How can universities demonstrate they aren’t patent trolls?

Let’s say, just for the sake of argument, that university administrators at places like Caltech don’t want to be labelled patent trolls. What might make it clear that universities are not just one more set of patent trolls?

“We’re not trolls, we are moralizing trolls.”

On the face of it, university administrators have adopted a simple variation of patent trolling. Rather than just acquiring patents with which to shake down industry–all very overt and unapologetic (and for which there is some degree of respect–at least these folks own their decisions), university administrators instead cover their actions with a moralizing rhetoric about the public good–meaning only that they would rather sign a petty monopoly deal first and give the right to shake down industry to their monopoly partner (and that’s what many university exclusive patent licenses do–it’s in their templates). If nothing happens with their patents–no licenses or an exclusive license that comes to nothing–and industry uses an invention that crosses into a university’s patent claims, then with a spout of moral indignation and a nonsensical fuss about “protecting the public” (from what? from actual product in use?), the university switches into patent troll mode and sues whomever it can if it can’t get an abetting exclusive licensee=assignee to do the suing for it.

If this scenario–which plays itself out repeatedly–is not what a university administration wants, then what might a university do to make it crystal clear that it won’t play the troll, that the troll operating model is not available to it, not even as a threat to leverage a deal?

Disavow Infringement as a Primary Cause of Action

There’s of course, an easy way–renounce patent troll practices. If industry adopts, that’s success. Patent or no patent. In fact, getting companies to report their use of a university invention is way, way, way more important than making them pay a price for use. There are reasons to invoke infringement, such as when the infringer is harming the public (not the university)–by producing defective product, or claiming to conform to a standard when they are not, or asserting a patent claim against a commons. One might also consider infringement when licensees have product on the market, having invested in doing so, and a free rider shows up unwilling to acknowledge the investment. Of course, when it comes to federally supported research, the university taking ownership of patents on subject inventions is the ultimate free rider, having contributed nothing and taking no market risks of its own. Perhaps universities ought to cut free riders a little slack, given their own lives in glass houses.

What, not sue? “We have to sue to show we are serious about our patents.” (I have heard this claim from university administrators in the wild.) “If we just give things away, then it is a race to the bottom.” (Also heard often.) The thinking behind such thinking is that the role of the patent is to drive up royalty income, not to “call forth risk capital” where none otherwise would show up on its own. All this fuzzes the brains of many monopoly-loving university patent administrators. Sorry, I can’t help that some of you are unsuited for the job. You do it, I know, for the money. Perhaps you don’t feel the need to think things through. All the worse.

Make University Ownership Voluntary (Again)

Make university ownership of inventions voluntary. That cuts both ways–inventors are not obligated to assign to the university and the university is not obligated to take ownership if offered. Most universities now have patent policies that demand ownership of inventions upfront, often using quirky present assignment language and yet more goofball (but deadly serious) language that insists that everyone has agreed to the policy. But this kind of thing is verbal trickery bordering on bad faith and doesn’t actually assign title to anything.

The starting point then is to offer inventors the right to keep their inventions, subject to any commitments they have already made involving the university or its sponsors or to a colleague (such as a principal investigator). Such an offer can be easily folded into practice. Add a check box on an invention disclosure form with the line: “I prefer to retain ownership of this invention.” If someone at the university won’t let you change the form, then ask the question directly. Offer to waive if you can. Most patent policies are written so badly that there is a way.

Some people find this suggestion horrible. “Why reject good TNT when you can make a big patent bomb with it for only $10K? Someone will pay for the opportunity to threaten to set it off. Don’t allow inventors to profit by finding that someone first. And don’t allow inventors to waste all the support they have been given by the university by not finding someone willing to explode that patent bomb. And don’t allow those inventors to profit in any other way–especially not in a way that isn’t part of our profit-seeking model.”

Please, get over it. Inventing is not a faculty obligation. Faculty get university support whether they invent or not, whether they have good ideas or not, whether they have good business ideas or not. If faculty want to profit from university support, they can do so a hundred ways that don’t involve patents. University authors also profit from university support. So do students getting an education–all those CS and MBA folks walking into six-digit salaries giving up only an address for the alumni association to try to hit them up for donations.

