[00:00.000 --> 00:05.000]  ...organization that does DC-based advocacy on technology and policy issues.
[00:05.800 --> 00:09.740]  And so I noticed that we have kind of two patent talks back to back.
[00:09.840 --> 00:11.220]  There's another one at 4 o'clock.
[00:11.780 --> 00:15.000]  And that one, I think, will go into some more of the really specific laws.
[00:15.040 --> 00:24.360]  But I want to use this talk as kind of an appetizer to, you know, what's your appetite in terms of, you know, what are the problems with the patent system and what exactly is going on?
[00:24.460 --> 00:28.940]  And, you know, the one thing that I'm pretty sure most of you have heard of are patent trolls.
[00:30.300 --> 00:37.800]  You know, these are people who, you know, they take these really silly patents on, you know, sending emails or scanning documents.
[00:38.140 --> 00:40.420]  And they make these outrageous demands.
[00:41.780 --> 00:44.780]  You know, they say, like, you have to pay me $1,000 if you use a scanner.
[00:44.980 --> 00:48.520]  Or you have to pay me $100,000 if, you know, you send email in this way.
[00:49.280 --> 00:53.220]  And they send these, you know, to a lot of these really small companies that can't afford to fight them.
[00:54.040 --> 00:56.620]  And kind of to top it off, they don't make anything.
[00:56.620 --> 01:09.480]  Okay, so, you know, you've got these companies going out there saying to all of you guys, you know, you're not allowed to write computer programs or do all the cool stuff you're doing, and we're not going to give you anything in exchange except for demand letters.
[01:10.240 --> 01:19.580]  You know, this is... besides patent trolls, I think a lot of you have heard about some of these patent wars, like the one between Apple and Samsung.
[01:20.360 --> 01:25.540]  These involve, you know, more silly patents, some of the ones on rounded corners you've probably heard of.
[01:26.240 --> 01:29.940]  You've probably heard of the Amazon patent on photography against the white background.
[01:30.900 --> 01:39.900]  So, you know, there are a lot of things going on that, you know, I think make people in our community think, you know, there's something really wrong with the patent system.
[01:40.020 --> 01:42.140]  And there is something really wrong with the patent system.
[01:42.600 --> 01:53.560]  But, you know, the other thing I get when I talk to people in these sorts of groups is, you know, the sense that, you know, this patent system is this arcane thing that I can't understand.
[01:53.560 --> 01:55.080]  And I don't know what's going on with it.
[01:55.180 --> 01:56.580]  And I don't know what to do.
[01:59.160 --> 02:02.900]  And it's sort of the sense of hopelessness that there's no way to fix this thing.
[02:03.300 --> 02:06.880]  And this conference is called HOPE, so I am here to give you hope.
[02:07.440 --> 02:09.620]  There is something you can do to fix this.
[02:10.820 --> 02:14.540]  With your help and with your work, we'll be able to actually make it better.
[02:15.380 --> 02:18.460]  But in order to do that, we first have to actually understand what's going on.
[02:19.520 --> 02:27.360]  Now, I don't imagine that too many of you do much work in legal policy, but I do imagine that a lot of you know about security.
[02:27.980 --> 02:36.460]  And the way I would encourage you to think about the problems with the patent system is like a security vulnerability.
[02:36.860 --> 02:39.560]  The patent system is basically like a computer system, right?
[02:39.720 --> 02:42.760]  It takes certain inputs, you know, patent applications.
[02:43.300 --> 02:44.720]  It does some processing on it.
[02:44.760 --> 02:46.500]  The patent examiner does some examination on it.
[02:46.500 --> 02:49.440]  And it produces some outputs, you know, it produces patents.
[02:50.520 --> 02:52.700]  And a lot of times, you know, this works okay.
[02:53.080 --> 02:54.860]  And, you know, you get the data that you're expecting.
[02:55.020 --> 03:08.580]  And a lot of times people figure out ways to send, you know, carefully crafted data that gets out results that you're not supposed to be able to get, namely the kinds of silly patents on, you know, rounded corners or sending emails.
[03:10.340 --> 03:14.560]  So, you know, I would encourage you to think about some of the problems in that way.
[03:15.160 --> 03:22.660]  To look at the ways that people are taking advantage of the system in order to get things out of it that they're not really supposed to get out of it.
[03:23.020 --> 03:29.040]  And so, you know, to start off figuring out what that is, we have to look at, you know, how is the patent system supposed to work?
[03:30.680 --> 03:39.640]  The way it's supposed to work is that patents are an exchange between the inventors on the one hand and the public on the other.
[03:40.520 --> 03:49.500]  You know, the inventor, they invent something, they create something new, they spend a lot of time, you know, figuring out how they want to make this product work and how to get it to be useful.
[03:50.140 --> 03:52.300]  And they provide that information to the public.
[03:52.460 --> 03:55.880]  That's, you know, that's the inventor's, that's the inventor's part of the bargain.
[03:56.340 --> 04:04.740]  And in exchange, the public, you know, through the government, gives the inventor certain rights, you know, certain monopoly rights.
[04:04.840 --> 04:11.840]  They say, all right, since you invented this, you get this patent, you get to do all of these, all these special things with it, and you get to keep other people from doing that.
[04:12.020 --> 04:14.000]  So this is meant to be kind of an equal bargain.
[04:14.140 --> 04:16.920]  You know, the inventor has to provide something, the public provides something.
[04:16.920 --> 04:27.160]  And when we look at what's on both sides of the bargain, the person who receives a patent, they get a lot of rights.
[04:28.360 --> 04:45.900]  If you own a patent, you get to keep other people from making, from using, from selling, from offering to sell, and selling includes giving away for free, so even offering to give away for free, from selling parts, from telling other people how to use an invention,
[04:46.220 --> 04:52.940]  from importing an invention into the United States, from exporting parts of the invention out of the United States.
[04:53.040 --> 04:54.280]  These are a lot of rights.
[04:54.660 --> 05:05.600]  If you hold a patent, and you see somebody else doing any one of those things, you have a reason to go after them and sue them for potentially a lot of money or to tell them to stop doing it.
[05:06.140 --> 05:09.160]  So the patent is a very, very powerful thing.
[05:09.920 --> 05:17.920]  And in exchange, the patent owner is expected to do a lot of work in order to get that patent.
[05:18.100 --> 05:20.440]  So the person has to invent something.
[05:20.680 --> 05:26.440]  That invention has to fall within certain categories of what is allowed to receive a patent.
[05:27.380 --> 05:29.840]  They have to come up with something that's new.
[05:30.180 --> 05:32.220]  They have to come up with something that's non-obvious.
[05:32.380 --> 05:34.600]  These are supposed to be pretty hard tests.
[05:34.700 --> 05:37.140]  There are a lot of things that, you know, you and I would know how to do.
[05:37.240 --> 05:40.260]  You're not supposed to be able to get patents on that because it would be considered obvious.
[05:41.600 --> 05:49.780]  You know, you have to file this really detailed patent application that explains exactly how the thing works, exactly, you know, all of the aspects of it.
[05:49.840 --> 05:51.080]  You have to put in all these drawings.
[05:51.420 --> 05:55.100]  You know, it can be a very expensive, very complicated thing to put together a patent application.
[05:55.440 --> 06:04.680]  And then you have to go to the patent examiner and go through, you know, two, three, five years of examination and, you know, explain to them And why this invention is really interesting.
[06:05.700 --> 06:07.040]  This is a lot of work.
[06:07.600 --> 06:11.500]  And it demands that you have some sort of really good invention.
[06:14.480 --> 06:20.220]  That's why we feel it's okay to provide all of these really powerful rights on the left.
[06:20.380 --> 06:23.960]  Because you have to do all of that work on the right and you have to give something really useful.
[06:24.780 --> 06:26.980]  So that's how it's supposed to work.
[06:27.320 --> 06:37.980]  But if you want to take advantage of the patent system, your goal would be to try to get as many of those rights as you can on the left side without having to do any of the work on the right side.
[06:38.600 --> 06:41.780]  So we want to see, you know, how you do that.
