U.S. universities have rejected a request from trade body Consumer Electronics Association to withdraw their objection to U.S. patent reform legislation that aims to curb so-called patent trolls.
The Innovation Act, reintroduced in the House of Representatives in February, targets businesses that use patent licensing and lawsuits as their main source of revenue. These patent firms are largely seen as responsible for the proliferation of patent infringement lawsuits and settlement demand letters that usually target small business users of technology.
In a letter Thursday to the CEA, the Association of American Universities and the Association of Public and Land-grant Universities said that legislation to curb troll abuses “should be narrowly tailored to address the abuses of this small minority of patent holders without substantially weakening the U.S. patent system as a whole.”
But the legislation in its current form would increase the overall risks and costs of legitimate patent enforcement for universities, startup companies, licensees of university research, and all other patent holders, the organizations added.
Universities have frequently sued companies for patent infringement, and are concerned about provisions in the bill such as fee-shifting, which would require the losing party to pay the winning side’s fees.
A district court in Pennsylvania ordered last year that Marvell Technology should pay Carnegie Mellon University US$1.54 billion for infringing on two hard-drive chip patents. The company has appealed the decision.
The universities agree that fee-shifting will deter and punish frivolous litigation by patent trolls, but they are concerned that this provision and another referred to as joinder, which allows a defendant to bring in a patent trolls’ parent organization into the suit for fee recovery, will work against legitimate patent holders as well.
“The presumptions in favor of fee-shifting and joinder would increase the risk of expensive litigation to the point that such patent holders would in many cases be unable to assume the risk of enforcing intellectual property rights,” the academics wrote. The result could be that universities’ capacity to transfer their research discoveries from campus to the private sector would be undermined.
In a letter last week asking 145 universities to remove their institution’s name from a Feb. 24 opposition letter, CEA President and CEO Gary Shapiro wrote that litigation fees would be shifted in patent disputes only if “the position and conduct of the non-prevailing party or parties” were not “reasonably justified in law and fact.” The fee-shifting provision has existed in patent law since 1946 and the joinder provision is unlikely to be used against universities as they are not “entities that exist for the sole purpose of litigating a patent.”
The CEA has over 2,000 members including tech heavyweights like Google and Apple.
The Innovation Act was passed by the House in December 2013 but was spiked in the Senate.