Two IPs In A Pod
Brilliant inventions, fresh product designs, iconic brand names and artistic creativity are not only the building blocks of successful business - they deliver a better world for us all. But these valuable forms of intellectual property must be protected in order to flourish. We are the Chartered Institute of Patent Attorneys - the UK's largest intellectual property organisation. Our hosts Lee Davies and Gwilym Roberts chat with entrepreneurs, creatives, patent attorneys and the occasional judge about how patents, trade marks, designs and copyright can improve our lives and solve problems for humanity.
Two IPs In A Pod
with David Kappos
In this episode of Two IPs in a Pod, hosts Lee and Gwilym sit down with David Kappos, former Director of the USPTO and a key figure in IP law. They dive into his fascinating career, from his work at IBM to his time in the Obama administration, exploring pivotal moments and key insights. The conversation also touches on the future of IP law in the US, the challenges ahead, and some stories about the most famous people they’ve all met along the way.
Hey, gwilym, you know you're not a great James Bond fan, are you?
Speaker 2:I know a little James Bond more.
Speaker 1:Have you watched Never Say Never, whatever it is Something like that, isn't it?
Speaker 2:Never Say, never Again. Never Say, never Again. Remake unlicensed remake of Thunderball.
Speaker 1:Yeah. So the podcast gets a bit like that, doesn't it? Because we said on the last podcast that that would be our last one for the season, and then we get a big hitter come along and we think, no, we've got to get one more in this season.
Speaker 2:We have, I think, three times now said this is the last one in the series, this is the last one in the series and we are ending on a high, of course, which we're going to come to.
Speaker 2:Yeah, so that's actually a bit of interesting James Bond knowledge. By the way, never Say Never Again. Sean Connery was a remake of Thunderball, because they had a bit of a. Ian Fleming had an issue with the film rights versus the book rights and the film was a bit odd and it wasn't very well scripted. So they actually brought Dick Clements and Ian Lafrenan.
Speaker 1:Oh, that's Army.
Speaker 2:No Porridge, porridge. Oh, they're the um, that's army, no porridge. So so they actually reuse a joke from a ronnie barker joke from.
Speaker 1:Porridge is reused in never say never again so we know our guest is on this podcast and poor davis sat there thinking what on earth are they talking about?
Speaker 2:yeah, well, it's a very obscure british but brilliant british comedy. But the writers? There's a scene in never say never again where um sean connery has to go and visit a doctor and the doctor says I need you to fill this sample and sean connery says what from here? And that's actually a joke from porridge. So there you go. Fact of the day.
Speaker 1:So I do know my james bond oh yeah, I'm so glad I said that. I just wanted to get some kind of reference into never saying never again about it being the last one on the podcast. I didn't, I didn't actually know that you were a true james bond buff, so um another time and and only in the series, we are doing more podcasts yes, it's just the last one of the series for the summer, um, and then we're gonna have a little break for a few weeks, aren't we?
Speaker 1:and then we'll start again in um in the autumn. So shall we get our guest? Would that be a good place to go next?
Speaker 2:Lee Davis and Gwilym Roberts are the two IPs in the pod and you are listening to a podcast on intellectual property brought to you by the Chartered Institute of Patent.
Speaker 1:Attorney. So really excited, gwilym, aren't we? We've been looking forward to this one for a long time. We have Dave Kapos with us, former head of the USPTO. And, dave, I know your legend goes before you, but do you want to give yourself a little introduction?
Speaker 3:Yeah, surely. And great to hear about the James Bond lore. That's, of course, a super famous movie franchise that we love over here in the US as well, and I enjoy watching those films. So now I'm going to have to go back Guilhem and rewatch Never Say Never Again. I think I was involved in the deal here a few years ago where the catalog that catalog was included in the film assets. If I'm remembering correctly that it was one of our deals here, super famous anyway. So, yeah, great to join you guys, lee and Guilhem, and to be with the CIPA folks Great organization.
Speaker 3:As Guilhem knows, I've had some history with it. Going back, I'm Dave Kapos, as Lee said, former director of the USPTO during the Obama administration. Before that I was a chief IP lawyer at IBM, where we had and IBM still has a nice operation there in Hursley, where we had, and IBM still has a nice operation there in Hursley. And since then I've been now 11, going on 12 years. I've been a partner here at Cravath in New York City. As you can see, that is actually New York City behind me on this Thursday morning in the heat of the summer, august 1st, and it's a pleasure to join you I'd say it's really, it's really great to have you on.
Speaker 1:Thank you so much for um for for joining us. So where, where do you want to start? Have you got? Have you got like a really pressing question for?
Speaker 2:dave, I'm a big fan of starting at the beginning. So, dave, obviously you came out. I think it's through ibm and prior to the us commissioner role. That's right, isn't it? Yeah? Yeah so just talking about talking through what you did there and what you're up to, because I think you know that's, that's a pretty impressive stuff.
Speaker 3:Yeah, I'm sorry I missed that. William the um here at cravath. Or what I'm doing you know generally outside of the IBM story.
