Patent Wars: Innovators, Revolutionaries, and the Race to Reform

In this month's episode, we're talking patent reform solutions with Judge Paul Michel, Professor Adam Mossoff, and Randy Landreneau!

Nearly two decades worth of Federal Circuit and Supreme Court rulings have thrown the patent system into disarray and weakened patent rights for inventors. Subject matter eligibility is a confused, chaotic mess – leaving even the Federal Circuit Chief Justice at a loss on how to determine eligibility. The muddied state of invention enablement puts at risk the software innovations fueling economic growth and the key life science innovations that can save lives. Court interventions on injunctions have made it all but impossible for patent owners to stop others from using their property rights without permission, turning predatory infringement into an efficient business model. This already perfect storm was compounded by an act of Congress a decade ago that inadvertently created a patent killing machine that has weaponized the patent office against inventors. This has all been bolstered domestically by the deep pocketed marketing and lobbying campaigns of a big tech industry that is now destroying the ladder it once climbed up on. And is being exploited internationally in an undeclared cold war that has led to the greatest wealth transfer in human history – and begs the existential question of who is going to develop the technologies of tomorrow. 

Over the course of the past couple of months, we've had the opportunity and honor to host conversations with thought leaders across the patent world. Working from their insights, this episode explores the biggest problems plaguing patenting and how those problems impact the innovation economy that so very tightly depends on strong, predictable, and reliable patents. Building on that understanding, we work toward getting a more complete view of the legislative, judicial, and educational solutions needed to get back to the gold standard patent system. In doing so, we not only talk with our guests about their support for the proposed solutions on the table, but we also explore the strongest criticisms. 

** Resources **

⦿ Show Notes: https://www.aurorapatents.com/blog/patent-wars-innovators-revolutionaries-and-the-race-to-reform
⦿ Judge Paul Michel and C4IP: https://c4ip.org/
⦿ Adam Mossoff on Twitter: https://twitter.com/AdamMossoff
⦿ Randy Landreneau and US Inventor: https://usinventor.org/
⦿ Innovation Race Movie: https://www.innovationracemovie.com/
⦿ Apply: https://www.aurorapatents.com/careers.html

** Follow Aurora Consulting **

⦿ Home: https://www.aurorapatents.com/
⦿ Twitter: https://twitter.com/AuroraPatents
⦿ LinkedIn: https://www.linkedin.com/company/aurora-cg/
⦿ Facebook: https://www.facebook.com/aurorapatents/
⦿ Instagram: https://www.instagram.com/aurorapatents/

And as always, thanks for listening! 

---
Note: The contents of this podcast do not constitute legal advice.

Chapters

• 0:00 Intro
• 2:06 Guest Intros: Judge Paul Michel, Professor Adam Mossoff, and Randy Landreneau
• 3:57 Hiring Announcement
• 4:31 Innovation Race Documentary
• 7:00 Problem: The Eligibility Mess
• 8:03 Bilski, Myriad, Mayo, and Alice
• 13:45 Eligibility History and Economic Impact
• 23:53 Solution: Patent Eligibility Restoration Act
• 33:08 Patent Eligibility Restoration Act Criticism
• 35:29 Risks: Use of "non-technological" and Software Patents
• 37:56 Risk: Pathogen Patents
• 46:26 Problem: Enablement and Genus Claims
• 50:17 Enablement History and Impact on Human Health
• 55:01 Problems: AIA, PTAB, Big Tech, Patent Trolls, and Injunctive Relief
• 55:37 AIA and PTAB explained
• 1:00:10 Big Tech and the Patent Troll Myth
• 1:08:02 Crony Corporatism: An Old Playbook
• 1:09:47 Design Defects of the AIA
• 1:11:29 No Standing Requirement
• 1:14:16 Lower Burden of Proof
• 1:15:02 Presumption of Validity
• 1:16:05 Judges vs APJs
• 1:20:17 Inventor Cost to Defend
• 1:21:13 Repeat Challenges
• 1:23:32 Josh Malone and Bunch O Balloons
• 1:26:21 Injunctive Relief
• 1:32:55 Solution: STRONGER Patents Act
• 1:41:23 Solution: Restoring America’s Leadership in Innovation (RALI) Act
• 1:45:57 Forging a Path from STRONGER to RALI
• 1:50:49 Problem: Patent Pending Indefinitely
• 1:51:14 Solution: Gold Plated Patents
• 1:56:50 Solution: Understand Selection Effect
• 2:02:17 Problems and Solutions: China's Undeclared Cold War
• 2:14:13 Problems and Solutions: Awareness and Education
• 2:21:48 Calls to Action
• 2:22:38 Second American Revolution
• 2:32:36 Quality Patents
• 2:33:38 Outro

Transcript

WEBVTT

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G'day, and welcome to the Patently Strategic Podcast, where we discuss all things at the

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intersection of business, technology, and patents. This podcast

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is a monthly discussion amongst experts in the field of patenting. It is for inventors,

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founders and IP professionals alike, established or aspiring.

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And in this month's episode, we're talking about the patent reform solutions needed

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to save the innovation economy. Me with the revolutionaries who are leading the charge.

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Nearly two decades worth of Federal Circuit and Supreme Court rulings

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have thrown the patent system into disarray and weakened patent rights for inventors.

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Subject matter eligibility is a confused, chaotic mess, leaving even

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the Federal Circuit Chief Justice at a loss on how to determine eligibility.

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The muddied state of invention enablement puts at risk the software

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innovations fueling economic growth and the key life science innovations

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that can save lives. Court interventions on injunctions have made

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it all but impossible for patent owners to stop others from using their

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property rights without permission, turning predatory infringement into

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an efficient business model. This already perfect storm was compounded

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by an act of Congress a decade ago that inadvertently created a patent

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killing machine that has weaponized the Patent Office against inventors.

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This has all been bolstered domestically by the deep pocketed marketing and lobbying

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campaigns of a big tech industry that is now destroying the ladder

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it once climbed up on. It is being exploited internationally

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in an undeclared Cold War that has led to the greatest wealth transfer

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in human history and begs the existential question of who is

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going to develop the technologies of tomorrow? Over the course of the past couple of

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months, we've sat down with thought leaders across the patent world in an

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effort to understand the biggest problems plaguing patenting and

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how those problems impact the innovation economy that still very tightly

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depends on strong, predictable, and reliable patents.

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Building on that understanding, we work toward getting a more complete view of

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the legislative, judicial, and educational solutions

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needed to get back to the gold standard patent system. In doing

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so, we not only talk with our guests about their support for the proposed

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solutions on the table, but we also explore the strongest criticisms.

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I'm incredibly excited to share that we'll be doing so with the help of distinguished

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industry heavyweights who are currently deep in the trenches of these issues and working

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tirelessly towards their solutions. Our guests include Judge

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Paul Michel, former Chief Justice of the nation's top patent court,

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who stepped down from his position to be able to speak freely on these problems.

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Professor Adam Mossoff, law professor at George Mason, and simply one of the

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most brilliant minds in intellectual property law, whose research is regularly

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leaned on by Congress, the Federal Circuit, and even the Supreme Court

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on all things patent law and innovation policy. And Randy Landreneau,

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president of US. Inventor, the largest inventor advocacy group

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in the country, a group that has worked diligently to push through legislative

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and administrative changes to protect inventors and innovative startups.

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We couldn't be more excited about this opportunity or think of a more impactful way

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to use this podcast platform. The hosts and panelists you hear from

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monthly on here all either run or work for pet and boutiques that help inventors

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and early stage startups protect their inventions. We firmly

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believe that innovation is essential to a healthy economy, and empowered

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inventors are the key ingredient to the innovation ecosystem.

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We started this podcast to help inventors, founders and practitioners deal especially

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with the sharp corners of this world. We devote so much airtime to

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trying to help listeners navigate the world as it is, but discussions like the

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ones we're sharing today present an incredible opportunity to talk about

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the world as we'd like it to be. Our guests have been exceptionally generous

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with their time. We recorded over six and a half hours worth of interviews.

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Recognizing that we want to reach as many people with this as possible

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and time is always precious, we've woven highlights from these conversations

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together into a single episode. Typically, we only do one episode

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per month, but given the quality of these conversations and the value in the

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unique perspectives of each guest, following publication of this condensed

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episode, we'll be releasing the full length interviews and weekly installments

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for anyone who'd like to go deeper. Before jumping into the thick of this,

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I do have one quick announcement. If you'd like to help us navigate this complex

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world, get the word out about these critical issues, and help inventors

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in the most tangible way possible, I have great news.

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Aurora is now hiring for a part time biomedical sciences patent

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agent. This is a salaried, fully remote position with a flexible

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work week and benefits work where you want, when you want, with a great

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team on engaging subject matter, and even get the opportunity to join

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us on this podcast, learn more, and apply@aurorapatents.com

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careers. We'll also include that link in the show. Notes. Now back

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to the task at hand. We've been wanting to do a patent reform focused

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episode like this for a long time, particularly since we covered US.

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Inventors 2021 Decade of Stolen Dreams rallies with our American

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Inventor Horror Story episode. It was then that we truly witnessed

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firsthand just how devastating the American Invents Act and the Ptab

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have been for inventors. Flash forward a couple of years to the present,

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and the makers of a new documentary entitled The Innovation Race reached

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out to us to screen their film. The film's premise really resonated with

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us. I'm going to play a brief segment from the trailer. We have

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a great history of inventors in America who've done great things the

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Wright Brothers, Thomas Edison. We have

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a system that has encouraged people to be inventors to

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solve problems by providing them with the ownership

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of what they actually created and patented. How do we turn

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inventions into innovations? How do we turn an

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idea in a venture's head or something

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in a lab or the garage into a real world product or

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a real world service that other people can use and enjoy. And that's

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the key of the patent system. That's what patents as property rights

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do. A patent is a constitutionally

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created property right. It's something that our founders, our framers of our Constitution

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recognize. Our patent system used to be very strong

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and reliable. That's no longer the case. There's some big tech companies

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up here whispering in the ears of Congressmen,

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sliding campaign donations to them and saying,

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we want you to dilute the patent system even more.

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Patents haven't just played an important role in growing our economy.

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They played a key role in developing the technologies

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that have made our country safer.

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Xi Jinping and the Chinese Communist Party the last five years have made

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it abundantly clear that they intend to not just compete with the

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United States, they intend to surpass us and to be the world's

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leader in innovative technology.

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Innovation drives economic security and national security.

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We've lost sight of what it is to protect this nation.

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Those voices you heard are from bipartisan interviews with folks like Senator

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Chris Coons from Delaware and Representative Thomas Massey from Kentucky,

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combined with a myriad of inventors, judges, generals,

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law professors, and policy experts, several of whom you'll hear

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from today, you can find options for streaming and learn more@innovationracemovie.com.

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The end of the film, which touches on solutions, provides a launching

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point for our discussion today. We're going to start with one of the hotter topics

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because of its recent traction in Congress and the attention,

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or more appropriately, abuse, that it's been getting in the courts. And that's the

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problem of subject matter eligibility. Before being approved or rejected,

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this is the first gate a patent application must pass through an examination.

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Whoever invents or discovers any new and useful process, machine,

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manufacture, or composition of matter, or any new and useful improvement

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thereof, may obtain a patent. Therefore,

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section 101, as it's called, defines what kinds of things you

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can patent any new and useful process, machine, manufacture, or composition

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of matter. The gatekeeping function of this statute that's largely

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been unaltered since it was handwritten in 1790, has simply been

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intended to prevent the patenting of the fundamental building blocks

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of human ingenuity things like letters, numbers,

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equations, and gravity. This all work great, as Professor Adam Mossoff

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will explain, until a series of Supreme Court decisions that he not so

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affectionately refers to as the four horsemen of the Innovation Apocalypse.

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The Four Horsemen are the bilski Myriad, Mayo and Alice.

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Decisions in these cases resulted in judicially created exceptions

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for laws of nature, natural phenomena, and abstract ideas adding

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new classes of unpatentable subject matter listening.

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As Adam explains, the Supreme Court handed down a series of decisions,

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four decisions between 2009 and 2014

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on this idea of what counts as an actual invention that can be patented.

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So it's long been recognized that you can only patent inventions like invented

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processes or new machines, new molecules,

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or a molecule that you actually isolate in the lab,

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because molecules aren't isolated out in the world. They're part of living organisms

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and other things. And then that molecule

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becomes isolated, and then you put it into an innovative pill,

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and that becomes a new treatment for cancer or hepatitis.

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So you can patent those things, but you can't patent abstract

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ideas, like equals MC squared. That's the law of nature can't

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patent. Two plus two equals four. That's an abstract idea.

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You can't patent the things in nature themselves,

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like you can patent the molecule that you've isolated,

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which is, by the way, what almost all drugs were

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for 120 years before we started designing them from

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the protein up with biotech innovations. But we're just people going out and

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scooping up sludge from jungles

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and figuring out there's a molecule in there that actually works against

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bacteria.

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The sludge you can't patent. That's just a fact of nature.

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But that, you know, microscopic molecule that you've isolated

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from the sludge and figured out how to put into a pill to get it

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past the hydrochloric acid in your stomach and get absorbed through your intestinal walls

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and travel through your blood system and not get attacked by your own body's immune

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system, that's an invention.

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That's a discovery that's worth protecting, and it should be protected.

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So this is a very important distinction that has long

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existed. It's the root of all patent systems, starting in England and

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in the United States. But the United States

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supreme court, starting in 2009, really just

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threw a monkey wrench into the whole works of this doctrine.

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And a series of decisions vastly expanded the

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scope of what it means to have something count as an abstract

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idea or law of nature and really,

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for lack of a better term, just made a mess of the law.

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They created a two step framework that

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provides no guidance to courts.

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As lawyers like to say, it's totally indeterminate, and it's

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leaning to just willy nilly decisions by courts and

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led to willy nilly decisions by the ptab in

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invalidating patents. In an industry where words matter more than in most,

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the supreme court was unfortunately, light on details. They created

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these new categories of unpatentable subject matter, but without

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working definitions to apply them, leaving it up to the lower courts and

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the patent office to sort through the ambiguity here's. Randy Landrenau

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they put it in writing, and they didn't really describe, well, what does that mean

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exactly? And, of course, if the details aren't there,

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suddenly you have a whole new area where attorneys can

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do their thing right. And, of course, that's what they've done. And did they ever.

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The wide array of innovation domains these judicial exceptions were

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applied to as justification to evaluate patents,

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really stress tests, the bounds of reason to give you a sense of

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just how crazy it's become. So patents

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on oil drilling,

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processes for oil derings, patents on

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automatic garage door openers, patents on

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processes for making automobile axles.

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And in fact, just recently,

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the International Trade Commission, a special court, applied this doctrine

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to invalidate a patent on a drill bit that

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used diamonds in the bit in an innovative way,

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saying that this is just an abstract idea, by the way, so the courts

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tell you how crazy this is, right? An oil derrick,

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a garage door opener, an automobile axle,

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and a drill bit are all being referred to as abstract ideas

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or laws of nature. I mean, this is insane.

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These are classic industrial and 20th century inventions that have

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long been secured by patents, that have been upheld as valid as patentable inventions by

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courts going back 200 years. And now the courts are now saying,

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no, this is automatically excluded from the patent system. These are abstract

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ideas or laws of nature.

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And the fact that the judges are able to write these opinions and not just

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see the absurdity on the face of the opinion itself is

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just really surprising. And this is completely destabilized

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patent system because patents are no

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longer reliable and effective property rights.

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Imagine if I said, yeah, you can have a property right in your house,

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but it could be potentially invalidated as an abstract

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idea by a judge. If you sue someone for trespass down

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the road or you don't even have to sue someone from trespass. Someone just gets

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upset at you and can file a petition at an agency to have them review

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and cancel your deed in your house. Because your house is built on land

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and land is a fact of nature and you can't have title

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and facts of nature. This sounds absurd,

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and it sounds like that can't be because that's so crazy sounding.

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But that's actually effectively what's happening in the courts with respect to patents

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right now, and they've invalidated thousands of patents. Now, to appreciate

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where this inevitably goes, it's important to understand the historical significance

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of eligibility in US patent law and the profound impact it's had

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on shaping the economy. First, understand where

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we started from. The United States has always been

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a leader worldwide

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in terms of its willingness to provide protections to

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next stage innovations and

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cutting edge innovations. So this has been a key

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part of the US pad system from the very beginning.

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Just one small example. When we broke with England

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for the Founders, for the very first time, put patents in the Constitution.

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Never been done before in history as well. Another innovation when

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very first Congress in 1790, right? They're spending weeks debating

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about how do we refer to President Washington, do we call him His Excellency,

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do we call him Mr. President, do we call him the Excellency, the Presidency,

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because he was the analog to the British king. So they were kind of trying

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to figure out, what do we call him. While they're debating that for

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weeks, they immediately enact the 1790 pound act because

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they know that's important. We need to get the country

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going, and innovation and protecting innovation with property rights is

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the basis for doing that.

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But they broke from England in a lot of ways in creating

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our patent system. So it's very common for people as they are. Our patent system

15:19.336 --> 15:23.058
came from England, and that's certainly true. There's elements of our patent system that did.

15:23.144 --> 15:26.034
But there's also novel new elements in our patent system.

15:26.072 --> 15:28.678
Like we embraced a first to invent system.

15:28.764 --> 15:31.942
England was not a first to invent. So we embraced the idea

15:31.996 --> 15:35.894
that you are an inventor. So just like the farmer who labors over

15:35.932 --> 15:39.106
a year to till the soil and harvest

15:39.138 --> 15:42.726
the crops, eventually that the farmers engage in productive labor. And that's

15:42.758 --> 15:46.746
the basis for which we then justify legal protection in

15:46.768 --> 15:50.090
the fruits of the farmer's labors with property rights in the wheat,

15:50.830 --> 15:54.586
the inventor engages in productive, innovative labors. And that's

15:54.618 --> 15:58.350
the basis by which we secure and protect the inventor's

15:58.690 --> 16:02.074
fruits of his or her labors in their invention with a patent,

16:02.122 --> 16:05.710
a property right. But we also protected processes.

16:05.870 --> 16:09.774
So England never protected processes. So James

16:09.822 --> 16:13.540
Watt, who invents the first practical steam engine,

16:13.910 --> 16:17.746
the basis of the entire industrial revolution, he couldn't get

16:17.768 --> 16:20.342
a patent on the process of the steam engine. He could only get a process

16:20.396 --> 16:23.526
on the machine that he invented himself. But the United States

16:23.548 --> 16:26.360
said no. Processes are inventions themselves, too,

16:26.810 --> 16:30.326
and they are right. You don't go out into the world and find

16:30.508 --> 16:33.818
the process of how to make a drug or how to operate a

16:33.824 --> 16:38.714
steam engine. These have to be invented just as much as the machines and

16:38.752 --> 16:41.962
other things that you work on with the processes. And in fact, the very first

16:42.016 --> 16:45.034
patent that issued in the United States, samuel Hopkins,

16:45.082 --> 16:48.718
was a process on making potash. So that type of patent would

16:48.724 --> 16:52.286
have never been issued in England, and that's patent number one in the

16:52.308 --> 16:56.274
United States. So the United States has always been an

16:56.312 --> 16:59.842
innovative leader in recognizing that

16:59.896 --> 17:03.998
there are innovations that historically have not been protected

17:04.174 --> 17:07.394
or did not exist and couldn't be protected, or that aren't protected in other countries.

17:07.442 --> 17:11.282
But we are protecting them because these are legitimate new creations

17:11.346 --> 17:14.774
of innovators, and they should be protected as property rights like any

17:14.812 --> 17:18.522
other fruits of productive labors, such that people

17:18.576 --> 17:21.690
can then go out into the marketplace and benefit from them themselves

17:21.760 --> 17:26.060
and benefit consumers. And so this is why

17:27.390 --> 17:31.146
the chemical revolution starts in Germany in the 19th century. But the

17:31.168 --> 17:34.560
pharmaceutical revolution, which applies chemistry to

17:35.490 --> 17:39.022
drugs to help actual people's lives, shifts to the United States.

17:39.076 --> 17:42.462
It's why the Industrial Revolution starts in England but then shifts to the United

17:42.516 --> 17:46.202
States in the 19th century. And it's why then the computer

17:46.276 --> 17:49.906
revolution doesn't shift from anywhere. It starts in the United States in the 20th

17:49.928 --> 17:54.126
century, and it's why the biotech revolution started in the United States. We protected

17:54.158 --> 17:57.814
biotech innovation starting in the 1970s and 80s when

17:57.852 --> 18:01.286
other countries said, oh, no, this is

18:01.308 --> 18:04.646
protecting life, or this is going to lead to

18:04.668 --> 18:07.798
Frankenstein type concerns and things of this sort,

18:07.884 --> 18:10.630
and I say said, no, these are legitimate,

18:10.710 --> 18:14.726
actual innovations that scientists and biologists

18:14.758 --> 18:17.514
are coming up with. They will benefit people's lives,

18:17.632 --> 18:21.018
and these should be patented. And that's why the

18:21.024 --> 18:24.894
biotech revolution happens. That was

18:24.932 --> 18:28.346
the context of how amazing our patent system is, and it's why our patent

18:28.378 --> 18:32.266
system was referred to as the gold standard of global patent systems.

18:32.378 --> 18:36.050
Predictably, this shift in perspective on eligibility has already started

18:36.120 --> 18:40.206
a sea change in where investment, innovation, and economic activity

18:40.238 --> 18:44.066
are occurring globally. For added context, the study Adam will

18:44.088 --> 18:48.178
refer to involves 1700 patent applications on the same inventions

18:48.274 --> 18:52.018
filed in China, the European Union, and the United States. I published

18:52.034 --> 18:55.494
a short study with a colleague a few

18:55.532 --> 18:59.018
years ago that showed that not only are we invalidating patents and

18:59.024 --> 19:01.180
have destabilized the US. Patent system,

19:02.110 --> 19:04.460
but that other countries haven't done this.

19:06.430 --> 19:10.022
You actually can show that there are patent

19:10.086 --> 19:13.642
applications that are being rejected by the Patent Office for

19:13.696 --> 19:17.754
being an abstract idea or a law of nature under this patent eligibility doctrine,

19:17.882 --> 19:21.306
that those patents on the exact same inventions are now being granted

19:21.338 --> 19:25.598
in Europe and in China. And that is really significant

19:25.694 --> 19:29.646
because that means people are getting property rights

19:29.838 --> 19:32.850
in these inventions in Europe and in China.

19:33.750 --> 19:37.522
And so we've now flipped, right? So, 40 years ago, people were getting

19:37.576 --> 19:41.286
property rights and biotech innovations in the United States and not getting them in

19:41.308 --> 19:44.358
Europe, and of course, certainly not China at the time. They were totally communist at

19:44.364 --> 19:47.926
that time, but they weren't getting them in Europe. That's why

19:47.948 --> 19:52.054
the biotech revolution happens in the United States, because the property rights were being secured

19:52.102 --> 19:55.734
in the United States. So therefore the licensing was occurring here, the venture capital

19:55.782 --> 19:59.574
investment was occurring here, the manufacturing started to occur

19:59.622 --> 20:03.110
here. All of the economic activity that contributes to the

20:03.120 --> 20:06.986
growth of our innovation economy, creates jobs, creates these flourishing

20:07.098 --> 20:10.778
lives through the products that are being purchased by consumers, happens in the countries

20:10.874 --> 20:14.798
that secure the property rights. And so we've now flipped it where we're

20:14.814 --> 20:18.162
no longer securing those inventions, but other countries are.

20:18.216 --> 20:21.300
And these are cutting edge inventions. Josh, you mentioned it.

20:22.070 --> 20:25.246
This isn't just garage door

20:25.278 --> 20:29.094
openers and automobile axles. Those are just, I think, exemplify just

20:29.132 --> 20:32.962
how crazy the doctrine is. The patents that are being invalidated that we identified

20:33.026 --> 20:37.510
are patents in innovative new diagnostic tests for cancer

20:38.170 --> 20:41.846
treatments, for diabetes, cutting edge

20:41.878 --> 20:45.578
innovations that the United States historically has protected and and

20:45.664 --> 20:49.034
is no longer doing so. And so this

20:49.072 --> 20:53.078
is bad by itself, but it's even worse comparatively

20:53.094 --> 20:56.494
in the global context, given that people are getting patents in

20:56.532 --> 21:00.014
other countries like Europe, and in China. And so that's where then

21:00.052 --> 21:03.486
the venture capital is going to flow to. That's where the economic activity is going

21:03.508 --> 21:07.166
to occur. And if we're seeing evidence of that actually happening. Judge Michel

21:07.198 --> 21:10.322
echoed similar concerns about the chilling effects, in particular,

21:10.456 --> 21:14.050
of investments dropping off. Much invention, as you know,

21:14.120 --> 21:17.138
is very expensive and very slow to mature,

21:17.234 --> 21:21.890
and therefore it often depends on substantial continuing

21:22.050 --> 21:25.394
external funding, often by venture capitalists,

21:25.442 --> 21:29.062
but also by other sort of institutions.

21:29.206 --> 21:32.294
And that's where the patent system is so critical,

21:32.422 --> 21:35.610
because without the protection of patents,

21:36.190 --> 21:39.930
many investment decisions will be made in the negative.

21:40.450 --> 21:43.310
If we had a stronger patent system,

21:43.380 --> 21:47.230
as we did 20 years ago, or maybe even twelve

21:47.300 --> 21:50.814
years ago, we'd be way

21:50.852 --> 21:54.322
better off. But the incentive to make

21:54.376 --> 21:57.602
these large investments has dropped off,

21:57.656 --> 22:00.420
and now the investments are starting to drop off.

22:01.030 --> 22:04.766
And that's a terrible warning sign, an awful trend

22:04.798 --> 22:09.170
that the country needs to reverse as fast as it possibly

22:09.250 --> 22:12.882
can. And that's the thing people don't understand. Patents,

22:12.946 --> 22:16.818
in a way, are more about investors than about inventors.

22:16.914 --> 22:20.794
So my most important message to people is we have

22:20.832 --> 22:25.530
to incentivize the investment, or the cures

22:26.430 --> 22:29.898
are not going to get to patients, the products are not going

22:29.904 --> 22:34.442
to get to consumers. The technology needed to deter

22:34.506 --> 22:37.994
China from invading other countries won't get created.

