As many in the higher education community are well aware from news coverage here and elsewhere, the Recording Industry Association of America (RIAA), on behalf of its member labels, recently initiated a new process for lawsuits against computer users who engage in illegal file-trafficking of copyrighted content on peer-to-peer (P2P) systems. In the new round of lawsuits, 400 of these legal actions were directed at college and university students around the country. The inclusion of so many students was unprecedented. Unfortunately, it was also necessary.
In the three and a half years since we first began suing individuals for illegal file-trafficking, we have witnessed an immense growth in national awareness of this problem. Today, virtually no one, particularly technology savvy students, can claim not to know that the online “sharing” of copyrighted music, movies, software and other works is illegal. By now, there is broad understanding of the impact from this activity, including billions of dollars in lost revenue, millions of dollars in lost taxes, thousands of lost jobs, and entire industries struggling to grow viable legitimate online market places that benefit consumers against a backdrop of massive theft.
We have made great progress -- both in holding responsible the illicit businesses profiting from copyright infringement and in deterring many individuals from engaging in illegal downloading behavior. Nevertheless, illegal file-trafficking remains a significant and disproportionate problem on college campuses. A recent survey by Student Monitor from spring 2006 found that more than half of college students download music and movies illegally, and according to the market research firm NPD, college students alone accounted for more than 1.3 billion illegal music downloads in 2006.
We know some in the university community believe these figures overstate the contribution of college students to the illegal file-trafficking problem today. Yet new data confirms that students are more prone to engaging in this illegal activity than the population at large. While college students represented only 10 percent of the sample in the online NPD study, they accounted for 26 percent of all music downloading on P2P networks and 21 percent of all P2P users in 2006. Furthermore, college students surveyed by NPD reported that more than two-thirds of all the music they acquired was obtained illegally.
Moreover, our focus on university students is not detracting from our continuing enforcement efforts against individuals using commercial Internet Service Provider (ISP) accounts to engage in this same behavior. Indeed, we have asked ISPs to participate in the same new process that we have implemented for university network users.
Yet this is about far more than the size of a particular slice of the pie. This is about a generation of music fans. College students used to be the music industry’s best customers. Now, finding a record store still in business anywhere near a campus is a difficult assignment at best. It’s not just the loss of current sales that concerns us, but the habits formed in college that will stay with these students for a lifetime. This is a teachable moment -- an opportunity to educate these particular students about the importance of music in their lives and the importance of respecting and valuing music as intellectual property.
The prevalence of this activity on our college campuses should be as unacceptable to universities as it is to us. These networks are intended for educational and research purposes. These are the environments where students receive the guidance necessary to become responsible citizens. Institutions of higher education, of all places, are where people should learn about the value of intellectual property and the importance of protecting it.
The fact that students continue to engage in this behavior is particularly egregious given the extraordinary lengths to which we have gone to address the problem. Our approach always has been and continues to be collaborative -- partnering with and appealing to the higher motives of universities. We have met personally with university administrators. We have provided both instructional material and educational resources, including an orientation video to help deter illegal downloading. We have worked productively through organizations like the Joint Committee of the Higher Education and Entertainment Communities. We have participated in Congressional hearings.
We have informed schools of effective network technologies to inhibit illegal activity. We have licensed legitimate music services at steeply discounted rates for college students and helped to arrange partnership opportunities between universities and legitimate services. We have stepped up our notice program to alert schools and students of infringing activity. And, of course, we have as a last resort brought suit against individual file-traffickers.
With this latest round of lawsuits, we have initiated a new pre-lawsuit settlement program intended to allow students to voluntarily settle claims before a suit is actually filed. We have asked for school administrations’ assistance in passing our letters on to students in order to give them the opportunity to settle a claim at a discounted rate and before a public record is created. This is a program initiated in part as a response to defendants who told us they would like this opportunity, and we are encouraged by the swift response of so many schools. Lawsuits are by no means our desired course of action. But when the problem continues to persist, year after year, we are left with no choice.
