In an interview with Jay Leno, the ever-controversial Elon Musk dropped a bomb which surprised a lot of observers and created some turmoil in the IP community. Mr. Musk is one of the best-known business leaders and influencers of this era and his musings are dissected by tens of millions of people. He is also known for changing his tune from time to time, as we just saw with his reversal on the Twitter acquisition this week. In any event, I’d like to explore this and highlight my reasons for disagreeing with his statement.
As usual, as I focus on the macro picture in this newsletter, I want to remind everyone that we track everything that is going on in this world and for those who need their regular dose of news, once again you can follow me on either LinkedIn or Twitter where I post almost daily about some of the most newsworthy events..
Tangible IP News
I was in Dallas recently speaking at the second IP Watchdog LIVE conference about the future of patent monetization with a great roster of co-panelists to kick off the conference on Sunday evening. Overall, the tone of this very well-organized conference was cautious, especially when it comes to asserting patents in the US, given recent changes in the law and how judges are selected to hear cases. IP Watchdog has several excellent summaries of the conference on their website.
For those who missed our most recent newsletter a few weeks ago, we announced the sale of a rather large transaction involving over 100 assets and relative software code in the computer visualization area, as well as the closing of a few licenses with Fortune 100 companies on a couple of portfolios pertaining to Application Programming Interfaces (API).
I am also pleased to report that after a successful monetization of the AST IP3 2020 portfolio, which we represented, we have been retained exclusively to resell the IP3 2021 assets. See the official announcement here. This portfolio represents the cream of the crop of patents as AST reviewed over 1000 submissions and only acquired 34 LOTS for a total price of $3.86M. This year, we will be offering those for a fixed – no haggling – price representing a deep discount over what AST paid in order to facilitate business decisions and accelerate transactions.
In terms of new assets for sale, we have 5 distinct portfolios now actively marketed pertaining to smartphone cameras, 3D digital advertising, GNSS and Zigbee, high frequency trading technologies and the new AST IP3 2021 portfolio, some of which we have already received offers on. If you are interested in reviewing any of these, please do not wait and email us at firstname.lastname@example.org to receive the full package of materials.
Similarly, if you’d like to be added on our distribution list in the future so that you are the first to receive new opportunities, please email us at email@example.com.
Calling for high quality portfolios!
For a short window this year, we are entertaining new prospective portfolios across a variety of sectors. You can review our criteria here but if you own a patent portfolio with at least two issued US patents and have knowledge of others using your technology (infringement), we are happy to review for potential brokerage. We will also look at larger portfolios where evidence of use is uncertain.
Some of the areas of particular interest include:
- Medical device technology – wearables and IOT health monitoring also of interest
- Autonomous driving systems
- Hardware such as cameras and displays
- Streaming media
We have a buyer with interest in LTE patents.
We also have a buyer with interest in acquiring battery-related assets – specifically rechargeable assets applicable to either (or both) consumer devices and electric vehicles.
Please reach out to Erika Warner with any assets that may match this request at firstname.lastname@example.org.
Progress On the Hill?
For those who enjoy tracking the number of patent-related bills that have been proposed in congress in the last 10 years and never went anywhere, this one may sound familiar. Yes, indeed we have another attempt to reform a clearly broken aspect of the current patent system, i.e., the eligibility issue created by the Supreme Court in Alice made worse by years of inconsistent decisions from the Federal Circuit. SCOTUS has now had over 20 opportunities so far to revisit Alice and clarify the rules for patent matter eligibility and has refused to do so each and every time. Therefore, Congress has finally decided to act and Senator Tillis (R- NC) recently introduced a bill dubbed the “Patent Eligibility Restoration Act of 2022”, which aims at correcting the most egregious abuses of the current legal framework whereby thousands of validly issued patents have been declared invalid summarily by judges too often happy to check one case off their docket without having to actually consider the issue on the merits. This ongoing issue has hit small inventors especially hard and too many have never had their day in court as a result. The proposed Bill received an additional boost last week when Senator Coons (D-DE) who is now replacing retiring Senator Patrick Leahy as the Committee Chair for all things IP, announced that he would co-sponsor the Bill, a much-needed requirement for the Bill to move forward in Committee before a full Senate vote. This Bill, which would effectively overrule Alice (and previous SCOTUS cases such as Mayo and Myriad), has received the support of most industry pundits, including former Chief Judge Michel and several past USPTO directors, as a definite step in the right direction. Surprisingly, the US Inventors Association which advocated hard for a 101 congressional fix, has come out against the Bill for not going far enough. This puts them in the same corner – albeit on quite different grounds – as the big tech industry which is quite content with the status quo. Odd bedfellows!