More so–the track record of university inventors, left to their own interests, is that they give back to the university and to the community over and over again. Inventors indeed might profit, but university inventors in particular are generous folks. Unlike some university patent administrators with their hardened consciences. Consider that if you are horrified by university inventors owning their inventions.

Consider the Public in Equitable Interest 

There are some things one can do to ease the pangs (and administrative sin) of envy. First, ask for an equitable review for use of extra resources–resources committed with special conditions that anticipate invention and recognize that the invention ought to be managed to recognize the support. This approach had a long run before being destroyed by university administrator patent ownership-lust. If there’s an equitable reason for the university to receive some share of any income from the patent, then a department chair or lab director or dean would know. Make it easy–0%, 10%, 30%. If the inventor wants to keep working on the invention in the university lab, then it’s 30%. If the inventor takes things outside the lab–transfer is already happening, yippie!–then its 10%. If the inventor releases the invention under fair and reasonable non-discriminatory terms to everyone, then 0%. Let the inventor keep whatever he or she wants to keep.

The neat thing is, the university does not have to file a patent application, fuss with inventors over marketing, or worry the matter. The inventor wants to file, fine. The inventor wants to use university space. Not a problem. It wasn’t a problem to invent. It’s not a problem to develop the invention for public use either. If the lab space is designated for other uses, then that’s an issue for the dean or chair or lab director to take up–has nothing to do whether the university or the inventor owns a patent. Has to do with what work is properly done in university lab space.

Break the Appearance of Being an Agent

University administrators try to build into patent policy assertions that they are not agents for inventors. Royalty sharing is not consideration for assignment. Administrators have no obligation to inventors to maximize royalties. Yet administrators work in a model that was made public as an agent model. They live in the ruins of the temples whose god they hate. They don’t even bother to build their own. Like hermit crabs, they appropriate the shells of former patent policies, make a few adjustments to get their spiny tails screwed up the spiral, and off they go. Any casual on-looker would think they were still snails, when they are crabs about it. Actually, all that disavowing about agency is cast broad enough (conveniently) to also disavow having to license anything, or enforce the terms of a license to ensure public benefit, or to generate revenue to “secure a return on the public investment.” The disavowal of agency ends up being a disavowal of a fundamental claim of why the technology transfer function exists and charges fees for licenses.

A voluntary offer to manage makes clear that whatever the university does next, if the inventor does want the university involved, is a matter of public interest, not becoming a covert money-making venture to create petty patent monopolies, with the university and inventor splitting the spoils gathered in by speculators. Instead, there’s a negotiation, not some absolute policy–and no trolling–infringement can’t happen if a university patent owner renounces infringement as an operative concept for simple use.

Voluntary Assignment Means an Inventor Has Chosen You

Working in a voluntary invention assignment environment is the most liberating thing for university IP management. People work with you because they have chosen to work with you. People take your deal because, as far as they are concerned, it is the best deal available. People want you to succeed because they have chosen you and you have chosen them. That’s a decent start to a relationship. There is nothing like it in a compulsory policy environment. Can never be. In a compulsory environment, folks can be civil, but they are civil in the form of master and servant, or master and slave.

Once you are in a voluntary environment, renounce trolling in practice. Inventors have to know this up front and still want your assistance. Refuse to do exclusive licenses that are really covert assignments–that is, eliminate the right to sue for infringement or to settle infringement from the deal; and eliminate the right to sublicense–having the right to “have made” is sufficient. No need for an exclusive licensee to be able to trade on the value of the patent other than to make product. If an exclusive licensee wants to sublicense, then what it really wants is a non-exclusive license. If a university inventor wants to go trolling industry, then make them put up the risk capital for it and find a troll. If people don’t like that behavior, the inventor will pay a personal price for it–people won’t work with them again, companies will refuse to fund them, and they will learn a lesson that humans teach but chimpanzees don’t. That will fuddle their monkey brains. And they won’t be able to hide behind a university trolling practice. “Gosh, it wasn’t me–it was those darned university patent administrators who love to troll, but only after some fussy protestations about the public interest, like a bad romance novel set in space.”

