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In patent monetization circles, patents asserted by (or even just sourced from) leading research universities are among the most sought-after, yet elusive, assets there are. Driving the desirability of university-sourced patents for erstwhile licensors are a number of unique characteristics those patents often demonstrate. There is tremendous jury appeal, for one, in patents sourced from brand-name research universities, partly because of the goodwill associated with their status as bastions of research and education, as well as the perception that academic inventors are truly at the cutting-edge of their fields. Add in that the profit motive is not automatically associated with universities the way it is with corporations (never mind NPEs), and juries seem inclined to recognize innovation arising out of universities even more favorably. As a result, it is no surprise that university-owned patents have led to some of the biggest patent verdicts in history.

Attracted by the hope of replicating those verdicts, a host of patent monetization players are ready and willing to pitch universities on patent assertion. Propelled by the rise of litigation funding, as well as patent marketplaces like Cypris showcasing university patents, entities from law firms to NPEs are approaching universities with confidence, hoping to convince tech transfer offices that patent monetization can lead to revenues for their institutions. Considering the pressure on those tech transfer offices in light of the enrollment and financial challenges presented by the COVID-19 pandemic, it is not hard to imagine that we stand at the precipice of a golden age of university patent assertion. Likely by a host of different types of plaintiffs, from the university themselves, to NPEs that have acquired university patents, to companies that have taken exclusive licenses to university patents for the primary purpose of commercializing the underlying technologies.

One of the challenges for assertion of university patents, however, is that whenever there is any transfer of rights from the university to a patent owner or exclusive licensee, standing issues can arise that can become a problem when part of the reason the university divested or licensed the patent for assertion to a third-party is because the university itself has no interest in participating in patent litigation, even if the litigation costs are being borne by someone else. If confronted by that fact pattern, an alleged infringer will no doubt look to standing as an issue of interest and a potential weak point to exploit against a university-sourced patent. In fact, a 2018 district court decision out of Texas had previously provided defendants with a roadmap for the successful use of a standing defense to get a patent case involving a university-sourced patent dismissed.

Until last week, that is. In a split decision, featuring the rare situation where all three appellate judges on the panel issued written opinions, the Federal Circuit recently overturned that Texas district court decision, finding that there was an abuse of discretion in the decision to dismiss the case because the 11th Amendment sovereign immunity enjoyed by the patent-owning university precluded its involuntary addition to the case as a plaintiff.

A mouthful, I know. Let’s set the scene. In the case, GENSETIX, INC. v. BAYLOR COLLEGE OF MEDICINE, patents that originated with the University of Texas related to cancer immunology ended up exclusively licensed to Gensetix. In 2017, Gensetix brought suit against Baylor, alleging infringement by Baylor, the new employer of the inventor on the patents Gensetix held the exclusive license in. Even though Texas had a contractual obligation with Gensetix to assist in infringement litigation, Texas declined to join the lawsuit as a co-plaintiff. Going further, Texas filed a motion to dismiss, asserting its sovereign immunity as a basis to avoid being forced into the lawsuit involuntarily.

As the defendant, Baylor pressed the issue even further. It argued that Texas was a necessary co-plaintiff, since Gensetix did not own all the rights in the patent. And since sovereign immunity barred Texas from being added to the case as an involuntary co-plaintiff, the case could not move forward against Baylor as a result. The district court agreed, dismissing the case. But the Federal Circuit found otherwise. The majority agreed, as an initial matter, that sovereign immunity applied to Texas, since unlike other state-owned universities who were found to have waived their immunity by asserting their patents, Texas had made clear from the get-go it had no interest in participating in Gensetix’s lawsuit. But while Texas couldn’t be added as an involuntary plaintiff due to its immunity, that did not mean that the district court was right to dismiss the case. First, there was no prejudice to Texas if Genestix’s lawsuit went forward, since the interests of both parties were aligned — both would see financial benefit from a successful result, for one. Next, the contract between the parties precluded Texas from filing a second lawsuit using the patents, considering that Gensetix had already exercised its rights to bring suit. Finally, since Texas was a necessary party, Gensetix had no choice but to try to proceed without Texas. Taken together, the Federal Circuit majority determined that equity principles compelled a result where Gensetix would be allowed to move ahead with its case — despite Texas’ immunity.

