Transcript
Patent Monetization: Buying and Selling.
The following is a computer-generated transcript from the Patently Strategic Podcast. The results aren't always perfect, but we will continue working on improving the quality of the automation.
WEBVTT
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Good day and welcome to the Patently Strategic Podcast,
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where we discuss all things at the intersection of business, technology and
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patents. This podcast is a monthly discussion amongst experts in the field of
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patenting. It is for inventors, founders, and IP professionals alike,
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established or aspiring. And in this episode we take a deep dive
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into the war games filled world of patent buying and selling.
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We are joined today by a special guest host, Louis Carbonneau, founder and CEO
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of Tangible IP. Mr. Carbonneau is a recognized expert
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in intellectual property, with close to 30 years of professional
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U. S. Canadian and international experience in all facets of intellectual property,
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law and business. His firm is the largest brokerage firm in the world and has
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transacted over 4500 patents in the past decade. When we
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sat down with Louis, we hope to be able to provide our listeners with a
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101 style talk on the ins and outs of patent monetization.
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What we got was so much more and so very consistent with our mission of
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helping our audience see around corners and help their future selves.
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Louis begins with some excellent historical perspective and an overview
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of the state of the market, but really drives it all home with a plethora
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of forward thinking strategies to make for more robust,
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defendable, assertable patents. Patents are a long game.
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The little things you do now can have tremendous impact over the next
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15 or more years of your business journey, and it's vital that inventors and practitioners
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start keeping these strategies in mind if they have any hope of crafting battle
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ready, commercial grade patents. And if you haven't listened to our episode on patent
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Searching, I highly recommend you also give it some ears. In this episode,
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Louis talks a lot about the importance of searching as it pertains
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to drafting valuable patents. How it'll help if you get IPRd and
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also help against infringers. It tees in wonderfully with the context
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and strategy bits Shelley covers in the prior episode, so be sure to check it
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out. Louie's joined today by our always exceptional group of IP
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experts, including Ashley Sloat, President and director of patent strategy.
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Here Aurora Consulting, Shelly Couturier, patent strategist and search
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specialist. Here Aurora David Jackael, President of Jackrel Consulting,
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David Cohen, principal at Cohen Sciences, Amy Fiene, patent attorney
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at Vanko, an adjunct professor at BYU, and Neil Thompson, patent agent
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At Torrey Pines Law Group. All right, take it away team.
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Does anybody have any strategy tidbits, problems
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issues, technical issues super quick because
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I presented on this months ago. But the after final practice
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stuff we ran into this really weird issue where if
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you after final rejection, you ask the examiner for an interview
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and they say, sure, then you have the interview and then you apply for an
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ACP two point or after that it was rejected because
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they said you've already had an interview and part of ASCP
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two o is your guaranteed. And after final interview.
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And so now what we do, which I just did the
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other day yesterday. If we're in that situation,
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we're going to file an MP two. No, it can be helpful to call the
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examiner and be like, here's our plan.
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Is it going to be accepted? Do you have any advice for us? Whatever we
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call them, and we say, hey, if we have an interview
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first, does that preclude you approving
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an SC? Two apparently different art units have different rules about this
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within the Patent Office. Internal rules? No.
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Interesting. I think that would be a standardized practice. I know.
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Right. But I think it is kind of weird because you're not even,
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like, guaranteed an app. They don't have to give you
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an interview after your final rejection at. All.
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Right. So then they do. And then you're saying a two and they're
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like, really, you want to after final. So I'm trying to get that right.
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I know. Right. But anyway, that was a weird little quirk that were just
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the first time you ran into it, like a few weeks ago. No,
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thanks for sharing. Is good to know, because S examiners
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can kind of be sticklers about stuff like that. So it's good to know.
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Awesome. E else have any issues?
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People have been using patents that are going to ask everybody
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briefly about Patent Center, and we've had increasingly increasing
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issues with EFS web, and that's not being able to get PDF recognized
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and errors and things like that. Has it be experiencing similar to the
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patent center, or is that I've been pretty seamless
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or pretty painless experience?
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Yeah. We've been using Patent Center for a while,
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maybe almost a year, right. When it sort of became
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available, we started using it one of the terms I do a lot of work
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with, and I like it a lot. I like it much better than EFS.
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I don't use private pair anymore either. I go into Patent Center and
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I use that. There's a little search.
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Once you're logged in in Patent Center, you can search any application, and it gives
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you all the information that private pair gives you this private
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pair for years. It's just, like, always hangs up
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or too much traffic or whatever issue.
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This application doesn't exist when you know it does.
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So anyway, I use a center for that a lot, too. All right.
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I'll turn it over to Louis. Okay.
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Well, good morning or afternoon. So who's on the West Coast?
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Who's on the East Coast here or in the middle of in Montana?
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In California.
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I think there's three in Utah.
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Yes, the Michigan. We do
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cover all the most of the time zone. No central time
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zone, I guess. But we will. Kristen will be joining our team in a couple
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of weeks, and she'll be central. So we'll have all the time zones covers.
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And if I recall Ashley from our call,
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you guys all do prep and cross work pretty much,
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right. Yeah, I believe so. Neil, is that correct for your end as well?
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Yeah. Okay. I'm searching.
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So I've been doing more and more searching, but otherwise I think we're all
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kind of a typical patent agent and lining.
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Okay. And I'm the guy who's trying to monetize your work product,
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and it's not easy. I'll tell you why.
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So just in terms of background, so I don't
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draft happen myself. So I'm an IP attorney, obviously by
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profession, but I've doubled and
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prep and pros earlier in my carrier, but I was mostly on the litigation
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side for several years. And then I joined
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Microsoft in 95, I think,
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as a kind of a general console for one of their subsidiaries.
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And then with the modern ship in Seattle, where I stayed until
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2009. And there I was in charge of various
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groups, legal and business functions, but in the
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patent group for most of it and heading a lot of the international
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operations and then essentially general
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manager for IP licensing business. So that's where I started
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to try to learn to monetize IP
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and patents, and it was not easy in the area, and it's still
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not easy here. It's not easy to do it for a very large Corporation,
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because whenever you approach someone and you say we have
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some great patents and great technology, we'd like you guys, maybe to explore taking
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the license on people here. We want to sue you if
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it's Microsoft saying it. So it was pretty hard because of that. Whereas we
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didn't have those intentions at all. I was trying to to get
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rid of some of the non core technology or some
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research stuff that was not going to be productized and try
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to find better conduits for those. So that tells
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you, even if you have the best of intentions, sometimes by nature,
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by the nature of the assets you're trying to monetize,
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sometimes it's hard to even engage in a dialogue,
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but fast forward to today. So basically
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what I did went to Microsoft ended
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up doing some kind of brokerage on the side for some brokers that
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had interacted with when I was at Microsoft
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and they were having a hard time getting their calls return from some
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local aggregator here intellectual ventures where I'm sure you've all
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heard about. So I started doing a bit of that, and then I realized it's
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okay. There's a market. There was a market bag damn in transacting
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patents. So eventually it became a big part of what
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we do. And today we probably
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are the largest patent brokerage firm worldwide, just in terms of being
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the most active one. And we broker over
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to 500 patents now,
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whether mostly sale, but sometimes licenses as well.
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And sometimes both. We close about a deal every
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month or so. We just announced the sale of a small
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financial software portfolio yesterday,
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I believe. And a few weeks ago, we announced the sale of a large portfolio
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from the Japanese company Seco 100
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some patents. So those are kind of typical transactions.
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We do we have a lot of things, obviously in the fire.
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I think what I'd like to do today, and frankly, this is not meant by
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any way to be kind of a master class. It's mostly meant to
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be interactive. And every time I have presentations
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or discussions with guys who actually draft that,
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I learn a lot more from them that they learn from me.
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So by all means, please ask questions and make comments.
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As I said, I'm not in the daily practice of prepping and prosecuting patent,
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but I do see about three to five portfolios
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every single day that people want us to broker. And we
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broke her patents from individual adventures to startups
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SMEs Large Corporation. We represent, for instance, or have
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in the recent past, companies such
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as Google, HP Enterprise, Simons Mikia,
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Honeywell Carrier, Orange Telecom,
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we transfer. We represent people all around the world who reach
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out to us. Tick Togo we
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do work for a lot of people, mostly on the sell side,
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but also on the buy side, helping them acquire patents
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as well. So there's still
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a lot of people looking to sell their patents, and there are a few looks
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to buy them, not as many, obviously.
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So there's a market. And there are two things I like
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to talk about briefly, things that you don't have a lot of control over,
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which are really the forces in the market that
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are essentially making this market
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better or worse, depending on what the
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trends are. And then I'll talk more at length about things that
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you can impact through your
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work that makes you a better work product and easier
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to sell downstream. So as far as looking
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at the market in general, it's like any market.
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It's basically predicated primarily by supply
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and demand. And there was a time ten years ago where you had
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companies kind of priming the pump. Iv I mentioned intellectual
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venture was one basically buying and swooping almost everything
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that people have and buying a lot of patents that
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were forward looking, not Lesly being
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infringed upon. So there was a market that was quite different back then,
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and you had kind of a, I would say,
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an arms race to having patents,
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the case law. The situation was much different
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back then. If you look back about 1012 years
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ago, you know, you have a lot of the men
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for patents. It was considered to be the next kind of commercial weapon.
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You had mega transactions. If you remember the Nortel deal
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where people had a bidding war and paid four and a half billion
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dollars for the north portfolio, that was follow quickly
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because Google lost that bid on. Then they bought Motorola Mobility for
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something like 10 billion and $12 billion, mostly for their patents
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and so forth. That was kind of the golden age or goal of
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the era monetization. And unfortunately,
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that's when I started. So I missed all the
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five years before. That had been great for anyone who was buying or selling
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patterns. Then after 2012, you know,
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it came to a screeching halt. Essentially, I think people
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realized that they were overpaying for assets that
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were sometimes not that clear in terms
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of what demand or what the income has. And then the
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case law change. We had bills key
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and we had Alice and we're still living with the aftermath
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of Alice and it's Progeny Panel. We have the AI
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are American Bands Act, which really through
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Monkey Ranch and the Gear because suddenly people
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discover that IPRs were the new way to invalidate
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patents and it kind of took on a life of its own. So all
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these things contributed to a very different
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marketplace today that we had 7810
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years ago. And as a result, there are a lot of things
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you have no control them, which impact obviously,
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the liquidity of the market. Who's looking to buy.
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It's very hard for companies to acquire a lot
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of patents when they're not sure whether they're
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added or not. It's as basic as that is that try
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to buy some land, if you're not sure that you actually have the
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right to build something on it, and the
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city can tell you, they'll say, well, build something. It will tell
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you if we could issue a permit, but you have to build first.
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That's a little bit the kind of irony we have with patents.
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You have to get them first. I don't
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know. The average, I think, is 50 $60,000, according to the
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latest survey I've seen for a single patent overall,
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including maintenance fees and all this just
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to get the pattern. And then you have to pay another quarter million dollars for
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the PT have to tell you whether it was crap from day
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one or was it actually valid,
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which, if you think about it, your stuff for a second, what industry
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could survive with a business model like this where you have to buy the thing
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and then you have to pay five times more than you paid for the first
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time, just to be told whether you can use it or not into
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that. Working with the government, it works great.
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And the Patent Office, remember, is the most profitable,
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if not the only profitable agency and all the
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US government. So you can see why.
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So supplying the man obviously is not what it used to be. There's a lot
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more people wanting to sell their patents than people wanting to buy. And the
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people who want to buy are always looking for the perfect patent,
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which they can't find. For instance, we have 15 pools
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for sale and we can have access to hundreds of others.
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And we have three clients that have retained us to help them buy
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a portfolio. And we still haven't found anything to like.
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Yeah, not because there's a lack of portfolios
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out there, but they just never like what they see.
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There's always things that there's a risk there there's
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an alist risk here. There's some issues with validity
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or priority. I mean, people can't seem to find
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something they like, even though they have the budget and the
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appetite to buy patents, whereas there's a month, enough patents
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out there that are willing to be picked. So we have a big kind
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of the sun is between what
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people want to sell and what people are looking to buy. So there's
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not a good match. And there's
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a lot of friction between, I would say, what the buyers want
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and what they see on the market and that's,
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frankly, buyers are like, are they typically
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like larger corporations? And your sellers tend to be smaller
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entities, or is that not? It could
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be that. But it could be the reverse as well. And we represent Nokia,
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Simon Newell, and the buyers might be small
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entities who want to pad their
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or bulk up their portfolio in organically because it will take a decade
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to do it organically. It can be another large Corporation,
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although it's fairly rare that
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wants to address maybe a need because they're going into
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a new direction and they're kind of naked and they want to have
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something quickly or they
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have a patent licensing discussion that's coming up in the next
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year or two. And they know who is going to be with and they want
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to have something that reads on that company so they can basically
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have some leverage in the discussion. Or even
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we have one client that has retained us and is looking for a
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patent. And it's funny because they
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have a trademark issue with another company,
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but they're looking for patterns as a
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way to gain leverage, to have a more global discussion with that company and make
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the trademark. You should go away. And they can't really find
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anything on the trademark side, because it's a bit hard. They're the ones that
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came after them. They're looking into patterns
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to create some kind of leverage, to have a discussion and have some
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kind of settlement with the other firms. As many reasons as
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you have buyers. And obviously you have the whole world of
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non practicing entities who are buying patents,
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essentially to monetize, usually through litigation,
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because licensing is just kind of obligated
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tour to say you tried. We actually most people
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don't even try anymore because they know they're not going to get anyone's attention.
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So they just file lawsuits first and then sit
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down to discuss it. The other party wants to discuss.
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I would say there are more buyers these days who are
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not practicing entities that operating companies.
18:38.560 --> 18:42.280
The sellers are usually operating companies. Nps don't
18:42.290 --> 18:45.700
really tend to resell the
18:45.710 --> 18:49.690
patents they bought. They try to squeeze their one lemon
18:49.700 --> 18:53.170
juice. They can, with a few exceptions.
18:53.180 --> 18:56.860
For instance, we've been retained to represent AST, and I
18:56.870 --> 19:00.160
don't know if you guys are familiar with as. It stands
19:00.170 --> 19:04.630
for Allied Security Trust. It is a defensive
19:04.640 --> 19:07.960
aggregator, a little bit like an RP in San Francisco.
19:09.010 --> 19:13.150
They have about 45, 50 members. Most of them are Fortune
19:13.240 --> 19:16.630
500 companies, and what they do is they kind of do
19:16.640 --> 19:20.220
the clearinghouse for a lot of patent acquisitions,
19:20.230 --> 19:23.370
licensing. So there are a lot of companies that
19:23.380 --> 19:26.820
will not even review patents. You want to sell them, they'll signal through as
19:27.320 --> 19:30.510
they'll do our due diligence. And they'll tell us whether we should look at that.
19:30.630 --> 19:35.410
And then if there is any epitype with
19:35.420 --> 19:39.610
any of the St member, either to buy a license, then you negotiate
19:39.620 --> 19:43.360
with St on behalf of one or several members
19:43.660 --> 19:47.870
that will either acquire the patents, or we
19:47.930 --> 19:51.410
have some kind of exclusive licensing program with them where we can
19:51.420 --> 19:55.040
agree on a price per member per
19:55.050 --> 19:58.490
license. And then we will
19:58.500 --> 20:02.570
license their members at a certain previewed price. And if
20:02.580 --> 20:06.440
five members want to take a license and we'll have five licenses, and then
20:06.450 --> 20:09.920
they ask to just act as a kind of the master
20:09.930 --> 20:13.760
license or master of the license, sublicense her will
20:13.770 --> 20:16.640
to their members. So that's a defensive,
20:17.140 --> 20:20.350
non practicing entity, if you will, defensive aggregator,
20:21.100 --> 20:24.460
mostly to represent large companies.
20:25.030 --> 20:28.570
Rp is a bit the same. Although friendly, they don't acquire a
20:28.580 --> 20:32.560
lot of patents. A lot of people realize it's very expensive to acquire patents,
20:33.010 --> 20:36.670
and they prefer to if it's going to be a defensive play, they much
20:36.680 --> 20:40.120
prefer to just license that these days and deal with
20:40.130 --> 20:43.870
the risk. They're not going to use these patents against others. They don't really
20:43.880 --> 20:47.980
need the assertion value of the patent. They just want to avoid
20:48.480 --> 20:52.090
litigation. So you have a lot of those five licenses,
20:52.390 --> 20:55.780
but it's really hard to approach someone. So would you like to take the license
20:55.790 --> 20:59.500
on these patents again? We're a broker. We're not an NP. We're not
20:59.510 --> 21:02.860
a patent Rol. We want to have our calls return. And the reason we
21:02.870 --> 21:06.370
have so many large companies or retain us is because
21:06.380 --> 21:10.030
we're not perceived as a trip by anyone, and that's
21:10.040 --> 21:13.090
important to maintain that. So,
21:13.120 --> 21:17.040
for instance, we represent Semen, a few portfolios,
21:17.540 --> 21:20.910
and we have portfolios where we have clean charts that we created
21:20.920 --> 21:24.240
that read on Semen, and that's fine. And we tell our clients, see,
21:24.390 --> 21:27.660
look, we have another portfolio. By the way, we charted
21:27.670 --> 21:30.840
you guys on such and such products. Do you want to take a look at
21:30.980 --> 21:34.490
and they'll say yes or they'll say no, but, you know, they understand that we're
21:34.500 --> 21:37.400
not there to sue them. We actually doing them a favor by showing it to
21:37.410 --> 21:40.640
them before it's going to be so likely to an end, he's going to sue
21:40.650 --> 21:44.800
them. And sometimes they feel that they
21:45.300 --> 21:48.430
feel embolden enough to say, Well, let's wait to see if they sue and we'll
21:48.440 --> 21:51.730
do with them. Then that's kind of I would
21:51.740 --> 21:55.240
say the and in most cases, it's this wait
21:55.740 --> 21:59.650
and see, nobody ever got fired for not writing a check to a
22:00.150 --> 22:03.280
patent owner right now.
22:03.670 --> 22:06.850
Other things. Well, so basically, supply and demand,
22:08.080 --> 22:11.650
obviously, case law, we know how
22:12.150 --> 22:15.550
hard it is to get clarity on 101,
22:15.840 --> 22:19.860
for instance. And there are a ton of other decisions in
22:20.040 --> 22:23.670
terms of damages, in terms of venue transfer
22:23.790 --> 22:27.450
that play, especially in the litigation world. They have a lot of
22:27.460 --> 22:30.900
impact, whether you can sue in Texas or you can sue elsewhere
22:31.380 --> 22:34.950
or stay there, at least. And then you have all the
22:34.960 --> 22:39.810
usual case law. You could
22:39.820 --> 22:43.800
prove the laity or not, and treble damages inducement.