Speaker 2:So what we were up to there.
Speaker 3:Oh yeah, well, you know at the time. I mean, things have changed a lot, of course, but IBM was perennially the chief patent holder spend of several hundred million dollars a year at several hundred people all across the globe, and and the licensing works. I mean it's great. You know, I obviously can't speak to IBM now, but I could say when I worked there it was absolutely a great company. I could have spent the rest of my career there had it not been for, you know, the being asked to go and serve in the administration and the one other thing we should come back to this.
Speaker 3:You know IBM in those days was making key innovations in what we now know to be generative AI. We didn't call it that then, you know, but when the IBM Deep Blue computer beat the Jeopardy champion, that was a closed generative AI system that did it. So the company researched in that area and I think still does, for generations breaking barriers and what we now are seeing unfold before us, that quantum computing comes to mind as well, that we're starting to see explode on the scene, and maybe we'll get to talk about that during the podcast.
Speaker 2:I actually read that Louis Gerstner was CEO there at one point and he's written quite a good book about how he handled IBM, because IBM ran everything in the 50s, 60s, 70s, 80s. It had a bit of a jitter and he came along and kind of worked out where it should be and I think it's an amazing story yeah, lou was.
Speaker 3:he was the ceo and my boss, um, when I sort of was coming up through the ranks at ibm and the book he wrote I think was called um, making elephants dance, something like that, and I've read it.
Speaker 3:It is a great book about a, you know, a terrific, authentic turnaround. The company you know it's publicized in the book, I think was, you know, within weeks of literally not being able to make payroll, literally running out of cash. This is a company with a half a million employees, right, and Lou came in and, you know, in the space of his tenure as CEO, totally turned the place around. And then Sam Palmisano, who was my boss when I was the chief IP lawyer there and is still a good friend and collaborator I now sit on the board of his nonprofit, the Center for Global Enterprise was, you know, again, a fantastic leader who had the foresight and the courage to see things coming like the commoditization of PCs and hard drive storage and retail store solutions, and so did the increasing importance and prevalence of services in the IT industry. And so it was Sam who orchestrated really important M&A deals that reshaped the company and enabled it to stay very profitable for another 15, 20 years.
Speaker 2:Actually, we'll move on from IBM in a sec, but having read that book I'm way more interested than I was previously. It's a little long. Actually, we'll move on from IBM in a sec, but having read that book I'm way more interested than I was previously. Lee, it's a brilliant book on strategy actually. It really is interesting what he did and I'm a big science fiction fan. If you can read any science fiction book in the 60s about a future dystopia, they always find a dusty computer or it's a printer roll with IBM printed on it and you realize just how absolutely prevalent it was in every area of life. At one point it's incredible because they're a powerhouse now as well, as you say, moving into new areas yeah, remember the um uh, space odyssey movie, right uh, but how was IBM?
Speaker 3:each letter shifted by one, right? Yeah, I've heard that Love it.
Speaker 2:And then I mean just the history, because you've got an interesting story. As you say, you moved to the government side. Was that you reaching out or was it you reached out to? How did that happen? Where did you move? What were the moves?
Speaker 3:No, that was definitely all incoming. I had no ambitions or really interest in leaving. I had the I thought you know the best job in the world chief IP lawyer of the biggest IP holder, so I had no interest in leaving. I was called at the beginning of the Obama administration because I was known, you know, as the chief IP lawyer spending a lot of time in DC. I've gotten to know, you know important members of Congress and staff, and so they called me at the beginning of the administration and said you know, we think the USPTO is in trouble and would you come and see if you can help fix it?
Speaker 2:I mean, you were the talk of the town. I remember it really well, and then we'll see the turnaround. I don't know if it was a turnaround, but the work you did was amazing. But was it? Did you jump at it? Did you jump at it? Did you think maybe not? What was your thought process when this came in at it? Did you jump at it? Did?
Speaker 3:you think, maybe not what. How did you, what was your thought process when this came in? Well, why so? What I said was look, um, uh, let me go talk to my wife. Uh, that was actually exactly what I said, because I wasn't gonna, you know, even think about something like that without, uh, my wife, um, you know, agreeing to to, you know, because, right, the spouse is along for the journey, as rough as it can get, and my wife was very supportive and so, right, I was able to then go forward with the job.
Speaker 2:And I mean Lee and I can have a fanboy moment here, but I guess you met a couple of presidents over your time as a result of that role.
Speaker 3:You've met a couple of presidents over your time as a result of that role. Yeah, I got to know President Obama fairly well. There were some weeks I'm looking at pictures of us up here on my office some weeks when I was spending so much time at the White House. It's very disruptive to go there because you know you got to go through security to get in. It takes time. You got to leave your devices so I'd always bring hard copy paper with me, so I have something to do. Then you're perennially waiting for your meeting with the president and whatever or other you know members of the vice president.
Speaker 3:I did some work with Joe Biden, now President Biden, when he was vice president. He was very good in those days and really could run a room of CEOs. That was what I was involved with him on some entertainment industry work. But yeah, so I got to spend a fair amount of time with President Obama, spent some time again with Joe Biden, then vice president, even before that with President clinton, so I've gotten to know a few of them, at least in passing that's quite cool, can?