22:38.042 --> 22:41.822
So these stakes are enormous. It's actually difficult

22:41.876 --> 22:45.402
to think of higher stakes than what's involved

22:45.466 --> 22:48.914
with the health of the patent system. He goes on to provide some insights into

22:48.952 --> 22:52.002
the best possible vector for a fix to the eligibility mess.

22:52.136 --> 22:54.994
This really gets to the heart of the matter, and I think this is especially

22:55.112 --> 22:59.218
pointed coming from someone who spent 22 years as a Federal Circuit judge.

22:59.314 --> 23:02.786
The problem with courts is they're so bound by precedent, they can't

23:02.818 --> 23:06.386
fix it once the Supreme Court has said something unhelpful,

23:06.498 --> 23:10.442
unwise, in my view, you can't fix

23:10.496 --> 23:13.626
it except by legislation. When you

23:13.648 --> 23:17.820
think about it, eligibility already

23:18.270 --> 23:22.118
is in the statute. Four classes are deemed eligible. It's right in

23:22.144 --> 23:26.014
the plain language of the current section 101. Along comes

23:26.052 --> 23:29.758
the court and rewrites the bill because they didn't like it. They thought

23:29.844 --> 23:33.120
other policy approaches were better.

23:33.730 --> 23:37.310
Well, number one, I don't think they're right. But more fundamentally,

23:37.390 --> 23:41.230
they aren't the right people to be deciding broad questions of national

23:41.310 --> 23:44.914
innovation policy. That's for the congress. The Congress has

23:44.952 --> 23:48.918
the skill to do it, and it has the lawful authority to do it.

23:49.004 --> 23:51.974
Unelected judges should not be making patent policy.

23:52.092 --> 23:56.370
Period. And so we turn to our first proposed solution. The Patent Eligibility

23:56.450 --> 24:00.454
Restoration Act seeks to put to an end these judicially created exceptions

24:00.502 --> 24:04.454
to patent eligibility, while also attempting to strike a balance in preventing

24:04.502 --> 24:08.074
the patenting of the fundamental building blocks. It hopes to do so

24:08.112 --> 24:12.030
by maintaining the existing statutory categories of eligible subject matter

24:12.180 --> 24:15.934
while explicitly enumerating a list of excluded subject matter,

24:16.052 --> 24:19.130
resolving legitimate concerns over patenting of mere ideas,

24:19.210 --> 24:23.194
the mere discovery of what already exists in nature and social and cultural

24:23.242 --> 24:26.322
content that is believed to be beyond the scope of the patent system.

24:26.456 --> 24:29.214
Senator Tom Tillis, a Republican from North Carolina,

24:29.342 --> 24:32.238
introduced the first draft of the bill last August,

24:32.334 --> 24:35.746
and Senator Chris Coons, Democrat from Delaware, announced that he has

24:35.768 --> 24:39.190
come on as a co sponsor. The bill has also received broad community

24:39.260 --> 24:42.658
support from industry pundits, PTO directors, former judges.

24:42.754 --> 24:46.114
And the Biden administration seems to support the idea of reform.

24:46.242 --> 24:49.766
But while widely supported in its intent and fueled for

24:49.788 --> 24:53.594
traction with bipartisan support, there are some pretty serious questions about

24:53.632 --> 24:57.386
a couple of aspects of this bill. There are three concerns we've seen come

24:57.408 --> 25:00.874
up a fair amount how it supplies to software, use of the word

25:00.912 --> 25:04.954
nontechnological and the potential reintroduction of pathogen patents.

25:05.082 --> 25:08.670
We'll take on each of these with our guests. We'll turn to the judge first

25:08.740 --> 25:12.142
to see if he thinks Congress is on the right track. You've said,

25:12.196 --> 25:15.338
and I love this quote because when the stakes are high, there's no time

25:15.364 --> 25:18.606
to pull punches. Quote the Supreme Court's decisions

25:18.638 --> 25:22.466
in the last decade have confused and distorted the law of eligibility. You want

25:22.488 --> 25:25.614
to say it's a mess, illogical, unpredictable, chaotic,

25:25.742 --> 25:29.094
bad policy for important innovation, including for promoting human

25:29.132 --> 25:32.594
health. Congress needs to rescue the innovation economy from the courts

25:32.642 --> 25:36.006
which have left it a disaster. Let's hope Congress rises to

25:36.028 --> 25:39.866
the need. End quote. Does this bill, as it's written, rise to

25:39.888 --> 25:43.706
the need? Well, I don't think the bill is perfect because

25:43.808 --> 25:47.866
it's still a work in progress at the

25:47.888 --> 25:51.758
time we speak. It's still being refined by

25:51.844 --> 25:55.274
small teams of lawyers. Secondly,

25:55.402 --> 25:58.682
its political viability is not yet really tested.

25:58.746 --> 26:01.760
There might have to be further changes to make it possible.

26:02.210 --> 26:05.634
So I don't say it's perfect, but I do think it's very, very good.

26:05.752 --> 26:09.470
And I give huge credit to Senator Tillis and Senator Coons

26:09.550 --> 26:13.554
for the hearings. They held over three days in 2019 with

26:13.592 --> 26:17.186
45 witnesses from enormously diverse

26:17.218 --> 26:19.350
group of stakeholders and experts.

26:21.210 --> 26:25.400
And I'm very hopeful that the bill

26:25.770 --> 26:29.258
that was introduced in the last

26:29.344 --> 26:33.078
Congress and is about to be reintroduced in this Congress

26:33.174 --> 26:36.726
will move forward and ultimately get passed.

26:36.838 --> 26:41.306
And it's a little immodest, but I

26:41.328 --> 26:44.302
had some hand in the shaping of that bill.

26:44.436 --> 26:47.966
So I think it's very good being as objective as I

26:47.988 --> 26:51.694
can. But I guess I'm partly subjective because I was part of

26:51.732 --> 26:54.590
the drafting effort.

26:55.250 --> 26:58.658
But it's a great start. It's a very good bill. It would make

26:58.744 --> 27:02.114
huge improvements in predictability. I've also

27:02.152 --> 27:05.794
read a lot of comments in patent media indicating that this bill would overrule the

27:05.832 --> 27:09.906
three or four, depending on how you're counting Supreme Court cases that have put patent

27:09.938 --> 27:13.058
eligibility into its present state of disarray.

27:13.234 --> 27:16.774
The bill doesn't include explicit language to that effect, so I ask

27:16.812 --> 27:20.954
the judge for clarification. Well, it certainly would overrule some

27:20.992 --> 27:24.582
of the careless statements the Supreme Court embedded

27:24.646 --> 27:28.026
in its opinion deciding the four cases. I say four

27:28.048 --> 27:31.902
because I'm going to add Bilski as the first in the quartet time

27:31.956 --> 27:35.374
wise. But you're right, the other three are more famous and

27:35.412 --> 27:36.960
more problematic still.

27:39.090 --> 27:42.634
It might not necessarily change the

27:42.692 --> 27:46.686
decision, but it would change the doctrine,

27:46.718 --> 27:50.482
which is very important because it's the doctrine that guards future

27:50.616 --> 27:54.334
cases. It's the language in the opinion, not just the outcome

27:54.462 --> 27:56.950
eligible or ineligible.

27:57.930 --> 28:01.494
So I think that what

28:01.532 --> 28:05.366
I would say is the bill overrules most

28:05.468 --> 28:09.434
of the four Supreme Court cases, but maybe not

28:09.552 --> 28:13.514
at the level of 100%. We also asked Adam if he thought

28:13.552 --> 28:16.982
the legislation as it's written, accomplishes its stated goals.

28:17.046 --> 28:20.426
Is the legislation perfect? No. Very rarely

28:20.458 --> 28:23.658
is any legislation perfect. One waits

28:23.674 --> 28:26.960
for perfect legislation. One is waiting for Godot, right?

28:31.410 --> 28:34.180
Is it really the perfect legislation? No.

28:36.870 --> 28:40.660
Ideally, legislation should be very basic, very simple.

28:41.270 --> 28:44.754
That was, by the way, why the US. Patent system also worked

28:44.792 --> 28:48.326
was because the patent statutes were very basic and simple for a

28:48.348 --> 28:52.006
very long time, up until the American Vents Act is the first really kind of

28:52.028 --> 28:55.990
excessively complicated patent statutes that are being enacted.

28:58.010 --> 29:01.382
The sections of the statutes are typically one, maybe two sentences

29:01.446 --> 29:05.130
at most. The sentences are not very long. They're understandable.

29:06.030 --> 29:09.626
And that's key to having a property rights system where it's just you have

29:09.648 --> 29:12.910
a basic, understandable foundation for which then people can go

29:12.980 --> 29:16.526
and take their exclusive rights, their property rights, into the

29:16.548 --> 29:20.394
marketplace. My preference is for us to continue that practice

29:20.442 --> 29:23.950
because it's shown economically and historically to be the key to

29:24.100 --> 29:28.530
successful legal foundations and property rights for driving economic growth.

29:28.870 --> 29:32.418
And so ideally, they really should just pass a statute that's just a

29:32.424 --> 29:36.566
couple of sentences that just says all of these Supreme Court decisions from 2009

29:36.588 --> 29:40.066
to 2014, they're overruled, they're abrogated.

29:40.178 --> 29:44.194
We, as Congress deemed these judicial

29:44.242 --> 29:47.926
opinions by the Supreme Court as mistaken interpretations of what

29:47.948 --> 29:51.366
we were trying to achieve when we enacted the patent statutes according

29:51.398 --> 29:55.386
to the authorization and Constitution for us to do so as Congress. But while

29:55.408 --> 29:59.430
not perfect, adam still thinks it's an important step in the right direction.

29:59.510 --> 30:02.560
The bill, as framed achieves a lot of really good,

30:03.330 --> 30:05.520
and it's never going to be perfect.

30:06.370 --> 30:10.110
Even the 1952 Patent Act wasn't perfect in every respect,

30:11.810 --> 30:15.342
and we should support it with an eye towards,

30:15.476 --> 30:18.706
okay, let's now support it and say something like this

30:18.728 --> 30:21.778
should be enacted, but maybe you should be some changes on the

30:21.784 --> 30:25.298
margins. But at core, it's a good thing. And we should be definitely

30:25.464 --> 30:28.886
saying that this is a discussion Congress should have. They should be

30:28.908 --> 30:32.870
moving this forward and working to correct

30:32.940 --> 30:36.694
the concerns and the problematic language on the margins. While that

30:36.732 --> 30:40.290
moves forward, the language in particular we should be looking at correcting

30:40.370 --> 30:43.626
is where I'd like to turn our attention next. Among those in the.

30:43.648 --> 30:47.338
Industry some concerns have been expressed that the bill tries to do too much

30:47.424 --> 30:51.082
and opens new doors for judicial uncertainty. In a US

30:51.136 --> 30:54.746
inventor piece on IP watchdog coauthors Paul Morinville,

30:54.778 --> 30:58.366
Randy Landrenau and Josh Malone argue that in its present state the

30:58.388 --> 31:02.106
bill is immature and that the most important words dangle undefined.

31:02.298 --> 31:05.738
In highlighting the associated risk they point to the problem that got

31:05.764 --> 31:09.534
us here in the first place. As we said earlier section 101 defines

31:09.582 --> 31:12.734
eligible subject matter as whoever invents or discovers

31:12.782 --> 31:16.494
any new and useful process, machine manufacture or composition

31:16.542 --> 31:20.162
of matter or any new and useful improvement thereof.

31:20.306 --> 31:24.278
The Supreme Court somehow found a way to create an exception to the word any.

31:24.444 --> 31:27.906
A word that the dictionary says is used to express a lack

31:27.938 --> 31:31.850
of restriction. They called this restriction to the word any

31:31.920 --> 31:35.014
an abstract idea but then also failed to define

31:35.062 --> 31:38.474
what an abstract idea is. And here we are. We asked

31:38.512 --> 31:39.740
Randy about this.

31:42.210 --> 31:46.170
The devil is in the details. It's like okay so it has to be technological.

31:46.250 --> 31:50.446
What the heck does that mean? And they didn't. Again when

31:50.468 --> 31:54.546
you don't have a very finely defined set

31:54.568 --> 31:58.098
of terms everything can go wrong.

31:58.184 --> 32:02.238
Everything can go wrong. That's where you get unintended consequence.

32:02.334 --> 32:07.642
I mean to me technological is anything that performs

32:07.726 --> 32:11.046
a function like a function well

32:11.068 --> 32:14.598
wait a minute that's my definition. But is that how a judge is going

32:14.604 --> 32:17.766
to see it? Is that how the certainly not.

32:17.788 --> 32:21.306
How the opposing attorney who's trying to invalidate the patent is going to see it.

32:21.488 --> 32:24.730
They're going to take every leeway they can to

32:24.880 --> 32:28.540
make an argument to destroy your patent and

32:29.310 --> 32:32.560
the law has to provide a way

32:33.330 --> 32:37.130
for you to have some type of prediction

32:37.210 --> 32:40.302
as to whether or not you're going to actually win

32:40.356 --> 32:43.738
or lose. And that prediction

32:43.834 --> 32:46.386
goes all the way back to do you file a patent for this thing or

32:46.408 --> 32:50.306
not? If you can't predict that your patent is

32:50.328 --> 32:54.114
going to stay valid you can't invest you

32:54.152 --> 32:57.302
can't spend your time and effort you can't devote your life to this thing.

32:57.356 --> 33:01.014
Investors can't come in. You have to have

33:01.052 --> 33:04.374
something that's predictable and I think that's where it falls down.

33:04.492 --> 33:07.846
Again simplicity is the answer.

33:07.948 --> 33:11.766
Simplicity. You heard Randy mention the word technological in addition

33:11.798 --> 33:15.206
to many wanting more explicit language about the forced GODIS decisions

33:15.238 --> 33:18.278
being overruled the risk of the ambiguity surrounding

33:18.374 --> 33:22.146
this word is one of three chief criticisms we frequently see arise

33:22.198 --> 33:25.566
around the language in the bill. The others include concerns that the bill could

33:25.588 --> 33:29.146
turn software into ineligible subject matter and potentially endanger

33:29.178 --> 33:32.154
global health by reintroducing pathogenic patents.

33:32.282 --> 33:35.914
If the concerns are valid those could all be catastrophic outcomes

33:35.962 --> 33:39.906
but it's worth unpacking each. First to Randy's point the bill would

33:39.928 --> 33:43.186
make ineligible any patent on quote a process that is

33:43.208 --> 33:45.918
a nontechnological economic, financial,

33:46.014 --> 33:48.902
business, social, cultural or artistic process.

33:49.036 --> 33:52.946
This means that only processes deemed technological would be patentable.

33:53.058 --> 33:56.358
The current bill provides no definition of what technological means

33:56.444 --> 33:59.894
and would leave this interpretation up to the courts. And even if the word were

33:59.932 --> 34:03.674
defined, the definition would have to encompass whatever innovations the future might

34:03.712 --> 34:07.306
hold, which we can't possibly know. Any use of this word ends up

34:07.328 --> 34:11.414
either undefined and ambiguous or defined and overly prescriptive

34:11.542 --> 34:14.990
onto software patents. The bill says any person

34:15.060 --> 34:18.506
may obtain a patent for a claimed invention that is a process described

34:18.538 --> 34:21.886
in such provision if that process is embodied in a machine or

34:21.908 --> 34:25.406
manufacturer. Unless that machine or manufacturer

34:25.438 --> 34:28.894
is recited in a patent claim without integrating beyond

34:28.942 --> 34:32.974
merely storing and executing the steps of the process that the machine

34:33.022 --> 34:36.834
or manufacturer perform. As someone who spent 20 years writing software,

34:36.962 --> 34:40.770
I suspect the goal here is excluding nontechnological inventions

34:40.850 --> 34:44.946
that are merely replicated but now performed on a computer. But that's

34:44.978 --> 34:48.438
not what it says. What is merely storing and executing the

34:48.444 --> 34:51.930
steps of the process mean all software does this.

34:52.000 --> 34:55.274
So how might future courts run wild with a phrase like this?

34:55.472 --> 34:59.622
We certainly don't want to trade the Alice decision, something that's made software patents

34:59.686 --> 35:03.274
difficult to get for something that bans software patents altogether.

35:03.402 --> 35:07.486
The third concern centers around pathogenic patents. It's been argued that

35:07.508 --> 35:11.434
had this legislation been in place, researchers could have patented naturally

35:11.482 --> 35:15.146
occurring viral RNA sequences, making it more difficult for others

35:15.188 --> 35:18.814
to develop COVID vaccines and drugs, and that the language should be modified

35:18.862 --> 35:22.446
to prevent the reintroduction of patents on naturally occurring genomic

35:22.478 --> 35:25.602
sequences that are isolated and purified in the lab.

35:25.736 --> 35:29.062
I ask Adam and Judge Michel about all of these concerns. Now,

35:29.116 --> 35:30.790
I am a little worried.

35:31.850 --> 35:36.102
I've heard the arguments about the concern about the

35:36.236 --> 35:39.106
invalidation of software patents.

35:39.298 --> 35:42.694
I'm also worried about the throwing business method patents

35:42.742 --> 35:46.410
also under the bus, because I think the protection of

35:46.480 --> 35:50.618
business methods are processes that have long been protected in our country. They're not new.

35:50.784 --> 35:53.100
Again, this is pure rhetoric that they're new.

35:54.270 --> 35:57.962
I highlighted on this day innovation history. Business method patents

35:58.106 --> 36:01.802
from the 19th century and other scholars have found extensive

36:01.866 --> 36:05.550
numbers of business method patents going back to the early 19th century.

36:07.330 --> 36:10.530
These are legitimate processes. The patent access you have to process.

36:10.600 --> 36:13.666
And a business method is a process. And so as long as it's novel and

36:13.688 --> 36:17.046
non obvious, then you should be able to get a patent on it. It's an

36:17.068 --> 36:20.326
invention. So I'm really concerned about that,

36:20.348 --> 36:24.102
that it does completely throw business

36:24.156 --> 36:28.766
methods under the bus. And given the fact that there's

36:28.818 --> 36:32.694
a kind of a conflation of business methods with computer software

36:32.742 --> 36:36.966
patents, that computer software

36:36.998 --> 36:39.850
patents will go down too. And I think this is what they're highlighting, is that

36:39.920 --> 36:43.158
the language in the statute is not clear on this. And given kind

36:43.184 --> 36:46.714
of the constant confusion by judges and lawyers,

36:46.842 --> 36:50.266
people should know better, but are nonetheless get confused about these matters.

36:50.458 --> 36:54.142
And the reason why they're confused is because there's massive confusion in the policy debates

36:54.206 --> 36:55.620
about these issues.

36:57.990 --> 37:03.874
And so that this could have the effect of being

37:03.912 --> 37:07.974
the basis for the invalidation not just the business method patents or

37:08.012 --> 37:11.430
the exclusion of business methods from wholesale from the patent system,

37:11.500 --> 37:15.062
but also the wholesale exclusion of computer

37:15.116 --> 37:18.346
software patents, which would be a disaster. And I'm concerned about

37:18.368 --> 37:22.554
the new terminology like technology that is

37:22.592 --> 37:24.700
used in it as well.

37:25.870 --> 37:29.686
I understand from the people who have drafted

37:29.718 --> 37:32.958
the legislation or supported it and been part of

37:32.964 --> 37:37.066
the process that they're

37:37.098 --> 37:40.974
hoping that there's a significant body of

37:41.012 --> 37:45.126
law in Europe that applies that term and that they're looking hopefully

37:45.178 --> 37:49.054
to incorporate that, which is a fairly determined,

37:49.182 --> 37:52.642
and from what I understand, pretty good area of law. I mean,

37:52.696 --> 37:56.206
they're more restrictive in it than we would be normally for the pathogen patent

37:56.238 --> 37:59.846
concern. We benefit from some extra context ashley provided in the

37:59.868 --> 38:03.234
interview. You can't patent something in nature,

38:03.282 --> 38:06.646
but if you isolate it, so if there's a virus and

38:06.668 --> 38:10.434
I isolate whatever capsid protein

38:10.482 --> 38:13.942
or something, the DNA for that, then I can patent

38:14.006 --> 38:17.770
that DNA, and now I can own any product

38:17.840 --> 38:22.794
stemming from that DNA and I just isolated it. Right. Which I'm

38:22.922 --> 38:27.194
coming from being a lab rat back in the day. A lot of isolation

38:27.242 --> 38:29.840
stuff is easy, right? It's not hard.

38:31.250 --> 38:34.654
We know the components that viruses have and things like that.

38:34.692 --> 38:39.614
And so does there need to be a little bit more buffering

38:39.662 --> 38:43.234
around? Yes. If you isolate something, that's great, but again,

38:43.272 --> 38:45.762
you have to take it to a useful end and that's what you protect,

38:45.816 --> 38:49.574
right? Oh, I've created diagnostic assay now that yes,

38:49.612 --> 38:52.866
I use this purified DNA sequence to do whatever with. I can't

38:52.898 --> 38:56.280
just protect that purified DNA sequence. Yeah,

38:56.730 --> 38:59.946
I know that third issue very well, and I think that that is not a

38:59.968 --> 39:06.186
real concern for

39:06.208 --> 39:08.940
a couple of reasons. So as a preliminary matter,

39:12.030 --> 39:16.250
ashley made it very clear in her description of the concern

39:16.330 --> 39:19.806
that she said, well, it's easy to do, right, or people already know

39:19.828 --> 39:23.374
how to do it. Well, that means that just

39:23.412 --> 39:26.206
because it's patent eligible doesn't mean you get a patent on it. You still have

39:26.228 --> 39:29.970
to meet novelty and nonobviousness and disclosure and enablement.

39:30.630 --> 39:33.474
And this is one of the problems with this debate, is that the people who

39:33.512 --> 39:36.914
are opposed to reform big tech,

39:37.112 --> 39:39.598
who love willy nilly decision making,

39:39.784 --> 39:41.670
invalidate lots of different patents,

39:43.050 --> 39:46.834
are more than happy to say, oh yeah, this will open the floodgates,

39:46.882 --> 39:50.594
and anyone can get a patent now. No, it's not. It's just one requirement.

39:50.642 --> 39:54.026
It's one hurdle of a very long race of

39:54.048 --> 39:57.446
many hurdles that patent applicants have to go through. And this is why patent

39:57.478 --> 40:02.560
application process, as you guys know, takes many years because

40:03.010 --> 40:06.090
it's multiple requirements. And each of these requirements is a necessary

40:06.170 --> 40:09.694
requirement, as I tell my students in teaching patent law.

40:09.732 --> 40:13.122
Right? This is why every defendant argues the entire

40:13.176 --> 40:16.466
kitchen sink about why the patent is invalid because all you need is one to

40:16.488 --> 40:19.220
stick and that's all.

40:20.470 --> 40:24.274
Just because an isolated molecule is

40:24.312 --> 40:27.954
patent eligible, given the isolation which now makes it not

40:27.992 --> 40:31.366
a natural fact, it's now a human creation in the lab,

40:31.548 --> 40:34.840
doesn't mean that it's necessarily novel or that it's non obvious.

40:35.370 --> 40:39.178
To the extent, in fact, to the extent that, for instance, the entire

40:39.264 --> 40:42.602
human genome has now been published. There,

40:42.656 --> 40:45.914
I think, is an entirely legitimate and very

40:45.952 --> 40:49.466
real argument that any

40:49.568 --> 40:54.000
classic kind of DNA patent of the type that issued in the 1990s

40:54.690 --> 40:58.030
at the turn of the century is just not novel anymore

40:58.770 --> 41:02.366
because it's already known. It's part of the prior art,

41:02.548 --> 41:06.322
the facetas know how to know about these things and know how to find them.

41:06.456 --> 41:09.394
And even if it's not novel, it's obvious because they know how to find them.

41:09.432 --> 41:11.700
It's really super easy, as Ashley said. Exactly.

41:13.270 --> 41:16.498
So you're still having to go through novelty, you're still having to go through non

41:16.514 --> 41:18.280
obviousness and things of that sort.

41:19.850 --> 41:25.186
But second of all, the isolation of molecules

41:25.218 --> 41:29.722
of DNA. This is the biotech revolution that

41:29.776 --> 41:33.370
is what drove the Innovations

41:35.070 --> 41:38.538
and it was the US willingness to say these are patentable inventions to which we

41:38.544 --> 41:42.010
are going to apply novelty and non obvious to figure out

41:42.080 --> 41:45.514
which was a key to creating kind of this foundation for stable

41:45.562 --> 41:49.050
and reliable property rights that drove venture capital investing

41:49.130 --> 41:52.334
and the creation of whole new companies like Genentech and

41:52.372 --> 41:52.960
others.

41:55.010 --> 41:58.500
I'm less worried about,

41:58.950 --> 42:02.482
oh, this is going to somehow blockade research and development because the actual

42:02.536 --> 42:06.226
historical practice is the exact opposite to the extent to which there

42:06.248 --> 42:10.186
was a massive explosion in biotech research and development

42:10.238 --> 42:14.614
innovation. When did that occur? In the 1980s and

42:14.652 --> 42:18.262
early aughts. And that's exactly when we were providing those

42:18.316 --> 42:22.246
exact protections to isolated molecules. And there's a lot of rhetoric

42:22.278 --> 42:25.738
here too, like, Ashley, I know you're not gracing rhetoric, you're the

42:25.744 --> 42:29.020
true geek. So you're like, I get the science, I know the technology.

42:29.390 --> 42:33.498
The arguments that are being made in the policy debates. There are literally op eds

42:33.514 --> 42:37.166
being published by law professors George Contreras and others saying, oh my

42:37.188 --> 42:40.442
God, if this legislation Reform Act is enacted, this Patent Eligibility

42:40.506 --> 42:43.818
Reform Act, they'll get patents on your genes and your

42:43.844 --> 42:47.202
bodies, and it's just like that's just not

42:47.256 --> 42:51.214
true. And it never was true. The judge

42:51.262 --> 42:54.894
also shared some insights with us and this comes from the perspective of personally

42:54.942 --> 42:57.606
being involved in the legislative drafting process.

42:57.788 --> 43:01.222
Active work, as I said, is being done right now on

43:01.276 --> 43:04.310
trying to strengthen, clarify, sharpen the language.

43:04.730 --> 43:08.878
Great attention is being paid to the word non technological

43:09.074 --> 43:13.050
and various substitutes are on the table being considered.