22:43.810 --> 22:47.670
All these things have an impact on, I would say,
22:47.680 --> 22:51.180
at the end of the day, when you've distilled everything in terms of what's left
22:51.210 --> 22:55.320
with a patent evaluation, changes in legislation.
22:55.330 --> 22:58.710
Obviously, I don't know if you saw the two proposed bills by
22:59.210 --> 23:02.640
Lee signature Lee earlier this week. Well, you can
23:03.140 --> 23:06.600
tell that the big tech the infringement lobby wrote them. I mean,
23:06.610 --> 23:10.560
one is to force patent owners
23:10.960 --> 23:14.050
to record their patent.
23:14.340 --> 23:18.240
I thought by virtue of having paid the agent fee, they were
23:18.250 --> 23:21.510
recorded with the patent office, and if you assign them, you have to record them.
23:21.520 --> 23:24.180
But apparently they want to create another recordation step.
23:24.510 --> 23:28.200
And it's called Pride and Ownership, or Pride and Patent Act,
23:28.210 --> 23:32.170
something like that, which is ridiculous because the whole
23:32.180 --> 23:35.050
premises, if you have a pattern, you should be proud of it. So you should
23:35.060 --> 23:38.860
record it. Otherwise, you won't be allowed to claim travel
23:38.890 --> 23:42.880
damages. So it's such a scam,
23:42.890 --> 23:46.030
and you can tell the road that. And I don't know if it's going to
23:46.040 --> 23:49.330
pass, but it's just a flag or best value
23:49.340 --> 23:52.180
when I see these things, the second package. Even worse,
23:52.190 --> 23:55.960
it's basically a very surgical act to reverse
23:55.990 --> 23:59.770
the current sense from the P tab on the fine rule. So basically,
23:59.980 --> 24:03.340
currently, if they're if there is a parallel
24:04.690 --> 24:08.800
lawsuit on a patent assertion track
24:08.980 --> 24:12.700
and with a district court and it's moving,
24:13.630 --> 24:16.780
let's say they did it just didn't file yesterday. But let's say they
24:17.280 --> 24:20.980
filed six months ago and there's already some motions or maybe a Markman
24:20.990 --> 24:24.490
schedule, and sometimes maybe they have a trial date. Well, if there's
24:24.500 --> 24:28.510
any kind of progress in the case and someone thousand IPR currently
24:28.520 --> 24:31.840
under that rule, the P tab will differ and
24:31.850 --> 24:35.050
say we want to Institute the petition because there's
24:35.060 --> 24:38.680
already a case that is likely to be heard before we're ready, which makes
24:38.690 --> 24:41.890
perfect sense. And two years ago
24:41.900 --> 24:45.580
as a reverse, the court would stay their case because the P tab was
24:45.590 --> 24:48.790
going faster and there was already an IPR, so it's kind of the
24:48.800 --> 24:52.480
reverse. It makes sense. Whoever is going to be ready first to hear the case.
24:52.490 --> 24:56.050
What we're trying to avoid our duplications and
24:56.380 --> 24:59.590
inconsistent decisions where you look at the same pattern and the P
24:59.600 --> 25:03.130
tab says it's embedded in the course says it's valid, so that creates
25:03.630 --> 25:07.060
chaos and uncertainty and so there's a bill that's
25:07.070 --> 25:10.600
trying to do that. So obviously, again, you probably know who wrote
25:10.610 --> 25:14.140
this. It's got to be the same guys wrote the other one because they don't
25:14.150 --> 25:17.950
like that through all because they were having a field day in the
25:17.960 --> 25:21.190
tab with 80% in validation rate
25:21.460 --> 25:25.600
and in the district course, they don't get that. Especially the cases
25:25.610 --> 25:29.200
are in Texas. So these things obviously
25:29.210 --> 25:32.020
influence the outcome and in turn,
25:32.050 --> 25:35.950
influence valuation, because at the end of the day, the price reflects how
25:35.960 --> 25:39.700
the market is behaving it's like the stock market. It goes up
25:39.710 --> 25:43.180
and down depending on how these things are, where these arrows are pointing.
25:43.650 --> 25:47.350
One thing that's computing to raise valuation as
25:47.360 --> 25:50.830
being the influx of cash or from Mitigation funding entities.
25:51.070 --> 25:54.550
Now it's very easy to find money to
25:54.760 --> 25:58.420
finance an assertion campaign against Apple and Samsung,
25:58.430 --> 26:01.660
and all the big guys will make you spend 5 million or
26:01.670 --> 26:05.770
$10 million in a case that you will find the money if you
26:05.780 --> 26:09.430
have a good case. So it's no longer an issue of having
26:09.440 --> 26:12.970
to set over very early or just dismiss your case or not started
26:12.980 --> 26:16.270
in the first place because you don't have the money to do it. So as
26:16.280 --> 26:19.540
a result, there you have seen some decision
26:20.040 --> 26:23.570
with very large awards, the hundreds of millions and even billion
26:23.580 --> 26:26.900
dollars. Well, that insurance contributes to attract more
26:26.910 --> 26:31.190
cases, and it raises valuation. So all these market forces
26:31.460 --> 26:36.140
influence essentially the
26:36.650 --> 26:40.330
value of this asset class. But there's not much you
26:40.340 --> 26:43.150
can do about these things. So let's talk about things that you can do.
26:43.160 --> 26:46.930
So, as I said, we review about three to five ports
26:46.940 --> 26:50.980
every day, and I have to say, first, we probably
26:50.990 --> 26:53.860
take under brokerage, maybe one or 2% of what we see.
26:54.130 --> 26:57.340
And the reason for that is in many cases. Well, first,
26:57.350 --> 26:58.480
if there's no infringement,
26:59.490 --> 27:03.100
we won't take it under a brokerage. Just because the
27:03.110 --> 27:06.700
only reason why people buy patents these days is for the assertion value.
27:06.730 --> 27:10.450
It's like buying accounts receivable. You know, someone owes
27:10.460 --> 27:14.650
you something and you buy it for that reason either because
27:14.680 --> 27:17.980
you say, if this person comes after me, I have something
27:17.990 --> 27:22.210
to throw that or I'm going to basically monetize this kind of accounts receivable,
27:22.710 --> 27:26.410
which is an unlicensed infringer. If you
27:26.910 --> 27:30.880
say, well, I might, you know, like most inventors, when you ask them, is anybody
27:30.890 --> 27:34.510
in infringing on your patent? They proudly respond,
27:35.010 --> 27:38.380
no, we're so much ahead of the curve, you know. Well, that's too bad.
27:38.390 --> 27:41.530
Then we can't sell you. Your patent has no value.
27:41.770 --> 27:44.560
What do you mean? I'm ahead of everyone. Well, yeah,
27:44.980 --> 27:48.700
start a business, sell products, but don't expect
27:48.710 --> 27:52.360
anyone to buy your patents. If nobody's infringing, they don't
27:52.370 --> 27:55.930
need it. And then I have to explain to them. You know, if I
27:56.430 --> 28:00.190
have the best auto insurance policy with the lowest premium and the best coverage,
28:00.440 --> 28:03.650
and I'm trying to sell this and you see, Louie, it's great, but I don't
28:03.660 --> 28:06.890
want a car. It's the same thing with patents. If they don't need
28:06.900 --> 28:10.910
it, it's irrelevant whether it's the greatest invention since
28:10.920 --> 28:14.150
sliced bread. So just think of it from their
28:14.650 --> 28:18.350
standpoint. They don't need this. They don't need to practice these right. If they
28:18.360 --> 28:22.100
do two years from now, be sure either they'll take a chance that
28:22.110 --> 28:25.370
they'll do it, which most people do, or they'll knock at your door then.
28:25.380 --> 28:28.700
But there's no reason for them to write your check now for something they might
28:28.710 --> 28:35.630
only need two, three, five years or maybe be never. So there's
28:35.640 --> 28:39.230
one of those situations where, like you said, companies trying to
28:39.240 --> 28:42.050
just kind of get rid of, like, I know an individual actually in town here
28:42.060 --> 28:46.460
who does a lot of this for Ranker, where he basically has a very significant
28:46.470 --> 28:50.050
pulse on their it not even just patents and
28:50.060 --> 28:54.100
stuff like that, but also just their know how their technical specs
28:54.110 --> 28:58.250
and things like that. And his whole role with Striker is to move it
28:58.460 --> 29:02.210
out of the company, either licensing or selling. So I can imagine,
29:02.220 --> 29:06.450
in some cases, it's kind of like you said with Microsoft, they have this and
29:06.460 --> 29:09.990
it's all pet project that they never took anywhere. In that
29:10.000 --> 29:13.410
case, nobody may be infringing, but it may be of value to
29:13.420 --> 29:16.620
another company. No, you're totally right, Ashley,
29:16.630 --> 29:20.040
but that's not selling patterns. It's just licensing
29:20.050 --> 29:23.670
technology. This is pure technology transfer. What you're describing. It's a
29:23.680 --> 29:26.400
totally different universe. And I've done a lot of that.
29:26.700 --> 29:30.240
Then you have some orphan technology that you're not using
29:30.570 --> 29:34.770
bundle with no how with trade
29:34.780 --> 29:38.910
secrets, patterns, sometimes even trademark. But usually
29:38.920 --> 29:43.140
it's going to be some technology that represents years of R and sunken
29:43.640 --> 29:47.130
investment, millions of dollars, millions of lines of code or whatever.
29:47.140 --> 29:51.180
The technology is a ton of knowhow. And you say, okay, this is
29:51.190 --> 29:55.050
enabling. I can basically sell this or license this to someone
29:55.440 --> 29:59.610
and help them hit the ground running. And in that context,
29:59.640 --> 30:03.450
the patents really only come for the ride. They're not the main factor.
30:03.950 --> 30:07.860
They're not the driving factor behind the transaction, because with
30:07.870 --> 30:11.070
the know how, without the underlying technology, frankly,
30:11.190 --> 30:14.490
there's not much you can do. These patents will not teach you how to do
30:14.500 --> 30:18.630
that. So we're talking about the sale or license
30:18.640 --> 30:21.870
of makeup patents versus technology transfer, where there
30:21.880 --> 30:24.180
might be patents that come for the ride. But they're not.
30:24.320 --> 30:27.800
They're not really the driving factor, but it's
30:27.810 --> 30:31.700
a good point, because some people sometimes say, how come
30:31.760 --> 30:36.110
some people have that company, as I
30:36.120 --> 30:39.650
sold 100 patents to company? Well, you have to look at the deal.
30:39.660 --> 30:42.860
It was really not a sale, a path. And it was a technology transfer deal
30:42.870 --> 30:46.640
where they had to obviously transfer the the underlying IP
30:46.650 --> 30:50.480
to that other company. But believe me, without the underlying technology, that would have been
30:50.490 --> 30:54.170
no deal. So there will always be a
30:54.440 --> 30:57.800
exception you might have we sold one large for full a few years
30:58.300 --> 31:02.630
back to a Chinese company in the automotive space because they
31:02.640 --> 31:06.440
were only in China. They wanted to go global and they were totally vulnerable with
31:06.450 --> 31:09.530
no patents outside of China. And we had a great pro
31:09.540 --> 31:13.400
that was a great fit for them, and they bought it and there was
31:13.410 --> 31:17.300
no claim charge. Nobody was infringing. I mean, I was kind of getting close,
31:17.310 --> 31:21.530
but this was mostly I can afford looking play in their case and
31:21.540 --> 31:25.280
just stopped doing that because we had a similar twit. And we said,
31:25.290 --> 31:29.090
no, we don't do that anymore. We only buy patents. We have immediate
31:29.100 --> 31:32.600
needs. So even they have kind of backtrack a
31:33.100 --> 31:36.230
little bit on what they did, but it's fairly rare that you'll see that.
31:36.240 --> 31:40.070
Then again, it's a very different animal. There are companies who have full
31:40.080 --> 31:43.820
licensing teams trying to do that. And then you have the
31:43.830 --> 31:47.720
large Corporation that are essentially licensing their set patents
31:47.730 --> 31:51.230
and kind of assertion stick licensing way where there's
31:51.240 --> 31:55.430
no other really technology. But it's really standard essential
31:55.930 --> 31:59.510
patents, which is also kind of a third pillar, separate silo
31:59.540 --> 32:03.590
and very different business. And you have the likes of Ericson,
32:03.600 --> 32:05.870
Nokia and others who do that for a living.
32:06.790 --> 32:10.700
And in that case, they're really essentially doing
32:11.200 --> 32:14.900
patent pooling and making sure that people pay their fair share
32:14.910 --> 32:18.590
for practicing a standard that they participated into.
32:18.770 --> 32:22.190
Okay, I kind of asked about you
32:22.250 --> 32:26.150
take about one, two of the portfolios
32:27.620 --> 32:31.700
you review. So other than the question
32:31.710 --> 32:35.750
of infringement, what are the other main things? I mean, you're rejecting,
32:35.760 --> 32:39.590
right? You want to reject it's mainly a question
32:40.090 --> 32:43.660
of dismissing and what remains then it's interesting.
32:43.670 --> 32:46.810
Yes, I was going to come to it.
32:46.820 --> 32:49.630
Thank you, David.
32:50.230 --> 32:54.220
Basically, the first thing I look at is okay. Is there any
32:54.230 --> 32:57.940
potential infringement? I know if there's none, it's going to be really hard to sell
32:58.440 --> 33:00.340
unless there's 500 patents.
33:01.080 --> 33:05.020
So I'm not saying that's the only thing I'll look at, but that's one
33:05.030 --> 33:08.230
of the first thing. The second thing, obviously, is is there's only
33:08.240 --> 33:11.650
one patent or do we have a portfolio? Because if there's only one patent,
33:12.220 --> 33:15.290
it's really, really hard to monetize these one.
33:15.300 --> 33:18.650
One season, two season. People are not interested,
33:19.610 --> 33:22.490
especially if there's no open continuation.
33:22.500 --> 33:26.030
That's where you guys can make a big difference in your practice in
33:26.150 --> 33:29.000
the US. Always leave an open continuation.
33:29.390 --> 33:33.260
Always, always. Even if it's your 8910 pattern in the same family,
33:33.270 --> 33:35.840
just put a placeholder file continuation.
33:37.660 --> 33:41.900
Forget to send some materials we buy
33:41.910 --> 33:44.750
six months before you get it. Missing material,
33:44.840 --> 33:48.380
request, whatever. Frankly, there are little tricks of the trade
33:48.390 --> 33:52.310
there to buy time or buy time. Keep the family open because
33:52.320 --> 33:55.940
the case law changes all the time, as you know, and it's
33:55.950 --> 33:59.660
a lot easier to go back and change claims when you have an open continuation
33:59.670 --> 34:03.590
than trying to follow the exam. If you have an IP and
34:03.880 --> 34:07.610
someone files a bunch of prior art in
34:07.620 --> 34:11.060
your IPR file. You can go back and take all the prior
34:11.070 --> 34:14.900
art and then put this in the prosecution of the continuation
34:14.910 --> 34:17.630
and get a bulletproof pattern.
34:18.560 --> 34:22.610
If there's a new case law, that like an Alice case or what
34:22.620 --> 34:25.790
happened ten years ago when suddenly the means plus
34:25.800 --> 34:29.450
functions claims were out of favor and you have an opened continuation, well, guess what.
34:29.460 --> 34:33.530
You can just go back and change your claims to do anything acrobatic
34:33.540 --> 34:37.760
to try to salvage the portfolio. So that's the very first unforced
34:37.770 --> 34:41.330
error that most people do. And frankly, if you don't do
34:41.830 --> 34:44.930
that, if you don't at least recommend to your client to file
34:44.940 --> 34:48.580
a continuation for me, it's almost mile practicing because
34:49.440 --> 34:52.990
you're really putting your content at a disadvantage.
34:53.510 --> 34:56.910
Another thing we see all the time and again, you can have a big
34:56.920 --> 35:00.540
impact on that is the lack of priority search. There are
35:00.550 --> 35:04.080
still people who operate in, like in the nineties where you would sit to your
35:04.090 --> 35:08.010
client. I don't pay anything to the prior search. It says the examiners job.
35:08.020 --> 35:11.400
They'll do it for free, and then you get a patent sheet and guess what
35:11.410 --> 35:15.690
you said. Look, I told you there's a big I'm
35:15.700 --> 35:21.070
hard sometimes on the patent bar because I think the
35:21.080 --> 35:24.640
interests are not really well, like what
35:24.650 --> 35:28.840
the client wants in most cases is a patent that will
35:28.870 --> 35:32.500
be meaningful for their business. What the patent
35:32.510 --> 35:36.550
agents and patent attorney is have a deliverable as
35:36.560 --> 35:40.120
a metric is to get a patent issue. And as you all
35:40.130 --> 35:43.450
know, a patent can issue. Almost any patent will issue.
35:43.460 --> 35:47.320
If you narrow claim enough so that it becomes meaningless,
35:47.500 --> 35:51.100
you'll get an issuance. And if all the client wants is something to frame
35:51.110 --> 35:54.700
and put them there, well, that may be fine, but I guess that's really not
35:54.710 --> 35:57.940
what most of them are looking for here. And if
35:57.950 --> 36:01.510
you essentially give them a result, which is an
36:01.520 --> 36:06.300
issue pattern, and they think they have something of value that
36:06.310 --> 36:10.440
will support their business when they need to enforce. And 510
36:10.450 --> 36:14.070
years later, when they finally need to enforce it, they realize that all
36:14.080 --> 36:18.000
their business was built on a house of cards because the
36:18.010 --> 36:22.110
foundation is like quicksand, and the minute they want to enforce, they're being told their
36:22.120 --> 36:25.900
patent is Invalid because there was a ton of prior art that should have
36:25.910 --> 36:28.450
been discovered during prosecution and was not.