Speaker 1:I can. I just segue and do a little kind of. I know we don't do politics on the podcast, but um so, um. So tell me if I'm going down the wrong street with this one and we can always cut it out. But dave, um. So the the way, the way the system works in the states, with the head of the uspto being largely a political appointment, is obviously very different to the way it works in the UK, where we have a career civil service and civil service is very disconnected from party politics. How, in your experience, how does the manner of the likes of USPTO director appointments frame IP policy in the States of USPTO director appointments frame IP policy in the States.
Speaker 3:Well, it is indeed a policy job here in the US and it's what's called a past job, presidentially appointed, Senate confirmed. So it's one of about a thousand or so roles in the government that require the appointment by the president of the United States and Senate confirmation. So it's a political job. You serve at the will and whim of the president. You can be dismissed on any given day for any reason or no reason, you know, by the president. And the role is, you know it's a kind of a two-hatted role.
Speaker 3:One is to make the trains run, examine and issue patents and trademarks, and then the other hat manager budget of now. You know at the time it was around $3 billion, Now it's around $5 billion, I think maybe four and change and, but you know, at the time was around 10,000 employees, I think it may be around 13,000 now. That's one side. And then the other side is the policy hat advising, as is in the law, right, advising the Secretary of Commerce and the President, through the Secretary of Commerce, on intellectual property policy issues, patent, trademark, trade secret, copyright. So in that role, you know you're constantly jousting and jostling in the administration, you know, with other agency heads and the White House, and you know, OSTP, Office of Science, Technology Policy, OMB, Office of Management and Budget, on and on and on, in order to advance intellectual property-related policies.
Speaker 2:So just before we move on from that, I was going to say, I mean, yeah, lee and I we've met a few presidents ourselves, obviously, but strictly speaking, presidents of the Chartered Institute of Patent Determinants. Even so, some pretty high-powered players.
Speaker 1:Including, of course, roger Berto David DeWitt. In fact, you very kindly came to visit SEPA. I think in the it was probably the last few months of your tenure at the USPTO when, back in the days when Roger was vice president at SEPA, yes, yeah, and since I remember having a meeting with the CIPA folks.
Speaker 2:So I think we live with the president. No, they won't have me. They won't have me. I'd have him tomorrow.
Speaker 1:Dave, no, they won't have me. They won't have me.
Speaker 2:I'd have him tomorrow, dave, but he won't have me. Thank you, that's very kindly so. Yeah, lee, and I have obviously met a lot of presidents. I was going to say this before I close, lee, but I'm not going to because I don't think we're going to win. So, dave, you've mentioned Clinton, obama, biden. Who's your?
Speaker 3:favorite president of those three? No, that would be a. It's like asking someone you know which is your favorite of your kids All three super amazing and can really run a room. The thing that's the most amazing about these folks all of them, I found is when you're in a room with them.
Speaker 3:there could be a hundred other people there and you feel like you are the most important person in the world, suddenly Like how did this happen, I thought I was like an intelligent, you know person who could reason perfectly and not like suddenly feeling like a Beatles fan in the 1960s or something that is amazing.
Speaker 2:And yeah, so we're not the only fanboys. It's not all that. And then I obviously then on to Cravath. We talked to Lisa Jorgensen quite recently actually, obviously at Wide Bay, you'll know her well. She has also done the Holy Trinity of in-house private practice and institutional Cravath was presumably another kind of adventure in a different direction, going into private practice.
Speaker 3:Yeah, yeah, very much. So you know it's serving a lot of clients, not one client. The in-house role has, you know, I always loved it because you get to really know the client well, the business people, the strategy, the legal issues, the business people, the strategy, the legal issues. In a law firm role, you know, you're getting to know, as best you can, lots of different clients. And here, you know this is, we're in the M&A world, so we're doing big ticket deals right In many industries entertainment mentioned before, biopharma, travel and transportation materials, products like that as well as big ticket litigation. So, yeah, it's a very different environment. It's a place where you know people don't come to you, to a place like Cravath with their normal legal issues. They either handle those in-house or they get other lawyers to handle them. They come to Cravath with their most pressing sort of business issues. So you get used to everything you know feeling like a high wire act.
Speaker 2:That still sounds exciting, if stressful by the sound of it. Yeah, I'm still smiling. So we were actually originally planning to try and catch up with you when Lee and I were over at Pinter in Atlanta. I think I did actually bump into you at the GLIPA conference in fact. So we did kind of cross paths, but at the time we were obviously talking to a lot of American players, as it were, but we didn't ever actually get into a little overview of the state of the nation in terms of, in particular, the patent side of things in the US, any kind of big headlines that you think are worth mentioning about how things are going over there right now.
Speaker 3:Yeah, sure, and I, for your audience, I have to first say yeah, we were on literally the Atlanta Braves football field, right in the giant indoor stadium, and they had the goalposts set up and they had football set up, with like attendance for people to try to kick a field goal from 20 yards out or something like that, and if I remember right, greenlandilym punched one through the upright.