[06:42.340 --> 06:45.860]  And the example I'm going to give you is I'm going to show you how to get a patent on this.
[06:47.060 --> 06:51.220]  Okay, this is a three-line computer program written in BASIC.
[06:52.240 --> 07:00.100]  I'm pretty sure most of you can figure out what it does, but just for people who are only listening, this is a program that compares two numbers.
[07:00.460 --> 07:03.280]  If one of the numbers is less than the number, then the program stops.
[07:03.780 --> 07:06.940]  Otherwise, it subtracts and it adds two numbers.
[07:07.260 --> 07:08.060]  That's it.
[07:09.200 --> 07:12.960]  Alright, so obviously you're not supposed to be able to get a patent on that, right?
[07:13.020 --> 07:14.040]  This is a mathematical formula.
[07:14.160 --> 07:15.000]  This is really simple.
[07:15.140 --> 07:17.000]  You know, all of you probably do this all the time.
[07:17.380 --> 07:23.120]  So how do we get a patent on this?
[07:23.120 --> 07:33.200]  Well, first of all, you know, I need to, I need to flesh out this program a little bit because, you know, it, this thing wouldn't really work right now.
[07:33.680 --> 07:36.440]  So I'm gonna, okay, so sorry.
[07:37.020 --> 07:44.100]  Before we talk about that, the way I'm gonna do this, the way I'm gonna do this is I'm gonna take advantage of a number of cases.
[07:44.240 --> 07:46.680]  And I'm gonna, I'm gonna sprinkle the case law in here.
[07:47.080 --> 07:49.860]  And the first case I'm gonna start with is this one called Diamond vs.
[07:49.940 --> 07:53.360]  Deer, which has a line that says claims have to be considered as a whole.
[07:53.560 --> 07:57.480]  A claim is a part of a patent that defines, you know, what you think you invented.
[07:58.980 --> 08:03.640]  And, you know, this is the part that the courts are gonna look at, that the lawyers are gonna look at.
[08:03.920 --> 08:05.580]  This is the part that's important to your patent.
[08:06.340 --> 08:15.600]  And the goal is gonna be to make this claim, as a whole, look really complicated, even though it's really only covering this, this three-line computer program.
[08:16.260 --> 08:17.320]  So how we do that, okay.
[08:17.500 --> 08:26.200]  First of all, I'm gonna say, you know, instead of just saying like, just random variables, I'm gonna give the variable some names.
[08:27.020 --> 08:30.460]  I'm gonna do this in the banking sector context.
[08:30.900 --> 08:33.180]  So, you know, I'm gonna talk about an account.
[08:33.440 --> 08:34.760]  I got to talk about two accounts.
[08:34.920 --> 08:36.360]  So you've got Account 1 and Account 2.
[08:36.760 --> 08:39.640]  And I'm gonna change the, the variable to Exchange.
[08:39.940 --> 08:44.940]  So basically now, this is just a little program about exchanging money from one account to another.
[08:45.080 --> 08:46.060]  Everybody see how That's how that works.
[08:46.540 --> 08:48.520]  This should be pretty straightforward.
[08:48.920 --> 08:54.060]  I'm pretty sure that most of you have done this at some point in your life, if you've exchanged money with somebody.
[09:00.330 --> 09:01.950]  We need to declare our variables.
[09:02.430 --> 09:04.950]  That is kind of how computer programs work.
[09:05.090 --> 09:05.970]  So we need to do that.
[09:07.910 --> 09:16.410]  Let's put in an input-output statement so that we actually receive some data, because you need to know how much money to exchange before you can exchange the money.
[09:16.410 --> 09:21.370]  And I'll throw in a couple print statements just so we know what happened.
[09:22.270 --> 09:29.210]  As you can see, all the things I've added, these are just very conventional things that you would ordinarily do in a computer program just to get the thing to work.
[09:30.010 --> 09:35.290]  Lots of law out there saying that adding these sorts of steps doesn't contribute anything to patentability.
[09:35.910 --> 09:40.790]  And I think all of you would understand that adding a couple of print statements shouldn't make something patentable.
[09:41.590 --> 09:48.750]  So here we've got this computer program, which I've just fleshed out a little bit, but it really is that same program.
[09:48.970 --> 09:54.970]  So starting from here, let's go for writing some real patent language.
[09:55.570 --> 09:56.250]  All right.
[09:56.590 --> 09:59.570]  So we're going to start out with a computer system.
[09:59.770 --> 10:01.250]  We're going to talk about computer system.
[10:01.350 --> 10:03.010]  Computer system, that doesn't sound so complicated.
[10:03.130 --> 10:05.070]  Let's call it a data processing system.
[10:05.970 --> 10:07.350]  Data processing system.
[10:07.490 --> 10:09.010]  What does a data processing system have?
[10:09.010 --> 10:15.510]  Well, it's got a, it's got a keyboard and it's got a keyboard controller, you know, something to receive the data for the keyboard.
[10:15.850 --> 10:20.290]  But a keyboard, that's, that's kind of a conventional term too.
[10:20.530 --> 10:26.070]  Let's call it a communications control on a first party device, because that sounds a little fancier, right?
[10:26.210 --> 10:27.070]  You know, first party device.
[10:27.210 --> 10:29.050]  And now, you know, maybe we're talking about some network stuff.
[10:29.210 --> 10:30.870]  You know, it's how it sounds, it sounds better.
[10:31.890 --> 10:32.330]  Okay.
[10:32.650 --> 10:38.010]  So we've got communications controller, first party device, coupled to said communications controller.
[10:38.910 --> 10:39.350]  Sorry.
[10:39.670 --> 10:41.210]  What else does a computer have?
[10:41.550 --> 10:43.890]  It's got a, it's got a memory, right?
[10:44.070 --> 10:45.830]  But, you know, memory, that's kind of conventional.
[10:45.970 --> 10:47.830]  Let's call it a data storage unit.
[10:48.070 --> 10:49.670]  And it's got a CPU.
[10:50.530 --> 10:52.610]  Instead of calling it a CPU, we'll call it a computer.
[10:52.610 --> 11:03.210]  But we'll also mention, by the way, that the computer is coupled to a said data storage unit and said communication controller, just in case you weren't sure that your CPU was connected to your keyboard, right?
[11:05.490 --> 11:06.170]  All right.
[11:06.510 --> 11:06.930]  All right.
[11:07.070 --> 11:08.810]  So, so now we've got, we've got the...
[11:08.810 --> 11:12.590]  And you know, this is a lot of text just to explain what a computer is, right?
[11:12.790 --> 11:16.330]  So why, why are we spending so much time just explaining what a computer is?
[11:16.430 --> 11:19.630]  Well, it's because we have a number of cases out there.
[11:20.370 --> 11:23.030]  One of which was this case called Bilsky versus Kapos.
[11:23.270 --> 11:35.310]  I'm just quoting something out of the, the patent offices guidelines, which says that recitation of a machine or transformation, either express or inherent, weighs in favor of patent eligibility.
[11:35.710 --> 11:44.610]  So that means that if you're talking about a machine, it sounds a whole lot like a whole lot more like it ought to be patentable than if you just talk about an equation.
[11:45.050 --> 11:50.490]  So the more I make this look like a machine, you know, the better a place I, I seem to be.
[11:50.830 --> 12:00.510]  So as a result, I'm going to spend a lot of time just, you know, explaining, okay, you know, what parts of a computer I have, even though these are all just very generic parts of a computer.
[12:01.350 --> 12:01.930]  All right.
[12:01.930 --> 12:06.350]  So let's move on to what this computer actually does.
[12:06.670 --> 12:08.470]  So you remember we declared our variables.
[12:08.570 --> 12:15.450]  So we'll have a data storage having stored there in a first account balance and a second account balance, right?
[12:15.450 --> 12:17.530]  That reflects the two, the two lines I got there.
[12:18.270 --> 12:22.530]  But, you know, first account balance, second, that makes sense.
[12:22.710 --> 12:23.950]  We can't use words that make sense.
[12:24.130 --> 12:32.970]  So we're going to say information about a first party or information about a first account for a first party and information about a third account for a second party.
