2015] DO PATENT LICENSING DEMANDS MEAN INNOVATION? 139
licenses leading to the deployment of new products or at least creating the
proper environment for such deployment. If that is not happening, then
aspects of the patent system begin to look more like economic waste, a tax on
innovative companies being paid in part to inventors but increasingly to
intermediaries that themselves contribute little to society.
In this Article, we offer a first window on that critical factual question by
surveying people who actually engage in patent license negotiations to see
whether the deals they strike lead to new products or to technology transfer
or other markers of innovation. We find that very few patentee-initiated
license requests result in any innovation, whether we measure that directly by
looking for new products and features, or indirectly by looking for proxies
such as the transfer of technology, sharing of personnel, or the development
of joint ventures. Notably, our results seem to hold regardless of whether the
patent owner seeking a license is a patent troll, a product-producing company,
or a university. Based on our survey results, ex post patent licensing
negotiations seem to be almost entirely divorced from innovation. Because of
the small number of respondents, however, we encourage further research
before drawing definitive policy conclusions.
To b e clea r, we d o not f ind or sugge st tha t ther e is no techn ology trans fer
occurring, or that the patent system cannot promote that technology transfer.
Universities and inventors can and do strike deals with companies that are
better positioned to implement the new ideas they develop, and these
alliances have, indeed, led to valuable drugs and other products. But those
deals frequently take place ex ante, before a patent issues and often before
patents are even filed. It is the technology being sold; the patents accompany
the sale of the technology. Ex post licensing demands and litigation—the
focus of our Article—seem less promising.
In Part II, we discuss the debate over patent trolls and the relevance of
technology transfer. In Part III, we explain our methodology. Part IV presents
our results, and Part V offers some tentative policy implications of those
II. PATENT TROLLS AND PATENT LICENSING
Patent trolls are the hottest topic of debate within patent law today.1
Trolls, also known as “non-practicing entities” (“NPEs”) or “patent assertion
entities” (“PAEs”), are individuals or businesses that do not make any
products and instead make their money from licensing or asserting patents
against entities that do make products. While there is some debate as to who
fits in the troll category, under most reasonable definitions roughly half of the
1. See, e.g., Mark A. Lemley & A. Douglas Melamed, Missing the Forest for the Trolls, 113
COLUM. L. REV. 2117, 2118–21 (2013).