INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM

Yale Journal of Law and Technology Volume 15 Issue 2 Yale Journal of Law and Technology Article 1 2013 INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM Jacob H. Rooksby Follow this and additional works at: https://digitalcommons.law.yale.edu/yjolt Part of the Computer Law Commons, Intellectual Property Law Commons, and the Science and Technology Law Commons Recommended Citation Jacob H. Rooksby, INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM, 15 Yale J.L. & Tech (2013). Available at: https://digitalcommons.law.yale.edu/yjolt/vol15/iss2/1 This Article is brought to you for free and open access by Yale Law School Legal Scholarship Repository. It has been accepted for inclusion in Yale Journal of Law and Technology by an authorized editor of Yale Law School Legal Scholarship Repository. For more information, please contact . Rooksby: INNOVATION AND LITIGATION INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM Jacob H. Rooksby* 15 YALE J.L. & TECH. 312 (2013) ABSTRACT Universities that own patents have a problem. While nearly all are keen to enhance their revenue generated from patents, few are eager or prepared to enforce them in court, alone or with their exclusive licensees, should a third party deploy a product or process covered by a university-owned patent. Yet strict prudential standing requirements imposed by the United States Court of Appeals for the Federal Circuit (“CAFC”) effectively require university participation as plaintiffs in enforcement lawsuits over their exclusively licensed patents, regardless of a university’s effective ability or enthusiasm to participate in a given action. Supported by forty years of lawsuit data and original survey and interview data collected from high-level administrators at universities that litigate patents, this Article explores in depth the complicated legal and policy tensions presented by university participation as plaintiffs in patent infringement litigation. I offer two proposals for alleviating these tensions. The first proposal urges universities to move toward a coherent position on patent ownership and enforcement, particularly in light of recent trends in higher education finance. The second proposal outlines a potential legislative amendment to the Patent Act that would allow universities to enjoy the revenue-generation aspect of patent ownership while freeing them from the legal compulsion to participate as co-plaintiffs with their exclusive licensees in enforcement actions. This novel tweaking of the CAFC’s prudential standing requirement would save universities untold time and money that they currently spend pursuing litigation. By permitting universities to focus more on innovation and less on litigation, this proposal also would better align societal * Assistant Professor of Law, Duquesne University School of Law. A.B., summa cum laude, College of William & Mary; M.Ed., J.D., Ph.D., University of Virginia. Special thanks to Rebecca Eisenberg, Chris Holman, Kevin Outterson, Yaniv Heled, Cynthia Ho, Benjamin Liu, Emily Morris, and Liza Vertinsky for providing helpful feedback on this Article at the Junior Faculty Workshop on Intellectual Property Issues in the Pharmaceutical Industry, held at Indiana University McKinney School of Law in December of 2012. All errors are my own. Published by Yale Law School Legal Scholarship Repository, 2013 1 Yale Journal of Law and Technology, Vol. 15 [2013], Iss. 2, Art. 1 INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM expectations for university commercialization efforts with the public interest. 313 https://digitalcommons.law.yale.edu/yjolt/vol15/iss2/1 2 Rooksby: INNOVATION AND LITIGATION 15 YALE J.L. & TECH. 312 (2013) 2012-2013 TABLE OF CONTENTS INTRODUCTION .............................................................................316 I. UNIVERSITY PARTICIPATION AS PLAINTIFFS IN PATENT INFRINGEMENT LAWSUITS ................................................318 A. CAFC Case Law Affecting University Participation ...... 318 1. Legal Push or Market Pull?.......................................318 2. Patent Licenses, Patent Assignments, and the “All Substantial Rights” Inquiry .......................................320 3. Asymmetric Results ....................................................324 B. Tensions Between Universities and Patents ................... 326 C. Data on Incidence of University Patent Enforcement .... 330 1. Previous Studies and Comments ................................330 2. University Experiences in Litigating Patents ............333 3. Lawsuits Filed, 1973 – 2012 ......................................335 II. A STUDY OF UNIVERSITIES THAT LITIGATE PATENTS ............340 A. Background and Methodology ........................................ 340 B. Summary of Results ......................................................... 345 1. Research Question 1 – Litigation Policies.................345 2. Research Question 2(a) – Considerations .................346 3. Research Question 2(b) – Likelihood to Litigate .......348 4. Research Question 2(c) – Litigation As Mission Enhancing ..................................................................350 5. Research Question 3 – Public/Private Differences ...352 C. University Approaches to Patent Infringement Litigation ... ......................................................................................... 352 1. The Minority Approach: Willing Pursuers and Prepared Participants ................................................352 2. The Majority Approach: Reluctant Pursuers and Contingent Participants .............................................353 III. CHANGING POLICY: TOWARD A COHERENT POSITION ON UNIVERSITY PATENT OWNERSHIP AND ENFORCEMENT ....353 A. Reframing University Understanding of Patents ............ 354 B. Inconsiderate Positions on Enforcement: What Universities Don’t Do Can Hurt Them ..................................................... 359 C. Develop Decisional Infrastructures Concerning Patent Enforcement .......................................................................... 361 1. Benefits .......................................................................362 2. Arguments Against Developing Decisional Infrastructures Concerning Patent Infringement Litigation Are Inapposite ...........................................364 3. Summary ....................................................................365 IV. CHANGING LAW: LET UNIVERSITIES INNOVATE WHILE LICENSEES LITIGATE.........................................................366 314 Published by Yale Law School Legal Scholarship Repository, 2013 3 Yale Journal of Law and Technology, Vol. 15 [2013], Iss. 2, Art. 1 INNOVATION AND LITIGATION: TENSIONS BETWEEN UNIVERSITIES AND PATENTS AND HOW TO FIX THEM A. Why Legislative Action Is Needed................. (...truncated)