If you try to renounce trolling in practice without policy support when you are still compulsory, then the troll-hopeful university inventors (there are some) and their troll-happy speculator friends (who think of themselves as “boosters” or “business advisors to senior university leadership”) will come after your jobs. They don’t play nice. They don’t play fair. And in good troll fashion they don’t like the light of day or reason or public purpose. Make university assignment voluntary whenever possible, and renounce trolling. Do this in practice if you can’t get it in formal policy. Then make it as clear as possible to faculty, industry, and the public.

Make Patent Prosecution Public

Make university patent applications open and public. The conventional practice is to keep applications secret. But Stanford followed a different course with the Cohen-Boyer patent applications. They went to industry to ask whether patenting was an acceptable pathway–and the folks in industry they talked to agreed it was. That was as much to say they agreed to take a license, even pay a fee for it. Why? Perhaps because a patent combined with a non-exclusive licensing program ensured that the patent would not be licensed exclusively to any one company. Stanford also then kept the patent prosecution open. Why? So industry could see the claims up front, could see the prior art, could see the patent examiner’s responses.

Sure, it might be harder to obtain a patent in the first place. But if a university wants to show that its patent management is different from the ordinary practice, and it wants to get industry’s attention from the get go, then it will make its patent prosecutions public. If someone can show that the invention isn’t patentable, the sooner the better. Why would a university want to deal in a patent with flaws so deep it represents a right that never should have been granted? Never. So make patent prosecutions open. Tell inventors that this is the practice. Make it clear they have a choice to spend their own money (or other people’s money if they can get it) and do the ordinary thing. But the university is directed at engaging industry, not tricking industry, surprising industry, or cheating industry or trolling industry. Make university patent prosecution public. It’s not a trade secret, it’s not confidential–it part of the marketing that distinguishes the product.

Oh, and yes, it does give others the opportunity to design around your patent anyway, or to create improvements before you can–but remember, your job is to promote the use of your subject inventions, not create private monopolies, and if you have renounced infringement, then why would someone bother to design around when the cost of doing so is always way more than simply registering one’s use? And yes, I know, following this argument through gets right at the nasty, dark heart of the matter–that Bayh-Dole is just a ruse to allow the creation of petty patent monopolies and has nothing whatsoever to do with promoting the use of subject inventions. If a subject invention is desirable to users, then a petty patent monopoly is indicated to make the invention desirable to speculators on the desire of the engineers and scientists and doctors. The monopoly patent changes the audience of desire from the invention to the patent. If you renounce infringement, then the patent monopoly changes to one of stewardship on behalf of a use community–call it escrow or trustee or standards coordinator or rain-maker or the proper role of a university in the administration of patents made with federal support.

Always License For Research

Always make research use FRAND–fair, reasonable, and non-discriminatory. And royalty-free. Research is any use–nonprofit or for-profit–in which results are published in a reasonable time, with the backing data. Research that tests and validates (have to have this). Research on (how that invention works and why). Research with (using the invention as a tool to do more research). At the most, ask organizations to register their use–that way you can establish that there is use. If no one registers their use in the first three years, well then you have evidence that you will need to use other methods. Second part of licensing practice–make internal use a simple non-exclusive license. Again, FRAND is your friend. Anyone who registers their research use (think evaluation of, research on, research using) should have an option to upgrade for any internal use–make, use, have made. Perhaps there’s a fee, but even better, if you charge a fee, charge it for assistance services–delivery of data and updates, access to the lab for assistance, access to updates.

From Research to Commons

Now here’s the kicker. Make the non-exclusive internal use licensing a commons. Eliminate the word “license” as well. Talk about “assistance” and “service” and “of course, confirmation of our permission–we want you to use, don’t need for you to publish, and all we ask back is that you don’t block our work of making stuff available. Our deal is, make and use and mess around all you want, but agree that if you invent anything patentable, and obtain patents, you agree not to assert those patents against the university if it develops the invention in the same direction, nor against anyone else who takes the standard internal use license. Assert to mess things up, and you lose what you have got. But if anyone dares sell, offer for sale, or import, and that crosses your claims, nail the buzzards, if that’s your company way. But don’t disrupt research and don’t disrupt the practical application of the invention or its improvements via your use and your patenting.” There’s your Bayh-Dole mandate in play. Believe it. Use it. Rely upon it.

