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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

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came from England, and that's certainly true. There's elements of our patent system that did.

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But there's also novel new elements in our patent system.

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Like we embraced a first to invent system.

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England was not a first to invent. So we embraced the idea

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that you are an inventor. So just like the farmer who labors over

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a year to till the soil and harvest

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the crops, eventually that the farmers engage in productive labor. And that's

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the basis for which we then justify legal protection in

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the fruits of the farmer's labors with property rights in the wheat,

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the inventor engages in productive, innovative labors. And that's

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the basis by which we secure and protect the inventor's

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fruits of his or her labors in their invention with a patent,

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a property right. But we also protected processes.

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So England never protected processes. So James

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Watt, who invents the first practical steam engine,

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the basis of the entire industrial revolution, he couldn't get

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a patent on the process of the steam engine. He could only get a process

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on the machine that he invented himself. But the United States

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said no. Processes are inventions themselves, too,

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and they are right. You don't go out into the world and find

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the process of how to make a drug or how to operate a

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steam engine. These have to be invented just as much as the machines and

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other things that you work on with the processes. And in fact, the very first

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patent that issued in the United States, samuel Hopkins,

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was a process on making potash. So that type of patent would

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have never been issued in England, and that's patent number one in the

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United States. So the United States has always been an

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innovative leader in recognizing that

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there are innovations that historically have not been protected

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or did not exist and couldn't be protected, or that aren't protected in other countries.

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But we are protecting them because these are legitimate new creations

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of innovators, and they should be protected as property rights like any

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other fruits of productive labors, such that people

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can then go out into the marketplace and benefit from them themselves

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and benefit consumers. And so this is why

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the chemical revolution starts in Germany in the 19th century. But the

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pharmaceutical revolution, which applies chemistry to

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drugs to help actual people's lives, shifts to the United States.

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It's why the Industrial Revolution starts in England but then shifts to the United

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States in the 19th century. And it's why then the computer

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revolution doesn't shift from anywhere. It starts in the United States in the 20th

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century, and it's why the biotech revolution started in the United States. We protected

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biotech innovation starting in the 1970s and 80s when

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other countries said, oh, no, this is

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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.