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Two Law Professors’ Plan to Downsize Patent Litigation

May 8, 2015, 7:59 PM

In a move that drew attention around the country, Tesla Motors CEO Elon Musk last June cleared all the company’s patents from display in the Palo Alto headquarters. “Maybe [patents] were good long ago, but too often these days they serve merely to stifle progress ... and enrich those in the legal profession,” he explained .

But when Musk publicly pledged that Tesla will not initiate any patent lawsuits – a position that other tech executives have embraced – it was only a voluntary commitment that could be broken.

Such promises, however, could be made into legally binding commitments under a framework laid out earlier this year by two law professors, Jennifer Urban, a professor at U.C. Berkeley School of Law and Jason Schultz, a professor at New York University School of Law.

“We want them to put their money where their mouth is,” said Schultz, in an interview.

To do this, he and Urban have proposed the Defensive Patent License : It creates a legal framework for a network of companies that want to share their patents, and have agreed not to initiate patent lawsuits.

Companies that sign a defensive patent license agree not to initiate patent infringement suits. In exchange, they gain free access to all the patents held by other companies that also sign a defensive license. There is a network effect in that as more companies sign on, more patents become available and the incentive for new companies to join the network grows.

The professors also tried to cut off frivolous litigation, noting that many non-practicing entities acquire their patents from companies that file for bankruptcy. But if a company signed a defensive patent license and then files for bankruptcy, its patents remain available for free to any company in the network with it.

They first proposedthe ideain April 2012 in the Harvard Journal of Law and Technology. TechCrunch also wrote about it .

John Gilmore, the co-founder of the Electronic Frontier Foundation and an influential civil libertarian in Silicon Valley, donated 25 patents related to screen display to the network. And Schultz predicted that if the idea catches on it could lead to a 25 to 30 percent reduction in patent litigation throughout the next decade.

The only problem so far is that no companies have signed on yet.

“Our goal is to offer a legal commitment to what has generally been a philosophical position that a lot of tech companies take,” Schultz said.

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