[12:33.190 --> 12:35.150]  But, you know, we can flush that even more.
[12:35.310 --> 12:42.610]  We can say that the information about the first account for the first party is independent from a second account maintained from a first exchange institution.
[12:42.610 --> 12:44.870]  And the same thing about the second account.
[12:45.070 --> 12:52.830]  Now, all that says is that the information that I am storing in this computer is also somewhere else.
[12:53.910 --> 12:58.490]  All I said is that this information on the computer, it's also on some other computer.
[12:58.970 --> 13:03.810]  It doesn't add anything to the actual operation of the computer.
[13:04.010 --> 13:06.490]  It doesn't add anything to the complexity of the system.
[13:06.510 --> 13:08.990]  It just says, this is what the data happens to be.
[13:09.610 --> 13:15.610]  There are a lot of Supreme Court cases that say, you know, this stuff doesn't matter, but it makes the thing look really long.
[13:15.810 --> 13:17.030]  So, you know, we like it.
[13:17.950 --> 13:18.630]  All right.
[13:19.050 --> 13:21.050]  What else can we do?
[13:24.870 --> 13:27.570]  So, okay, now we're gonna get this input statement.
[13:27.810 --> 13:35.430]  So you remember I had this computer that was coupled to the data storage unit and said communication controller, because, you know, apparently we didn't know that computers were connected to keyboards.
[13:36.310 --> 13:37.970]  What does this computer do?
[13:39.050 --> 13:45.850]  So, we're gonna spend a lot of time talking about what, talking about, you know, this very simple algorithm.
[13:46.030 --> 13:57.050]  And the reason for that is that there are a couple of cases that are out there that say that if you spend a lot of time explaining an algorithm, that algorithm turns the computer into this special purpose computer.
[13:57.330 --> 14:02.750]  And because it's a special purpose computer, now suddenly the thing is patentable, whereas a general computer is not.
[14:02.750 --> 14:12.130]  So, and, you know, there's one case that was actually decided just last year, that decided that a patent was, you know, perfectly eligible.
[14:12.350 --> 14:21.110]  And the reason for that was that it required many, had a lot of steps in these steps required intricate and complex computer programming.
[14:21.670 --> 14:27.870]  Now, if any of you actually read that patent, I'll give you a little background on this one.
[14:27.870 --> 14:34.170]  This was a patent on the technology of displaying an ad before watching a video online.
[14:35.430 --> 14:40.330]  How many of you think that that requires intricate and complex computer programming?
[14:40.890 --> 14:43.610]  Now, the lights are off, but I'm pretty sure there are no hands up.
[14:45.170 --> 14:48.590]  Yes, lots of problems there, but we're going to try.
[14:48.870 --> 14:54.510]  We're going to try to make this thing look like it requires intricate and complex computer programming.
[14:54.630 --> 14:55.410]  So how are we going to do that?
[14:56.990 --> 15:02.890]  All right, we're going to receive an exchange amount from the keyboard, right?
[15:03.010 --> 15:04.270]  That was the first thing that we did.
[15:04.410 --> 15:06.450]  We, you know, we received some data from the keyboard.
[15:07.350 --> 15:12.630]  Receive an exchange amount, we're going to say, receive a transaction, because transaction, that's kind of a fancy thing, right?
[15:13.830 --> 15:20.150]  And, you know, this part about being from the keyboard, remember, we didn't call it a keyboard, we call it a first party device.
[15:21.030 --> 15:25.270]  And just in case you forget, we're going to receive it via the communications controller.
[15:28.430 --> 15:35.690]  So now we've got the actual steps of comparing the data.
[15:36.510 --> 15:49.510]  And so a simple way of explaining that, which I put up on the screen, is we adjust the accounts based on the transaction, we call it a transaction, so I'll call it a transaction again, if the accounts have sufficient balances.
[15:49.730 --> 15:54.270]  So we're going to do a comparison to see if the accounts have sufficient balances.
[15:54.570 --> 15:57.390]  And then if they do, we're going to adjust the accounts, right?
[15:57.530 --> 16:00.070]  This makes sense, which means that we have to fix it.
[16:01.150 --> 16:11.690]  Instead of saying, instead of saying just adjusting accounts, let's say electronically adjust the first account and the third account, because, you know, instead of just saying accounts, we can list them and that adds more words.
[16:12.970 --> 16:16.910]  Based on the transaction, you know, that's a very simple way of saying things.
[16:17.030 --> 16:23.150]  Let's say, in order to affect an exchange obligation arising from said transaction.
[16:23.410 --> 16:25.110]  You see, I've introduced this new term, right?
[16:25.270 --> 16:26.130]  Exchange obligation.
[16:26.330 --> 16:27.350]  What's an exchange obligation?
[16:27.590 --> 16:29.230]  Well, you have to do the exchange.
[16:29.410 --> 16:30.330]  Well, what's the computer going to do?
[16:30.390 --> 16:31.390]  It's going to do the exchange.
[16:31.570 --> 16:37.290]  So all I've done is really introduced a term that, you know, describes what is happening.
[16:38.450 --> 16:45.290]  Again, you know, it's not any real substance to this, but it does make it seem like there's more going on.
[16:46.350 --> 16:54.110]  And then, oh, and, you know, I'll mention again, that it's between the first party and the second party, simply because I can.
[16:55.390 --> 17:04.710]  And then this part about if the accounts have sufficient balances, that's, you know, again, very simple.
[17:04.990 --> 17:13.610]  So instead, we're going to say, after ensuring that said first party and or said second party have adequate value and said first account and or said third account respectively.
[17:16.770 --> 17:21.310]  Read through that again and you'll notice that all that's really saying is just compare two numbers.
[17:21.950 --> 17:31.870]  But, you know, this sounds like it's a, it's a pretty complicated operation, you know, because of the fact that they say and or there, which, you know, means that you could do it that way or you could compare some other numbers.
[17:32.550 --> 17:43.110]  It sounds like there's more meat to this, but really all we're talking about in, you know, this, this half page of text is comparing two numbers.
[17:43.270 --> 17:45.290]  That's what I've gotten line 40 over there.
[17:45.510 --> 17:53.450]  And then if you, if the comparison succeeds, then we decrement one account and we, we increment the other accounts.
[17:55.170 --> 18:05.950]  And then finally, we've got this, we've got this print statement, which is, you know, we just, we just print a message about the amount that's being exchanged.
[18:06.810 --> 18:11.970]  And so, you know, what I've written over there is just generate a message about the transaction.
[18:13.030 --> 18:17.970]  But instead, you know, you know, this is, this is actually a good audience participation time.
[18:18.130 --> 18:19.810]  Does anybody have a thought for what to say here?
[18:21.670 --> 18:22.650]  You can just yell it out.
[18:24.910 --> 18:31.550]  Come on, just, just make up something, you know, tell me something, tell me something that you would say, to, to make a print statement look fancy.
[18:31.910 --> 18:36.730]  Generate an electronic output, chronicling the details of the transaction.
[18:36.870 --> 18:37.270]  Excellent.
[18:37.890 --> 18:42.010]  Generate an electronic output, chronicling the details of the transaction.
[18:42.530 --> 18:43.350]  In a human readable format.
[18:43.410 --> 18:45.010]  In a human readable format, I like it.
[18:45.090 --> 18:45.590]  Anybody else?
[18:51.250 --> 18:51.830]  Wait, wait.
[18:51.910 --> 18:54.770]  Somebody said electrons, which means we actually got physics into this thing now.
[18:54.930 --> 18:55.110]  All right.
[18:56.550 --> 18:57.610]  All right.
[18:58.350 --> 18:59.150]  All right.
[18:59.430 --> 19:17.410]  The actual thing they put in here is generate an instruction to said first exchange institution and or said second exchange institution to adjust said second account and or said fourth account in accordance with the adjustment of said first account and or said third account,
[19:17.530 --> 19:19.990]  wherein said instruction be an error... I can't do that.
[19:20.890 --> 19:29.830]  Where in said instruction being an irrevocable time invariant obligation based on said first exchange institution and or said second exchange institution.