An op-ed writer recently published in this forum described this approach as bullying. There is a big difference between using “bullying tactics” and using a “bully pulpit” to make an important point. Should we ignore this problem and stand silent as entire generations of students learn to steal? Should we not point out that administrators are brushing off responsibility, choosing not to exercise their moral leadership on this issue? This problem is anything but ours and ours alone. If music is stolen with such impunity, what makes term papers any different? Yet we know university administrators very aggressively pursue plagiarism. Why would universities -- so prolific in the creation of intellectual capital themselves -- not apply the same high standards to intellectual property of all kinds? This is, after all, a segment of our economy responsible for more than 6 percent of our nation’s GDP.
Furthermore, a Business Software Alliance study conducted last year found that 86 percent of managers say that the file-sharing attitudes and behaviors of applicants affect on their hiring decisions. Don’t administrators have an obligation to prepare students for the real world, where theft is simply not tolerated? Our strategy is not to bully but to point out that the self-interest of universities lies remarkably close to the interests of the entertainment industries whose products are being looted. And, most importantly, we have sought to do so in a collaborative way.
It doesn’t have to be like this. We take this opportunity to once again ask schools to be proactive, to step up and accept responsibility for the activity of their students on their network -- not legal responsibility, but moral responsibility, as educators, as organizations transmitting values. Turning a blind eye will not make the problem go away; it will further ingrain in students the belief that a costly and illegal pastime is sanctioned, and even facilitated, by school administrations.
The necessary steps are simple. First, implement a network technical solution. Products like Red Lambda’s cGrid are promising as effective and comprehensive solutions that maintain the integrity, security, and legal use of school computing systems without threatening student privacy. Some schools have used these products to block the use of P2P entirely, realizing that the overwhelming, if not sole, use of these applications on campus is to illegally download and distribute copyrighted works. For schools that do not wish to prohibit entirely access to P2P applications, products such as Audible Magic’s CopySense can be used to filter illegal P2P traffic, again, without impinging on student privacy.
Second, offer a legal online service to give students an inexpensive alternative to stealing. One such service, Ruckus, is funded through advertising and is completely free to users. When schools increasingly provide their students with amenities like cable TV, there is simply no reason not to offer them cheap or free legal access to the music they crave.
Third, take appropriate and consistent disciplinary action when students are found to be engaging in infringing conduct online. This includes stopping and punishing such activity in dorms and on all Local Area Networks throughout a school’s computing system.
Some administrations have embraced these solutions, engaged in productive dialogue with us to address this problem, and begun to see positive results. We thank these schools and commend them for their responsible actions.
Yet the vast majority of institutions still have not come to grips with the need to take appropriate action. As we continue our necessary enforcement measures -- including our notices and pre-lawsuit settlement initiative -- and as Congress continues to monitor this issue with a watchful eye, we hope these schools will fully realize the harm their inaction causes them and their students. We call upon them to do their part to address this continuing, mutual problem.
Mitch Bainwol and Cary Sherman
Mitch Bainwol is chairman and CEO and Cary Sherman is president of the Recording Industry Association of America.
We’ve all heard the stories of various professors who warned us of keeping extra copies of our dissertation drafts in a Ziploc bag in the freezer -- just in case something were to happen.
When I wrote my dissertation a few years ago, I never resorted to the frozen dissertation. Instead, I kept one copy on my home computer, another on my laptop, a third on my office computer, and, thanks to the ease of sending files via e-mail, I dispatched a copy to my trusted, long distance friend; I think I had other copies on a local friend’s computer. Additionally, there were multiple disk copies on various (now obsolete) floppies and zip drives kept in a number of locations. I learned quickly to save files with dates embedded in the names so I could tell which version was the most current one. So if my house burned to the ground or my whole town was magnetically tangled in a weird sci-fi meltdown, there would be at least one surviving copy of that dissertation.
Once the dissertation was completed, defended and revised, the fear of losing it subsided. There is, after all, a copy on file with the Library of Congress, and I could always order a copy from UMI dissertation services. The paranoia eased as the nightmares of not really finishing the dissertation and having to start all over again with a new Chapter One began to be a thing of the past. While the dissertation still contains some unpublished chapters that every now and again get glanced at to see if they meet the criteria of a certain call for proposals, new research projects have replaced the one that hung over my head.
So I began to research and write on new items and topics, as most who have gone through the dissertation process will admit to having nervous twitches every time they hear a catchword or phrase from their former project and need to move on. For me, it was “community” (or “the ‘C’ word,” on days I couldn’t even bear to say the whole name). And while I’m still interested in various communities and their connection to writing, writing processes and writers, it was time to move on to bigger and better projects.