In concurrence, Judge Newman disagreed that Texas should have enjoyed sovereign immunity in light of its contractual obligations to Gensetix, but agreed that the case should proceed with or without Texas as a plaintiff. Conversely, Judge Taranto agreed that Texas enjoyed sovereign immunity, but dissented to the finding that the district court had incorrectly dismissed the litigation for failing to join Texas as a result of that immunity. In his view, while Genestix could have a claim against Texas for breach of contract, Texas’ concern about prejudice to its patent rights because of Gensetix’s assertion could not be ignored. Put differently, if Texas wanted to put its patents at risk, it was free to do so, but the decision to waive its sovereign immunity belonged to it alone — and no waiver was required just because a licensee wanted to advance a lawsuit.

Ultimately, the Gensetix decision will likely prove an important one as assertion of university patents becomes more popular with time. The analysis of sovereign immunity as it relates to standing, along with the consideration of whether all substantial rights were given over as part of the supposed exclusive license provides direction to universities and their monetization partners on how to structure deals to avoid standing issues, while allowing the university to preserve its sovereign immunity if it so desires. At the same time, the decision also highlights the complexities inherent in universities partnering with third-parties when it comes to patent assertion. Whether this decision will encourage more universities to go it alone is up for debate. College students may not be sure if they are going back to class. But it is a good bet their schools are considering whether to put their patents to work, COVID-19 be damned.

Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

Crimes of dishonesty or breach of trust have long been no barrier whatsoever to a long and lucrative career as a broker, thanks to FINRA. However, due to the fact that they are subject to an actual regulator that is bound by a law, for 70 years such actions have blocked anyone guilty of such from getting a job as a bank teller or greeter—forever—without written permission from that regulator, the Federal Deposit Insurance Co.

That’s all about to change, thanks to the alignment of the Trump administration’s last-minute deregulatory frenzy, the general desire of his regulators to shirk responsibilities like processing applications for the aforementioned permission, a certain permissiveness towards those things that have defined this president and his life, and, unusually, a genuine desire to do the right thing and open up opportunities to those blocked by a youthful indiscretion, perhaps.

Current associates have expectations for how partners communicate that vary markedly from those of their decade-ago peers. They demand more openness, honesty and compassion. Stealth layoffs are highly visible internally and run counter to these expectations. They would cause profound and lasting damage to the respect associates have for partners and firm leaders, with consequent impact on motivation and loyalty. …

It’s clear that today’s associates would see stealth layoffs as management failing to take responsibility, being dishonest and lacking compassion. They’d exact a heavy toll on relationships with partners and leaders, and thus on motivation and ultimately firm productivity and vitality.

— Hugh A. Simons, formerly a senior partner and executive committee member at The Boston Consulting Group and chief operating officer and policy committee member at Ropes & Gray, suggesting that open layoffs would be preferable to stealth layoffs for today’s generation of Biglaw associates. 

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

Debt financing your law degree with student loans is going to ruin your life. Fine, that’s a little harsh. Let’s try again. Debt financing your law degree with student loans is going to be a huge setback and you’re probably going to have to significantly delay starting your life. There we go. It’s brutally honest but it’s true.

According to a new report put together by the American Bar Association’s Young Lawyers Division, student loan debt serves as an albatross around the necks of the nearly 1,100 lawyers in the early stages of their careers who responded to a YLD survey. “Participants said heavy student loan debt is affecting virtually every aspect of their lives,” per the report. Really? No shit. Student loan debt ruins everything.

More than half of the survey respondents—56%–said they had postponed the decision to buy a house or opted to forgo buying altogether as a result of their debts. And 29% said they had either decided to postpone getting married or not get married because of debt. When it comes to having a children, 48% said their debt prompted them to delay that or decide to not have children altogether. …

More than half of the survey respondents—58%–said they postponed or decided not to take a vacation because of their loan debt, while 46% said they decided not to buy a car or postponed a car purchase due to their loans.

