Caltech’s infringement lawsuit against Apple, Broadcom is latest in university patent suit trend

Chess board with pawnThe California Institute of Technology (Caltech) is a private university in Pasadena, CA, offering undergraduate and graduate studies with a heavy emphasis on science and engineering. In 2015, Caltech spent more than $300 million on research initiatives and it has surpassed that $300 million mark in each year since 2010. The academic institution holds a patent portfolio of nearly 1,800 active U.S. patents, according to Innography’s patent portfolio analysis tools. Through early June, Caltech had earned 94 U.S. patents from the U.S. Patent and Trademark Office. Statistics released by the Intellectual Property Owners Association shows that in 2014, Caltech was tied for 196th overall among U.S. patent grant recipients; during that year, it earned 172 U.S. patents.

On May 26th, Caltech filed a patent infringement lawsuit in the U.S. District Court for the Central District of California which lists, among other defendants, fabless semiconductor Broadcom and consumer electronics developer Apple Inc. (NASDAQ:AAPL). Broadcom, which was acquired this February by Singapore-based Avago Technologies, and Apple are alleged to have infringed upon four patents granted to Caltech between 2006 and 2012. The lawsuit specifically mentions Apple’s use and sale of Wi-Fi products , which incorporate irregular repeat-accumulate/low-density parity-check (IRA/LDPC) encoders and decoders, technology patented by Caltech. Infringing products include the iPhone 5s, iPhone 6s, iPad Air and Apple Watch. Broadcom was a main supplier of semiconductor chips for wireless devices designed by Apple during the period of infringement.

According to multiple reports, the Caltech patents-in-suit are incorporated into both the 802.11n and 802.11ac wireless connectivity standards, which are used by Apple products to communicate digital information. The four patents, each of which is titled Serial Concatenation of Interleaved Convolutional Codes Forming Turbo-Like Codes, are U.S. Patent No. 7116710, U.S. Patent No. 7421032, U.S. Patent No. 7916781 and U.S. Patent No. 8284833. This series of patents protects methods and an apparatus for encoding and transmitting data messages with a simplified design, which can overcome the theoretical Shannon limit on the amount of data that can be carried on a channel.

This latest patent infringement lawsuit is part of a growing trend where universities find themselves forced to file suit in U.S. district courts in order to protect their patent rights. Last October, Apple was ordered to pay $234 million to the Wisconsin Alumni Research Foundation (WARF) for infringing a patent protecting a technology, which improved the performance of computer processors like those found in iPhones and iPads. Although that’s a sizable award, it was much reduced from the maximum $862.4 million for which Apple could have been liable in the case. In October 2009, WARF settled another patent infringement suit over the same processor patent in a case it filed against semiconductor chipmaker Intel (NASDAQ:INTC). During 2013, Boston University filed suit against dozens of tech companies for infringing patented material related to the production of blue light-emitting diodes (LEDs), including such major names as Microsoft (NASDAQ:MSFT), Sony (NYSE:SNE) and BlackBerry (NASDAQ:BBRY). Last September, Reuters reported that academic institutions file anywhere from 45 to 50 patent-related suits filed each year in the United States.


Whenever academic institutions are seen as a plaintiff at court, there are questions that arise as to why a school is diverting resources away from education activities to win a case against private enterprise. The answer is simple. They are forced to sue because those that infringe the patents refuse to take licenses on reasonable terms, they refuse to negotiate, and they refuse even to return calls. They choose to infringe with eyes wide open because they feel like they can. This is the face of what is called efficient infringement.

Recent overhauls to our country’s system of protecting intellectual property have forced universities and other patent owners into a corner where asserting their hard-earned rights are concerned. Last October, The New York Times reported on the rise of “efficient infringement” which has increased in the wake of the 2011 America Invents Act. Tools created by that legislation to challenge patent validity, such as at the USPTO through the Patent Trial and Appeal Board (PTAB), allow major companies with huge amounts of financial and legal resources to ignore reasonable licensing inquiries and to shift the legal burden onto the patent owner by challenging the patent’s validity. Hostility toward patents in the courts has reached new highs, with numerous cutting edge innovations dealing with software, biotechnology, medical diagnostics and personalized medicine all being routinely found patent ineligible. Rather than take patent licenses, or even engage in negotiations, many companies have calculated that they are better served by ignoring patent rights and openly infringing. These efficient infringers dare universities and other patent owners to sue.

As that New York Times article cited above notes, however, there has been a troubling pattern of associating universities with so-called “patent trolls,” an accusation which is based largely on the fact that, like other non-practicing entities (NPEs), universities don’t manufacture products but license their technologies to others. We’ve been debunking the idea that an academic institution could possibly be the same thing as a patent owner abusing their IP rights by extorting money from small businesses. In a June 2014 interview with then-Association of University Technology Managers (AUTM) president Jane Muir, explained why universities are not patent trolls, saying:

[U]niversities are not the next patent troll because at the end of the day, university tech transfer offices were put into place to ensure that the new discoveries that happen in the research laboratories ultimately get out into the marketplace by way of product and services that improve the human condition. The big difference is with patent trolls. They’re not interested in commercializing discoveries. They’re interested in using those patents to sue legitimate companies who do want to move those products into the market. From the commercialization standpoint that really is the fundamental difference. Patent trolls have no real interest in commercializing.