Speaker 2:I wish. I'm not sure I did.
Speaker 1:You didn't tell me this, Gwilym.
Speaker 2:I'm not sure I've ever got a ball between two posts in my life, but if people remember that then I'll accept it.
Speaker 3:That's the way I remember it. So anyway, say to the US patent system you know, I wish I could say that it was strong and healthy, but it's kind of not in many ways, and you can see that just by reviewing very briefly the legislation that's pending to try and fix it. So just the other day a new bill was introduced in Congress called the Restore Act, that would roll back the eBay injunction decision. That has effectively eliminated injunctive relief for patent infringement. You have it in the UK. You are, your courts are brilliant at issuing injunctions. Of course in Germany you get injunctions readily once a patent is found to be valid and infringed. Unfortunately, in the US, post Aviva, you almost never get an injunction anymore, even once a patent is found to be valid and infringed, even if you're a manufacturer enforcing against a competitor. So the Restore Act fixed that. We also have pending the Patent Eligibility Restoration Act, pira, which would unwind our terrible state of patent eligibility under our Section 101 that's created so much chaos and confusion. We also have pending the PREVAIL Act A lot of acronyms here.
Speaker 3:Prevail is legislation that would fix the Patent Trial and Appeal Board by changing presumptions, by ensuring that much like the way the system works in Europe if you use the Patent Trial and Appeal Board to commence an inter-parties review what you call oppositions, we call them inter-parties reviews that you do that and you don't also fight in the district court at the same time, which is completely stupid. And we didn't intend for the AIA to create that world, but it has created that world, so we need to fix it. So anyway, guilhem, that world, but it has created that world, so we need to fix it. So anyway, guilhem. The answer to your question is things aren't great and we've got legislation pending to fix them. We just need to get those bills through.
Speaker 2:Yeah, because I've heard lots of US attorneys actually just kind of saying that the US has become a little bit anti-patent. It's no injunctions, very easy to attack and knock them out, so it's interesting to hear there's a rebalancing of it. Presumably this kind of legislation is quite difficult to get through. There's a political angle to it, there's a legislative process to go through. So what's the timescale to what the prospects at least have been?
Speaker 3:Yeah well, PEER and PREVAIL have been around for a while, so they've had a hearing in front of the Senate Judiciary IP subcommittee. I actually testified at that, or the PEER?
Speaker 3:hearing anyway and we're hoping they'll get calendared for markup in the Senate Judiciary Committee. We've been trying to get that done since May in the Senate Judiciary Committee. We've been trying to get that done since May. The next chance now is going to be September, but the legislative calendar is a very, very narrow one right now because of the presidential and congressional elections coming up in the fall. So it may be and to just be candid I'd say it's likely that those bills could get extended into 2025. They'll have to be reintroduced, but they likely will be for further legislative consideration then, Like I said about Restore, it was just introduced earlier this week, so it has not yet had a hearing, so it's like a little ways further off.
Speaker 2:But I hope that we'll get progress and action and maybe even enactment of one or two or maybe all three of those bills by 2025 I mean that is interesting and good to hear, because I think one of the things we've been hearing over here is partly perhaps because of this perception of in within the the US isn't necessarily the best place to enforce right now. It's been shifting the landscape a little bit to make the new European UPC potentially a starting point for a kind of a global litigation program. Is that something that you've been advising or how are you seeing that balance?
Speaker 3:Yes, it's a great point, grelim, and absolutely I'm advised in fact helped put together a program with a German firm that we work with a lot here in New York on the UPC late last year I think it was after six months. We've been doing updates after the first year. I'm really super pleased to see the traction the UPC is getting gradual but continuous improvement and uptake in cases and issuing decisions, and so I'm very actively telling clients you ought to be thinking about the UPC to enforce your IP rights now.
Speaker 2:Are you finding that, uh, clients are comfortable with it slightly some people might say slightly confusing array of different authorities and and rights within the european system, or do you find you can navigate through? Take them through it fairly clearly right, I think it.
Speaker 3:You know, I would say it's complicated, right, and clients have to get used to it, but they are, and there's always a bit of caution and reluctance to be the first to jump in. But that's done now, because others have jumped in and we're starting to see a track record, and a good one, build up, and so I feel like, yes, it's complicated, yes, it takes some explaining. We're able to do some of it over here and then we get, you know, firms in the UK or in, you know, continental Europe involved. To take it to the next level of clients are, you know, seriously interested folks who are actually licensed to practice there. But it's explainable and I think clients are getting more comfortable that if you designate your patents, you can then enforce them and it's a great court.
Speaker 2:Interestingly before we started recording proper. You're actually asking about. One of the developments which you can touch on actually is um, where the eu ipo, which is the eu kind of intellectual property organization, is fitting in on the patent landscape, given that we have, of course, also the european patent office, um, which for less kind of uh ip, um, saudi people gives european patents because not a european union organization kind of predates the modern form. So we have this slight conflict. But yeah, the Saudi people gives European patents but is not a European Union organisation kind of predates the modern form. So we have this slight conflict. But yeah, dave, you were expressing slight confusion, as it were, about why the EUIPO is stepping in on standards-essential patents. How's that being viewed over there?