Survey respondents reported a median educational debt load of $160,000 (including undergraduate debt), and forty percent said their current debt load was higher than when they first graduated thanks to interest. About one quarter of the young lawyers who took the survey provided short answers about how those monstrous debt loads were affecting their lives. In short, shouldering this debt is causing lawyers to suffer.

“There was an underlying theme of unhappiness, frustration and fear stemming from loan burdens,” the report reads. “Many mentioned issues with mental health, and some cited depression. Others mentioned an inability to save for the future or retirement, as well as difficult choices related to healthcare for themselves or their family.”

Before you decide to debt finance a law degree, please thoroughly research the consequences you could face. It’s not pretty. Life with student loan debt sucks.

New Lawyers Put Off Kids, Home Ownership Due to Crushing Student Debt [Law.com]

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Staci Zaretsky is a senior editor at Above the Law, where she’s worked since 2011. She’d love to hear from you, so please feel free to email her with any tips, questions, comments, or critiques. You can follow her on Twitter or connect with her on LinkedIn.

For folks taking the in-person bar exam today, most states are requiring folks to wear masks — something proctors took all of a couple minutes to stop doing — while sitting uncomfortably close to each other. But what happens at lunch time? You can’t really wear a mask while you’re eating, right? Surely the site of the test would expand the distancing for that, given that they officially feel 6 feet isn’t enough to allow people to remove masks inside the testing area.

Ahem.

That’s from a post by Campbell dean Judge Rich Leonard tagged as “socially distanced lunch at bar exam for Campbell students.” And it’s certainly distanced but I’m not sure this is what the CDC had in mind when they put out their recommendations.

And what’s more troubling is that this probably is a better run lunch than some out there right now. I’d not be shocked to learn of a bar exam that turned its examinees loose on the town to mingle at local restaurants… assuming those establishments could even keep up with the influx of graduates.

Again, please take care of yourselves out there.

Earlier: Bar Exam ‘Socially Distant’ Seating Doesn’t Look Much Different Than Its ‘No Cheating’ Seating
This Is What A Socially Distanced Bar Exam Looks Like… Do You Feel Safe?

A Miami-Dade judge, Circuit Judge David C. Miller, is under fire for the way he handled crowd noise at the courthouse. As reported by Law.com, the incident happened back in January (which tbh seems like a million years ago) when Miller was presiding over a tobacco trial and he said courthouse guests that had gathered in the lobby for Miami-Dade Circuit Judge William Altfield’s investiture disturbed his courtroom.

According to a report from the Judicial Qualifications Commission Chair Krista Marx, after first sending the bailiff and court clerk to quiet the disruption, Miller personally got involved, which included “yelling and waving his arms at the people in the lobby while trying to get them be quiet.” He also admonished a guest, “Do not shake your head at me,” and threatened to hold her in contempt. The ruckus Miller caused actually disrupted another trial in a different courtroom.

Suffice it to say the Commission wasn’t pleased with Miller’s behavior:

“The commission is particularly disturbed by Judge Miller’s repeated threat to hold one of the people in the lobby in contempt for shaking her head in disbelief over Judge Miller’s behavior,” Marx’s report said. “Judge Miller had other options available for dealing with the disruption to his trial, such as taking a recess or calling court administration to ask for assistance. The method he ultimately chose to employ reflected poorly on himself, and the judiciary as a whole.”

The report further said the incident violated three judicial ethical canons: creating an independent and honorable judiciary, promoting public confidence, and being patient, dignified, and courteous with all people a judge comes in contact with in an official capacity.

The report recommends a reprimand for Miller’s behavior. The Florida Supreme Court will review the JQC’s recommendation.

Miller has signed a stipulation conceding his conduct was inappropriate.

Read the Commission’s full report below.

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Kathryn Rubino is a Senior Editor at Above the Law, and host of The Jabot podcast. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

Well, we’re really doing this. States are beginning in-person bar examinations this week despite persistent warnings from public health officials and we hope everyone comes out of this experience safely. Joe and Kathryn offer a final roundup of what’s going on with the bar examinations this week, from social distancing seating plans to the bogus claim that the bar tests “minimum competency.” And, Joe unveils what the ideal attorney licensure regime would look like.