36:29.420 --> 36:33.230
Then you didn't really do them any favor. So by
36:33.730 --> 36:37.400
all means, go ahead. How do you balance? You know, I think,
36:37.410 --> 36:40.910
you know, I think some of the balance is always interesting with searching,
36:40.920 --> 36:44.530
right? Because I feel like you could search
36:44.540 --> 36:47.920
a few hours and find some stuff, and you could also send,
36:48.400 --> 36:52.330
you know, days searching and never scour
36:52.540 --> 36:56.590
everything right. Somebody who's a better search, a different search for a different database,
36:56.600 --> 37:00.230
different country, different transition, whatever could find something
37:00.240 --> 37:03.800
like where do you do you have a feeling for,
37:04.300 --> 37:08.450
like what that balance is of searching and
37:08.460 --> 37:12.320
finding versus scouring on the one
37:12.820 --> 37:15.930
balance and not searching. Yeah, well, first,
37:16.350 --> 37:19.020
a lot of people don't search at all. I mean, you can see when a
37:19.520 --> 37:22.590
pattern has been issued. You look at the priority site and you see a little
37:22.600 --> 37:26.040
asterisk in front of every single pattern. You know that that means
37:26.050 --> 37:29.400
there was no prior art search done, and they rely completely
37:29.410 --> 37:32.430
on the examiner to do it. And as you probably know,
37:32.610 --> 37:36.330
although the typical prosecution may take two to three years,
37:36.690 --> 37:40.200
on average, a US examiner will spend more than 3 hours
37:40.700 --> 37:43.380
looking for priority, and they essentially search at best database.
37:44.400 --> 37:49.820
It's a completely inadequate
37:50.320 --> 37:54.140
search. And no wonder why so many patents are invalidated after
37:54.150 --> 37:56.810
there'd be an issue. I mean, you look at them and say, come on.
37:57.020 --> 38:00.530
I mean, there's got to be something else and you look
38:00.540 --> 38:04.100
for 3 hours and you find four pieces of prior that are relevant. I mean,
38:04.110 --> 38:07.580
it's not rocket science. The main problem is not doing it at
38:07.590 --> 38:10.970
all as far as the balance is concerned, what you've described.
38:10.980 --> 38:14.240
Ashley, I think there's the good prior
38:14.300 --> 38:17.420
search, and most firms will do that. And we do a lot of those two
38:17.430 --> 38:20.840
or patentability, as you know, for a fixed
38:20.850 --> 38:24.470
price. And they'll look through the main databases and they'll look
38:24.480 --> 38:27.920
through nonpatent literature, and you can pretty much cover
38:28.420 --> 38:31.930
90% of the ground for less than $2,000, essentially.
38:31.940 --> 38:35.350
And then you have the litigation kind of search where you're being
38:35.360 --> 38:39.400
sued, and then you're going to basically spend whatever needs
38:39.410 --> 38:42.760
to be spent until you find something, because it can make the difference between
38:43.260 --> 38:47.110
losing and winning and having a big award to pay or having
38:47.120 --> 38:50.320
an Invalid panel. So I
38:50.330 --> 38:53.890
can say when I was at the search firm, that's exactly how it
38:53.900 --> 38:57.970
played out. I depended on the case. When Intellectual
38:57.980 --> 39:01.510
Adventures was at their height, we would search
39:01.520 --> 39:06.230
for them anywhere from 15 to 25 hours
39:06.640 --> 39:10.580
finding infringers and validating patents,
39:10.590 --> 39:12.290
trying to invalidate patents.
39:14.630 --> 39:18.330
And I think that's reasonable. And there's
39:18.340 --> 39:22.200
so many firms that do that. There's so much competition there. And the
39:22.210 --> 39:25.770
tools are great. Again, you can get this kind
39:25.780 --> 39:29.370
of effort 1520. 5 hours for again, less than
39:29.520 --> 39:33.120
$2,000 for a client. If you look again at the
39:33.130 --> 39:36.540
price of a bad patent, which is the same than the price of a good
39:36.550 --> 39:39.900
patent, which is about 50 $60,000, it's a
39:39.910 --> 39:43.620
drop in the bucket. And not only that, I tell my clients if
39:43.650 --> 39:47.610
you do the patentability assessment and we find all the prior and you've
39:47.620 --> 39:51.510
written a good disclosure invention disclosure before that allows
39:51.520 --> 39:54.850
us to do the search, and you bring that your patent
39:54.860 --> 39:58.450
attorney. You're probably going to recruit those cars because they won't have to conduct
39:58.460 --> 40:01.660
a bunch of interviews to understand what it is about. They'll have a
40:02.160 --> 40:05.410
product right in front of them. You draft much better patents when you know
40:05.420 --> 40:08.890
what the examiner is going to have, and you can preempt some
40:08.900 --> 40:12.100
of the arguments in the way you draft and the way you craft your not
40:12.110 --> 40:15.130
only your spec, but your claims, obviously. So it
40:15.140 --> 40:18.280
makes for a more robust patent more likely to be issued,
40:18.520 --> 40:22.210
less likely to be challenged successfully, and it
40:22.710 --> 40:26.890
costs overall, probably one $502,000,
40:27.310 --> 40:31.300
some of which you'll recruit because you'll probably have a less expensive
40:31.800 --> 40:34.990
prosecution and drafting because you provided more information to
40:35.000 --> 40:38.860
your patent attorney. So I frankly, see no reason why not
40:38.890 --> 40:43.470
doing that. But again, you know, if the answer is you
40:43.480 --> 40:46.770
don't have an invention, right? It already exists. You know, this is
40:46.780 --> 40:50.400
really that's the issue. This is not a good business
40:50.410 --> 40:54.120
model for you guys to tell the client it's a crap. You don't need to
40:54.130 --> 40:57.570
file a Petman that already exists, or that invention is going
40:57.580 --> 41:01.230
to be so incremental. You know, that the claims will
41:01.240 --> 41:04.500
be so narrow by the time it is you three years from now,
41:04.510 --> 41:07.650
the technology will have evolved and you will
41:07.660 --> 41:11.160
have leap way forward your tiny invention.
41:11.170 --> 41:14.820
So don't waste your money on me. So nobody wants to say that.
41:14.830 --> 41:17.970
But frankly, that would be the honest answer. In many cases, when you
41:17.980 --> 41:21.630
look at the part that don't spend your money on this, you know, it already
41:21.640 --> 41:25.400
exists so incremental that it's not worth
41:25.410 --> 41:28.820
it. And the day people do that, you're going to
41:28.830 --> 41:32.720
have a lot less patents that are invalidated because we essentially
41:32.730 --> 41:36.320
they weren't valid in the first place. Believe me, I see a lot
41:36.330 --> 41:39.860
of those. I mean, I'm not doing we see so much volume, I can tell
41:39.870 --> 41:44.050
you it's not just bad patent attorneys.
41:44.060 --> 41:47.830
It's just the business incentives are misaligned.
41:47.950 --> 41:51.910
And that's what's creating a lot of these patterns to be issued because
41:52.410 --> 41:55.240
your metric is not the same as the client, but the client doesn't know it.
41:55.260 --> 41:59.070
The client thinks that you have the same metric and
41:59.080 --> 42:01.290
the same goal, and you don't. Actually,
42:02.040 --> 42:05.620
you have that argument with law firms. I would
42:05.650 --> 42:10.170
match, right? I mean, this sounds like a point of continuous my
42:10.200 --> 42:13.230
attention. I mean, they send me a lot of stuff. I just look
42:13.240 --> 42:18.000
at the work product and say, Guys, you didn't do your job here because
42:18.010 --> 42:21.390
we will do some priority search and we'll find something and we'll tell
42:21.400 --> 42:24.810
the client, look, we can't take this under brokerage because you didn't
42:24.820 --> 42:27.960
invent anything. You should have done a priority search prior to
42:27.970 --> 42:31.470
filing. And you want to save yourself, especially when there's portfol with
42:31.480 --> 42:34.590
five to ten patent. You would have saved yourself half a million dollars,
42:34.600 --> 42:37.740
probably. And seeif, you had only
42:38.240 --> 42:41.430
spent $2,000 in search originally.
42:42.890 --> 42:45.810
Again lost that I'm part of the path.
42:46.080 --> 42:49.680
I just don't like
42:49.690 --> 42:53.320
the fact that the business incentives are not properly
42:53.330 --> 42:56.590
aligned with what the client needs to get a meaningful patent at
42:56.620 --> 43:00.520
the end, and it reflects in the marketplace today because
43:01.150 --> 43:04.780
we can see all the bad things we want to say about the P tab,
43:05.080 --> 43:08.860
about being biased and all this. But the reality is, in a lot
43:08.870 --> 43:12.850
of cases, there were some relevant priority that
43:12.860 --> 43:16.200
made some of these patents Invalid the way they were drafted. And again,
43:16.210 --> 43:19.650
if you have an open continuation, then you can maybe save it if
43:19.740 --> 43:23.220
you don't. And it's well, you can always follow reexam,
43:23.250 --> 43:26.540
but that's another another battle.
43:26.770 --> 43:31.100
One more thing. So with regard to the that
43:31.110 --> 43:34.930
you like, you do
43:34.940 --> 43:38.440
further analysis, I would imagine, depending on how much
43:38.500 --> 43:43.010
the seller gives
43:43.020 --> 43:46.790
you to begin with. So do you
43:46.800 --> 43:50.540
share all that with the potential buyer? That's the question. Do you
43:50.550 --> 43:54.170
share your full with a potential
43:54.180 --> 43:58.370
buyer? Yeah, it depends.
43:58.460 --> 44:01.910
What we do is when we do tree as again,
44:01.920 --> 44:05.270
there are some that we can reject very quickly. Sometimes we'll
44:05.280 --> 44:09.080
reject them because the expectations are just unrealistic.
44:09.580 --> 44:13.280
The guy has one provisional patent and he wants a billion
44:13.290 --> 44:16.810
dollars for it. Those are quickie. You know,
44:16.820 --> 44:20.620
you're not going to get anywhere. So again, we require at least two issue
44:20.650 --> 44:24.250
patterns because we know that just one single pattern is almost impossible to
44:24.260 --> 44:27.790
transact. We're looking for something that's infringe
44:27.800 --> 44:31.150
we want to have obviously as much priority
44:31.650 --> 44:35.920
side of as possible. We want to have claims that are enforceable,
44:36.070 --> 44:40.040
and that's something I should just say a few words
44:40.050 --> 44:43.340
on a lot of the claims we look at are not
44:43.350 --> 44:47.870
enforceable. And again, that's on you guys a lot
44:47.880 --> 44:51.920
of divided infringement issues, people. Sometimes when the draft patent, they don't think
44:51.930 --> 44:55.730
about who's going to be the infringer, and you have to have that in mind.
44:56.470 --> 44:59.780
We have so many patents where we look at the claim
44:59.790 --> 45:02.000
and say, look, there's going to be two agents.
45:03.260 --> 45:07.040
It's like solar panel patent. If it's infringed by
45:07.050 --> 45:10.340
the installer, it's not going to do me any good. I need
45:10.350 --> 45:14.240
something that's infringed by the manufacturer here. The installers are
45:14.250 --> 45:17.360
all mom and pops, and you're not going to start suing the guy who does
45:17.370 --> 45:21.020
a few solar panel installs every month. So you
45:21.030 --> 45:24.770
can see that in the cloud space. You can see that in any kind
45:24.780 --> 45:28.370
of server network where you have the server, the club. Sometimes it's
45:28.380 --> 45:31.760
just a matter of redrafting the claim so that everything happens
45:31.770 --> 45:35.370
at the server level. But I love things we
45:35.380 --> 45:39.030
look at it was done, maybe two hassle, but you have
45:39.040 --> 45:42.090
clear divided in finding issues. And again,
45:42.360 --> 45:45.900
there's not much you can do about Alice in the case, but there's
45:45.910 --> 45:50.220
a lot you can do about drafting claims that won't have these issues in
45:50.230 --> 45:53.650
definiteness lack of support in the specs. I mean,
45:53.660 --> 45:57.280
we see it all the time, frankly. And again, this is all about the drafter.
45:57.970 --> 46:01.390
This is not about the invention itself. It's about how you draft client,
46:01.400 --> 46:04.570
making sure that you have your support and to send it.
46:04.580 --> 46:08.440
You have no indefiniteness, no divided infringement. I mean, just these
46:08.450 --> 46:12.100
three things that I've mentioned probably disqualify
46:12.550 --> 46:15.820
30, 40% of the path to look at. So you can do
46:15.830 --> 46:17.770
a lot of goodness by thinking, okay,
46:18.760 --> 46:22.700
who's the potential infringer or the potential infringers
46:22.710 --> 46:26.390
and make sure we draft some claims that encapsulate each
46:26.400 --> 46:29.810
of them in a way that is whole and will
46:29.820 --> 46:31.730
not create these divided infringement issue.
46:33.330 --> 46:37.180
The lack of support is a very common of
46:37.680 --> 46:40.900
the Cascading CIP driving nuts.
46:42.100 --> 46:44.890
We're trying to sell a portfolio. It's 44 patents,
46:45.140 --> 46:48.620
and they all CIPS are one another. Do you
46:48.630 --> 46:51.800
think anyone in his right Manor Harriman is going to take the
46:51.810 --> 46:55.130
time to look at 43 specs and try
46:55.140 --> 46:58.370
to distill the new subject matter
46:58.870 --> 47:02.060
that was inserted than each of one and then compare the claim
47:02.070 --> 47:05.990
and then trying to basically decipher. Okay, if that word
47:06.000 --> 47:09.830
is there and it first appeared in that CIP,
47:09.840 --> 47:13.640
that means that for this kind of scenario, my priority date suddenly
47:13.650 --> 47:16.910
is three years later. Hence I have to look at intervening
47:16.920 --> 47:20.090
prior art. Forget it. Nobody's going
47:20.100 --> 47:23.270
to do that. So stop these this CIP nonsense.
47:23.540 --> 47:26.690
I mean, you're just shooting yourself in the foot first,
47:26.900 --> 47:30.610
you lose a lot of patent term, and it
47:30.620 --> 47:33.970
might look trivial when you follow a patent. It's going
47:33.980 --> 47:37.180
to be good for 20 years. But the reality is, most patents that
47:37.190 --> 47:41.110
are transacted are in their last five, six years of shelf life.
47:41.320 --> 47:44.500
So most of the patents we take on the brokers
47:44.510 --> 47:48.250
have between, I would say, twelve and 18 years already
47:48.280 --> 47:52.000
passed. So which means that sometimes they have less than two years less. Sometimes they
47:52.010 --> 47:55.510
have six months less than their return. So if you file the CIP,
47:56.080 --> 48:00.310
and for some reason, the actual filing
48:00.320 --> 48:04.000
date for those claims is three or four years later than the parent
48:04.500 --> 48:07.810
one. You didn't do yourself any favor or your count
48:07.820 --> 48:11.080
any favor, because suddenly that patents about to expire
48:11.170 --> 48:14.260
or may have just expired. And that was the one with the good claims,
48:14.740 --> 48:18.730
because we all know the first pattern you're going to get is not the one.
48:18.740 --> 48:21.850
Whether you're going to fall in love with the claims, it's going to be maybe
48:21.860 --> 48:24.990
the third or fourth continuation, but try
48:25.490 --> 48:28.590
to stay away from CIPS because they do more. I can tell you they do
48:28.650 --> 48:32.040
more damage than anything else. I haven't seen anyone in
48:32.050 --> 48:35.760
terms of buyers or litigators that like them, so I have to defer
48:35.820 --> 48:39.060
to them on that. And I can see when we have too many CIPS.
48:39.070 --> 48:42.150
People say, look, it's like spaghetti code. I'm not going
48:42.160 --> 48:46.080
to get into this. It's too complicated. The linear and obviously
48:46.090 --> 48:49.200
sometimes you don't have any choice but to follow CIP and
48:49.210 --> 48:53.820
something. If you do it carefully, you will be able to make sure
48:53.830 --> 48:57.930
you have sufficient support and you're just having some data. So don't take
48:57.940 --> 49:02.310
this as gospel, but for the most part, I've seen a lot more disadvantages
49:02.320 --> 49:05.340
of people finding CIPS than not.
49:06.780 --> 49:10.470
You're better with just finding pretty large on
49:10.970 --> 49:14.760
the patent and doing a bunch of divisional in my experience
49:14.940 --> 49:18.090
and regular continuations to keep the family
49:18.590 --> 49:22.930
open. So that's one thing where you can help.
49:23.440 --> 49:27.430
We see a lot of on necessary restrictions
49:27.940 --> 49:31.840
where people. So if we just add this restriction,
49:32.050 --> 49:35.710
the examiner is going to be happy and issue the patent. Instead of fighting the
49:35.720 --> 49:39.040
good fight, the people surrender too hurtly
49:39.050 --> 49:43.300
sometimes and too easily. And as a result, you end up with unnecessary
49:43.310 --> 49:47.150
restrictions in your claim or limitation in your claims that
49:47.160 --> 49:51.200
when you're trying to enforce are the ones that are not on the corresponding
49:51.210 --> 49:54.450
product, and then you're kind of stuck. So it's okay to
49:54.460 --> 49:57.750
add limitations, independent claims. But please don't do that in your
49:57.780 --> 50:01.230
independent claims just to satisfy the examiner instead of
50:01.500 --> 50:03.480
pushing back when you think you should,
50:04.280 --> 50:08.260
it's better to. So there
50:08.270 --> 50:12.220
is a little bit of a balance, because what I sometimes see and it frustrates
50:12.230 --> 50:15.940
me is that you have firm that try to push for
50:16.420 --> 50:19.840
these broad claims, especially at the outset.
50:19.850 --> 50:23.140
When, you know, when the searching has been done, you have all the
50:23.150 --> 50:26.590
literature and there's just no way in hell that somebody's going
50:26.600 --> 50:29.710
to get those claims. But then you have these firms that say, you know,
50:30.040 --> 50:33.250
will push for this like really broad method. I feel like I see a lot
50:33.260 --> 50:36.490
of method of treatment where they're, like, pushed for this broad method of treatment
50:36.500 --> 50:40.460
claim. And it just, you know, I feel like that's
50:40.470 --> 50:44.420
also setting somebody up for failure to to go in there with this crazy
50:44.430 --> 50:48.080
broad claim to try to kind of almost sleep one by an examiner who
50:48.090 --> 50:51.760
maybe is not reading things as closely or not paying attention as close
50:51.770 --> 50:54.700
as I feel like the overly brought to be just as differ mental as the
50:54.710 --> 50:58.030
overly arrow. You don't want to be really
50:58.040 --> 51:01.420
bad, especially with Alice. You're going to get into a car Curry very quickly.
