Apple’s Newest Courtroom Foe Is Patent-Savvy University

As a veteran of the global smart phone wars, Apple is used to courtroom
battles with fierce competitors such as Samsung and Nokia.

This week,
however, a federal jury returned a verdict against Apple in a lawsuit
brought by a different kind of adversary: a public university. The
University of Wisconsin-Madison’s licensing arm, the Wisconsin Alumni
Research Foundation, convinced a jury that Apple had infringed its
patent for improving chip efficiency when the company incorporated the
technology into some of its phones and tablets. Research institutions
and universities have not traditionally been major players in patent
litigation, and even now schools still launch relatively few patent
suits compared to private companies – about 40 to 50 cases per year,
according to preliminary research by University of Alberta professor
Tania Bubela.

But within that world, WARF has become an aggressive
litigator. Since 2000, the foundation has filed 33 lawsuits against 31
different defendants, according to a Reuters analysis of federal court
data maintained by RPX Corp, a patent risk management firm.

In the
current case, WARF is claiming $400 million (roughly Rs. 2,598 crores) in damages from Apple. As
the dispute over how much the iPhone maker owes is hashed out, critics
are questioning whether schools receiving public money for research
should be engaged in hostile patent litigation.

WARF, however, has
argued that such lawsuits are key to monetizing inventions created at
research universities, and that protecting patents encourages
innovation. The Apple trial is now in the damages phase, and if WARF
gets anywhere close to what it is asking, it would be one of the largest
patent payouts ever to a university.

Attorney Michael Ng, who has
represented Australia’s national science agency in US courts, said
that universities are feeling forced into litigation. “In recent years
there has been a greater reluctance, for example in high-tech, to do
voluntary licensing deals, and that sometimes leaves holders of
intellectual property with no other recourse.” In its current lawsuit,
WARF hired one of the country’s top patent litigators, Morgan Chu, to go
head-to-head with Apple attorney William Lee. And last month WARF sued
Apple again over the same patent, this time targeting the company’s
newest products, the iPhone 6s and iPhone 6s Plus, and iPad Pro. WARF
also sued Intel Corp in 2008, but the case was settled the following
year on the eve of trial. WARF, housed on the university’s Madison
campus, has been around for 90 years and helps patent and commercialize
the university’s inventions. In 2014-15 alone, it provided more than
$100 million (roughly Rs. 649 crores) in direct and in-kind support to the university, it said.

WARF
declined to provide any of its staff to be interviewed for this
article, citing the ongoing trial. Apple also declined to comment. The
patent at issue in the Apple suit was granted in 1998 and covered a
“predictor circuit” to boost microchip performance developed by a
computer science professor, Gurindar Sohi, and three of his students.
Sohi declined to comment. In the years leading up to the invention,
Sohi’s research was funded in part by the National Science Foundation
and the Office of Naval Research, which provided about $200,000
annually, according to court documents. In 1995, he and another
professor also received a $2.3 million (roughly Rs. 14 crores) grant over three years from the
NSF and the Advanced Research Projects Agency. All three of those
agencies are credited in the patent itself, which notes: “The United
States has certain rights in this invention.” Some legal experts have
criticized lawsuits over patents developed with public funding.
“Government funding is being used to go after some of our most
innovative companies,” said Robin Feldman, a professor at the University
of California Hastings College of Law. “Do we want taxpayer money to
fund this behavior?” Though universities are legally able to obtain
patents, considered a private right, on research funded by public
dollars, “This policy is being turned on its head,” she said. But WARF
has argued in the past, as it did to the Federal Trade Commission in
2009, that companies that infringe on university patents should have to
pay monetary damages. Such penalties, the foundation says, encourage
companies to license patents, providing revenues on which universities
depend on to create startups and commercialize their inventions. “In
short, strong patents and a high cost for infringement stimulate
innovation,” its managing director, Carl Gulbrandsen wrote in a letter
to the FTC. WARF brought in nearly $152 million (roughly Rs. 987 crores) in income from royalties
and investments last year, according to its website.

© Thomson Reuters 2015

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