Indeed, universities work to push as much of their patented innovation into the market so that it will be beneficial to the public. That was the very purpose of Bayh-Dole. Prior to Bayh-Dole, university technology would lay stagnant and not benefit anyone. The government gave universities control of their patents so they could license the technology out and bring revenue in to continue further research. When efficient infringers choose to ignore patent rights and openly infringe they are essentially stealing rights and frustrating the Congressional intent.

Leaving the misguided patent troll conflation argument aside, some tend to raise their eyebrows when they see universities wading into the muck of patent infringement suits, even when those eyes are looking at the situation from the perspective of academia. Reuters reported on an Iowa Law Review study that will be published later this year, which was penned by faculty from both Stanford University and UC Hastings College of the Law. Reuters published a quote from the upcoming study: “The more recent university practice of suing or demanding licenses from existing companies appears much less likely to be driving innovation.”

While we don’t have the full study to critique yet, it must be noted that whether or not university infringement suits drives innovation misses the point entirely. It is no fault of the universities that are forced to sue willful and knowing infringers that litigation is a complete waste of time. The infringers who are engaging in efficient infringement are the ones to blame for the fact that time and money spent in courtrooms fighting over their infringement is distraction them from innovating. Furthermore, efficient infringers who take university technology disrupt the innovation cycle and are to blame for the fact that universities are not innovating as much as they could and should. Had these efficient infringers taken a license to the technology rather than ignored the patent grant in the first place there would have been no wasted time and money on lawyers and legal process, universities would have been paid a reasonable royalty for what was taken and those funds would be reinvested into research and educational programs. The efficient infringers are the ones who need to look in the mirror, not the other way around.

Obviously, patent infringement lawsuits are not filed to drive innovation, they’re filed to protect the innovations made so that fair payments can be received from those who find it more convenient to ignore patent rights and choose to infringe with their eyes wide open. Ignoring license overtures and forcing patent owners to sue is rampant. Getting free riders like Apple, Broadcom and others to pay for what they take so that it can be reinvested into further innovation and educational opportunities is why universities find it necessary to file patent infringement lawsuits. Of course, fairly dealing with university patent owners would be far preferable for everyone involved, but don’t blame universities when the efficient infringers simply circular file inquiries and refuse to return phone calls. Simply put, when an infringer doesn’t care to license at all, what is a patent owner to do?

Much of the media coverage surrounding the recent Caltech lawsuit seems to avoid this idea that Caltech is acting as a patent troll in this case. Still, in light of recent Congressional activities on attempting to pass patent reform, it’s important to note how legislation passed in the past few years has backed universities and other patent owners into a corner as they try to assert their legitimate property rights. Meanwhile, Congress, the judicial system and the wider public continue to flounder helplessly in the patent troll and patent system reform debates almost completely ignorant of the plight of patent owners.

Perhaps in the wake of the Supreme Court’s decision in Halo Electronics v. Pulse Electronics, which now gives district courts discretion to award up to triple damages in certain patent infringement situations. Indeed, the Supreme Court explained that those cases where enhanced damages have been authorized and could at the discretion of the district courts be awarded include cases that can be characterized as “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.” After Halo Electronics winning triple damages has become much easier and anyone engaging in efficient infringement should be worried. The actions of the efficient infringers are undeniably deliberate, conscious, flagrant and are absolutely characteristic of the actions of classic pirate activity. They take because they can.

How long before an efficient infringer gets tagged with treble damages for engaging in egregious conduct associated with patent infringement? Not soon enough!

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Gene Quinn

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 43 Comments comments.

  1. xtian June 14, 2016 8:55 am

    Universities are trolls. They are non-practicing entities whose mission is to out-license or sue. That’s why tech transfer office are set up. University tech transfer office are just like NPE’s. If you want another example of a university troll: http://signicent.com/patents-a-potential-source-of-revenue-for-cash-strapped-universities/

    In response to the AUTM quote – Who ever said NPE’s aren’t interested in bringing a product to market to “improve the human condition?” The original owner from which the NPE purchased the patent surely thought that they were going to bring a product to market, but found themselves too small to influence the efficient infringer. So, when that dream failed, the original patent owner can at least recover part of their investment by off-loading its patent to a NPE who can front the money to sue the efficient infringer.

    Just because the NPE is a different party than the original patent owner why do we demonize their otherwise lawful actions of asserting granted patents?

    I say universities are trolls because trying to justify their actions when compared to the actions of an NPE is a distinction without a difference. I see the university tech transfer office as an equivalent of an NPE. If the university professor is not successful in getting a third party to license his/her patents (like the original patent owner), then the only thing the university can do to recover the investment costs is to “transfer” the patent to the tech transfer office (original owner selling their patents to an NPE) so that it can sue. Again, Caltech QED.

    Think of this potential hypothetical, what happens when a university sells/licenses its patents to an NPE in hopes of recovering some monetary amount from its patents?

  2. Gene Quinn June 14, 2016 12:11 pm

    xtian-

    Obviously you are completely uninformed. Universities are not trolls. Only one who is truly ignorant would make such an utterly absurd statement.

    You claim that universities are trolls because their actions are no different than a troll, which shows that you clearly have no knowledge of the industry or issues. Universities invent the early stage technologies that they patent. Patent trolls acquire the patents they own and then use extortion tactics to seek extortion-like settlements. Patent trolls don’t innovate. Universities innovate. Universities also reinvest the money from licensing into further research and development.

    Funny how you seem perfectly fine with efficient infringement, which is willful stealing of rights.

