You may have heard the news this week that Apple lost a patent lawsuit filed by the University of Wisconsin, and may be on the hook for up to $862.4 million in damages. This news should serve as a reminder that universities are some of the nation’s worst patent trolls, actively ignoring their own stated missions to widely spread academic research and knowledge. For example, the University of Wisconsin’s stated mission is:
The mission of the University of Wisconsin System is to develop human resources, to discover and disseminate knowledge, to extend knowledge and its application beyond the boundaries of its campuses, and to serve and stimulate society by developing in students heightened intellectual, cultural, and humane sensitivities, scientific, professional and technological expertise, and a sense of purpose. Inherent in this broad mission are methods of instruction, research, extended training, and public service designed to educate people and improve the human condition. Basic to every purpose of the UW System is the search for truth.
Notice how much of that is about sharing knowledge and improving the world. But, of course, when UW had a chance to say "pay me!" it didn’t skip a beat. And many universities are doing the same thing. It’s a massive problem and it’s one caused almost entirely by Congress. We’ve discussed this a few times before, but in 1980, Congress passed the Bayh-Dole Act, which was supposed to incentivize more research at universities by allowing those universities to patent that research. The people who supported this idea were working off the myth that patents are the main way to incentivize innovation and research. This is wrong, and from this initial mistake, lots of serious problems have flowed. The Bayh-Dole Act has been a dismal failure in many, many ways, leading to a world now where many universities have resorted to patent trolling.
What really happened in the wake of the Bayh-Dole Act, was that many universities thought that they’d (1) patent all their professors’ research (2) license it and (3) profit like crazy. The reality was that they did the first part — and then many universities set up "tech transfer offices" to try to license it. And then they ran smack dab into reality, which is that most of their patents sucked and no one wanted to license them. Making matters worse, even when they had a legitimate or interesting patent, the universities massively overvalued those patents, demanding licensing fees that were ridiculous.
The end result was a near total disaster for most universities. Rather than make money, most universities lost a ton of money between all the patent filing and the expensive tech transfer offices that were supposed to be a revenue generator, but turned out to be massive losses for the vast majority of universities that set them up (there are very few exceptions). On top of that, this rush to patent and license resulted in a secondary problem: it actually decreased research and information sharing. Historically, professors would often share research with colleagues and work together on projects. But universities started pushing them not to do that as much, because of the patents. And on top of that, it became riskier to do follow on research over fears around the patents. So the entire intent of the bill backfired drastically.
As a result, many university tech transfer offices followed one of two paths to try to justify their existence: they sold off patent portfolios to patent trolls directly (Intellectual Ventures’ big initial portfolio of patents was mostly them buying junk patent portfolios from desperate universities, who needed to show some sort of return), or they started patent trolling themselves. The University of California at Berkeley became a major patent troll. As did the University of Southern California. And Carnegie Mellon. And, apparently, the University of Wisconsin as well.
This recent ruling is just the latest example of how far we’ve come and just how much damage the Bayh-Dole Act has done. It’s not only diminished university research and important information sharing, it’s now leading these universities to actively attack actual innovators and shake them down for money. If Congress really wants to fix patent trolling, it really needs to roll back the Bayh-Dole Act.