patent owners don’t have rights). Thus, a patent owner might not practice because the owner is prevented from practice by other patent owners. Clearly, as an area of developing technology fragments into a bunch of separate inventors and their organizations, with each organization (or inventor) claiming their own ownership rights in their little bits of the overall technology, the likelihood goes down–exponentially with the number of players and patents–that any one inventor or organization can practice their invention without first obtaining a license from everyone else.
Federal research policy that spreads common work around among universities while insisting on patenting as a measure of productivity creates a situation in which no company can readily practice any patented invention. The area quickly becomes a twenty- to thirty-year innovation desert, full of academic publications and press releases claiming potential, full of patents “available for licensing,” but no one practicing much of any of the inventions (except, for a time, as part of further research, to create yet more inventions and more patents). This stuff is not “early stage” technology, despite the common label. It is “impossible stage” technology or “gridlock stage.”
Clearly, universities have reason to avoid creating gridlock stage technologies, but for the most part they don’t bother. Their basic tool is the “technology administration agreement” (or “inter-institutional agreement”), used primarily for inventions jointly owned by two or more universities. These agreements are often slow and difficult to negotiate and end up adding additional layers (and lawyers) of review to any subsequent transactions involving the invention. Worse, these agreements generally are not used for inventions that don’t have co-ownership.
There are ways to handle patent pools, commons, and other strategies that don’t involve anti-trust issues–creating standards, licensing with FRAND conditions (fair, reasonable, and non-discriminatory), and collectively releasing to the public domain in favor of other approaches to promote use (such as offering assistance). But universities don’t do such things unless they are induced (by threats of loss of research funding, say) to do so by others. Universities have no workable methods to prevent gridlock stage technologies.
As a consequence of “collaborative” research at the federal level, combined with the prevailing university dual monopoly approach to patents (comprehensive, compulsory ownership plus preference for exclusive licensing), universities actively contribute to gridlock stage technologies. They increase the level of ownership claims, where background scholarship would publish without such claims; they prevent the aggregation of new patents in an emerging area by a licensing agent working at the interface with industry and so positioned for FRAND transactions in support of platform development, standards, and competition; and by licensing exclusively such patents, universities make it next to impossible for anyone else to gain access to the research underlying those patents–once the exclusive license has been transacted, the licensee holds the patent as an asset and (in most cases) is prevented by the exclusive license from dedicating a licensed patent to a standard or commons or cross-licensing action–or any transaction that would diminish the gridlock situation.
Despite published and policy claims otherwise, nonuse is the primary patent management strategy used by American patent management administrators. They don’t license most of their patents, and when they do license, they license exclusively without regard for anything other than a reservation to practice the invention at their own university and then only for research (and educational) purposes (and, for subject inventions, a non-exclusive license to the government). When they license exclusively, they often do not distinguish fields of use, or use based on specific claims, and so even when one part of a university patent might be practiced (rare enough as it is), frequently many other claims of the same patent are not practiced, and with no consequence for not practicing. Nonuse rules.