I was starting a new book-length project and already had an interested publisher in it. So, after teaching the first half of the summer, I had the rest of the summer mapped out for me. In addition to the book project, I planned on revising a conference paper to expand it to a full length article and send it out for publication. And a chapter of the dissertation was being reworked for a peer reviewed journal.
Once the dissertation was behind me, paranoia about my scholarly work subsided. After all, who besides me would be interested in it (with the exception of my department chair, dean, those who review my work for tenure, and the journals/publications to whom I send my work)? No need for Ziploc freezer bags except to save the blackberries growing in the backyard that I couldn’t eat fast enough before they went bad. No need for multiple copies all over the country on various computers in the age of flash drives, when one could save almost the entire content of one’s computer on a one inch stick of 2 gigabytes, right? Every now and again I could e-mail a copy to my campus PC to have an additional back up, but with a laptop and two flash drive back-ups, I thought I was being overzealous with my system. This way, I could bring a flash drive to the library or my boyfriend’s place and plug in there rather than lug the laptop with me. The ease and portability of flash drive technology must be saving lots of ABDs much anguish and worry over their dissertations and other projects.
But then it happened -- in a flash, so to speak -- and I couldn’t have been more wrong. I returned home from a night at my boyfriend’s place and noticed a light left on and an interior door left open. At first, I didn’t think much of it. I turned off the light and shut the door. Then there were some items knocked over in the bathroom that I picked up and wondered for a minute how it happened, but didn’t really stop to think too long about it. Instead, I returned some phone calls, made some strong coffee, and then decided it was time to get to some writing done. I walked into my home office to turn on my computer and stopped short.
Where’s my laptop??? While it was a functioning laptop, I hardly ever unplugged it from the wall and the DSL modem -- I used it mostly as a desktop, as it was much newer and faster than my dissertation desktop that runs at a dinosaur’s pace. I had sent an e-mail right before leaving the night before, so I know it was there on my desk when I left. But it wasn’t there now. And I stood there dumbfounded.
I grabbed the phone but wasn’t sure who to call. I finally managed to remember 911 and got a dispatcher, to whom I told what had happened. The dispatcher connected me to the local police, who asked a number of questions and then wanted to know if I was in the house. “Yes, I’m in the house,” I said— “Should I not be?” I was told I may wish to wait outside for the police to arrive. Given that I’d been in there an hour, if someone was still in the house, I think I would have noticed. Still, I opened up my front door and waited in front of my house for a few minutes until they got there. The two officers went through my house and thought it was odd that someone would come in only to take a laptop that was two years old. My two back-up flash drives were also missing as was the power supply to the laptop. But the person(s) who took my computer were kind to leave me the DSL and printer connections and the other items in my office.
I told the cops that I am an academic and that all of my research was on the computer and flash drives. They asked if someone in the office was “out to get me” or if I had a disgruntled co-worker or student. I had finished teaching two summer classes the week before and all of the students had passed, so I didn’t think a student would attempt to rob me. And if a colleague really wanted to get me, s/he would have his/her chance as I was up for my fourth-year tenure review in a few weeks. As one of two compositionists in my department, I doubt any of my colleagues would want to sabotage my research or career. They’re mostly concerned that I publish in blind peer-reviewed journals.
Upon further examination of my house, the robber(s) stole my checkbook, cash, traveler’s cheques, some small electronics, a majority of my jewelry and watches -- and a pillow case off of my bed to put the loot in as they left. What they didn’t take, they returned to the drawers and closets, so I guess I’m fortunate that I had relatively thoughtful and neat robbers. The police haven’t been very helpful, but I’ve learned that there had been more than 20 robberies in my neighborhood in the previous week or so. The police also told me that fewer than 13 percent of robbery victims ever get any items recovered. While I was devastated that my grandmother’s jewelry was gone, I was sickened that my scholarly research had disappeared without a trace.
In the sleepless weeks following the robbery, I have met more of my neighbors than I had in the previous three years of living here. Some are nice; some seem rather odd; all are scared about becoming the next victim of a burglary. My passport, Social Security card, and birth certificate are locked in a safety deposit box at a nearby bank, which means I can’t decide on a moment’s notice to grab a flight to Paris, but I can live with that. I’ve also had an alarm system installed and no longer think of opening up a window to let in some fresh air. I haven’t been able to sleep more than two or three hours a night—even after the alarm system was installed. I feel violated and angry, and wonder how much therapy it will take before I am able to sleep through the night at home.