    In short, your comment demonstrates an astonishing ignorance. In the future when you know so little about a topic you should really refrain from commenting and proving that you are, in fact, clueless.

    -Gene

  3. Edward Heller June 14, 2016 1:31 pm

    Gene, I agree that Halo v. Pulse throws a monkey wrench in to the smooth workings of the efficient infringement model that relies on the lack of any penalties for refusing to license.

  4. xtian June 14, 2016 1:46 pm

    Gene – I appear to have struck a nerve.

    I’ll respond to you substantive comments, not your ad hominem attacks.

    “Universities invent the early stage technologies that they patent.Patent trolls acquire the patents they own and…” Indeed. Is it wrong to acquire patents? Should all companies not be allowed to acquire patents? Are you implying that one must “work” their patent in order to assert it? What it your implication here?

    “…and then [the trolls] use extortion tactics to seek extortion-like settlements”
    What is CALtech doing? Did they not approach Apple for a license before they sued? Or did they just sue Apple outright? What is wrong with seeking a license?

    “Patent trolls don’t innovate. Universities innovate” Partially true. I don’t disagree with your second sentence. Trolls definitely do innovate. They have created stream of commerce around an intangible asset – a market place that hadn’t existed before. That’s innovation. What non-practicing patent entities don’t do is file patent applications. They buy them.

    “Universities also reinvest the money from licensing into further research and development.” A non sequitur. Why does it matter what the money is used for and in all your interview, have you ever asked a university if they do indeed reinvest their licensing fees into R&D or does it just go to the general coffers. So, does the university have to reinvest 100% of its licensee revenue in R&D? What if the university only put $0.25 of every license fee dollar back to R&D and the other $0.75 goes to the athletics department? Is that still o.k.? What if it were only $0.01? How much $ needs to be reinvested in R&D to be acceptable?

    Finally, you misinterpret my entire post. “Funny how you seem perfectly fine with efficient infringement, which is willful stealing of rights.” I never said I was fine with efficient infringement. If an entity thinks that it can efficiently infringe, then it assumes the risk that the patent owner will not sue and the amount the patentee is asking for or will be rewarded by a court will be lower than fees the patentee originally asked for. In the infringement case, the court should consider this when awarding damages, and enhance them if necessary. I am neither for or against “efficient” infringement. It’s a business/risk assessment call.

    I do agree with you that the university’s patent rights are legitimate. They have a right to patent their inventions, and to assert those rights when infringers do not respect them. Where we disagree is – Why isn’t a business (in your words, trolls) allowed to do the same thing? The original patent was obtained legitimately. The company bought it from the inventor and now decides to license it or assert it against infringers. Why do we demonize the actions of these companies, but not that of a university? My point is that the entity doing the assertion should be irrelevant if the underlying patent and actions in asserting it are lawful.

    Here’s another example of bad behavior that could be used to justify the pejorative troll. Notice the troll didn’t sue until the asset was owned by a major pharma (product was on the market for 10 years and owned by 2 different companies before the troll determined that the sued-owner of the product had enough money to pay or would pay just to get rid of the nuisance license request). Also notice that the troll didn’t even plead for an injunction, just royalties. Oh, by the way, the troll in this case was MIT. http://www.massdevice.com/mit-and-childrens-medical-sue-shire-over-dermagraft-diabetic-foot-ulcer-treatment/

    Having a differing view on a topic is not ignorance.

  5. Edward Heller June 14, 2016 3:53 pm

    xtian, on the MIT case, I am not sure of the facts here.

    It says that DermaGraft began selling in the US in 2007 and that the MIT lawsuit was filed in late 2012 or early 2013. There may be laches if DermaGraft had been on notice very early. Otherwise, it looks like MIT filed about 6 years after DermaGraft went to market.

    Now as to why MIT did not promptly file suit? Those facts are not stated. Did it even know of the infringement?

    Aside from that, if MIT-patented technology is used by another, just how is it that MIT has no right to enforce at all? That is the implication of you’re calling MIT a troll.

  6. xtian June 14, 2016 4:05 pm

    Ed – How silly is my implication that MIT can’t assert their patents? Its pretty far-fetched. So would we have a different opinion if MIT weren’t a university, but a company, i.e., a NPE troll?

  7. Edward Heller June 14, 2016 4:19 pm

    xtian, I associate the word troll with patent misuse or litigation abuse. In either case, I think the equities of the situation should result in the patents being unenforceable. When I hear the word troll, I think of Lemelson, who was the king of patent prosecution abuse/laches. The equities of his misconduct eventually cause up to him when the Federal Circuit held his patents to be unenforceable.

    But ordinary patent owners have the legal right to go into court and obtain damages. That activity is neither illegal, immoral, an abuse or an activity that must be quelled. What IS both illegal and immoral is the notion that one has a right to infringe. That right is implied when one suffers no penalty at all for willful defiance of a patent owner’s legitimate demands to pay a reasonable royalty or to cease and deist. But, because of Seagate, until yesterday, infringers did not have to stop infringing or to pay a license fee, because there was simply no penalty for intransigence.

  8. Night Writer June 14, 2016 4:28 pm

    Funny how powerful labeling is. Troll has advanced the anti-patent judicial activists agenda beyond what one would think possible. It is like a racial epithet. So powerful and harmful, and once attached to a group so difficult to undo.

    I have noticed that the negative connotations of troll are not as strong as they used to be.

    Weird.

