"Are Universities Patent Trolls?"
Link to full paper: Stanford Public Law Working Paper No. 980776
The confluence of two significant developments in modern patent practice leads me to write a paper with such a provocative title. The first development is the rise of hold-up as a primary component of patent litigation and patent licensing. The second development in the last three decades is the massive surge in university patenting. At the confluence of these developments is a growing frustration on the part of industry with the role of universities as patent owners. Time and again, when I talk to people in a variety of industries, their view is that universities are the new patent trolls.
In this paper, I argue that Universities should take a broader view of their role in technology transfer. University technology transfer ought to have as its goal maximizing the social impact of technology, not merely maximizing the university's licensing revenue. Sometimes those goals will coincide with the university's short-term financial interests. Sometimes universities will maximize the impact of an invention on society by granting exclusive licenses for substantial revenue to a company that will take the invention and commercialize it. Sometimes, but not always. At other times a non-exclusive license, particularly on a basic enabling technology, will ultimately maximize the invention's impact on society by allowing a large number of people to commercialize in different areas, to try out different things and see if they work, and the like.
University policies might be made more nuanced than simply a choice between exclusive and nonexclusive licenses. For example, they might grant field-specific exclusivity, or exclusivity only for a limited term, or exclusivity only for commercial sales while exempting research, and they might condition continued exclusivity on achievement of certain dissemination goals. Finally, particularly in the software context, there are many circumstances in which the social impact of technology transfer is maximized either by the university not patenting at all or by granting licenses to those patents on a royalty-free basis to all comers.