It’s hard to go back to the drawing board, so to speak, and start working on the book project and revisions again -- as much of what I did is gone and would have to be started anew. Looming deadlines float over my clouded head.
Perhaps those professors who put their dissertations in the freezer were on to something, though the police said that most thieves look in freezers and refrigerators for valuables. As a writing specialist, I have spent much time dealing with plagiarism. I never really considered someone physically stealing my computer, files -- my work -- as an act of plagiarism, but it is. I’m not sure where it’s safe to put one’s intellectual property. Laptops and flash drives are easy to steal. Thieves look in freezers for cash, jewelry and other valuables. Most non-college educated thieves would probably laugh at seeing an ABD’s dissertation chapters or an assistant professor’s articles under ice. If one can leave it on the university server, that is an option, but our server limits the amount of space available so large texts may not fit there. One can e-mail files to oneself, as I’ve done in the past, but then one must keep track of various drafts, e-mail accounts, and files, and deal with the limited space issue as well.
I’m not sure I have a better answer. I can honestly say that it never occurred to me that someone would think to break into my house and rob me. (After all, I was in grad school for nine and a half years; what could I possibly have that someone would want?) The laptop and flash drives are long gone, I’m sure. I just hope whomever took them wiped out the drives, as there’s also a concern now not only of intellectual property loss but of identity theft. I will never attempt to do my own taxes online, as I did on my laptop this year. Credit bureaus have been notified and watches were issued to my accounts; new credit card numbers and bank accounts were also issued, too. There’s a lot of paperwork victims of robberies must muddle through. Trying to remember PINS and passwords to reset bills to internet services and EZ-PASS was a nightmare.
I can’t totally protect myself from becoming a victim of another crime.
So do I contemplate putting my research on ice? Maybe I should resort to an obsolete computer no one would want or—better yet—a typewriter may be worth considering. While I’m not the most technically advanced person in my field, I don’t think I’m ready to abandon technology—I cannot fathom revision without a computer. I like the idea of flash drives. Unless there’s a fire, flood, theft, or one manages to run it through the washer/dryer, flash drives offer portability, but as technology becomes smaller, it is easier to steal or misplace. Laptops are also convenient. But I will no longer resort to only having my research at one location—home, office, or elsewhere. E-mailing files is probably the best way to make sure one has access to them in a flash, so to speak, when one’s flash drive goes missing.
Risa P. Gorelick
Risa P. Gorelick is an assistant professor of English at Monmouth University and co-chair of the Research Network Forum at the Conference on College Composition & Communication.
My corner of the Internet has been abuzz over a muckraking article that recently appeared in The Guardian on the subject of Facebook. Tom Hodgkinson, the highly principled slacker behind The Idler and author of How to Be Free, makes some familiar complaints: online friends are a pale imitation of face-to-face relationships, Facebook encourages high-schoolish obsession with popularity, it prompts its members to reveal too much about themselves, and it uses that information for commercial gain. But the article goes further. Facebook is not just an American-owned company with global ambitions. According to Hodgkinson, it’s highly influenced by a “neocon activist” board member and funded by a venture capital firm that has ties to the CIA. Their ultimate aim: “an arid global virtual republic, where your own self and your relationships with your friends are converted into commodities on sale to giant global brands.”
Ironically, The Guardian helpfully provides a “share” link so you can send the article to all of your Facebook friends.
One of the most interesting responses to this article bubbled up on A-Librarians, a forum for anarchist and radical librarians. (Yes, I am, in case you’re wondering. And “anarchist librarian” is not an oxymoron. Look it up.) While other lists were debating whether the article’s claims were credible, or whether Facebook is valuable regardless, the members of this list were getting down to philosophical basics. Why does the concept of property so thoroughly infuse our understanding of rights? Are our conceptions of privacy dependent on owning one’s individual “self”? If we own our identity, is our public persona a form of intellectual property, as a trademark is?
