Patent lawsuit victories are turning heads at Pittsburgh universities
By Debra Erdley
Published: Tuesday, Jan. 22, 2013, 12:01 a.m.
Universities are finding there may be gold in the patents their researchers produce, but the mother lode is in lawsuits to protect those patents.
The eye-popping $1.17 billion a jury awarded Carnegie Mellon University one day after Christmas and the $85.8 million a judge awarded the University of Pittsburgh last spring are turning heads in academia.
“After the CMU award, I'm sure there are a lot of university deans who want their tech transfer offices to get a little more aggressive” protecting patents, said Chris Barry, a certified public accountant and forensic accountant who tracks patent cases for PricewaterhouseCoopers.
Officials at Pitt and CMU declined to discuss their court cases, citing ongoing litigation.
In the Pitt case, a federal judge ruled that Varian Medical Systems, a California medical device maker, infringed on Pitt patents for a respiratory device. A jury in the CMU case found a Bermuda-based chip manufacturer, Marvell Technology Group LTD, appropriated CMU research for a computer chip used in high-speed drives.
It's unclear how much either school could collect if they prevail in appeals.
Dr. Allen Black, a physician-turned patent lawyer who teaches biotechnology patent law at Pitt, said that could vary depending on legal costs and what the universities pay their researchers.
The Bayh-Dole Act, a 1980 federal law designed to funnel the fruits of federally funded research to the marketplace, stipulated that money from licensing and royalties should flow to the researcher and the university to encourage innovation and fund research.
Although the Pitt and CMU awards are being challenged, their impact is evident.
“Universities have increasingly looked to exploit the financial potential of their patent portfolios. Part of this stems from university administrators' hopes of generating new revenues. ... Part of this also stems from the desire to emulate high-profile cases, such as the CMU case, in which universities have hit a ‘home run' by receiving significant damage awards or licensing income,” said Peter Lee, a professor who teaches patent law at the University of California at Davis.
A recent survey by PricewaterhouseCoopers found those who sue to protect patents win about two-thirds of the time.
University patent lawsuits accounted for only 18 of the 1,751 cases that made their way through the courts between 1995 and 2011, the accounting firm found.
Michael Shamos, a lawyer and computer science professor at CMU who testifies as an expert in patent infringement cases, said part of the growth in patent litigation stems from the economic downturn.
“There is a saying in the patent field that it is recession-proof. When times are good, companies have no trouble spending a lot of money for patents. Whenever times go bad, companies start scrounging around for money, so if they own a lot of patents, they start litigating,” Shamos said.
Combined, the two schools pulled in more than $1 billion in government and corporate research grants last year.
Pitt has 490 patents in a portfolio that dates to 1996. CMU has had 457 patents issued to it since 2002.
“It's a huge step to go from an issued patent to actual money. Most patents that are granted never produce anything,” Shamos said.
Indeed, university earnings on patents from research often are paltry compared with research spending.
Last year, CMU's best by far in a decade, the university technology transfer office pulled in $19.9 million in income from licensing. A significant chunk of that came from the sale of Carnegie Learning, a spinoff company in which CMU held a stake.
When Lycos, an early search engine developed at CMU, went public in the late 1990s, the proceeds were sufficient to underwrite the $20 million construction of the building that houses computer science department offices and facilities.
But Lee said many research schools barely break even on patent and licensing revenue and some lose money trying to capitalize on research.
Jonathan Parks, a patent lawyer with Pietrogallo, Gordon, Alfano, Bosick & Raspunti in Pittsburgh, wrote the patent for which CMU won its case. He declined to discuss it, but said it's important for universities to take their patents seriously.
“Universities spend a lot of money innovating and it is important that they protect it. Patents are the only legal monopoly the U.S. government grants,” Parks said.
Debra Erdley is a staff writer for Trib Total Media. She can be reached at 412-320-7996 or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Shale oil, gas drilling boom wins favor with labor unions, thwarting environmentalists
- Change in kidney allocation rules should help patients
- Population expansion in Western Pennsylvania hinges on immigrants
- Landslides put Baldwin firefighters in financial peril
- Catholic learning sessions to start in Pittsburgh
- Officials identify Chartiers shooting victim as Wilkinsburg man
- Newsmaker: James Lange
- Film tax credits bill would bump up state budget
- Patients nationwide die waiting as 1 in 5 kidneys rejected by doctors
- Pope Francis inspires incredible optimism
- Bullied South Fayette student’s case prompts wiretap overhaul legislation