SQuo incentives create more patent litigation – TTOs

[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]

University patent litigation is on the rise.70 Estimates vary, but university­ filed patent lawsuits appear to have increased substantially in the last two decades.

Consider the overall patent litigation trajectory since the passage of the America Invents Act (AIA) in 2011.71 While it has only increased marginally­ net of fluctuations-between 2011 and 2017, its rate of growth nearly tracked with contemporaneous increases in patent grant rates between 1998 and 2017.nAlthough nearly 4,800 patents were granted to universities in 2012, just 4,000 were issued in 2017.73 Over roughly the same time period (2011-17) the volume of patent infringement claims filed only grew, starting at around 4,000 in 2011 and peaking at nearly 7,000 in 2013, with a regression toward earlier figures by 2017.74 All the same, patent litigation is more active since the passage of the AIA than it has ever been.

While this growth represents larger trends within the patent sector, a disproportionate part of this growth comes from universities and their assignees. These parties account for an increasingly larger proportion of patent lawsuits as time moves on.75 For example, patent litigation more than doubled between 1995 and 2007, but university involvement in patent litigation increased by nearly four-fold during that period. 76 This trend has prompted scholars to investigate, only relatively recently, the participation of universities in the present surge in patent litigation. n

Research from scholars at Stanford University places the issue in bright relief. Examining data from patent litigation lawsuits between 2000-15, they found that universities and associated entities comprised the second largest group of NPEs within their dataset, trailing only inventors themselves. 78 And universities and associated entities were one of just two groups with increased patent infringement filings, amidst a host of other categories of filers. 79 Within NPE-involved cases from 2000-17, universities (along with non-profits) were the most likely to succeed in their claims and received the greatest damage awards when successful. 80Attempting to quantify the aggregate number of university-filed patent lawsuits, another study found that, between 1980 and 2009, 568 patent litigation cases involved universities. 81 This may seem like a small volume of cases for universities to be involved with in a thirty-year time band. But considering that over 90 percent of patent cases settle before trial, each of these cases represents scores more that never made it to trial.82