43:14.270 --> 43:18.134
Now, if you were to press me and say, well, can you assure

43:18.262 --> 43:22.110
certain people who are nervous that this bill is absolutely

43:22.180 --> 43:25.146
foolproof and there can never be any unintended consequences?

43:25.258 --> 43:29.040
No, of course I can't. No one can, because you can't predict the future.

43:29.410 --> 43:30.880
No bill is perfect.

43:32.390 --> 43:36.610
But are the risks ones that could

43:36.680 --> 43:40.514
prudently be accepted? Absolutely. In my opinion, the risks are quite

43:40.552 --> 43:44.942
small, and people should just get their courage up because

43:45.016 --> 43:48.726
we need reform so badly. We shouldn't let it

43:48.908 --> 43:52.470
fail because some people were overly nervous.

43:53.370 --> 43:58.326
Now, in terms of clarity of the exclusions,

43:58.438 --> 44:01.050
that's also being worked on very actively.

44:01.630 --> 44:06.202
And we've had on our drafting group people

44:06.256 --> 44:07.930
from all backgrounds,

44:09.150 --> 44:12.830
including independent inventors. This is not just a big company

44:12.980 --> 44:17.530
kind of thing at all. And we've had people from all different technologies,

44:17.610 --> 44:21.006
from what I'll call the computer world and the

44:21.028 --> 44:25.358
pharma world and so on. So everybody's

44:25.454 --> 44:29.362
viewpoints and risks and concerns have been taken

44:29.416 --> 44:33.342
into account. I myself don't see any appreciable

44:33.406 --> 44:37.974
chance that appropriate inventions in

44:38.012 --> 44:42.310
the computer technology arena

44:43.610 --> 44:47.490
will get fenced out. I think there's no serious risk

44:47.570 --> 44:50.726
of that. People are right to be concerned about it, but I don't think there's

44:50.758 --> 44:54.326
a serious risk about that. And if the risk

44:54.358 --> 44:57.722
can be further reduced from an already low level to a very low

44:57.776 --> 45:00.634
level by more tinkering with language,

45:00.682 --> 45:03.338
I'm all for it. I've been participating daily,

45:03.434 --> 45:05.440
hourly, even this week,

45:06.370 --> 45:09.854
in those kind of refinements. We have a group

45:09.892 --> 45:13.634
of extremely thoughtful experts working on

45:13.672 --> 45:16.990
this. And of course, it's also being vetted

45:17.070 --> 45:21.220
by people in the patent office and by

45:21.990 --> 45:26.642
people on the staffs of all the senators on the IP

45:26.706 --> 45:29.890
subcommittee. The membership just newly announced yesterday,

45:29.970 --> 45:32.840
as you know. No surprises, really,

45:33.450 --> 45:34.920
at least in my view.

45:35.930 --> 45:39.226
So I think the

45:39.248 --> 45:43.078
big risk that scares me is that it'll get bogged

45:43.094 --> 45:46.806
down and not pass. The risk that it will get passed

45:46.918 --> 45:50.618
and will hurt. Innovation is minuscule. Adam comes to a

45:50.624 --> 45:54.646
similar conclusion. As he said earlier, while there is a need for language correction,

45:54.758 --> 45:58.286
all in all, I think these are concerns on the margins. When bills like

45:58.308 --> 46:01.626
this introduced, it's really important. These are important first steps.

46:01.658 --> 46:03.550
It's a huge hurdle to overcome,

46:04.530 --> 46:07.698
and we have to be really careful about letting the perfect be the enemy of

46:07.704 --> 46:11.486
the good. Unintended consequences are a frequent phenomenon in DC,

46:11.598 --> 46:15.726
so there seems to be sufficient reason for two of the three concerns expressed.

46:15.838 --> 46:19.174
Like the judge says, this is a work in progress. So I'm at least

46:19.212 --> 46:22.834
hopeful that conversations like these can help to advocate for cleaner,

46:22.882 --> 46:26.614
simpler language with less potential for side effects. And with

46:26.652 --> 46:30.246
that, we move on to the other half of the distorted judicial puzzle and

46:30.268 --> 46:33.754
that's enablement. We're not going to spend a lot of time setting this one up

46:33.792 --> 46:37.354
because it was the entire focus of our last episode called SCOTUS and Focus,

46:37.472 --> 46:41.034
where we took a deep dive on the Amgen versus Santa Fe case. And its

46:41.072 --> 46:44.942
potential impact on the full scope of enablement for genus claims and

46:44.996 --> 46:48.426
the potential devastating impact, especially to life science and pharma

46:48.458 --> 46:51.246
patents. If it sounds like I just made up a bunch of words,

46:51.348 --> 46:55.086
go check out that episode. The Supreme Court is taking this case on, and by

46:55.108 --> 46:59.070
the time this episode publishes, opening arguments will have already begun.

46:59.230 --> 47:02.594
In response to my question as to whether or not this case is our best

47:02.632 --> 47:06.200
hope for clarity on the problem of enablement, the responses were

47:06.570 --> 47:08.230
less than optimistic.

47:11.290 --> 47:14.086
I'm sorry, Josh. When I laugh and you said, is this case our best hope

47:14.108 --> 47:17.446
for clarity? Because anyone who is

47:17.468 --> 47:18.620
a betting person,

47:20.510 --> 47:24.026
the last thing you would expect from the Supreme Court and patent law

47:24.048 --> 47:27.946
is clarity. I'm afraid that based on

47:28.048 --> 47:30.960
the Supreme Court's track record of the past 20 years,

47:32.290 --> 47:35.498
and the Supreme Court has really reengaged with patent laws at a level we haven't

47:35.514 --> 47:42.250
seen for about 100 years now, the majority of those decisions have

47:42.420 --> 47:47.518
muddied the doctrinal waters at best, and have eliminated

47:47.614 --> 47:51.486
or weakened patent rights at worst.

47:51.678 --> 47:55.138
The biggest concerns center around one, the ability for the court to

47:55.144 --> 47:58.786
adequately understand the science, and two, the hope that

47:58.808 --> 48:02.054
the court is not misled or doesn't buy into flimsy rhetoric around

48:02.092 --> 48:05.554
the history of genus claims in US patent law. And for added context,

48:05.602 --> 48:09.266
the Juno case the judge will refer to momentarily is a similar enablement

48:09.298 --> 48:12.966
case that he believes the Supreme Court should have taken up instead of Amgen.

48:13.078 --> 48:16.886
Now the question becomes, can they be helpful?

48:17.078 --> 48:20.830
Can they understand what's going on

48:20.900 --> 48:24.814
here? And I'm worried that they won't understand

48:24.932 --> 48:28.480
the scientific realities well enough to

48:29.330 --> 48:33.454
adjust the two doctrines, written description and enablement

48:33.502 --> 48:38.306
just to give them headline titles in

48:38.328 --> 48:41.940
a way that will work for the human health

48:42.630 --> 48:45.060
technologies and industries and companies.

48:46.010 --> 48:50.166
Why? Because you have to understand a lot about

48:50.268 --> 48:54.280
science in order to understand why

48:54.810 --> 48:58.226
genus claims have to be broad

48:58.338 --> 49:03.702
and why it's impossible to test

49:03.836 --> 49:09.510
and prove out every potential variant

49:10.450 --> 49:12.830
in the genus.

49:13.490 --> 49:17.646
Because in the Juno case, the record said there

49:17.668 --> 49:21.562
were millions of billions of antibody

49:21.626 --> 49:23.780
fragments that could be used.

49:25.590 --> 49:29.534
And so the company was essentially faulted because they didn't

49:29.582 --> 49:33.054
test millions and billions. Well, that's ridiculous. Would have taken forever,

49:33.102 --> 49:36.014
it would have taken a fortune, would have been totally meaningless.

49:36.142 --> 49:40.246
Because there were workable known antibody fragments that

49:40.268 --> 49:43.430
were old art, they were in the books, they were being used by everybody.

49:43.580 --> 49:46.610
So I'm worried now. Why am I so worried?

49:46.770 --> 49:51.260
When you look at the Myriad case, I think they basically didn't understand

49:51.950 --> 49:55.962
how genetic sequences work.

49:56.096 --> 49:59.654
I think the Myriad case is a warning sign that they're a little weak

49:59.702 --> 50:01.790
on certain areas of science.

50:02.850 --> 50:06.602
And to the extent that Myriad decision

50:06.666 --> 50:11.150
was influenced by shallow scientific understanding,

50:11.650 --> 50:15.230
that makes me worry that Amgen may similarly

50:15.390 --> 50:18.638
be affected like he did with eligibility.

50:18.734 --> 50:22.174
Adam also shares some helpful historical context around the allowance

50:22.222 --> 50:26.214
and application of genus claims. So I think based on its current track

50:26.252 --> 50:30.210
record, if one shouldn't

50:30.370 --> 50:34.358
be overly optimistic or

50:34.524 --> 50:38.186
Alan greenspan once said irrationally exuberant about what

50:38.208 --> 50:42.220
the Supreme Court might decide in the Amgen versus Sanofi case.

50:43.150 --> 50:47.034
The only hope is that the Supreme Court is

50:47.072 --> 50:51.086
not misled by the

50:51.108 --> 50:55.066
fear mongering and misrepresentation

50:55.098 --> 50:59.578
of the history and law of genus claims, especially by the amnesty

50:59.754 --> 51:02.110
that filed in support of Sanofi.

51:02.870 --> 51:06.846
And I just published an article on this in Westlaw

51:06.878 --> 51:10.114
today that's publicly accessible with

51:10.232 --> 51:14.130
Matthew Dowd, excellent attorney and

51:14.280 --> 51:18.486
former clerk of Chief Judge Paul Michel of

51:18.508 --> 51:22.786
the Federal Circuit on calling out the fear

51:22.818 --> 51:26.278
mongering and misrepresentation of the history of genus claims in

51:26.284 --> 51:28.280
the patent system in the case.

51:29.370 --> 51:32.682
There's a sense or this claim that genus claims are somehow new,

51:32.736 --> 51:36.122
that they're a creation of the Federal Circuit because it's always nice

51:36.176 --> 51:39.594
to claim the Federal Circuit did something new as a way

51:39.632 --> 51:43.280
to get the Supreme Court to rule against it.

51:43.810 --> 51:47.440
But in fact, genius claims have been around since the very beginning of our country.

51:49.330 --> 51:52.734
They didn't call them genus claims because they didn't have this terminology back

51:52.772 --> 51:56.754
then. But if you read the patent claims that is upheld by the US

51:56.792 --> 52:00.046
Supreme Court and O'Reilly v. Morris, claim one, it's a genus

52:00.078 --> 52:03.540
claim. We quoted in our article showing example of it.

52:05.030 --> 52:07.250
The Wright brothers had a genus claim.

52:08.310 --> 52:11.826
Charles Goodyear's patent on vulcanizing rubber was a genus

52:11.858 --> 52:15.510
claim. It covered a whole range of different species of different

52:15.580 --> 52:19.510
embodiments in which this process

52:19.580 --> 52:23.180
was applied for vulcanizing rubber. By that, Charles Goodyear figured out.

52:23.790 --> 52:27.274
So these are not some kind of new crazy thing that came about because

52:27.312 --> 52:30.310
of the biotech revolution of the past 20 years.

52:30.480 --> 52:35.226
These are long standing legal

52:35.418 --> 52:38.814
devices in patents to effectively and

52:38.852 --> 52:42.478
properly secure especially pioneering innovation, which is

52:42.484 --> 52:45.822
why we see them in the biotech innovation, because all of those innovations

52:45.886 --> 52:49.154
were pioneering inventions where they couldn't it was inconceivable to

52:49.192 --> 52:52.654
them how to identify and specify every single embodiment.

52:52.702 --> 52:56.786
They couldn't do it. And just like pioneering

52:56.818 --> 52:59.942
innovators in the biotech space today can't list out every

52:59.996 --> 53:02.950
conceivable single embodiment, it's impossible.

53:03.610 --> 53:07.314
So this is the proper and only legal

53:07.362 --> 53:10.794
way that you can do it, which is why they have existed and have

53:10.832 --> 53:14.486
been enforced and upheld by the US Supreme Court from the very beginning

53:14.518 --> 53:17.420
of our country. And so,

53:19.470 --> 53:23.822
unfortunately, I'm very pessimistic about what the court will do given

53:23.876 --> 53:27.866
its track record. So my hope is only that it's

53:27.898 --> 53:31.422
not misled and throws out genus claims. With biotech already

53:31.476 --> 53:35.294
reeling from the eligibility mess we've discussed and the entire business model being

53:35.332 --> 53:38.994
under attack, there's a lot on the line not only for the economy, but for

53:39.032 --> 53:42.322
advances in human health. That's what we're really talking about here.

53:42.376 --> 53:46.362
It's what's good for more technology advances

53:46.446 --> 53:49.702
and, you know, it's particularly important in the human health area.

53:49.836 --> 53:53.762
It's very clear to me that the human health scientists

53:53.826 --> 53:57.314
are right on the verge of huge breakthroughs

53:57.362 --> 54:01.074
in curing cancer incurring, alzheimer's incuring,

54:01.122 --> 54:04.714
diabetes incurring, this, that, and the other and coming

54:04.752 --> 54:09.094
up with preventions and diagnostic methods

54:09.142 --> 54:12.414
to early detect and on and on.

54:12.532 --> 54:16.506
So they're right on the cusp of these big breakthroughs, and we're strangling

54:16.618 --> 54:20.538
the industry with stupid decisions on written decision

54:20.714 --> 54:23.626
description, pardon me, and enablement.

54:23.738 --> 54:27.406
So talk about high stakes. I mean, again, the stakes couldn't

54:27.438 --> 54:30.798
be higher. Genetic medicine, personalized medicine,

54:30.974 --> 54:34.402
it's all up for grabs. And guess what? China is running

54:34.456 --> 54:38.182
wild with that. Now, they're advancing a mile a minute in these very

54:38.236 --> 54:42.870
technologies, and we're not, because we've strangled the

54:43.020 --> 54:46.566
ability of the patent system to support and protect them. So where does

54:46.588 --> 54:49.674
that leave us in terms of a solution? My hope is just that

54:49.712 --> 54:53.370
Supreme Court doesn't throw out genus claims,

54:54.030 --> 54:56.810
because that would be a mistake, a legal mistake.

54:57.150 --> 55:00.794
Would it be one more provision we'd have to add to the Rally Act?

55:00.992 --> 55:04.542
Rally? Now, that's another important legislative acronym to remember.

55:04.676 --> 55:08.234
But before we unpack that, I'd like to talk about a host of big ticket

55:08.282 --> 55:11.614
problems that it and its close cousin, the Stronger Patents Act,

55:11.652 --> 55:15.054
seek to address, while eligibility and enablement are presently getting most

55:15.092 --> 55:18.194
of the attention. When I asked our guests to prioritize the main

55:18.232 --> 55:22.462
threats faced by the patent system and the innovation economy, two concerns

55:22.526 --> 55:26.146
immediately came to mind for each. One. The PTAB or

55:26.168 --> 55:29.682
Patent Trial and Appeal Board. Aka. The patent death squad.

55:29.826 --> 55:33.126
And two, the Supreme Court born inability for patent owners to

55:33.148 --> 55:36.866
receive what's called Injunctive Relief to stop infringers the Patent

55:36.898 --> 55:40.294
Trial and Appeal Board. So this is this administrative court that was created by the

55:40.332 --> 55:43.766
America Invents Act 2011, the ironically named

55:43.798 --> 55:47.306
American Vents Act. Typical Congress that always says the

55:47.328 --> 55:51.226
exact opposite title of the statute, what it enacts. Prior to

55:51.248 --> 55:55.246
that, if someone was infringing your patent and

55:55.268 --> 55:59.150
you sued them for patent infringement, the battle would take place in a real court.

55:59.490 --> 56:03.354
A real court. You have a jury, you have a real judge who's lifetime

56:03.402 --> 56:06.786
appointed. You want a lifetime appointed judge. You want a jury, you want due process.

56:06.888 --> 56:09.858
That's what our court system, by the way,

56:09.864 --> 56:13.634
that's called an Article Three Court. For any of you out there who hear

56:13.672 --> 56:17.860
this term, Article Three Court, it's just a real court with a jury. In fact,

56:18.650 --> 56:22.594
the 7th Amendment says you are entitled to a trial

56:22.642 --> 56:26.550
by jury for any civil matter of greater than $25

56:26.620 --> 56:30.550
or something. They probably need to update that amount. But anyway,

56:30.700 --> 56:33.866
the point is, this is like a constitutional right as an American. And you

56:33.888 --> 56:36.986
know what? You don't have that right in a lot of other countries. A lot

56:37.008 --> 56:40.646
of other countries. You face three judges and they decide. And if they're

56:40.678 --> 56:44.134
biased, you're in big trouble. So this is a big part of America.

56:44.182 --> 56:47.614
So prior to 2011, your patent battles would take place

56:47.652 --> 56:51.194
in a real court. And you know what? It's not fast and it's not cheap,

56:51.242 --> 56:54.494
but it's fair. And the inventor didn't always win.

56:54.532 --> 56:57.620
But if they should win. They would. The argument was. Well,

56:58.310 --> 57:01.310
patent office isn't perfect. Every now and then they make a mistake.

57:01.470 --> 57:06.210
And if they make a mistake, there should be a cheaper, faster, more efficient

57:07.910 --> 57:11.334
way to solve it other than District Court. Oh, but it's got to be fair

57:11.532 --> 57:14.998
and, oh, yeah, and we're going to let the Patent Office take care of it.

57:15.084 --> 57:18.486
Now, that sounds pretty reasonable, right? Like, well,

57:18.508 --> 57:21.866
what could go wrong there? But there's a term in

57:21.888 --> 57:25.510
Washington, DC. That's a big term. It's unintended consequences,

57:25.590 --> 57:29.018
right? Oh, man. In unintended consequences. There were

57:29.104 --> 57:33.182
the whole point of creating the PTAB was, we want a

57:33.236 --> 57:38.718
faster, more, quote, efficient process

57:38.804 --> 57:42.960
for invalidating patents. I'll tell you.

57:43.510 --> 57:48.050
As I mentioned before, I was on the Hill speaking

57:48.120 --> 57:52.914
with staffers and other stakeholders in

57:52.952 --> 57:56.446
2010 in the debates and leading up to the AIA,

57:56.638 --> 58:00.038
where I always like to point out to them, there's an old classic maxim that

58:00.044 --> 58:03.174
you can do something fast or you can do something right, but you can't do

58:03.212 --> 58:06.920
both. And so I kept telling them that,

58:07.450 --> 58:10.986
yeah, you want a fast process to invalidate patents, it's not

58:11.008 --> 58:14.682
going to be a right process. This AIA introduced process was called

58:14.736 --> 58:18.246
Inter Parties Review, or IPR, in which the validity of granted

58:18.278 --> 58:22.282
patents can be challenged by any member of the public, offensively or

58:22.336 --> 58:25.646
defensively. One way these challenges can arise is when

58:25.668 --> 58:29.566
you attempt to stop a large competitor from infringing your patent or attempt to

58:29.588 --> 58:33.438
license it to them. They often instead try to use the Ptap to invalidate

58:33.454 --> 58:36.766
the patent using means and designed effects we'll

58:36.798 --> 58:40.814
cover shortly. This flawed invalidation process quickly became weaponized

58:40.862 --> 58:44.754
by large infringers to use someone else's technology royalty free

58:44.872 --> 58:48.086
and to prevent new disruptive technology from competing in the

58:48.108 --> 58:52.354
marketplace. And the Ptabs invalidation rates have been staggering.

58:52.482 --> 58:56.406
The Patent Office has various statistics they quote that don't sound as

58:56.428 --> 58:59.926
bad, but I will tell you, the actual number is if you look

58:59.948 --> 59:04.186
at the number of cases that have gone to a final written decision, 84% of

59:04.208 --> 59:07.546
those patents have been fully or partially invalidated. And we have the

59:07.568 --> 59:10.746
number. And you can quote statistics in all

59:10.768 --> 59:14.398
kinds of ways to make them look different, but that is a hard and fast

59:14.484 --> 59:18.494
fact. And by the way, partially invalidated usually

59:18.532 --> 59:21.646
means the claims that matter. He's absolutely right about that.

59:21.748 --> 59:24.586
Data published on Professor Dennis Crouch's patent, Leo,

59:24.698 --> 59:28.094
showed that most patents tangled up in IPRs are also involved

59:28.142 --> 59:31.986
in litigation or licensing. Patents involved in litigation or licensing are

59:32.008 --> 59:35.922
considered top tier patents and make up a very small percentage of all

59:35.976 --> 59:40.306
granted patents. The net effect has been a clear path to endorsed piracy

59:40.418 --> 59:44.370
using the same patent Office that granted a quality patent to an inventor

59:44.450 --> 59:47.654
to later schizophrenically take it away. So how could something

59:47.692 --> 59:51.486
like this happen? What on earth would have motivated Congress

59:51.538 --> 59:55.194
to pass a bill like this when others clearly predicted it would not

59:55.232 --> 59:58.794
end well, congress was sold a bill of goods. You can see this

59:58.832 --> 1:00:03.566
because in the legislative history, congress very clearly said this

1:00:03.588 --> 1:00:07.530
is intended to be, quote, an alternative

1:00:07.610 --> 1:00:11.246
to expensive court litigation. But why was this a

1:00:11.268 --> 1:00:14.786
need? What was the impetus for needing a supposedly new,

1:00:14.888 --> 1:00:18.574
faster, more efficient, less expensive path to invalidate

1:00:18.622 --> 1:00:21.758
patents? The answer was trolls,

1:00:21.854 --> 1:00:24.898
and not the kind with brightly colored hair you might have played with as a

1:00:24.904 --> 1:00:28.006
kid, or even the kind you find on Twitter. No,

1:00:28.108 --> 1:00:31.410
congress was told it needed to save the world from patent trolls.

1:00:31.490 --> 1:00:35.174
You talk about a brilliant program,

1:00:35.292 --> 1:00:38.600
marketing program, influence program by big tech.

1:00:40.670 --> 1:00:43.798
It's like this whole patent troll propaganda,

1:00:43.974 --> 1:00:47.526
man. Was it used? Was it sold? Was it hammered?

1:00:47.558 --> 1:00:51.478
In the halls of Congress, the resulting rhetoric that surrounded the patent troll

1:00:51.494 --> 1:00:55.466
narrative, which is phrases like, the patent system is broken and patents are attacks

1:00:55.498 --> 1:00:59.758
and innovation. These various phrases that were pushed into kind of the

1:00:59.844 --> 1:01:03.454
public discourse about patents and innovation, really what

1:01:03.492 --> 1:01:05.870
arose, especially in Washington, DC.

1:01:06.450 --> 1:01:09.438
Over the past ten or 15 years, is, for lack of a better term,

1:01:09.454 --> 1:01:11.986
a moral panic about the patent system. The sense of like, oh, my God,

1:01:12.008 --> 1:01:15.338
it's destroying the whole world, and it's just the exact opposite.

1:01:15.374 --> 1:01:19.026
Of course, there can be a very well crafted

1:01:19.138 --> 1:01:22.646
story that is so compelling, it's like you almost have

1:01:22.668 --> 1:01:25.926
to believe it. But there could

1:01:25.948 --> 1:01:29.606
be a whole nother side. I asked Randy to explain the narrative of the patent

1:01:29.638 --> 1:01:33.530
troll. We all know that there are some

1:01:33.600 --> 1:01:36.570
percentage of attorneys out there who aren't totally ethical.

1:01:37.150 --> 1:01:41.014
There's going to be some frivolous litigation. It's America. When you have freedom,

1:01:41.142 --> 1:01:44.670
you have things that are you don't hold

1:01:44.740 --> 1:01:48.366
everything down because part of it is being free and having free speech and all

1:01:48.388 --> 1:01:52.058
that. But here's the thing. They took a few cases,

1:01:52.154 --> 1:01:54.974
and they'll always come up with a few cases. I look at this one,

1:01:55.092 --> 1:01:58.162
I said, oh, you see, there's proof. Well, okay, that's one case

1:01:58.216 --> 1:02:01.486
out of the whole country. Does that mean you have to burn

1:02:01.518 --> 1:02:04.820
the whole system down? And that's kind of what they've done. They've taken

1:02:05.670 --> 1:02:09.350
a few cases, and they'll always point to a few different cases that all sound

1:02:09.420 --> 1:02:13.126
terrible, and that's why we have to destroy the

1:02:13.148 --> 1:02:16.358
ability of an inventor. Now, they don't put it

1:02:16.364 --> 1:02:19.382
this way, but what they say as well, we're handling frivolous litigation.

1:02:19.526 --> 1:02:22.986
Every narrative needs a convincing villain, and the bad guy has

1:02:23.008 --> 1:02:26.314
to be defeated. The patent troll became the basis for

1:02:26.352 --> 1:02:30.702
action. It was predicated upon a narrative that

1:02:30.756 --> 1:02:36.106
everyone knows now called the patent troll, which, like trolls,

1:02:36.298 --> 1:02:39.770
is a very compelling, dramatic,

1:02:39.850 --> 1:02:42.874
and vivid image.

1:02:42.922 --> 1:02:46.450
But like trolls, is just a myth. So, like Randy says, some time ago,

1:02:46.520 --> 1:02:50.418
there were a few bad actors that bought or licensed some lesser quality

1:02:50.504 --> 1:02:53.566
patents, and they weren't practicing the invention.

1:02:53.758 --> 1:02:56.946
These few bad companies started suing legitimate companies

1:02:57.048 --> 1:03:00.286
based on. These patents, these bad actors, are considered non

1:03:00.318 --> 1:03:04.098
practicing entities or NPES, and gave birth to the concept

1:03:04.114 --> 1:03:07.670
of the patent troll. Unfortunately for the direction this ends up going,

1:03:07.820 --> 1:03:11.446
most inventors are also considered non practicing entities

1:03:11.558 --> 1:03:15.226
and historically always have been, but operate not in

1:03:15.248 --> 1:03:18.522
this unethical manner, but in good faith and according to how the system

1:03:18.576 --> 1:03:22.094
was designed to work. Innovators require support

1:03:22.212 --> 1:03:25.742
that in division of labor. People who have the resources, the money,

1:03:25.796 --> 1:03:30.078
the capital, the infrastructure can

1:03:30.164 --> 1:03:34.030
link up with through contracts the

1:03:34.100 --> 1:03:37.422
nimble innovators who have the intellectual capital.

