Boston University is a prestigous, research-oriented university that can claim a number of famous alumni. Unfortunately, one of the classes it's added in recent months is aimed at a demographic that's been under increasing fire in the United States -- the humble patent troll. BU sued Samsung
in April, Amazon
in June, and as of yesterday, has added Apple
to the mix. The non-profit university has asked that each company be banned from selling pretty much anything, and wants a share of the profits on devices that have been sold.
The patent in question is 5,686,738
(the '738 patent) which describes a method of bonding a thin layer of gallium nitride over a crystal lattice. It was filed in 1995 and granted in 1997 to one Professor Theodore Moustakas. A secondary patent, brought up in some cases, was granted to Moustakas in 2003. The first patent only has a few years left before expiration, which is apparently what inspired Boston University to start suing everyone. BU started with a few small LED manufacturers but has moved on to bigger prey, and is now attempting to block the shipment of virtually every major smartphone and tablet vendor in the United States.
Furthermore, BU has gone after distributors, rather than focusing on the large electronics companies themselves. Samsung's lawyer Jeffrey Lerner submitted a letter he received from BU counsel Michael Shore, as evidence. The letter reads:
Samsung's customers and distributors are next. Unless Samsung stipulates to include customer US imports and sales in damages (or settles), BU is going to sue every single distributor and customer who imports a GaN infringing sensors.[sic].
A Bridge Too Far
On the one hand, what we have here are real patents that describe specific ways of building a product and they're held by an engineer, not a Patent Assertion Entity (PAE) with no research experience or work in the appropriate industry. This is the sort of situation patents are supposed to protect, right?
Actually, no. Even if we assume that Moustakas' patents will hold up under examination, this is the sort of scenario that's turned the patent business into such a litigious mess. Boston University, having recently discovered that it has the rights to this patent, has also discovered that a number of electronics companies use this method of creating displays. With just a few years to go before the patent expires, clearly the only thing the "non-profit*" school can do is sue everyone, everywhere, all at once.
No, Boston University isn't a PAE, but it's acting
like one. The patent system in America has broken, the costs of defending against false patent claims is skyrocketing. Why is this happening? Because it's hugely lucrative.
Payments to patent trolls have increased by nearly 6x over just six years. Clearly, Boston University is hoping for several huge payouts from the major electronics and retail firms. Hopefully it finds itself facing the Billy Goats Gruff instead.
* -- When your endowment sits at $1.1B and your President is paid more than one million a year, I think we can question the "non-profit" status.