Full Transcript for How LOT Network is tackling Patent Risk: Insights from Ken Seddon

--> 00:04:03.039 Um and it's across all industries automotive, banking, semiconductor, pharma even. 00:04:03.199 --> 00:04:09.439 And the one thing all these companies have in common, the one thing I can get them all to agree on is that NPEs are harmful to their business. 00:04:09.599 --> 00:04:22.319 And so what they've all done is signed the exact same license agreement, very straightforward, that simply says, look, I agree if I if any of my patents ever go to an NPE, the rest of you in the community get a free license. 00:04:22.480 --> 00:04:28.160 And in return, they're receiving that exact same promise from the 6,000 other companies. 00:04:28.319 --> 00:04:30.639 So it's effectively herd immunization. 00:04:30.800 --> 00:04:34.879 And uh last year we had 1,087 companies join. 00:04:35.120 --> 00:04:37.279 This year we'll do close to 1,200. 00:04:37.360 --> 00:04:43.600 And the reason why it's growing faster, so yeah, the herd is strong, but what people are realizing is I want to be in the herd. 00:04:43.680 --> 00:04:50.639 Because every time you know three three companies a day are joining lot, our herd gets bigger and uh they're stronger, safer. 00:04:50.720 --> 00:04:55.759 But the companies that are not in lot, they're now part of the ever-shrinking group that's not protected. 00:04:56.079 --> 00:05:00.079 Nobody wants to be the gazelle that's going left when the herd goes right. 00:05:01.839 --> 00:05:10.399 And uh, in light of all the changes that have happened with the strengthening patent system on a global scale, people realize this is a risk they have to take very seriously. 00:05:10.720 --> 00:05:13.519 Yeah, and I think the herd immunization makes a lot of sense, actually, doesn't it? 00:05:13.600 --> 00:05:18.319 So I mean some companies will decide not to do it, but that might be, for example, because they might want to sell to a child. 00:05:19.199 --> 00:05:21.279 And we even have we've got lot members now. 00:05:21.519 --> 00:05:27.040 I think this fears of recession, patents are very expensive to maintain and keep alive. 00:05:27.199 --> 00:05:35.759 And a lot of, you know, quite often in most legal departments, the IP budget is the largest chunk of the whole legal budget and it gets the biggest attention. 00:05:35.839 --> 00:05:39.360 And the CFO will say, Well, do we really need 10,000 patents? 00:05:39.519 --> 00:05:41.199 Could we get away with 9,500? 00:05:41.600 --> 00:05:43.759 You know, how would that really change our strategy? 00:05:43.920 --> 00:05:49.040 And the pressure for that, these companies either throw the patents away or put them up for sale. 00:05:49.199 --> 00:05:58.560 We've had members recently quite successfully sell off patents to MPEs, and kind of an unexpected uh twist, they're using me as their priest. 00:05:58.720 --> 00:06:04.000 Their view is I joined a lot, I gave everybody a chance to get a free license. 00:06:04.160 --> 00:06:10.160 If I can make money selling my patents to an NPE and somebody outside the herd gets hurt, that's their fault. 00:06:10.319 --> 00:06:16.319 Because they could have joined the I they've they feel like I took the high road, I gave everybody a chance to get a free license. 00:06:16.720 --> 00:06:20.079 And if you don't want my free license, well, then you're gonna have to pay the NPE. 00:06:20.399 --> 00:06:21.680 You have the moral conscience. 00:06:22.079 --> 00:06:22.560 It is. 00:06:22.639 --> 00:06:29.600 It doesn't not that they should feel guilty, but I think one of the concerns when you sell patents is what's gonna happen to them. 00:06:29.759 --> 00:06:32.160 Is it gonna is there a risk of retaliation? 00:06:32.399 --> 00:06:34.319 Is there gonna be a harm to your reputation? 00:06:34.480 --> 00:06:36.000 Are my customers gonna get sued? 00:06:36.079 --> 00:06:37.839 How does it impact everything? 00:06:38.000 --> 00:06:44.000 And now that 6,000 companies are in lot, a lot of people could say, okay, the people I care about are protected. 00:06:44.160 --> 00:06:46.720 I don't have to worry about if some other industry gets hit. 00:06:46.959 --> 00:06:47.279 Okay. 00:06:48.000 --> 00:07:06.240 Um, so that's when we first uh uh had it on the podcast, um, a lot was gonna moving into Europe, if I may, I feel like the the note because the UKC had kicked off, and suddenly there was this extremely cost-effective and quite powerful court that there wasn't there before with what 400 million people in its orbit, as it were. 00:07:06.560 --> 00:07:10.240 And you, I think early on said, look, this is gonna be troll troll territory. 