1:03:37.486 --> 1:03:41.038
And that from that, as Adam Smith explained, the wealthy nations,

1:03:41.134 --> 1:03:45.214
you get this incredible maximization of value and

1:03:45.272 --> 1:03:48.582
wealth creation. Patents have been

1:03:48.636 --> 1:03:52.374
historically this kind of private property bridge. It's how you get from

1:03:52.412 --> 1:03:55.910
the invention in the lab, the invention in the garage

1:03:58.570 --> 1:03:59.910
to the marketplace.

1:04:01.290 --> 1:04:04.758
Because the problem isn't invention. Humans have always been inventive. Humans have

1:04:04.764 --> 1:04:08.178
been inventing for thousands of years. Why haven't those inventions

1:04:08.274 --> 1:04:12.142
got into the marketplace? You know, the,

1:04:12.196 --> 1:04:16.154
the really fascinating, you know, hockey stick graph

1:04:16.202 --> 1:04:19.946
that really is the most revealing hockey stick graph that ever has existed

1:04:19.978 --> 1:04:24.126
is the one that shows economic development

1:04:24.158 --> 1:04:27.938
and levels of innovation over about from

1:04:28.024 --> 1:04:31.026
like, you know, over a 2000 year period from, you know,

1:04:31.048 --> 1:04:34.434
this, you know, started ad ad ad period to today.

1:04:34.552 --> 1:04:39.646
And it's almost entirely flat for

1:04:39.688 --> 1:04:43.366
1900 years. And then you get to the 19th century, and then

1:04:43.388 --> 1:04:46.440
it goes straight up.

1:04:47.850 --> 1:04:50.886
That just happens to correlate with rule of

1:04:50.908 --> 1:04:54.346
law, protection of rights of lifelibrian, property, limited government,

1:04:54.448 --> 1:04:57.430
the development of market, but also patents.

1:04:57.590 --> 1:05:00.698
But hey, no need to let facts and history get in the way of a

1:05:00.704 --> 1:05:04.506
good narrative. Big tech saw these few bad actors and initiated

1:05:04.538 --> 1:05:08.110
a nationwide campaign that suggested that the patent troll problem

1:05:08.180 --> 1:05:11.754
was real and huge, even though there were only a few bad actors,

1:05:11.802 --> 1:05:15.726
and it worked exceedingly well. It's been entirely

1:05:15.918 --> 1:05:19.890
a policy narrative for which millions of dollars were spent

1:05:20.550 --> 1:05:24.434
pushing it into the policy debates, into the popular press.

1:05:24.552 --> 1:05:28.098
I mean, earlier it was interesting. In a conversation,

1:05:28.194 --> 1:05:31.490
Ashley mentioned how, you know, you know, innovators and inventors

1:05:31.570 --> 1:05:34.680
doing startups, like, they don't know about patents, but yet, like,

1:05:35.130 --> 1:05:38.098
your grandmother or grandfather heard patent troll.

1:05:38.274 --> 1:05:41.898
I got questions from people like, what are these patent trolls they hear about?

1:05:42.064 --> 1:05:45.494
People don't even know anything about the patent system who are actually getting patents,

1:05:45.622 --> 1:05:48.874
but they've heard of patent trolls, which tells you that doesn't happen

1:05:48.912 --> 1:05:49.770
by accident.

1:05:52.110 --> 1:05:56.394
It's well documented that this was a coordinated campaign pushed

1:05:56.442 --> 1:06:00.510
by big tech, coordinated with academics,

1:06:01.010 --> 1:06:04.954
you know, writing articles and producing junk science empirical

1:06:05.002 --> 1:06:08.606
studies, like the claim that, you know, 20 trolls

1:06:08.638 --> 1:06:12.254
cost the economy $29 billion in 2011. It's a totally

1:06:12.302 --> 1:06:15.974
bogus junk science study that has

1:06:16.012 --> 1:06:19.574
been totally shredded by

1:06:19.612 --> 1:06:23.110
academics and scholars. And yet,

1:06:23.260 --> 1:06:26.806
like troll, it continues to be cited and referenced to the

1:06:26.828 --> 1:06:27.720
very day.

1:06:30.570 --> 1:06:34.222
And again, because it represents

1:06:34.306 --> 1:06:37.466
this narrative that has been proven very effective, very,

1:06:37.568 --> 1:06:40.922
very policy. People like to say sticky and just like

1:06:40.976 --> 1:06:45.162
that. And to this day, any entity that is not practicing their invention

1:06:45.226 --> 1:06:48.506
but holds a patent on it is labeled a patent troll.

1:06:48.618 --> 1:06:52.094
This includes solo inventors, universities, and the like.

1:06:52.212 --> 1:06:55.834
Just about anybody who sues someone for patent infringement

1:06:55.962 --> 1:06:59.026
can be called a patent troll because it's just

1:06:59.048 --> 1:07:03.038
so easy to label them. And I was at it back in 2015 when Paul

1:07:03.054 --> 1:07:05.780
and I were fighting the Fight against the Innovation Act.

1:07:06.390 --> 1:07:10.470
We ended up kind of accidentally being invited to a luncheon

1:07:11.050 --> 1:07:14.726
in the house. So basically, you have these lobbyists who will

1:07:14.748 --> 1:07:17.318
invite all these staff members, and they'll give them lunch, and I'll give them a

1:07:17.324 --> 1:07:19.594
bunch of propaganda while they're eating, right?

1:07:19.792 --> 1:07:22.140
And basically,

1:07:23.230 --> 1:07:26.300
I got invited because they didn't know who I was. So Paul and I went.

1:07:27.390 --> 1:07:31.206
The first thing this woman said was, oh, the first patent troll was Eli

1:07:31.238 --> 1:07:34.862
Whitney. Eli Whitney was a patent troll. So why would big tech

1:07:34.916 --> 1:07:38.282
propagate this? Apple, Google, Microsoft, et cetera,

1:07:38.426 --> 1:07:41.806
all the big players leveraged patents for their own success and for

1:07:41.828 --> 1:07:45.154
what they didn't invent in house, they would buy or license patents for new

1:07:45.192 --> 1:07:48.802
innovations, paying people for their inventions. This was the private property

1:07:48.856 --> 1:07:52.094
bridge from intellectual to real capital that Adam discussed

1:07:52.142 --> 1:07:56.190
earlier. But hey, dealing with licensing is a massive inconvenience,

1:07:56.270 --> 1:07:59.494
and it's easier and cheaper to steal than it is to respect the law or

1:07:59.532 --> 1:08:02.966
develop the technology yourself. So a weakened patent system was the

1:08:02.988 --> 1:08:06.770
goal. And this sort of crony corporatism isn't a new playbook.

1:08:06.930 --> 1:08:10.438
It turns out there's plenty of historic precedent for big companies trying to

1:08:10.444 --> 1:08:14.170
capture the regulatory state to create barriers to entry and protect

1:08:14.240 --> 1:08:17.738
market share. This just happens to be the first time that it worked.

1:08:17.824 --> 1:08:21.374
Big corporations have been trying to weaken our patent system since about

1:08:21.412 --> 1:08:25.598
1850. Now, I don't know. Here's someone else you might want to

1:08:25.684 --> 1:08:30.090
interview. Her name is Zarina Khan. She's a researcher,

1:08:30.250 --> 1:08:33.806
an academic, and she's written about how you go all

1:08:33.828 --> 1:08:37.700
the way back to 1850. Any new technology comes out,

1:08:38.630 --> 1:08:41.778
a new industry builds around it. In the early years, there are a lot of

1:08:41.784 --> 1:08:45.058
lawsuits, and the big companies being sued for patent infringement go to

1:08:45.064 --> 1:08:48.286
Washington, DC. And try to weaken the system. And you're

1:08:48.318 --> 1:08:51.906
talking about telephone. I mean, telegraph, telephone,

1:08:52.098 --> 1:08:56.214
locomotives, automobiles, all the way up to whatever the current key

1:08:56.252 --> 1:08:59.658
area of business is. That's where it's happening. And right

1:08:59.664 --> 1:09:00.780
now, it's big tech.

1:09:03.790 --> 1:09:07.194
Amazingly, our politicians held pretty firm until,

1:09:07.392 --> 1:09:10.698
I don't know, about ten years ago. And what happened was

1:09:10.784 --> 1:09:13.914
now it was big tech with all of their influence,

1:09:13.962 --> 1:09:17.326
all of their think about the airwaves they can control, think about the things they

1:09:17.348 --> 1:09:20.826
can put out that people see far and wide.

1:09:20.938 --> 1:09:24.394
The big tech's narrative sticks. Eli Whitney is a patent troll,

1:09:24.442 --> 1:09:28.766
and Congress rushes in to save the day by passing the AIA in 2011.

1:09:28.878 --> 1:09:32.398
Unleashing, the PTAB and its 84% kill rate. I alluded

1:09:32.414 --> 1:09:36.098
to two potential legislative solutions earlier the Rally Act and the

1:09:36.104 --> 1:09:39.778
Stronger Patents Act. In order to understand their key differences,

1:09:39.874 --> 1:09:44.242
it's important to lay out specifically why the PTAB has been such an effective WMD

1:09:44.306 --> 1:09:47.438
and what's absolutely necessary for any meaningful reform.

1:09:47.554 --> 1:09:51.434
The design defects in

1:09:51.472 --> 1:09:54.790
the relevant sections of the AIA were really serious.

1:09:54.870 --> 1:09:58.730
One portion of it, the part dealing with post

1:09:58.800 --> 1:10:02.602
grant reviews, was very badly designed,

1:10:02.746 --> 1:10:06.622
very naively designed by people who don't understand how

1:10:06.676 --> 1:10:10.286
litigation can. I guess the cliche nowadays is

1:10:10.468 --> 1:10:13.822
be weaponized to protect people who

1:10:13.876 --> 1:10:17.474
should have to pay or be enjoined rather than

1:10:17.512 --> 1:10:21.362
be protected. We could easily devote an entire episode to the weaponized design

1:10:21.416 --> 1:10:24.738
defects alone. And some of this can get a little technical on

1:10:24.744 --> 1:10:28.502
the legal side of things. So we're going to 30,000 foot this a little bit.

1:10:28.636 --> 1:10:32.594
Most of these defects come down to a difference in long held legal standards

1:10:32.642 --> 1:10:36.434
in traditional constitutionally defined Article Three courts versus

1:10:36.482 --> 1:10:40.250
the rules Congress established for the PTAB. Of course, the district court.

1:10:41.390 --> 1:10:45.206
Those are patent infringement actions where someone is asserting

1:10:45.238 --> 1:10:49.130
the invalidity of the patent as a defense, so the patent owner

1:10:50.430 --> 1:10:54.640
has the opportunity to win in a legitimate sense.

1:10:55.730 --> 1:10:59.178
The patent owner doesn't win in the PTAB. The PTAB sole

1:10:59.194 --> 1:11:02.702
function as an administrative tribunal is to invalidate a patent. The whole reason

1:11:02.756 --> 1:11:05.970
why it was created was to create something that wasn't a court.

1:11:06.470 --> 1:11:10.306
And there's a reason why courts function well because they follow the rule of law

1:11:10.328 --> 1:11:14.846
and due process. The PTAB doesn't operate under the same rules,

1:11:15.038 --> 1:11:18.866
procedurally or substantive, as courts. There's no summary judgment. There's no

1:11:18.888 --> 1:11:22.514
American hearing for interpreting the claims. There's no motions

1:11:22.562 --> 1:11:25.510
to dismiss. You don't even have a claim.

1:11:26.970 --> 1:11:30.342
There's no real discovery. Right, but that's just the beginning.

1:11:30.486 --> 1:11:33.898
The PTAB omits the standing requirement, has a lower burden of

1:11:33.904 --> 1:11:37.686
proof and a weakened presumption of validity when compared to legal standards

1:11:37.718 --> 1:11:41.018
used in courts. Recall earlier when I mentioned that in

1:11:41.024 --> 1:11:44.954
these proceedings of the PTAB, the validity of granted patents can be challenged

1:11:45.002 --> 1:11:48.462
by any member of the public. Anyone in the entire

1:11:48.516 --> 1:11:52.254
world, for any reason, can file a PTAB. People should not be allowed to

1:11:52.292 --> 1:11:55.694
challenge patents in the PTAB unless

1:11:55.742 --> 1:11:59.998
they're being charged with infringement or have actually been sued in court.

1:12:00.174 --> 1:12:03.522
Those people absolutely should have the chance to

1:12:03.576 --> 1:12:06.710
challenge the patent of PTAB, but not stock short

1:12:06.780 --> 1:12:10.018
sellers like Kyle Bass. Not troublemakers,

1:12:10.114 --> 1:12:13.206
not shills for defendants who get

1:12:13.228 --> 1:12:17.078
formed out of nowhere and have no business

1:12:17.164 --> 1:12:20.966
except to file petitions

1:12:20.998 --> 1:12:25.162
in the PTAB. So the most important thing is to do what courts have always

1:12:25.216 --> 1:12:29.066
done require what lawyers call standing. That would be reform number

1:12:29.088 --> 1:12:32.766
one. The worst example I know of, one of the bad examples, I know

1:12:32.788 --> 1:12:36.394
a guy, the company is Valancell it's in North Carolina.

1:12:36.442 --> 1:12:38.270
His name is Dr. Stephen Le. Buff.

1:12:39.570 --> 1:12:43.054
He's the one who was the first person who figured out

1:12:43.092 --> 1:12:46.590
how to make biometric sensing devices work on an active body.

1:12:46.660 --> 1:12:49.682
Prior to that, if you were in a coma, they could have something on you

1:12:49.816 --> 1:12:53.166
sensing your heart rate or whatever, but if you were moving around, it didn't

1:12:53.198 --> 1:12:56.594
work. He figured this out. He patented it a long,

1:12:56.632 --> 1:12:59.682
long time before an Apple Watch ever was in existence.

1:12:59.746 --> 1:13:03.350
Well, at some point, Apple Watch comes out, and of course,

1:13:03.420 --> 1:13:06.534
Dr. LeBuff has a very successful business or licensing this technology.

1:13:06.652 --> 1:13:09.686
Apple approaches them like they're going to license, but no,

1:13:09.708 --> 1:13:14.054
they just take it, and then he sues them over. The four patents are infringing.

1:13:14.182 --> 1:13:17.386
They then take him to the PTAB, not just for the

1:13:17.408 --> 1:13:21.146
four patents they're infringing, but for another eight patents that he happens to

1:13:21.168 --> 1:13:24.926
have. How about that? No one thought, well, what happens if

1:13:24.948 --> 1:13:28.686
you don't have to have standing? Well, what happens is they can do whatever they

1:13:28.708 --> 1:13:32.830
want. There was even the case of a disgruntled ex wife trying to

1:13:32.900 --> 1:13:36.298
just invalidate her ex husband's patents, and we're seeing

1:13:36.324 --> 1:13:39.506
people commit extortion. This is the reason why

1:13:39.528 --> 1:13:43.058
people can file 40 or 50 petitions against the same patent. And of

1:13:43.064 --> 1:13:47.046
course, there have also been cases of hedge fund guys try

1:13:47.068 --> 1:13:50.882
to publicly invalidate a valuable drug stock right after you've shorted

1:13:51.026 --> 1:13:53.510
the drug stock. Right. Unified Patents,

1:13:54.730 --> 1:13:58.546
they don't produce anything. They are a membership organization.

1:13:58.658 --> 1:14:02.138
Big tech and others pay them a fee to be a

1:14:02.144 --> 1:14:06.086
member of this organization. And what Unified Patents does is they seek

1:14:06.118 --> 1:14:09.434
out patents that their customers want the use

1:14:09.472 --> 1:14:13.158
of, and they simply attack those patents and try to invalidate them

1:14:13.184 --> 1:14:16.986
or get a zero dollar license agreement. And then there's the massive gulf surrounding

1:14:17.018 --> 1:14:20.478
the burden of proof required for invalidation and the presumption of

1:14:20.484 --> 1:14:23.966
validity for the property. Right? These are the rocks that a patent

1:14:23.998 --> 1:14:28.130
owner has to stand on. Reform number two at the PTAB,

1:14:28.630 --> 1:14:32.210
again, requiring legislative amendment of the terms in the

1:14:32.280 --> 1:14:36.158
AIA itself is to equalize the

1:14:36.184 --> 1:14:39.686
burden of proof to kill a patent. So it's the

1:14:39.708 --> 1:14:43.282
same in court and at the PTAB

1:14:43.426 --> 1:14:46.774
right now. It's a high standard in the court, as you

1:14:46.812 --> 1:14:50.614
know, clear and convincing evidence. In the Ptab,

1:14:50.662 --> 1:14:54.426
a significantly lower standard applies because that's what the

1:14:54.448 --> 1:14:58.422
Congress said. It goes by the name Preponderant

1:14:58.486 --> 1:15:02.560
Evidence for short. That has to change.

1:15:02.930 --> 1:15:06.922
The third thing that I think is fundamental, and it might require

1:15:06.986 --> 1:15:10.494
legislation, would be to make it

1:15:10.532 --> 1:15:14.350
clear that there's a significant

1:15:14.430 --> 1:15:18.030
burden of proof on the part of the challenger.

1:15:18.190 --> 1:15:21.746
Because all these patents were examined by experts before they were

1:15:21.768 --> 1:15:25.206
even issued, and often that examination took years and an

1:15:25.228 --> 1:15:29.570
enormous amount of work by technologically savvy lawyers

1:15:29.650 --> 1:15:33.314
and examiners. Yes, of course they make mistakes.

1:15:33.362 --> 1:15:36.882
All humans make mistakes. But all the serious

1:15:36.946 --> 1:15:40.454
efforts to evaluate whether examination

1:15:40.502 --> 1:15:43.722
mistakes are rampant and as

1:15:43.776 --> 1:15:47.094
common as good examinations have shown, the opposite

1:15:47.142 --> 1:15:50.574
they've all shown that vast majority of the time, the work

1:15:50.612 --> 1:15:53.360
done by examiners is quite sound.

1:15:54.450 --> 1:15:58.842
So it should be a very clear presumption

1:15:58.986 --> 1:16:02.398
of validity at the get go in

1:16:02.404 --> 1:16:05.634
the PTAB, just as it is in court. But what about

1:16:05.672 --> 1:16:08.942
the administrative officials presiding over the cases of the PTAB

1:16:09.006 --> 1:16:12.286
who get to make the decisions on validity? They are given the title

1:16:12.318 --> 1:16:15.650
of Administrative Patent Judges, or APJs for short.

1:16:15.800 --> 1:16:19.334
But they're not judges in any classical sense of the word. The problem

1:16:19.372 --> 1:16:22.994
is you have an administrative tribunal

1:16:23.042 --> 1:16:26.658
that is not constrained by any requirements of the rule of law of due

1:16:26.674 --> 1:16:30.102
process. Anything that Americans assume

1:16:30.166 --> 1:16:34.566
should occur when your rights, whether a property right or even a contract,

1:16:34.758 --> 1:16:38.566
had been challenged and you were called upon

1:16:38.598 --> 1:16:42.190
to defend your rights before a neutral administrator,

1:16:42.530 --> 1:16:45.674
a judge, there was a very interesting exchange.

1:16:45.802 --> 1:16:51.150
It's called Oil States, which was actually addressing whether the

1:16:51.300 --> 1:16:54.418
judges, the administrative patent judges at the

1:16:54.424 --> 1:16:58.994
PTAB, were constitutionally appointed or not, where the

1:16:59.032 --> 1:17:02.418
attorney defending the PTAB referred to

1:17:02.424 --> 1:17:06.034
them as judges. And Chief Justice Roberts said excuse me, what did you call

1:17:06.072 --> 1:17:09.480
them? And he says, Judges, your Honor. And he says, Where I'm from,

1:17:10.010 --> 1:17:13.526
we use a different term. Some things that could

1:17:13.548 --> 1:17:17.910
be changed in the Patent Office would be being more careful

1:17:18.670 --> 1:17:21.978
about who gets assigned to what cases. There ought to

1:17:21.984 --> 1:17:25.574
be a code of ethics requiring

1:17:25.622 --> 1:17:29.066
recusal of people who have a conflict of interest in

1:17:29.088 --> 1:17:32.030
the courts. We've had this forever, and it's quite strict.

1:17:32.450 --> 1:17:35.914
By contrast, at the PTAB, there is no code of ethics.

1:17:35.962 --> 1:17:40.014
There are no recusal rules at all that

1:17:40.052 --> 1:17:43.682
apply to the PTAB judges per se. That's a huge

1:17:43.736 --> 1:17:47.294
mistake that could be fixed by the Director,

1:17:47.422 --> 1:17:51.694
and it should be fixed by the Director. And if the Director doesn't

1:17:51.742 --> 1:17:55.730
fix it, then the Congress can and should. With regard

1:17:55.800 --> 1:17:59.490
to the rules of recusal applying to all the judges

1:17:59.570 --> 1:18:02.470
other than the Supreme Court, that's a whole separate problem.

1:18:02.540 --> 1:18:06.194
But all the other judges are bound by strict

1:18:06.242 --> 1:18:09.026
recusal rules that are in statute.

1:18:09.138 --> 1:18:13.050
So Congress can pass a statute. If the Patent Office

1:18:13.120 --> 1:18:15.866
doesn't fix this very fast on their own,

1:18:15.968 --> 1:18:19.850
that would get rid of these conflicts. If people own stock in a company,

1:18:19.920 --> 1:18:23.642
they should not be sitting on that company's

1:18:23.786 --> 1:18:27.434
patents, for example. And there's some other wrinkles

1:18:27.482 --> 1:18:31.630
that are a little more complicated, but that's the clearest cut example.

1:18:31.780 --> 1:18:35.522
And similarly, if somebody comes into the PTAB from,

1:18:35.576 --> 1:18:38.914
let's say, 20 years of private practice where they

1:18:38.952 --> 1:18:44.260
represented, I'll just pick a name out of the air

1:18:44.790 --> 1:18:48.990
apple for 20 years. They shouldn't be allowed to sit on apple cases.

1:18:49.150 --> 1:18:53.810
They have 270 of these judges. It's not like there won't be other judges

1:18:53.970 --> 1:18:57.046
who can sit on the panel and hear the case. The case will

1:18:57.068 --> 1:19:01.394
go ahead. It just shouldn't have people whose prior clientele

1:19:01.442 --> 1:19:04.906
or whose current stockholdings create a conflict. Let me tell you

1:19:04.928 --> 1:19:08.330
something. I never really thought about this until I got into this whole effort.

1:19:10.110 --> 1:19:13.978
A lifetime appointed judge is not trying to get a better job somewhere.

1:19:14.154 --> 1:19:18.074
They're kind of in for life. Whereas in an administrative

1:19:18.122 --> 1:19:21.034
court, you have judges who are like employees,

1:19:21.082 --> 1:19:24.702
who, for all you know, they're certainly not

1:19:24.836 --> 1:19:27.838
looking at going to work for you in the future, maybe for Google or Apple

1:19:27.854 --> 1:19:31.586
or one of those big guys. This problem, unfortunately, goes well beyond the concerns of

1:19:31.608 --> 1:19:35.090
any one APJ. They're panel stacking.

1:19:35.750 --> 1:19:39.634
They're stacking panels to reach preordained results that

1:19:39.672 --> 1:19:43.110
needs to end. I mean, that's a fundamental breach of the rule of law.

1:19:43.180 --> 1:19:47.014
I mean, we had a huge fight in our country over this in the 1930s

1:19:47.052 --> 1:19:51.020
over the packing of the US Supreme Court by President

1:19:51.630 --> 1:19:55.306
Roosevelt when he was upset about the court invalidating his

1:19:55.328 --> 1:19:59.066
New Deal programs. And everyone recognizes the

1:19:59.088 --> 1:20:01.310
reason why it's called the court packing dispute.

1:20:02.930 --> 1:20:06.938
And it still shocks me to this very day that lawyers,

1:20:07.034 --> 1:20:09.360
people who are trained in the law,

1:20:10.210 --> 1:20:14.042
are stacking panels and are participating in stacked panels

1:20:14.106 --> 1:20:17.266
and aren't thinking to themselves, isn't there something wrong with this?

1:20:17.368 --> 1:20:20.834
So what does this cost an inventor to defend their property rights in an

1:20:20.872 --> 1:20:24.334
administrative body that was sold as a faster and less expensive

1:20:24.462 --> 1:20:28.370
alternative to invalidating patents? So it has now become so expensive

1:20:28.450 --> 1:20:32.626
to enforce a patent. Let's assume a perfectly valid patent,

1:20:32.738 --> 1:20:36.178
I'm blatantly infringing it, I get sued,

1:20:36.274 --> 1:20:39.210
I file in the PTAB.

1:20:41.950 --> 1:20:45.766
The reality is that the total time frame

1:20:45.878 --> 1:20:49.226
could easily take five to ten years before I

1:20:49.248 --> 1:20:52.730
can get a final result out of the courts. And it could easily

1:20:52.810 --> 1:20:55.934
cost millions of dollars, even as

1:20:55.972 --> 1:20:59.390
high as five to ten millions of dollars. Now, most small

1:20:59.460 --> 1:21:03.098
companies can't afford that. So they're basically priced out

1:21:03.124 --> 1:21:06.686
of the US justice system because we've made it too expensive,

1:21:06.798 --> 1:21:10.894
unnecessarily expensive, and slow and cumbersome

1:21:10.942 --> 1:21:14.222
and burdensome and all the rest. It costs, on average,

1:21:14.286 --> 1:21:18.200
a half million dollars to defend at the PTAB per case.

1:21:18.650 --> 1:21:22.358
But surely, once a patent is found valid, that's it, right?

1:21:22.524 --> 1:21:26.278
We'd think so. In any balanced system, most are probably familiar with the

1:21:26.284 --> 1:21:30.202
legal concept of double jeopardy that prohibits a person from being tried more than once

1:21:30.256 --> 1:21:33.574
for the same matter after they have been acquitted or convicted.

1:21:33.702 --> 1:21:37.750
It is a long standing and important protection against government abuse

1:21:37.830 --> 1:21:40.934
and ensures that individuals are not subjected to repeated

1:21:40.982 --> 1:21:44.282
prosecutions. Not so in this kangaroo court.

1:21:44.426 --> 1:21:48.506
Senator Chris Coons from Delaware sponsors one of the bills we'll talk about shortly

1:21:48.618 --> 1:21:52.154
has said that big companies are using repeated challenges to just muscle

1:21:52.202 --> 1:21:55.854
their way over even the most valid patent by invalidating or weakening

1:21:55.902 --> 1:21:59.266
it through repeated challenges. Patent owner doesn't get anything out of

1:21:59.288 --> 1:22:02.210
the PTAB, choosing not to invalidate their patent.