  9. Night Writer June 14, 2016 4:40 pm

    It is also weird that the anti-patent judicial activists like Lemley and K Street have avoided being labeled and have avoided being tainted for their activism. This is so weird because the anti-patent movement is so clearly being driven by companies like Google at the expense of the small company and the rest of us. It is a lot like the financial industry where people like Lemley “just know” ’cause, ’cause, ’cause, that patents are bad.

    My guess is that in 20 years people like Lemley will be looked at as the great destroyers of our legal system with judicial activism at the expense of innovation.

    People should spend some time to understand what Google is up to. They say that all innovation can be taken care of by the big corporations with there massive billions in the bank. And all that Congress has to do is get out of their way and all will be good in the Google world we live in. They will insure that innovation keeps going strong.

  10. Edward Heller June 14, 2016 4:41 pm

    May I add that the labeling of patent holders who own valid patents and who seek royalties (usually with revenue sharing with the inventors) as trolls is a tool used by big business to effectively insulate themselves from patents owned by small inventors/startups and universities. The result of their efforts of the last dozen years or so are IPRs, litigation “reforms,” eBay, Medimmune, Seagate, and a general attitude that patents owned by other than an operating entities are little better than toilet paper to be ignored.

    Halo v. Pulse is a small step in the right direction. Hopefully, the Supremes take MCM Portfolio LLC v. Hewlett-Packard and draw a line through IPRs as well.

  11. Anon June 14, 2016 5:53 pm

    I was following your post at 10 up until I arrived at the point of “and draw a line through IPRs as well.”

    I am curious Mr. Heller – when did the Supreme Court obtain the legislative power of the equivalent of a line item veto?

    Do you really mean what you said, or do you mean something else?

  12. Edward Heller June 14, 2016 6:04 pm

    Anon, don’t you find it interesting that no one but you has raised the severability issue? The government has made no argument. HP has made no argument. And HP (to date) has received no amicus support. As well, neither the PTAB nor Federal Circuit sua sponte raised the issue.

    You might consider filing your own brief on this issue. It is due June 30.

  13. Anon June 14, 2016 7:22 pm

    No one is raising it does not mean that the inevitable will not happen.

    Until that day, I STILL look for someone, somewhere (anyone, anywhere) to put forth an alternative legally cogent result that differs from what I have postulated.

    I was thinking that perhaps you has something in mind with your comment – rather than perhaps being merely glib.

    Do you have a legally cogent alternative?

  14. Curious June 14, 2016 9:33 pm

    Universities are not trolls. Only one who is truly ignorant would make such an utterly absurd statement.
    It is not an ignorant statement — it is a statement born of the times. You, Gene, have your definition of “troll.” Others, however, have different definitions.

    In fact, I recently ran across the following definition of for troll: “Trolls, in the patois of the patent community, are entities that hold patents for the primary purpose of enforcing them against alleged infringers.” This definition fits how I have observed this term being frequently used: if you are a defendant in a patent lawsuit, then the plaintiff is a patent troll — no other qualifications needed. Turning to universities, the primary purpose of the universities in holding patents is to enforce them. Licensing a patent is merely permitting somebody who would be infringing the patent to do so legally. Whether the licensing occurs before or after the activity covered by the claims is initiated shouldn’t make much of a difference.

    Getting back to the definition I reproduced above, ANYBODY and EVERYBODY who enforces a patent against an infringer qualifies as a patent troll under this definition. Where did I find this definition? In the majority opinion of the very recently decided Supreme Court case of Halo Electronics v. Pulse Electronics.

    Don’t get me wrong, I don’t agree with the Supreme Court’s definition for the term “patent troll.” However, before we can go about changing how people interpret that phrase, we must first acknowledge that (many) people believe that phrase has a different meaning than the meaning we attach to the phrase “patent troll.” We must first acknowledge the problem before we can address it.

  15. Gene Quinn June 14, 2016 9:35 pm

    xtian-

    You say: “I’ll respond to you substantive comments, not your ad hominem attacks.”

    Calling you ignorant is not an ad hominem attack. You clearly do not know what you are talking about, which is why I said only someone who is completely ignorant could ever say the things you said. Look up the word “ignorant.” It accurately characterizes your earlier comment and is not an ad hominem attack.

    As for this comment here, I’m really not sure how to characterize it. Obviously you aren’t interested in an honest conversation. You take issue with my saying that universities innovate, calling that statement only partially true. Obviously, universities innovate and you saying that it is only partially true to say they innovate is nothing short of asinine.

    Then you say my pointing out that universities reinvest what they collect into innovation is a non sequitur. You should look up the definition of such big words as non sequitur and ad hominem before you use them improperly. You are dead wrong when you say that universities are no different than patent trolls and I provide examples why, including that universities innovate and they reinvest in innovation and you then claim that is irrelevant.

    You are right to say that having a different view on a topic does not make you ignorant, but your comments show that your views are based on falsehoods and lies. That is why it is 100% accurate to say that you are ignorant on this topic.

    -Gene

  16. Night Writer June 15, 2016 10:17 am

    Reality is that all the studies I’ve seen that are real–i.e. not from unethical law professors, but business type of people–say that the patent reforms are not good. They are hurting innovation and the pain is most felt with the small inventor. I think the law professors are unconscionable to push their unethical papers because they think patents are bad. Example after example illustrates that law journals are worse than a blog post and that law professors have no ethics and often are after other money, e.g., Lemley earns more from his litigation work than being a law professor and he has billed himself as the man that can take down those “abstract” software patents. To my mind, worse than bank robbers.