Speaker 3:Yeah, it's not viewed well here, even by the government, including up to the Secretary of Commerce. Gina Raimondo has made very clear and conspicuous statements to her European counterparts that America is concerned about what at first the Commission and now the, you know, the Parliament is doing relative to using a trademark granting authority. And there's another sub story there why the trademark granting authority would call itself the intellectual property office, intentionally misdescribing itself. That's normally, at least in the US. That actually could be trademark infringement in its own right. But for whatever reason, the trademark granting authority deceptively misdescribes itself as an intellectual property authority and now is poised to take on a patent mission which it itself has openly admitted in the past that it's got absolutely no competency in. So okay, I mean, it's like if you spend enough money you can get pigs to fly right, you just have to pour enough money into it. And if you spend enough money you can build up a competency in an agency that by its own admission lacks any such competency. But that really is, in my mind, not the big picture. The big picture is you know why do we have bureaucrats anywhere in Europe, in the US, anywhere, substituting their judgment for the marketplace?
Speaker 3:Standard, essential patent licensing happens every single day. I did it for a living for many years, so I know exactly how it works, both as licensor and as licensee. There's very little litigation going on, writ large From time to time. You know, advocates have, I think, intentionally used terms like patent wars when they themselves have created the patent wars. And really I'll give you another film metaphor. You might have seen a long time ago the old Clint Eastwood film For a Few Dollars More, where he plays a Western gunslinger who stokes a war between two rival families by going to each one in series and saying I can help you get at the other guys if you just pay me more money. And then going to the other guys and saying I can help you get at the first guys if you just pay me more money for a few dollars more.
Speaker 3:Well, that's what's going on with those who say there are patent wars.
Speaker 3:It's the folks who are filing the patent infringement lawsuits then who say, oh my God, there's a patent war going on, without saying, well, yeah, there is, because I started it. So, setting that aside, there really is very little litigation in the SEP area. Even the commission's own commissioned sponsored study found that. But yet they go ahead anyway and create this new weird undertaking to derail enforcement and give it, by the way, back to the UPC an advanced vote of no confidence in this brand new brilliant court that's been set up to decide SEP disputes, among others. And the bureaucrats come in and say we don't like you guys, so we're going to take this whole genre of licensing away from you and give it to bureaucrats at the trademark granting authority. I mean, if the whole thing makes no sense to you, you can imagine how we feel over here about it. So, unfortunately, my understanding is that's all gone through and happening and it's just a question now of how much damage gets done. That's very clear, kurt. Thank you.
Speaker 2:It's just a question now of how much damage gets done. That's very clear, kurt. Thank you Out of interest. You mentioned the whole concept of, as you said, a bureaucracy-based organisation running the standards-essential argument. Where do you think the European Patent Office, which at least has patents in the name, would fit in with this kind of debate? Or is it the same point that this is one for the market to settle?
Speaker 3:Well, as I understand it, the EPO has stepped in. They've been helpful actually, and I thank Antonio Campinos for the letter that he sent in I think that was to the commission at the time or related authorities saying whoa, just be aware, this is what we do for a living and we got a lot of expertise. Aware, you know, this is what we do for a living and we got a lot of expertise. We might actually be able to help you. You kind of haven't asked us, but we're right over here in Munich, so I thought that was helpful. I think it's also helpful that the EPO has stepped in and offered to EU IPO the trademark, granting people again to say, look, we got the competency, so if you're going to take this on, we can actually help you with it. So that seems constructive. But I mean again, it misses the bigger picture, which is that the government doesn't need to be involved in royalty rate setting for SEPs or other patents.
Speaker 3:There's a marketplace that works fine. We now know you know, through the Avance patent pool that I'm sure you're very familiar with that literally essentially every automaker outside the Chinese automakers has taken the Avance license. It's extremely inexpensive. It's like, I think, $32 through, if I remember right through essentially all the patents, you need to put 5G in an automobile One-time payment.
Speaker 3:And I recently bought a new fancy automobile that's just got 4G in it and I find out I'm paying about that much every month for my fancy automobile's connectivity right so that it can, you know, tell me what the speed limit is as I'm driving along on the road and you know, and provide me with all kinds of other useful information. So you know, for less than the price of washing your car once and about what I'm paying each month for probably what will be the 10 year life of my vehicle for connectivity. The automakers get access to the entire stack of patents that's required. It's like the deal of the century for them. No wonder they all took the license and they love it. So I find the whole situation extremely confusing.