[19:30.370 --> 19:32.750]  Anybody thought they could come up with that one?
[19:33.590 --> 19:36.370]  This is why they pay the lawyers the big bucks.
[19:38.950 --> 19:44.490]  You know, it actually sounds like there might be something more going on in there, so let's take a look at what's going on exactly.
[19:45.010 --> 19:51.970]  Generate an instruction to said first exchange institution and or said Well, we're just saying where the instruction goes.
[19:53.570 --> 19:59.910]  And if the print statement is read by the right person, that's where it went.
[20:00.110 --> 20:04.530]  So again, that first part, it really just says what the data is used for.
[20:04.610 --> 20:06.310]  It has nothing to do with what the computer is doing.
[20:07.870 --> 20:17.390]  To adjust second account and or said fourth account, that's just talking about what the exchange institution should do when it receives it.
[20:18.250 --> 20:22.210]  This patent claim, it doesn't actually say the exchange institution has to do anything.
[20:22.470 --> 20:24.670]  It just says the instruction has to explain that.
[20:24.890 --> 20:29.530]  And you'll see in the print statement that I have there, it just says, you know, here's an instruction to the institution, do this.
[20:31.110 --> 20:35.210]  And everything that you read in this patent suggests that that's enough.
[20:36.050 --> 20:44.110]  In accordance with the adjustment of said first account and or said third account, well, you know, I just printed out the amount that's exchanged.
[20:45.390 --> 20:47.710]  That's that, that's that.
[20:48.170 --> 20:59.210]  And then this business about wherein said instruction is an irrevocable time invariant obligation placed on said first exchange institution and or said second exchange institution.
[20:59.610 --> 21:04.770]  Now, that sounds a little bit like, you know, there's some sort of database locking going on here.
[21:05.590 --> 21:16.090]  And, you know, if there were some database locking in going on in here, I would actually say that's kind of an interesting thing because, you know, database locking is a very hard thing to do, you know, coordination among, among different threads.
[21:16.210 --> 21:17.390]  That's a pretty complicated thing.
[21:17.610 --> 21:22.590]  And, you know, if they, if they talked about like different methods of, you know, locking databases, that could actually be kind of cool.
[21:23.230 --> 21:26.090]  But you read through the patent application, they don't say a thing about it.
[21:26.150 --> 21:31.250]  They just say, well, you know, people know how to lock databases, so just tell them to.
[21:36.090 --> 21:49.070]  I mean, you know, so, you know, if you're, if you're, if all we're doing is we're just saying, you know, do this, then, you know, if I just say, you know, here's an instruction, and by the way, it happens to be irrevocable and time invariant and time,
[21:49.070 --> 21:54.910]  time invariant, and you happen to obey that, then, you know, the implementation behind that is kind of irrelevant.
[21:55.410 --> 21:59.890]  And as far as the patent An application goes from what I read through it.
[22:00.330 --> 22:03.590]  It doesn't seem to require any special way of doing that.
[22:03.730 --> 22:06.990]  It doesn't seem to require any particular database technology.
[22:07.230 --> 22:16.850]  As far as I can tell, really all they're requiring there is just telling somebody, by the way, this happens to be the way I want it to be.
[22:17.270 --> 22:22.690]  So really, I think that all of this text more or less boils down to just one print statement.
[22:23.090 --> 22:26.870]  But you see just how much stuff I generated out of that.
[22:27.570 --> 22:30.310]  And all of you guys, you came up with all sorts of other things.
[22:30.590 --> 22:34.870]  And that's basically what happens in a lot of these patents.
[22:34.990 --> 22:40.550]  We hear a lot about the patent on scanning, scanning documents to emails.
[22:41.290 --> 22:51.630]  And when you read through the title of the patent application, and if you actually spend a lot of time figuring out what's going on in that one, I did this a couple of months ago.
[22:52.970 --> 22:58.410]  It does turn out that all they really are saying they've invented is scanning something to email.
[22:58.630 --> 23:01.870]  But they don't write a patent claim that says scanning to email.
[23:02.070 --> 23:12.510]  They write some huge behemoth like this, that sounds like you're doing all of this fancy one one-touch automatic processing, all sorts of things.
[23:14.090 --> 23:17.270]  And I think what happens is that it tends to impress a lot of people.
[23:17.530 --> 23:22.390]  But when you actually get down and think about what they're talking about, it really doesn't amount to much.
[23:22.510 --> 23:25.110]  I mean, sorry, I keep hitting the wrong button.
[23:25.830 --> 23:31.130]  Here's the entirety of the patent claims that we just talked about.
[23:31.350 --> 23:33.050]  This is a lot of text.
[23:33.050 --> 23:41.610]  This is a lot of text to explain what is basically this seven-line computer program that really amounts to the three lines I showed you before.
[23:43.010 --> 23:46.350]  And that's basically what you see in a lot of these patents.
[23:47.230 --> 23:56.950]  One of these days, the next time you see one of these patents that somebody is talking about, they're saying this is a silly patent on photography or something, jump back to the end of the document.
[23:57.130 --> 24:02.650]  Take a look at it and just look at how much they've written.
[24:03.550 --> 24:05.790]  You know, you may be able to understand, you may not.
[24:06.090 --> 24:10.490]  There are a lot of fancy words that get thrown around in patent claims.
[24:11.210 --> 24:19.510]  But if you really spend the time to understand it, you'll often find that they are much simpler than, you know, their length would suggest.
[24:20.390 --> 24:25.770]  So, okay, now I get to show you the slide, which I kept accidentally showing you.
[24:25.950 --> 24:28.290]  That thing that I just showed you, that's an actual patent claim.
[24:28.490 --> 24:30.810]  This is the patent that it came from.
[24:31.030 --> 24:33.910]  This is a patent by a guy named Ian Shepherd.
[24:34.090 --> 24:36.930]  It's owned by a company called Alice Corporation.
[24:37.230 --> 24:51.610]  Some of you may have heard the name Alice Corporation, because that is the name of one of the parties to a recent Supreme Court case called Alice versus CLS Bank.
[24:52.850 --> 24:59.530]  Many of you have probably heard about this case as, you know, not completely eliminated, but making it much harder to get software patents.
[24:59.990 --> 25:13.550]  That case decided basically that, you know, all of that fancy text I just showed you, even with all the discussion of computers and everything, really amounted to nothing more than, you know, a basic equation or really just a basic method of, you know,
[25:13.610 --> 25:14.990]  conducting financial transactions.
[25:15.310 --> 25:19.390]  And as a result, it wasn't eligible for being a patent.
[25:20.490 --> 25:27.390]  And, you know, think of how much work it took before the Supreme Court got to that point.
[25:28.030 --> 25:31.250]  You know, you know, Alice filed for this patent application.
[25:31.530 --> 25:32.790]  They, they went to the patent office.
[25:32.930 --> 25:36.350]  They convinced patent examiners that this was a really complicated and interesting thing.
[25:36.550 --> 25:41.930]  They convinced the patent office of this, um, I think six or seven times.
[25:42.370 --> 25:47.870]  They have, they have something like six or seven patents on, on this technology, all of which are, you know, really long and detailed.
[25:48.230 --> 25:51.010]  Um, and all of which more or less talk about the same thing.
[25:51.290 --> 25:59.110]  And then, you know, they, so they get, they get their patents and then they go off and they, um, you know, they start asserting their patents against one of the biggest financial companies in the world.
[25:59.710 --> 26:08.510]  Um, they get involved in, I think, three or four years of patent litigation and they convinced several courts that, you know, this thing is valid.
[26:08.630 --> 26:16.410]  And they convinced, um, five out of 10 judges on the lower appeals court that this thing was valid and that they ought to be able to get a patent on it.
[26:16.630 --> 26:30.870]  And then, you know, So they go to the Supreme Court and I went to the Supreme Court to watch this case being argued and the justices had stacks of the briefs on their desks and the stacks were something like this high, right?
[26:30.930 --> 26:40.150]  This is how much paper was written over it just to explain what was going on in these patents and why was this bad for the economy and people.