Cross the Commons to Commercialization

Anyone with an internal use license can take an option to sell commercial product. They register this option. Perhaps they pay a simple fee–$1,000. Done. Get ten options and you have covered your patent costs. Don’t file if you don’t think you will get ten options. Or file as a public service rather than as an “investment.”  If anyone exercises their option, perhaps they pay an annual fee or a one-time fee or a royalty on sales. That covers your patenting costs, then. Let them choose. Make it easy for them to deal. You might even let the first one in set the price of the deal. That’s attractive. You’d be surprised how many companies won’t choose $0 if that’s what you will then charge the next company in, too. This is true, even, when the company has funded research leading to an invention and wants (or should have) only a non-exclusive license. There are all sorts of interesting ways to handle pricing based on the number of companies that have already taken a license. Give the advantage to those first in. Better deal because there is more risk–and besides, your goal is use, the sooner the better, not money. Money happens because folks see what you are doing, like it, and want you to continue with such doing. Money doesn’t happen, then, because you are a threatening menace to industry, prepared to shake it down or blow things up. We have a name for moralizing fundamentalists who threaten to blow things up–terrorists. You don’t have to go that way.

The Stinking Truth

This approach to university patents starts with voluntary arrangements that permit a university to focus on public interest, renounce infringement and trolling, and then build relationships out from research to use to product. Never prevent research or internal use while hoping for product. This is just the opposite of a conniving policy that depends on creating private monopolies while excluding all other uses so speculators can fiddle. Yes, there are times when an exclusive license really does “call forth private risk capital” and nothing else will. But those times are one in a 1,000 or one in 5,000 inventions. But even then, why deny research and internal uses? Ah, it is all about the money, isn’t it?

So here’s the stinking truth at the bottom of the pickle barrel. If a university renounces infringement, then the value of a research discovery gets distributed over a range of interactions–teaching (workshops), research (sponsorship, donation), services (distribution, consulting, updates), memberships (subscriptions, consortia)–and  not just by means of a patent license (royalties, fees, judgments, settlements). The point of compulsory assignment, monopoly licensing, and the threat of infringement is to prevent money that would flow through any of these other channels to be diverted to patent royalties. There will still be these other things, but their value is reduced by the unavailability of patent rights to those participating–and even if a university does recognize patent rights, say, for consortium members, administrators often make it a pain in the butt to secure those rights, with plenty of poison and incompetence in their drafting.

The Bayh-Dole scam–really goes back to the IPA scam–has to create space for itself. It has to set up to make itself appear to be successful (as do, say, pyramid schemes). To do that, it cannot tolerate competition, must be predatory on the value of research services, and aims to attract speculators with money to burn rather than benefit from the goodwill that attends helping people learn about and use what research has discovered.

Any scam can wrap itself in a cloak of public interest. It’s a standard technique. Why would anyone say “Hey, check out this scam!” when they can say “We’re here to help!” Gosh, helping, that’s so nice. Put kittens on your technology transfer website, why don’t you. Research discovery doesn’t have to be a scam. Nor technology change. Nor teaching people how something new works or could work. But Bayh-Dole is a scam through and through–from the subtle cheating drafted into law and the overt distortions of the implementing regulations to the gross misrepresentations about Bayh-Dole to the secrecy and failure to comply or enforce Bayh-Dole on any of its major concerns–ownership, licensing, money, accountability. Yeah, it’s a scam. But a university does not have to play along with the scam, exploit the scam, try to be like any ordinary scamming university, trying to fit in with the scam for fear of being laughed at or criticized for “not getting it.” A university can stay strong in its social roots, meaning that university administrators must be strong in their social roots and faculty have to be strong in their social roots. It’s a matter of character, and of course saying that it is a matter of character gets laughed at these days, too. “Idealism–bah, we are pragmatists here, and monopoly is the way the world works, and playing ‘hardball.'” In a world with clever scams, the university administrative position on patents is to be the best scammer possible–and that means to claim public interest and still profit however one can. Renounce all that, university administrator. It will do you and the public some good.


This entry was posted in Agreements, Commons, Freedom, Policy and tagged , , , , . Bookmark the permalink.