Universities commonly have technology transfer operations that spin off companies derived from university research and license patents created by university research. Setting aside whether those operations are a smart financial practice—seven out of eight universities fail to break even on the costs of operating their tech transfer office—tech transfer offices are often cited as an example of a desirable non-practicing entity, taking university research and commercializing it.
But when tech transfer offices start buying patents and asserting them, is that still the case?
STC.UNM is the University of New Mexico’s tech transfer office. It’s been around since 1995 and has spent much of that time performing traditional tech transfer functions—helping university inventors commercialize and license their patents. And in the first 22 years of STC’s existence, it four times found it necessary to file a patent lawsuit asserting patents developed by university inventors as part of this function.
But all of that recently changed. Over the course of three months in 2019, STC filed four lawsuits—as many as it had filed in the previous 22 years. And two of these lawsuits had a critical difference—the patents being asserted had nothing to do with anyone at the University of New Mexico.
In fact, the patents had been developed by the Industrial Technology Research Institute (ITRI), a Taiwanese entity created and funded by the Taiwanese government. ITRI’s mission is the development of Taiwanese industry, including its protection against non-Taiwanese competitors. (One of ITRI’s best-known projects is TSMC, now one of the world’s largest semiconductor manufacturers.) ITRI conducted a multi-year, multi-litigation campaign against South Korean consumer electronics company LG, including filing a case in the Eastern District of Texas asserting that LG had infringed the three patents STC is now using.[1. In an interesting footnote to this case, the attorneys representing ITRI against LG are the same attorneys who were reportedly the originators of the idea to shield pharmaceutical patents from review by selling them to Native American tribes. That tactic for avoiding review, as reported by Patent Progress, ultimately failed.] Despite asserting more than two dozen patents against LG across ten lawsuits, ITRI never succeeded in proving even a single claim was valid and infringed.
And if you can’t successfully assert a patent, what can you do with it? You just sell it to someone else. In this instance, STC.UNM (with a three month stopover at “Sino Matrix Technology”, another Taiwanese company that appears to have been associated with ITRI in the past.)
Not Invented Here
In Sept. 2018, STC.UNM filed an amicus brief asking the See CAFC to maintain its special protection from inter partes review, stating that in order to “achieve its goals, STC.UNM seeks patent protection for the technologies developed at The University.” (emphasis added.)
Six months after filing that brief, STC filed its first lawsuit using ITRI patents.
University technology transfer offices often cite the research work their universities perform when they discuss the patent system. And that university research work is often valuable, leading to serious technological advances. The Association of University Technology Managers, the trade association for tech transfer officers, cites a number of non-financial benefits, including promoting a culture of innovation at the university, providing a research experience for students, increasing university prestige and faculty retention, and helping obtain additional opportunities for federal grant funding.
But much of that argument is predicated on one underlying fact—the university is commercializing the research performed by its professors and students. When the research is acquired from outside of the university, none of those benefits accrue. And when a university acquires patents from someone else and then asserts them without any tie to the university or attempt to transfer technology via startup creation, how can you tell the difference between a university and a patent An entity in the business of being infringed — by analogy to the mythological troll that exacted payments from the unwary. Cf. NPE, PAE, PME. See Reitzig and Henkel, Patent Trolls, the Sustainability of ‘Locking-in-to-Extort’ Strategies, and Implications for Innovating Firms.?