With the holiday season upon us, there’s nothing better than to curl up by the fire with a hot cup of tea and a stack of patent-related articles. Here’s a few you might want to take a look at.
U.S. vs. Foreign Companies at the PTAB
An interesting article from Unified Patents examined inter partes reviews (IPRs) based on the location of the petitioner and the patent owner. They found that nearly two-thirds of IPR petitions were brought by U.S. companies, while nearly 70% of challenged patents were owned by foreign companies.
This suggests that—contrary to the narrative that IPR has harmed American companies—the primary impact has been to protect American companies from invalid patents. In some cases, IPR has even protected them from patent trolls funded by foreign governments.
Financial Rewards Don’t Drive University Patenting
Stanford Law Prof. Lisa Larrimore Ouellette recently published the results of an extensive study of whether university royalty-sharing arrangements with professors are beneficial. Using the variation in royalty-sharing between different universities as a natural experiment allowed Ouellette to determine the impacts of higher and lower royalty shares on patenting and development behavior.
Contrary to earlier results, which are shown to be due to coding errors, Ouellette finds “no compelling empirical evidence that increasing university inventors’ royalty share has a significant effect on any of the outcomes one would expect to be most affected.” This, in turn, has a policy impact because royalties kept by a university are required to be reinvested in research and education, while no such requirement attaches to money shared with a professor. If royalty-sharing doesn’t drive professorial patenting, then the more beneficial outcome is likely to be achieved by keeping that money within the university where it can be used to provide additional research and educational funding.
While Ouellette doesn’t go this far, it’s also worth remembering that the vast majority of university tech transfer offices lose money. If they lose money for their university, and if money to professors doesn’t drive desirable behaviors, it might be worth considering whether incentivizing open licensing of university-developed inventions would be more desirable than the present system.
Finally, a recent article in Landslide examines NPE structures. Responding to the “myth of the NPE” argument put forth by those who want nothing more than a return to a world in which defendants can’t reasonably risk defending themselves against infringement lawsuits, the article describes how NPEs remain a serious concern. (Just this week, a Federal Circuit case described a lawyer-owned NPE that has filed more than 100 patent lawsuits despite never once reaching a merits judgment in its favor.)
Using one such NPE—Uniloc—as its example, the article looks at where Uniloc’s funding comes from and how its private equity funding source appears to have driven its extensive litigation campaign. (The same private equity source now owns the patents created by the fraudulent startup Theranos—patents that will likely chill investment into the kind of diagnostic technology that Theranos claimed to have invented.) Much of the article is, admittedly, inference based on what little is publicly available about Uniloc’s corporate structure and financing, but that shifting web of corporate shells and financing is in and of itself concerning. At a bare minimum, a defendant should be able to know who they’re being sued by—not just the corporate shell, but the party that stands to benefit.
With the PTAB recently announcing that it would consider various factors such as timing of litigation and strategy and organization of the parties when deciding whether to institute, this article concludes by suggesting that the PTAB should consider applying that scrutiny equally to patent owners who employ shell games to hide their financing and beneficial ownership—parties such as Uniloc.