51:02.050 --> 51:06.790
I think what I'm saying is very often I will see in persecution someone
51:06.800 --> 51:10.210
who will just came into the examiner
51:10.270 --> 51:13.150
by adding a limitation the claim that I need to be there,
51:13.360 --> 51:16.690
and that's going to basically backfire
51:16.700 --> 51:20.890
later on because those are the ones that very often will
51:20.900 --> 51:24.580
not be on the infringing product. And we'll make a difference between an fringe
51:25.080 --> 51:28.600
claim or not. Just sometimes be careful not to
51:28.610 --> 51:32.020
cave in to really thinking that that's just a minor
51:32.520 --> 51:35.980
thing, especially if it's going to be in your independent claim, then it's
51:35.990 --> 51:39.520
going to follow the whole claim set.
51:40.320 --> 51:43.630
So sometimes we personally,
51:43.690 --> 51:47.110
I much prefer to see some scar tissue in prostitution,
51:47.140 --> 51:50.770
then some something that just kind of went by so smoothly
51:50.830 --> 51:54.400
that at the end of the you say, well, the exact didn't really
51:54.410 --> 51:57.820
do his or her job then, because their job is to push back and make
51:58.060 --> 52:02.080
you earn that patent. And if you see just one non
52:02.090 --> 52:06.100
final rejection, and then they allow your claim
52:06.130 --> 52:09.490
set without asking too much, it's almost suspicious from
52:09.500 --> 52:13.000
you. I like to see a few rejection letters
52:13.030 --> 52:16.900
and some good fight, some scar tissue where you didn't make some concession.
52:16.910 --> 52:20.860
But you you basically overcame this because when
52:20.870 --> 52:24.180
you get into a mode, there's an IPR,
52:24.210 --> 52:27.330
you're gonna have the same battle to fight. And if it's already being
52:27.340 --> 52:31.080
fought with the examiner, you have a lot more leverage and
52:31.380 --> 52:35.190
P tab. Then I asked to second guess the examiner, which they don't like
52:35.200 --> 52:38.400
to do as much as when it's silent. When it's time.
52:38.760 --> 52:42.420
It's almost like an appeal. The Noble they say, well, the exact didn't have this
52:42.430 --> 52:45.900
priority or this argument wasn't presented. So we don't
52:45.910 --> 52:49.370
know how he or she would have thought about it. And so we'll
52:49.380 --> 52:52.820
just substitute our in thinking if it's already there.
52:52.830 --> 52:56.710
And there's been some good argument
52:56.720 --> 53:00.350
that's going to help you. For instance, we have a for fall
53:00.380 --> 53:03.770
currenty that's being litigated. And there was during
53:03.780 --> 53:07.390
prosecution and it's over a little swing set,
53:07.450 --> 53:11.800
you know, those swing set that kind of move vertically instead
53:11.810 --> 53:15.790
of swinging or traditionally and great invention
53:16.480 --> 53:19.870
from our guy and all this and during
53:19.880 --> 53:24.680
prosecution, the examiner just seemed
53:24.690 --> 53:27.860
to understand the difference in all this, or I didn't want to see it.
53:28.190 --> 53:30.830
And our guy had to go through an appeal,
53:31.070 --> 53:34.970
fell on appeal, went to the tab as an appeal, not as
53:34.980 --> 53:38.600
IPR, and he won. He won. And then he got the
53:38.610 --> 53:42.290
claim that he wanted and he saw the good fight in one. And I have
53:42.300 --> 53:45.200
to tell you, it made a huge difference in the case because we had the
53:45.210 --> 53:47.950
Mark one a few months ago. And because of that,
53:47.960 --> 53:51.430
we're able to convince the judge that this has already
53:51.440 --> 53:55.650
been kind of litigated and the claim construction was clear and that's
53:55.660 --> 53:59.760
what it meant. And we have won that battle already. And the
53:59.770 --> 54:02.850
judge was differential to the fact that there was
54:02.860 --> 54:06.000
an appeal and that we fought for this. They didn't want to go with the
54:06.010 --> 54:10.110
other side's construction, which was basically relitigating
54:10.120 --> 54:13.710
the appeal during prosecution. So again,
54:14.210 --> 54:17.280
it's always think that the little things you do or don't do now
54:17.290 --> 54:21.120
will have an impact maybe only 15 years from now, but it will.
54:21.600 --> 54:25.020
And you got to do it right. So all these things
54:25.030 --> 54:27.060
you can really help. As I said,
54:27.970 --> 54:30.980
prior searches, the claim,
54:30.990 --> 54:34.970
drafting open continuation support in the spec.
54:35.340 --> 54:38.070
Try not to do the CIP route if you can.
54:39.600 --> 54:42.930
Foreign corresponding patents help as well.
54:43.380 --> 54:46.740
So we always prefer to see a portfolio
54:46.750 --> 54:49.980
that has some EPO filings or Chinese
54:50.010 --> 54:53.040
filings, mostly because since Ebay,
54:53.050 --> 54:57.600
we've had to export the injunction leverage
54:57.610 --> 55:00.870
to other countries. You have to go in countries that will grant
55:00.880 --> 55:04.020
you an injunction and currently is mostly is Germany and
55:04.030 --> 55:07.230
China. So if you file a German man, a Chinese
55:07.240 --> 55:10.450
counterpart. You're giving your client. And again,
55:10.750 --> 55:13.660
five years, ten years from now. Will it be other countries?
55:13.690 --> 55:17.680
Probably. But there's so much you can guess. But currently
55:17.690 --> 55:20.830
I can tell you if I have a portfolio that's infringed
55:20.840 --> 55:24.460
by a phone manufacturer or a multinational company that
55:24.470 --> 55:28.330
has activities elsewhere in the world. And I have an infringe
55:28.360 --> 55:31.790
German counterpart or an in French Chinese counterpart, I can
55:31.800 --> 55:35.000
do a lot more damage than I have a ton more leverage to negotiate a
55:35.500 --> 55:38.900
license for a settlement with the printer than if family have a US ten.
55:39.060 --> 55:42.480
I may not even have to sue the US.
55:42.700 --> 55:46.180
I may only have to sue in China or in Germany and
55:46.190 --> 55:49.390
tell the guy, obviously, we have a US patent. We're going to
55:49.400 --> 55:52.780
sue in the US for damages if we don't settle. But for
55:52.790 --> 55:56.620
now, we can get an injunction in Germany or in China that can
55:56.630 --> 55:59.620
disrupt your supply chain. So why don't we have a conversation?
55:59.760 --> 56:03.510
And that's how this game is played. So you have to understand
56:03.520 --> 56:07.390
that these are strategic weapons. So if
56:07.400 --> 56:10.960
he has any questions or comments like the word scar
56:10.970 --> 56:13.690
tissue, I'm going to add that to my vocabulary.
56:14.610 --> 56:18.340
It's good cartis. You know, when you
56:18.350 --> 56:21.910
work in the field, you get a lot of cases and the skin
56:21.920 --> 56:25.630
is much thicker. That's the same thing with a patent. You know,
56:25.640 --> 56:28.900
you want something like this. Sometimes an
56:29.400 --> 56:32.860
inventor will say we didn't even have a non rejection letter. It just flew out.
56:32.870 --> 56:36.790
I had my claims allowed on the initially didn't have
56:36.800 --> 56:39.970
to fight for it. And they're so happy. I have to bring the news
56:39.980 --> 56:41.710
that this is actually not very positive.
56:43.740 --> 56:47.680
So these are the things where again,
56:48.340 --> 56:52.150
it's okay to fight back with the examiner. And interviews are great.
56:52.160 --> 56:55.390
I think everybody who practices interviews usually have better
56:55.400 --> 56:59.230
results than people who don't. So there's no reason not to
56:59.240 --> 57:02.500
do that. And you can get a lot of good business
57:02.510 --> 57:07.390
intelligence. And sometimes, you know, they're human
57:07.400 --> 57:10.790
being. It's not that they don't want you to have the
57:10.800 --> 57:13.880
pattern for your client. If you convince them that this word is
57:13.890 --> 57:17.150
better than that word or is the same as the same scope
57:17.160 --> 57:20.720
as far as they're concerned. But for you, you know, strategically that it's
57:20.730 --> 57:24.050
going to keep some options of some options open. It's okay
57:24.060 --> 57:27.110
to fight for that, because it's going to make a big difference. And again,
57:27.200 --> 57:30.400
the deliverable that you give the client should not be.
57:30.410 --> 57:33.910
I just got your patent issue because for me, it's meaningless.
57:33.920 --> 57:38.290
It's like I've got your painting frame. But is the painting
57:38.300 --> 57:41.950
any good you really have
57:41.960 --> 57:45.220
to think about? Is this an enforceable patent that they
57:45.230 --> 57:49.380
will be able to rely on and a certain and
57:49.390 --> 57:53.040
maintain validity thereof when they need it, whether it's
57:53.050 --> 57:56.420
two years or 15 years from now or if they want to
57:56.430 --> 58:00.080
sell it, will they get anything out of it? Because, you know, it's commercial
58:00.110 --> 58:03.800
grade, as opposed to something that's so narrow that it only really
58:03.810 --> 58:07.190
covers a clone of their
58:07.200 --> 58:12.180
product. And that's maybe the last thing I'd like to say. And adding,
58:12.720 --> 58:15.840
including on my end, is a lot of patents are
58:15.850 --> 58:19.080
really drafted to cover the invention, which is really not
58:19.090 --> 58:22.440
what you should be doing. You should be really thinking
58:22.450 --> 58:25.890
of the design around. And then invent around that design around and file
58:25.900 --> 58:29.280
some claims to cover that because nobody's gonna clone your I mean, except for
58:29.290 --> 58:32.790
to Chinese knockoff. Nobody's gonna clone perfectly what
58:32.800 --> 58:36.360
your client is doing. In all cases that I've seen,
58:36.860 --> 58:40.990
frankly, the initial infringement is innocent.
58:42.100 --> 58:45.790
You don't have anyone who knew about your
58:46.290 --> 58:50.080
clients patent when they designed their feature. They just designed something that came
58:50.090 --> 58:53.230
to them naturally within the software world. And then
58:53.240 --> 58:56.950
it just so happens it might read on your clients patent. So if your patent
58:56.960 --> 59:00.730
was really narrow, narrow to cover their invention, there's a very good
59:00.740 --> 59:04.270
chance it will not be enough to secure
59:04.750 --> 59:08.140
any kind of infringement story on that, because there
59:08.150 --> 59:12.370
will be too many limitations. So again, think about playing
59:12.380 --> 59:15.700
the bad guys. What will your competitors do? And the clients love that
59:15.710 --> 59:19.420
when you explain to them it's kind of role playing right now pretend you're the
59:19.430 --> 59:22.750
bad guy and try to break that patent or try to
59:22.760 --> 59:26.260
go around. What would you do? How would you do it? Okay. What are
59:26.270 --> 59:29.620
the pros and cons? And let's file some plans around that and enrich
59:29.630 --> 59:33.580
the patent. So it can be more of a kind of a war game simulation
59:33.610 --> 59:36.700
than just drafting something and say, look at this and tell me if
59:36.710 --> 59:40.180
you agree. So again, you want to have something that's going
59:40.190 --> 59:43.510
to be meaningful down the road. You just don't know when you're going
59:43.520 --> 59:46.480
to need it, but it's not a reason not to do a job about it.
59:46.490 --> 59:50.170
So that when it happens, if and when it happens, you've got
59:50.180 --> 59:53.960
something that is ready for bat certainly
59:53.970 --> 59:56.300
makes patent a lot more fun when it's war games.
1:00:01.600 --> 1:00:05.670
Okay. That's all I have to say. Awesome. We really
1:00:05.680 --> 1:00:09.090
appreciate you. Thank you so much for historical perspective. And then also
1:00:09.390 --> 1:00:13.230
some practical tips, because I think the whole spirit
1:00:13.240 --> 1:00:16.260
of this group is to up our game per se.
1:00:16.270 --> 1:00:19.470
And so I think I know there's some tidbits I've been taking down
1:00:19.480 --> 1:00:23.260
the side, too about just different ways to think about
1:00:23.270 --> 1:00:26.050
things. And so I hope everybody else has in Tibbits, or if you have any
1:00:26.060 --> 1:00:29.200
additional questions, there's a few more minutes to throw them out there.
1:00:29.600 --> 1:00:32.670
Yeah. No, thank you. Give us a lot to think about.
1:00:32.820 --> 1:00:35.670
Yeah. Thanks, Kate. Thank you very much.
1:00:35.680 --> 1:00:39.570
Was a pleasure interacting with you guys. Best of luck. And again, I love
1:00:39.580 --> 1:00:43.380
Patent lawyers. It's just that I'm trying to help them get a better work product
1:00:43.390 --> 1:00:46.470
at the end. Perfect.
1:00:47.670 --> 1:00:48.870
Okay. Bye bye, everyone.
1:00:50.800 --> 1:00:54.130
All right. That's all for today folks. Thanks for listening and remember
1:00:54.140 --> 1:00:57.940
to check us out at Aurora. Patents. Com for more great podcasts, blogs and
1:00:57.950 --> 1:01:01.630
videos covering all things patent strategy. And if you're an agent or attorney
1:01:01.640 --> 1:01:04.360
and would like to be part of the discussion or an inventor with a topic
1:01:04.370 --> 1:01:08.120
you'd like to hear discussed, email us at podcast at war. Patents.
1:01:08.240 --> 1:01:11.690
Com. Do remember that this podcast did not constitute legal advice,
1:01:11.700 --> 1:01:14.030
and until next time, keep calm and patent on.
00:04.190 --> 00:07.500
Good day and welcome to the Patently Strategic Podcast,
00:07.510 --> 00:11.070
where we discuss all things at the intersection of business, technology and
00:11.080 --> 00:15.000
patents. This podcast is a monthly discussion amongst experts in the field of
00:15.010 --> 00:18.510
patenting. It is for inventors, founders, and IP professionals alike,
00:18.600 --> 00:22.020
established or aspiring. And in this episode we take a deep dive
00:22.030 --> 00:25.050
into the war games filled world of patent buying and selling.
00:25.200 --> 00:29.040
We are joined today by a special guest host, Louis Carbonneau, founder and CEO
00:29.050 --> 00:32.580
of Tangible IP. Mr. Carbonneau is a recognized expert
00:32.590 --> 00:35.700
in intellectual property, with close to 30 years of professional
00:36.200 --> 00:40.200
U. S. Canadian and international experience in all facets of intellectual property,
00:40.700 --> 00:44.320
law and business. His firm is the largest brokerage firm in the world and has
00:44.330 --> 00:47.860
transacted over 4500 patents in the past decade. When we
00:47.870 --> 00:50.680
sat down with Louis, we hope to be able to provide our listeners with a
00:50.690 --> 00:54.130
101 style talk on the ins and outs of patent monetization.
00:54.340 --> 00:58.150
What we got was so much more and so very consistent with our mission of
00:58.160 --> 01:01.510
helping our audience see around corners and help their future selves.
01:01.520 --> 01:04.870
Louis begins with some excellent historical perspective and an overview
01:04.880 --> 01:07.960
of the state of the market, but really drives it all home with a plethora
01:07.970 --> 01:10.630
of forward thinking strategies to make for more robust,
01:10.690 --> 01:14.050
defendable, assertable patents. Patents are a long game.
01:14.060 --> 01:17.620
The little things you do now can have tremendous impact over the next
01:18.120 --> 01:22.000
15 or more years of your business journey, and it's vital that inventors and practitioners
01:22.010 --> 01:25.720
start keeping these strategies in mind if they have any hope of crafting battle
01:25.730 --> 01:29.440
ready, commercial grade patents. And if you haven't listened to our episode on patent
01:29.450 --> 01:32.650
Searching, I highly recommend you also give it some ears. In this episode,
01:32.660 --> 01:35.770
Louis talks a lot about the importance of searching as it pertains
01:35.780 --> 01:39.130
to drafting valuable patents. How it'll help if you get IPRd and
01:39.140 --> 01:42.580
also help against infringers. It tees in wonderfully with the context
01:42.590 --> 01:46.180
and strategy bits Shelley covers in the prior episode, so be sure to check it
01:46.190 --> 01:49.390
out. Louie's joined today by our always exceptional group of IP
01:49.450 --> 01:52.960
experts, including Ashley Sloat, President and director of patent strategy.
01:52.970 --> 01:56.590
Here Aurora Consulting, Shelly Couturier, patent strategist and search
01:56.600 --> 02:00.430
specialist. Here Aurora David Jackael, President of Jackrel Consulting,
02:00.930 --> 02:04.910
David Cohen, principal at Cohen Sciences, Amy Fiene, patent attorney
02:04.920 --> 02:08.840
at Vanko, an adjunct professor at BYU, and Neil Thompson, patent agent
02:08.850 --> 02:11.710
At Torrey Pines Law Group. All right, take it away team.
02:11.720 --> 02:15.400
Does anybody have any strategy tidbits, problems
02:15.490 --> 02:19.630
issues, technical issues super quick because
02:19.640 --> 02:23.380
I presented on this months ago. But the after final practice
02:23.390 --> 02:27.310
stuff we ran into this really weird issue where if
02:27.320 --> 02:30.730
you after final rejection, you ask the examiner for an interview
02:30.740 --> 02:34.210
and they say, sure, then you have the interview and then you apply for an
02:34.220 --> 02:38.470
ACP two point or after that it was rejected because
02:38.480 --> 02:42.100
they said you've already had an interview and part of ASCP
02:42.110 --> 02:44.920
two o is your guaranteed. And after final interview.
02:45.080 --> 02:48.200
And so now what we do, which I just did the
02:48.210 --> 02:51.260
other day yesterday. If we're in that situation,
02:51.270 --> 02:54.440
we're going to file an MP two. No, it can be helpful to call the
02:54.450 --> 02:58.010
examiner and be like, here's our plan.
02:58.310 --> 03:02.690
Is it going to be accepted? Do you have any advice for us? Whatever we
03:02.700 --> 03:05.990
call them, and we say, hey, if we have an interview
03:06.000 --> 03:10.190
first, does that preclude you approving
03:10.200 --> 03:14.000
an SC? Two apparently different art units have different rules about this
03:14.060 --> 03:16.730
within the Patent Office. Internal rules? No.
03:16.740 --> 03:20.600
Interesting. I think that would be a standardized practice. I know.
03:20.660 --> 03:24.290
Right. But I think it is kind of weird because you're not even,
03:24.580 --> 03:28.000
like, guaranteed an app. They don't have to give you
03:28.010 --> 03:30.730
an interview after your final rejection at. All.