I don’t know the answers to those questions, which relate not only to Facebook, but the debates over Google’s project to digitize great university library collections, and the fights over access to journal articles written by professors whose institutions can’t afford to gain access to them. But as a librarian who is in favor of sharing ideas freely, these debates made me rethink the fundamental relationship between the individual’s desire to share their thoughts and experiences with others and the commercial entities that provide the distribution channel for that act of sharing. It seems to me the crux of the problem is that the profit motive influences both sides of the equation – differently.
Corporations like Google and Facebook are worth a lot of money, which is a bit odd. They don’t create their content, and what’s there, they give away for free. They mediate the space where we go to express ourselves, and where find out what others think. Sure, we have to put up with a bit of advertising, but that’s just a minor irritant for something that’s free.
But there is a cost.
These corporations provide us with a space to play, engage with others, and make connections. We get to build our own identities in a public way. In return, we give them (perhaps without realizing it) a panopticon view of our lives, a chance to gather data on what we think, do, read, say, enjoy, and with whom we associate -- our "communities of interest" in the parlance of the FBI, or "friends" in Facebook’s lexicon. It’s exceedingly valuable information because it can be sold to companies who want to follow trends and focus their advertising dollars on just those individuals most likely to respond. The more people involved, the more valuable the data.
Facebook embarrassed itself last fall by overestimating our enthusiasm for this exhibitionist social contract. They launched Beacon, a service that would send information about one’s online purchases to a Facebook member’s friends unless an obscure “opt out” box was checked quickly before it disappeared from sight. Their assumption was that everyone would enjoy sharing their shopping lists as much as their playlists -- your friend Mike just bought Hanes underwear and thinks you might want to buy some, too! -- but that idea hit an invisible barrier of resistance. Whoa, that’s going too far! We got cold feet when the commercial consequences of our sharing was made visible. The outcry, ironically mobilized through Facebook itself, forced them to back off.
But on the whole, the public is content to go along. Just give me a place to express myself to the world, and you can do ... whatever it is you do.
People trust these playful-seeming corporations to not do evil far more than they trust their government. In 2007, an ACLU poll found a majority of the public opposed warrantless wiretapping. Earlier, tens of thousands of people signed petitions opposing the government’s ability to track what they were checking out of libraries or buying at bookstores.
Libraries have always taken privacy seriously – not because it’s valuable in itself, but because it’s a necessary condition for the freedom to read whatever you want without risk of penalty. When the PATRIOT Act was passed, librarians checked to make sure their databases erased the connection between a book and its borrower as soon as the book was returned. That erasure, however, makes it harder to offer the kind of personalization, such as recommendations based on previous book choices, that the public increasingly expects from online systems. After all, it’s what they get from Amazon.
Suspicion of the government does not extend to corporations running the Web 2.0 playground. Those guys just seem so ... nice. And after all, if they give us the tools to tell people we read a good novel or like a particular band, why not let the company make a little money from it?
The complexities of private/public digital tradeoffs have been debated in many different contexts. Siva Vaidhyanathan has questioned why libraries, a public good, should partner with Google, a private corporation, to digitize their contents; aren’t we concerned that Google will control the most complete library in the world? Others defend the practice because – well, without Google’s deep pockets, it simply wouldn’t happen on so vast a scale. Besides, the books go right back on the library’s shelf once digitized. What’s the harm in sharing?
Let’s set aside the contentious copyright issue for the moment and concentrate on why Google is providing “free” resources. Unlike libraries, Google gets content for free, gives it away for free, and makes its money by being an enormous distribution channel for everything from physics research to 19th century scanned books to the latest YouTube video. By watching the traffic through those channels, they are able to provide highly-specific information on who’s interested in what. The more we use Google, the more information they accrue about what we’re using, and the more valuable that mountain of information becomes.
And, let’s face it: we have selfish motives, too. Social networking blurs self-expression and self-promotion. The idea of property and its exchange has so infiltrated our culture as a defining concept that many people do, in fact, think of their public persona as their brand. It’s important to “be out there.” Their lives grow more valuable as more people recognize and acknowledge their ideas, their tastes, and their interests.
This isn’t just a youthful obsession. Facebook has recently opened its service to everyone, regardless of school or college affiliation. A novelist I know was just advised by her agent to set up a Facebook profile to increase her online presence and engage in “relationship marketing” with potential customers. In other words, she’s expected to act as her own sock puppet so she can sell more books. Make friends and influence people.
