What led you to a career in patent prosecution and monetisation – and what advice would you have for anyone considering a similar path?
I am an engineer and lawyer by training but an inventor at heart. The co-mingling of law, engineering and business is what led me to a career in patent prosecution and monetisation.
I am named inventor on more than 20 issued US patents and several pending US patent applications. In addition, I am the owner of several patent assertion entities (PAEs). I have always been curious about how things work and how things can be improved. After graduating with a bachelor’s degree in electrical engineering and later an MBA, I worked as an engineer in the semiconductor industry for more than 10 years, mostly focusing on path-finding development in non-volatile memory. It was an exciting time to be working with industry titans to bring a new memory technology to market. My efforts resulted in dozens of patents, including several in which I am named inventor.
This background and experience in industry combined with experience as an inventor and training as a lawyer helps me when working with clients in the IP space. When dealing with patent prosecution and monetisation, it is important to keep in mind the big picture and how these three disciplines interact. Clients appreciate the perspective and insights that I have obtained over the years. I think it helps that they see me as someone like them: an inventor trying to make money from their invention.
How do you manage expectations and maintain close working relationships with clients to monetise their patent assets when the stakes are so high?
Communication is key but process matters too. It is important to set expectations at the beginning of the relationship. When dealing with patent monetisation, there are a lot of issues that could arise. Examples include Section 112 written descriptions, Section 101 patent eligibility and Section 102/103 anticipation/obviousness. They also include potential issues related to patent prosecution, such as prosecution estoppel, disclaimer, inventorship and assignment. Thus, properly vetting patent portfolios prior to monetisation is crucial. Ultimately, the goal is to uncover potential issues that may arise during litigation. During this vetting process, risks and potentials can be addressed and monetisation goals ascribed.
After vetting, a strategy is developed and shared with all stakeholders. In this way, not only is everyone on the same page with a strategy unique to a particular patent portfolio, but there is also a path whereby potential unforeseen issues can be addressed. One technique we like to use to address these is through patent continuation practice.
Continuation practice is where one or more active pending continuation applications is maintained in the same patent family as the patents being litigated. These continuation applications can be used to clarify the invention by issuing new
patent claims as well as having prior art from litigation, inter partes reviews or re-examinations cited and issued. Depending on where the case is in litigation, these newly issued patents could even be added to the existing litigation or used in follow-on litigation against the same accused infringers.
How do you expect patent analytics tools to change the ways of working for rights holders and investors, particularly in the valuation space?
Patent analytics tools play an important role. Evaluating patent portfolios is a complex process and each patent and claim set is unique. You need to look at the issued claims for potential weaknesses with respect to Alice and Sections 101 and 112. Then, you must look at the priority date and how Section 102/103 challenges could come into play. Finally, you should look at damage models for potential infringers. If you have no way to sort through the chaos, it is easy to become buried in data.
There are some really great patent analytics tools out there that use Big Data to compile and organise data into usable information. These can be useful for specific requests, such as comparing relative strengths of competitor IP portfolios or identifying trends in patents. Other tools help with prior art searches and provide key metrics about the file wrapper. We developed some in-house tools early on that help us quickly evaluate patent assets. After an asset goes through this first screening, we then dive deeper into our due diligence.
That said, I am not sure whether patent analytics tools will ever fully replace the human element. There is simply too much information to consider and it would be impossible to program an algorithm to consider everything. To be sure, these tools have simplified a lot of the grunt work and helped to streamline the process and I only expect them to get better in the future.
You have been entrusted by a spread of companies, start-ups and government organisations. What are the key skills for a top-level IP professional to hone?
At bottom, you have to be good at what you do – clients demand it and if you are not they will find another IP professional. So communication, managing expectations, knowledge of IP law, being up to date on current case law and trends, good judgement and an ability to leverage IP analytic tools are all key. More than this it is being able to process all the relevant facts for a given IP portfolio and then leverage these developed skills in order to create a winning strategy. This is something at which we excel: evaluating IP portfolios and creating winning strategies.
Our track record speaks for itself. Oso-IP members have been involved with numerous companies whose IP assets were monetised yielding more than $100 million in returns. Through this, patent holders have received millions of dollars in compensation in royalty share payments in connection with the successful monetisation of their intellectual property.
Can you tell us about some of the biggest obstacles currently facing the IP industry?
Without a doubt, one of the biggest obstacles currently facing the IP industry is big companies’ attack on smaller patent rights holders. You could call it gaslighting, but it really is a false narrative being pushed by Big Tech.
