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Law firms are reporting a steady increase in university patenting activity, while university statistics reveal spikes in legal spending to protect inventions developed on campus. Universities, hospitals and research institutions filed 15,115 U.S. patent applications in 2005, compared with 13,803 in 2004, the latest figures available from the Association of University Technology Managers in Northbrook, Ill. Washington-based Venable’s intellectual property group has experienced extensive growth in university-related work in the past few years, said Washington partner Michael Gollin. “We’re good at it and we’re focusing on it and working with some big universities and research institutions,” Gollin said. The firm’s clients include the University of California system and Johns Hopkins University. Prolific universities that file hundreds of patents a year are much like a midsize company, Gollin said. “Most major inventions in the life sciences, at one point or another in its cycle, can be traced back to an academic discovery,” Gollin said. Michael Ward, an intellectual property partner in Morrison & Foerster’s San Francisco office, has seen his practice expand as the University of California, Davis campus aggressively patents plant varieties. “There’s been a flurry of activity,” he said. Struggling with structure Fish & Richardson’s roughly 200-lawyer patent group, or nearly half of the firm, has seen a steady increase in patent filing and advice work from both universities and research institutions, said Mark Ellinger, the managing principal of the firm’s Minneapolis office. The firm represents many of the major universities around the country, including the California Institute of Technology, Harvard University, the University of Minnesota and the University of Southern California. Besides filing patents, Fish & Richardson has also helped schools restructure their technology-transfer departments, which handle patenting and licensing, but Ellinger declined to name specific clients. “They struggle with their internal structures and models for commercializing intellectual property in universities,” he said. For the universities, carrying a robust patent portfolio adds up to sizable legal bills. The Massachusetts Institute of Technology (MIT), a prolific patent filer that farms out work to “probably two dozen” law firms, including almost every patent law firm in Boston, has been slowly yet steadily increasing its domestic and overseas patent filings, said Lita Nelsen, director of MIT’s technology licensing office. MIT’s U.S. patent filings climbed by 28% from 245 in fiscal 2002 to 314 in fiscal 2007, according to university statistics. The patents include discoveries in semiconductor technology and biotechnology. Costs are escalating Yet the school’s legal spending on patents far outpaces its new filing rate because of rising law firm billing rates and ongoing legal issues associated with the school’s extensive patent pool. MIT, which relies on outside firms to make all of its patent filings and for occasional patent lawsuits, reported that patent spending climbed by nearly 41% from $9.1 million in fiscal 2002 to $12.8 million in fiscal 2007. “Patents I filed five years ago I’m spending money on,” Nelsen said. “It keeps escalating.” Universities often hedge their bets by making many early-stage patent applications while seeking out licensees, said Dana Gordon, a patent attorney at Boston’s Foley Hoag. A typical scenario involves spending $5,000 to $15,000 to file a one-year U.S. provisional application, then extending protection by filing a patent cooperation treaty (PCT) application for $10,000 to $15,000. The PCT filing adds another 1 1/2 years of patent protection in 150 countries. “You never can be sure at inception whether a particular piece of technology is going to have commercial legs,” Gordon said. “They err on the side of being too careful.” When the 2 1/2 years expire, the school needs to decide whether to sink hundreds of thousands of dollars into a U.S. patent application. Foley Hoag’s patent work for universities has expanded in the past five years, as clients like Brandies University in Waltham, Mass., have ramped up their patenting, Gordon said. University of California statistics mirror the pattern at MIT. The 10-campus university system’s total U.S. patent filings, including first and follow-on filings, grew by 34% from fiscal 2002 to 1,184 in fiscal 2006, and first foreign filings rose by 46% during the same years to 361 in fiscal 2006. Outside legal spending, meanwhile, spiked by 71% during those years from $25.2 million in fiscal 2002 to $43.1 million in fiscal 2006. The patents include a chemical catalyst that directly stimulates the immune system to lower the vaccine dose required for immunization Filing overseas dramatically boosts the legal costs, said Irvin Mettler, associate director of the office of technology licensing for University of California, Berkeley. Venable’s Gollin agreed that international filings are a major undertaking for schools. One university client that he declined to name is filing a drug patent in 17 countries on behalf of a drug company licensee. “When a university acts more like a pharmaceutical company they have to be sophisticated and they expect a lot from their outside counsel,” Gollin said. University-initiated patent lawsuits are more rare, but schools vary widely in how willing they are to take court action against infringers, said Morrison & Foerster’s Ward. Acceptance of litigation as an enforcement tool is increasing with schools like the University of California system acting as a pacesetter, Ward said. Ward cited as an example the system’s patent litigation against agricultural giant Monsanto Co. over a bovine growth hormone patent. The case settled just before trial in February 2006, with Monsanto paying $100 million in upfront royalties and agreeing to future royalty payments. The Regents of the University of California v. Monsanto Co., No. 04-634 (N.D. Calif.). “They’re seeing that the University of California is aggressive and wiling to take on people like Monsanto and get very favorable settlements,” Ward said. “The awareness is increasing.” Fish & Richardson’s Ellinger said he’s seen a slight increase in universities filing patent suits with licensees. Ellinger noted the firm’s recent representation of MIT and its licensee, drug maker Repligen Corp., in a patent case against ImClone Systems Inc. over the cancer treatment drug Erbitux. ImClone paid $65 million to settle the case in September. MIT v. ImClone Systems Inc., No. 04-10884 (D. Mass.). Northeastern University has also recently come out swinging, teaming up with a licensee to sue Google Inc. in federal court in Texas for violating a search engine patent. Northeastern University v. Google Inc., No. 07-486 (E.D. Texas). Northeastern declined to discuss the case, and Google spokesman Jon Murchinson said the company believes that the lawsuit has no merit.

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