03:30.740 --> 03:34.630
Right. So then they do. And then you're saying a two and they're
03:34.640 --> 03:39.130
like, really, you want to after final. So I'm trying to get that right.
03:39.190 --> 03:43.240
I know. Right. But anyway, that was a weird little quirk that were just
03:43.250 --> 03:45.510
the first time you ran into it, like a few weeks ago. No,
03:45.660 --> 03:49.470
thanks for sharing. Is good to know, because S examiners
03:49.480 --> 03:52.050
can kind of be sticklers about stuff like that. So it's good to know.
03:53.730 --> 03:58.120
Awesome. E else have any issues?
03:59.040 --> 04:02.530
People have been using patents that are going to ask everybody
04:02.540 --> 04:06.310
briefly about Patent Center, and we've had increasingly increasing
04:06.320 --> 04:10.620
issues with EFS web, and that's not being able to get PDF recognized
04:10.630 --> 04:14.010
and errors and things like that. Has it be experiencing similar to the
04:14.020 --> 04:17.920
patent center, or is that I've been pretty seamless
04:17.930 --> 04:20.730
or pretty painless experience?
04:22.920 --> 04:25.380
Yeah. We've been using Patent Center for a while,
04:25.410 --> 04:28.680
maybe almost a year, right. When it sort of became
04:28.690 --> 04:31.890
available, we started using it one of the terms I do a lot of work
04:31.900 --> 04:35.070
with, and I like it a lot. I like it much better than EFS.
04:36.060 --> 04:39.720
I don't use private pair anymore either. I go into Patent Center and
04:39.730 --> 04:43.230
I use that. There's a little search.
04:43.240 --> 04:46.770
Once you're logged in in Patent Center, you can search any application, and it gives
04:46.780 --> 04:50.430
you all the information that private pair gives you this private
04:50.440 --> 04:53.820
pair for years. It's just, like, always hangs up
04:54.090 --> 04:57.660
or too much traffic or whatever issue.
04:57.750 --> 05:00.840
This application doesn't exist when you know it does.
05:01.680 --> 05:04.770
So anyway, I use a center for that a lot, too. All right.
05:05.120 --> 05:07.160
I'll turn it over to Louis. Okay.
05:08.870 --> 05:12.200
Well, good morning or afternoon. So who's on the West Coast?
05:12.210 --> 05:16.000
Who's on the East Coast here or in the middle of in Montana?
05:16.480 --> 05:19.420
In California.
05:19.680 --> 05:23.350
I think there's three in Utah.
05:23.360 --> 05:27.060
Yes, the Michigan. We do
05:27.070 --> 05:30.660
cover all the most of the time zone. No central time
05:30.670 --> 05:34.140
zone, I guess. But we will. Kristen will be joining our team in a couple
05:34.150 --> 05:36.990
of weeks, and she'll be central. So we'll have all the time zones covers.
05:38.130 --> 05:41.430
And if I recall Ashley from our call,
05:41.490 --> 05:44.940
you guys all do prep and cross work pretty much,
05:45.440 --> 05:48.860
right. Yeah, I believe so. Neil, is that correct for your end as well?
05:49.620 --> 05:52.960
Yeah. Okay. I'm searching.
05:52.970 --> 05:56.650
So I've been doing more and more searching, but otherwise I think we're all
05:56.660 --> 06:01.200
kind of a typical patent agent and lining.
06:01.210 --> 06:04.830
Okay. And I'm the guy who's trying to monetize your work product,
06:04.920 --> 06:07.830
and it's not easy. I'll tell you why.
06:08.480 --> 06:11.970
So just in terms of background, so I don't
06:12.470 --> 06:16.260
draft happen myself. So I'm an IP attorney, obviously by
06:16.270 --> 06:20.190
profession, but I've doubled and
06:20.610 --> 06:24.510
prep and pros earlier in my carrier, but I was mostly on the litigation
06:24.520 --> 06:28.110
side for several years. And then I joined
06:28.120 --> 06:30.360
Microsoft in 95, I think,
06:30.390 --> 06:34.500
as a kind of a general console for one of their subsidiaries.
06:34.510 --> 06:39.240
And then with the modern ship in Seattle, where I stayed until
06:39.740 --> 06:43.290
2009. And there I was in charge of various
06:43.300 --> 06:47.370
groups, legal and business functions, but in the
06:47.380 --> 06:51.390
patent group for most of it and heading a lot of the international
06:51.420 --> 06:55.050
operations and then essentially general
06:55.060 --> 06:58.380
manager for IP licensing business. So that's where I started
06:58.390 --> 07:02.010
to try to learn to monetize IP
07:02.100 --> 07:05.760
and patents, and it was not easy in the area, and it's still
07:05.770 --> 07:09.780
not easy here. It's not easy to do it for a very large Corporation,
07:09.810 --> 07:13.650
because whenever you approach someone and you say we have
07:13.660 --> 07:17.790
some great patents and great technology, we'd like you guys, maybe to explore taking
07:17.800 --> 07:21.990
the license on people here. We want to sue you if
07:22.000 --> 07:25.950
it's Microsoft saying it. So it was pretty hard because of that. Whereas we
07:26.010 --> 07:30.120
didn't have those intentions at all. I was trying to to get
07:30.150 --> 07:33.630
rid of some of the non core technology or some
07:33.810 --> 07:37.830
research stuff that was not going to be productized and try
07:37.920 --> 07:41.340
to find better conduits for those. So that tells
07:41.350 --> 07:44.790
you, even if you have the best of intentions, sometimes by nature,
07:45.240 --> 07:48.960
by the nature of the assets you're trying to monetize,
07:48.970 --> 07:51.840
sometimes it's hard to even engage in a dialogue,
07:52.540 --> 07:55.910
but fast forward to today. So basically
07:55.920 --> 07:59.720
what I did went to Microsoft ended
08:00.220 --> 08:04.050
up doing some kind of brokerage on the side for some brokers that
08:04.940 --> 08:08.220
had interacted with when I was at Microsoft
08:08.230 --> 08:11.760
and they were having a hard time getting their calls return from some
08:12.260 --> 08:15.900
local aggregator here intellectual ventures where I'm sure you've all
08:15.910 --> 08:19.380
heard about. So I started doing a bit of that, and then I realized it's
08:19.880 --> 08:24.480
okay. There's a market. There was a market bag damn in transacting
08:24.980 --> 08:28.760
patents. So eventually it became a big part of what
08:28.770 --> 08:32.180
we do. And today we probably
08:32.190 --> 08:36.020
are the largest patent brokerage firm worldwide, just in terms of being
08:36.030 --> 08:39.110
the most active one. And we broker over
08:39.120 --> 08:41.000
to 500 patents now,
08:42.140 --> 08:46.130
whether mostly sale, but sometimes licenses as well.
08:46.490 --> 08:50.420
And sometimes both. We close about a deal every
08:50.430 --> 08:53.930
month or so. We just announced the sale of a small
08:54.440 --> 08:58.140
financial software portfolio yesterday,
08:58.150 --> 09:02.460
I believe. And a few weeks ago, we announced the sale of a large portfolio
09:02.470 --> 09:06.880
from the Japanese company Seco 100
09:06.890 --> 09:10.450
some patents. So those are kind of typical transactions.
09:10.460 --> 09:12.760
We do we have a lot of things, obviously in the fire.
09:14.480 --> 09:17.960
I think what I'd like to do today, and frankly, this is not meant by
09:17.970 --> 09:21.200
any way to be kind of a master class. It's mostly meant to
09:21.210 --> 09:25.490
be interactive. And every time I have presentations
09:25.500 --> 09:28.750
or discussions with guys who actually draft that,
09:28.760 --> 09:31.630
I learn a lot more from them that they learn from me.
09:31.640 --> 09:35.020
So by all means, please ask questions and make comments.
09:35.530 --> 09:39.580
As I said, I'm not in the daily practice of prepping and prosecuting patent,
09:39.910 --> 09:43.300
but I do see about three to five portfolios
09:43.330 --> 09:46.990
every single day that people want us to broker. And we
09:47.020 --> 09:51.370
broke her patents from individual adventures to startups
09:51.490 --> 09:55.570
SMEs Large Corporation. We represent, for instance, or have
09:56.070 --> 09:59.530
in the recent past, companies such
09:59.540 --> 10:03.500
as Google, HP Enterprise, Simons Mikia,
10:03.510 --> 10:08.480
Honeywell Carrier, Orange Telecom,
10:08.490 --> 10:12.590
we transfer. We represent people all around the world who reach
10:12.600 --> 10:16.430
out to us. Tick Togo we
10:16.550 --> 10:19.760
do work for a lot of people, mostly on the sell side,
10:19.770 --> 10:24.590
but also on the buy side, helping them acquire patents
10:25.310 --> 10:28.760
as well. So there's still
10:28.770 --> 10:31.970
a lot of people looking to sell their patents, and there are a few looks
10:32.060 --> 10:34.520
to buy them, not as many, obviously.
10:35.750 --> 10:39.170
So there's a market. And there are two things I like
10:39.180 --> 10:42.560
to talk about briefly, things that you don't have a lot of control over,
10:42.570 --> 10:46.140
which are really the forces in the market that
10:46.150 --> 10:49.720
are essentially making this market
10:49.730 --> 10:53.350
better or worse, depending on what the
10:53.360 --> 10:57.160
trends are. And then I'll talk more at length about things that
10:57.170 --> 11:00.640
you can impact through your
11:00.650 --> 11:04.380
work that makes you a better work product and easier
11:04.390 --> 11:07.800
to sell downstream. So as far as looking
11:07.810 --> 11:10.830
at the market in general, it's like any market.
11:10.860 --> 11:14.400
It's basically predicated primarily by supply
11:14.410 --> 11:18.240
and demand. And there was a time ten years ago where you had
11:18.250 --> 11:22.140
companies kind of priming the pump. Iv I mentioned intellectual
11:22.150 --> 11:25.740
venture was one basically buying and swooping almost everything
11:25.750 --> 11:29.430
that people have and buying a lot of patents that
11:29.440 --> 11:33.600
were forward looking, not Lesly being
11:33.610 --> 11:37.320
infringed upon. So there was a market that was quite different back then,
11:37.330 --> 11:39.810
and you had kind of a, I would say,
11:40.440 --> 11:44.010
an arms race to having patents,
11:44.020 --> 11:47.340
the case law. The situation was much different
11:47.350 --> 11:50.880
back then. If you look back about 1012 years
11:50.890 --> 11:54.270
ago, you know, you have a lot of the men
11:54.330 --> 11:57.930
for patents. It was considered to be the next kind of commercial weapon.
11:59.070 --> 12:02.610
You had mega transactions. If you remember the Nortel deal
12:03.110 --> 12:06.750
where people had a bidding war and paid four and a half billion
12:06.760 --> 12:10.530
dollars for the north portfolio, that was follow quickly
12:11.030 --> 12:14.610
because Google lost that bid on. Then they bought Motorola Mobility for
12:14.620 --> 12:18.030
something like 10 billion and $12 billion, mostly for their patents
12:18.330 --> 12:21.570
and so forth. That was kind of the golden age or goal of
12:21.580 --> 12:25.080
the era monetization. And unfortunately,
12:25.090 --> 12:28.560
that's when I started. So I missed all the
12:28.710 --> 12:32.430
five years before. That had been great for anyone who was buying or selling
12:32.440 --> 12:35.610
patterns. Then after 2012, you know,
12:35.620 --> 12:39.000
it came to a screeching halt. Essentially, I think people
12:39.120 --> 12:42.330
realized that they were overpaying for assets that
12:42.750 --> 12:46.640
were sometimes not that clear in terms
12:46.650 --> 12:51.080
of what demand or what the income has. And then the
12:51.090 --> 12:55.160
case law change. We had bills key
12:55.170 --> 12:59.210
and we had Alice and we're still living with the aftermath
12:59.220 --> 13:03.200
of Alice and it's Progeny Panel. We have the AI
13:04.830 --> 13:08.590
are American Bands Act, which really through
13:10.180 --> 13:14.230
Monkey Ranch and the Gear because suddenly people
13:14.240 --> 13:19.300
discover that IPRs were the new way to invalidate
13:19.800 --> 13:23.830
patents and it kind of took on a life of its own. So all
13:23.840 --> 13:27.450
these things contributed to a very different
13:27.460 --> 13:30.990
marketplace today that we had 7810
13:31.000 --> 13:34.200
years ago. And as a result, there are a lot of things
13:34.210 --> 13:37.410
you have no control them, which impact obviously,
13:37.470 --> 13:40.740
the liquidity of the market. Who's looking to buy.
13:41.670 --> 13:45.210
It's very hard for companies to acquire a lot
13:45.220 --> 13:48.630
of patents when they're not sure whether they're
13:48.640 --> 13:53.430
added or not. It's as basic as that is that try
13:53.440 --> 13:57.120
to buy some land, if you're not sure that you actually have the
13:57.130 --> 14:00.780
right to build something on it, and the
14:00.790 --> 14:03.990
city can tell you, they'll say, well, build something. It will tell
14:04.000 --> 14:06.810
you if we could issue a permit, but you have to build first.
14:06.820 --> 14:10.320
That's a little bit the kind of irony we have with patents.
14:10.330 --> 14:14.370
You have to get them first. I don't
14:14.380 --> 14:18.330
know. The average, I think, is 50 $60,000, according to the
14:18.340 --> 14:22.020
latest survey I've seen for a single patent overall,
14:22.080 --> 14:25.320
including maintenance fees and all this just
14:25.330 --> 14:28.470
to get the pattern. And then you have to pay another quarter million dollars for
14:28.480 --> 14:31.680
the PT have to tell you whether it was crap from day
14:31.690 --> 14:33.330
one or was it actually valid,
14:34.530 --> 14:38.520
which, if you think about it, your stuff for a second, what industry
14:39.020 --> 14:42.030
could survive with a business model like this where you have to buy the thing
14:42.150 --> 14:45.720
and then you have to pay five times more than you paid for the first
14:45.730 --> 14:51.120
time, just to be told whether you can use it or not into
14:51.130 --> 14:54.660
that. Working with the government, it works great.
14:55.020 --> 14:59.100
And the Patent Office, remember, is the most profitable,
14:59.110 --> 15:03.120
if not the only profitable agency and all the
15:03.130 --> 15:06.390
US government. So you can see why.
15:07.740 --> 15:11.100
So supplying the man obviously is not what it used to be. There's a lot
15:11.110 --> 15:14.730
more people wanting to sell their patents than people wanting to buy. And the
15:14.740 --> 15:17.820
people who want to buy are always looking for the perfect patent,
15:18.320 --> 15:22.220
which they can't find. For instance, we have 15 pools
15:22.230 --> 15:25.610
for sale and we can have access to hundreds of others.
15:25.620 --> 15:29.180
And we have three clients that have retained us to help them buy
15:29.190 --> 15:31.880
a portfolio. And we still haven't found anything to like.
15:31.960 --> 15:35.710
Yeah, not because there's a lack of portfolios
15:35.720 --> 15:38.470
out there, but they just never like what they see.
15:38.480 --> 15:42.070
There's always things that there's a risk there there's
15:42.080 --> 15:46.360
an alist risk here. There's some issues with validity
15:46.370 --> 15:49.570
or priority. I mean, people can't seem to find
15:49.580 --> 15:53.860
something they like, even though they have the budget and the
15:53.870 --> 15:57.640
appetite to buy patents, whereas there's a month, enough patents
15:57.650 --> 16:03.790
out there that are willing to be picked. So we have a big kind
16:03.800 --> 16:07.360
of the sun is between what
16:07.370 --> 16:11.350
people want to sell and what people are looking to buy. So there's
16:11.360 --> 16:15.790
not a good match. And there's
16:15.800 --> 16:19.180
a lot of friction between, I would say, what the buyers want
16:19.190 --> 16:22.930
and what they see on the market and that's,
16:22.940 --> 16:26.340
frankly, buyers are like, are they typically
16:26.350 --> 16:29.790
like larger corporations? And your sellers tend to be smaller
16:29.800 --> 16:34.080
entities, or is that not? It could
16:34.580 --> 16:37.320
be that. But it could be the reverse as well. And we represent Nokia,
16:37.380 --> 16:40.790
Simon Newell, and the buyers might be small
16:40.800 --> 16:43.940
entities who want to pad their
16:44.440 --> 16:47.900
or bulk up their portfolio in organically because it will take a decade
16:48.400 --> 16:52.250
to do it organically. It can be another large Corporation,
16:52.280 --> 16:56.450
although it's fairly rare that
16:56.810 --> 17:00.770
wants to address maybe a need because they're going into
17:00.800 --> 17:04.370
a new direction and they're kind of naked and they want to have
17:04.380 --> 17:09.380
something quickly or they
17:09.390 --> 17:13.160
have a patent licensing discussion that's coming up in the next
17:13.430 --> 17:16.790
year or two. And they know who is going to be with and they want
17:16.800 --> 17:20.540
to have something that reads on that company so they can basically
17:21.040 --> 17:24.740
have some leverage in the discussion. Or even
17:25.010 --> 17:28.250
we have one client that has retained us and is looking for a
17:28.260 --> 17:31.700
patent. And it's funny because they
17:31.710 --> 17:34.700
have a trademark issue with another company,
17:35.100 --> 17:38.520
but they're looking for patterns as a
17:38.580 --> 17:42.390
way to gain leverage, to have a more global discussion with that company and make
17:42.400 --> 17:46.000
the trademark. You should go away. And they can't really find
17:46.010 --> 17:50.020
anything on the trademark side, because it's a bit hard. They're the ones that
17:50.030 --> 17:53.800
came after them. They're looking into patterns
17:53.860 --> 17:58.150
to create some kind of leverage, to have a discussion and have some
17:58.160 --> 18:01.570
kind of settlement with the other firms. As many reasons as
18:01.580 --> 18:05.250
you have buyers. And obviously you have the whole world of
18:05.260 --> 18:08.460
non practicing entities who are buying patents,
18:08.960 --> 18:12.180
essentially to monetize, usually through litigation,
18:12.680 --> 18:16.560
because licensing is just kind of obligated
18:16.800 --> 18:20.380
tour to say you tried. We actually most people
18:20.390 --> 18:23.800
don't even try anymore because they know they're not going to get anyone's attention.
18:23.810 --> 18:27.460
So they just file lawsuits first and then sit
18:27.470 --> 18:29.980
down to discuss it. The other party wants to discuss.