1:22:02.550 --> 1:22:05.906
Petitioner gets everything. And the petitioner can keep filing petitions as

1:22:05.928 --> 1:22:09.302
well. In fact, they file repeated petitions, as people

1:22:09.356 --> 1:22:13.142
well know, or many people do now they're called

1:22:13.196 --> 1:22:16.358
serial petitioning. I'm not a particularly good fan of that because it

1:22:16.364 --> 1:22:19.370
sounds like we're talking about Cornflakes or Rice Krispies.

1:22:21.230 --> 1:22:25.382
So I like to make it clear that we're talking about companies like Samsung

1:22:25.446 --> 1:22:29.814
and Apple and others filing 30, 40 50 petitions

1:22:29.862 --> 1:22:33.102
against the exact same patent, making the exact same

1:22:33.156 --> 1:22:36.526
arguments. And why are they doing that? Because actually,

1:22:36.628 --> 1:22:40.362
studies have shown that their chances of a petition

1:22:40.426 --> 1:22:43.838
being granted go up even when the

1:22:43.844 --> 1:22:47.682
petition has been initially denied. They just refile the exact same

1:22:47.736 --> 1:22:50.878
petition. They change two sentences in it so it's a quote,

1:22:50.974 --> 1:22:54.174
different petition, and they refile

1:22:54.222 --> 1:22:57.686
it with the exact same arguments to the exact same evidence. And this has been

1:22:57.708 --> 1:23:01.426
confirmed now through empirical studies that the chance of that petition

1:23:01.458 --> 1:23:04.598
now being granted go up. That is not a

1:23:04.604 --> 1:23:08.422
system operated under the rule of law in any meaningful sense

1:23:08.476 --> 1:23:12.474
at the PTAB. Whereas I mentioned patent owner doesn't get anything out of it.

1:23:12.512 --> 1:23:15.606
And so it literally is a situation where patent owner has to pay to defend

1:23:15.638 --> 1:23:18.650
their patents constantly against 40 50 petitions,

1:23:18.990 --> 1:23:22.486
40 or 50 bytes at the exact same apple, where in court

1:23:22.518 --> 1:23:25.802
you get one bite. Speaking of double jeopardy, these challenges

1:23:25.866 --> 1:23:29.182
can also come after a patent is held valid in a court under

1:23:29.236 --> 1:23:33.002
statute grounds, not in the purview of a PTAB, josh Malone.

1:23:33.146 --> 1:23:36.494
So here he is. He comes out with his invention. It goes totally viral.

1:23:36.542 --> 1:23:40.340
Totally viral. You have no idea how what a seller this thing is.

1:23:40.790 --> 1:23:44.546
And it's being infringed heavily by TeleBrands. That's a

1:23:44.568 --> 1:23:47.160
big American company, big as seen on TV company.

1:23:47.530 --> 1:23:51.382
And he gets them in a real court before

1:23:51.436 --> 1:23:55.910
they get him to the PTAB, and he's fighting for a temporary injunction.

1:23:56.650 --> 1:24:00.874
And they come down with their MIT expert who argues that,

1:24:00.992 --> 1:24:04.550
well, we're not infringing because the patent is not valid,

1:24:04.630 --> 1:24:08.220
because it's unclear. Josh's patent says

1:24:09.230 --> 1:24:12.714
when the balloons are substantially filled with water, you shake the device and they fall

1:24:12.752 --> 1:24:16.746
off seal. Well, what does substantially filled with water mean? This is an unclear term.

1:24:16.858 --> 1:24:19.966
And come on, give me a break. Anyway, the judge did not go with their

1:24:19.988 --> 1:24:24.126
argument. Josh won. Then they appealed it. They appealed it to the

1:24:24.148 --> 1:24:27.266
next level. And again, and that judge actually laughed at them.

1:24:27.368 --> 1:24:31.570
And their attorneys ended up getting sanctioned for making a frivolous argument.

1:24:32.070 --> 1:24:35.438
So Josh was like mopping the floor with these guys in a real court,

1:24:35.534 --> 1:24:38.198
and he should have it should have been over. But no, they take it to

1:24:38.204 --> 1:24:41.506
the PTAB, make the same argument, and the PTAB says, you're right, it's unclear,

1:24:41.538 --> 1:24:45.400
and they invalidate the patent. Now, luckily, Josh had

1:24:45.850 --> 1:24:49.794
not just one patent, but many patents on this one invention,

1:24:49.842 --> 1:24:52.120
which that's something inventors. Oh, man.

1:24:52.970 --> 1:24:56.326
You file one and you do continuations, a whole bunch of continuations.

1:24:56.358 --> 1:24:58.666
So if they take out one patent, you can fight with another. If they take

1:24:58.688 --> 1:25:01.994
out that one, you can fight with another. But that was one of the things

1:25:02.032 --> 1:25:05.806
he did that helped him eventually win. And he eventually did win, but it

1:25:05.828 --> 1:25:09.454
cost $20 million, 20 million he and his investors had to spend

1:25:09.572 --> 1:25:12.798
to finally pull off a win. Who can do that? He's the one in

1:25:12.804 --> 1:25:14.740
a million that was able to pull it off,

1:25:15.830 --> 1:25:19.186
and everybody else just gets crushed. But it can also

1:25:19.208 --> 1:25:22.818
go the other direction, survive in court and then get dragged through the

1:25:22.824 --> 1:25:26.614
PTAB. But it's turned out not to be an alternative at

1:25:26.652 --> 1:25:30.102
all. It's turned out to be an

1:25:30.156 --> 1:25:34.054
upfront system, a prelude to

1:25:34.172 --> 1:25:37.394
court litigation. So first you have to survive

1:25:37.442 --> 1:25:41.850
in the PTAB, which takes two or three years, including appeals,

1:25:42.270 --> 1:25:45.770
and then you have to survive more challenges in the court

1:25:46.110 --> 1:25:49.494
on a broader array of legal subjects,

1:25:49.542 --> 1:25:54.142
invalidity grounds. So the

1:25:54.196 --> 1:25:58.126
Congress's expectation that this would be an alternative, they were told that.

1:25:58.228 --> 1:26:01.806
But the way it worked out, the truth was the opposite of what they

1:26:01.828 --> 1:26:05.282
were told. And so people talk about

1:26:05.336 --> 1:26:09.390
unintended consequences. I think there were unintended consequences

1:26:09.470 --> 1:26:13.234
here. The cynical part of me thinks a lot of the consequences were

1:26:13.272 --> 1:26:16.500
absolutely intended by the foes of

1:26:17.110 --> 1:26:21.238
vibrant patent system. And there are many. And they're large.

1:26:21.404 --> 1:26:24.966
Big tech is not at all shy about exploiting this type of weakness with its

1:26:24.988 --> 1:26:28.598
massive war chests. In a talk he gave at Columbia Law School in

1:26:28.604 --> 1:26:32.182
2019, bruce Sewell, former general counsel at Apple,

1:26:32.246 --> 1:26:35.654
explained that his $1 billion legal budget, that's billion

1:26:35.702 --> 1:26:39.306
with a B allowed him to, quote, use risk as a

1:26:39.328 --> 1:26:42.778
competitive advantage. And that Tim Cook told him, quote, I don't

1:26:42.794 --> 1:26:46.206
want you to stop pushing the envelope. And look, I'm not

1:26:46.228 --> 1:26:49.934
an apple hater. I'm recording this on a Mac and I love

1:26:49.972 --> 1:26:53.918
my iPhone, but this is gross. We're talking about going after

1:26:54.004 --> 1:26:57.166
the inventors who are the engine of our innovation economy.

1:26:57.278 --> 1:27:00.194
Good luck selling iPhones after burning the country down.

1:27:00.312 --> 1:27:04.114
Earlier, I mentioned that there was another concern that immediately came to mind for our

1:27:04.152 --> 1:27:07.474
guests right alongside the PTAB when prioritizing problems.

1:27:07.592 --> 1:27:10.978
That is, the issue of injunctive relief and the last pain point we'll

1:27:10.994 --> 1:27:14.466
cover before telling you about the two legislative solutions designed to tackle

1:27:14.498 --> 1:27:18.598
this and the PTAB. The infringement story unfortunately, gets even worse in

1:27:18.604 --> 1:27:22.238
the broader context of another Supreme Court patent decision that inverted

1:27:22.274 --> 1:27:25.962
the power dynamic between patent owners and infringers. Used to be.

1:27:26.016 --> 1:27:28.870
And to anybody who's new to this issue, this is going to be a shock.

1:27:28.950 --> 1:27:32.446
Used to be if you sued the infringer and you finally

1:27:32.548 --> 1:27:35.898
won the case, well, you could immediately stop the infringer.

1:27:35.994 --> 1:27:39.274
I mean, like, duh. Well, there was a big Supreme Court decision.

1:27:39.322 --> 1:27:42.906
Again, Supreme Court has not helped

1:27:42.938 --> 1:27:46.370
us. It was the ebay decision.

1:27:47.030 --> 1:27:50.126
The patent holder won, but the Supreme Court

1:27:50.158 --> 1:27:54.066
ruled that it was in the public interest of the infringer to keep producing the

1:27:54.088 --> 1:27:57.310
invention and the court would figure out what the inventor got out of it.

1:27:57.400 --> 1:28:00.934
And what that has turned into is if you win

1:28:00.972 --> 1:28:04.358
your case, of course, with all the obstacles now,

1:28:04.524 --> 1:28:08.440
you're one of these very few people that finally end up winning a case.

1:28:09.290 --> 1:28:13.226
You have to pass a public interest test to determine whether or not you

1:28:13.248 --> 1:28:16.678
can get injunctive relief. And that's a very hard thing to do if it's

1:28:16.694 --> 1:28:18.810
a startup versus a huge operation,

1:28:19.950 --> 1:28:23.146
in most cases, you're going to lose that. So the big infringer gets

1:28:23.168 --> 1:28:26.746
to keep the invention. And the court, as my buddy Paul

1:28:26.778 --> 1:28:30.142
would say, some english major in a robe tells you what you get if someone

1:28:30.196 --> 1:28:33.966
trespasses on your land, or someone comes and squats in your

1:28:33.988 --> 1:28:37.278
home, you can order them out of your house. That's what it means to

1:28:37.284 --> 1:28:40.514
have property, right? You can control how your property is used,

1:28:40.552 --> 1:28:43.938
your home or your bicycle, or your computer. And if someone's using it in

1:28:43.944 --> 1:28:47.074
a ways that you don't want them to, and they're not listening to you,

1:28:47.112 --> 1:28:49.874
you can get an order from a court to stop them. It's called an injunction.

1:28:49.922 --> 1:28:53.378
And since patents are property rights, and have been from the very beginning,

1:28:53.554 --> 1:28:57.318
they've been protected with these same types of injunctions. And this is important

1:28:57.404 --> 1:29:00.678
because this is what gives patent owners the ability to go into the market and

1:29:00.764 --> 1:29:04.554
to enter into contracts. Because if you can't say to people,

1:29:04.592 --> 1:29:07.606
no, you have to use it on my terms, and people aren't willing to negotiate

1:29:07.638 --> 1:29:11.260
with you. And the supreme court really

1:29:11.710 --> 1:29:15.354
undermined the ability of patent owners to obtain injunctions. So this is through judicial

1:29:15.402 --> 1:29:17.390
decisions. The courts,

1:29:18.770 --> 1:29:22.934
I think, unintentionally, unwittingly, and ignorantly

1:29:23.002 --> 1:29:27.262
about what the consequences would be have made injunctive

1:29:27.326 --> 1:29:30.430
relief for proven infringement of valid patents.

1:29:30.510 --> 1:29:34.210
Extremely difficult to get, almost impossible for many,

1:29:34.280 --> 1:29:38.054
many patent owners and patent owning companies

1:29:38.252 --> 1:29:42.274
to get without an injunction. There's no incentive

1:29:42.402 --> 1:29:46.102
for the proven infringer to settle or

1:29:46.156 --> 1:29:49.050
to pay a reasonable royalty.

1:29:49.630 --> 1:29:52.858
So the leverage that used to drive

1:29:52.944 --> 1:29:56.886
the system is now mostly gone. And that's because injunctions

1:29:56.918 --> 1:30:00.658
have been largely taken off the table. And big tech knows

1:30:00.694 --> 1:30:05.390
this, and so it's very much part of their practice of predatory infringement,

1:30:06.130 --> 1:30:09.598
is that they know that you can't stop them.

1:30:09.764 --> 1:30:13.422
At most, you'll get damages, and the damages will barely cover

1:30:13.476 --> 1:30:16.914
the cost of your lawyers after litigating for ten or 15 years.

1:30:17.112 --> 1:30:20.594
If you've got the patent, you should have the exclusive right

1:30:20.632 --> 1:30:24.494
to it, and you should be able to stop the infringer in a regular court

1:30:24.542 --> 1:30:28.120
case. You should have your day in court. If you win,

1:30:28.970 --> 1:30:32.680
they shouldn't be able to keep selling or producing it or using it.

1:30:34.410 --> 1:30:37.926
And that's what we had for a couple

1:30:37.948 --> 1:30:41.378
of hundred years that worked so well. This has

1:30:41.484 --> 1:30:45.334
really undermined and crippled the foundation

1:30:45.382 --> 1:30:48.774
of patents as property rights, as drivers of economic

1:30:48.822 --> 1:30:51.974
activity, of the ability of inventors

1:30:52.022 --> 1:30:55.486
to be able to receive renumeration property, renumeration in the

1:30:55.508 --> 1:30:58.010
marketplace through contracts and licenses.

1:30:58.170 --> 1:31:01.566
And in the same way that you sell your house and you can sell your

1:31:01.588 --> 1:31:04.558
house because someone just can't come and sit in it and say, I'm just going

1:31:04.564 --> 1:31:07.438
to be here, and here's the money I'm going to pay you for sitting in

1:31:07.444 --> 1:31:10.078
your house. And you're going to say, no, this is my house, and if you

1:31:10.084 --> 1:31:12.510
want to buy it, here's what it costs.

1:31:13.410 --> 1:31:16.550
Patent owners used to have that ability, and they don't anymore.

1:31:17.610 --> 1:31:20.978
It's really important to restore injunctions to patents.

1:31:21.074 --> 1:31:25.314
How are you going to have the next great American startup if the large infringer

1:31:25.442 --> 1:31:29.046
has stolen the technology and has flooded the market with it, and they get

1:31:29.068 --> 1:31:32.666
to keep it? I think it's impossible to overstate the significance of the

1:31:32.688 --> 1:31:36.870
impact that policies like these will have on long term economic viability

1:31:36.950 --> 1:31:40.474
for the country and the impact it will have on almost everyone if

1:31:40.512 --> 1:31:43.806
something doesn't change. You can't keep inflicting this kind

1:31:43.828 --> 1:31:47.422
of pain on the backbone of the American economy. Not when

1:31:47.476 --> 1:31:50.826
small businesses have accounted for two thirds of net job creation

1:31:50.858 --> 1:31:54.878
over the past 20 years and employ half of the private sector workforce.

1:31:54.974 --> 1:31:57.474
Any small company,

1:31:57.672 --> 1:32:01.186
university, individual inventor, startup. They don't have

1:32:01.208 --> 1:32:04.610
ten or 15 years to sit around and go through millions of dollars of

1:32:04.680 --> 1:32:08.850
legal fees and multiple levels of lawsuits and appeals

1:32:09.010 --> 1:32:12.626
and just to be ground down through the excessive legal

1:32:12.658 --> 1:32:16.146
process that we have in our country and to be put through the PTAB

1:32:16.338 --> 1:32:20.620
multiple times as well. So we need to

1:32:22.510 --> 1:32:26.522
rebalance the patent system so that it's fair and practical for

1:32:26.576 --> 1:32:30.730
small companies and even individual inventors, solo inventors,

1:32:31.250 --> 1:32:35.114
because they're so important, because they're number one more numerous.

1:32:35.242 --> 1:32:38.318
And historically, the smaller companies,

1:32:38.484 --> 1:32:42.142
smaller, innovative companies, have actually had the most big

1:32:42.196 --> 1:32:45.978
technological breakthroughs, more than the big companies. So we

1:32:46.004 --> 1:32:49.714
need them even more than we need the big companies. And yet we're treating them,

1:32:49.832 --> 1:32:53.426
I think, very poorly. And that has to change. We have

1:32:53.448 --> 1:32:57.026
to rebalance the system. There are, fortunately, two pieces of

1:32:57.048 --> 1:33:00.550
bipartisan legislation that have been designed to take on that needed

1:33:00.620 --> 1:33:04.226
change, tackling the problems of the PTAB and injunctive relief

1:33:04.258 --> 1:33:08.054
head on, but in their own unique ways. We're going to talk first about

1:33:08.092 --> 1:33:11.606
the Stronger Patents Act. This patent reform bill was last introduced

1:33:11.638 --> 1:33:14.854
by Senator Chris Coons, Democrat from Delaware, and Tom Cotton,

1:33:14.902 --> 1:33:18.326
Republican from Arkansas, in mid 2019. The Stronger

1:33:18.358 --> 1:33:21.534
Patent Act proposes various reforms of the type we were just

1:33:21.572 --> 1:33:25.086
talking about. Not all

1:33:25.108 --> 1:33:28.890
of the reforms you're talking about, but a lot of them. The Stronger Patents

1:33:28.970 --> 1:33:32.726
Act solved the problem quite well, in my opinion,

1:33:32.858 --> 1:33:37.170
of both injunctions and

1:33:37.240 --> 1:33:40.786
PTAB standards in the AIA. It would have

1:33:40.808 --> 1:33:44.366
amended the AIA. It addresses the problems surrounding injunctive

1:33:44.398 --> 1:33:48.354
relief and incentivized efficient infringement by abrogating

1:33:48.402 --> 1:33:51.874
or repealing the Supreme Court's 2006 ebay versus

1:33:51.922 --> 1:33:56.006
Merck Exchange decision that we discussed. This restores the long held principle of

1:33:56.028 --> 1:33:59.138
treating patents as private property. Rights by restoring

1:33:59.154 --> 1:34:03.062
the presumption of injunctive relief upon a finding that a patent is valid

1:34:03.126 --> 1:34:06.186
and has been infringed. Simply put, if you sue an

1:34:06.208 --> 1:34:09.766
infringer and win the case, you'd once again be able to stop the infringer

1:34:09.798 --> 1:34:13.846
from selling, producing, and using your invention. How it deals with the Ptab

1:34:13.878 --> 1:34:17.102
is where this philosophically differs with the next one we'll talk about,

1:34:17.236 --> 1:34:21.226
and that difference comes down to a perspective on the AIA. The Patent Trial

1:34:21.258 --> 1:34:24.846
and Appeal Board, in my opinion, has an appropriate

1:34:24.878 --> 1:34:28.670
place, but it hasn't been well designed

1:34:28.750 --> 1:34:32.062
and it hasn't been implemented in a balanced

1:34:32.126 --> 1:34:36.226
way. I don't think the American

1:34:36.328 --> 1:34:39.954
Ventst Act was a big mistake. I think on balance,

1:34:40.002 --> 1:34:43.334
it did a lot of good and needed things. We've talked about those

1:34:43.372 --> 1:34:46.614
aspects the judge is referring to in prior episodes, but this is where

1:34:46.652 --> 1:34:50.194
solutions diverge a bit. The Stronger Patents Act seeks to reform

1:34:50.242 --> 1:34:53.514
the Ptab as opposed to abolishing it. One of the main ways

1:34:53.552 --> 1:34:56.694
it accomplishes this is by aligning the disparities we discussed

1:34:56.742 --> 1:35:00.538
regarding district court appeal standards compared to the tilted rules of the

1:35:00.544 --> 1:35:04.506
Ptab. If enacted, the bill would require standing in the Ptab,

1:35:04.618 --> 1:35:07.918
ensuring that a petitioner has a business or financial reason to

1:35:07.924 --> 1:35:10.922
challenge the validity of a patent, so the hedge fund managers,

1:35:10.986 --> 1:35:14.522
jilted, ex spouses, and more importantly, big tech alliance groups

1:35:14.586 --> 1:35:17.474
can't just decide to attack a patent or harass a business.

1:35:17.592 --> 1:35:21.566
It would also raise the burden of proof standards for the evidence needed to invalidate

1:35:21.598 --> 1:35:25.102
a patent, harmonizing it with district courts. This standard raises

1:35:25.166 --> 1:35:28.726
the presumption of validity in the Ptab by giving appropriate deference to

1:35:28.748 --> 1:35:31.846
the USPTO's. Initial expert examination and issuance of

1:35:31.868 --> 1:35:34.962
a patent, which has since been relied upon by inventors,

1:35:35.026 --> 1:35:38.946
patent owners, and investors. The bill also has provisions to eliminate

1:35:38.978 --> 1:35:42.442
the use of repeat challenges that are all too often being used to beat down

1:35:42.496 --> 1:35:44.854
and invalidate even the most valid patents.

1:35:44.982 --> 1:35:48.774
Petitioners would only be allowed to file one petition to challenge a patent unless

1:35:48.822 --> 1:35:52.654
they are later charged with infringement of additional claims. The bill would

1:35:52.692 --> 1:35:55.998
similarly establish that any entity financially contributing to a

1:35:56.004 --> 1:35:59.486
Ptab validity challenge is a real party in interest who

1:35:59.508 --> 1:36:02.814
cannot bring future challenges, ensuring that no entity can make

1:36:02.852 --> 1:36:06.626
multiple Ptab challenges as a silent financial contributor, much of

1:36:06.648 --> 1:36:10.798
the double jeopardy concern would also be addressed by eliminating redundancy with district

1:36:10.814 --> 1:36:14.814
courts. If an IPR is instituted, the petitioner cannot bring validity

1:36:14.862 --> 1:36:18.338
challenges of the same type in district court. While in spirit

1:36:18.354 --> 1:36:21.798
everyone agrees that these are desirable outcomes, some contend that the

1:36:21.804 --> 1:36:24.886
Ptab is fundamentally flawed at its core and must be

1:36:24.908 --> 1:36:28.246
eliminated entirely. Yeah, you change things like that and blah, blah,

1:36:28.278 --> 1:36:31.914
blah. I don't know that

1:36:31.952 --> 1:36:35.786
that would make that much of a difference, because if

1:36:35.808 --> 1:36:39.500
the judges if the system is already biased as it is,

1:36:40.430 --> 1:36:44.174
I just don't know, because what you're dealing with is people.

1:36:44.292 --> 1:36:47.534
It's kind of like that's a subjective thing to a high

1:36:47.572 --> 1:36:51.120
degree. And part of the problem you have is

1:36:53.090 --> 1:36:57.294
you have these judges. They're called APJs,

1:36:57.342 --> 1:37:01.342
Administrative Patent Judges. Recall. These are the officials who preside

1:37:01.406 --> 1:37:04.946
over the cases and decide whether or not a patent is valid. You know,

1:37:04.968 --> 1:37:08.242
the ones looking for a better job, who have no code of conduct on ethics

1:37:08.306 --> 1:37:10.360
or recusals for conflict of interest.

1:37:11.210 --> 1:37:14.994
There are conflicts. There was a guy named Matt

1:37:15.042 --> 1:37:23.002
Clements. He was an attorney working basically

1:37:23.136 --> 1:37:27.462
helping Apple fight patent infringement cases. Right. He was their attorney,

1:37:27.606 --> 1:37:31.226
Matt Clemens, he then becomes a Ptab judge in 24,

1:37:31.328 --> 1:37:35.370
I think maybe 23 or 24 cases where he is a Ptab judge

1:37:35.450 --> 1:37:38.574
hearing Apple cases where they're trying to invalidate a patent. They win,

1:37:38.612 --> 1:37:43.070
of course. And my colleague Josh Malone

1:37:43.490 --> 1:37:46.882
was at a Ptab trial where one of our

1:37:46.936 --> 1:37:50.786
members, an inventor we know, was being having his patent attacked by

1:37:50.808 --> 1:37:54.322
Apple. And there was Matt Clements again on the other side of the aisle working

1:37:54.376 --> 1:37:57.586
for Apple as an attorney. Now, how the hell can this go

1:37:57.608 --> 1:38:00.566
on? You couldn't do that as a real judge. But even if you squared some

1:38:00.588 --> 1:38:03.846
of that up to eliminate the egregious issues, randy says that

1:38:03.868 --> 1:38:07.206
this problem is deeply institutionalized. So here, Google and

1:38:07.228 --> 1:38:10.430
big tech are helping get this law passed using a lot of influence, a lot

1:38:10.440 --> 1:38:13.734
of lobbying, a lot of propaganda get the law passed. And of course,

1:38:13.772 --> 1:38:15.686
this thing's going to be run by the patent office. It's going to be set

1:38:15.708 --> 1:38:18.914
up by the director of the Patent office. Well, next thing you know, the former

1:38:18.962 --> 1:38:22.586
head of patent strategy, Google, is appointed as the director of our patent

1:38:22.618 --> 1:38:26.282
office. How about that? Talk about capture of an agency.

1:38:26.426 --> 1:38:30.654
Wow. Her name was Michelle Lee. Look it up. Michelle Lee, former head

1:38:30.692 --> 1:38:34.266
of Patent Strategy at Google, was appointed as the director of our patent

1:38:34.298 --> 1:38:37.706
office. Now, of course, she set the court

1:38:37.738 --> 1:38:40.862
up, the administrative court. She hired the judges, made the rules,

1:38:41.006 --> 1:38:44.866
weaponized it, turned it into a patent killing machine. Randy also

1:38:44.888 --> 1:38:48.250
makes the argument for simplicity and that any reform that keeps the Ptab

1:38:48.270 --> 1:38:52.710
alive is just adding complexity to complexity. And it's not the solution.

1:38:53.050 --> 1:38:56.566
The solution is we want our day in court. You could make a

1:38:56.588 --> 1:39:02.698
bunch of changes to the Ptab theoretically, and maybe it

1:39:02.704 --> 1:39:05.100
would be more fair. Certainly it would be more fair.

