Do University Technology Patents Pay Off? Ask Apple, Which Was Ordered to Pay $234 Million.

The prevailing wisdom states that when universities try to cash in on their research — be it chip design or gene splicing — they come out on the losing end.

Tell that to Apple, which was ordered this week to pay $234 million to the University of Wisconsin’s patent-licensing group for violating a patent on technology that improves the efficiency and performance of computer processors.

The Wisconsin Alumni Research Foundation convinced a jury that the A7 chips that power the iPhone 5s, the iPad Air and the iPad mini infringe on this patent. The University Friday hailed the verdict as a triumph for education and pledged to plow the money back into research and education.

“This is a case where the hard work of our university researchers and the integrity of patenting and licensing discoveries [have] prevailed,” said WARF managing director Carl Gulbrandsen.

Some researchers, including the Brookings Institute, have argued that universities should abandon the old approach of licensing their technology to the highest bidders, noting that only a handful of schools — as in eight — took 50 percent of the total licensing income of the university system. Instead, the study’s author, Walter Valdivia, urged universities to nurture their own startups and make their patents available to these budding companies.

For some educational institutions, the court route has proved lucrative — especially in the technology sector.

A University of California spinoff, Eolas, won $520.6 million against Microsoft in 2003 in a Web browser patent suit. In 2010, Cornell University won a $184 million jury verdict against Hewlett-Packard, though damages were later reduced to $53 million. And last year, Carnegie Mellon University collected one of the largest damage awards in history — a $1.5 billion judgment — in a suit against Marvell Technology Group saying that it infringed on two hard disc drive patents.

In the Wisconsin suit, Apple could have been liable for up to $862.4 million in damages. The educational institution used the same patent to sue Intel in 2008, in a dispute that was settled out of court.

Apple has said it plans to appeal the verdict.

This article originally appeared on Recode.net.

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