00:07:10.319 --> 00:07:11.600 This is this is what trolls want. 00:07:11.680 --> 00:07:13.360 Low cost, high impact. 00:07:13.680 --> 00:07:17.279 Um, how have you seen things panning out as in the last two and a half years? 00:07:17.519 --> 00:07:20.639 Yeah, it's taking a little longer than I would have predicted originally. 00:07:20.800 --> 00:07:31.040 I think um, because in Europe, uh loser pays models, and in many cases, uh, you have to post a bond of some kind in order to proceed with litigation. 00:07:31.199 --> 00:07:37.439 So I think it just took longer for the litigation funders to work that into their model. 00:07:37.600 --> 00:07:46.480 They were used to the US system, and it just took them time to calculate what rate of return, what risks do these other checkpoints introduce. 00:07:46.560 --> 00:07:51.759 But we've already seen hundreds of NPE cases being filed in the US. 00:07:51.920 --> 00:07:56.319 Um, I think it also is required or expectations were raised. 00:07:56.399 --> 00:07:58.319 The the NPEs feel more confident. 00:07:58.399 --> 00:08:03.920 As long as I have a quality patent, um, I'm absolutely free to go, you know, I'm I'm confident I'm gonna win. 00:08:04.000 --> 00:08:07.759 So then I don't have to worry about a loser pay model and be quite successful. 00:08:08.000 --> 00:08:11.920 That's brought about a lot of interest around standard essential

patents. 00:08:12.000 --> 00:08:12.240 Right. 00:08:12.399 --> 00:08:17.279 You know, because there's kind of this declaration, we're all agreeing that it's essential to the standard. 00:08:17.360 --> 00:08:19.360 Now we're just debating, is it valid? 00:08:19.439 --> 00:08:21.920 Uh, do you perform that part of the standard or not? 00:08:22.079 --> 00:08:28.160 And it eliminates some of the uncertainty around uh litigating with these with patents by MPs. 00:08:28.399 --> 00:08:31.279 So is the the it the the snowball starts up, is it worth saying? 00:08:31.519 --> 00:08:31.920 Absolutely. 00:08:32.080 --> 00:08:33.279 Yeah, absolutely. 00:08:36.720 --> 00:08:43.759 Back to the other point, another big change, especially in the last nine, 12 months, I think you're saying is what you're calling the strengthening of the patent system. 00:08:43.919 --> 00:08:44.799 Tell us more. 00:08:45.120 --> 00:08:48.240 Yeah, uh patents have definitely gotten stronger. 00:08:48.480 --> 00:08:50.559 Let me clarify what I mean by stronger. 00:08:50.720 --> 00:08:56.000 Um, it's not that they're more valid or that the claim scopes have gotten bigger. 00:08:56.159 --> 00:09:08.320 It's simply that there's a greater risk that that patent is going to make it to a district court and uh you're gonna face a verdict, or at least a trial, the cost of a trial, and maybe a verdict. 00:09:08.480 --> 00:09:19.759 And so the the um about six to nine months ago, there was a major shift in uh the your ability to file what's called an interparty re-exam. 00:09:20.000 --> 00:09:29.279 Normally, the first line of defense an operating company does in the US is go to the patent office and change the validity, challenge the validity of that patent. 00:09:29.519 --> 00:09:32.320 That effectively has gone away. 00:09:32.480 --> 00:09:34.879 Um there's still some possibility of it. 00:09:34.960 --> 00:09:39.759 Uh, but what's really concerning is how things have somewhat been politicized. 00:09:39.840 --> 00:09:42.000 Um interesting if you look at the data. 00:09:42.159 --> 00:09:51.279 If the patent is owned by an NPE of the end of last quarter, you only had a 15% chance of instituting the IPR. 00:09:51.440 --> 00:09:58.639 But if the patent was owned by an operating company, you have a 30% chance of instituting the IPR. 00:09:58.879 --> 00:10:04.000 And what I can't figure out is why the owner of the patent should matter. 00:10:04.320 --> 00:10:11.120 If we're simply, as intellectuals, deciding, well, does this prior art raise a question of patentability for this patent? 00:10:11.279 --> 00:10:15.200 The owner of the asset shouldn't matter, and it's starting to matter. 00:10:15.679 --> 00:10:22.159 And that's part of what I think the average IP attorney needs is to wake up to and be more responsive to. 00:10:22.559 --> 00:10:26.480 And that's not a statistical fluctuation, that's a doubling of the proportion. 00:10:26.639 --> 00:10:27.600 I hadn't heard that before. 00:10:28.559 --> 00:10:28.960 Yeah. 00:10:29.200 --> 00:10:34.559 And we can we can we can hypothesize as to why that might be, but the fact of it is really interesting. 