18:31.090 --> 18:34.690
I would say there are more buyers these days who are
18:34.700 --> 18:37.390
not practicing entities that operating companies.
18:38.560 --> 18:42.280
The sellers are usually operating companies. Nps don't
18:42.290 --> 18:45.700
really tend to resell the
18:45.710 --> 18:49.690
patents they bought. They try to squeeze their one lemon
18:49.700 --> 18:53.170
juice. They can, with a few exceptions.
18:53.180 --> 18:56.860
For instance, we've been retained to represent AST, and I
18:56.870 --> 19:00.160
don't know if you guys are familiar with as. It stands
19:00.170 --> 19:04.630
for Allied Security Trust. It is a defensive
19:04.640 --> 19:07.960
aggregator, a little bit like an RP in San Francisco.
19:09.010 --> 19:13.150
They have about 45, 50 members. Most of them are Fortune
19:13.240 --> 19:16.630
500 companies, and what they do is they kind of do
19:16.640 --> 19:20.220
the clearinghouse for a lot of patent acquisitions,
19:20.230 --> 19:23.370
licensing. So there are a lot of companies that
19:23.380 --> 19:26.820
will not even review patents. You want to sell them, they'll signal through as
19:27.320 --> 19:30.510
they'll do our due diligence. And they'll tell us whether we should look at that.
19:30.630 --> 19:35.410
And then if there is any epitype with
19:35.420 --> 19:39.610
any of the St member, either to buy a license, then you negotiate
19:39.620 --> 19:43.360
with St on behalf of one or several members
19:43.660 --> 19:47.870
that will either acquire the patents, or we
19:47.930 --> 19:51.410
have some kind of exclusive licensing program with them where we can
19:51.420 --> 19:55.040
agree on a price per member per
19:55.050 --> 19:58.490
license. And then we will
19:58.500 --> 20:02.570
license their members at a certain previewed price. And if
20:02.580 --> 20:06.440
five members want to take a license and we'll have five licenses, and then
20:06.450 --> 20:09.920
they ask to just act as a kind of the master
20:09.930 --> 20:13.760
license or master of the license, sublicense her will
20:13.770 --> 20:16.640
to their members. So that's a defensive,
20:17.140 --> 20:20.350
non practicing entity, if you will, defensive aggregator,
20:21.100 --> 20:24.460
mostly to represent large companies.
20:25.030 --> 20:28.570
Rp is a bit the same. Although friendly, they don't acquire a
20:28.580 --> 20:32.560
lot of patents. A lot of people realize it's very expensive to acquire patents,
20:33.010 --> 20:36.670
and they prefer to if it's going to be a defensive play, they much
20:36.680 --> 20:40.120
prefer to just license that these days and deal with
20:40.130 --> 20:43.870
the risk. They're not going to use these patents against others. They don't really
20:43.880 --> 20:47.980
need the assertion value of the patent. They just want to avoid
20:48.480 --> 20:52.090
litigation. So you have a lot of those five licenses,
20:52.390 --> 20:55.780
but it's really hard to approach someone. So would you like to take the license
20:55.790 --> 20:59.500
on these patents again? We're a broker. We're not an NP. We're not
20:59.510 --> 21:02.860
a patent Rol. We want to have our calls return. And the reason we
21:02.870 --> 21:06.370
have so many large companies or retain us is because
21:06.380 --> 21:10.030
we're not perceived as a trip by anyone, and that's
21:10.040 --> 21:13.090
important to maintain that. So,
21:13.120 --> 21:17.040
for instance, we represent Semen, a few portfolios,
21:17.540 --> 21:20.910
and we have portfolios where we have clean charts that we created
21:20.920 --> 21:24.240
that read on Semen, and that's fine. And we tell our clients, see,
21:24.390 --> 21:27.660
look, we have another portfolio. By the way, we charted
21:27.670 --> 21:30.840
you guys on such and such products. Do you want to take a look at
21:30.980 --> 21:34.490
and they'll say yes or they'll say no, but, you know, they understand that we're
21:34.500 --> 21:37.400
not there to sue them. We actually doing them a favor by showing it to
21:37.410 --> 21:40.640
them before it's going to be so likely to an end, he's going to sue
21:40.650 --> 21:44.800
them. And sometimes they feel that they
21:45.300 --> 21:48.430
feel embolden enough to say, Well, let's wait to see if they sue and we'll
21:48.440 --> 21:51.730
do with them. Then that's kind of I would
21:51.740 --> 21:55.240
say the and in most cases, it's this wait
21:55.740 --> 21:59.650
and see, nobody ever got fired for not writing a check to a
22:00.150 --> 22:03.280
patent owner right now.
22:03.670 --> 22:06.850
Other things. Well, so basically, supply and demand,
22:08.080 --> 22:11.650
obviously, case law, we know how
22:12.150 --> 22:15.550
hard it is to get clarity on 101,
22:15.840 --> 22:19.860
for instance. And there are a ton of other decisions in
22:20.040 --> 22:23.670
terms of damages, in terms of venue transfer
22:23.790 --> 22:27.450
that play, especially in the litigation world. They have a lot of
22:27.460 --> 22:30.900
impact, whether you can sue in Texas or you can sue elsewhere
22:31.380 --> 22:34.950
or stay there, at least. And then you have all the
22:34.960 --> 22:39.810
usual case law. You could
22:39.820 --> 22:43.800
prove the laity or not, and treble damages inducement.
22:43.810 --> 22:47.670
All these things have an impact on, I would say,
22:47.680 --> 22:51.180
at the end of the day, when you've distilled everything in terms of what's left
22:51.210 --> 22:55.320
with a patent evaluation, changes in legislation.
22:55.330 --> 22:58.710
Obviously, I don't know if you saw the two proposed bills by
22:59.210 --> 23:02.640
Lee signature Lee earlier this week. Well, you can
23:03.140 --> 23:06.600
tell that the big tech the infringement lobby wrote them. I mean,
23:06.610 --> 23:10.560
one is to force patent owners
23:10.960 --> 23:14.050
to record their patent.
23:14.340 --> 23:18.240
I thought by virtue of having paid the agent fee, they were
23:18.250 --> 23:21.510
recorded with the patent office, and if you assign them, you have to record them.
23:21.520 --> 23:24.180
But apparently they want to create another recordation step.
23:24.510 --> 23:28.200
And it's called Pride and Ownership, or Pride and Patent Act,
23:28.210 --> 23:32.170
something like that, which is ridiculous because the whole
23:32.180 --> 23:35.050
premises, if you have a pattern, you should be proud of it. So you should
23:35.060 --> 23:38.860
record it. Otherwise, you won't be allowed to claim travel
23:38.890 --> 23:42.880
damages. So it's such a scam,
23:42.890 --> 23:46.030
and you can tell the road that. And I don't know if it's going to
23:46.040 --> 23:49.330
pass, but it's just a flag or best value
23:49.340 --> 23:52.180
when I see these things, the second package. Even worse,
23:52.190 --> 23:55.960
it's basically a very surgical act to reverse
23:55.990 --> 23:59.770
the current sense from the P tab on the fine rule. So basically,
23:59.980 --> 24:03.340
currently, if they're if there is a parallel
24:04.690 --> 24:08.800
lawsuit on a patent assertion track
24:08.980 --> 24:12.700
and with a district court and it's moving,
24:13.630 --> 24:16.780
let's say they did it just didn't file yesterday. But let's say they
24:17.280 --> 24:20.980
filed six months ago and there's already some motions or maybe a Markman
24:20.990 --> 24:24.490
schedule, and sometimes maybe they have a trial date. Well, if there's
24:24.500 --> 24:28.510
any kind of progress in the case and someone thousand IPR currently
24:28.520 --> 24:31.840
under that rule, the P tab will differ and
24:31.850 --> 24:35.050
say we want to Institute the petition because there's
24:35.060 --> 24:38.680
already a case that is likely to be heard before we're ready, which makes
24:38.690 --> 24:41.890
perfect sense. And two years ago
24:41.900 --> 24:45.580
as a reverse, the court would stay their case because the P tab was
24:45.590 --> 24:48.790
going faster and there was already an IPR, so it's kind of the
24:48.800 --> 24:52.480
reverse. It makes sense. Whoever is going to be ready first to hear the case.
24:52.490 --> 24:56.050
What we're trying to avoid our duplications and
24:56.380 --> 24:59.590
inconsistent decisions where you look at the same pattern and the P
24:59.600 --> 25:03.130
tab says it's embedded in the course says it's valid, so that creates
25:03.630 --> 25:07.060
chaos and uncertainty and so there's a bill that's
25:07.070 --> 25:10.600
trying to do that. So obviously, again, you probably know who wrote
25:10.610 --> 25:14.140
this. It's got to be the same guys wrote the other one because they don't
25:14.150 --> 25:17.950
like that through all because they were having a field day in the
25:17.960 --> 25:21.190
tab with 80% in validation rate
25:21.460 --> 25:25.600
and in the district course, they don't get that. Especially the cases
25:25.610 --> 25:29.200
are in Texas. So these things obviously
25:29.210 --> 25:32.020
influence the outcome and in turn,
25:32.050 --> 25:35.950
influence valuation, because at the end of the day, the price reflects how
25:35.960 --> 25:39.700
the market is behaving it's like the stock market. It goes up
25:39.710 --> 25:43.180
and down depending on how these things are, where these arrows are pointing.
25:43.650 --> 25:47.350
One thing that's computing to raise valuation as
25:47.360 --> 25:50.830
being the influx of cash or from Mitigation funding entities.
25:51.070 --> 25:54.550
Now it's very easy to find money to
25:54.760 --> 25:58.420
finance an assertion campaign against Apple and Samsung,
25:58.430 --> 26:01.660
and all the big guys will make you spend 5 million or
26:01.670 --> 26:05.770
$10 million in a case that you will find the money if you
26:05.780 --> 26:09.430
have a good case. So it's no longer an issue of having
26:09.440 --> 26:12.970
to set over very early or just dismiss your case or not started
26:12.980 --> 26:16.270
in the first place because you don't have the money to do it. So as
26:16.280 --> 26:19.540
a result, there you have seen some decision
26:20.040 --> 26:23.570
with very large awards, the hundreds of millions and even billion
26:23.580 --> 26:26.900
dollars. Well, that insurance contributes to attract more
26:26.910 --> 26:31.190
cases, and it raises valuation. So all these market forces
26:31.460 --> 26:36.140
influence essentially the
26:36.650 --> 26:40.330
value of this asset class. But there's not much you
26:40.340 --> 26:43.150
can do about these things. So let's talk about things that you can do.
26:43.160 --> 26:46.930
So, as I said, we review about three to five ports
26:46.940 --> 26:50.980
every day, and I have to say, first, we probably
26:50.990 --> 26:53.860
take under brokerage, maybe one or 2% of what we see.
26:54.130 --> 26:57.340
And the reason for that is in many cases. Well, first,
26:57.350 --> 26:58.480
if there's no infringement,
26:59.490 --> 27:03.100
we won't take it under a brokerage. Just because the
27:03.110 --> 27:06.700
only reason why people buy patents these days is for the assertion value.
27:06.730 --> 27:10.450
It's like buying accounts receivable. You know, someone owes
27:10.460 --> 27:14.650
you something and you buy it for that reason either because
27:14.680 --> 27:17.980
you say, if this person comes after me, I have something
27:17.990 --> 27:22.210
to throw that or I'm going to basically monetize this kind of accounts receivable,
27:22.710 --> 27:26.410
which is an unlicensed infringer. If you
27:26.910 --> 27:30.880
say, well, I might, you know, like most inventors, when you ask them, is anybody
27:30.890 --> 27:34.510
in infringing on your patent? They proudly respond,
27:35.010 --> 27:38.380
no, we're so much ahead of the curve, you know. Well, that's too bad.
27:38.390 --> 27:41.530
Then we can't sell you. Your patent has no value.
27:41.770 --> 27:44.560
What do you mean? I'm ahead of everyone. Well, yeah,
27:44.980 --> 27:48.700
start a business, sell products, but don't expect
27:48.710 --> 27:52.360
anyone to buy your patents. If nobody's infringing, they don't
27:52.370 --> 27:55.930
need it. And then I have to explain to them. You know, if I
27:56.430 --> 28:00.190
have the best auto insurance policy with the lowest premium and the best coverage,
28:00.440 --> 28:03.650
and I'm trying to sell this and you see, Louie, it's great, but I don't
28:03.660 --> 28:06.890
want a car. It's the same thing with patents. If they don't need
28:06.900 --> 28:10.910
it, it's irrelevant whether it's the greatest invention since
28:10.920 --> 28:14.150
sliced bread. So just think of it from their
28:14.650 --> 28:18.350
standpoint. They don't need this. They don't need to practice these right. If they
28:18.360 --> 28:22.100
do two years from now, be sure either they'll take a chance that
28:22.110 --> 28:25.370
they'll do it, which most people do, or they'll knock at your door then.
28:25.380 --> 28:28.700
But there's no reason for them to write your check now for something they might
28:28.710 --> 28:35.630
only need two, three, five years or maybe be never. So there's
28:35.640 --> 28:39.230
one of those situations where, like you said, companies trying to
28:39.240 --> 28:42.050
just kind of get rid of, like, I know an individual actually in town here
28:42.060 --> 28:46.460
who does a lot of this for Ranker, where he basically has a very significant
28:46.470 --> 28:50.050
pulse on their it not even just patents and
28:50.060 --> 28:54.100
stuff like that, but also just their know how their technical specs
28:54.110 --> 28:58.250
and things like that. And his whole role with Striker is to move it
28:58.460 --> 29:02.210
out of the company, either licensing or selling. So I can imagine,
29:02.220 --> 29:06.450
in some cases, it's kind of like you said with Microsoft, they have this and
29:06.460 --> 29:09.990
it's all pet project that they never took anywhere. In that
29:10.000 --> 29:13.410
case, nobody may be infringing, but it may be of value to
29:13.420 --> 29:16.620
another company. No, you're totally right, Ashley,
29:16.630 --> 29:20.040
but that's not selling patterns. It's just licensing
29:20.050 --> 29:23.670
technology. This is pure technology transfer. What you're describing. It's a
29:23.680 --> 29:26.400
totally different universe. And I've done a lot of that.
29:26.700 --> 29:30.240
Then you have some orphan technology that you're not using
29:30.570 --> 29:34.770
bundle with no how with trade
29:34.780 --> 29:38.910
secrets, patterns, sometimes even trademark. But usually
29:38.920 --> 29:43.140
it's going to be some technology that represents years of R and sunken
29:43.640 --> 29:47.130
investment, millions of dollars, millions of lines of code or whatever.
29:47.140 --> 29:51.180
The technology is a ton of knowhow. And you say, okay, this is
29:51.190 --> 29:55.050
enabling. I can basically sell this or license this to someone
29:55.440 --> 29:59.610
and help them hit the ground running. And in that context,
29:59.640 --> 30:03.450
the patents really only come for the ride. They're not the main factor.
30:03.950 --> 30:07.860
They're not the driving factor behind the transaction, because with
30:07.870 --> 30:11.070
the know how, without the underlying technology, frankly,
30:11.190 --> 30:14.490
there's not much you can do. These patents will not teach you how to do
30:14.500 --> 30:18.630
that. So we're talking about the sale or license
30:18.640 --> 30:21.870
of makeup patents versus technology transfer, where there
30:21.880 --> 30:24.180
might be patents that come for the ride. But they're not.
30:24.320 --> 30:27.800
They're not really the driving factor, but it's
30:27.810 --> 30:31.700
a good point, because some people sometimes say, how come
30:31.760 --> 30:36.110
some people have that company, as I
30:36.120 --> 30:39.650
sold 100 patents to company? Well, you have to look at the deal.
30:39.660 --> 30:42.860
It was really not a sale, a path. And it was a technology transfer deal
30:42.870 --> 30:46.640
where they had to obviously transfer the the underlying IP
30:46.650 --> 30:50.480
to that other company. But believe me, without the underlying technology, that would have been
30:50.490 --> 30:54.170
no deal. So there will always be a
30:54.440 --> 30:57.800
exception you might have we sold one large for full a few years
30:58.300 --> 31:02.630
back to a Chinese company in the automotive space because they
31:02.640 --> 31:06.440
were only in China. They wanted to go global and they were totally vulnerable with
31:06.450 --> 31:09.530
no patents outside of China. And we had a great pro
31:09.540 --> 31:13.400
that was a great fit for them, and they bought it and there was
31:13.410 --> 31:17.300
no claim charge. Nobody was infringing. I mean, I was kind of getting close,
31:17.310 --> 31:21.530
but this was mostly I can afford looking play in their case and
31:21.540 --> 31:25.280
just stopped doing that because we had a similar twit. And we said,
31:25.290 --> 31:29.090
no, we don't do that anymore. We only buy patents. We have immediate
31:29.100 --> 31:32.600
needs. So even they have kind of backtrack a
31:33.100 --> 31:36.230
little bit on what they did, but it's fairly rare that you'll see that.
31:36.240 --> 31:40.070
Then again, it's a very different animal. There are companies who have full
31:40.080 --> 31:43.820
licensing teams trying to do that. And then you have the
31:43.830 --> 31:47.720
large Corporation that are essentially licensing their set patents
31:47.730 --> 31:51.230
and kind of assertion stick licensing way where there's
31:51.240 --> 31:55.430
no other really technology. But it's really standard essential
31:55.930 --> 31:59.510
patents, which is also kind of a third pillar, separate silo
31:59.540 --> 32:03.590
and very different business. And you have the likes of Ericson,
32:03.600 --> 32:05.870
Nokia and others who do that for a living.
32:06.790 --> 32:10.700
And in that case, they're really essentially doing
32:11.200 --> 32:14.900
patent pooling and making sure that people pay their fair share
32:14.910 --> 32:18.590
for practicing a standard that they participated into.
32:18.770 --> 32:22.190
Okay, I kind of asked about you
32:22.250 --> 32:26.150
take about one, two of the portfolios
32:27.620 --> 32:31.700
you review. So other than the question
32:31.710 --> 32:35.750
of infringement, what are the other main things? I mean, you're rejecting,
32:35.760 --> 32:39.590
right? You want to reject it's mainly a question
32:40.090 --> 32:43.660
of dismissing and what remains then it's interesting.
32:43.670 --> 32:46.810
Yes, I was going to come to it.
32:46.820 --> 32:49.630
Thank you, David.
