3 Questions For A Professor, Inventor, Entrepreneur (Part I)

At the turn of March, I wrote on these pages about an interesting conversation I heard on the Clause 8 podcast, hosted by Eli Mazour. After reading my column recapping his podcast, Eli was kind enough to connect me with one of the protagonists on the David side of the ledger in the David v. Goliath patent battle discussed, Northwestern’s professor Dan Brown. I welcomed the opportunity, as I continue to believe that the more we hear about the litigation process from actual litigants, the more we can learn as IP litigators — irrespective of whether our practice focuses on representing patent holders or accused infringers. Because of that belief, I am very pleased to present a further discussion with Professor Brown regarding his experiences as an inventor and entrepreneur, including why he feels so strongly that our current domestic patent system is in dire need of reform.

By way of background, Dan Brown, Ph.D., is an award-winning designer, serial inventor, entrepreneur, and full-time professor, in the Segal Design Institute – Northwestern University. A native of Chicago’s south side, Dan attended St. Xavier University, earning a bachelor’s degree in biology, with a minor in chemistry. Dan earned a master’s degree from the McCormick School of Engineering at Northwestern University in 2005, and a Ph.D. in Design from Coventry University in the United Kingdom. Over the years, Dan has received over 100 U.S. and international utility patents for his novel new product solutions in industry and, entrepreneurially, taken many to market himself as a founder of two startups.

In particular, Dan has seen both sides of the American Dream with his American-Made Bionic Wrench invention; innovation-based market success, while at the same time having to continuously fight knockoffs in the marketplace almost destroying his business. Dan believes that the best social system for our society is a good job. But job creation and the economic benefits of innovation fundamentally depend on the ability of the inventor-entrepreneurs to protect their investments through their intellectual property. Thus, Dan has committed himself to this important cause and continues to work towards an equitable, protectable, and sustainable intellectual property system for all inventors.

Now to the interview. As usual, I have added some brief commentary to Dan’s answer below but have otherwise presented his answer to my first question as he provided it.

Gaston Kroub: You are a thought leader on the issue of why we need a stronger patent system in this country. What is the problem with the existing system?

Dan Brown: The call for more innovation is ever present. Every election cycle, we hear from all parties that we need to invest in innovation to support jobs and economic growth; nobody disagrees with this. It is a popular belief that we have a reliable patent and legal system to preserve these innovation efforts. Yet today, from my experiences, I would say that we have a cannibalistic system that destroys those rare innovation efforts that challenge the status quo products in the marketplace.

Efficient infringement, aka patent theft as a business strategy, is an opportunistic misappropriation, emboldened by the lack of an inventor’s ability to protect their innovation. Fueled by the low risk of piracy being appropriately penalized in the current system. This infringers’ gambit scenario creates an opportunistic incentive to game the legal system, a David vs. Goliath battle where even in the rare case Goliath were to lose, he doesn’t fear the resulting penalty, because there rarely is one. There is a straw man argument that willful infringement is not a real problem in our society. The proponents of this argument misrepresent that the occurrence of willful infringement is so rare that inventors who claim it are merely crying wolf. At first blush, the data suggests that very few defendants are found guilty of infringement, and even fewer are found guilty of willful infringement when compared to the total number of patents issued.

This is a flawed argument, as most patents that are issued never see the light of day commercially. It is probably less than 5% of all patents that have the potential to scale by competing and displacing the existing solutions. Simply, very few issued patents have the competitive advantage to displace the current competition, thus there is no motivation to copy them and thus the numbers are skewed. So, when the rare invention that achieves competitive advantage threatens the business of established competition, it attracts a lot of attention from competitors, instead of being offered the protection it has earned, it is being unjustly attacked.

If we do not address this level of piracy behavior with enough deterrence there will continue to be no reason for potential infringers not to roll the dice and take the risk of infringing. This gaming is a real business strategy, as reported in Bloomberg Opinion (2020), where Boris Teksler, Apple’s former patent chief, told the Economist recently that “efficient infringement, where the benefits outweigh the legal costs of defending against a suit, could almost be viewed as a ‘fiduciary responsibility,’ at least for cash-rich firms that can afford to litigate without end.” In other words, stealing patented technology is an accepted intentional business strategy, and it is playing out in this predatory efficient process. Only harmonizing the IP protections with potential criminal remedies for those willful patent cases involving the criminal intent will check the business strategy of gaming the system.

GK: While there are criminal penalties available to punish infringers and misappropriation in other IP contexts (e.g., trademark and trade secret), the call by Professor Brown for a criminalization of willful patent infringement would represent a strong shift from current thinking about patent litigation’s impacts. At the same time, the frustration about the lack of a real deterrent for existing willful infringement comes through in sharp focus in Brown’s comments, informed by his personal experiences trying to defend his product from his own customer’s betrayal in the pursuit of profit. While a robust debate in terms of evaluation of the merits of his proposal is needed, he is right to point out how current incentives seem to encourage infringement in a number of important contexts, with the sole inventor or small company often bearing the brunt of the collateral damage. Yet despite these conditions, our political and economic leaders claim to try to encourage entrepreneurship and job creation, all in the name of supporting innovation. Brown is not the first, nor will he be the last, to claim that our IP system’s balance is out of whack.

Next week, we will hear from Dan about why he believes willful patent infringement needs better policing, as well as his thoughts on how inventors must adapt to the changing economic realities when it comes to patent enforcement.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.