For example, in a recent antitrust-related hearing, Apple’s CEO, Tim Cook, called for “further study and action” on the “plague of PAEs”, saying that: “these entities are hardly champions of innovation, entrepreneurs, or start-ups”. However, from my personal experience, as a manager of PAEs, I can tell you that these statements are categorically false. In terms of innovation, I can also tell you that business-minded inventors invent with the expectation that if society finds their invention useful and practises it, they will be fairly compensated. This is the fundamental societal contract that underlies our patent system – or any patent system for that matter. With this in mind, it is also important to note that due to the cost and expertise required to use our patent system, PAEs are often the only way that a cash-strapped inventor can access the patent system and be fairly compensated. To this end, without PAEs, there is simply no key motivator for smaller inventors (ie, access to a patent system that pays dividends on innovations), thereby making PAEs an indisputable champion of innovation by entrepreneurs and start-ups.
It is simply unfathomable for Big Tech to use its market dominance and cash-rich bottom line to win against a start-up in the market and then to argue that because the start-up failed in the market, it is not good policy that it should partner up with a PAE to enforce its patents against the market incumbents. In view of Big Tech’s market dominance, many entrepreneurs and start-ups are forced to lean on their patents to be profitable (or at least recoup losses). Further, by the time they need to utilise their patents, such start-ups often also need access to money and expertise (of a PAE) to leverage such sole/remaining asset.
What is your take on Apple Inc v Iancu?
As confirmed by the US Supreme Court in Thryv, institution decisions by the USPTO are final and non-appealable in connection with inter partes reviews that were created by the America Invents Act 2011. Further, the USPTO recently used its authority (in Fintiv) to issue procedural denials of institution of inter partes reviews more frequently. Given that the US Supreme Court has confirmed that such denials are final and non-appealable, multiple billion-dollar technology companies including Apple, Intel, Cisco, and Google lodged a lawsuit against the USPTO in the Northern District of California challenging both the substance of the foregoing procedural denials, as well as the process by which they have come to be.
While Big Tech does not typically file lawsuits without colourable arguments, I believe that the technical legal arguments underlying its complaints are completely overshadowed by the history of implementation of the American invents Act and the relevant equitable arguments at play here. First, it is notable that the original incarnation of the new regime was implemented by Michelle K Lee, the former deputy general counsel and head of patents and patent strategy for Google, one of the Big Tech plaintiffs in the current lawsuit. It is also notable that the ex-Googler’s original incarnation of the inter partes reviews regime, while incurring no complaints from Big Tech, cancelled some or all claims over 80% of the time for inter partes reviews that received a final written decision. Such statistics served as the foundation for the ongoing backlash from the US inventor community and even the judicial system, where lead Federal Circuit Chief Judge Randall Rader called the PTAB “death squads killing property rights”. In view of this and the fact that nobody (even Big Tech) expected the America Invents Act to be so effective at reducing Big Tech’s exposure to third-party rights holders, I believe that it is very hard for anybody (including Big Tech) to argue, with a straight face, that adjustments should not be made in favour of patent holders. The current Big Tech efficient infringement utopia should not be allowed to stand, in my opinion.
How bad is it for patent rights holders in the current state of the relatively new inter partes reviews regime when it comes to licensing to Big Tech?
By working in the patent licensing space for almost five years prior to the America Invents Act as well as almost 10 years thereafter, I have seen first hand the devastation of the current inter partes review-regime on smaller inventors and patent holders. Make no mistake about it, after an inventor or small patent holder pays tens of thousands of dollars for a US patent, pays hundreds of thousands of dollars at the PTAB defending inter partes reviews to keep this patent, has significantly less than a 50-50 shot of surviving serial inter partes reviews so that they can finally access a jury, and finds out that Big Tech is an expert at this legal game that is tilted in its favour – they do not repeat such an endeavour. In fact, the vast majority of inventors I have encountered over the last decade, have moved on, many joining large firms where their inventions are simply assigned over for a salary. To put this in economic terms, for inventors in the US patent system, the conversion rate from intellectual capital to intellectual property has been decimated.
The fact that Big Tech is resorting to a lawsuit against the government to advocate for maintaining the former status quo when the patent system remains in a devastated state, exposes the fact that it will stop at nothing until its outbound licensing exposure dwindles to budgetary immateriality. This is further evidenced by Big Tech, to this day, invoking now-debunked patent-related false narratives (which got them to where they are today) in this patent battle and related antitrust battles.
Andrew Gordon has over 10 years’ experience managing complex patent prosecution portfolios and turning them into valuable patent assets. He has worked with groups of all sizes – from individual inventors to Fortune 500 companies – to successfully protect and monetise their intellectual property. Mr Gordon’s expertise helps inventors to realise the full potential of their disclosures. He holds a BS in electrical engineering, an MBA and a JD.