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Iowa State University – The Biggest Patent Troll on the Planet?

The Des Moines Register ran a story today about the Iowa State University Research Foundation (ISURF) suing Monsanto for infringing patented soybeans. ISURF is the entity which controls Iowa State University patents. Every year ISURF applies for about fifty patents and receives between $2-10 million in patent royalties. As of Fiscal Year 2006, ISURF had 355 active patents, 160 patent applications in process and 690 active license/option agreements.

What is a patent troll? A patent troll is an individual or entity with patents that earns money not through manufacturing a patented product or process, but by threatening other producers into licensing the patented technology. Patent trolls rely on the very high cost of patent litigation (usually $1.5 Million dollars for each side) and low royalty demands to build their coffers. Is ISURF a patent troll?

According to the Association of University Technology Managers (AUTM) 2005 U.S. Licensing Survey, Iowa State University has one of the lowest rates of income per license ($4M/745 licenses) among well-established University Technology transfer departments. According to the ISURF’s own 2006 Annual Report, ISURF ranked third among all U.S. Universities in the number of licenses and options signed in fiscal year 2004. Despite spending $1.3M obtaining and maintaining patents and another $111,000 in fees associated with licensing, infringement/litigation and general legal, ISURF is at the low end of the scale when it comes to license income.

I do not know how to read this data, other than it appears ISURF is spending a lot more time chasing down lots of tiny companies for tiny royalties. No doubt there are a few monster technologies and monster license fees in the bunch, but compare this data with schools at the other end of the spectrum like Emory University. Emory generates half a billion dollars in license income from only 154 licenses. Apparently, other universities are dividing up their inventing ideas that shape the world vs. patent trolling days a little differently.

Historically, patent trolls have shied away from fights with deep pocketed corporations. For 800 pound gorillas, the threat of huge attorney fees has just not been sufficient to extort small license fees. Recently, however, the United States Supreme Court has drastically limited the ability of patent trolls to use injunctions to extort license fees and to patent obvious changes to existing technology.

Could this recent suit by ISURF against Monsanto be as a result of the recent “anti-trolling” mandates by the Supreme Court? Are patent trolls drawing a line in the sand? Whichever way this case eventually turns, it will no doubt have far reaching implications as to how universities view the value of patent trolling.

Brett Trout

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