[26:42.090 --> 26:51.230]  And only after all that work, did the Supreme Court finally explain, no, this is not actually any super awesome thing.
[26:51.410 --> 26:55.390]  This is just adding numbers to a bank account.
[26:57.310 --> 26:58.730]  This happens all the time.
[26:59.170 --> 27:01.970]  And most of the cases don't get to the Supreme Court.
[27:02.390 --> 27:04.730]  It's unfortunate, but it's the case.
[27:06.650 --> 27:09.010]  Very few... almost none of the cases will get to the Supreme Court.
[27:10.270 --> 27:14.830]  Almost none of the cases cases will get to, you know, even an appeals level.
[27:15.290 --> 27:22.750]  And the cases that get to an appeals level are a tiny fraction of the cases that, you know, are just fought in the trial courts.
[27:22.890 --> 27:32.450]  And the cases that are fought in the trial courts are just a tiny fraction of the demand letters that are sent out to, you know, small companies or, you know, people who are just using technology.
[27:33.850 --> 27:37.150]  So you know, there are a lot of these... there are a lot of these things out there.
[27:38.350 --> 27:42.810]  This is This is a very well-known technique, and a lot of people have been using it.
[27:42.970 --> 27:52.450]  So I guess the question then is, that's the exploit, so what's the bug?
[27:53.990 --> 27:56.190]  And I wrote a little article about this.
[27:56.370 --> 28:06.690]  If any of you are interested in reading works of fiction on how the patent office works, this is probably the only article on this subject.
[28:07.250 --> 28:16.190]  This is a story about the Amazon White Background Photography patent, which I imagine a lot of you have heard of at some point.
[28:16.310 --> 28:29.550]  Basically, this is a patent on a particular way of arranging an object and the camera and the lamps and things so that you get photographs with a nice white background.
[28:30.890 --> 28:37.350]  And a lot of people complain about this, but what I did at some point a couple of weeks ago was, you know, I went through the patent.
[28:37.450 --> 28:42.690]  I went through, you know, again, very long claims and figure out what is going on here.
[28:43.350 --> 28:49.510]  And what happened here is... I'll cite another piece of law here.
[28:51.070 --> 28:55.310]  There's a case that was decided just a couple weeks ago.
[28:56.690 --> 28:59.270]  It was a case about hearing aids.
[28:59.550 --> 29:00.570]  I'll tell you about this case.
[29:00.690 --> 29:01.210]  This is kind of interesting.
[29:01.470 --> 29:03.090]  It's a case about hearing aids.
[29:03.450 --> 29:09.610]  And, you know, the company that had the patent, they said, we've got this patent hearing aid.
[29:10.110 --> 29:11.530]  They're suing all these other people.
[29:11.750 --> 29:16.890]  And one of the other guys says, well, actually, you know, we found this other hearing aid that predates your hearing aid by like five years.
[29:17.130 --> 29:19.170]  So, you know, remember that new non-obvious stuff?
[29:19.350 --> 29:20.130]  Like, you shouldn't get your patent.
[29:21.810 --> 29:23.610]  The patent office agreed with them.
[29:23.790 --> 29:25.130]  The board agreed with them.
[29:25.310 --> 29:28.030]  And actually, you know, even the appeals court agreed with them.
[29:28.470 --> 29:34.690]  But the patent owner, the person who owned the patent on the hearing aid, they had another claim.
[29:35.010 --> 29:39.630]  And this other claim said, oh, yeah, we got the whole hearing aid and it has a plug.
[29:41.870 --> 29:42.570]  Just a plug.
[29:43.150 --> 29:44.430]  Actually, they didn't describe it as a plug.
[29:44.530 --> 29:50.630]  They described it as a multi-pronged electrical connection for transmitting data or something like that.
[29:53.870 --> 29:58.650]  The patent examiner, when they actually saw this thing, they the first time around, they said, that's a plug.
[29:59.130 --> 30:01.330]  You can't add a plug to hearing aid.
[30:01.430 --> 30:02.250]  It's only get a patent on that.
[30:03.550 --> 30:15.630]  And, but then, you know, when it went up through the chain and when it went up to the appeals court, they said, well, you know, the examiners just said that, but the examiner didn't show any evidence of that.
[30:15.750 --> 30:18.630]  The examiner just, you know, said this was out of common sense.
[30:18.810 --> 30:27.050]  And the board cannot accept general conclusions about what is basic knowledge or common sense as a replacement of documentary evidence.
[30:27.270 --> 30:38.490]  So basically what they're saying is, you know, unless you actually have like this piece of paper in front of you that says hearing aids have plugs, you can't just use your common sense to know that you could add a plug to anything.
[30:39.370 --> 30:51.890]  And as a result, you know, their patents stood up, not the part about the hearing aid, but the part about attaching a plug to it because of the fact that, you know, the law requires this sort of very, very stringent evidence.
[30:53.810 --> 30:54.690]  Who are the judges?
[30:54.970 --> 30:55.170]  Yes.
[30:56.190 --> 31:05.990]  Well, I'm not gonna make fun of the judges other than to point you to the recent ethical scandal about Judge Randall Rader, which is probably unrelated to this.
[31:06.730 --> 31:27.730]  One of the issues that we do see just, you know, more generally is there is this very kind of cozy relationship between a lot of the, like among the patent bar and among the patent office, and among a lot of, and among, you know, the, the people who decide these sorts of things.
[31:28.410 --> 31:35.890]  So, you know, you know, I'm gonna jump ahead to this slide.
[31:36.110 --> 31:39.110]  So, you know, you know, this is kind of getting into the, the problem of what can we do?
[31:41.030 --> 31:44.630]  You know, there are a lot of places, there are a lot of opportunities for us to explain what's going on.
[31:44.830 --> 31:48.490]  But the problem is that, you know, who is talking to the patent office right now?
[31:50.610 --> 31:58.570]  How many of you know that on Tuesday, the patent office is holding a public meeting to discuss software patents?
[32:00.770 --> 32:02.810]  I thought I saw a hand somewhere up there.
[32:02.870 --> 32:03.830]  I think I see one hand.
[32:05.070 --> 32:06.330]  Okay, so, so good.
[32:06.430 --> 32:06.990]  There are a couple of people.
[32:07.390 --> 32:08.590]  You should all know this.
[32:08.770 --> 32:12.250]  There is a, there's a public meeting on to discuss software patents.
[32:12.510 --> 32:23.990]  There is currently a rulemaking, there's currently not a rulemaking, but a request for public comments on how to decide what, what patents are eligible, particularly software patents.
[32:24.450 --> 32:27.670]  There are a lot of opportunities actually to give input to the patent office.
[32:28.010 --> 32:35.490]  But the fact of the matter is that, you know, when the patent office provides one of these opportunities, they send it out to the mailing list.
[32:35.690 --> 32:37.670]  And you know, who's subscribing to the mailing list?
[32:37.870 --> 32:38.970]  It's the patent lawyers.
[32:39.210 --> 32:41.910]  So the patent lawyers will all show up to this meeting on Tuesday.
[32:42.310 --> 32:43.090]  Public knowledge.
[32:43.370 --> 32:44.050]  And me.
[32:46.530 --> 32:54.570]  And, and you know, because of the fact that this has become such a big thing, there will actually be a number of people who are working on the patent reform site who will be showing up to this.
[32:54.730 --> 32:55.670]  And I think that's good.
[32:55.870 --> 33:12.150]  But, you know, I think the thing that we really need to show people is that this is a huge community of people who really care about, you know, about technology and about the ability to, and the ability to, you know, create and develop and make new things.
[33:13.610 --> 33:27.290]  There's a sense, I think, among a lot of the people that are, you know, very within the patent system, that, you know, patents are the incentive, patents are un-incentive to create an inventive, to creating inventions.
[33:28.750 --> 33:30.150]  There doesn't seem to be much else.
[33:30.310 --> 33:32.530]  So therefore, patents are the only incentive to create an invention.
[33:32.750 --> 33:38.650]  So therefore, you know, the only thing we should be doing is making patents as strong as possible, because that'll get us the most inventions.
