Tea Leaf Readers in Demand as Team Trump Meets with Silicon Valley Giants

Trump Tower entrancePeter Thiel, Reince Priebus and Jared Kushner are hosting technology industry giants for a policy discussion at Trump Tower on December 14, 2016. Patent reform is likely to be on the agenda as it is one of the issues tech giants (along with big banks and retailers old and new) have invested in heavily for over a decade.

Jared Kushner, the son-in-law to President-elect Donald Trump who is married to Ivanka Trump, is widely reported to be one President-elect Trump relies on heavily for advice. Jared, like his wife, comes from a family of real estate development and like Ivanka has branched out on his own into an intellectual property dependent business. Ivanka is famous for fashion and design products based on the power of fame and brand. Jared is the vortex of media. POLITICO recently quoted Brad Parscale, the Trump campaign’s digital director, who said that Jared is a “genius” when it comes to digital media, knowing where the voters were and “leveraging data to target disenfranchised voters and turn them out.”

In 2006 Jared bought The New York Observer. A simple search of the Observer’s website shows a variety of news stories covering patent issues. There are several stories focused on patent trolls including Patent Trolls Come in All Shapes and Sizes from 2011. Another story from 2011 calls out the “pork” Wall Street got in the America Invents Act by way of the covered business method review scheme added at the last minute on the Senate floor buried in a large package of amendments including the wildly popular end to Congress stealing user fees from the patent office. And this past summer The Observer observed that candidate Hillary Clinton endorsed venue reform led by Senator Jeff Flake (R-AZ). This article concluded that “patent suits against companies who make products are brought by companies that don’t” is a bad thing because “it drives up prices for consumers to the benefit of opportunists and attorneys.”

Is this an example of the “fake news”? It very well may qualify as “fake news” given that we’ve never seen any proof of such price hikes in response to patent litigation settlements or verdicts. In fact, even when many hundreds of millions of dollars (or more) are paid out by the infringer lobby there has never been evidence of price increases, which rather clearly suggests those in the infringer lobby who so deftly engage in an efficient infringement strategy (i.e., stealing rights without paying) have already priced in settlements and infringement verdicts to their products and services.

President-elect Trump’s statements this week on high drug prices may indicate some linkage in his mind between patents and consumers paying too much. But that plays right into what Wilbur Ross, nominee to run the Commerce Department and hence the USPTO, has been saying as an advisor to Trump for a long time now: zero tolerance for IP theft. High drug prices in the US are often linked to the need to pay for large R&D and government testing and approval costs in a global market where generics, copyists and governments erode the value of IP. Given the focus by President-elect Trump on renegotiating trade agreements perhaps high drug prices can be driven down by increasing IP enforcement outside the United States. After all, there can be little serious debate that the United States is funding drug development for the world.

Since at least 2011 Donald Trump, Jr. has been involved in the patent assertion entity MacroSolve, which is now owned by Drone Aviation Corporation where Lt. General Michael Flynn is a board member. And in 2012, Trump, Jr. wrote an essay condemning the smear campaign that seeks to conflate innovators with patent trolls. Peter Thiel is well known for his dislike of patent trolls and software patents, as well as for his support of policies that allow disruptive new market entrants to compete with established market forces. Thiel also enjoys the opportunities of litigation finance to defeat his enemies at Gawker and has financed a startup called Legalist to enable the crowd to bet on lawsuit outcomes.

Is Peter the rock, Jared the paper, and Donald Jr. the scissors for President-elect Trump’s patent policies? Is it possible that the positions of these three key Trump advisors will coalesce around a nuanced patent policy in a Trump Administration along the lines of the recent FTC PAE report, which sought to distinguish innovators and their need to enforce patent rights from bad actions of those who employ abusive litigation tactics? Intellectual property policy remains nonpartisan and more about divergence in business models and cultural views about private property rights as well as the power of the individual vs. the economics of a community or aggregated, integrated systems. It should be interesting to read the tea leaves after these tech giants meet at Trump Tower on the 14th. Stay tuned!



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Join the Discussion

6 comments so far.

  • [Avatar for angry dude]
    angry dude
    December 13, 2016 09:35 pm

    Edward Heller @

    wishful thinking

    in reality it is next to impossible for small and medium sized US companies to enforce any IP rights overseas, especially in China

    The US government should focus their efforts on protecting the fruits of the labor of the most innovative American companies and individuals inside US borders.
    For Chinese infringers there are ITC-imposed injuctions on importing patent-infringing products – this injunction power can and should be used to its max – despite so-called outcries for “public interest” cause its money stolen from US inventors

  • [Avatar for Edward Heller]
    Edward Heller
    December 13, 2016 05:41 pm

    Stronger patent protection outside the US in countries like China allows US companies to protect overseas markets against competition primarily from other international firms. But it also allows US companies to locate manufacturing in those countries where they will be protected by patents against the factories of their international competition. (I do not think anyone seriously thinks that China will allow enforcement against a local Chinese manufacturer.)

    The recent statement by Trump Jr. on the misuse of the troll label makes one want to jump and should for joy.


  • [Avatar for jbavis]
    December 13, 2016 03:12 pm

    > “Given the focus by President-elect Trump on renegotiating trade agreements perhaps high drug prices can be driven down by increasing IP enforcement outside the United States. ”

    Wishful thinking. What is Trump going to focus on – bringing back manufacturing jobs – or stronger patent protection outside the U.S? Pick one, America cannot have both – no foreign country will concede both.

  • [Avatar for angry dude]
    angry dude
    December 12, 2016 11:48 pm

    JPM @2

    “…as soon as an inventor sues an infringer the infringer threatens an IPR. So you’re faced with settle for very little money…”

    Perhaps you should know that large SV companies never settle with independent inventors – they’ll drag you through the court proceedings and then through appeal if they lose
    Unless there is possibility of injunction or enhanced damages at the end the whole thing is not worth wasting years of your life not to mention money if you are lucky to have some

    Right now US Patent system is a joke, a sinister joke designed in google’s and apple’s corporate boardrooms

    This has to stop

  • [Avatar for JPM]
    December 12, 2016 06:56 pm

    It is good to see that Donald Trump Jr is aware that large tech companies like to call inventors patent trolls by his first hand experience of being around MacroSolve.

    MacroSolve’s litigation efforts show the sad state of the patent enforcement landscape since the PTAB was setup by Google’s Michelle Lee. Other articles about MacroSolve on the internet state that MacroSolve licensed their portfolio on average for 60K per defendant. That is very low. These depressed values are due to the AIA and PTAB. As folks here know who litigate, as soon as an inventor sues an infringer the infringer threatens an IPR. So you’re faced with settle for very little money (ie 60K), which most likely is not the true value of the technology, or take your chances at the PTAB with an 80% chance of your patent getting killed.

    I am hopeful that the Trump administratiom will repeal the AIA and shutdown the PTAB. The AIA ans PTAB have absolutely decimated patent valuations.

    The swamp needs to be drained.

  • [Avatar for Edward Heller]
    Edward Heller
    December 12, 2016 04:18 pm

    Let us keep our fingers crossed.

    One thing is for sure, Hillary’s endorsement of venue reform because enforcement of patents by NPEs is bad for economy would have spelled disaster for the patent system had she been elected.