00:10:34.720 --> 00:10:34.960 Okay. 00:10:35.279 --> 00:10:44.480 Yeah, and I think what the means is uh you as a defendant operating company, you now have to assume, okay, I I don't have that first line of defense. 00:10:44.639 --> 00:10:50.639 I'm gonna have to challenge the validity and infringement at trial, and we're going to trial on this patent. 00:10:50.720 --> 00:10:59.919 And so that has made the uh the call time to money shorter for these uh for the litigation funding funding folks. 00:11:00.159 --> 00:11:02.960 They're now you know, there's not gonna be a stay of the litigation. 00:11:03.120 --> 00:11:04.159 We're going to trial. 00:11:04.240 --> 00:11:12.000 We can calculate with more certainty when it's gonna be filed and statistical analysis, what are my odds of winning, and how much I'm gonna get. 00:11:12.159 --> 00:11:17.840 And it gives that's that certainty, I think, is attracting a lot more litigation funders. 00:11:18.240 --> 00:11:22.240 And litigation funding, again, is an amazing, it's a strange concept, isn't it? 00:11:22.320 --> 00:11:27.039 That the IP litigation should be something that's effectively its own investment class, I think. 00:11:27.679 --> 00:11:28.000 It is. 00:11:28.080 --> 00:11:29.360 I mean, I guess you have a choice. 00:11:29.440 --> 00:11:38.320 You know, some people have a choice between investing in Apple stock or Google or Microsoft or whatever, but there is money that's looking for a greater rate of return. 00:11:38.559 --> 00:11:50.240 And um, just giving on the loan itself, uh, when these litigation funders give the loan to the NPE, they're charging anywhere from 20 to 35 percent interest, you know, far more than a bank. 00:11:50.320 --> 00:11:53.279 If the NPE could go to a bank, they would, but they they couldn't. 00:11:53.440 --> 00:11:56.240 So there's that guarantee return on the interest rate. 00:11:56.320 --> 00:12:00.480 And then, of course, if you hit the home run, um, their clients are doing well. 00:12:00.639 --> 00:12:06.399 And it's not, again, I don't think it's nefarious, it's just money that's looking for the best rate of return that it can get. 00:12:06.639 --> 00:12:11.759 Yeah, yeah, that's I'm I'm interested in logistics, Bullham. 00:12:11.840 --> 00:12:26.320 So I won't, I won't go there yet until you finish sort of um a couple more kind of landscape questions, really, which is uh uh yeah, we I think you've had some interesting stats about how much US patent litigation is NPE driven. 00:12:26.879 --> 00:12:30.159 Oh yeah, it's it's the number it's the number one source of patent risk. 00:12:30.240 --> 00:12:35.840 In the US against a high-tech company, it's 90% of all patent litigation being filed. 00:12:36.080 --> 00:12:44.480 And the reality, it's you know, if you think it makes common sense, most operating companies

don't have the desire or budget to go fight their competition. 00:12:44.559 --> 00:12:57.840 They're trying to deal with the tough economic times, they're trying to figure out tariffs, they're trying to figure out oil supply and gas prices and supply chain, and there just isn't that appetite to sue their direct competitor. 00:12:58.080 --> 00:13:07.759 Of course, the the only exception being the pharma folks still tend to do that, and that's because that's a different world of one patent, one product, and it's really fighting the livelihood of that product. 00:13:07.919 --> 00:13:14.559 But from a risk mitigation standpoint, if you're an in-house attorney, your job is to figure out the NPE problem. 00:13:14.879 --> 00:13:21.200 Okay, and so very strong prevalence in the US, increasing visibility uh in in Europe. 00:13:21.440 --> 00:13:23.519 Uh, are you seeing any other around the world? 00:13:23.600 --> 00:13:25.440 Is it catching on this model? 00:13:25.519 --> 00:13:36.960 Or there is there is some NPE activity in China, but at this point it's limited to one foreign entity suing another foreign entity in the Chinese leverage. 00:13:37.200 --> 00:13:37.440 Yeah. 00:13:37.600 --> 00:13:37.840 Yeah. 00:13:38.000 --> 00:13:43.120 So the courts, the Chinese courts are glad to allow you to have your fight in their courtroom. 00:13:43.279 --> 00:13:47.279 You just can't involve state-owned enterprises. 00:13:47.360 --> 00:13:49.120 That's that's not going to get you much success. 00:13:49.360 --> 00:13:54.879 Now, but in China, you don't have the same kind of injunction and damages risk uh that you do elsewhere. 00:13:55.120 --> 00:14:07.360 Brazil has gotten very uh a lot of attention recently uh because they're more of a timing standpoint, you can get a preliminary injunction within six weeks uh but after filing the court. 