[33:39.010 --> 33:47.090]  Now, I'll bet that a lot of the people in this room have invented something, probably something that is worthy of a patent.
[33:47.690 --> 33:51.410]  And I'll bet that a lot of you have not filed for a patent application on it.
[33:51.630 --> 33:51.970]  Why?
[33:52.150 --> 33:54.550]  Because, you know, we invent things Yes, we invent things for other reasons.
[33:54.810 --> 33:59.790]  We invent things because they're cool, or because it's fun, or because it's useful, or because I wanna show it off to my friends.
[34:00.250 --> 34:15.830]  The whole open-source movement is based on this, the idea that I make things because they're useful and they benefit the world, not because I'm gonna make a lot of money off of them, or because I'm gonna demand that long list of patent rights that you get from having a patent.
[34:16.330 --> 34:18.330]  There are lots of reasons that people make things.
[34:19.130 --> 34:34.490]  Even the for-profit startup community, You know, they build their technology as fast as possible, not because they're hoping that they can take over the market through patent rights, but because they're hoping that by being fast and being agile, they can create a whole new industry,
[34:34.730 --> 34:36.590]  like the next Facebook or the next Twitter.
[34:37.190 --> 34:47.750]  There are lots of incentives out there, but the incentives that get talked about whenever I go to the patent office and whenever I talk to patent attorneys, it's just patents.
[34:48.310 --> 34:52.270]  It's, you know, we need more patents because otherwise we won't have more inventions.
[34:52.670 --> 34:55.810]  And a lot of times that tends to be the message we get.
[34:56.850 --> 35:05.030]  The thing is that the people who will give the real message that's, you know, no, no, no, there are lots of reasons that we make things and sometimes patents get in the way of that.
[35:05.270 --> 35:07.010]  You know, those people are in this room.
[35:07.750 --> 35:14.210]  Those people are the people who often are saying, you know, I really just want to be, I really just want to be making stuff.
[35:15.130 --> 35:21.090]  You have to be telling that to, you know, to some of these, to, you know, the people who are decision makers.
[35:22.190 --> 35:32.210]  You know, I said at the beginning that, that we, that, you know, we should think about the problems of the patent system as kind of security exploits.
[35:32.830 --> 35:39.930]  And one of the places where that analogy breaks down, this is one of my favorite XKCD comics, which I think is tangentially on patents.
[35:40.530 --> 35:52.810]  One of the places where I think that that incentive breaks down is that normally when you report a security of vulnerability, everybody agrees that it's bad and that we should fix it.
[35:52.930 --> 36:01.350]  Now, sometimes there's, like, inertia or sometimes there's a desire for, you know, the company to, to be secret about it or not, like, tell other people that there's security of vulnerability.
[36:01.670 --> 36:06.430]  But, you know, I think everybody agrees that security vulnerabilities are problems that need to be fixed.
[36:06.730 --> 36:22.090]  Um, whereas when you get to, So if you do basically bugs in the legal system that allow for things that are not supposed to happen to happen, you actually have people who are in support of the bugs, because they make a lot of money off of that.
[36:22.610 --> 36:29.470]  So what's going on in this comic, if you can't read it, is this guy, he says, dude, I had this idea like some five years ago and some company is getting rich doing it.
[36:30.070 --> 36:31.050]  I want my cut.
[36:31.310 --> 36:39.930]  And he goes to this website called the Department of Ideas and said, I came up with this idea five years ago, and then, you know, waits a couple of weeks and in the mail, he gets this box of money.
[36:41.830 --> 36:53.690]  What I think has happened is that a lot of people have started looking at the patent system, you know, not as an incentive to actually go out and make stuff, but as kind of a lottery ticket.
[36:54.050 --> 37:02.710]  You know, I file my patent application and maybe five, 10 years down the road, I'll just sit around and wait for other companies to make the same thing.
[37:03.010 --> 37:05.970]  And then I'll just go ask for my box of money.
[37:06.530 --> 37:10.290]  Um, that's not really how the patent system is supposed to work, right?
[37:10.430 --> 37:15.810]  What I said at the beginning was patents are supposed to be exchange information in exchange for monopoly.
[37:16.490 --> 37:26.430]  Um, the information that's being exchanged, you know, with a patent like I just showed you is very minimal, you know, that that that's not anything that any of you didn't know, you know, how to add to numbers.
[37:27.070 --> 37:30.990]  Um, but you know, they're going off trying to try to collect a lot of money.
[37:30.990 --> 37:38.290]  And because of the fact that they make a lot of money off of this, they have very strong incentives to keep the system the way it is.
[37:39.070 --> 37:47.070]  And you know, they, they, so, you know, they're spending a lot of time lobbying the patent office saying, you know, don't change the system.
[37:47.190 --> 37:47.950]  Don't mess with it.
[37:48.070 --> 37:50.170]  Don't, don't like change the incentives or anything.
[37:50.930 --> 38:04.130]  Um, they, they spent a lot of money going to Congress saying, you know, if you, if you mess with the patent system, like all the inventions going to go overseas to China or something, you know, they, they, they spent a lot of We spent a lot of time talking about this,
[38:04.310 --> 38:23.130]  and for many years, they were really the only voice talking about this, especially on Capitol Hill and within the government, but recently I think some of the other people, including some of the smaller technology companies, some of the mobile app developers I've seen,
[38:23.570 --> 38:35.150]  a lot of the non-technology companies, a lot of restaurants, have been showing up in Congress saying, no, no, actually, these patents, they're actually not helping the economy, particularly in our areas.
[38:36.050 --> 38:57.290]  And so I think what we need to do, if we really want to fix this, I can give you the specifics on where's the right place to comment on, or where's the right place to submit filings, or where's the right place to write about this, but really it requires that we all be active in pointing out how important technology is to us,
[38:57.570 --> 39:06.170]  and how important it is that we don't have patents that are getting in the way of, you know, real invention and real innovation.
[39:06.590 --> 39:10.330]  So, you know, I think, I'll wrap up my talk because I see there's one question.
[39:10.690 --> 39:10.830]  Yeah?
[39:12.390 --> 39:23.850]  So, from the very, from the very meaning of the letter, of the word patent, you know, transparent, the original purpose of patents was to prevent knowledge loss through trade secrets.
[39:24.010 --> 39:24.210]  Yes.
[39:24.430 --> 39:29.910]  So, in exchange for, you tell us how you did this, and we'll give you the, when was this loss?
[39:29.910 --> 39:32.790]  The reason completely being lost in the, in the debate.
[39:32.990 --> 39:33.190]  Yeah.
[39:33.610 --> 39:38.510]  Um, so that's, so that still is, I mean, it still is there.
[39:39.090 --> 39:53.430]  Um, but the thing is that there are a lot of people, you know, especially the ones who just have the patents right now, um, who, who want to say, well, you know, patents are kind of like a property right, so, you know, I've got them, and I really don't want anybody to be,
[39:53.430 --> 39:54.270]  to be touching them.
[39:54.790 --> 40:03.210]  Um, and you end up with this debate that ends up being very much over, like, economics, and, you know, like, property rights and all these things.
[40:03.390 --> 40:14.810]  And they forget really about those basic principles, that patents are supposed to be a way of encouraging innovation and getting people to discuss their secrets and talk about how things work and not hide them.
[40:14.910 --> 40:16.210]  But they're not about encouraging innovation.
[40:16.410 --> 40:16.490]  Yeah.
[40:18.750 --> 40:25.690]  They're about getting, yeah, they're about getting, they're about getting Coca-Cola to, you know, give up the secret formula.
[40:27.770 --> 40:35.210]  Isn't it, isn't it the examiners who have really lost the, the program there and not, not the people who are applying for the patents?
[40:35.490 --> 40:46.810]  Like, shouldn't a patent examiner take a look at, at an application and be like, okay, it's not good enough to say, oh, this application is, you know, I'm trying to protect something I invented.
[40:46.970 --> 40:47.870]  That's not what it's for.
[40:47.970 --> 40:48.770]  It's like you just said.
[40:49.250 --> 40:52.090]  Why isn't the patent examiner evaluating it on that basis?
