Schools Profit in Patent Victories

Article excerpt

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" in 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 it prevails 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. …