1:39:05.870 --> 1:39:09.226
But here's my argument. Would it still protect the

1:39:09.248 --> 1:39:13.434
little guy? I know that those changes in that bill would

1:39:13.472 --> 1:39:17.134
help larger players who care about Pats, but what

1:39:17.172 --> 1:39:20.494
about the small player who doesn't have money, who may

1:39:20.532 --> 1:39:24.298
not have but one or two patents, doesn't have a bunch

1:39:24.314 --> 1:39:28.034
of attorneys? I think that person needs

1:39:28.152 --> 1:39:31.634
their day in court with a jury and to be able to do it on

1:39:31.672 --> 1:39:35.474
contingency. So we really need to get back to where you

1:39:35.512 --> 1:39:39.282
have your rights, you have your day in court. It's a simplicity.

1:39:39.346 --> 1:39:42.130
We need to get back to Adam offers us a bridge.

1:39:42.210 --> 1:39:46.550
Ideally, the Ptab should be abrogated and eliminated.

1:39:47.130 --> 1:39:48.890
That's not going to happen tomorrow,

1:39:52.510 --> 1:39:55.990
but we can move and start moving in that direction

1:39:56.070 --> 1:39:59.020
and at least limit the damage that's being done now.

1:40:00.050 --> 1:40:03.870
A lot of lawyers, we understand law moves incrementally.

1:40:07.010 --> 1:40:10.858
It doesn't move in kind of huge radical fashions.

1:40:11.034 --> 1:40:14.850
When it does, I shouldn't say it doesn't, it does

1:40:14.920 --> 1:40:18.386
move in huge radical fashions at times, but those are

1:40:18.408 --> 1:40:22.050
the rarer events. Most of the time it's incremental development.

1:40:23.670 --> 1:40:27.126
And I think we should move towards the long term goal of

1:40:27.148 --> 1:40:28.630
getting rid of the Ptab,

1:40:30.730 --> 1:40:34.194
but it's not going to happen tomorrow or next year. And in the meantime,

1:40:34.242 --> 1:40:38.746
we can limit some of the damage and we can show

1:40:38.928 --> 1:40:42.186
that, use the

1:40:42.208 --> 1:40:45.878
damage that's causing as evidence for why we need to reform it and eliminate

1:40:45.894 --> 1:40:49.242
it at the same time. So I

1:40:49.296 --> 1:40:52.842
100% agree that we should support efforts to reform

1:40:52.906 --> 1:40:56.846
it, to impose rule of law constraints on it. These things need

1:40:56.868 --> 1:41:00.880
to stop. It would staunch some of

1:41:01.410 --> 1:41:04.686
the bleeding that we are having and some of the extreme damage

1:41:04.718 --> 1:41:08.740
that's being caused to the innovation economy and to innovators right now.

1:41:10.950 --> 1:41:14.066
But we should always keep the eye on the prize and on the

1:41:14.088 --> 1:41:17.538
target, which is that at the end of the

1:41:17.544 --> 1:41:21.186
day, this is fundamentally an institution that can't

1:41:21.218 --> 1:41:24.886
be reformed to work well. Which brings us to a legislative solution that would

1:41:24.908 --> 1:41:28.194
eliminate the Ptab, give inventors their day in court, and restore

1:41:28.242 --> 1:41:32.140
the rule of law and due process. I think the real answer is

1:41:32.510 --> 1:41:34.806
we really want to get back to where we have our day in court,

1:41:34.838 --> 1:41:38.666
in a real court, and we want

1:41:38.688 --> 1:41:42.030
to get back to what America had that was so valuable

1:41:42.530 --> 1:41:45.710
in incentivizing innovation. There is a bill

1:41:45.780 --> 1:41:49.146
last Congress that would do that and has not been reintroduced

1:41:49.178 --> 1:41:53.098
yet. That was Thomas Massey's. Bill the Restoring Leadership

1:41:53.194 --> 1:41:55.754
restoring America's Leadership and Innovation act HR.

1:41:55.802 --> 1:41:59.346
5874. This patent reform bill, also known for short as

1:41:59.368 --> 1:42:03.346
the Rally Act, was last introduced by Representative Thomas Massey, republican from

1:42:03.368 --> 1:42:06.894
Kentucky in late 2021. It is worth noting that Representative

1:42:06.942 --> 1:42:10.598
Massey is an MIT engineer, inventor, and holder of 29 of

1:42:10.604 --> 1:42:13.926
his own patents. Simplicity. Get rid of the Ptab. This is what

1:42:13.948 --> 1:42:17.346
Massey's bill would do get rid of the abstract idea exception.

1:42:17.378 --> 1:42:21.494
And of course, the third big area is injunctive

1:42:21.542 --> 1:42:24.966
relief. This bill is by far the widest sweeping, most inventor

1:42:24.998 --> 1:42:28.774
and patent owner friendly legislation on the table. The bill's one pager

1:42:28.822 --> 1:42:32.846
states that it restores patent protection for inventors and mitigates a generation of

1:42:32.868 --> 1:42:35.934
laws, regulations, and court decisions that have

1:42:35.972 --> 1:42:39.834
discouraged innovation by failing to secure to inventors the exclusive

1:42:39.882 --> 1:42:43.006
rights to their discoveries. First and foremost, rather than

1:42:43.028 --> 1:42:46.474
attempting to reform like the Stronger Patents Act, it abolishes

1:42:46.522 --> 1:42:50.174
the Ptab and its 84% kill rate for the over 3000 patents

1:42:50.222 --> 1:42:54.226
reviewed since 2011. It does so with the justification that

1:42:54.248 --> 1:42:57.854
the ptab is proven to be a failed experiment in practice.

1:42:57.902 --> 1:43:00.962
It is not faster nor cheaper nor an alternative to regular

1:43:01.026 --> 1:43:04.534
district court. It has not mitigated patent trolls, but has

1:43:04.572 --> 1:43:08.578
only made it harder for legitimate small businesses to compete. Accused infringers

1:43:08.594 --> 1:43:11.946
would still have the right to challenge patent validity in a regular court of law,

1:43:12.048 --> 1:43:16.122
which is how the US patent system has worked for our 1st 190 years.

1:43:16.256 --> 1:43:20.006
Second, the bill strikes down the judicially created eligibility tests

1:43:20.118 --> 1:43:23.742
going farther than the Eligibility Restoration Act. It would restore us.

1:43:23.796 --> 1:43:27.850
Code section 101 to the broad threshold question, as Congress intended,

1:43:27.930 --> 1:43:31.114
allowing eligible patents for any new and useful process, machine,

1:43:31.162 --> 1:43:34.886
manufacture, or composition of matter, leaving the other gates to catch patents

1:43:34.938 --> 1:43:38.526
that would block and not promote progress of science and useful arts.

1:43:38.638 --> 1:43:41.794
Explicit bill language states that it would effectively abrogate the four

1:43:41.832 --> 1:43:44.894
horsemen of the innovation Apocalypse. The Bilski,

1:43:44.942 --> 1:43:48.946
Alice Myriad and Mayo SCOTUS decisions we discussed earlier created

1:43:48.978 --> 1:43:52.550
the confused and chaotic mess around eligibility. It does so

1:43:52.620 --> 1:43:56.194
to ensure that life science discoveries, computer software,

1:43:56.242 --> 1:43:59.654
and similar inventions and discoveries are patentable and that those

1:43:59.692 --> 1:44:03.338
patents are enforceable. Third, and like the stronger Patents Act,

1:44:03.424 --> 1:44:07.114
the bill restores much needed injunctive relief on a finding of

1:44:07.152 --> 1:44:11.226
infringement of a patent. The court would have to presume that any further infringement of

1:44:11.248 --> 1:44:15.066
the patent would cause the patent owner irreparable harm, a presumption

1:44:15.098 --> 1:44:19.066
that could only be overcome by the infringers showing clear and convincing evidence

1:44:19.098 --> 1:44:22.286
to the contrary. The bill also explicitly abrogates the

1:44:22.308 --> 1:44:25.774
Supreme Court's ebay ruling in the subsequent lower court interpretations

1:44:25.822 --> 1:44:29.726
that have made it almost impossible to stop infringers from making, using and selling

1:44:29.758 --> 1:44:33.438
pirated inventions. What that will do is cause large entities

1:44:33.534 --> 1:44:36.934
to not just steal technology, they'll actually work with you,

1:44:36.972 --> 1:44:40.486
they'll license it, and it won't cost them much.

1:44:40.668 --> 1:44:45.720
It'll be such a small amount of their

1:44:46.410 --> 1:44:49.606
profits will simply go to licensing a technology

1:44:49.708 --> 1:44:53.226
here and there that's really valuable. And here and there you'll have

1:44:53.248 --> 1:44:56.538
an inventor with a startup that'll make a huge difference because the

1:44:56.544 --> 1:45:00.640
big guys can't steal it. And you'll have the incentive to have

1:45:01.090 --> 1:45:04.602
garage inventors doing things that are really valuable,

1:45:04.746 --> 1:45:09.066
which we need and which will help improve

1:45:09.098 --> 1:45:13.038
our economy, help monopolies not take over as much,

1:45:13.204 --> 1:45:16.674
and help America stay ahead of the rest of the world and stay

1:45:16.712 --> 1:45:20.286
more secure. There are some significant concerns, however, about the bill's.

1:45:20.318 --> 1:45:23.826
Viability professor Dennis Crouch of Patently O said of

1:45:23.848 --> 1:45:27.986
the 2018 version that, quote this proposal has a 0% likelihood

1:45:28.018 --> 1:45:32.006
of passing, but it has been introduced and offers an interesting discussion point.

1:45:32.108 --> 1:45:35.766
IP Watchdog founder and CEO Gene Quinn, strong advocate of

1:45:35.788 --> 1:45:39.126
Congressman Massey's, has written that abolishing the Ptab at this

1:45:39.148 --> 1:45:41.974
point simply will not happen and called it a, quote,

1:45:42.022 --> 1:45:46.006
politically infeasible and impossible demand at the expense of other available solutions

1:45:46.038 --> 1:45:48.954
to improve the Ptab. You know, I mean, look,

1:45:49.152 --> 1:45:53.114
maybe a valid thing to say, it's ambitious,

1:45:53.242 --> 1:45:56.846
it's an ambitious bill. But even if not passed, at a minimum, it can do

1:45:56.868 --> 1:46:00.826
a lot for shaping the conversation, for potentially influencing administrative

1:46:00.858 --> 1:46:04.334
and judicial decision making. And it doesn't have to be incompatible

1:46:04.382 --> 1:46:07.986
with the path that could be forged first by the Stronger Patents Act.

1:46:08.088 --> 1:46:12.020
Certainly Massey's bill being the

1:46:12.710 --> 1:46:16.520
end all solution, it does create a lot of

1:46:17.050 --> 1:46:20.774
discussion, right? It's a great discussion point and

1:46:20.812 --> 1:46:24.438
we certainly would like to see it passed. So it's a

1:46:24.444 --> 1:46:27.866
great piece of legislation and it should be

1:46:27.888 --> 1:46:30.700
on the table. But it is a practical matter.

1:46:31.390 --> 1:46:35.290
There's not enough support for it because

1:46:35.360 --> 1:46:39.146
it's a very radical proposal. It proposes to

1:46:39.168 --> 1:46:44.974
do a lot right in

1:46:45.012 --> 1:46:49.486
two respects. It's important. One is that by

1:46:49.508 --> 1:46:52.786
just being proposed and being supported by a lot of

1:46:52.808 --> 1:46:55.570
Congressmen has a lot of co sponsors,

1:46:56.790 --> 1:47:00.514
it sets the range of discussion. It makes these

1:47:00.552 --> 1:47:04.478
topics appropriate policy discussions,

1:47:04.654 --> 1:47:08.486
topics, policy discussion in DC. Which is really significant and important because

1:47:08.508 --> 1:47:12.806
they need to be. It's an important part of the policy process in

1:47:12.828 --> 1:47:16.694
terms of making issues. Now, topics of policy debate that

1:47:16.732 --> 1:47:20.410
weren't being debated before. It's an important part of the process

1:47:20.480 --> 1:47:24.810
in terms of also not just making issues, part of the policy debate

1:47:26.430 --> 1:47:30.098
on the Capitol and in Congress, but it's

1:47:30.134 --> 1:47:34.302
an important signal to the courts and to the agencies also,

1:47:34.356 --> 1:47:36.720
that these are important, relevant issues.

1:47:37.570 --> 1:47:41.534
There's significant evidence that the bills that

1:47:41.572 --> 1:47:42.798
were introduced starting in 2006,

1:47:42.804 --> 1:47:46.426
a lot of those bills

1:47:46.538 --> 1:47:50.642
focused on topics of remedies. And those topics were slowly coming

1:47:50.696 --> 1:47:54.082
out of the bills over the years as the Supreme Court kept granting cert

1:47:54.136 --> 1:47:58.342
in cases and remedies cases like Ebay and

1:47:58.396 --> 1:48:01.654
in others and in the Federal Circuit as well.

1:48:01.852 --> 1:48:05.430
I think there's a lot of evidence, not direct evidence, but evidence that

1:48:05.500 --> 1:48:09.222
the courts were getting the message that this is an important issue,

1:48:09.276 --> 1:48:11.820
this is an important topic, and we can fix this.

1:48:13.230 --> 1:48:17.254
In fact, it's within our domain to fix it as a court and remedies

1:48:17.382 --> 1:48:20.946
as remedies matter. So we should do so. And they did. So those topics

1:48:20.998 --> 1:48:24.670
came out of the bills as the courts ruled

1:48:25.330 --> 1:48:28.586
on the topics and in favor of the legislation. So it's

1:48:28.618 --> 1:48:32.414
important signal to other government actors that you can

1:48:32.452 --> 1:48:36.340
fix this or you should fix this if you have the power to do so.

1:48:38.550 --> 1:48:42.078
And it becomes potentially the basis for actual legislation

1:48:42.174 --> 1:48:45.474
down the road as you go through that process of

1:48:45.592 --> 1:48:48.886
having the policy debate, of educating people about these issues.

1:48:48.988 --> 1:48:51.880
Yes, I'm a strong supporter of the Stronger Patent Act.

1:48:52.410 --> 1:48:55.766
And I'm also a supporter of the Rally Act. I don't think the

1:48:55.788 --> 1:49:00.250
two are not mutually exclusive. Both should be on the table as active

1:49:00.910 --> 1:49:04.154
pieces of legislation that we should be debating and talking

1:49:04.192 --> 1:49:07.770
about right now politically.

1:49:08.590 --> 1:49:12.606
And just as a practical matter, the Stronger Ban Act, if and

1:49:12.628 --> 1:49:15.774
when it gets reintroduced in the new Congress, has a very strong

1:49:15.812 --> 1:49:19.438
chance of being axed upon and voted on.

1:49:19.524 --> 1:49:21.920
And I think we should take advantage of that.

1:49:22.690 --> 1:49:26.126
I know some people are worried, oh, by reforming the Ptab,

1:49:26.158 --> 1:49:30.062
you impliedly can see that it can work or worse.

1:49:30.126 --> 1:49:33.474
And by reforming the Ptab, you'll reduce the damage and reduce the

1:49:33.512 --> 1:49:36.430
reasons for why it should be eliminated.

1:49:36.590 --> 1:49:39.814
But there's always going to be

1:49:39.852 --> 1:49:43.366
some damage because the whole point of this is to be

1:49:43.388 --> 1:49:47.154
an agency that does things that courts don't do. We shouldn't worry

1:49:47.202 --> 1:49:51.046
that we're going to be papering over covering

1:49:51.078 --> 1:49:54.586
up any of the fundamental problems. They'll still be there just that

1:49:54.688 --> 1:49:58.540
we can actually do some good and save some innovators now

1:49:59.150 --> 1:50:03.206
with the Stronger Patent Act, and that's why I support it. Yeah, another foothold

1:50:03.238 --> 1:50:05.758
on the up the side of the mountain. Yeah. I know that there are a

1:50:05.764 --> 1:50:09.134
lot of congressmen and senators now who are now educated about

1:50:09.172 --> 1:50:12.870
these issues, who were completely oblivious

1:50:12.970 --> 1:50:16.674
to the destruction that has been wrought on our patent system and

1:50:16.712 --> 1:50:21.540
on our innovation economy. Five six years ago or

1:50:21.910 --> 1:50:25.902
worse, five, six years ago, thought, oh, yeah, patent holes

1:50:25.966 --> 1:50:29.858
and all these issues that this is we really have to get rid of patents.

1:50:29.954 --> 1:50:33.494
And, you know, and they've done a complete 180, some of them,

1:50:33.532 --> 1:50:36.870
I think, because of because of the efforts of people like

1:50:37.020 --> 1:50:40.726
Senator Coons and Congressman Massey and

1:50:40.828 --> 1:50:44.506
the work of a lot of other people who have been supporting them

1:50:44.688 --> 1:50:49.002
in their policy efforts, like the two of you and many others.

1:50:49.136 --> 1:50:53.046
Grassroots education. It's a big part of why we do this podcast.

1:50:53.238 --> 1:50:56.222
And we're going to get back to that in just a bit because it's absolutely

1:50:56.356 --> 1:51:00.106
one of the most actionable things we can discuss in the arena of solutions.

1:51:00.218 --> 1:51:03.658
But first, I wanted to ask our guests a question that I haven't been able

1:51:03.684 --> 1:51:07.726
to shake since researching both Ptab and District Court invalidation rates

1:51:07.758 --> 1:51:11.762
while preparing for our American Inventor Horror Story episode. I got two

1:51:11.816 --> 1:51:15.506
very different but equally enlightening answers. Judge, my next question

1:51:15.528 --> 1:51:18.690
is, it's a little bit more in the abstract,

1:51:18.770 --> 1:51:22.678
so feel free to push back on this one. But in

1:51:22.684 --> 1:51:26.134
our business, in our life, we look at things and sometimes we feel

1:51:26.172 --> 1:51:29.206
like we're fighting 100 different problems. Sometimes we try

1:51:29.228 --> 1:51:33.194
to zoom out and say, like, okay, are we fundamentally solving the right problem here?

1:51:33.392 --> 1:51:36.586
Is there a bigger issue that we could solve to make

1:51:36.688 --> 1:51:40.726
these 100 smaller problems go away? And that's

1:51:40.758 --> 1:51:42.560
the basis for this next question.

1:51:44.610 --> 1:51:48.138
One of the places we've often wondered if there's not a solution buried

1:51:48.234 --> 1:51:51.802
in all of this is with the role of the PTO

1:51:51.866 --> 1:51:55.566
and its weight, or apparent lack

1:51:55.598 --> 1:51:58.910
thereof, in ultimate patent validity,

1:51:58.990 --> 1:52:02.606
right? So patent is a constitutionally created

1:52:02.718 --> 1:52:06.594
property, right. A lot of times you see them compared to

1:52:06.712 --> 1:52:09.974
things like title deeds, like we might have on our home or another

1:52:10.012 --> 1:52:12.920
piece of property, right. But at the present,

1:52:13.530 --> 1:52:17.394
it feels like it's sort of a broken metaphor, right? You got the expert

1:52:17.442 --> 1:52:20.966
agency that's the PTO, they grant a piece of intellectual

1:52:20.998 --> 1:52:24.150
property that an inventor builds upon and leverages,

1:52:24.310 --> 1:52:28.326
much like somebody would leverage a piece of property cleared

1:52:28.358 --> 1:52:31.510
by a title company. But that's where things kind of start to

1:52:31.520 --> 1:52:35.066
break down, right. The Ptab is invalidating patents at a clip

1:52:35.098 --> 1:52:38.254
of 84%. That's according to us.

1:52:38.292 --> 1:52:41.674
Inventor. But studies have shown that even district courts

1:52:41.722 --> 1:52:45.086
are invalidating patents or claims at an alarming

1:52:45.118 --> 1:52:48.306
rate of about 40% still. So, you know,

1:52:48.328 --> 1:52:51.934
any any reform that we have that's related to post grant proceedings

1:52:51.982 --> 1:52:54.980
is potentially missing a bigger issue.

1:52:55.750 --> 1:52:59.430
Post grant proceedings could be incredibly rare in a world where the

1:52:59.500 --> 1:53:02.690
PTO decisions were more binding than they presently

1:53:02.770 --> 1:53:06.418
are. So I don't get a maybe certificate from the title

1:53:06.434 --> 1:53:10.262
company when I buy a home. In a more ideal

1:53:10.326 --> 1:53:13.514
world, it seems like we should get to the point where the

1:53:13.552 --> 1:53:17.130
determination made by the PTO was closer to something

1:53:17.200 --> 1:53:20.382
binding, with invalidations being an

1:53:20.436 --> 1:53:24.382
extremely rare exception. Any other system

1:53:24.436 --> 1:53:28.062
essentially leaves you with a patent pending indefinitely right,

1:53:28.196 --> 1:53:31.150
until it's tested by the courts.

1:53:31.570 --> 1:53:35.002
So, again, kind of an out of the box, more abstract question,

1:53:35.076 --> 1:53:38.974
but if you had the power to change the system where the PTO decision

1:53:39.022 --> 1:53:41.620
would be more binding, like that of a title company,

1:53:42.790 --> 1:53:45.570
how would you do it? Well,

1:53:45.720 --> 1:53:49.606
David Capos and I have talked about this a lot, and we both

1:53:49.788 --> 1:53:53.794
believe in the concept of what some people call a gold plated

1:53:53.922 --> 1:53:57.854
patent. A patent that would be extremely difficult to invalidate

1:53:57.922 --> 1:54:00.410
because it was so carefully vetted.

1:54:02.030 --> 1:54:05.370
One way to do this perhaps there are other ways,

1:54:05.440 --> 1:54:09.414
but one way to do this would be to give the applicant

1:54:09.462 --> 1:54:12.682
the option of getting an ordinary patent

1:54:12.826 --> 1:54:16.046
just through examination. But if you want

1:54:16.068 --> 1:54:19.566
to get a gold plated patent, you have to go an

1:54:19.588 --> 1:54:23.006
additional step, and it has to be further vetted by the

1:54:23.028 --> 1:54:26.566
Central Reexam Unit, but under a time limit.

1:54:26.618 --> 1:54:30.114
The problem with the reexam system in days of old was

1:54:30.152 --> 1:54:33.954
it went on forever and ever. That's part of the reason why there's this hard

1:54:33.992 --> 1:54:38.374
stop one year deadline for the Ptab that was to overcome the problem of

1:54:38.572 --> 1:54:42.786
endless reexaminations. But if the reexam unit

1:54:42.818 --> 1:54:46.854
was adequately staffed and properly guided, I believe it

1:54:46.892 --> 1:54:51.020
could gold plate patents within a year.

1:54:51.710 --> 1:54:55.526
And if it's the choice of the inventor or the inventive

1:54:55.638 --> 1:54:58.970
entity whether to ask for the extra

1:54:59.120 --> 1:55:02.426
step, who can complain? If you want to get an ordinary patent and

1:55:02.448 --> 1:55:05.806
take your risks at the Ptab of the court later on,

1:55:05.908 --> 1:55:09.360
fine, you take that pathway, that fork in the road.

1:55:10.290 --> 1:55:13.780
But if you want a gold plated patent, you got to go an extra step,

1:55:14.150 --> 1:55:17.934
and then it's going to be extremely difficult. I think you probably couldn't

1:55:17.982 --> 1:55:23.454
make it utterly inviolate,

1:55:23.502 --> 1:55:26.946
but you can make it extremely difficult to invalidate,

1:55:27.058 --> 1:55:31.026
and you should. So I'm, for exploring

1:55:31.138 --> 1:55:34.962
that option. I think the reality is that Congress

1:55:35.026 --> 1:55:38.586
will never give the patent office the money they would need for the

1:55:38.608 --> 1:55:42.346
examiner to get it right. In 99% of

1:55:42.368 --> 1:55:45.494
the cases in an ordinary examination,

1:55:45.622 --> 1:55:50.326
they have something like 9000 examiners

1:55:50.358 --> 1:55:55.358
there. They would need 90,000 or 150,000

1:55:55.444 --> 1:55:58.910
or 300,000. Who knows what they would actually need?

1:55:58.980 --> 1:56:02.174
The cost would be prohibitive, the fees would go

1:56:02.212 --> 1:56:06.034
up. It's never going to happen. So what you have

1:56:06.072 --> 1:56:09.442
to do is make the ordinary examination system as

1:56:09.496 --> 1:56:12.660
good as it can be as a practical matter,

1:56:13.190 --> 1:56:16.520
given limited time, limited money,

1:56:18.010 --> 1:56:21.778
and younger examiners,

1:56:21.874 --> 1:56:26.050
and also inadequate prior art searching capabilities

1:56:26.130 --> 1:56:29.562
and old computer systems and other things that can

1:56:29.616 --> 1:56:33.066
and should be improved rapidly. But I

1:56:33.088 --> 1:56:36.954
am convinced that a gold plated patent system would

1:56:36.992 --> 1:56:40.814
be the best single solution to get over the problem of

1:56:40.852 --> 1:56:43.946
patents being undependable. As long as patents

1:56:44.138 --> 1:56:47.742
are seen as undependable, the investment we need

1:56:47.796 --> 1:56:51.566
will not get made. It's that simple. Yeah, that's a really

1:56:51.588 --> 1:56:54.626
great question and there's a lot in there. So let me unpack it a little

1:56:54.648 --> 1:56:57.762
bit. And I'm going to start

1:56:57.816 --> 1:57:01.300
by throwing perhaps a curveball, which is that

1:57:03.750 --> 1:57:07.430
I am not unhappy or disturbed by the 40%

1:57:07.500 --> 1:57:09.590
invalidation rate in district court.

1:57:10.170 --> 1:57:14.054
And so let me explain that now because

1:57:14.092 --> 1:57:17.320
a lot of people say, what do you mean? How can that be the case?

1:57:17.850 --> 1:57:21.818
But however you identify it,

1:57:21.904 --> 1:57:25.498
whether 70% up to 100% in some of

1:57:25.504 --> 1:57:29.014
the programs at the Ptab, that is a problem. That's an institution

1:57:29.062 --> 1:57:32.266
that is clearly out of balance. Then as I'm sure you're wondering,

1:57:32.298 --> 1:57:36.110
but why is he not upset about the 40% invalidation rates at the district court?

