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Academic Goes Commercial

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By Meredith W. Salisbury

If you work at a university, chances are you’ve already heard about Madey v. Duke, the intellectual property case in which researcher John Madey sued Duke University for using his patented laser technology without his permission. (Madey had brought his technology to Duke, worked there for many years, and filed suit when the school continued to use the tool after he left the institution.) Duke’s response, naturally, was that its status as a university gave it a research exemption, allowing academic scientists free rein to experiment with patented tools and methods.

An appeals court reversed the original district court’s ruling in favor of Duke, and now that the Supreme Court has declined to hear the case — which is on its way back to the district court to hash out damages or penalties — it’s a good time to go over lessons learned.

Essentially, the appeals court looked over the case and in doing so made a distinction between “academic” and “experimental use.” Raymond Van Dyke, an attorney specializing in science-based IP at Nixon Peabody, explains that the experimental use defense has been around for two centuries, and is designed to protect people “involved in scientific experimentation or philosophical endeavors” — essentially, anyone using patented technology for purely academic tinkering or teaching purposes.

That defense is still considered valid, Van Dyke points out, but the court’s ruling highlights that it’s “very limited” in scope. As academic institutions get bigger, make more money through tech transfer offices, and become more competitive about luring resources and talent, the old assumption that a university’s research automatically qualifies for an exemption is no longer valid, according to the court that decided Madey v. Duke.

“The more and more commercial you become, the more subject to the patent laws you are,” Van Dyke adds. The appeals court’s decision was based on the idea that, by continuing to use Madey’s technology, Duke had boosted its reputation and attracted more grants, tipping the scales from academic to commercial use.

For you, the Madey decision could mean you’ll spend more time checking into patents or IP issues before embarking on research. Van Dyke suggests that just being a member of one of these quasi-commercial universities could put you at higher risk of being subject to regular patent law. The people who need to consider this most are those who have commercial ties — being a corporate consultant, for one — or who have started, or plan to start up, a company.

However, while you and your tech transfer office will likely have to do more homework, Van Dyke and attorney Christine Vito agree that the odds are strongly against a spate of corporate lawsuits based on this case.

For one thing, says Vito, with Testa, Hurwitz & Thibeault, most companies recognize that the next generation of cutting-edge technology tends to come from academia, and stifling that will only hurt their bottom line in the end. Second, there are two major incentives for companies to keep their mouths shut: finances — rule of thumb says patent lawsuits run around $1 million each — and fear of bad publicity for going after academics, Vito says.

Those disincentives don’t necessarily apply to individuals, Vito notes, so it’s possible that this case would clear the way for more lawsuits from researchers like John Madey. I’m willing to bet that whether we see more of these suits will depend heavily on the final outcome (specifically, any financial damages) of Madey v. Duke, which at press time was not yet scheduled for its last appearance in court. Though the district court must obey the higher court’s ruling in favor of Madey, Vito says, there’s always the possibility that the district court will “come to a decision that doesn’t have a consequence to Duke.” Without a doubt, that’ll be the real crux of the matter.

 

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