Here’s the interesting paradox: The only way to increase the intellectual property value of your identity is to give it away. That’s the only way it can be shared, linked to and recognized by others. Trading a little personal information for a public platform, whether for personal expression or self-promotion (or both), seems a fair exchange.
Does this sound eerily familiar? It should.
As scholars, our ideas gain value as we make them public, and we have been historically myopic about the consequences of trading the rights to our ideas for access to distribution channels. This unexamined practice put us all over a barrel when publishers required the academy to ransom those ideas back through prohibitively expensive journal subscriptions for libraries. The personal advancement attached to making our ideas public only added to the problem; more publications translated into higher prestige. There was just too much stuff for libraries to buy back, and not enough budget. The Open Access movement is on track to significantly change the “terms of service” when it comes to scholarly communication. Though the battle’s far from over, we’ve made real progress.
But we’ve barely begun to examine the unintended consequences of the Faustian bargain we strike when we share content through privately-owned digital domains of the public sphere.
Tom Hodgkinson says we have a choice: we can help Facebook’s right-wing investors make a lot of money, or we can simply opt out of “this takeover bid for the world.”
But hold on – it’s our world. And we didn’t approach the problems of scholarly communication by ceasing to publish. We started by educating the community about the consequences and renegotiating the terms of our relationship with publishers.
Scholarly work isn’t the only form of communication worth fighting for. The privately owned digital public sphere is a fertile if febrile commons where millions of people play out their identities and share ideas. The bargains we used to routinely accede to in order to get our research published were easy to ignore because we personally benefitted from them. In fact, we didn’t read the fine print, and we didn’t anticipate the consequences. Something very similar is going on in social networking.
Scholars and librarians champion the value of free and open exchange of ideas for the public good. It’s time to take those values beyond the academy. If we made an effort to help the public understand the tradeoffs we make to be part of the digital social sphere, maybe we’d all think more critically about how our public identities are formed and exploited – for what they are worth.
Barbara Fister is academic librarian and professor at Gustavus Adolphus College.
Higher education recognizes patents as indicators of advanced research and innovation and as sources of significant revenue. Today, patents are facing a serious threat from lawmakers on Capitol Hill. The Patent Reform Act of 2007, passed by the U.S. House of Representatives last September and currently under consideration in the U.S. Senate, would raise the costs to obtain a patent, create new uncertainty as to the validity of patents, and place new limits on the damages that may be awarded to patent owners when their patents are infringed. These provisions could have significant adverse consequences for current and future patents and patent applications from higher education institutions.
Why should anyone but lawyers and technology transfer managers care about a seemingly obscure patent bill? Because raising the costs to obtain a patent will force institutions to either increase their cash outlays for patent prosecution or reduce the number of patent applications they file. More research that might have led to revenue streams for universities and inventors will be left unpatented -- simply given away by publication of the research. Reduced revenue inevitably leads to reduced funds available for future research. Fewer startup companies based on such research will exist because it is more difficult to obtain venture capital funding when the underlying research is not protected by patents. Repercussions will be felt by both inventors and administrators.
The bill as currently drafted has provisions that would ultimately improve patent quality by creating a new post-grant opposition period, reduce litigations brought in locations far from the homes of either party, and facilitate research collaborations, all of which are supported by a number of higher education associations, including the Association of American Universities, the American Council on Education, the National Association of State Universities and Land-Grant Colleges, the Association of American Medical Colleges and the Council on Governmental Relations. Despite the potential positive effect of parts of the bill, the overall impact of the legislation, as currently drafted, would be detrimental to colleges and universities.
The five associations noted above -- all representing university interests in patent reform -- have expressed their views to Congress via both formal testimony and numerous other communications. However, a non-university group, the Coalition for Patent Fairness, has circulated documents purporting to present the views of universities while seriously misrepresenting those views. To help maintain the patent system as a successful engine for innovation, college administrators and researchers need to make their own views on the bill clear to their Congressional representatives.
Higher education institutions should be particularly worried by four provisions of the legislation as currently drafted: those with respect to the determination of damages, mandatory prior art searches, a post-grant “second window” in which to challenge a patent, and the diversion of fees away from the patent office. These provisions will reduce the certainty and value of existing and future patents and will cast doubt on the ability of patent holders to receive proper protection for their inventions. This will undermine the ability of universities to bring their innovations to market and into public use.