Speaker 2:And it's the kind of thing where you just know there's another agenda at play, because it doesn't make sense the agenda that's been described it is. I mean often when people talk to me in broad terms, does the IP system work? Where can we show it working? Well, I tend to give is, in broad terms, the standards central system, because it is what underpins the global interoperability, etc. I can say that anywhere else in the world it just works and that's because everyone subscribes to the same technology inputs and pays in by the royalties. One of the issues I think that comes up is the arbitrage opportunities. Because we have a global, let's say, telecom system, we do not have a global legal system. Do you think that's part of the problem? You mentioned it in the run-up. People have been Tesla hoping the UK court would set a global rate, uk court saying I'm not too sure we actually do that. How do you solve that problem when it does come to litigation?
Speaker 3:It's a great question. Guleem Courts setting global royalty rates for SDPs generally or now for pools, is a very vexing problem. The Chinese courts are showing a very strong propensity for wanting to get into that game and using it as a vehicle to drive royalty rates down to the advantage of Chinese national champions in the auto industry, in the telecommunications industry, etc. So it's a very dangerous game to get into. But the good news is that we now know from the Avance patent pool that courts don't need to get into that game because these pools work right and Avance is not the only one that works. They work when they're designed right and there's some issues with designing them right, some things that can go wrong and things need to be navigated. But I think that's what's going on in that Tesla case that came out in the UK recently, where you know, going back to unwired planet, the UK court did its very best job and and to you know and again people say it's set a global royalty rate it didn't do that. It said look, we're going to issue an injunction in the UK over the UK patents unless you folks can come together and agree on a royalty rate and all the extant evidence shows that the market for patent licensing in this area is to grant global licenses. So go figure that out or you're going to have an injunction in the US I mean the UK over UK patents. The UK court, to my knowledge, reading it as an American lawyer, did not try to say we're going to exercise jurisdiction over Chinese patents or over US patents. It only found over UK patents. All right, so set that aside. That's the unwind planet decision, which has been read, you know, to say that a single court can grant a global royalty rate. And that's the decision that the Chinese courts have been latching on to to say, well, if the UK can do it, why can't we do it in China? We're going to set a global royalty rate and we're going to do it in a way that advantages Chinese companies. And so here we are.
Speaker 3:The Tesla decision now is the first case where you've got a pool and you've got a licensee, not a licensor saying we're willing to live with a global royalty rate, but the licensee saying we want the UK court to set a global royalty rate for us. And the UK court decision, as I read it, says time out, we're done, we're not doing this anymore. This is a licensee and it's a pool. The pool administrator has no authority over the pool licensors, the patent holders, and the UK court is absolutely the wrong place to get a licensee actually an American company, tesla coming in and saying we want you to grant a global royalty rate for us in the UK court over a licensor which I think was an American company also. So I view that case, guilhem, as a watershed moment, in that the UK court is wisely saying we don't need to be involved in this.
Speaker 3:These pools work, fine. There are some things courts are not really great at doing and judges having the humility to recognize that and to exercise a view of comedy where they do not overextend their laws over the property of other countries, like patents and mature of the UK court and I think it repositions from Unwired Planet in view of intervening history. We now know these pools work. We now know SEP licensing works. Let the market work. Courts don't need to get involved Beyond deciding disputes about patents issued in their country and giving remedies in their country. Perfectly fine if the Chinese courts or US courts or whatever want to do that, but let the pools work. We've shown, we have learned that they do.
Speaker 2:Thank you. And yeah, I mean, lord Justice Burse is a good friend of the podcast and obviously he was pivotal in that decision and fantastic lawmaker, brilliant guy, yeah, great lawmaker, and basically you know, you guys have great reality, um, and I I think his position absolutely was that. So this is, this is all I can. This is as far as it goes, but I have to apply the law that I've got in front of me to the facts I've in front of me. It's definitely been misrepresented as a land grab, whereas actually it's a very common sense saying this is a bigger problem than the UK calls. All I can do is tell you what the situation is here. So it's good to hear that it's being viewed in that spirit, although being misused, possibly in certain places. But, dave, I've been dominating. I know Lee is itching to take over.
Speaker 1:So I don't know if itching is quite the word, because I've just I've just been sat here learning and I've been learning. So, Dave, I'm going to try to do a neat little segue now. I don't know if it's going to work, but let me try and work it. We've talked a little bit about the EU positioning around this. Of course, it's not just on SEPs, there's also moves around SPCs and also there's moves around the EU trying to be to express some kind of leverage over the EPO when it comes to sanctions, for example the Russian sanctions. So the EU's been doing a lot around patents all of a sudden. But it's not just pro-patent stuff. We're hearing. We're hearing a lot of anti-patent stuff, not necessarily within the Commission itself, but around the Commission, coming out of discussions around vaccine waiver. If we go back to the pandemic, what's the position like in the States? Do you get a lot of anti-pattern rhetoric there?
Speaker 3:Tremendous. It's a huge problem. So you know, we're fighting right now tooth and nail actually, and they're valiant warriors in DC andC and beyond. Even today, this morning, I'm getting emails. You know, for decades, going back 40 years, we've had a law called the Bayh-Dole Act. It was passed in 1980, and it was heralded as perhaps the most important commercial legislation of the entire 20th century. It's been credited with creating trillions of dollars of economic opportunity and millions of jobs in the US, and it's been copied by many other countries.