32:50.230 --> 32:54.220
Basically, the first thing I look at is okay. Is there any
32:54.230 --> 32:57.940
potential infringement? I know if there's none, it's going to be really hard to sell
32:58.440 --> 33:00.340
unless there's 500 patents.
33:01.080 --> 33:05.020
So I'm not saying that's the only thing I'll look at, but that's one
33:05.030 --> 33:08.230
of the first thing. The second thing, obviously, is is there's only
33:08.240 --> 33:11.650
one patent or do we have a portfolio? Because if there's only one patent,
33:12.220 --> 33:15.290
it's really, really hard to monetize these one.
33:15.300 --> 33:18.650
One season, two season. People are not interested,
33:19.610 --> 33:22.490
especially if there's no open continuation.
33:22.500 --> 33:26.030
That's where you guys can make a big difference in your practice in
33:26.150 --> 33:29.000
the US. Always leave an open continuation.
33:29.390 --> 33:33.260
Always, always. Even if it's your 8910 pattern in the same family,
33:33.270 --> 33:35.840
just put a placeholder file continuation.
33:37.660 --> 33:41.900
Forget to send some materials we buy
33:41.910 --> 33:44.750
six months before you get it. Missing material,
33:44.840 --> 33:48.380
request, whatever. Frankly, there are little tricks of the trade
33:48.390 --> 33:52.310
there to buy time or buy time. Keep the family open because
33:52.320 --> 33:55.940
the case law changes all the time, as you know, and it's
33:55.950 --> 33:59.660
a lot easier to go back and change claims when you have an open continuation
33:59.670 --> 34:03.590
than trying to follow the exam. If you have an IP and
34:03.880 --> 34:07.610
someone files a bunch of prior art in
34:07.620 --> 34:11.060
your IPR file. You can go back and take all the prior
34:11.070 --> 34:14.900
art and then put this in the prosecution of the continuation
34:14.910 --> 34:17.630
and get a bulletproof pattern.
34:18.560 --> 34:22.610
If there's a new case law, that like an Alice case or what
34:22.620 --> 34:25.790
happened ten years ago when suddenly the means plus
34:25.800 --> 34:29.450
functions claims were out of favor and you have an opened continuation, well, guess what.
34:29.460 --> 34:33.530
You can just go back and change your claims to do anything acrobatic
34:33.540 --> 34:37.760
to try to salvage the portfolio. So that's the very first unforced
34:37.770 --> 34:41.330
error that most people do. And frankly, if you don't do
34:41.830 --> 34:44.930
that, if you don't at least recommend to your client to file
34:44.940 --> 34:48.580
a continuation for me, it's almost mile practicing because
34:49.440 --> 34:52.990
you're really putting your content at a disadvantage.
34:53.510 --> 34:56.910
Another thing we see all the time and again, you can have a big
34:56.920 --> 35:00.540
impact on that is the lack of priority search. There are
35:00.550 --> 35:04.080
still people who operate in, like in the nineties where you would sit to your
35:04.090 --> 35:08.010
client. I don't pay anything to the prior search. It says the examiners job.
35:08.020 --> 35:11.400
They'll do it for free, and then you get a patent sheet and guess what
35:11.410 --> 35:15.690
you said. Look, I told you there's a big I'm
35:15.700 --> 35:21.070
hard sometimes on the patent bar because I think the
35:21.080 --> 35:24.640
interests are not really well, like what
35:24.650 --> 35:28.840
the client wants in most cases is a patent that will
35:28.870 --> 35:32.500
be meaningful for their business. What the patent
35:32.510 --> 35:36.550
agents and patent attorney is have a deliverable as
35:36.560 --> 35:40.120
a metric is to get a patent issue. And as you all
35:40.130 --> 35:43.450
know, a patent can issue. Almost any patent will issue.
35:43.460 --> 35:47.320
If you narrow claim enough so that it becomes meaningless,
35:47.500 --> 35:51.100
you'll get an issuance. And if all the client wants is something to frame
35:51.110 --> 35:54.700
and put them there, well, that may be fine, but I guess that's really not
35:54.710 --> 35:57.940
what most of them are looking for here. And if
35:57.950 --> 36:01.510
you essentially give them a result, which is an
36:01.520 --> 36:06.300
issue pattern, and they think they have something of value that
36:06.310 --> 36:10.440
will support their business when they need to enforce. And 510
36:10.450 --> 36:14.070
years later, when they finally need to enforce it, they realize that all
36:14.080 --> 36:18.000
their business was built on a house of cards because the
36:18.010 --> 36:22.110
foundation is like quicksand, and the minute they want to enforce, they're being told their
36:22.120 --> 36:25.900
patent is Invalid because there was a ton of prior art that should have
36:25.910 --> 36:28.450
been discovered during prosecution and was not.
36:29.420 --> 36:33.230
Then you didn't really do them any favor. So by
36:33.730 --> 36:37.400
all means, go ahead. How do you balance? You know, I think,
36:37.410 --> 36:40.910
you know, I think some of the balance is always interesting with searching,
36:40.920 --> 36:44.530
right? Because I feel like you could search
36:44.540 --> 36:47.920
a few hours and find some stuff, and you could also send,
36:48.400 --> 36:52.330
you know, days searching and never scour
36:52.540 --> 36:56.590
everything right. Somebody who's a better search, a different search for a different database,
36:56.600 --> 37:00.230
different country, different transition, whatever could find something
37:00.240 --> 37:03.800
like where do you do you have a feeling for,
37:04.300 --> 37:08.450
like what that balance is of searching and
37:08.460 --> 37:12.320
finding versus scouring on the one
37:12.820 --> 37:15.930
balance and not searching. Yeah, well, first,
37:16.350 --> 37:19.020
a lot of people don't search at all. I mean, you can see when a
37:19.520 --> 37:22.590
pattern has been issued. You look at the priority site and you see a little
37:22.600 --> 37:26.040
asterisk in front of every single pattern. You know that that means
37:26.050 --> 37:29.400
there was no prior art search done, and they rely completely
37:29.410 --> 37:32.430
on the examiner to do it. And as you probably know,
37:32.610 --> 37:36.330
although the typical prosecution may take two to three years,
37:36.690 --> 37:40.200
on average, a US examiner will spend more than 3 hours
37:40.700 --> 37:43.380
looking for priority, and they essentially search at best database.
37:44.400 --> 37:49.820
It's a completely inadequate
37:50.320 --> 37:54.140
search. And no wonder why so many patents are invalidated after
37:54.150 --> 37:56.810
there'd be an issue. I mean, you look at them and say, come on.
37:57.020 --> 38:00.530
I mean, there's got to be something else and you look
38:00.540 --> 38:04.100
for 3 hours and you find four pieces of prior that are relevant. I mean,
38:04.110 --> 38:07.580
it's not rocket science. The main problem is not doing it at
38:07.590 --> 38:10.970
all as far as the balance is concerned, what you've described.
38:10.980 --> 38:14.240
Ashley, I think there's the good prior
38:14.300 --> 38:17.420
search, and most firms will do that. And we do a lot of those two
38:17.430 --> 38:20.840
or patentability, as you know, for a fixed
38:20.850 --> 38:24.470
price. And they'll look through the main databases and they'll look
38:24.480 --> 38:27.920
through nonpatent literature, and you can pretty much cover
38:28.420 --> 38:31.930
90% of the ground for less than $2,000, essentially.
38:31.940 --> 38:35.350
And then you have the litigation kind of search where you're being
38:35.360 --> 38:39.400
sued, and then you're going to basically spend whatever needs
38:39.410 --> 38:42.760
to be spent until you find something, because it can make the difference between
38:43.260 --> 38:47.110
losing and winning and having a big award to pay or having
38:47.120 --> 38:50.320
an Invalid panel. So I
38:50.330 --> 38:53.890
can say when I was at the search firm, that's exactly how it
38:53.900 --> 38:57.970
played out. I depended on the case. When Intellectual
38:57.980 --> 39:01.510
Adventures was at their height, we would search
39:01.520 --> 39:06.230
for them anywhere from 15 to 25 hours
39:06.640 --> 39:10.580
finding infringers and validating patents,
39:10.590 --> 39:12.290
trying to invalidate patents.
39:14.630 --> 39:18.330
And I think that's reasonable. And there's
39:18.340 --> 39:22.200
so many firms that do that. There's so much competition there. And the
39:22.210 --> 39:25.770
tools are great. Again, you can get this kind
39:25.780 --> 39:29.370
of effort 1520. 5 hours for again, less than
39:29.520 --> 39:33.120
$2,000 for a client. If you look again at the
39:33.130 --> 39:36.540
price of a bad patent, which is the same than the price of a good
39:36.550 --> 39:39.900
patent, which is about 50 $60,000, it's a
39:39.910 --> 39:43.620
drop in the bucket. And not only that, I tell my clients if
39:43.650 --> 39:47.610
you do the patentability assessment and we find all the prior and you've
39:47.620 --> 39:51.510
written a good disclosure invention disclosure before that allows
39:51.520 --> 39:54.850
us to do the search, and you bring that your patent
39:54.860 --> 39:58.450
attorney. You're probably going to recruit those cars because they won't have to conduct
39:58.460 --> 40:01.660
a bunch of interviews to understand what it is about. They'll have a
40:02.160 --> 40:05.410
product right in front of them. You draft much better patents when you know
40:05.420 --> 40:08.890
what the examiner is going to have, and you can preempt some
40:08.900 --> 40:12.100
of the arguments in the way you draft and the way you craft your not
40:12.110 --> 40:15.130
only your spec, but your claims, obviously. So it
40:15.140 --> 40:18.280
makes for a more robust patent more likely to be issued,
40:18.520 --> 40:22.210
less likely to be challenged successfully, and it
40:22.710 --> 40:26.890
costs overall, probably one $502,000,
40:27.310 --> 40:31.300
some of which you'll recruit because you'll probably have a less expensive
40:31.800 --> 40:34.990
prosecution and drafting because you provided more information to
40:35.000 --> 40:38.860
your patent attorney. So I frankly, see no reason why not
40:38.890 --> 40:43.470
doing that. But again, you know, if the answer is you
40:43.480 --> 40:46.770
don't have an invention, right? It already exists. You know, this is
40:46.780 --> 40:50.400
really that's the issue. This is not a good business
40:50.410 --> 40:54.120
model for you guys to tell the client it's a crap. You don't need to
40:54.130 --> 40:57.570
file a Petman that already exists, or that invention is going
40:57.580 --> 41:01.230
to be so incremental. You know, that the claims will
41:01.240 --> 41:04.500
be so narrow by the time it is you three years from now,
41:04.510 --> 41:07.650
the technology will have evolved and you will
41:07.660 --> 41:11.160
have leap way forward your tiny invention.
41:11.170 --> 41:14.820
So don't waste your money on me. So nobody wants to say that.
41:14.830 --> 41:17.970
But frankly, that would be the honest answer. In many cases, when you
41:17.980 --> 41:21.630
look at the part that don't spend your money on this, you know, it already
41:21.640 --> 41:25.400
exists so incremental that it's not worth
41:25.410 --> 41:28.820
it. And the day people do that, you're going to
41:28.830 --> 41:32.720
have a lot less patents that are invalidated because we essentially
41:32.730 --> 41:36.320
they weren't valid in the first place. Believe me, I see a lot
41:36.330 --> 41:39.860
of those. I mean, I'm not doing we see so much volume, I can tell
41:39.870 --> 41:44.050
you it's not just bad patent attorneys.
41:44.060 --> 41:47.830
It's just the business incentives are misaligned.
41:47.950 --> 41:51.910
And that's what's creating a lot of these patterns to be issued because
41:52.410 --> 41:55.240
your metric is not the same as the client, but the client doesn't know it.
41:55.260 --> 41:59.070
The client thinks that you have the same metric and
41:59.080 --> 42:01.290
the same goal, and you don't. Actually,
42:02.040 --> 42:05.620
you have that argument with law firms. I would
42:05.650 --> 42:10.170
match, right? I mean, this sounds like a point of continuous my
42:10.200 --> 42:13.230
attention. I mean, they send me a lot of stuff. I just look
42:13.240 --> 42:18.000
at the work product and say, Guys, you didn't do your job here because
42:18.010 --> 42:21.390
we will do some priority search and we'll find something and we'll tell
42:21.400 --> 42:24.810
the client, look, we can't take this under brokerage because you didn't
42:24.820 --> 42:27.960
invent anything. You should have done a priority search prior to
42:27.970 --> 42:31.470
filing. And you want to save yourself, especially when there's portfol with
42:31.480 --> 42:34.590
five to ten patent. You would have saved yourself half a million dollars,
42:34.600 --> 42:37.740
probably. And seeif, you had only
42:38.240 --> 42:41.430
spent $2,000 in search originally.
42:42.890 --> 42:45.810
Again lost that I'm part of the path.
42:46.080 --> 42:49.680
I just don't like
42:49.690 --> 42:53.320
the fact that the business incentives are not properly
42:53.330 --> 42:56.590
aligned with what the client needs to get a meaningful patent at
42:56.620 --> 43:00.520
the end, and it reflects in the marketplace today because
43:01.150 --> 43:04.780
we can see all the bad things we want to say about the P tab,
43:05.080 --> 43:08.860
about being biased and all this. But the reality is, in a lot
43:08.870 --> 43:12.850
of cases, there were some relevant priority that
43:12.860 --> 43:16.200
made some of these patents Invalid the way they were drafted. And again,
43:16.210 --> 43:19.650
if you have an open continuation, then you can maybe save it if
43:19.740 --> 43:23.220
you don't. And it's well, you can always follow reexam,
43:23.250 --> 43:26.540
but that's another another battle.
43:26.770 --> 43:31.100
One more thing. So with regard to the that
43:31.110 --> 43:34.930
you like, you do
43:34.940 --> 43:38.440
further analysis, I would imagine, depending on how much
43:38.500 --> 43:43.010
the seller gives
43:43.020 --> 43:46.790
you to begin with. So do you
43:46.800 --> 43:50.540
share all that with the potential buyer? That's the question. Do you
43:50.550 --> 43:54.170
share your full with a potential
43:54.180 --> 43:58.370
buyer? Yeah, it depends.
43:58.460 --> 44:01.910
What we do is when we do tree as again,
44:01.920 --> 44:05.270
there are some that we can reject very quickly. Sometimes we'll
44:05.280 --> 44:09.080
reject them because the expectations are just unrealistic.
44:09.580 --> 44:13.280
The guy has one provisional patent and he wants a billion
44:13.290 --> 44:16.810
dollars for it. Those are quickie. You know,
44:16.820 --> 44:20.620
you're not going to get anywhere. So again, we require at least two issue
44:20.650 --> 44:24.250
patterns because we know that just one single pattern is almost impossible to
44:24.260 --> 44:27.790
transact. We're looking for something that's infringe
44:27.800 --> 44:31.150
we want to have obviously as much priority
44:31.650 --> 44:35.920
side of as possible. We want to have claims that are enforceable,
44:36.070 --> 44:40.040
and that's something I should just say a few words
44:40.050 --> 44:43.340
on a lot of the claims we look at are not
44:43.350 --> 44:47.870
enforceable. And again, that's on you guys a lot
44:47.880 --> 44:51.920
of divided infringement issues, people. Sometimes when the draft patent, they don't think
44:51.930 --> 44:55.730
about who's going to be the infringer, and you have to have that in mind.
44:56.470 --> 44:59.780
We have so many patents where we look at the claim
44:59.790 --> 45:02.000
and say, look, there's going to be two agents.
45:03.260 --> 45:07.040
It's like solar panel patent. If it's infringed by
45:07.050 --> 45:10.340
the installer, it's not going to do me any good. I need
45:10.350 --> 45:14.240
something that's infringed by the manufacturer here. The installers are
45:14.250 --> 45:17.360
all mom and pops, and you're not going to start suing the guy who does
45:17.370 --> 45:21.020
a few solar panel installs every month. So you
45:21.030 --> 45:24.770
can see that in the cloud space. You can see that in any kind
45:24.780 --> 45:28.370
of server network where you have the server, the club. Sometimes it's
45:28.380 --> 45:31.760
just a matter of redrafting the claim so that everything happens
45:31.770 --> 45:35.370
at the server level. But I love things we
45:35.380 --> 45:39.030
look at it was done, maybe two hassle, but you have
45:39.040 --> 45:42.090
clear divided in finding issues. And again,
45:42.360 --> 45:45.900
there's not much you can do about Alice in the case, but there's
45:45.910 --> 45:50.220
a lot you can do about drafting claims that won't have these issues in
45:50.230 --> 45:53.650
definiteness lack of support in the specs. I mean,
45:53.660 --> 45:57.280
we see it all the time, frankly. And again, this is all about the drafter.
45:57.970 --> 46:01.390
This is not about the invention itself. It's about how you draft client,
46:01.400 --> 46:04.570
making sure that you have your support and to send it.
46:04.580 --> 46:08.440
You have no indefiniteness, no divided infringement. I mean, just these
46:08.450 --> 46:12.100
three things that I've mentioned probably disqualify
46:12.550 --> 46:15.820
30, 40% of the path to look at. So you can do
46:15.830 --> 46:17.770
a lot of goodness by thinking, okay,
46:18.760 --> 46:22.700
who's the potential infringer or the potential infringers
46:22.710 --> 46:26.390
and make sure we draft some claims that encapsulate each
46:26.400 --> 46:29.810
of them in a way that is whole and will
46:29.820 --> 46:31.730
not create these divided infringement issue.
46:33.330 --> 46:37.180
The lack of support is a very common of
46:37.680 --> 46:40.900
the Cascading CIP driving nuts.
46:42.100 --> 46:44.890
We're trying to sell a portfolio. It's 44 patents,
46:45.140 --> 46:48.620
and they all CIPS are one another. Do you
46:48.630 --> 46:51.800
think anyone in his right Manor Harriman is going to take the
46:51.810 --> 46:55.130
time to look at 43 specs and try
46:55.140 --> 46:58.370
to distill the new subject matter
46:58.870 --> 47:02.060
that was inserted than each of one and then compare the claim
47:02.070 --> 47:05.990
and then trying to basically decipher. Okay, if that word
47:06.000 --> 47:09.830
is there and it first appeared in that CIP,
47:09.840 --> 47:13.640
that means that for this kind of scenario, my priority date suddenly
47:13.650 --> 47:16.910
is three years later. Hence I have to look at intervening
47:16.920 --> 47:20.090
prior art. Forget it. Nobody's going
47:20.100 --> 47:23.270
to do that. So stop these this CIP nonsense.