Damages. The damages language in the current bill would restrict the ability of courts to apply all of the relevant factors and methods to calculate a proper damages award. Under current law, courts can consider almost any relevant factor under a variety of methods to determine the value of the invention and what damages should be paid to the patentee for infringement. The proposed bill would tell courts what factors to consider under particular circumstances. Despite the occasional headline-making award, courts are quite good at looking at the relevant factors and arriving at a proper damage award. If Congress mandates what factors to consider and what not to consider, courts will be forced to try to categorize inventions and make whatever shape peg is the invention fit into the particular-shaped hole created by the bill. This will result in years of uncertainty and unjustified damage awards as the new law evolves. The cost of such a new law will not only be in unjustified damage awards, but also in increased litigation costs as plaintiffs and defendants demand longer trials to argue about damages and also more appeals on damages issues. This provision will make it difficult for universities to get appropriate compensation when an infringement occurs and will also create tremendous uncertainty as to the value of a patent, thus making patents less valuable overall. Simply stated, the more uncertainty there is as to the value of a patent, the more difficult it is to license the patent and the less revenue a university or inventor will receive for a patent license.
To best represent the interests of colleges and universities nationwide, the damages portion of the Act should be changed so that damages are determined through a case-by-case analysis using appropriate economic factors and valuation methods rather than the restrictive valuation process the bill would impose. Such a change would go a long way toward preserving the economic interests of universities and encouraging further innovation by deterring infringement.
Mandatory search reports. The second problematic provision mandates that patent applicants undertake the expense of prior art searches and submit a search report and relevancy analysis to the patent office (so-called “applicant quality submissions”). While patent applicants are already required to submit prior art known to them, this provision will require an extensive and expensive search by applicants and a report explaining the submitted prior art, thus shifting the costs of such a search from the federal government to the applicants. This burdensome and costly exercise will likely lead to increased charges of inequitable conduct for failure to conduct sufficiently thorough prior art searches and for mischaracterizing the prior art in the relevancy analysis. This will further increase the length and cost of patent trials. By mandating such a search, the Act will make the patent application process even more complicated, more expensive and cause particular harm to non-profit and academic inventors.
Second window oppositions. The third troubling section of the Act relates to the open-ended post-grant review “second window.” The Act calls for a “first window” for post-grant review that allows patent challenges at the patent office within the first 12 months after the patent issues. (This is similar to the European system that provides for such challenges, but during a 9 month window.) However, the Act would also create a “second window” in which to challenge issued patents. This second window will have a detrimental effect on the certainty and value of patents. The second window makes patents susceptible to such challenges throughout the life of the patent, allowing different challengers to file serial challenges that could keep a patent under challenge for many years of its life, thus creating a disincentive for partner companies to license university technologies. It is in the best interest of universities that inter partes reexamination, allowed by the House bill but not by the Senate bill, be available instead of the more costly second window.
Fee diversion. Finally, one of the more troubling aspects of the House bill is the lack of a provision to prevent the diversion of fees collected by the patent office. (The Senate bill includes an anti-fee diversion provision.) Perhaps the single most important factor in improving patent quality is to improve the quality of patent application examination. For many years, the fees collected by the patent office have been diverted to the general treasury. For the past few years, Congress has chosen not to divert fees. However, to build and maintain a sufficiently large and highly qualified pool of experienced examiners, the patent office needs to be assured of consistent funding and not be at the whim of other federal budget requirements from year to year. Anti-fee diversion language should be included in any patent reform bill.
Currently, the full Senate is poised to consider the bill and over a dozen amendments that were proposed last month. But neither the bill nor the amendments remedy the fundamental flaws discussed above.
Lobbying is intense on both sides of the bill and a vote will likely come in the next few weeks. College officials should work to be sure the bill represents the interests of higher education.
Sheldon E. Steinbach and Bruce T. Wieder
Sheldon E. Steinbach is a partner in the postsecondary education practice at Dow Lohnes PLLC, a law firm that specializes in postsecondary education, intellectual property, communications and information technology. The former general counsel for the American Council on Education, he has been practicing higher education law for more than 35 years. Bruce Wieder is a partner at Dow Lohnes, specializing in patent law. A former engineer, he is an adjunct professor at Georgetown University Law Center and is registered to practice before the U.S. Patent and Trademark Office.