Speaker 3:I remember when I was stationed in Japan, when I was at IBM, I helped explain and advocate in favor of what became the Japanese Bayh-Dole Act, and the idea is very simple. It actually is to say look, contractors, many, many, many companies that take funding from the government should still be permitted to own the inventions they create using that government funding, subject to some very basic reporting requirements and a backstop where, if there's like a national emergency and the patentee can't produce goods, the government can have a right to march in, as we call it, and the Bayh-Dole Act was passed under that rubric. It's worked brilliantly well. There have been many requests by commercial entities to march in and the government never has. Who are in the Republican and Democratic administrations, including when I was in the government. So suddenly, lee, with absolutely no reason, no provocation, the excuse given of wanting to control high drug prices, but just a bald excuse, and I come back to that. You know we've got the current administration saying we're going to turn that all on its head. We're going to re-legislate from the administration, which of course is illegal. Congress legislates, the administration does not legislate in the US, and we're just going to declare that we want the government to start marching in. You know, essentially, any time any competitor comes in and says I can manufacture that for less money which of course you know competitors from everywhere, starting with China you could expect to jump all over that opportunity. Right, let someone else invest billions in working all the kinks out of a new product or service, let them get it on the market, then come in and say I can do it less expensively. Of course I can. I didn't invest the billions in the R&D in the first place. So absolutely insane. You know, bald-faced grab and overruling of legislation.
Speaker 3:And we're finding that in the US right now that the guidelines, that or policy statement that the government was supposed to issue from the administration was supposed to come out in June, if I remember right, and it didn't, I think largely because there's been an incredible hue and cry over it and it didn't come out in July. Now we're in August and you know we still haven't seen it. So you know it could come out any day. I wouldn't be surprised if it comes out during the dog days of summer here, when things are quiet and DC is empty in August, when things are quiet and DC is empty in August. But I hope it never comes out. So that's just one example.
Speaker 3:You know we've endured the trips waivers that you mentioned, where Europe was the adult in the room. I mean, historically, the US had always been great at saying absolutely not. We're not waving trips provisions in order to to nationalize patents, patents or set patents aside. The patents have nothing to do with drug availability, vaccine availability, transportation, refrigeration, government corruption in many countries, vaccine hesitancy, lack of trained medical practitioners the list goes on and on.
Speaker 3:There are many well-documented reasons why vaccines don't make it to people in some parts of the world and it's a terrible problem. But it's got nothing to do with patent system. So if you actually blame it on the patent system and try and use the patent system to solve the problem. You're actually killing more people, right? Because in the process of doing that, you're not solving the real problems. You are rearranging deck chairs, right as we say, while the ship goes down. So absolutely egregious, irresponsible to suggest that TRIP should be waived for the vaccines or for the diagnostics or anything. And I was shocked, stunned, appalled that the US didn't step up. I was super pleased that Europe did and said this is crazy, we're not doing this, we're not agreeing to it.
Speaker 1:Yeah, sipa itself took a really strong position on that in terms of the European dimension, so we were really very, very happy with the position that Europe took on that. Is this in any way? I want to kind of segue into a project that you're now heavily involved in with Andre Iancu. Was any part of this influential in you and Andre and others setting up the Council for Innovation and Promotion?
Speaker 3:No, you know I think all of it played a role the recognition that the US IP system is moving in the wrong direction. You know, generally writ large, that a strong, credible, clear, simple, pro-innovation voice is needed to speak truth to power. It was all of those things. But, lee, you're right, would we have created C4IP? If everything were going great with the IP system? I'm not sure there would have been any need for it.
Speaker 1:And so what are your big aims? How does the world look different, or certainly the states look different, five, ten years down the line so how?
Speaker 3:what do we want to see happen? So yeah, so let me reel it off. We've created a scorecard among many projects, and this is a first ever scorecard rating and racking and giving a letter grade A to F to every single member of the US Congress. Every congressperson, every senator, every single person gets a letter grade and the letter grade is calculated objectively. That's a letter grade and the letter grade is calculated objectively. We actually hired an Israeli concilium economist not not patent lawyers to put this together by curating every speech, every statement, every press release, every vote, every floor statement, on and on and on that every member of Congress makes pro-IP or anti-IP, racking and stacking everything, and that produces the score for each member. So, as an example then, coming back to your question, lee, our vision is that in five years by the way, when we came up with the first index, the first version of this, the first scorecard earlier this year, the average score, I want to say, was like C minus. There were just a few members of the Senate that scored A's and a few B's, and you know some F's as well, quite frankly. And so it's out there, it's very transparent, and you can find the scorecard at the website c4iporg and you know it's one of those read it and weep kind of things. Our vision is that every member of Congress I mean it'll be asking a little much to say we want every member to have an A, but I would tell you our vision is we could get every member up to a B level, at least a B level. That would be great. That's number one.
