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Patent Haters Take Notice! University Innovation Fuels Robust Economic Activity


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
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Posted: August 7, 2013 @ 7:40 am
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On Monday, August 5, 2013, the the Association of University Technology Managers (AUTM), a nonprofit association of academic technology transfer professionals, released the highlights of the AUTM U.S. Licensing Activity Survey: FY2012. The AUTM survey shares quantitative information about licensing activities at U.S. universities, hospitals and research institutions.The full report is scheduled for release at the end of the year.

The highlights of the survey reveal that University licensing and startup activity continued to see a robust increase during fiscal year 2012.

Institutions responding to the survey reported $36.8 billion in net product sales from licensed technologies in fiscal year 2012. In addition, startup companies formed by 70 institutions employed 15,741 full-time employees. This was the second year in which AUTM asked questions specifically targeted at ascertaining the economic impact of academic technology transfer.

For example, among other things the survey showed:

  • 22,150 total U.S. patent applications filed (+11.3%)
  • 14,224 new patent applications filed (+7.2%)
  • 5,145 issued U.S. patents (+9.5%)
  • 5,130 licenses executed (+4.7%)
  • 1,242 options executed (+7%)
  • 483 executed licenses containing equity (+16.1%)
  • Total license income: $2.6 billion (+6.8%)
  • 705 startup companies formed (+5.1%)
  • 4,002 startups still operating as of the end of FY2012 (+1.9%)

“The technology transfer profession is a multifaceted profession and challenging to quantify. However, the results of this survey clearly demonstrate that technology transfer professionals made significant contributions to the U.S. economy throughout the recession,” Says AUTM President Sean Flanigan, RTTP.

“When people think about job creation, they don’t typically think about universities, but the data show that universities substantially contribute to the creation of new jobs in this country,” adds Flanigan.

My Take….

At present patents and innovators are under attack by some Silicon Valley tech giants, the White House and members of Congress who are more interested in grandstanding than seeking meaningful legislative proposals that are likely to address litigation abuse.

Indeed, some Silicon Valley tech giants are not particularly fond of innovating and only begrudgingly use the patent system. Of course, these same companies will erroneously claim they are innovators, but by definition innovation means doing something new, not copying what others have done and ignoring their patent rights. These folks who think innovation is making a product rather than introducing something NEW, see patents as a necessary evil. This is extraordinarily short-sighted, but they have deep pockets for lobbying and getting their point of view in front of decision-makers. But the path they are following, which would lead to the weakening of patent rights and ultimately the destruction of the patent system, will make them vulnerable. If they succeed in weakening patent rights and perhaps destroying jurisdiction of the ITC, exactly how will they be able to stop the inevitable Chinese invasion? Shareholders in these short-sighted tech companies really ought to pay attention and inform themselves before it is to late! Those advocating for the weakening of patent rights and dismantling of the patent system, not only ignore the reality that patented innovation leads to economic development, but their ignorance will cause them to be unable to compete with cheaper imports once they have succeed.

The vilification of patent owners and innovators done using the rather sterilized term “non-practicing entities.” The term is extremely misleading because it assumes that no one is using the technology and the creators are just holding “real companies” hostage. But if real companies are being held hostage doesn’t that necessarily mean that the technology that is represented in the patent is being used? Of course it does. So the term “non practicing entity” is as least misleading if not intentionally used to deceive.

Patent owners and innovators held up for ridicule used to be called patent trolls. The trouble with using the term “patent troll” to vilify certain actors is that it won’t allow for the full agenda to be achieved. Those who vilify patent owners and innovation want the patent system to simply cease to exist. But the dismantling of the patent system couldn’t even be thinkable if the debate were about patent trolls. Even the masses who are swayed by sound-bites are not willing to label Universities, Hospitals, Research & Development companies or independent inventors as patent trolls. But increasingly the ire of the Silicon Valley tech giants is directed at Universities and other hard science, basic research R&D companies and independent inventors. But who would seriously refer to a University, or real people like Thomas Edison or the Wright Brothers, as a troll? It is much easier to win hearts and minds if you win the linguistic battle, and the term “patent troll” simply wouldn’t due.