00:14:07.519 --> 00:14:12.000 So you have to be very responsive uh in addressing an NPE case there. 00:14:12.960 --> 00:14:17.679 So Gwillam touched on the importance of Europe in terms of how you expand in the network. 00:14:18.000 --> 00:14:20.799 Uh so I'd just like to tease into that a wee bit. 00:14:20.960 --> 00:14:21.919 There are multiple Europe. 00:14:22.240 --> 00:14:25.120 So we use the word Europe and sort of interchangeably for all sorts of things. 00:14:25.200 --> 00:14:26.799 We've got the political Europe, the EU. 00:14:27.120 --> 00:14:33.200 Um we've got the geographical Europe, the physical continent, we've got the patent Europe, the EPC. 00:14:33.360 --> 00:14:35.600 Um, so there's there's multiple Europe's. 00:14:35.840 --> 00:14:36.799 Which one are you looking at? 00:14:36.879 --> 00:14:37.840 Is it a geographical thing? 00:14:37.919 --> 00:14:38.720 Is it a political thing? 00:14:38.960 --> 00:14:39.919 Where are you focusing? 00:14:40.159 --> 00:14:42.799 Uh and I want to I would actually maybe introduce a fourth one. 00:14:42.879 --> 00:14:43.840 I would thank you. 00:14:45.759 --> 00:14:48.399 I would suggest maybe it's really the technical Europe. 00:14:48.480 --> 00:14:52.240 Um and this is really driven by the divergence of technology. 00:14:52.480 --> 00:15:00.399 So if you are a car maker, it doesn't really matter where you are, but you're a car maker, now you're incorporating wireless technology, NVIDIA technology. 00:15:00.480 --> 00:15:00.960 Yeah, yeah, yeah. 00:15:01.200 --> 00:15:03.759 Technology that came from outside of your industry. 00:15:03.919 --> 00:15:14.080 Um, if you're just a a retailer, now you're including AI in your customer databases and trying to predict what I should stock in my store. 00:15:14.159 --> 00:15:16.080 So now you're using AI technology. 00:15:16.320 --> 00:15:28.799 So I think it's this convergence of technology that as any European company uses more tech that they had nothing to do with developing, they're just increasing the risk of that risk exposure. 00:15:29.039 --> 00:15:31.519 Yeah, yeah, but okay, I've got another Europe. 00:15:32.799 --> 00:15:33.919 There's probably some more as well. 00:15:34.080 --> 00:15:35.519 There's probably food Europe. 00:15:36.000 --> 00:15:36.639 Yeah, for sure. 00:15:36.879 --> 00:15:37.519 Yeah, yeah, yeah. 00:15:37.759 --> 00:15:39.440 Weather Europe, climate Europe, yeah. 00:15:40.399 --> 00:15:48.480 So in terms of uh let's sort of break it down a wee bit, because Europe is a difficult thing, it's almost intangible, isn't it, in terms of how you access it. 00:15:48.559 --> 00:15:52.080 Are there particular countries that you're keen to get into first? 00:15:52.159 --> 00:15:52.960 How does it work? 00:15:53.360 --> 00:15:54.240 What's the strategy? 00:15:54.480 --> 00:15:56.960 Well, so I know where the problems are. 00:15:57.120 --> 00:16:02.960 Um what I'm seeing is the NVEs love the German courts uh for filing a lot of their activities. 00:16:03.039 --> 00:16:07.120 So really it's a question of who's gonna get sued in the German courts. 00:16:07.200 --> 00:16:13.840 So we already have Volkswagen, Mercedes, Daimler, um, they're all members of La Bosch, they're all members of Law. 00:16:14.080 --> 00:16:20.159 So really it's a question of who's gonna get pulled into those European at those German courts uh with the lawsuit. 00:16:20.320 --> 00:16:35.279 And given the kind of the universal nature of it, it could be from any country, it could be an Italian company, could be a company that's in Spain, but if you have some activity in Germany and you could get sued in Germany under the um the UPC, you're now at risk. 00:16:35.440 --> 00:16:36.080 So yeah. 00:16:36.240 --> 00:16:40.320 Um, and we're just trying, we're and I I really do feel like I'm in a race condition. 00:16:40.480 --> 00:16:46.240 I'm trying to get companies into luck, get them the vaccine before the disease gets to them. 00:16:46.639 --> 00:16:50.320 You know, because these trolls are trying to buy patents anywhere they can get them. 00:16:50.480 --> 00:16:55.679 And the strong the sooner I can

