Universities Matter: The Truth about Patent Licensing

Tuesday, Feb 28th, 2017
The Background

Having no success so far in pushing through further far-reaching legislation in Congress, proponents of weaker patent rights have been searching for new avenues to achieve their aims. One of the latest efforts, led by the Electronic Frontier Foundation (EFF), is to try to convince the public that universities shouldn’t be allowed to license their patents to other non-practicing entities, businesses that license technology but don’t manufacture themselves.

That’s a dangerous position to hold and one that we need to dispel. Here’s why:

Two Important Facts About Patent Licensing

  1. It helps the economy: University patent licensing contributed up to $1.18 trillion to the U.S. economy since 1996.1
  2. It helps keep higher education going strong: One study revealed that 58 academic institutions pulled in $662 million in licensing fees on their IP.2

“EFF’s proposals would be a real threat to university tech transfer (itself a major driver of startups and job growth in university innovation hubs), which is critically dependent on a university’s ability to license patented technologies to startups.” – Richard Epstein via Forbes

Why We Disagree with The EFF

  1. We believe that the EFF has a misguided view of non-practicing entities. Being an inventor doesn’t require being a manufacturer, too. Inventors should be entitled to the full benefit of their intellectual property. Labeling them as “non-practicing entities” devalues their hard work and contributions to society.
  2. The EFF has been unsuccessful in passing H.R. 9 and S.1137; we see this effort as a more underhanded approach to weakening patents.
  3. We shouldn’t make it harder for universities to earn money from their innovations. Those monies fuel important ongoing research. The intellectual property of universities stimulates startups, which ultimately results in better choices for consumers and job growth. We shouldn’t restrict that cycle of innovation. Universities do not manufacture products and rely on partnerships to bring their research and invention to market.

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1https://www.bio.org/sites/default/files/BIO_Eco_Impact_of_Uni_Lic_Policy... 2http://www.ipwatchdog.com/2012/12/10/university-tech-licensing-has-subst...