![]() ![]() The university LLC won’t engage in the type of patent licensing that most actual university spinoffs would want, which are typically exclusive licenses over patents that give it a product or service no one else has. By and large, software patents are the lowest quality patents, and their rise has coincided with the rise of large-scale patent trolling. In other words, they’ll be demanding licensing fees over lots and lots of software patents. The proposal sent to the UC Board of Regents explains that the LLC’s goal will be to get payment for patents that “have not been successfully licensed via a bilateral ‘one patent, one license’ transaction.” The universities’ proposal is to start by licensing in three areas: autonomous vehicles, “Internet of Things,” and Big Data. This new university patent licensing company won’t be getting any of the small number of impressive revenue-producing patents. ![]() As many as 95% of university patents do not get licensed at all. Just a tiny slice of universities earn the majority of patent-licensing revenue, often from a few blockbuster pharmaceutical or biotech inventions. A 2013 Brookings Institute study showed that 84% of universities didn’t make enough money from their patents to cover the related legal costs and the staffing of their tech transfer office. Low-Quality Patents By The Bundleĭespite the explosion in university patenting and the growth of technology transfer offices (essentially university patent offices), the great majority of universities lose money on their patents. With 15 universities now forming a consortium to license electronics and software patents, it’s going to be a mess for innovators and lead to worse, more expensive products. When taxpayers fund research, the fruits of the research should be available for all. That means that that the existence of this licensing entity could harm innovation and competition. While larger tech companies can absorb the cost of either litigating or paying off the patent assertion entity, smaller innovators will face a much larger burden, proportionately. Patents in this context are legal tools that allow someone to monopolize publicly-funded research and capture its promise for a private end. But there’s not much evidence that university patenting helps technology reach the public, and there’s a growing body of evidence that patents hinder it. That’s part of why so much university research is publicly funded. It’s good news when universities share technology with the private sector, and when startup companies get formed based on university research. In January, the DOJ said it wouldn’t challenge the program on antitrust grounds. ![]() In September 2020, it quietly went public, when the University of California Regents authorized making UC Berkeley and UCLA two of its founding members. This patent commercialization company has been secretly under discussion since 2018. Unfortunately, this description also applies to a company that has just been formed by a consortium of 15 large research universities. That’s the kind of entity that EFF criticizes because they use flimsy patents to squeeze money from operating companies, rather than making their own products. That sounds an awful lot like a patent troll. If they don’t get paid, the company will use contingency-fee lawyers and a litigation finance firm to make sure the licensing campaign doesn’t have much in the way of up-front costs. This helps give them leverage to extract settlements from companies that don’t want to pay to defend the matter in court, even if a court might ultimately invalidate the patent if it reached the issue. Patents in hand, the LLC starts approaching high-tech companies and demanding licensing fees. Imagine this: a limited liability company (LLC) is formed, for the sole purpose of acquiring patents, including what are likely to be low-quality patents of suspect validity.
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