Giachino (00:05.0010 - 00:30.0120)
Welcome to IP Protection Matters. I'm your host, Renee Giachino. Today, we are joined by Dr. Julie Carlson. Julie is the Director of Government Affairs at Qualcomm. Dr. Carlson joins us today to discuss the broad implications of the globalization of IP litigation for patent policy and national leadership. Thank you so much for joining us, Julie. We greatly appreciate it.
Carlson (00:30.0239 - 00:32.0299)
Glad to be here, Renee. Thanks for having me.
Giachino (00:32.0720 - 01:17.0139)
I want to start looking back at your history. You focus on policy issues related to IP standardization and innovation. You previously served as Associate Director for Antitrust and Innovation Policy at the Information Technology and Innovation Foundation, as well as some time at the U.S. Federal Trade Commission.
Speaking generally, what do you see as some of the biggest changes related to intellectual property and, maybe even more specifically, the protection of intellectual property? I know that's a very broad question if you want to narrow it down to one or two things that you see as the biggest changes or issues right now that we're facing.
Carlson (01:17.0150 - 03:35.0309)
Sure Renee. That's a great question to get us started. Maybe I'll focus on two things. The first would be the US Supreme Court decision in eBay v MercExchange. That was a case that changed the standard for issuing an injunction once a patent has been found to be invalid and infringed.
I should be clear, I'm not a lawyer. I'm an economist, but as I understand it, the prior standard had been that there was a rebuttable presumption of an injunction in that case. The standard has since been changed to a four-factor test. The results of that change and the way that the lower courts have interpreted the Supreme Court's guidance has meant that it is much more difficult to obtain an injunction once a patent has been found to be infringed. So that's had a real impact on the ability of patent owners to enforce their rights.
I would say the second thing was the passage of the America Invents Act. I think that was around 2011. That created the PTAB, which was meant to be an alternative venue to district court litigation and has, in fact, resulted instead in duplicative patent litigation as opposed to making patent litigation more efficient.
I think both of those things have had a real impact on the ability of patent owners to enforce their rights.
Giachino (03:35.0800 - 04:34.0140)
You serve currently as the Director of Government Affairs at Qualcomm. Your employer's website makes it very clear that the drive to invent is a core value of Qualcomm's identity, as well as the protection of inventors' rights. That's important to both the company and to its business model.
Having just referenced the fact that the eBay case perhaps was a misstep, is it time or beyond time for Congress to get more involved in terms of the IP landscape, whether that's from a litigation or an injunctive relief standpoint? We've seen certainly through the last few sessions of Congress, legislation come up - very important legislation - and several pieces in fact, that get reintroduced and then nothing happens. Is it time for Congress to step in?
Carlson (04:34.0779 - 05:41.0350)
Absolutely. I think Congress could do a lot of good here to right the ship. You mentioned the pending bills. There are currently three bills before Congress. One is [the] RESTORE [Act] that relates to injunctions, and that is actually a very simple bill, which just returns the standard for injunctions back to what it was prior to the eBay decision.
There's also the PREVAIL Act, which is meant to address some of the issues we've seen around the PTAB that have been harmful.
The third bill is PERA, which relates to patent eligibility. I think all three of those would go a long way to improving the ability of patent owners to reliably enforce their rights.
Giachino (05:41.0760 - 06:24.0519)
All three of those are very clearly still being considered on Capitol Hill. What does your crystal ball potentially show with respect to any or all of those in terms of being able to get passage? I know it clearly is going to have to be a bipartisan effort, but we have seen a bipartisan effort as it relates to IP protection. That's nothing new, and it shouldn't be.
This is critically important regardless of which side of the aisle that you sit on. Do you hold out hope that we might see, in this current session, the passage of any of those three critically important pieces of legislation - RESTORE, PREVAIL or PERA?
