Cornell University (Photo: sach1tb)
More than three dozen universities are spending millions of dollars on Wash­ington lobbyists to help shape patent ­litigation reform as the U.S. Senate crafts a plan to stop abusive practices.
The universities last year spent at least $11.4 million lobbying on legislation intended to reduce the litigation clout of so-called patent trolls, among other issues, according to congressional records. Cornell University, Pennsylvania State University, the University of Illinois at Urbana-Champaign and the University of Pittsburgh are among some of the leading research institutions that have deployed lobbyists to those ends.
Many of the universities portray the House’s Innovation Act as a step in the wrong direction and the Senate’s Patent Transparency and Improvements Act as a better path forward. The universities, which, like patent trolls, typically don’t use their patents to make anything themselves, are particularly concerned about the House measure’s fee-shifting provision. The language would require losers in patent litigation to pay the prevailing party’s legal bills.
The universities’ stance puts them at odds with Google Inc., Oracle Corp., Verizon Communications Inc. and other major technology companies — despite agreement between members of the higher education community and the tech industry that patent trolls’ costly attacks against businesses and their customers must end.
Lesley Millar-Nicholson, director of the University of Illinois Office of Technology Management, said the House bill could saddle universities with significant legal costs if they seek to defend their patents and lose, stymieing their ability to encourage economic development and growth. Last year, the U.S. Patent and Trademark Office issued the University of Illinois 72 patents for technology involving flexible electronics and a smartphone biosensor, among other inventions, according to the university.
“We’re not doing this to make money,” Millar-Nicholson said of the university’s interest in patents.
At companies including Google, which reported almost $60 billion in revenues last year, patents are integral to the bottom line. Technology companies contend that fighting patent trolls, also known as patent-assertion entities, hurts business. Google general counsel Kent Walker last year cited a Boston University School of Law study that concluded the U.S. economy lost $500 billion from patent trolls between 1990 and 2010.
Google and other technology companies are members of the Coalition for Patent Fairness, which is working with Congress in support of the Innovation Act or legislation similar to it. The bill from House Judiciary Committee chairman Bob Goodlatte, R-Va., cleared the full House in December on a 325-91 vote.Its leading counterpart in the Senate, the Patent Transparency and Improvements Act, is scheduled for a vote on April 8 in the Senate Judiciary Committee. The measure from panel chairman Patrick Leahy, D-Vt., and Sen. Mike Lee, R-Utah, doesn’t include a fee-shifting provision. But Leahy said during a committee meeting last month that he would include fee-shifting language in a new version of the bill.
Matt Tanielian, the business coalition’s executive director, said he supports Leahy’s efforts to put his legislation in closer alignment with the House bill. “We support strong reforms because we think there is a serious problem,” he said.
Technology companies have substantial resources to try to influence the reform debate on Capitol Hill. Google in 2013 spent $14.1 million lobbying on the House and Senate measures, among other issues, according to congressional records.
No university spent more than $1 million on federal lobbying last year. The University of Illinois, for example, spent only $420,000 on its federal lobbying during 2013.
But the universities aren’t deterred.
John Vaughn, executive vice president of the Association of American Universities, said he is often in touch with congressional staffers and regularly participates in Washington panel discussions about patent reform. “I think the views of universities are being heard and seriously considered,” he said.
Vaughn pointed to comments Sen. Dianne Feinstein, D-Calif., made last month. Feinstein said she was “finding herself between sixes and sevens” in representing California, which is home to the top five patent-producing cities and more than 40 percent of the country’s venture capital.
“Behind these words, for a California senator, is a number of conflicting interests,” Feinstein said. “That’s what I have to try to reconcile in whatever bill that comes out — that not only is Silicon Valley satisfied, not only is the biotech industry satisfied, but the universities and the small inventors are as well.”
FEINSTEIN ‘NAILED IT’
Feinstein’s remarks “just nailed it,” Vaughn said. “There’s clearly a recognition that was lacking in the House,” he added.
Although representatives of the tech and higher education communities have said they can work together to advance effective patent lawsuit reform legislation, at least one advocate has his doubts. During a patent reform discussion hosted by POLITICO last month, Kayak Software Corp. deputy general counsel Benjamin Berman lamented that Vaughn was speaking on behalf of universities. Berman said he fears that a bill supported by universities would have “no teeth in it at all.”
“I’m really concerned about articulate, intelligent and well-thought-out people like John speaking on behalf of this issue,” he said. “I say that positively and complimentary. I don’t think this about you in any way, shape or form.”
Vaughn, in an interview, said universities can’t afford to remain silent and realize they need to reach common ground with other interested parties to find a solution to the patent-troll problem. But he acknowledged that drafting a workable bill is difficult.
At the University of Illinois, Millar-Nicholson said she has been in contact with Jonathan Pyatt, the university’s chief lobbyist in Washington, and is tracking the patent lawsuit reform bills online.
For Millar-Nicholson, the passage of a bill similar to the House legislation could make patenting inventions a fruitless endeavor. “It makes me wonder why the heck we’re patenting in the first place,” Millar-Nicholson said.
Contact Andrew Ramonas at firstname.lastname@example.org.