  17. Xtian June 15, 2016 10:42 am

    Ignorance: the lack of knowledge or awareness in general; uneducated or unsophisticated. You and I are neither of these. So let’s have a discussion on the merits.

    I quoted two sentences from you: “(1)Patent trolls don’t innovate. (2) Universities innovate.” I concluded that these statements were not both true, so I said the phrase is partially true. I agreed that Universities innovate when I said, “I don’t disagree with your second sentence.” But, I disagreed that trolls don’t innovate and gave my reasoning.

    OK, maybe “non sequitur was a poor choice of words. You are right. Irrelevant is a better, and here’s my reasoning. I believe that any entity (university or company) should be allowed to assert valid patent rights against any infrigner and do whatever it wants with the monetary proceeds it receives. To me, the ability to assert a patent should not be based upon what the asserting entity will do with any monetary proceeds from said assertion. Why? If the spoils of assertion are included as a factor in the ability of an entity to assert its patent, I think we run the risk of deciding what is a moral use of money. My questions as to how much of each dollar needs to be reinvested was an attempt to exemplify how much disagreement we (royal we) would have as to the question of “this use of the money is justified but this other use is not.” Would it change the situation if an NPE donated1%, 5%, 15% of its proceeds to a university, charity, Non-profit organization? Would it matter if the NPE distributed its funds to its shareholders?

    To continue this train of thought, I am interested in why you believe it is important to see where the money goes when determining if one’s actions make one a troll or not. What test would we use? Should we advocate that courts ask patent plaintiffs what they will do with the award if they win? Wouldn’t this be a factor in determining the amount of damages?

    Anyway, after a bit of searching, MIT actually posts its policy on its distribution of licencing fees. It’s a little hard to follow, but on first blush, it appears that the tech transfer office is “made whole” before any money is distributed. Discussion is welcome. http://tlo.mit.edu/community/policies/part4

    Hopefully my ignorance isn’t showing.

  18. Edward Heller June 15, 2016 12:04 pm

    Curious,“Trolls, in the patois of the patent community, are entities that hold patents for the primary purpose of enforcing them against alleged infringers,” does not translate into a Supreme Court definition, and it does not say that “ANYBODY and EVERYBODY who enforces a patent against an infringer qualifies as a patent troll under this definition.”

    That said, the definition is plainly harmful in that patent holders have a legal right to enforce; and every example of bad behavior given to congress involves some sort of abuse of process, not simple enforcement.

    Nevertheless, the definition targets “enforcement firms,” which are the vehicle by which the small inventor, the startup or the can actually enforce a patent. Think contingent fee lawyer — the long term anathema of big business — who allow the little guy access to the courts in the first place. The attack on the so-called troll, the way it is now framed, is not directed at abuse, but whether the small inventor, the startup or universities can even participate in the patent system.

  19. Brian Wright June 15, 2016 12:04 pm

    Curious wrote:

    “Turning to universities, the primary purpose of the universities in holding patents is to enforce them.”

    Absolutely incorrect. The primary purpose of universities holding patents is to enable technology commercialization. Period.

  20. Brian Wright June 15, 2016 12:24 pm

    I don’t think anyone here is arguing that patent holders don’t have a right to assert their patents. That’s a strawman argument.

    The key discussion is: “What is a troll”? Even taking the definition from Halo (“Trolls, in the patois of the patent community, are entities that hold patents for the primary purpose of enforcing them against alleged infringers”), I would completely disagree that this puts anyone that enforces a patent under this definition. Just because someone does enforce a patent doesn’t mean that’s the PRIMARY purpose of holding the patents. I mean, I’ve used my car to teach my daughter how to drive, but that’s not the primary purpose of my owning a car. So I can’t make such a jump.

    Companies that bring products to market hold patents for the primary purpose of protecting their market share. Is enforcement a possibility there? Of course. But most companies would prefer the threat of enforcement (and/or the general respect for IP rights) to be sufficient, without ever having to go to court. They don’t want any infringers of any kind.

    Universities hold patents for the primary purpose of enabling commercialization, but encouraging investment into technologies that would otherwise be unfundable. Does there need to be a willingness by a university (or a licensee) to enforce said patents? Yes. But, again, the strong preference is to avoid litigation, and certainly to prevent infringement in the first place.

    NPEs primary purpose of holding patents is to enforce them. They don’t have interest in patents that don’t already cover products (unlike the other two categories). Without pre-existing infringement by a third party, they have no business model.

    Under the Halo definition, NPEs are trolls and the others are not. Perhaps there is a better definition for trolls here: those that rely on pre-existing third party infringement for revenue.

    Again, NPEs as a concept should be legal. But some of their abusive tactics need to be curbed. Some progress on that front has been made, but more is needed.

  21. Gene Quinn June 15, 2016 12:45 pm

    xtian-

    The word “ignorant” is a perfect description for your comments. As you quote in your latest comment, it means a lack of knowledge or general awareness. Your comments clearly evidence that you lack knowledge and are at least generally unaware about this topic; you are ignorant.

    Patent trolls do not innovate. There really cannot be any serious debate on that topic unless you are going to take the intellectually bankrupt position that all patent owners and inventors are patent trolls, which would be completely asinine. Not all patent owners are patent trolls, and non-practicing entities are not patent trolls either. If you disagree and think NPEs are synonymous with patent trolls that would mean that not only are universities patent trolls, but so are many segments of General Electric, IBM, Microsoft, Qualcomm, Texas Instruments and virtually every top patenting and innovating corporation.