When you woke up this morning to find that “demon sperm” was trending on Twitter, did you call the cops? Or did you log off in disgust, because you remembered that the First Amendment only protects speech from government suppression, not content moderation by private companies?

If you managed not to call 911, congratulations! You are smarter than the president, who spent part of his evening whining that Twitter’s trending topics are “illegal.”

The rest of the evening he spent retweeting a video of a Tea Party-convened coven of quack doctors spewing lies about a supposed miracle “cure” for coronavirus on the steps of the Supreme Court.

Yeah, it’s hydroxychloroquine again. It’s always hydroxychloroquine with these loons.

After multiple studies showing the drug does more harm than good for COVID patients, the FDA pulled its emergency authorization for use to treat coronavirus. Which these esteemed medical professionals interpret as a deliberate plan to kill more Americans and ensure Donald Trump is defeated at the polls in November. It’s so obvious!

The star of the video is a Dr. Stella Immanuel who inveighed against masks and lockdowns, called double-blind efficacy studies of hydroxychloroquine unethical, and claimed that she and her staff all take the drug prophylactically without danger.

Here she is demanding Dr. Fauci et al submit to a pee test to prove they aren’t taking the drug themselves.

The Daily Beast notes that Dr. Immanuel believes a whole lot of bizarro nonsense.

Immanuel, a pediatrician and a religious minister, has a history of making bizarre claims about medical topics and other issues. She has often claimed that gynecological problems like cysts and endometriosis are in fact caused by people having sex in their dreams with demons and witches.

She alleges alien DNA is currently used in medical treatments, and that scientists are cooking up a vaccine to prevent people from being religious. And, despite appearing in Washington, D.C. to lobby Congress on Monday, she has said that the government is run in part not by humans but by “reptilians” and other aliens.

The video went viral, with clips continuing to circulate even after the original post was removed by Twitter, YouTube, and even the notoriously gun-shy mods at Facebook. Trump’s tweet of the video was removed by the platform, and his son Don Jr wound up in Twitter jail for twelve hours for promoting dangerous misinformation during a pandemic.

Or as Republican strategist Andrew Surabian put it, Twitter is “continuing to engage in open election interference — full stop.”

Will Bill Barr and Josh Hawley call for prosecution of Twitter and Facebook for dastardly First Amendment election violations? Not if a higher power gets to them first.

Better watch your back, Zuck! Apparently the man upstairs is as confused about the First Amendment as the man in the Oval Office.

Trump’s New Favorite COVID Doctor Believes in Alien DNA, Demon Sperm, and Hydroxychloroquine [Daily Beast]

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Elizabeth Dye (@5DollarFeminist) lives in Baltimore where she writes about law and politics.

Last week, Indiana pulled the plug on its planned online bar exam this week, rescheduling to next week in an effort to work out bugs that still plagued the system on Friday. The move got a lot of people wondering about Michigan’s plans, given that the neighboring state planned to hold its own online exam this week. Never fear, Michigan told the world! Unlike Indiana, Michigan employed ExamSoft as its vendor and wouldn’t have the problems plaguing the Hoosiers.

Fast forward…

Of course. A response on Twitter stated, “Can confirm. Examsoft isn’t taking calls either. We were supposed to start the second module 20 minutes ago and there has been no message from the test administrators.”

Michigan, for its part, thinks it’s got a handle on it:

Again, online exams are better than in-person exams, and there’s every reason to believe that this process will be vastly improved by October when more states are eyeing their online exams. But the problem is that the only way to get to October with a working system is to keep forcing applicants to act as unwitting Beta testers during the most important examination of their lives. That’s not a model for effective licensing… it’s just madness.

Sooner or later we’re just going to have to come to grips with the fact that this is an antiquated model of credentialing attorneys and build something new. If the goal is guaranteeing that all licensed attorneys are practicing at a high enough level to protect the public, a one-time exam on subjects that the lawyer never intends to practice simply makes no sense. Blow it all up and start over.

And until then just grant diploma privilege and put a stop to all this.

Earlier: Online Bar Exam Software Still Not Working On Friday, Test On Tuesday

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Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.