Carlson (06:25.0660 - 06:54.0850)
I'm always hopeful, Renee. I try to be optimistic. I think the bill that seems to have the greatest likelihood of moving is the PREVAIL Act. I think there's still a challenging road ahead even for that bill. I would say I'm not going to hold my breath, but not willing to rule it out at this stage.
Giachino (06:55.0220 - 07:14.0149)
Speaking of a challenging road ahead, do you believe that patent litigation has become a roadblock to corporate research and development? What have you experienced, whether that's at Qualcomm or in any of the other positions that you have held, as it relates to patent litigation and IP protection?
Carlson (07:14.0709 - 09:42.0729)
With respect to litigation, we've talked a little bit about the eBay [v MercExchange] decision and its impact on the availability of injunctions. I don't think we've talked yet about the practical implications of that. The ability to obtain an injunction is what gives the exclusionary right embodied in a patent its practical meaning. So without the availability of injunctions, it really is more difficult to bring recalcitrant infringers to the negotiating table.
If you can't reliably enforce your patent rights, then that undermines the incentives, not just for Qualcomm, but for a wide swath of U.S. innovators to undertake the long-term risky R&D that's necessary to bring these innovative technologies, for example, 5G and what will soon be 6G, to the market.
Qualcomm, for example, has spent more than $115 billion on R&D since our founding. That enabled us to develop this portfolio of over 200,000 patents and patent applications. But if we can't reliably enforce those patent rights, our ability to continue to invest in those industry-leading technologies suffers. Then certainly American technology leadership suffers.
In the case of litigation, that's the tool that, unfortunately, we have to use when we can't bring infringers to the table. I'll also note that despite the perceptions about the extent of litigation, I think litigation is actually pretty rare, especially in Qualcomm's case. Most of our license agreements are concluded amicably. Litigation is really a rare event for us, but you do need to have that availability of injunctions as a backstop for when negotiations break down.
Giachino (09:43.0090 - 09:59.0960)
Staying on that topic of litigation, it has been the case over decades that major IP litigation was primarily focused in the United States. I think we've seen a shift over the last decade or so. Do you believe that's true? And if so, why?
Carlson (10:00.0479 - 11:17.0760)
We've certainly seen a shift in jurisdictions where patent owners are asserting their rights. I think it's important to keep in mind that a lot of products are sold globally. So if you think about the cellular technology that Qualcomm has invented, that's deployed in devices all around the world. But patent rights are a national right and so they have to be enforced on a country-by-country basis.
If we can't reliably enforce our rights in the U.S., and I think as I've noted, the eBay decision has really impacted that, then patent owners have to go to other jurisdictions where enforcement of those rights is more robust and reliable. That means that we're seeing more patent litigation in places like Germany, India and Brazil. We've even seen some recent cases in Morocco, for example. All outside of the U.S.
Giachino (11:18.0119 - 11:39.0729)
What do you think that means for U.S. innovation and competitiveness? Are we seeing fair judgments, fair rulings and reliable enforcement? That is one key that we would want to make sure happened, whether that jurisdiction is in the United States or outside of the United States.
Carlson (11:39.0940 - 12:43.0320)
I think what we're missing when enforcement is taking place outside of the United States is that U.S. courts are no longer in some sense setting the judicial precedents. Those precedents are now being set outside of the United States. It's courts outside of the United States that are determining the value of portfolios that include U.S. patents. It's not U.S. courts that are making those determinations.
So if we care about judicial leadership, if we want U.S. courts to be making those decisions about U.S. patents, then I think there needs to be some real changes, particularly around injunctions, in order for that change to occur.
Giachino (12:43.0690 - 13:01.0909)
I've read quite a bit about the Unified Patent Court (UPC). Why has this become a popular venue, and do you think that they get it right? Is that something the U.S. should attempt to copy?
Carlson (13:02.0159 - 14:08.0500)
I want to be careful here just because again I’m not a lawyer. But as I understand it, one of the problems that the UPC solves is having to do country-by-country litigation. So every place that the “unitary patent” has effect, a UPC decision can be enforced. So that makes patent infringement litigation more efficient.