1:57:36.850 --> 1:57:40.094
Exactly. Those are invalidation rates that you

1:57:40.132 --> 1:57:44.100
are seeing at final decisions. And so what you have

1:57:44.870 --> 1:57:48.482
in these cases is something that economists and statisticians refer

1:57:48.536 --> 1:57:51.714
to as selection effects, which means that

1:57:51.912 --> 1:57:55.366
people are making decisions about whether to continue to

1:57:55.388 --> 1:57:58.946
file a lawsuit, whether to continue to prosecute

1:57:58.978 --> 1:58:02.920
or pursue the lawsuit, whether to settle based upon information

1:58:03.530 --> 1:58:07.334
that they have at each point of the process. And at

1:58:07.372 --> 1:58:11.494
a certain point, sometimes at the very beginning, sometimes later, you realize

1:58:11.622 --> 1:58:15.946
I'm going to lose or I'm going to win. It becomes clear.

1:58:16.048 --> 1:58:18.730
And so you settle.

1:58:19.870 --> 1:58:23.962
And in fact, this is what you see. In fact, most lawsuits

1:58:24.106 --> 1:58:26.110
don't even make it to trial.

1:58:27.090 --> 1:58:30.506
And by the way, most disputes don't even result in lawsuits

1:58:30.538 --> 1:58:34.974
being filed. And so at each point you get a smaller and smaller

1:58:35.102 --> 1:58:39.266
subset of the

1:58:39.368 --> 1:58:43.394
rights at issue. And so by the time you actually get to court and actually

1:58:43.432 --> 1:58:47.030
get to a final court decision, those are the true

1:58:47.100 --> 1:58:51.222
what we refer to as borderline cases. Those are the cases where you

1:58:51.276 --> 1:58:55.254
actually have significant colorable arguments on

1:58:55.292 --> 1:58:59.106
both sides as to the legitimacy

1:58:59.138 --> 1:59:03.242
of their positions. So this explains why the

1:59:03.296 --> 1:59:06.774
invalidation rates around 40%. And by the way, this isn't unusual

1:59:06.822 --> 1:59:09.910
in patent law. This is a phenomenon one sees in the entire

1:59:10.000 --> 1:59:13.534
US court system. And in fact this was studied by

1:59:13.572 --> 1:59:18.554
some economists back in the has come to refer to as the Priest

1:59:18.602 --> 1:59:20.190
Klein hypothesis,

1:59:22.050 --> 1:59:25.954
which is priest Klein posited that in

1:59:25.992 --> 1:59:29.582
any adversarial institution you're going to see decision

1:59:29.646 --> 1:59:33.650
rates around the 50%. Mark point was really about

1:59:33.720 --> 1:59:37.062
what I just referred to earlier, about selection effects, about how

1:59:37.196 --> 1:59:40.854
there's information that people are acquiring through the

1:59:40.892 --> 1:59:44.166
process that they're then selecting what to do based on that information.

1:59:44.268 --> 1:59:48.454
And that includes settling or dismissing or

1:59:48.492 --> 1:59:52.298
the judge dismisses the lawsuit or summary judgment and things of that sort as

1:59:52.304 --> 1:59:55.882
well. By the time

1:59:55.936 --> 1:59:59.180
you get to a court decision and even a court appeal in particular.

2:00:00.430 --> 2:00:03.550
So appellate decisions up to the pellet courts,

2:00:04.930 --> 2:00:08.222
you are at a point on the margin where

2:00:08.356 --> 2:00:11.834
someone is making a mistake. There's an information asymmetry

2:00:11.962 --> 2:00:15.826
that has not been accounted for and so you're roughly going

2:00:15.848 --> 2:00:20.130
to have a 50 50 divide and so you're filtering

2:00:20.470 --> 2:00:24.334
thousands and thousands of dispute of patent disputes out thousands of patents

2:00:24.382 --> 2:00:27.518
out of the system. Exactly what by the way, this is exactly what's

2:00:27.534 --> 2:00:30.982
supposed to happen such that by the time you get to the court decision those

2:00:31.036 --> 2:00:34.790
are the true cases where it's an open question

2:00:34.860 --> 2:00:38.006
as to whether this is a really valid patent or not or whether infringement has

2:00:38.028 --> 2:00:41.254
actually happened or not. I mean that's why there needs to be a court decision.

2:00:41.302 --> 2:00:44.694
And by the way, so what that tells me is a 40% invalidity

2:00:44.742 --> 2:00:48.634
rate is actually good, actually tells you that wow,

2:00:48.672 --> 2:00:52.586
our patents are really working. And I suspect what that 10% variance

2:00:52.618 --> 2:00:56.430
is because you would expect it to be 50%, is probably

2:00:56.500 --> 2:01:00.126
the presumption of validity at work. Is that kind of thumb on

2:01:00.148 --> 2:01:04.062
the scale that should exist for patents that have

2:01:04.116 --> 2:01:07.666
gone through the examination process and our property rights and should

2:01:07.688 --> 2:01:11.246
therefore should be construed in favor of the title

2:01:11.278 --> 2:01:14.802
deed owner, which is a principle that was first adopted in US

2:01:14.856 --> 2:01:18.226
courts long before the examination system was created. Because they adopted

2:01:18.258 --> 2:01:22.274
it actually formed the canons of interpretation

2:01:22.322 --> 2:01:25.702
for title deeds which the rule was at common

2:01:25.756 --> 2:01:29.302
law, if there's an ambiguity in a title deed it's to be construed in favor

2:01:29.356 --> 2:01:33.350
of the property owner. And the US courts

2:01:33.430 --> 2:01:36.906
incorporated and applied that to patents in the early 19th century when

2:01:36.928 --> 2:01:40.106
we didn't even have an examination system yet. They said patents are title deeds so

2:01:40.128 --> 2:01:43.486
we're going to adopt this. It was known as a canon of

2:01:43.508 --> 2:01:48.206
liberal construction in favor of the patent owner and

2:01:48.228 --> 2:01:51.902
then the 1836 that when we adopted the examination system that

2:01:51.956 --> 2:01:55.438
reinforced what becomes known as the presumption of

2:01:55.444 --> 2:01:59.006
validity based on the examination process as well. So my mistake,

2:01:59.118 --> 2:02:02.974
comparing a Ptab invalidation rate of 84% to a court invalidation

2:02:03.022 --> 2:02:06.402
rate is not an apples to apples comparison. Any given

2:02:06.456 --> 2:02:09.958
patent has an 84% chance of being viewed as invalid in the eyes of

2:02:09.964 --> 2:02:13.814
the Ptab, but any given patent doesn't have a 40% chance of being

2:02:13.852 --> 2:02:17.414
viewed is invalid in the eyes of the court. Not the same thing.

2:02:17.532 --> 2:02:20.726
Most of what we've discussed so far are threats from within a

2:02:20.748 --> 2:02:24.378
system void of any competition, can operate however it wants, and sometimes

2:02:24.464 --> 2:02:27.334
still end up okay. Many experts are beginning to argue,

2:02:27.382 --> 2:02:31.174
however, that there's a real sense of urgency in addressing these internal

2:02:31.222 --> 2:02:34.506
problems because of the rapidly escalating external threat

2:02:34.538 --> 2:02:38.654
that is China's undeclared Cold War. It is impossible to sincerely talk about

2:02:38.692 --> 2:02:42.026
these issues without confronting the existential threat they pose

2:02:42.058 --> 2:02:45.902
from their adversarial exploitation. But before diving into the specifics,

2:02:45.966 --> 2:02:50.286
we want to echo democrat Congressman Hank Johnson's and Republican Congressman Darryl

2:02:50.318 --> 2:02:53.554
Isa's recent House subcommittee comments that none of this

2:02:53.592 --> 2:02:57.286
conversation should be misconstrued as antiasian sentiment in the wake of

2:02:57.308 --> 2:03:00.806
a rise in harassment against Asian Americans. When we

2:03:00.828 --> 2:03:05.266
talk about China, we are referring to the Chinese government and its present authoritarian

2:03:05.298 --> 2:03:08.674
regime led by Xi Jinping. Senators, representatives,

2:03:08.722 --> 2:03:11.606
presidents, retired generals, retired judges,

2:03:11.718 --> 2:03:15.270
and the Justice Department contend that this issue is twofold.

2:03:15.350 --> 2:03:18.794
There is the well documented historic problem of IP theft that most

2:03:18.832 --> 2:03:22.346
are probably aware of, but there's also an evolving problem of

2:03:22.368 --> 2:03:26.586
going from a country that steals technology to a country that is successfully replicating

2:03:26.618 --> 2:03:29.978
the parts of the US. System that works so well for centuries,

2:03:30.074 --> 2:03:33.434
but that Congress and the courts are now throwing under the bus. The Justice

2:03:33.482 --> 2:03:37.042
Department has valued China's annual theft of intellectual property at

2:03:37.096 --> 2:03:40.626
four to $600 billion per year,

2:03:40.728 --> 2:03:44.290
which amounts to a post tax share of four to $6,000

2:03:44.360 --> 2:03:47.586
per American family of four. FBI Director Chris Wray has

2:03:47.608 --> 2:03:51.318
said that this is the largest transfer of wealth in human history.

2:03:51.484 --> 2:03:55.286
Some of this is attributable to outright theft, but much is now coming from

2:03:55.308 --> 2:03:59.286
bad faith manipulation of international rule of law. Listen into comments

2:03:59.318 --> 2:04:02.874
from Judiciary Committee Ranking Member Jerry Nadler, Democrat from

2:04:02.912 --> 2:04:06.342
New York, from a recent House subcommittee hearing on courts,

2:04:06.406 --> 2:04:10.486
intellectual property and the Internet. On the economic front, China's entry

2:04:10.518 --> 2:04:14.394
into the free market system has failed to encourage the PRC

2:04:14.442 --> 2:04:18.158
to obey the rules and customs that govern the international economic order.

2:04:18.324 --> 2:04:21.614
Rather, it has simply enabled the Chinese government to manipulate those

2:04:21.652 --> 2:04:25.434
rules to its advantage. For example, a requirement

2:04:25.482 --> 2:04:29.390
that in certain high tech sectors, US. Companies work with a Chinese counterpart

2:04:29.470 --> 2:04:33.314
has become one of many vehicles that the PRC has used

2:04:33.432 --> 2:04:36.258
to force technology transfer to their nation.

2:04:36.434 --> 2:04:40.342
This sometimes means requiring us. Companies to disclose key

2:04:40.396 --> 2:04:44.294
aspects of their technology in order to obtain licenses to operate within

2:04:44.332 --> 2:04:47.658
the PRC, among others. Unfortunately, there are

2:04:47.664 --> 2:04:51.414
also many documented instances of the PRC using outright illegal

2:04:51.462 --> 2:04:55.174
means to access US. Technology, including cyber

2:04:55.222 --> 2:04:58.598
espionage and trade secret theft. In sum,

2:04:58.694 --> 2:05:02.278
while the PRC was welcomed into the free market system, it has failed

2:05:02.294 --> 2:05:05.482
to honor many of the hallmarks of good global citizenship.

2:05:05.626 --> 2:05:09.134
This is a serious. Challenge to a system that has historically relied in large

2:05:09.172 --> 2:05:12.858
part on assumptions that the players will act in good faith.

2:05:13.034 --> 2:05:16.750
But with the announcement of a series of national policies aimed at making China

2:05:16.830 --> 2:05:20.670
a technological leader in all important emerging areas of innovation,

2:05:20.830 --> 2:05:24.834
we cannot afford to be blind to the illicit and questionable means

2:05:24.952 --> 2:05:28.626
that the PRC is. Using to leafrog the rest of the world and

2:05:28.648 --> 2:05:32.454
others. The success China is having for adopting features of our patent system before

2:05:32.492 --> 2:05:35.782
it got weakened. They have improved their patent system,

2:05:35.836 --> 2:05:39.286
and there are startups starting up

2:05:39.308 --> 2:05:42.906
in China based on Chinese patents, on key technologies that should be

2:05:42.928 --> 2:05:46.314
starting up in America. But you can't invest in them because you'll lose your money,

2:05:46.352 --> 2:05:50.422
because the patent can be invalidated. And so China is building the next Silicon Valley.

2:05:50.486 --> 2:05:53.698
A lot of people don't understand, and it sounds like a paradox, like they're stealing

2:05:53.734 --> 2:05:57.706
our IP, but then they also create this robust patent

2:05:57.738 --> 2:06:00.926
system. So they're like, well, which is it? And they don't recognize it. That's actually

2:06:01.028 --> 2:06:04.974
a unified part of an overall domestic

2:06:05.022 --> 2:06:09.406
industrial policy agenda of theirs, right? So notice

2:06:09.598 --> 2:06:12.558
it's not that they disrespect IP,

2:06:12.654 --> 2:06:16.486
it's that they want to grow their economy. They want to take as much technology

2:06:16.588 --> 2:06:20.646
from us as possible and create their own technology. So they steal technology

2:06:20.748 --> 2:06:26.178
from us, and they're trying to promote their own citizens

2:06:26.274 --> 2:06:30.598
to produce their own innovation. So they're

2:06:30.694 --> 2:06:34.538
part and parcel of a unified policy of

2:06:34.544 --> 2:06:38.554
a country that's trying to become a type

2:06:38.592 --> 2:06:42.314
of an innovation economy by leapfrogging

2:06:42.362 --> 2:06:45.278
ahead in this kind of this two pronged attack.

2:06:45.364 --> 2:06:49.440
Steal technology from foreign innovators, develop your own domestic technology,

2:06:51.250 --> 2:06:54.710
and it's been very effective for them. As Adam noted earlier in his analysis

2:06:54.730 --> 2:06:58.370
of patent applications in the US. Europe and China for the exact

2:06:58.440 --> 2:07:02.226
same inventions, applications are being rejected and invalidated in

2:07:02.248 --> 2:07:06.066
the US that are sailing through in China. This is no coincidence when

2:07:06.088 --> 2:07:09.026
you consider the recent congressional testimony of Mark Cohen,

2:07:09.138 --> 2:07:12.786
senior fellow and director of the Asia IP project, the Berkeley

2:07:12.818 --> 2:07:16.674
Center for Law and Technology. He noted that as, quote, someone who observes

2:07:16.722 --> 2:07:20.370
IP developments on both sides of the Pacific. It was interesting

2:07:20.460 --> 2:07:24.134
to see that at the same time that cases like Myriad and Bilski were decided

2:07:24.182 --> 2:07:27.926
by the Supreme Court, china amended its examination guidelines

2:07:27.958 --> 2:07:31.754
to permit the very same subject matter, now ineligible

2:07:31.802 --> 2:07:35.882
patents in the US to be granted in China. So our greatest international

2:07:35.946 --> 2:07:39.578
competitor has no eligibility mess to untangle, no PTAB

2:07:39.594 --> 2:07:43.166
to deal with, makes injunctions widely available and I'm going

2:07:43.188 --> 2:07:46.706
out on a limb here, but is also probably slightly less obsessed with

2:07:46.728 --> 2:07:50.098
troll mythology. And as Judge Michel noted, if the

2:07:50.104 --> 2:07:53.778
patents go there, the investment dollars go there. And if the investment dollars

2:07:53.864 --> 2:07:56.918
go there, so does the ensuing growth and control of

2:07:56.924 --> 2:08:00.726
the technology. One of the things that we take for granted is how when

2:08:00.748 --> 2:08:04.022
you're out innovating your adversaries, you are Very

2:08:04.076 --> 2:08:07.822
Secure. And when your adversaries

2:08:07.906 --> 2:08:11.482
are threatening to out innovate you, man, you are

2:08:11.536 --> 2:08:14.998
very insecure. Your security is absolutely threatened.

2:08:15.094 --> 2:08:18.950
This begs the fundamental question who do we want developing the technologies

2:08:19.030 --> 2:08:22.986
of tomorrow? More from Congressman Nadler's opening remarks.

2:08:23.098 --> 2:08:26.858
Today we see a government in China that has become increasingly authoritarian,

2:08:27.034 --> 2:08:31.034
using a vast array of technology to track its citizens and subjecting

2:08:31.082 --> 2:08:35.226
many of its people, most notably the Uyghur population,

2:08:35.338 --> 2:08:38.658
to shocking human rights abuses. I asked our guests if the

2:08:38.664 --> 2:08:42.366
best possible solution is just getting our house in order, doing the reforms

2:08:42.398 --> 2:08:45.362
needed to get back to the gold standard, and maybe the rest of the problem

2:08:45.416 --> 2:08:48.914
will take care of itself. Or was there something more we should be focused

2:08:48.962 --> 2:08:53.014
on? There actually have been some responses and

2:08:53.052 --> 2:08:57.174
positive developments in the space in the past couple of years because people

2:08:57.212 --> 2:09:00.746
haven't recognized, I think, that China has been in an

2:09:00.768 --> 2:09:04.300
undeclared Cold War with us for a very long time,

2:09:06.270 --> 2:09:10.606
and they're waking up to it now. They're realizing that

2:09:10.628 --> 2:09:13.230
this is a country that is not an ally of ours.

2:09:14.930 --> 2:09:18.734
But of course, we've now intertwined with them. So much of our

2:09:18.932 --> 2:09:22.430
global supply chain manufacturing. Apple,

2:09:22.770 --> 2:09:25.918
up until starting a year ago, had 100% of all of

2:09:25.924 --> 2:09:28.866
its products made in china, and now it's only down to, like,

2:09:28.888 --> 2:09:32.334
95%. I think it's so intertwined

2:09:32.382 --> 2:09:36.070
with that country. They're going to have a really hard time disentangling themselves

2:09:36.140 --> 2:09:40.694
from that country. So it's a real problem because

2:09:40.732 --> 2:09:45.206
we never became economically intertwined with the Soviet Union during

2:09:45.388 --> 2:09:46.840
the last Cold War.

2:09:48.810 --> 2:09:51.378
It's a real problem. People are waking up to it, and people are taking some

2:09:51.404 --> 2:09:55.958
actions. The tide may change And I think a lot of the reason is China.

2:09:56.054 --> 2:09:59.642
A lot of people are suddenly waking up to the fact that China is

2:09:59.696 --> 2:10:03.658
posing a huge economic and strategic threat

2:10:03.674 --> 2:10:06.830
to the United States. And a technology threat.

2:10:07.250 --> 2:10:11.066
So that sort of changed the thinking of a lot of people on Capitol

2:10:11.098 --> 2:10:15.070
Hill. And there have been recognition now and I believe,

2:10:15.140 --> 2:10:19.038
legislation or at least regulatory action taken about the disclosure of certain types

2:10:19.054 --> 2:10:22.820
of technologies to China and restrictions on certain trade issues,

2:10:23.350 --> 2:10:26.210
especially with respect to chips, for instance.

2:10:26.870 --> 2:10:31.670
And other things. Because chips can be used in jets and tanks

2:10:32.010 --> 2:10:36.002
and are used by jets and tanks. Because there isn't a division between the military

2:10:36.146 --> 2:10:39.340
and the civilian economy in China the way we have in the United States.

2:10:41.470 --> 2:10:44.490
Some positive actions I believe are being taken.

2:10:44.640 --> 2:10:48.374
Congress does seem more focused on this issue. Now, in addition to the hearings

2:10:48.422 --> 2:10:52.426
we've referenced here, the House also recently voted overwhelmingly to

2:10:52.448 --> 2:10:56.094
pass a resolution to create a select committee focused on us. Competition with

2:10:56.132 --> 2:11:00.234
China. The resolution passed in a 365 to 65 vote.

2:11:00.282 --> 2:11:03.754
But as Adam will explain, entangled manufacturing dependencies

2:11:03.802 --> 2:11:07.154
and the global need for standards collaboration further complicate this

2:11:07.192 --> 2:11:11.746
matter. But as I said, it's a complicated issue. Now. Because so

2:11:11.768 --> 2:11:15.826
many us Companies rushed to China in the 1990s

2:11:16.008 --> 2:11:19.670
at the turn of the century, especially companies like Apple.

2:11:20.970 --> 2:11:24.274
And to disentangle us from them in that respect

2:11:24.322 --> 2:11:27.922
is going to be very hard. And we have to walk carefully

2:11:27.986 --> 2:11:32.214
because we need to make sure that we don't disrupt positive aspects

2:11:32.262 --> 2:11:35.626
of the global innovation economy. So, for instance, there are these

2:11:35.648 --> 2:11:38.842
private organizations called standard development organizations that

2:11:38.976 --> 2:11:41.550
develop our technologies.

2:11:41.890 --> 2:11:44.430
So 5G WiFi,

2:11:45.090 --> 2:11:48.698
but all things are standardized. The depths

2:11:48.714 --> 2:11:52.666
of the grooves and screws are byproduct of standard development organizations

2:11:52.698 --> 2:11:55.338
because everyone has because you have to know when you go to Home Depot or

2:11:55.364 --> 2:11:58.402
Lowe's, you're going to get the same screw to use. It'll fit in the same

2:11:58.456 --> 2:12:02.190
hole that you have. So shipping containers

2:12:02.270 --> 2:12:05.250
are standardized according to standard building organizations.

2:12:06.150 --> 2:12:09.060
Of course, it's really important in technology like five G,

2:12:09.930 --> 2:12:13.586
four G, and three G. And there was a period

2:12:13.618 --> 2:12:17.302
where the US. Government said, oh, yeah, so the US. Innovators can't even talk

2:12:17.356 --> 2:12:21.206
with or participate with

2:12:21.228 --> 2:12:24.794
any organization or institution as Huawei, as a member, it's like, well, those are standard

2:12:24.832 --> 2:12:28.026
development organizations. So if there was a brief period there where the US. Government was

2:12:28.048 --> 2:12:32.054
making noise about prohibiting US. Innovators who created

2:12:32.102 --> 2:12:35.674
5G, like Qualcomm, which created 5G, from actually participating

2:12:35.722 --> 2:12:39.838
in the standard development organizations that agree to 5G,

2:12:39.924 --> 2:12:43.246
because Huawei is also a participant and a member of those organizations.

2:12:43.278 --> 2:12:45.220
So we can't do that.

2:12:47.990 --> 2:12:51.134
In fact, if we do that China

2:12:51.182 --> 2:12:54.974
is engaging in various strategies to take over standard development organizations

2:12:55.102 --> 2:12:58.486
and we are conceding the field to them, then if we prohibit American

2:12:58.588 --> 2:13:01.702
companies like Qualcomm and Interdigital to

2:13:01.756 --> 2:13:05.830
participate in these organizations, then we just basically are turning over to China

2:13:07.290 --> 2:13:10.954
the ability to control the future of these technologies and to ensure they're based

2:13:10.992 --> 2:13:14.534
on Chinese tech. And they will then incorporate

2:13:14.582 --> 2:13:19.206
into those technologies chinese norms of governance,

2:13:19.398 --> 2:13:23.434
which is, as we all well know, it's an authoritarian

2:13:23.482 --> 2:13:24.190
regime.

2:13:27.490 --> 2:13:31.326
We saw that with the lockdowns in China in response to the COVID the

2:13:31.348 --> 2:13:34.720
extreme lockdowns that made our lockdowns look like

2:13:35.810 --> 2:13:39.666
child's play. I mean, people were literally starving and

2:13:39.688 --> 2:13:43.550
jumping out of their apartments because they weren't even allowed to leave their apartments.

2:13:43.710 --> 2:13:47.222
Tanks rolling in the streets bolted into apartments. I mean, it was it got crazy.

2:13:47.276 --> 2:13:50.354
Yeah, people had people had their apartment doors wired shut

2:13:50.482 --> 2:13:54.038
so they couldn't leave their apartments. Can you

2:13:54.044 --> 2:13:57.718
imagine the

2:13:57.724 --> 2:14:00.838
country and I always like to point out to this is a country that's actively

2:14:00.854 --> 2:14:04.346
running concentration camps, I mean, the Uyghurs in the western portion of

2:14:04.368 --> 2:14:07.866
that country. This is not a friendly regime that

2:14:07.968 --> 2:14:11.274
it respects the rights of its citizens or respects the rights of other people around

2:14:11.312 --> 2:14:14.766
the globe. And we should recognize that for the vast majority of us,

2:14:14.868 --> 2:14:18.266
these issues and their ultimate solutions are largely out of our immediate

2:14:18.298 --> 2:14:21.454
control. One thing that literally everyone can help with

2:14:21.492 --> 2:14:24.738
is awareness and education. It's the only way the needle is

2:14:24.744 --> 2:14:28.306
going to move. Another problem, and this is not so much on

2:14:28.328 --> 2:14:31.906
the part of Congress but of the general public and the

2:14:31.928 --> 2:14:35.374
general media, is that they think patents

2:14:35.422 --> 2:14:39.334
are some nerdy little corner of the world that nobody needs

2:14:39.372 --> 2:14:43.394
to really worry about. It's only for geeks and patent lawyers.

2:14:43.522 --> 2:14:46.914
But the reality is the whole economy is undergirded

2:14:46.962 --> 2:14:50.742
by innovation, and most of the innovation is heavily

2:14:50.806 --> 2:14:54.214
promoted by strong patents. So if you have weak

2:14:54.262 --> 2:14:58.054
patents, you get less innovation. That means less economic

2:14:58.102 --> 2:15:01.294
growth. So this is the kind of set

2:15:01.332 --> 2:15:03.360
of messages I'm trying to get across.

2:15:04.050 --> 2:15:07.418
Yeah, I mean, the patent system is really essential

2:15:07.594 --> 2:15:11.326
infrastructure for innovation in

2:15:11.348 --> 2:15:14.446
the country. I heard others refer to it as the backbone

2:15:14.478 --> 2:15:16.340
of the economic engine.

2:15:17.670 --> 2:15:20.846
Getting the awareness out there around that, getting folks

2:15:20.878 --> 2:15:22.850
to sort of reconnect those dots,

2:15:24.630 --> 2:15:28.162
is huge. Education is a huge part of our mission and why we invest

2:15:28.216 --> 2:15:31.890
in this podcast. And that brings us to our Final Solution.

2:15:32.050 --> 2:15:35.170
We chatted with each of our guests about their educational efforts,

2:15:35.250 --> 2:15:38.518
starting with Judge Michel, who retired from his position as Chief Justice of

2:15:38.524 --> 2:15:41.926
the US. Court of Appeals for the Federal Circuit, the top seat in the nation's

2:15:41.958 --> 2:15:45.414
patent appeals court, so that he could speak freely and publicly

2:15:45.462 --> 2:15:49.046
about the state of the IP system. Well, throughout the decade

2:15:49.078 --> 2:15:52.218
ending in 2010, when I chose to retire,

2:15:52.394 --> 2:15:56.014
there was a steady campaign to weaken the

2:15:56.052 --> 2:15:59.102
patent system. Also other intellectual property

2:15:59.156 --> 2:16:02.946
rights, but particularly the patent system. And as it

2:16:03.048 --> 2:16:06.638
gained power, I got more and more concerned that it was going to hurt

2:16:06.654 --> 2:16:10.062
the country and the economy, even compromised

2:16:10.126 --> 2:16:12.130
national security, potentially.