get them into lock, uh, the more patents we can get under license. 00:16:55.919 --> 00:17:00.960 Right now we have six million patent assets already under our license. 00:17:01.200 --> 00:17:07.359 It's the world's largest patent pool of any kind, and that includes 25% of all US patents. 00:17:07.599 --> 00:17:21.759 So even if you are, you know, in the Netherlands or France, but you have some sales and activity in the US, you know, I can assure you that 25% of these patents uh US patents are not going to harm your your US business. 00:17:22.079 --> 00:17:23.440 So that's opened up a couple of questions. 00:17:23.599 --> 00:17:25.039 Am I I like to carry on, Glenn for a bit? 00:17:25.119 --> 00:17:26.960 Yeah, that's opened up another couple of questions for me. 00:17:27.039 --> 00:17:31.200 Sorry, it's logistics is what I do, so that's the bit's the bit that really interests me. 00:17:31.519 --> 00:17:39.920 Um so Gwillem and I on an earlier podcast were talking about um forum shopping when it comes to litigation and also courts being increasingly competitive. 00:17:40.079 --> 00:17:41.920 Um how are you seeing that play out? 00:17:42.160 --> 00:17:44.960 Is that is that a real risk for people, forum shopping? 00:17:45.279 --> 00:17:46.240 Uh I think it is. 00:17:46.400 --> 00:17:53.279 I don't know if we've had the verdicts that make it clear this verdict in Germany needs to be the place, is a hot place to go. 00:17:53.440 --> 00:18:01.440 I think it's more of a question: do the judges demonstrate an appetite and an understanding and a willingness to hear the patent cases? 00:18:01.519 --> 00:18:01.759 Uh-huh. 00:18:01.839 --> 00:18:09.839 And that's what I think the first wave of jury jury forum shopping is let me go where I think I'm gonna have a my case heard in a fair shot. 00:18:10.160 --> 00:18:16.079 Because the the NPEs, especially in Europe, they're only going to assert a patent they're fairly confident in. 00:18:16.240 --> 00:18:16.480 Yeah. 00:18:16.640 --> 00:18:30.079 They paid a lot of money for it, uh, probably with reads on some standard or uh something similar to a standard and a key implementation of a standard, and they're ex they're have big investors, they're expecting a big payday. 00:18:30.400 --> 00:18:40.319 And in terms of getting into companies, be they big or not so big, uh I won't say SMEs because that's probably not a massive target, but it will be in the future, won't it? 00:18:40.640 --> 00:18:42.480 How what's your audience? 00:18:42.640 --> 00:18:43.920 Is it the board? 00:18:44.160 --> 00:18:45.759 Is it in-house attorney? 00:18:45.839 --> 00:18:47.119 Is it external counsel? 00:18:47.359 --> 00:18:50.559 What how would you cultivate the audience? 00:18:55.519 --> 00:18:56.559 Yeah, it's interesting. 00:18:56.799 --> 00:18:58.480 It kind of depends on the size of the company. 00:18:58.559 --> 00:19:00.720 We do actually welcome SMEs. 00:19:00.799 --> 00:19:10.799 Um, Lot itself is a nonprofit, and we've grown

so fast that we've actually had to make Lot free for any company with less than$25 million in turnover. 00:19:11.039 --> 00:19:14.720 So we have over 4,000 startups are part of our community. 00:19:14.880 --> 00:19:20.799 For them, it's free and they're getting the same, they're part of the hurt, they're getting the same defensive protection. 00:19:20.960 --> 00:19:27.599 Um, if I'm talking to a very large tech company with a large pad portfolio, it's usually the chief IP council. 00:19:27.680 --> 00:19:28.000 Yeah. 00:19:28.240 --> 00:19:34.480 Um, if it's somebody who's in the early rounds of funding, um, it tends to be a general council. 00:19:34.640 --> 00:19:37.920 And we're also seeing traction with like a chief risk officer. 00:19:38.160 --> 00:19:46.319 In many ways, we get put in the same bucket as you know, privacy insurance, cybersecurity insurance, DO insurance. 00:19:46.640 --> 00:19:46.799 Yeah. 00:19:47.039 --> 00:19:53.759 We're just another form of risk that companies of all sizes are acknowledging as out there. 00:19:54.079 --> 00:20:01.519 Um, obviously, you can't get insurance policy really to deal with IP risk, but for solving your NBE problem, you just join a lot. 00:20:01.759 --> 00:20:07.920 So I guess our conversations have to be had with like finance leaders in organizations that you know what's it mean on the balance book? 00:20:08.240 --> 00:20:08.559 Exactly. 00:20:08.640 --> 00:20:11.119 And then for them, it's usually a very easy decision. 00:20:11.200 --> 00:20:15.839 You know, for even the biggest of companies, it's$20,000 a year to be a member. 00:20:16.000 --> 00:20:21.039 Uh, you know, you could get if you get sued one time, this thing's more than pinged for itself. 00:20:21.119 --> 00:20:30.240 So it's it's a very easy ROI conversation to have as compared to trying to secure a you know cybersecurity policy or something like that. 00:20:30.559 --> 00:20:34.480 I'm sitting here thinking, how does this change the world? 00:20:34.720 --> 00:20:36.559 That's that's because that always fascinates me. 00:20:36.720 --> 00:20:40.480 So this is new and growing, relatively new and growing. 