    A patent troll is one who engages in malicious behavior. Those who are patent trolls nearly universally purchase patents and then send extortion like letters.

    You ask why I bring up what universities do with the money? Seriously? I brought that up in order to prove you wrong. Earlier you said that universities were no different from patent trolls. That statement is false, not to mention ignorant (see our earlier discussions). So I point out a significant difference to prove you wrong and then for some reason you think my demonstrating you are factually wrong raises some interesting question about my position. NO, it raised a question about the truth of what you asserted.

    You paint with a broad brush, say things that are clearly false on their face, twist what is said that proves you wrong, and then bring everything back to what seems to be a personal gripe with MIT. If you have a problem with MIT why don’t you actually complain about MIT rather than making the absurd and factually incorrect assertion that universities are no different than patent trolls.

    -Gene

  22. Gene Quinn June 15, 2016 12:50 pm

    Curious, Brian Wright-

    I agree with Brian 100%. The purpose of university technology transfer is the commercialization of technology. Owning patent rights facilitates this because without exclusive rights behind a for-profit endeavor it is either extremely difficult or virtually impossible to get a for-profit entity to take the research done by a university and translate it into commercialization research and ultimately products and services.

    Universities don’t want to sue for patent infringement. They want to license. Universities I’m familiar with sue only as an absolute last resort when they are unable to negotiate a license and a for-profit entity is stealing the innovation. In that situation what are they to do? Many times there will be other for-profit entities that have agreed to a license. Those companies that respect the patent rights of the university are at a disadvantage compared with the stealing company, and the university is not getting the revenue they are entitled to receive (i.e., as determined by Congress under Bayh-Dole).

    It is time we stop thinking of the stealing companies as the victims of universities. The victims are the universities and the for-profit companies that respect rights and the system.

    -Gene

  23. Edward Heller June 15, 2016 1:11 pm

    “Patent trolls do not innovate.”

    We need a conversation about that.

    Inventors innovate. Thus, patents. If they are impecunious, they need help — to build a business, to license, to enforce. A NPE may have tried to innovate, but failed due to piracy or efficient infringement. Without the opportunity to enforce, the small entity, the university, realistically do not have patents and their initial efforts to innovate are foolhardy at best.

    Rights without enforcement are no rights at all.

    The only legitimate definition of a troll is accorded to the likes of Lemelson who has abused the process in some fashion, or lawfirms or the like that have such iffy patents that they do not ever want to enforce — to actually go into court.

    Thus any entity that actually goes to court to enforce cannot be a troll, and the existence of firms that permit enforcement are entirely the point of the patent system. They permit the small inventor, the startup or the university to engage in research in the first place.

  24. Curious June 15, 2016 1:36 pm

    does not translate into a Supreme Court definition, and it does not say that “ANYBODY and EVERYBODY who enforces a patent against an infringer qualifies as a patent troll under this definition.”
    Explain why not. What entity, that asserts their patents, doesn’t qualify as a patent troll under the Supreme Court’s characterization?

    Absolutely incorrect. The primary purpose of universities holding patents is to enable technology commercialization. Period.
    Commercialization of technology can be accomplished without patents. We wouldn’t have patent infringement lawsuits if some company (who didn’t own the patent) didn’t commercialized the technology covered by the patent.

    Universities aren’t using patents for defensive purposes. They aren’t using them to get better terms in a technology cross-licensing deal. They don’t need them to publish their research. The purpose for a university to get a patent is to make money off of it — and there is NOTHING wrong with that.

    Moreover, even if patents aided commercialization of technology by allowing one company to commercialize the technology while preventing others from doing the same, the “preventing” part is accomplished by enforcing the patent. As such, your “commercialization” necessarily involves enforcement (or a threat thereof).

  25. Gene Quinn June 15, 2016 1:40 pm

    Edward Heller-

    I realize Lemelson is viewed as an evil, bad actor, but he was an innovator. Lemelson also sued people in court to enforce his rights. Did he abuse the process? I don’t think so. Was his use of the process that was available odious? To many (if not most) the answer is yes. The length of patent term in the U.S. and many of the rules there associated were changed because of Lemelson and the desire to get rid of submarine patents. At the time he engaged in that course of conduct it was allowed. I don’t believe he did anything that was illegal or not specifically authorized.

    Patent trolls are bad actors. Today those bad actors threaten to sue without knowing whether the person they are threatening is even infringing, they have no intention of suing, and they offer to settle for hundreds of dollars sometimes, thousands other times, but for amounts that are akin to extortion.

    The industry would do well to focus on those bad actors that everyone can agree are bad actors. Those that threaten lawsuits without having done any due diligence and without any intention of suing and only to scare unsophisticated small businesses and individuals into paying.

    -Gene

  26. Curious June 15, 2016 1:43 pm

    Companies that bring products to market hold patents for the primary purpose of protecting their market share.
    How is protection accomplished? Via enforcement.

    the strong preference is to avoid litigation, and certainly to prevent infringement in the first place
    Welcome to the new world — if you don’t enforce your patents, they WILL get walked all over (unless your technology is worthless). Companies have little fear of enforcement these days. Why would I license technology when I know there is little chance that I’ll be sued? Why would I license technology that the patentee is unlikely to prevent my competitors from using the technology without a license.