And strangely, just days after this announcement, and probably not thrilled about being made irrelevant by Congress, the US Supreme Court made a 180 degree turn and finally accepted this week to hear a patent case (Interactive Wearables v. Polar Electro) that hinges on the exact same issue, something it had systematically refused to do so far. Perhaps this goes to show that a little competition never hurts even at that level…
Blackberry’s Last Reversal
After hastily announcing the sale of its vast patent portfolio several months ago to meet a self-imposed deadline, which we commented on extensively, Blackberry CEO John Chen then had to backtrack when it turned out some of the financing was not in place yet. It is a foregone conclusion that the deal with Catapult Innovation is likely not going to happen despite statements from the Canadian company that it is still confident it will. In parallel, Chen just announced that he is resurrecting its patent licensing business, “should that be necessary.” Clearly this was a mismanagement of the situation. This deal should never have been announced in the first place, as I already indicated in previous columns and, in the meantime time, 6 months of distractions have had disastrous impacts on BB’s royalty licensing results, which are down a staggering 77% from 2021 to 2022, and an even worse 94% decline if you compare Q3 2021 over Q3 2022. If I were a Blackberry shareholder, I would candidly be asking for Chen’s head as this was clearly a series of unforced errors.
Patents Are for the Weak, Or Are They Really?
Elon Musk is well known for his bombastic and provocative statements, most of which are dispersed via his Twitter account. Always happy to start a controversy – the Roger Stone of Big Tech and, like a former US president, he thrives on attention. No topic is beyond his reach, and he should be taken seriously, but maybe not quite literally. You can find his most outrageous “sorties” here.
However, his most recent statement to Jay leno that “patents are for the weak” merits a pause. The Tesla CEO (btw, he is not a true co-founder of Tesla and was only able to gain this title as a result of a lawsuit with the actual founders of the company) has had an interesting history with patents. In 2014, Tesla made its famous “All Our Patents Belong To You” pledge, whereby anyone is permitted to practice “in good faith” a set of Tesla’s patents (note only those listed are subject to the pledge). There are obviously limitations to that pledge and one has to read the fine print to understand exactly what rights and obligations they are committing to, but the main point is elsewhere.
Tesla’s long-term mission has never been to dominate the electric vehicle segment, although it was able to do so for quite a long time. Tesla has lost billions of dollars making and selling cars and has only recently turned an operating profit. In the interim, this hasn’t prevented Musk from becoming – for a while – the richest man in the world, very much the same way Jeff Bezos has by building Amazon over two decades, most of which were in the red.
No, Musk’s long-term vision has always been to enable and accelerate the building of a huge electric vehicle segment where he would then become the main supplier of batteries – by far the most expensive component – to all electric car manufacturers. He invested heavily in a US-based gigafactory in Sparks, Nevada, that is now cranking out battery packs to whoever wants to buy them. So, one has to see Tesla’s patent pledge very much as a “gateway drug” used to hook the car industry into building more battery-based vehicles, while removing barriers to entry (i.e. patent royalties). Tesla succeeds in cornering the market. This is a brilliant strategy where patents were used as a honeytrap rather than as a deterrent. And it seems to be working so far.
In the meantime, Musk can go around echoing the Silicon Valley machismo around patents by saying that they are for the weak. But he may have another reason to say so; Tesla has now been sued over 30 times for patent infringement, including 20 times in the last 3 years alone. So not everyone is using patents the same way Tesla does, it would appear.