00:20:40.640 --> 00:20:44.880 Your ambition would be to have more people in than outside, possibly everybody within rather than outside. 00:20:45.200 --> 00:20:51.200 Once everybody's within, has that changed the patent system so seismically that it no longer ceased to operate as it should? 00:20:51.519 --> 00:20:55.200 Actually, I think it's going to be the best thing for the patent system, period. 00:20:55.359 --> 00:20:57.119 Um, so I've been around long enough. 00:20:57.200 --> 00:20:59.599 I've got the gray hair and the cigars approve it. 00:20:59.759 --> 00:21:08.319 Um, I remember a day when I was at a company and we spent a million dollars per patent for a portfolio of wireless patents. 00:21:08.559 --> 00:21:13.440 Just recently, the BlackBerry portfolio sold for less than$35,000 a piece. 00:21:13.519 --> 00:21:13.759 Yeah. 00:21:13.920 --> 00:21:21.279 What has happened is in the last 10, 15 years, much has been done to weaken the patent system. 00:21:21.440 --> 00:21:24.400 And it's all in response to the NPE problem. 00:21:24.559 --> 00:21:26.960 You're seeing things like the eBay case. 00:21:27.039 --> 00:21:29.200 You know, NPEs can't get an injunction. 00:21:29.279 --> 00:21:30.880 Uh, you're seeing damages go away. 00:21:30.960 --> 00:21:33.200 Now you're seeing uncertainty with 101. 00:21:33.440 --> 00:21:37.680 You saw AIA was introduced, and that what's brought the IPR. 00:21:37.839 --> 00:21:43.440 So now there's a chance that patent is never going to get uh survive the patent office review. 00:21:43.599 --> 00:21:50.880 So all these things were done to effectively defang the patent system because of the NPU problem. 00:21:51.200 --> 00:21:56.400 If we can eliminate the NPU problem, we can go back to a world that we should be in. 00:21:56.480 --> 00:21:58.319 I want a world with strong patents. 00:21:58.480 --> 00:21:59.839 Honestly, I'm a cancer survivor. 00:22:00.319 --> 00:22:07.519 And I'm only alive because a drug company invested RD on a drug that treated me. 00:22:07.759 --> 00:22:14.640 And you're only going to invest in RD if you're confident there's a patent that's going to protect your invention. 00:22:14.799 --> 00:22:16.640 Otherwise, everyone's going to steal it. 00:22:17.119 --> 00:22:19.839 And I've got five daughters and a beautiful wife. 00:22:20.000 --> 00:22:24.559 I want better drugs and treatments and cures, and I want to have grandkids. 00:22:24.640 --> 00:22:32.079 So I want a strong patent system where operating companies have faith that their RD will be protected. 00:22:32.400 --> 00:22:36.240 Um, and we stop wasting money on the NPEs. 00:22:36.319 --> 00:22:39.200 Because no operating company is getting rich with this problem. 00:22:39.440 --> 00:22:43.279 It's just siphon away resources that should be reinvested in RD. 00:22:43.599 --> 00:22:44.079 That's interesting. 00:22:44.960 --> 00:22:47.279 The NPE problem is a problem. 00:22:49.119 --> 00:22:51.119 It's bad for the reputation of the patent system. 00:22:51.200 --> 00:22:51.359 Yeah. 00:22:51.519 --> 00:22:58.799 But all the attempts to legislate it out of existence fail because there's no safe definition of an NPE. 00:22:58.960 --> 00:23:05.359 I mean, I get I know you guys have got one in your agreement, but I mean trying to do it at the legislative um level. 00:23:05.440 --> 00:23:15.359 And I remember hearing about this and saying that in the pharma business, a lot of companies probably qualify with any definition as an NPE but unfail it. 00:23:15.680 --> 00:23:24.799 The companies that develop have no intention of making because that's not how it works in farm, and they then license on or whatever it is, quite often will be caught by any kind of broad definition of NPE. 00:23:24.960 --> 00:23:26.559 So there has to be another way of doing it. 00:23:26.799 -->

00:23:36.720 And and as you say, as a result, the systems get weakened because we find we we make provisions for the whole system focused on that that that small that smaller problem. 00:23:36.880 --> 00:23:39.279 So it is it it worries me actually as part of the system. 00:23:39.359 --> 00:23:41.759 That's that's not my interview, but I'll just throw that one away. 00:23:42.319 --> 00:23:47.839 So I know that there's um various other models out there for kind of dealing with this in terms of collaborative models. 00:23:48.000 --> 00:23:50.880 Um one that's just caught my eye quite recently. 00:23:50.960 --> 00:23:56.400 I think they're called licensing negotiation groups and LNGs or something like this. 00:23:57.279 --> 00:24:00.960 Well, is that is that the one that was brought about by the uh the auto industry? 