[40:52.090 --> 40:52.690]  Yeah.
[40:53.010 --> 41:05.430]  So, um, the idea is that the, you know, those, those protections I said at the beginning, the, the new, non-obvious, that, that sort of stuff, those are supposed to be the implementation of it.
[41:05.950 --> 41:09.750]  Um, that, that really gets to kind of the question of, you know, what's a good quality patent?
[41:10.110 --> 41:20.250]  Um, and that's a discussion that is starting to be heard in Congress, um, about, you know, what kinds of patents do we really want to be protecting?
[41:20.250 --> 41:22.570]  You know, do we want to be protecting all of these patents?
[41:22.890 --> 41:27.570]  Do we want a patent system that's just, you know, you file an idea, if the idea happens to be new, then you get a patent?
[41:27.890 --> 41:31.650]  Or do we want somebody to actually have to show that, no, you know, this was actually a really useful thing?
[41:32.770 --> 41:43.630]  Um, and that, so, so, you know, I think that the more that people are saying, look, you know, we're trying, what we really want is for people to be disclosing trade secrets.
[41:44.690 --> 41:51.430]  And, you know, a lot, you know, the idea that patents are just kind of this God-given right, um, you know, really doesn't make any sense.
[41:51.610 --> 41:54.550]  I think that's, that's a message that people need to be hearing more.
[41:54.850 --> 41:58.150]  Um, I can't see who's holding their hands up, so can we get the lights on?
[41:58.150 --> 41:58.190]  Can we get the lights on?
[41:58.370 --> 42:00.850]  For the question, if we're done with the slides, if we really like...
[42:00.850 --> 42:01.550]  Um, yeah.
[42:01.750 --> 42:02.470]  Is there a microphone?
[42:05.390 --> 42:06.270]  Is there a microphone?
[42:06.750 --> 42:06.830]  Yeah.
[42:07.610 --> 42:07.930]  Hey.
[42:08.390 --> 42:09.550]  So, I just had one question.
[42:09.870 --> 42:09.970]  Yeah.
[42:10.050 --> 42:14.730]  Where do you think, you mentioned earlier that these companies that are patent trolls, if you will, they don't actually produce anything?
[42:14.950 --> 42:15.090]  Mm-hmm.
[42:15.350 --> 42:18.890]  Whereas, like, Alice Corp, do they, they, did they provide the software for somebody?
[42:19.370 --> 42:26.690]  And if not, where did the disconnect come where someone's available to, to create a program or, or create a product that they don't actually make?
[42:27.210 --> 42:28.970]  And then try to get that as a patent.
[42:29.090 --> 42:29.970]  Where do they, is that historical?
[42:30.130 --> 42:30.670]  Is that always happening?
[42:30.770 --> 42:30.850]  Yeah.
[42:30.950 --> 42:32.750]  Or is that a disconnect that's pretty new?
[42:32.970 --> 42:47.010]  Um, so, you know, the, the question of whether or not you, you have an obligation to, um, actually make the thing that you have a patent on, um, kind of the, the conventional wisdom is that, no, there's never been any requirement, you know, you can, you can always have patents without,
[42:47.010 --> 42:47.570]  without that.
[42:47.790 --> 42:55.330]  There are some academics who are kind of challenging that position, saying, you know, no, actually there were, there was some law back in the day that said you actually had to make something.
[42:55.850 --> 43:12.270]  Um, really the problem is not so much that, um, it's not so much per se the fact that the company's not making anything, as if you're not making anything, your incentives are really weird when it comes to, um, when it comes to certain your patents.
[43:12.430 --> 43:15.090]  You know, if you don't make anything, you're not worried about being sued back.
[43:15.370 --> 43:22.190]  So you're gonna do, like all sorts of crazy things in the litigation because you're not really worried about your reputation, um.
[43:22.270 --> 43:29.770]  So as a result, you know, you'll make the cost skyrocketed and you'll make, you'll bring in like a thousand claims into your lawsuit and you'll, you'll do all sorts of things.
[43:30.930 --> 43:39.610]  And that's really what happens when we start looking at the activity of, you know, these so-called patent trolls or non-practicing entities.
[43:41.030 --> 43:43.870]  You know, the problem is not the fact that they don't make anything.
[43:44.090 --> 43:50.750]  The problem is the fact that, you know, because they don't make anything, and, you know, keep in mind, because of that fact, operating companies can do the same things, right?
[43:51.630 --> 44:00.910]  They end up engaging in all sorts of really, you know, really silly, pointless litigation abuse that, you know, doesn't really help anybody.
[44:01.550 --> 44:01.870]  All right?
[44:03.250 --> 44:10.570]  So, maybe it's a made-up stat, but I heard somewhere 30% of new patents can be shown to basically already exist as patents.
[44:10.710 --> 44:10.850]  Yeah.
[44:11.350 --> 44:18.950]  And that seems like the major bug in the system, both to take advantage and to sort of show the ridiculousness of the system.
[44:18.950 --> 44:21.410]  So, you know, are people doing that?
[44:21.510 --> 44:32.830]  You basically just look through all the patents, refile all of them with your language, get, you know, a third of them approved, and then countersue the company suing you with the same patent.
[44:33.090 --> 44:46.150]  So, I would be surprised if anybody is actually engaged in, you know, looking through old patents and trying to refile them, because discovery is a very intrusive process.
[44:46.150 --> 44:50.010]  And, you know, if one document slips out that you did that, you would be in big trouble.
[44:50.410 --> 44:56.370]  That being said, there's no requirement to do a search before you file a patent application.
[44:56.810 --> 45:02.010]  So, you know, if you just think that nobody's done this, you know, you'll file a patent application on it.
[45:02.170 --> 45:04.290]  And you probably have no idea that somebody did it.
[45:04.530 --> 45:09.710]  And, you know, the real issue is, you know, you may have two patent applications.
[45:09.710 --> 45:11.490]  You know, I actually just saw this the other day.
[45:13.210 --> 45:20.590]  You may have two patent applications that really cover the same subject matter, but you saw all the words you can put in them, right?
[45:20.950 --> 45:28.630]  There's so much variation in language, it becomes really, really hard to figure out exactly what's going on.
[45:28.770 --> 45:36.410]  And to make the assessment of, you know, this is what they're really talking about once I figure out, what all the complicated language is.
[45:36.550 --> 45:38.350]  And now I can actually do a real search.
[45:39.370 --> 45:43.110]  Part of this problem is that examiners have very, very little time to do their examination.
[45:43.610 --> 45:47.190]  Part of the problem is the hearing aid case problem.
[45:47.430 --> 45:51.590]  That, you know, you've got to find paper documentation of all the words, right?
[45:51.910 --> 45:54.730]  Even if the words are kind of meaningless or if they're just common sense.
[45:55.830 --> 46:05.750]  So, you know, those sorts of aspects make it really hard to get around this problem of, you know, you could have two patents basically on the same thing, but they look just different enough.
[46:05.870 --> 46:08.510]  That's really, really hard to make the argument that they're rejectable.
[46:08.710 --> 46:19.270]  Do you know of a case where two companies sort of countersuit each other with the same patent, or maybe there was a single company that got sued by two companies, you know, for very similar patents?
[46:20.350 --> 46:34.830]  So off the top of my head, I can't think of any, but what happens a lot, what used to happen a lot, the law changed so that this doesn't happen anymore, but you could have two people who file patent applications near the same time, and they would get into what's called an interference proceeding,
[46:35.050 --> 46:37.190]  in which they're trying to decide who came up with it first.
[46:38.570 --> 46:43.250]  But, of course, that depends on the examiner realizing that these two things are the same thing.
[46:44.750 --> 46:57.570]  Usually, the way that that comes up is that one of the attorneys finds out that this other company filed a patent application on the same subject matter, and the attorney will basically tell the examiner, by the way, I think that there's an interference here.
[46:57.570 --> 47:06.910]  So, you know, most of the time, when, you know, that sort of very clear duplicativeness comes up, it's because one of the attorneys noticed it.
[47:12.730 --> 47:20.130]  If you had the power to completely redesign the patent system from scratch, what would your ideal patent system look like?