    Under the Halo definition, NPEs are trolls and the others are not.
    I saw no distinction between practicing and non-practicing entities and the Supreme Court’s characterization of patent troll.

  27. Curious June 15, 2016 2:13 pm

    because without exclusive rights behind a for-profit endeavor it is either extremely difficult or virtually impossible … Universities I’m familiar with sue only as an absolute last resort
    How can a licensee have a reasonable expectation of “exclusive rights” if the patent holder (i.e., the university) has shown (in the past) an unwillingness to sue infringers?

    There is nothing wrong with universities enforcing their patents. There is nothing wrong with an inventor enforcing his/her patent. There is nothing wrong with an NPE enforcing the patent they acquired (or developed in house). These rights are enshrined in the US Constitution and 35 U.S.C. However, while I think there is nothing wrong with these activities (i.e., enforcement), this isn’t to say that some/many people (but not me) will call ALL of them trolls.

    This is the state of the world we live in. Instead of having nuanced conversations about what is right or wrong, we’ll give the object of our derision a broad-brushed label (e.g., a “politically-correct liberal” or a “fascist conservative”) and conclude that we are correct. Once the anti-patent side found a winning label (i.e., “patent troll”), they’ve abandoned nuance and used this label to paint anybody they don’t like (i.e., anybody asserting a patent). You can see the same thing happening with the courts. If you looked at the Supreme Court cases (e.g., Benson) about “abstract ideas” you see the nuanced language of “fundamental truth; an original cause, a motive” or “preemption” or “fundamental economic practice long prevalent” or “scientific truth.” However, the Federal Circuit has abandoned this nuanced language in favor of a much more expansive definition.

    My underlying point is that just like we need to redefine (into a more reasonable terms) what is meant by “abstract idea,” we need to redefine what is meant by “patent troll.” However, before we do that, we need to acknowledge that others are defining these terms (rightly or wrongly) much broader than how we would define these terms.

  28. Edward Heller June 15, 2016 2:53 pm

    Gene, regarding Lemelson, the Federal Circuit held that he had abused the process in Symbol Technologies, Inc. v. Lemelson Medical, 277 F.3d 1361 (Fed. Cir. 2002); Symbol Techs., Inc. v. Lemelson Med. Educ. & Res. Found., 301 F. Supp. 2d 1147 (D. Nev. 2004); Symbol Technologies, Inc. v. Lemelson Medical, Education & Research Foundation, LP, 429 F.3d 1051 (Fed. Cir. 2005); Symbol Technologies v. Lemelson Medical, 422 F.3d 1378 (Fed. Cir. 2005)

    To the extent that you further limit the definition of troll to those who actually abuse the litigation process, then we are in agreement. Status, such as being an inventor without a product, a startup that has gone bust, or a University that only licenses, or their agents and attorneys, alone is not sufficient.

  29. Edward Heller June 15, 2016 2:54 pm

    There is no Supreme Court definition, Curious.

  30. Brian Wright June 15, 2016 3:03 pm

    ” ‘Companies that bring products to market hold patents for the primary purpose of protecting their market share.’
    How is protection accomplished? Via enforcement.”

    Or threat of enforcement. Or third party respect of IP rights. So no, not all protection is done through enforcement. Without the possibility of enforcement, it’s effectively worthless (e.g., China), but many things operate under the realm of IP protection without the need for actual enforcement.

  31. Edward Heller June 15, 2016 3:33 pm

    Brian, let us underscore your point that a right without a remedy, the ability to enforce, is not a right at all. Without a functioning legal system, a patent only discloses technology at the expense of the inventor.

    The effort by efficient infringer lobby to strip any NPE of the ability to enforce, regardless of abuse of process, is an effort to deny patent rights to any but operating entities. This effort would deny the patent system to the small inventor who has no takers, the startup that fails, or the university that never makes and sells.

  32. Brian Wright June 15, 2016 3:43 pm

    Again, I don’t think anyone here is advocating revoking a group’s right to enforce.

  33. Edward Heller June 15, 2016 3:46 pm

    Brian, you may not be talking about that, and maybe no one here is talking about that, but let me assure you that the effect of IPRs and other such reforms is to make the expense and risk of enforcement so great as to effectively deny the patent system to all but the going concern, or the wealthy.

  34. Xtian June 15, 2016 4:42 pm

    Gene – “A patent troll is one who engages in malicious behavior.”

    Now we are getting somewhere. As Curious points out, the definition of a Troll is really important, and we can see that play out in the comments to the article of Mr. Means.

    Between you and me, we now appear to agree on a lot more than I originally thought. You said: “Not all patent owners are patent trolls, and non-practicing entities are not patent trolls either.” You emphasize that it is the actions, i.e., malicious behavior, of the entity that make it a troll.

    Now we are having a discussion. So let’s discuss what that malicious behavior is that makes one a troll. Is it sending blanket demand letters to multiple companies? (I believe ValuationGuy in another thread commented on this). Is it asking for a nominal/nuisance license fee? How does one legitimize the ask so that it is not malicious behavior? These are legitimate discussion points.

    BTW – I have no grip with MIT. I was using that University to try to show that the main stream usage/definition of “troll” would encapsulate the actions of this university. However, now that we have gotten down to what you believe a patent troll is – an entity that engages in malicious behavior (not just an entity that is an NPE), we can clearly see that some NPE’s are not trolls and some universities could be trolls (if they behave maliciously).