Speaker 3:Number two one of the things that's a huge theme for us in C4IP is that a government official, really anyone if they say they are pro-innovation, they must be pro-intellectual property. You cannot say you're pro-innovation without also being pro-intellectual property. And of course, everyone says they're pro-innovation. Find a member of parliament that says, oh, I'm against innovation, you're not going to find that they're all pro-innovation. Says, oh, I'm against innovation, you're not going to find that they're all pro-innovation. So we're trying to create this equation to put a lot of pressure on for the proposition that, no, you cannot say you're pro-innovation if you are working against intellectual property. You can only say you are pro-innovation if you are working for a strong and effective intellectual property system. And we're going to hold folks accountable for that.
Speaker 3:So what's our vision for five years from now? That every member of Congress will say, because I'm pro-innovation, I am also pro-intellectual property. That would be great and I think that should be doable. I don't know. Well, we have a few stragglers probably. We got some people who still think the world is flat, but you know, I would say most everyone. So the last one I'll give you I could go on all day, but I'll say our vision is that in less than five years from now, you know, like within the next couple of years, that those three pieces of legislation I mentioned restore, prevail and PIRA are passed into law. We fixed section 101, we fixed the PTAB and we fixed injunctions. That would be a huge sea change for the intellectual property system in the US.
Speaker 1:RAOUL PAL's quite, quite a mission in five years. Dave, that's good. Good luck with that, or less. One of my jobs on the podcast dave is to try and keep us to time, and we're kind of right up against the clock now. So, um, so, I'm I'm finished with all of my questions. So I'm just going to say thank you very much for coming on. It's been an absolute pleasure having you on. It's's been a delight. But I know that Gwilym's got a little closer question that he wants to ask.
Speaker 2:So the context, dave, is that Lee normally has some question that we're not expecting to finish off, linked somehow to the context of the call, and he's given me the lovely job of coming up with it this time. And I was actually going to say, going back to the fun, exciting knowledge of just how many US presidents you've hung out with, lee, I'll start with you and Dave, you're going to have to find someone else for your answer. But, ok, famous people you've met and you can't mention somebody you've already mentioned in the podcast it can't be that bloke.
Speaker 1:Who told you you can't sing in a lift? Uh, morrissey, yeah, I can't mention.
Speaker 2:Oh, no, no, I can't mention morrissey another one we need, we need another one, we need another one bob galdorf would be a biggie, obviously at the time, at the time when bob galdorf was god, um.
Speaker 1:So this was back in my years working in further education policy, when bob was the kind of keynote speaker at a big conference dinner thing and ended up being on my table, sat next to me he's. He's a great person to have dinner with, bob yeldof, um, because he is every bit the person that you see on the screen. He did just, doesn't stop, doesn't stop swearing, doesn't stop being really, really loud, doesn't stop waving his arms around soup, soup, going everywhere. That was quite a fun time and, uh. So, if I'm allowed to william, it would be um, the the recently departed, uh, his royal highness, um, the duke of edinburgh, so, um, prince philip, yeah, but who I've also had dinner with and and who also has some interesting mannerisms at dinner. So, for example, he, he stood up and unbuttoned his coat and had his tie kept straight under his coat by a big nappy pin. So I'll give you those two okay, over to you, dave.
Speaker 2:So you've obviously done three presidents. It was a pretty impressive start. Uh, other, go name another famous person in any, any walk of your lives.
Speaker 3:Yeah, I think of a few Nobel Prize winners that I've been fortunate to spend time with, and a number of years ago we had one from NYU, just down in lower Manhattan, who had come up with the economic what is Nobel Prize for an economic theory about innovation, spillover effects and the importance of strong innovation incentives, and had him come speak here about AI. Actually, this is, you know, around 2016 or so, before I was what it is now, was what it is now, and that was pretty inspiring because I gave him the objective of you know, help us envision what the right IP system should be to protect data. And he said you know, recognizing the data is non-rivalrous. You should have very lightweight protections for it, and I thought that it sounded obvious once he explained it, but beforehand it was anything but obvious, so that would be my example.
Speaker 1:So, gwilym, you know how this works. You don't get away with it. You post a question, so you better have the best answer. To finish with, Well, I didn't.
Speaker 2:Lee's better at this than me, though, because he always makes sure he's got a really good answer to his question. I actually haven't got a very good one at all. Daniel Craig once looked at me, but it does tie in with James Bond, so there we go.
Speaker 1:Daniel Craig. Was he wearing his budgie sparklers at the time or was he properly clothed?
Speaker 2:He was on an aeroplane and he looked like he did look very cool. He looked very cool indeed. There we go. That's all I got. That's all I got mate.
Speaker 1:That's sad. That's sad mate. Oh, dave, thank you so much for joining us. I hope you've enjoyed being on the podcast as much as we've loved having you on. It's been a real pleasure. As Gwilym and I were talking about in the chat, we did some really heavy stuff there and hopefully this is going to get sort of great reviews from our listeners, who need to leave those reviews on the podcasting platform of their choice so that other people can find the podcast.
Speaker 3:Yeah, guys, thanks for having me on Lee. Great to see you. Great, as always, fun conversation.
Speaker 1:Cheers, dave. That's a wrap, thank you.