00:24:03.200 --> 00:24:03.599 Yes, yeah, yeah. 00:24:03.680 --> 00:24:03.920 Yeah. 00:24:04.160 --> 00:24:08.160 That is, yeah, and that and that gets to be a bit of uh uh touchy. 00:24:08.240 --> 00:24:17.440 You have antitrust concerns where a group of operating companies are getting together, but they're doing it because they want to set the pricing for royalty rates. 00:24:17.599 --> 00:24:17.839 Right. 00:24:18.079 --> 00:24:30.720 So now you're so now you have the licensors, you have organizations like the Vonsi, the patent holders, the licensors, they believe they have the precedent and justification for a royalty rate. 00:24:30.880 --> 00:24:40.079 Now on the buy side, the licensees are saying, well, we think it we're gonna get together and try to influence the system and negotiate for a lower price. 00:24:40.240 --> 00:24:41.759 So that's all about royalty. 00:24:41.839 --> 00:24:46.319 And when you're doing that, that obviously triggers a lot of antitrust concerns. 00:24:46.640 --> 00:24:49.440 We don't we avoid that altogether because it's a free license. 00:24:49.519 --> 00:24:54.480 You know, everybody signs the exact same agreement, everybody's welcome as part of law. 00:24:54.640 --> 00:25:05.839 Whereas these licensing groups or pools, it tends to be just a handful of folks with a lot of market power trying to go directly against the other side who also has a lot of licensing power. 00:25:06.240 --> 00:25:06.880 It's fascinating. 00:25:07.359 --> 00:25:09.920 The competition, I think we've never done one on competition law. 00:25:10.000 --> 00:25:10.480 No, we should. 00:25:10.880 --> 00:25:20.240 Which is quite interesting, but there's always that crossover between IP, which is literally monopolistic, versus competition law, which hates monopolies. 00:25:20.319 --> 00:25:22.400 And yeah, they both there's a place for both of them. 00:25:22.559 --> 00:25:26.000 But every now and then you get to that intersection, and you've got to try and work out how you go on. 00:25:27.599 --> 00:25:30.720 That is yeah, it's really interesting how they buffed up against each other. 00:25:30.799 --> 00:25:32.319 But that's that's a separate podcast. 00:25:32.480 --> 00:25:32.799 So yeah. 00:25:33.039 --> 00:25:38.799 Well, we feel good about it because um the D of the Department of Justice, the FTC, they send very strong signals. 00:25:38.880 --> 00:25:45.279 The governments, I think universally, both in Europe and in the US, they prefer licensing over litigation. 00:25:45.440 --> 00:25:51.839 They they recognize how inefficient litigation is, and they much prefer the parties work it out themselves. 00:25:52.079 --> 00:25:58.319 And so, um, and the other advantage there is governments don't like figuring out the value of IP. 00:25:58.640 --> 00:26:00.480 What is this patent worth? 00:26:00.720 --> 00:26:02.799 And what's the right level of value? 00:26:02.960 --> 00:26:05.359 They much prefer the parties do that themselves. 00:26:05.440 --> 00:26:07.839 And so with law, you know, it's free. 00:26:07.920 --> 00:26:10.079 Everyone signs it, everyone's open to do it. 00:26:10.160 --> 00:26:11.519 It's the same agreement. 00:26:11.680 --> 00:26:13.359 Um, you can do it or not do it. 00:26:13.440 --> 00:26:15.039 It's absolutely voluntary. 00:26:15.359 --> 00:26:25.680 And uh I think that the models we'll try and echo and reaffirm many of the things the the DOJ said they would prefer license it and so done litigate over it. 00:26:26.640 --> 00:26:27.920 So I have another question. 00:26:28.079 --> 00:26:33.200 Uh I'm looking at your badge, Ken, which we made you put on the table because it they jangle these uh inter badges. 00:26:33.279 --> 00:26:35.839 Um and it tells me that you're a speaker. 00:26:36.240 --> 00:26:39.119 So um trademark event. 00:26:39.200 --> 00:26:39.759 What are you doing here? 00:26:39.920 --> 00:26:40.960 I think about hands. 00:26:41.599 --> 00:26:43.599 Well, I have to thank Willem for that. 00:26:43.680 --> 00:26:49.920 Um and well, and kudos to Intel and kudos to uh SIPA for you know putting on an event together. 00:26:50.079 --> 00:26:55.599 I think far too long the trademark folks and the patent folks have been siloed. 00:26:55.759 --> 00:27:02.559 Yeah, I mean, I worked at big companies where I knew there were trademark lawyers there, I just never got to interact with them or see them. 00:27:02.799 --> 00:27:08.079 And it's dangerous in a large firm where you don't know what your colleague does. 00:27:08.240 --> 00:27:17.599 And that the more you can understand their trade and their craft, if you're doing an MA deal or something, you need to be in a position to appreciate what you have to worry about. 00:27:17.759 --> 00:27:25.839 Um, and for the smaller companies, I know a lot of small one-man, one-person, one-woman shops where one person has to do everything. 00:27:26.000 --> 00:27:33.599 And so I think if you can create a platform where you can get knowledge on patents and trademarks, that's uh that's a rare thing. 00:27:33.680 --> 00:27:34.480 I'm not that familiar with. 00:27:34.720 --> 00:27:36.720 I know where else you would go to get that,