2:16:13.030 --> 2:16:16.402
And because I was on a court and I loved the work,

2:16:16.456 --> 2:16:19.942
I thought I would stay there until I was ready

2:16:19.996 --> 2:16:23.142
to be carried out in a pine box. The colleagues were great.

2:16:23.196 --> 2:16:26.754
The cases were fascinating, they were important, the lawyers

2:16:26.802 --> 2:16:30.038
were very good. But all that got washed

2:16:30.054 --> 2:16:33.500
away by my concern for the future of the country.

2:16:33.870 --> 2:16:37.882
And sitting judges, quite properly, I think, are quite

2:16:37.936 --> 2:16:42.160
restricted in what they're allowed to say on political issues,

2:16:42.610 --> 2:16:46.858
broad public policy questions and battles

2:16:46.954 --> 2:16:50.160
among different industries and things of that sort.

2:16:50.770 --> 2:16:54.030
And I didn't want to press those boundaries. So I decided,

2:16:54.110 --> 2:16:57.442
well, if I retire, then I'm completely free to speak.

2:16:57.496 --> 2:17:01.220
So I went from highly constrained to completely free

2:17:01.590 --> 2:17:04.274
and started out right away,

2:17:04.472 --> 2:17:07.810
speaking just about anywhere I was invited

2:17:07.890 --> 2:17:11.446
many different conferences and writing articles and so on.

2:17:11.548 --> 2:17:15.782
And that gained steam in the years since May 2010

2:17:15.836 --> 2:17:19.030
when I stepped down from the bench.

2:17:19.610 --> 2:17:23.494
And looking back on it, I have no doubt

2:17:23.542 --> 2:17:26.506
that I made the right choice, at least for me. Maybe it wouldn't have been

2:17:26.528 --> 2:17:29.926
the right choice for anybody and everybody, but it was for me.

2:17:30.048 --> 2:17:33.854
And I'll tell you a quick story about that

2:17:33.892 --> 2:17:38.062
kind of thinking. I once was at a conference and

2:17:38.116 --> 2:17:42.570
seated at lunch table next to justice

2:17:42.650 --> 2:17:45.794
O'Connor. And at that point, she had retired. She had

2:17:45.832 --> 2:17:49.442
stepped down from the supreme court, and she was

2:17:49.496 --> 2:17:53.726
very engaged in trying to revive civics teaching in the schools

2:17:53.758 --> 2:17:56.950
and the culture all around the country. Very busy with that.

2:17:57.100 --> 2:18:00.326
And she told me, I really enjoyed being on the

2:18:00.348 --> 2:18:04.360
supreme court. It was interesting work. I think it was very important,

2:18:05.690 --> 2:18:09.606
but I think what I'm doing now is even more important for the

2:18:09.628 --> 2:18:13.446
country. Just last fall, the judge also joined forces with some other heavyweights

2:18:13.478 --> 2:18:16.714
in this space to form the council for innovation promotion, or c four

2:18:16.752 --> 2:18:20.446
IP. This is a group of companies that

2:18:20.468 --> 2:18:24.320
are extremely concerned with the health and strength of the patent system,

2:18:25.250 --> 2:18:29.790
and they've come together to provide a coordinated

2:18:30.210 --> 2:18:34.110
campaign to try to revive the patent system in America,

2:18:34.270 --> 2:18:37.778
and they've put up some money in order

2:18:37.864 --> 2:18:41.140
to make that as effective as possible.

2:18:42.630 --> 2:18:46.182
It has a small board of directors. I'm one of the four

2:18:46.236 --> 2:18:50.274
members on the board of directors, along with former PTO

2:18:50.322 --> 2:18:54.610
heads Yanku and capos, and also fellow

2:18:54.690 --> 2:18:58.854
retired federal circuit judge Kathleen O'Malley. I'm allied

2:18:58.902 --> 2:19:02.554
with anybody and everybody that I can be allied with to

2:19:02.592 --> 2:19:04.540
try to work on,

2:19:05.870 --> 2:19:09.858
promoting and assuring the future of the country and our economy

2:19:09.974 --> 2:19:13.546
and employment and good paying jobs

2:19:13.578 --> 2:19:17.742
and technological leadership and

2:19:17.796 --> 2:19:21.374
all the rest, as I say, including even national security.

2:19:21.492 --> 2:19:25.550
Because the weakness of the patent system is not only hurting employment

2:19:25.710 --> 2:19:29.602
compared to what it otherwise could be, should be and

2:19:29.656 --> 2:19:33.794
not only hurting industrial technology

2:19:33.912 --> 2:19:37.282
leadership, but even things critical

2:19:37.346 --> 2:19:41.122
to national security are flagging, in my opinion,

2:19:41.266 --> 2:19:44.694
because the patent system has become so weak and

2:19:44.732 --> 2:19:48.470
I think people don't understand why the weakness matters. As the president

2:19:48.540 --> 2:19:51.798
of an organization that is dedicated to the restoration of the rights

2:19:51.814 --> 2:19:54.486
of inventors and innovative small businesses,

2:19:54.598 --> 2:19:57.866
education is a big focus for Randy. Awareness is so

2:19:57.888 --> 2:20:00.790
important. I remember talking to a guy at a Starbucks.

2:20:00.870 --> 2:20:03.280
I was wearing the US inventor t shirt, right?

2:20:04.930 --> 2:20:08.126
When the word patent comes up with this guy, the first thing he

2:20:08.148 --> 2:20:10.990
thinks of is drug companies and high prices.

2:20:11.330 --> 2:20:14.802
Now, what about an inventor doing something

2:20:14.856 --> 2:20:18.610
valuable, right? So there's all this propaganda out there,

2:20:18.680 --> 2:20:22.366
and we just have to fight, fight it through and keep informing.

2:20:22.398 --> 2:20:26.370
And to all of your listeners, help us get the word out.

2:20:26.520 --> 2:20:30.326
Help us get the word out. This is a key, key issue for this country.

2:20:30.428 --> 2:20:33.634
In a recent Forbes article on five strategies of strength in the innovation

2:20:33.682 --> 2:20:37.346
economy, adam's twitter account was mentioned when talking about bringing intellectual

2:20:37.378 --> 2:20:40.786
property down to earth. In addition to it just being refreshing to know that twitter

2:20:40.818 --> 2:20:43.942
can actually be used for down to earth, constructive conversation,

2:20:44.086 --> 2:20:47.478
we discussed with Adam how he's using twitter to educate about patents.

2:20:47.574 --> 2:20:51.120
One of the things that I really wanted to use twitter for was to

2:20:52.530 --> 2:20:56.366
make clear to people, actually how fundamental the

2:20:56.388 --> 2:20:59.738
patent system has been to everything in our society.

2:20:59.834 --> 2:21:03.182
And there's a real sense in which the patent system

2:21:03.236 --> 2:21:07.662
is a victim of its own success. It has been so successful in driving innovation,

2:21:07.806 --> 2:21:11.506
in being the basis of so many products and services that make

2:21:11.528 --> 2:21:14.802
up our modern life, that people come to think of it now,

2:21:14.856 --> 2:21:18.434
people don't recognize anymore. They think of it like the air we breathe and trees

2:21:18.482 --> 2:21:22.290
we see. I really wanted to try to emphasize

2:21:22.370 --> 2:21:25.926
and show no, that you shouldn't take anything for

2:21:25.948 --> 2:21:29.686
granted. From our toothbrushes to our toothpaste tubes to our raggedy

2:21:29.718 --> 2:21:33.402
and dolls to our board games like Monopoly, that all of these were

2:21:33.456 --> 2:21:38.058
patented inventions that were then deployed into the marketplace through

2:21:38.224 --> 2:21:42.498
licensing and other types of really innovative commercial mechanisms

2:21:42.534 --> 2:21:45.850
that were themselves invented by patent owners and business persons.

2:21:46.010 --> 2:21:49.422
And so on Twitter, I do on this date, innovation history.

2:21:49.556 --> 2:21:54.174
It's what I've kind of become known for, where I highlight the

2:21:54.212 --> 2:21:57.438
anniversary of a patent issuing historically.

2:21:57.534 --> 2:22:01.362
On the day we spoke, Adam's tweet was about Alfred Crail's 1897

2:22:01.416 --> 2:22:05.378
invention of the modern ice cream scoop. His invention again too.

2:22:05.544 --> 2:22:08.374
You may not think of it as a great invention in terms of, like,

2:22:08.412 --> 2:22:12.006
it's not the smartphone, it's not an

2:22:12.028 --> 2:22:15.890
antibiotic or one of these incredible innovations,

2:22:15.970 --> 2:22:19.446
but it is what our patent system drives, which is it's all.

2:22:19.468 --> 2:22:23.210
Of these small little innovations and innovations that create

2:22:23.280 --> 2:22:27.674
all of these little inefficiencies in our lives that add up to the

2:22:27.712 --> 2:22:30.566
modern life that we have now, where we have so much free time and it's

2:22:30.598 --> 2:22:34.190
so easy to do things. And it's a veritable miracle

2:22:34.770 --> 2:22:37.646
how we live today by any historical standard.

2:22:37.748 --> 2:22:41.166
In talking with all of our guests, I couldn't help but be inspired by their

2:22:41.188 --> 2:22:44.954
infectious optimism, passion, and unfettered determination

2:22:45.082 --> 2:22:48.446
to fight for a stronger patent system, no matter the odds.

2:22:48.638 --> 2:22:52.354
Randy went broke in his fight against the AIA. As an individual.

2:22:52.552 --> 2:22:55.810
Judge Michel stepped down from arguably the most powerful judicial position

2:22:55.880 --> 2:22:59.826
in patent law to fight for its reform. Adam works tirelessly

2:22:59.858 --> 2:23:03.350
and continuously in preparing countless briefs, studies, and policy

2:23:03.420 --> 2:23:07.062
memos that help to shape the fight and dialogue in these key issues

2:23:07.116 --> 2:23:10.422
around patents as private property rights. They roll this very large

2:23:10.476 --> 2:23:13.658
boulder up a very steep hill. In all of this,

2:23:13.744 --> 2:23:17.082
in the face of the seemingly insurmountable odds of large,

2:23:17.216 --> 2:23:21.162
very powerful, well funded opposition trillion dollar companies

2:23:21.296 --> 2:23:24.702
with an outsized thumb on the scale, dead set against every

2:23:24.756 --> 2:23:28.906
square inch of every possible solution? Hundreds. Of millions spent

2:23:28.938 --> 2:23:32.442
in lobbying and strategic litigation campaigns to get results from judges,

2:23:32.506 --> 2:23:36.398
regulators and elected officials the political realities of reelection

2:23:36.494 --> 2:23:39.698
and the background influence of PACs funded by opponents of a

2:23:39.704 --> 2:23:43.694
fair and strong patent system. Mass media that's underinformed

2:23:43.742 --> 2:23:46.938
and overinfluenced all compounded by the churn

2:23:46.974 --> 2:23:50.326
of congressional leadership changes, the unintended casualties of

2:23:50.348 --> 2:23:54.274
compromise and a waning interest of the public. It's daunting

2:23:54.322 --> 2:23:57.634
to think about let alone engage. But hope is far from lost

2:23:57.682 --> 2:24:01.258
when you have tenacity care and grit on your side. There was

2:24:01.264 --> 2:24:04.454
an interesting common theme that started rising up in these conversations.

2:24:04.582 --> 2:24:08.566
In discussing not getting worn down by these challenges with Judge Michel, he offered

2:24:08.598 --> 2:24:11.710
this perspective. So that's a formidable

2:24:12.450 --> 2:24:15.786
opposition force fighting

2:24:15.818 --> 2:24:20.110
against us, a little bit like Ukrainians fighting against a Russian army. They got 300,000

2:24:20.180 --> 2:24:23.466
people in your country, they have a much bigger

2:24:23.498 --> 2:24:27.618
army than you do and they're close to home and you're one little country

2:24:27.784 --> 2:24:31.074
trying to survive. That's a tough task to take

2:24:31.112 --> 2:24:34.290
on. And that's a little bit the way I sometimes feel. I don't mean to

2:24:34.440 --> 2:24:38.166
be too self indulgent, but it's a

2:24:38.188 --> 2:24:41.762
very tough fight because of the adamant

2:24:41.826 --> 2:24:45.446
opposition of certain very powerful forces. Then we

2:24:45.468 --> 2:24:49.290
were talking with Randy and he compared what this battle felt like to being something

2:24:49.360 --> 2:24:52.586
almost like the second American Revolution. So before it

2:24:52.608 --> 2:24:55.930
was the colonist versus the suppressive

2:24:57.310 --> 2:25:00.734
English rule and now it's the innovators and

2:25:00.772 --> 2:25:04.622
startups, the real innovators versus the huge

2:25:04.756 --> 2:25:08.190
multinational corporations that are trying to stop

2:25:08.260 --> 2:25:13.854
them and to keep them down. And I

2:25:13.892 --> 2:25:17.150
feel that it's very similar in a way to the American Revolution.

2:25:17.230 --> 2:25:20.386
And it's so important. It's so important.

2:25:20.488 --> 2:25:23.330
And if history is any indicator, when you have a small,

2:25:23.400 --> 2:25:26.614
not well funded scrappy and nimble group that cares about

2:25:26.652 --> 2:25:30.662
fighting and protecting their homeland and these fundamental values and principles going

2:25:30.716 --> 2:25:34.594
up against a well funded, technologically superior, well established

2:25:34.642 --> 2:25:38.294
empire that's just fighting for better profit margins, well, that's how

2:25:38.332 --> 2:25:41.538
revolutions are fought and won. It's that level of give a damn

2:25:41.554 --> 2:25:44.666
that can make the difference. We have no choice. We have to do everything we

2:25:44.688 --> 2:25:48.426
can. Someone like the Ukrainians, as you say. And when

2:25:48.448 --> 2:25:52.814
you go back to the foundation of the country in

2:25:52.852 --> 2:25:56.800
the Revolutionary War, we lost almost every big battle. That's right.

2:25:57.570 --> 2:26:00.602
And our troops were underfed,

2:26:00.666 --> 2:26:04.882
under equipped, short term and

2:26:04.936 --> 2:26:08.980
had many other handicaps. In the end,

2:26:09.430 --> 2:26:12.738
what made the difference? Of course, the French alliance and

2:26:12.744 --> 2:26:16.458
the French fleet helped a lot and some French soldiers and places like Dortown.

2:26:16.494 --> 2:26:21.654
So there are a lot of complexities. But the overall thing was the

2:26:21.692 --> 2:26:24.806
Continental Army refused to give

2:26:24.908 --> 2:26:28.198
up. They kept fighting. It went on for

2:26:28.284 --> 2:26:32.106
eight years before it was all completely over and there

2:26:32.128 --> 2:26:35.434
was a peace treaty. The people who want to have

2:26:35.472 --> 2:26:39.014
a viable patent system need to have the same attitude.

2:26:39.062 --> 2:26:42.686
We just can't give up. We have to keep going no

2:26:42.708 --> 2:26:46.222
matter what. And eventually we will win. For the same reason

2:26:46.356 --> 2:26:50.126
you said, because for the big tech people,

2:26:50.228 --> 2:26:54.290
it's 1000th of 1% more profit.

2:26:55.510 --> 2:26:59.406
Not life threatening to them, but it is life threatening

2:26:59.438 --> 2:27:02.814
to the small businesses, the startups,

2:27:02.862 --> 2:27:06.206
the research universities and many other patent

2:27:06.238 --> 2:27:09.910
holders. So we just have to keep fighting. I appreciate what you're doing.

2:27:09.980 --> 2:27:13.286
I'm trying to do what I'm doing. And I have to

2:27:13.308 --> 2:27:16.614
say it's not all self sacrifice. I'm really enjoying this.

2:27:16.652 --> 2:27:20.314
It really feels very good. I think you feel the same way. I can see

2:27:20.352 --> 2:27:23.782
that in your smile and your energy and your tone of voice.

2:27:23.846 --> 2:27:27.706
Our patent system was designed for the little guy. It was for

2:27:27.728 --> 2:27:28.700
the little guy.

2:27:31.230 --> 2:27:35.022
You probably know this 200 years ago. Think about this.

2:27:35.076 --> 2:27:38.346
Women didn't have a lot of rights 200 years ago. The Patent

2:27:38.378 --> 2:27:41.934
Act of 1790, and it described inventors as he,

2:27:41.972 --> 2:27:45.214
she, or they giving women all the rights of men when it came to patents

2:27:45.262 --> 2:27:48.754
and copyright. And the first black owner of a patent was

2:27:48.792 --> 2:27:52.420
Thomas Jennings in 1821, well before the Civil War,

2:27:53.350 --> 2:27:56.706
and he was a black guy in New York, taylor,

2:27:56.818 --> 2:28:00.918
who invented the first version of dry cleaning and did very well with it

2:28:01.004 --> 2:28:05.014
and used his wealth to help

2:28:05.052 --> 2:28:08.806
the abolitionist movement and to help get relatives out

2:28:08.828 --> 2:28:12.490
of slavery. And the point is, our system was not

2:28:12.560 --> 2:28:14.620
supposed to be just for the big guys,

2:28:15.630 --> 2:28:18.906
and that's what it's turned into. And we have to

2:28:18.928 --> 2:28:22.366
take it back to where it's for the little guy. Big guys can

2:28:22.388 --> 2:28:26.782
use it too, but you cannot exclude the little guys and

2:28:26.836 --> 2:28:30.670
gals. That is our fight,

2:28:30.820 --> 2:28:34.834
and we will not give up. And Adam reiterated the importance of the message and

2:28:34.872 --> 2:28:40.066
fighting on behalf of the fact you're part and parcel of our

2:28:40.088 --> 2:28:44.018
little ragtag group of rebels taking

2:28:44.104 --> 2:28:47.750
on a technologically superior

2:28:51.290 --> 2:28:54.790
big tech does appear like the Death Star, but it has its weaknesses.

2:28:57.530 --> 2:29:00.280
You're right. And at the end of the day,

2:29:01.930 --> 2:29:04.620
I'm always have been a believer that facts went out.

2:29:05.710 --> 2:29:09.882
You stick to the facts. You stick to making

2:29:09.936 --> 2:29:13.966
very clear what the message is, and in the long run,

2:29:14.148 --> 2:29:17.354
that's what moves people. The same thing was true in the American Revolution.

2:29:17.402 --> 2:29:20.350
Not all Americans were in favor of the revolution. I mean,

2:29:20.500 --> 2:29:24.010
250 years later, a lot

2:29:24.020 --> 2:29:28.274
of us have lost that kind of perspective, that it was a hotly contested issue.

2:29:28.472 --> 2:29:31.858
There were even were founders at both

2:29:31.944 --> 2:29:35.486
the First Continental Congress and the Second Continental Congress, like Dickinson,

2:29:35.518 --> 2:29:38.898
who are incredibly bright and brilliant people and committed

2:29:38.914 --> 2:29:42.582
to liberty, who were very much opposed to us

2:29:42.636 --> 2:29:46.310
breaking, who thought that, no, we should work very hard at trying

2:29:46.380 --> 2:29:49.714
to make amends with the mother

2:29:49.762 --> 2:29:52.934
country. And in fact,

2:29:52.972 --> 2:29:56.502
Dickinson, one of his arguments was,

2:29:56.556 --> 2:29:57.910
we're going to be crushed.

2:29:59.970 --> 2:30:02.938
I'm not. I mean, he literally said, we're just we're great. We're gonna be we're

2:30:02.954 --> 2:30:06.558
just a little colony. I mean, you guys really think he said in

2:30:06.564 --> 2:30:08.894
the second kind of thing, he said, you guys really think that you can take

2:30:08.932 --> 2:30:12.960
on the largest, most successful navy and army in the entire world at the moment?

2:30:14.310 --> 2:30:17.298
This is crazy. He's like, maybe even if we're right,

2:30:17.464 --> 2:30:18.900
we're not going to win this.

2:30:21.430 --> 2:30:24.114
But they won out, right? Because, as you said,

2:30:24.152 --> 2:30:27.578
tenacity. It's the tenacity, and it's the belief

2:30:27.694 --> 2:30:30.626
in the rightness of the cause based on the thing that you're fighting on behalf

2:30:30.658 --> 2:30:34.086
of facts, you know? Yeah. And what and what's right, given those

2:30:34.108 --> 2:30:37.994
facts. One of my favorite Benjamin Franklin quotes about

2:30:38.032 --> 2:30:41.350
this was, we must all hang together, or most assuredly,

2:30:41.430 --> 2:30:43.210
we shall all hang separately.

2:30:47.230 --> 2:30:50.746
And he was also the one who said that the

2:30:50.768 --> 2:30:54.446
price of liberty is eternal vigilance because

2:30:54.468 --> 2:30:58.206
they knew of which they spoke. I'm confident there's no shortage of that.

2:30:58.388 --> 2:31:01.866
Didn't know what to expect going into these conversations. These individuals

2:31:01.898 --> 2:31:05.034
live and breathe this topic on a daily basis.

2:31:05.162 --> 2:31:08.082
And I know sometimes I get sick of hearing myself say the same things,

2:31:08.136 --> 2:31:11.934
but there was so much genuine optimism and sincerity.

2:31:12.062 --> 2:31:14.980
I have been fighting this fight, and it's like,

2:31:16.410 --> 2:31:20.520
for whatever reason, I don't know,

2:31:21.290 --> 2:31:25.478
it's so important. I was so outraged from the very beginning of

2:31:25.644 --> 2:31:28.234
what they were trying to do to our system and to the little guy,

2:31:28.272 --> 2:31:31.962
to this key part of America, and that outrage has kept me

2:31:32.096 --> 2:31:32.780
going.

2:31:36.750 --> 2:31:40.006
I have a positive outlook on this, and we are gaining ground.

2:31:40.038 --> 2:31:43.454
We're absolutely gaining ground. We're making headway. We're making the issue

2:31:43.492 --> 2:31:46.778
more known, and we are so committed

2:31:46.794 --> 2:31:49.966
to this. If you'd like to join forces with this ragtag group of

2:31:49.988 --> 2:31:53.610
rebels or just learn more, you can follow Adam on Twitter

2:31:53.690 --> 2:31:57.346
at A-D-A-M-M-O-S-S-O-F-F where

2:31:57.368 --> 2:32:00.322
he posts regularly on patent and innovation policy,

2:32:00.456 --> 2:32:03.822
including his excellent this Day and Innovation History Tweet.

2:32:03.886 --> 2:32:08.110
To learn more about or support US. Inventor, you can find them@usinventor.org

2:32:08.190 --> 2:32:11.798
where you can sign their Inventor Rights Resolution and get on their email list to

2:32:11.804 --> 2:32:14.674
be notified about calls to action. For legislators,

2:32:14.802 --> 2:32:19.282
they're also a 501 C Four. If you're interested in helping to support them financially,

2:32:19.426 --> 2:32:22.566
this is a great organization and they live and die on donations.

2:32:22.678 --> 2:32:26.234
If you'd like to learn more about Judge Michel and the important bipartisan work being

2:32:26.272 --> 2:32:30.870
done by the Council for Innovation Promotion, please visit C Fourip.org.

2:32:30.950 --> 2:32:33.998
And of course, check out the documentary we mentioned at the top by going to

2:32:34.004 --> 2:32:37.886
Innovationracemovie.com. It's also important to note that as

2:32:37.908 --> 2:32:41.578
long as this is the world we live in as inventors and practitioners,

2:32:41.674 --> 2:32:45.758
we cannot settle for anything less than quality when it comes to our patents.

2:32:45.934 --> 2:32:49.506
We have to focus on minimizing surface area for these sorts of

2:32:49.528 --> 2:32:53.218
challenges. What's not in our control is what the courts in

2:32:53.224 --> 2:32:56.806
Congress are up to. What is in our control is creating the

2:32:56.828 --> 2:33:00.834
highest quality patents we can under the circumstances. In practice,

2:33:00.962 --> 2:33:04.774
this means being very intentional about things like not publicly disclosing before you

2:33:04.812 --> 2:33:08.534
file conducting thorough prior art searches crafting

2:33:08.582 --> 2:33:12.246
claims with clear boundaries, performing design around exercises

2:33:12.278 --> 2:33:15.974
to draft around infringement vectors writing enabling disclosures

2:33:16.022 --> 2:33:19.958
with limited functional language, understanding case law and aligning

2:33:19.974 --> 2:33:23.406
as closely as possible with both congressional statute as

2:33:23.428 --> 2:33:26.762
well as court precedent and remembering to keep patent families

2:33:26.826 --> 2:33:30.686
open with continuations. Sometimes the best offense is

2:33:30.708 --> 2:33:33.998
a great defense, patent wisely, and have a

2:33:34.004 --> 2:33:37.540
good 1. May the Force be with you, my friend. You as well.

2:33:37.910 --> 2:33:41.186
All right, that's all for today, folks. Thanks for listening. And remember to check

2:33:41.208 --> 2:33:44.174
us out@aurorapatents.com for more great podcasts,

2:33:44.222 --> 2:33:47.746
blogs, and videos covering all things patent strategy. And if you're an

2:33:47.768 --> 2:33:50.706
agent or attorney and would like to be part of the discussion or an inventor

2:33:50.738 --> 2:33:55.574
with a topic you'd like to hear discussed, email us at podcast@aurorapatents.com.

2:33:55.692 --> 2:33:59.146
Do remember that this podcast does not constitute legal advice. And until next

2:33:59.168 --> 2:34:10.634
time, keep calm and patent on Star

2:34:10.672 --> 2:34:14.526
Wars. A little bit of patent law get into some Star Wars stuff,

2:34:14.548 --> 2:34:17.918
too. Exactly why the Jedi really should have

2:34:17.924 --> 2:34:21.726
patented lightsabers then. It could

2:34:21.748 --> 2:34:24.480
have stopped the Sith from getting it right.

2:34:25.730 --> 2:34:27.870
Could have saved the Sits for patent infringement.

2:34:30.530 --> 2:34:34.494
I'm pretty sure that the Emperor would have come up with the PTAB at

2:34:34.532 --> 2:34:36.500
some point. He would have for precisely that reason.