47:23.540 --> 47:26.690
I mean, you're just shooting yourself in the foot first,
47:26.900 --> 47:30.610
you lose a lot of patent term, and it
47:30.620 --> 47:33.970
might look trivial when you follow a patent. It's going
47:33.980 --> 47:37.180
to be good for 20 years. But the reality is, most patents that
47:37.190 --> 47:41.110
are transacted are in their last five, six years of shelf life.
47:41.320 --> 47:44.500
So most of the patents we take on the brokers
47:44.510 --> 47:48.250
have between, I would say, twelve and 18 years already
47:48.280 --> 47:52.000
passed. So which means that sometimes they have less than two years less. Sometimes they
47:52.010 --> 47:55.510
have six months less than their return. So if you file the CIP,
47:56.080 --> 48:00.310
and for some reason, the actual filing
48:00.320 --> 48:04.000
date for those claims is three or four years later than the parent
48:04.500 --> 48:07.810
one. You didn't do yourself any favor or your count
48:07.820 --> 48:11.080
any favor, because suddenly that patents about to expire
48:11.170 --> 48:14.260
or may have just expired. And that was the one with the good claims,
48:14.740 --> 48:18.730
because we all know the first pattern you're going to get is not the one.
48:18.740 --> 48:21.850
Whether you're going to fall in love with the claims, it's going to be maybe
48:21.860 --> 48:24.990
the third or fourth continuation, but try
48:25.490 --> 48:28.590
to stay away from CIPS because they do more. I can tell you they do
48:28.650 --> 48:32.040
more damage than anything else. I haven't seen anyone in
48:32.050 --> 48:35.760
terms of buyers or litigators that like them, so I have to defer
48:35.820 --> 48:39.060
to them on that. And I can see when we have too many CIPS.
48:39.070 --> 48:42.150
People say, look, it's like spaghetti code. I'm not going
48:42.160 --> 48:46.080
to get into this. It's too complicated. The linear and obviously
48:46.090 --> 48:49.200
sometimes you don't have any choice but to follow CIP and
48:49.210 --> 48:53.820
something. If you do it carefully, you will be able to make sure
48:53.830 --> 48:57.930
you have sufficient support and you're just having some data. So don't take
48:57.940 --> 49:02.310
this as gospel, but for the most part, I've seen a lot more disadvantages
49:02.320 --> 49:05.340
of people finding CIPS than not.
49:06.780 --> 49:10.470
You're better with just finding pretty large on
49:10.970 --> 49:14.760
the patent and doing a bunch of divisional in my experience
49:14.940 --> 49:18.090
and regular continuations to keep the family
49:18.590 --> 49:22.930
open. So that's one thing where you can help.
49:23.440 --> 49:27.430
We see a lot of on necessary restrictions
49:27.940 --> 49:31.840
where people. So if we just add this restriction,
49:32.050 --> 49:35.710
the examiner is going to be happy and issue the patent. Instead of fighting the
49:35.720 --> 49:39.040
good fight, the people surrender too hurtly
49:39.050 --> 49:43.300
sometimes and too easily. And as a result, you end up with unnecessary
49:43.310 --> 49:47.150
restrictions in your claim or limitation in your claims that
49:47.160 --> 49:51.200
when you're trying to enforce are the ones that are not on the corresponding
49:51.210 --> 49:54.450
product, and then you're kind of stuck. So it's okay to
49:54.460 --> 49:57.750
add limitations, independent claims. But please don't do that in your
49:57.780 --> 50:01.230
independent claims just to satisfy the examiner instead of
50:01.500 --> 50:03.480
pushing back when you think you should,
50:04.280 --> 50:08.260
it's better to. So there
50:08.270 --> 50:12.220
is a little bit of a balance, because what I sometimes see and it frustrates
50:12.230 --> 50:15.940
me is that you have firm that try to push for
50:16.420 --> 50:19.840
these broad claims, especially at the outset.
50:19.850 --> 50:23.140
When, you know, when the searching has been done, you have all the
50:23.150 --> 50:26.590
literature and there's just no way in hell that somebody's going
50:26.600 --> 50:29.710
to get those claims. But then you have these firms that say, you know,
50:30.040 --> 50:33.250
will push for this like really broad method. I feel like I see a lot
50:33.260 --> 50:36.490
of method of treatment where they're, like, pushed for this broad method of treatment
50:36.500 --> 50:40.460
claim. And it just, you know, I feel like that's
50:40.470 --> 50:44.420
also setting somebody up for failure to to go in there with this crazy
50:44.430 --> 50:48.080
broad claim to try to kind of almost sleep one by an examiner who
50:48.090 --> 50:51.760
maybe is not reading things as closely or not paying attention as close
50:51.770 --> 50:54.700
as I feel like the overly brought to be just as differ mental as the
50:54.710 --> 50:58.030
overly arrow. You don't want to be really
50:58.040 --> 51:01.420
bad, especially with Alice. You're going to get into a car Curry very quickly.
51:02.050 --> 51:06.790
I think what I'm saying is very often I will see in persecution someone
51:06.800 --> 51:10.210
who will just came into the examiner
51:10.270 --> 51:13.150
by adding a limitation the claim that I need to be there,
51:13.360 --> 51:16.690
and that's going to basically backfire
51:16.700 --> 51:20.890
later on because those are the ones that very often will
51:20.900 --> 51:24.580
not be on the infringing product. And we'll make a difference between an fringe
51:25.080 --> 51:28.600
claim or not. Just sometimes be careful not to
51:28.610 --> 51:32.020
cave in to really thinking that that's just a minor
51:32.520 --> 51:35.980
thing, especially if it's going to be in your independent claim, then it's
51:35.990 --> 51:39.520
going to follow the whole claim set.
51:40.320 --> 51:43.630
So sometimes we personally,
51:43.690 --> 51:47.110
I much prefer to see some scar tissue in prostitution,
51:47.140 --> 51:50.770
then some something that just kind of went by so smoothly
51:50.830 --> 51:54.400
that at the end of the you say, well, the exact didn't really
51:54.410 --> 51:57.820
do his or her job then, because their job is to push back and make
51:58.060 --> 52:02.080
you earn that patent. And if you see just one non
52:02.090 --> 52:06.100
final rejection, and then they allow your claim
52:06.130 --> 52:09.490
set without asking too much, it's almost suspicious from
52:09.500 --> 52:13.000
you. I like to see a few rejection letters
52:13.030 --> 52:16.900
and some good fight, some scar tissue where you didn't make some concession.
52:16.910 --> 52:20.860
But you you basically overcame this because when
52:20.870 --> 52:24.180
you get into a mode, there's an IPR,
52:24.210 --> 52:27.330
you're gonna have the same battle to fight. And if it's already being
52:27.340 --> 52:31.080
fought with the examiner, you have a lot more leverage and
52:31.380 --> 52:35.190
P tab. Then I asked to second guess the examiner, which they don't like
52:35.200 --> 52:38.400
to do as much as when it's silent. When it's time.
52:38.760 --> 52:42.420
It's almost like an appeal. The Noble they say, well, the exact didn't have this
52:42.430 --> 52:45.900
priority or this argument wasn't presented. So we don't
52:45.910 --> 52:49.370
know how he or she would have thought about it. And so we'll
52:49.380 --> 52:52.820
just substitute our in thinking if it's already there.
52:52.830 --> 52:56.710
And there's been some good argument
52:56.720 --> 53:00.350
that's going to help you. For instance, we have a for fall
53:00.380 --> 53:03.770
currenty that's being litigated. And there was during
53:03.780 --> 53:07.390
prosecution and it's over a little swing set,
53:07.450 --> 53:11.800
you know, those swing set that kind of move vertically instead
53:11.810 --> 53:15.790
of swinging or traditionally and great invention
53:16.480 --> 53:19.870
from our guy and all this and during
53:19.880 --> 53:24.680
prosecution, the examiner just seemed
53:24.690 --> 53:27.860
to understand the difference in all this, or I didn't want to see it.
53:28.190 --> 53:30.830
And our guy had to go through an appeal,
53:31.070 --> 53:34.970
fell on appeal, went to the tab as an appeal, not as
53:34.980 --> 53:38.600
IPR, and he won. He won. And then he got the
53:38.610 --> 53:42.290
claim that he wanted and he saw the good fight in one. And I have
53:42.300 --> 53:45.200
to tell you, it made a huge difference in the case because we had the
53:45.210 --> 53:47.950
Mark one a few months ago. And because of that,
53:47.960 --> 53:51.430
we're able to convince the judge that this has already
53:51.440 --> 53:55.650
been kind of litigated and the claim construction was clear and that's
53:55.660 --> 53:59.760
what it meant. And we have won that battle already. And the
53:59.770 --> 54:02.850
judge was differential to the fact that there was
54:02.860 --> 54:06.000
an appeal and that we fought for this. They didn't want to go with the
54:06.010 --> 54:10.110
other side's construction, which was basically relitigating
54:10.120 --> 54:13.710
the appeal during prosecution. So again,
54:14.210 --> 54:17.280
it's always think that the little things you do or don't do now
54:17.290 --> 54:21.120
will have an impact maybe only 15 years from now, but it will.
54:21.600 --> 54:25.020
And you got to do it right. So all these things
54:25.030 --> 54:27.060
you can really help. As I said,
54:27.970 --> 54:30.980
prior searches, the claim,
54:30.990 --> 54:34.970
drafting open continuation support in the spec.
54:35.340 --> 54:38.070
Try not to do the CIP route if you can.
54:39.600 --> 54:42.930
Foreign corresponding patents help as well.
54:43.380 --> 54:46.740
So we always prefer to see a portfolio
54:46.750 --> 54:49.980
that has some EPO filings or Chinese
54:50.010 --> 54:53.040
filings, mostly because since Ebay,
54:53.050 --> 54:57.600
we've had to export the injunction leverage
54:57.610 --> 55:00.870
to other countries. You have to go in countries that will grant
55:00.880 --> 55:04.020
you an injunction and currently is mostly is Germany and
55:04.030 --> 55:07.230
China. So if you file a German man, a Chinese
55:07.240 --> 55:10.450
counterpart. You're giving your client. And again,
55:10.750 --> 55:13.660
five years, ten years from now. Will it be other countries?
55:13.690 --> 55:17.680
Probably. But there's so much you can guess. But currently
55:17.690 --> 55:20.830
I can tell you if I have a portfolio that's infringed
55:20.840 --> 55:24.460
by a phone manufacturer or a multinational company that
55:24.470 --> 55:28.330
has activities elsewhere in the world. And I have an infringe
55:28.360 --> 55:31.790
German counterpart or an in French Chinese counterpart, I can
55:31.800 --> 55:35.000
do a lot more damage than I have a ton more leverage to negotiate a
55:35.500 --> 55:38.900
license for a settlement with the printer than if family have a US ten.
55:39.060 --> 55:42.480
I may not even have to sue the US.
55:42.700 --> 55:46.180
I may only have to sue in China or in Germany and
55:46.190 --> 55:49.390
tell the guy, obviously, we have a US patent. We're going to
55:49.400 --> 55:52.780
sue in the US for damages if we don't settle. But for
55:52.790 --> 55:56.620
now, we can get an injunction in Germany or in China that can
55:56.630 --> 55:59.620
disrupt your supply chain. So why don't we have a conversation?
55:59.760 --> 56:03.510
And that's how this game is played. So you have to understand
56:03.520 --> 56:07.390
that these are strategic weapons. So if
56:07.400 --> 56:10.960
he has any questions or comments like the word scar
56:10.970 --> 56:13.690
tissue, I'm going to add that to my vocabulary.
56:14.610 --> 56:18.340
It's good cartis. You know, when you
56:18.350 --> 56:21.910
work in the field, you get a lot of cases and the skin
56:21.920 --> 56:25.630
is much thicker. That's the same thing with a patent. You know,
56:25.640 --> 56:28.900
you want something like this. Sometimes an
56:29.400 --> 56:32.860
inventor will say we didn't even have a non rejection letter. It just flew out.
56:32.870 --> 56:36.790
I had my claims allowed on the initially didn't have
56:36.800 --> 56:39.970
to fight for it. And they're so happy. I have to bring the news
56:39.980 --> 56:41.710
that this is actually not very positive.
56:43.740 --> 56:47.680
So these are the things where again,
56:48.340 --> 56:52.150
it's okay to fight back with the examiner. And interviews are great.
56:52.160 --> 56:55.390
I think everybody who practices interviews usually have better
56:55.400 --> 56:59.230
results than people who don't. So there's no reason not to
56:59.240 --> 57:02.500
do that. And you can get a lot of good business
57:02.510 --> 57:07.390
intelligence. And sometimes, you know, they're human
57:07.400 --> 57:10.790
being. It's not that they don't want you to have the
57:10.800 --> 57:13.880
pattern for your client. If you convince them that this word is
57:13.890 --> 57:17.150
better than that word or is the same as the same scope
57:17.160 --> 57:20.720
as far as they're concerned. But for you, you know, strategically that it's
57:20.730 --> 57:24.050
going to keep some options of some options open. It's okay
57:24.060 --> 57:27.110
to fight for that, because it's going to make a big difference. And again,
57:27.200 --> 57:30.400
the deliverable that you give the client should not be.
57:30.410 --> 57:33.910
I just got your patent issue because for me, it's meaningless.
57:33.920 --> 57:38.290
It's like I've got your painting frame. But is the painting
57:38.300 --> 57:41.950
any good you really have
57:41.960 --> 57:45.220
to think about? Is this an enforceable patent that they
57:45.230 --> 57:49.380
will be able to rely on and a certain and
57:49.390 --> 57:53.040
maintain validity thereof when they need it, whether it's
57:53.050 --> 57:56.420
two years or 15 years from now or if they want to
57:56.430 --> 58:00.080
sell it, will they get anything out of it? Because, you know, it's commercial
58:00.110 --> 58:03.800
grade, as opposed to something that's so narrow that it only really
58:03.810 --> 58:07.190
covers a clone of their
58:07.200 --> 58:12.180
product. And that's maybe the last thing I'd like to say. And adding,
58:12.720 --> 58:15.840
including on my end, is a lot of patents are
58:15.850 --> 58:19.080
really drafted to cover the invention, which is really not
58:19.090 --> 58:22.440
what you should be doing. You should be really thinking
58:22.450 --> 58:25.890
of the design around. And then invent around that design around and file
58:25.900 --> 58:29.280
some claims to cover that because nobody's gonna clone your I mean, except for
58:29.290 --> 58:32.790
to Chinese knockoff. Nobody's gonna clone perfectly what
58:32.800 --> 58:36.360
your client is doing. In all cases that I've seen,
58:36.860 --> 58:40.990
frankly, the initial infringement is innocent.
58:42.100 --> 58:45.790
You don't have anyone who knew about your
58:46.290 --> 58:50.080
clients patent when they designed their feature. They just designed something that came
58:50.090 --> 58:53.230
to them naturally within the software world. And then
58:53.240 --> 58:56.950
it just so happens it might read on your clients patent. So if your patent
58:56.960 --> 59:00.730
was really narrow, narrow to cover their invention, there's a very good
59:00.740 --> 59:04.270
chance it will not be enough to secure
59:04.750 --> 59:08.140
any kind of infringement story on that, because there
59:08.150 --> 59:12.370
will be too many limitations. So again, think about playing
59:12.380 --> 59:15.700
the bad guys. What will your competitors do? And the clients love that
59:15.710 --> 59:19.420
when you explain to them it's kind of role playing right now pretend you're the
59:19.430 --> 59:22.750
bad guy and try to break that patent or try to
59:22.760 --> 59:26.260
go around. What would you do? How would you do it? Okay. What are
59:26.270 --> 59:29.620
the pros and cons? And let's file some plans around that and enrich
59:29.630 --> 59:33.580
the patent. So it can be more of a kind of a war game simulation
59:33.610 --> 59:36.700
than just drafting something and say, look at this and tell me if
59:36.710 --> 59:40.180
you agree. So again, you want to have something that's going
59:40.190 --> 59:43.510
to be meaningful down the road. You just don't know when you're going
59:43.520 --> 59:46.480
to need it, but it's not a reason not to do a job about it.
59:46.490 --> 59:50.170
So that when it happens, if and when it happens, you've got
59:50.180 --> 59:53.960
something that is ready for bat certainly
59:53.970 --> 59:56.300
makes patent a lot more fun when it's war games.
1:00:01.600 --> 1:00:05.670
Okay. That's all I have to say. Awesome. We really
1:00:05.680 --> 1:00:09.090
appreciate you. Thank you so much for historical perspective. And then also
1:00:09.390 --> 1:00:13.230
some practical tips, because I think the whole spirit
1:00:13.240 --> 1:00:16.260
of this group is to up our game per se.
1:00:16.270 --> 1:00:19.470
And so I think I know there's some tidbits I've been taking down
1:00:19.480 --> 1:00:23.260
the side, too about just different ways to think about
1:00:23.270 --> 1:00:26.050
things. And so I hope everybody else has in Tibbits, or if you have any
1:00:26.060 --> 1:00:29.200
additional questions, there's a few more minutes to throw them out there.
1:00:29.600 --> 1:00:32.670
Yeah. No, thank you. Give us a lot to think about.
1:00:32.820 --> 1:00:35.670
Yeah. Thanks, Kate. Thank you very much.
1:00:35.680 --> 1:00:39.570
Was a pleasure interacting with you guys. Best of luck. And again, I love
1:00:39.580 --> 1:00:43.380
Patent lawyers. It's just that I'm trying to help them get a better work product
1:00:43.390 --> 1:00:46.470
at the end. Perfect.
1:00:47.670 --> 1:00:48.870
Okay. Bye bye, everyone.
1:00:50.800 --> 1:00:54.130
All right. That's all for today folks. Thanks for listening and remember
1:00:54.140 --> 1:00:57.940
to check us out at Aurora. Patents. Com for more great podcasts, blogs and
1:00:57.950 --> 1:01:01.630
videos covering all things patent strategy. And if you're an agent or attorney
1:01:01.640 --> 1:01:04.360
and would like to be part of the discussion or an inventor with a topic
1:01:04.370 --> 1:01:08.120
you'd like to hear discussed, email us at podcast at war. Patents.
1:01:08.240 --> 1:01:11.690
Com. Do remember that this podcast did not constitute legal advice,
1:01:11.700 --> 1:01:14.030
and until next time, keep calm and patent on.