except for good. 00:27:37.119 --> 00:27:45.200 No, and I think the I think the world needs a global IP, a patent, a global patent conference that has that same sort of scope as Inter. 00:27:46.559 --> 00:27:48.640 Therefore, putting it in one place makes sense. 00:27:48.799 --> 00:27:53.119 Uh I mean, you know, in private practice, for me it works because everyone will need to talk to you in one place. 00:27:53.200 --> 00:27:54.079 And I'll, you know, sure. 00:27:54.240 --> 00:27:59.200 If nothing else, it's going to save on flights for everybody and for the planet. 00:27:59.359 --> 00:28:02.880 Um, no, I'm looking forward to my panel actually, patent parent politics for it's a good thing. 00:28:02.960 --> 00:28:07.279 Oh, tell us a little bit about it, well, it's it's all I think the the there's two layers to it. 00:28:07.440 --> 00:28:11.680 One is how and why do patents go geopolitical, which they are. 00:28:11.839 --> 00:28:19.440 I mean, they they there's political elements, as you mentioned, uh potentially uh in the states, um, they're being used in trade negotiations more and more. 00:28:19.759 --> 00:28:21.759 I mean they'd be the subject of sanctions. 00:28:22.160 --> 00:28:23.039 The trade bazooka. 00:28:23.279 --> 00:28:30.480 Yes, so this power, they are a tool of power now, which they used to be a commercial tool, but there's a kind of a macro level. 00:28:30.559 --> 00:28:31.599 So that's an interesting one. 00:28:31.839 --> 00:28:37.200 But the other thing that uh Inter very kindly reminds us is that, and then remind people why it's relevant to your day job. 00:28:37.279 --> 00:28:39.200 Because I mean uh it's just not an academic one. 00:28:39.279 --> 00:28:43.279 We're actually going to talk about how might this affect your portfolio management, your decision making. 00:28:43.359 --> 00:28:44.799 So it's an interesting session, actually. 00:28:44.960 --> 00:29:01.039 It'll have been done, but I suspect by the time this podcast goes out, so I can tell you what actually good speakers too, the academics, we've got um people from you know the kind of these organizations like lot, we've got EPO speakers, uh range of, and we've got some people from oh Nokia's there as well, actually. 00:29:01.119 --> 00:29:10.319 So, you know, some people use the system, the whole thing, loads of different perspectives, probably some conflicting ones, but that's putting the sign of a good panel and perfectly valid as well. 00:29:10.400 --> 00:29:10.799 So, yeah. 00:29:11.119 --> 00:29:12.799 And I think we're lucky we've got you coming along. 00:29:12.880 --> 00:29:14.319 We've got a ministerial reception tomorrow. 00:29:14.480 --> 00:29:15.599 I think we've got you coming along to that game. 00:29:15.920 --> 00:29:16.960 I'm looking forward to it, yes. 00:29:17.119 --> 00:29:20.480 All these VIPs, I'm honored to be such a real smart people. 00:29:21.599 --> 00:29:22.640 They're all agree near you. 00:29:22.799 --> 00:29:25.039 I just imagine you're a consummate networker. 00:29:25.119 --> 00:29:26.400 I can sense that about it. 00:29:26.640 --> 00:29:31.680 Well, that's that's what I like wearing the white hat is because no one, I I people like I can help people. 00:29:31.759 --> 00:29:38.880 I can, you know, I I've got 6,000 companies, I know the head of IP, I know the general counsel, so we're constantly putting people together. 00:29:39.039 --> 00:29:44.640 Uh and being a nonprofit, I'm usually the only person in the room who doesn't care about money. 00:29:45.279 --> 00:29:47.920 So that gives me a certain kind of credibility. 00:29:48.240 --> 00:29:53.279 Like, okay, okay, I can't yell at this guy because you know he's pretty transparent. 00:29:54.160 --> 00:29:56.960 Well, Ken, thank you so much for coming on and sharing your time with us. 00:29:57.039 --> 00:29:58.079 Uh, enjoy the rest of the winter. 00:29:58.240 --> 00:29:59.839 I'm sure you're gonna have a great time right here. 00:30:00.160 --> 00:30:02.880 Um look forward to catching up with everyone in the week as well.