[47:23.850 --> 47:24.650]  Oh, wow.
[47:24.910 --> 47:28.610]  That's a long question.
[47:32.970 --> 47:34.510]  There's a very clever quote.
[47:34.550 --> 47:35.770]  I did hear somebody say, no patents.
[47:36.410 --> 47:50.330]  There's a very clever quote from, I forget who said this, that, you know, if we had to decide from scratch whether to have a patent system, we would say no, but if we had to decide whether to have a patent system since we have a patent system, then we would say yes.
[47:50.550 --> 47:51.910]  Basically, we have it because we have it.
[47:53.310 --> 48:05.950]  You know, I think the one thing that would really help, that I can explain very quickly, is to make the proceeding more two-sided, right?
[48:06.070 --> 48:11.430]  Right now, the way it works is that you have an application, you go in there, you know, it's the examiner.
[48:11.430 --> 48:13.810]  The examiner is often just like a recent college graduate.
[48:14.370 --> 48:20.010]  And then, you know, 30-year patent attorney veteran, you know, facing off.
[48:21.530 --> 48:24.770]  You know, it's not a particularly easy fight for the examiners.
[48:24.810 --> 48:27.070]  The examiners have a really hard time dealing with that sort of thing.
[48:27.730 --> 48:29.490]  And I mean, you and I would too.
[48:29.930 --> 48:35.010]  So, you know, getting more public involvement in there would, I think, be a really big step.
[48:35.010 --> 48:37.170]  The patent office has already started doing this.
[48:37.350 --> 48:39.370]  There's a new program called...
[48:41.430 --> 48:42.750]  Why can I not remember what it's called?
[48:43.910 --> 48:56.750]  It's a third-party submission, third-party submissions in which, you know, members of the public can send information to the examiners saying, hey, examiner, here's some, you know, here's some prior art that you should read.
[48:57.090 --> 49:07.690]  And I think that more use of that program, kind of more formalization of it, and development of business models around that program, I think, are real potential opportunities for dealing with that.
[49:08.530 --> 49:08.690]  All right.
[49:09.050 --> 49:09.450]  Next.
[49:11.050 --> 49:13.170]  Hey, I'm from Freeside, Atlanta.
[49:13.430 --> 49:15.750]  But I work with medical research during my day job.
[49:15.950 --> 49:16.150]  Uh-huh.
[49:16.150 --> 49:16.170]  Yeah.
[49:16.250 --> 49:21.990]  And I found that with the patent system, I know that that is where a lot of startups and a lot of money comes from.
[49:22.070 --> 49:35.010]  But the problem is that with some of the ideas we have, we're not necessarily able to get things moving forward because that whole patenting monetary thing now becomes a roadblock, like where nobody wants to move forward or invest time or money unless they know that there's going to be a patent down the road.
[49:35.170 --> 49:40.310]  Do you have, do you have any advice for people who are trying to make hopefully cheaper medical solutions?
[49:40.650 --> 49:41.050]  Yeah.
[49:41.330 --> 49:58.450]  It's a, so particularly when it comes to, you know, like the medical, the medical pharmaceutical device field, or medical device and pharmaceutical fields, a lot of the investors do kind of expect, you know, some sort of patent filings in there because they know that the regulatory path,
[49:58.710 --> 50:01.350]  you know, you have to get FDA approval and all sorts of other things.
[50:01.610 --> 50:11.250]  They know that that amount of time is going to cost a lot of, you know, potential lead time for the product and so they think patents are a good way of dealing with that.
[50:11.930 --> 50:16.890]  This is one of the reasons that, you know, patents are actually useful, right?
[50:16.990 --> 50:18.330]  The fact that they provide that lead time.
[50:19.310 --> 50:23.470]  But it's difficult for a lot of smaller companies to achieve that funding.
[50:23.470 --> 50:28.770]  The patent office has developed programs to reduce the cost of doing these things.
[50:28.950 --> 50:33.070]  So they have these things called like provisional applications and they have lower filing fees.
[50:33.410 --> 50:38.990]  Those are intended to try to help out some of the smaller companies where it's really useful.
[50:39.090 --> 50:41.370]  And I think that they're looking at other similar programs.
[50:41.690 --> 50:42.170]  Thank you.
[50:42.690 --> 50:42.930]  Yep.
[50:44.890 --> 50:52.870]  You talked about that, like, there's obviously companies that profit a lot over the bad situation of the patent system.
[50:52.870 --> 50:56.510]  And they try to defend the bugs in the system.
[50:56.710 --> 51:00.250]  But also there, I mean, there's also companies that are losing out.
[51:00.450 --> 51:06.970]  Like, I don't know how credible it is, like, the big tech company, like, anti-patent efforts.
[51:07.870 --> 51:13.950]  And they probably wouldn't like to, would like to, I don't know, they'd probably like the patent system to be better.
[51:15.570 --> 51:27.070]  Is there a way to, like, encourage these big companies that are on the losing side to take a more proactive effort rather than just, like, settle individually or something like that?
[51:27.210 --> 51:27.430]  Yeah.
[51:28.470 --> 51:34.670]  So there are a lot of big companies that are very active, more so on the legislative front.
[51:36.130 --> 51:41.130]  You know, I think that, so, Newegg is famous for being the one company that won't, they never settle.
[51:41.330 --> 51:42.470]  They will fight every case.
[51:42.550 --> 51:43.950]  And so far they've been successful in every case.
[51:44.430 --> 51:49.210]  But, you know, litigation costs, like, five million dollars per case.
[51:49.370 --> 51:49.970]  So it's really expensive.
[51:50.170 --> 52:00.410]  So a lot of them have turned to lobbying efforts and to talking to legislators as their preferred vehicle for trying to fix some of these problems.
[52:01.970 --> 52:08.870]  And, you know, in terms of that process, to a certain extent, you know, you don't even have to go to the companies to get them to help out.
[52:08.950 --> 52:10.030]  You can do it yourself, right?
[52:10.050 --> 52:12.570]  You can call your senator and tell them, like, I want to support this.
[52:13.510 --> 52:18.110]  Just as a little background, there was a big patent reform bill that was moving a couple months ago.
[52:18.470 --> 52:24.090]  That got killed off because of certain lobbying efforts from, like, other lobbies.
[52:24.450 --> 52:27.090]  It'll probably come up again, so keep an eye out for that.
[52:27.090 --> 52:32.010]  And when that comes up, that would definitely be a good place to play a role.
[52:32.870 --> 52:33.330]  All right?
[52:34.110 --> 52:34.510]  All right.
[52:34.530 --> 52:36.250]  We got one minute, so I'm going to try to do this last time.
[52:36.570 --> 52:41.430]  I'm just wondering how often, like, the claims, like the ones in that Alice Court patent get through.
[52:41.550 --> 52:47.410]  Is this sort of just the, sort of like, well, there's some examiners who aren't quite up on their game and the language is really complicated?
[52:47.410 --> 52:50.710]  Or is this kind of more the rule than the exception, if you have an idea about that?
[52:52.610 --> 52:54.210]  So I have seen a lot of them.
[52:55.710 --> 53:02.690]  I can't give you any, like, quantitative... I can't give you numbers, but I will say that this is a thing that a lot of people will do.
[53:03.190 --> 53:08.910]  Just, you know, putting in a lot of language to try to make it look, you know, really, really impressive.
[53:09.590 --> 53:11.710]  And a lot of it is just mandated by the law, right?
[53:11.810 --> 53:13.910]  It's not... this isn't like an examiner problem.
[53:14.070 --> 53:17.670]  Like, this is because the law says you have to have this, and you have to have this, and you have to have this.
[53:17.750 --> 53:20.670]  And the more stuff you put in, the more you're going to look like you comply with the law.
[53:21.270 --> 53:27.350]  So a lot of times, you know, that's really the driving factor behind, you know, all of this, all of this kind of verbosity.
[53:28.350 --> 53:33.650]  All right, I think we're out of time, but I'm going to be downstairs, so I'm happy to talk with you more.
[53:33.810 --> 53:35.250]  But thanks for being a great audience.