Yale has declined an offer that would exact a fee on the University’s use of video and audio transmission technology in return for protection from future patent infringement lawsuits.
Acacia Research Corporation, which claims to hold a patent for technology applying to everything from in-class video screenings to downloads from University Web sites, sent letters to universities nationwide this fall threatening legal action if the schools do not agree to pay a flat fee for use of its technology. Yale did not accept the offer before Acacia’s Dec. 1 deadline, choosing instead to face the possibility of paying royalties if a federal court upholds Acacia’s claim.
Deputy General Counsel Susan Carney said the University concluded that there is no reasonable basis to believe Yale is infringing on the patent, and the University does not expect to change its position unless a judge rules otherwise.
“There are substantial questions about the validity of Acacia’s patents and the broad rights it has asserted,” Carney said. “The patent is subject to review by the courts, so the University is prepared to reassess its position when the legitimacy of Acacia’s claims has been adequately addressed.”
The federal court based in San Jose, Calif., considering Acacia’s claim is not expected to determine the scope of the patent for at least six months, said Karlton Butts, Acacia’s vice president for licensing.
Under Acacia’s offer, which is scaled to each university’s enrollment, Yale would have owed $4,000 annually for the right to download or to stream audio and video files on campus, Butts said. The agreement was formulated in consultation with representatives from universities after the educational community balked at the company’s original proposal, which demanded 2 percent of revenues from courses utilizing streaming media.
Carney said the University has not closed the door on future changes to Acacia’s proposal.
“They made an offer that was supposed to expire a year ago on different terms,” she said. “These things are always subject to some negotiation.”
Jason Schultz, an attorney for the Electronic Frontier Foundation, said Acacia will probably offer a new proposal given the low chances that its claims will be upheld in court.
“What will likely happen is Acacia will at some point come crawling back with a weaker, even more watered-down agreement,” he said.
Though the proposal contains a provision releasing universities from the fees if the court strikes down Acacia’s claim, Schultz said he expects Acacia to settle out of court before that happens, in order to keep the agreements intact.
But Butts said he believes the claim will survive in court, proving costly for universities like Yale that refused to cooperate.
“We believe that we have patents that are valid and enforceable,” he said in a Nov. 17 interview. “We tried to … work out a license agreement that works for them and works for us.”
Yale Chief Information Officer Philip Long said he was pleased with the University’s decision, as signing the agreement could have helped to strengthen Acacia’s otherwise-weak claim in court. Nevertheless, he said, Yale now faces a greater fiscal risk.
“There’s a risk that if you sign and send them money, that helps them defend their patent,” Long said. “If you oppose and the patent is upheld, you’re almost certainly going to spend significantly more.”
Schultz said his contact with other universities suggests that the response to Acacia’s offer appears to be mixed.