    Ignorance is bliss.

  35. Anon June 15, 2016 5:14 pm

    Let us all just NOT use the term.

    See my post on a more current thread.

  36. Ely Erlich June 16, 2016 2:03 am

    Non-US patent attorney opinion: would a university asserting it’s patent in court be a topic of discussion anywhere in the world outside of the US?

  37. Ely Erlich June 16, 2016 2:05 am

    Excuse me – the “opinion” should be apparent from the question asked…

  38. John Willkie June 16, 2016 4:40 am

    Gene & Steve;

    You guys do a great job in general covering IPR suits, but I think in addressing the bigger picture, you left me ignorant. Ignorant in the sense of being able to read the pleading papers. The question I was looking for the answer to was whether Caltech participated in the IEEE standards-setting process for the 802.x standards, and whether their patenting preceded the standards-setting proceedings.

    If they didn’t participate, and patented the technology after the technology was put in the standard, I was wondering how they were first. These important considerations are important to FRAND considerations, and — ahem — whether an entity is a troll. (I use that term only in a very narrow sense in FRAND matters where the patenting entity filed their “invention” after it was put into a standard.) Now, I’m going to have to go looking without even a case number. A link to the court where the case was filed tends to not be helpful in such a quest.

    Now, I’m going

  39. Curious June 16, 2016 11:42 am

    Or threat of enforcement. Or third party respect of IP rights. So no, not all protection is done through enforcement.
    Do you have children? I do, and I have seen other parents deal with their children. With children, a threat of enforcement not followed up by actual enforcement is little threat. Children figure out quite quickly that they can ignore threats by people that don’t enforce those threats.

    third party respect of IP rights
    Maybe that worked in the past, but sophisticated parties these days have little respect for IP rights. The term “efficient infringement” is born of that lack of respect.

    There is no Supreme Court definition, Curious.
    There is no
    official definition, but when the Supreme Court writes (without criticism) that this is how the patent community uses this term, I’m going to take it for as close to a definition as you’ll ever get out of the Supreme Court. You may try to nuance this away as not being a dyed-in-the-wood definition, but that only works for those who care about nuance (not many these days).

  40. Edward Heller June 16, 2016 11:49 am

    Curious, your point is made. But given the Supreme Court definition, we need to point out that the definition is overbroad in that it includes both good actors and not so good actors, those that the patent system needs to function effectively, and those who abuse the patent system; and we need to further point out that the people who use the term so broadly, a term that includes both good actors and bad actors, do so intentionally.

  41. Curious June 16, 2016 1:26 pm

    we need to point out that the definition is overbroad in that it includes both good actors and not so good actors, those that the patent system needs to function effectively, and those who abuse the patent system; and we need to further point out that the people who use the term so broadly, a term that includes both good actors and bad actors, do so intentionally
    Bingo

    We can never make the other side from intentionally misusing that phrase. The term “patent troll” has a lot of negative baggage associated with it so they are going to continue to milk that for all its worth. However, we need make sure that those who misuse the term are called out for their misuse.

  42. Anon June 16, 2016 5:58 pm

    With all due respect, intentional misuse of terms is something that Mr. Heller is quite guilty of.

    So while you appear to be on the “right side” of this position, your inconsistency is more than a little glaring, and your persuasiveness suffers tremendously for that inconsistency.

  43. staff July 18, 2016 4:41 pm

    ‘troubling pattern of associating universities with so-called “patent trolls,”…’

    Those who play to this blatant Chinese style propaganda of ‘trolls’ by large multinational invention thieves do inventors and other small entities an injustice. The truth is, to infringers anyone who sues them for infringement is a ‘troll’. Playing to this rhetoric only spreads confusion and does further damage to the patent system and the rights of inventors. Don’t believe and propagate the lies of thieves.

    For example, one ‘troll’ definition is a plaintiff in a patent suit that does not themselves commercialize. That often includes universities -no doubt. But of course universities and many inventors often lack the resources to commercialize and since the Ebay SCOTUS decision we are often unable to obtain injunctions to stop infringement so inventors and others have no fair chance at commercializing -not with far larger, better funded infringers using our inventions. That’s just not fair. But then why should it matter if the inventor elects to license and not commercialize himself. If you build a house, do you have to live in it to own and sell it? Inventions are property, clearly, if one reads Madison and other founders at the time of the adoption of the US Constitution. Read our position statement and other posts on our site for details.

    The patent system now teeters on the brink of lawlessness. Call it what you will…patent hoarder, patent troll, non-practicing entity, shell company, etc. It all means one thing: “we’re using your invention and we’re not going to stop or pay”. It’s a pure red herring by large invention thieves and their paid puppets to kill any inventor support system. As Mark Twain said, ‘truth is not hard to kill, and (that) a lie well told is immortal’.

    For the last several years the Chinese and large multinationals have been ransacking and looting small American entities taking everything they can carry. Those are the same multinationals who when they cant export jobs, import workers and artificially inflate their employed Americans. The fact is, many of the giant multinationals and their puppets who defame inventors in this way themselves make no products in the US or create any American jobs and it is their continued blatant theft which makes it impossible for the true creators to do so.

    For our position and the changes we advocate to truly reform the patent system, or to join our effort, please visit us at https://aminventorsforjustice.wordpress.com/category/our-position/
    or, contact us at tifj@mail.com

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