Federal funds under Bayh-Dole incentives increase patent infringement law suits

[Christopher J. Jr., et al. "The Hidden Cost of University Patents." Berkeley Business Law Journal, vol. 21, no. 1, 2024, pp. 203-249. HeinOnline -tm]

Our findings that universities receiving more federal funds are increasingly likely to bring patent infringement lawsuits raise concerns about the efficient use of taxpayer dollars. Research grants are intended to benefit the public through generating and disseminating new knowledge. While our research does not address to what extent these goals are being served by the current situation, we must wonder about potential public harm arising from university filed lawsuits, and how this litigation is funded.

Patent infringement lawsuits filed by institutions receiving public research funds raise three distinct concerns warranting future research. First, lawsuits divert money from the university and its research-centric goals towards litigation costs. This raises questions about the propriety of such an allocation. 136 Indeed, even those directly involved in these lawsuits seem to question whether they further the university's research mandate. In a survey conducted by Professor Rooksby, more than half (54.6 percent) of chiefresearch officers at 23 different universities disagreed with the idea that patent litigation furthered "their universities' research missions."137

Of course, the case can be made that university-filed patent litigation protects research investments by maximizing licensing income, not to mention potential revenues from settlements or damages awards if the litigation is successful. 138 The resultant funds can then be recycled into the research pipeline. Whether this occurs in practice is, however, a question warranting further investigation.139 Recognizing that universities are disproportionately successful in patent litigation when compared to other NPEs,140 the question of whether these lawsuits are income positive or negative remains. Furthermore, future research must analyze whether these lawsuits increase licensing income outside of litigation. Indeed, this topic is animated by a 2013 Brookings Institute report which found that over 80 percent of universities don't bring in enough from their patent licensing to cover associated costs of their technology transfer office and patent prosecution_ 141 Relatedly, future work should investigate whether such licensing and litigation income is cycled back into research endeavors.