The UPC has committed to a more expeditious timeline for deciding cases. There have been some questions about their ability to stick to that timeline, but certainly cases have been decided more quickly. Those two things together, the ability to streamline litigation and then also a more speedy resolution of disputes, has made that a very attractive venue.
Giachino (14:09.0349 - 14:25.0000)
Shifting gears a little bit, Julie. If my research is correct, I believe you've spoken and written about a term that is quite interesting in this arena called patent trolls. Can you define that for us, and discuss its relevance to IP protection?
Carlson (14:25.0219 - 18:35.0270)
When I was an economist at the FTC (Federal Trade Commission), I worked on what the agency called Patent Assertion Entity Study. The agency was getting a lot of complaints about what colloquially are referred to as patent trolls. The FTC didn't want to use that term because it's a bit pejorative.
You can think about a few different kinds of patent owners. There's one category which we would refer to as practicing entities. So these are patent owners who have both invented the technology underlying the patent and also practice the claims of the patent in some product or service.
Then there's another category of patent owners, which in the FTC report were referred to as non-practicing entities. So these are entities that have done the inventive part and they've invented the technology that's covered by the patent, but they don't actually practice that patent in a product or service. Instead they license their technology to others to implement. So their business models are very focused on licensing. This could be individual inventors. This could also be larger research organizations. A university, for example, would also be a non-practicing entity.
Then you have this third category, which the FTC called patent assertion entities. These are organizations which actually didn't do the underlying invention, but have acquired the patents from others and are now asserting those against infringers of those acquired patents. There's a lot of controversy around some of the tactics that these, what I will call patent assertion entities or PAEs, use in their assertion campaigns.
What the FTC report showed is that there's actually a number of different business models. I think what we need to keep in mind, right, is that any owner of a patent has the right to assert that patent against infringers. Patent assertion entities can serve a valuable role in the innovation ecosystem where you have situations where a company, for example, went down an innovation path that didn't work out. They wanted to sell a product. They weren't successful, and now their only asset are these patents. In order for them to get any sort of return on the R&D that they invested, selling to a patent insertion entity might be one way to offset some of that investment.
What I want to encourage is for us to focus less on the patent owner and more on the conduct. So if we see these PAEs making meritless assertions, then that's sort of a conduct issue. We want to address that conduct and focus potential solutions on the conduct, but not impugn so much a PAE's right to assert their patents against infringers.
Giachino (18:35.0619 - 19:12.0239)
Assert and enforce. Yes, that's right. Our guest is Dr. Julie Carlson, Director of Government Affairs at Qualcomm.
Julie, before I let you go, I'd like to finish with a question that I typically start with, but I think it's a good way to wrap up our conversation today. Beyond the owner of a patent, whether that's the practice owner, the non-practicing entity, or the PAE that we've been talking about, why should we, the general public, Joan and John Q, care about IP protection? Why does IP protection matter to all of us is the question?
Carlson (19:12.0430 - 20:24.0880)
That's a great question, Renee. I think it matters because it enables all of the technologies that we're using in our daily lives.
I've got kids. When my daughter's away at college, it gives me a lot of comfort to be able to track where she's at and make sure she's being safe. The technology that allows me to do that is something that Qualcomm invented. The only way that Qualcomm is able to invest in the R&D that makes that technology possible is through our ability to reliably enforce the patents that we have on that technology.
Things that we tend to take for granted in our day-to-day are really enabled by the patent system and that's why I think the strong and reliable enforcement of patent rights is so important.
Giachino (20:25.0469 - 20:41.0089)
Julie, thank you so much for your time today. We greatly appreciate it. We know you have a very busy schedule.
Our guest has been Dr. Julie Carlson, Director of Government Affairs at Qualcomm. Thank you for tuning in to IP Protection Matters. Thank you again, Julie, for your time.