I prefer to use the term patent troll, because if we are going to be perfectly honest the problem is with bad actors who abuse the litigation process. These individuals are easy to characterize as “trolls” because they are intentionally misusing the Federal Courts in a malicious way. But let’s be perfect clear. The problem we have is not a patent system problem, nor is it a patent problem, nor is it an innovator problem. It is a bad actor problem. So let’s not lose sight of the real issue. We SHOULD be talking about what to do with those who abuse the litigation process and are using issued patent as the assault weapon of choice.

The AUTM survey is quite illuminating. It sure doesn’t sound like Universities are “patent trolls,” does it? University technologies directly lead to the formation and continuous operation for thousands of companies.

But how could Universities ever be characterized as non-practicing entities in the first place? If we are going to be intellectually honest there is no way you can characterize Universities as non-practicing entities. University innovations have laid the foundation for thousands of startup companies since 1980; in fact well in excess of 7,000 startup companies have been formed. These startup companies are not just high-tech companies, they are the highest tech companies based on the most cutting edge research and innovation our country has to offer. These companies are not imaginary or mythical, but rather they are real, tangible and operating companies; they exist! These startup companies are also U.S. formed companies that are located in the U.S. and employ U.S. workers. Now that is a jobs plan if I ever saw one!

The President continues to campaign for an ill defined jobs program and Congress repeatedly says they want to focus on jobs but can’t even pass a budget. At this same time, when our leaders seem hell-bent on standing in the way of progress and economic growth, patented innovations made by U.S. Universities and Hospitals are growing ever more important to our economy.

Can you imagine what innovators could do if our leaders in Washington would just get out of the way? I’m not even asking for them to do anything particularly helpful, or even helpful at all. I have long since given up on the idea that government can do anything that is likely to succeed. But do they have to continue to harass those who are succeeding in spite of their best efforts?

Rather than vilifying innovators it is time for our leaders to pay attention. If they cannot or will not contribute to a better economic future they should at least step aside.

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Posted in: AUTM, Gene Quinn, IP News, IPWatchdog.com Articles, Patent Trolls, Patents, Technology & Innovation, Technology Transfer, Universities

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

 


5 comments
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  1. How is NPE a misleading term? Regardless of whether a real company is using the patented technology or not, an NPE is an entity that neither manufactures nor uses the patented technology. If nobody is actually using the patented technology, this necessarily implies that the patent owner is an NPE.

  2. Anonymous-

    So Apple is an NPE. Apple doesn’t manufacture anything. It is all manufactured overseas by others and then imported into the US. Brilliant.

    As clearly explained in the article, the term NPE is misleading (or really flat out deceiving) when used to describe Universities because the technology is being practiced and used to start companies, create jobs and contribute to economic activity. To pretend otherwise is simply ridiculous.

    -Gene

  3. I’m still out here looking for NFOSEs
    but haven’t found any

    (Non Full Of Sh8 Entities)

    Too many people are out there spouting nonsense noises: NPE, Innovation, Exceptionalism, etc. without doing any deep diver thinking into why those noises are FOS.

  4. step back,

    I largely agree with your post.

    However, it appears to me that a groundswell is developing and that the pendulum may have reached its nadir and may start moving in the opposite direction.

    If articles such as the recent 5-part series on “Trolls” can be republished in the technical and mainstream press, a full and open discussion may ensue and nonsense (and those who benefit from such nonsense) may be seen in full sunlight. Such would be welcome antiseptic.

  5. Anon,

    Scientific research has shown that “people” do not respond to reason and rational thinking.

    Therefore, republishing the article will do nothing to stop the ground swell.

    On the other hand, if we mount a counter culture school yard bully movement that calls out these Nonpractice Noise-making Naybobs and their troll touting minions, then we might flip the table on them that like to make nonsense noises (otherwise known as the FOS8Es –the Full Of Sh8 Entities).

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