©2018. Published in Landslide, Vol. 11, No. 1, September/October 2018, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
The last decade in the patent law field has been defined by “patent troll” alarmism; major judicial, legislative, and regulatory efforts to limit patent rights in response; and increased corporate budgetary pressures to justify and lower IP-related legal expenses. The general mood of IP conferences and publications has understandably reflected these developments. However, Louis Foreman—the immediate past president of the Intellectual Property Owners (IPO) Education Foundation—has been a refreshing contrast. He has taken the long-term view and remained focused on the benefits of America’s patent system. He is currently the CEO of Enventys and Edison Nation, which help turn innovations into consumer products.
How did a nice, nonlawyer, nonengineer like you join the board of the IPO Education Foundation?
My first interaction with IPO was actually with a few other IPO board members while I was a member of the Patent Public Advisory Committee (PPAC). I first became aware of IPO and the Education Foundation through guys like Steve Miller, from Procter & Gamble, and then they had asked if I would be interested in serving on the Education Foundation.
I have now been a board member of the Education Foundation for about seven years. I enjoy not only the interaction with the other board members, but more importantly the mission of the Education Foundation to educate and inspire people not only to be innovative but also to see value in intellectual property. I’ve also been on the IPO board for the same amount of time, and I believe I’m the only nonattorney on the board. IPO has one board position where they want an inventor to be on the board, so this way they can bring a different perspective to the board. And so, for the last six or seven years that’s the role that I played.
Any insights about IP lawyers that you have learned over the years?
Although we have different backgrounds and certainly a different educational path to our careers, I think at the end of the day we have the same goals, and that is a strong intellectual property system. And so, what I’ve learned from the professionals whom I’ve worked with over the years is that they all share a common belief that the patent system is important, that having certainty and predictability to an IP system is important for the companies that they work for. As an innovator myself with multiple patents, obviously I need to make sure that there’s value in the intellectual property that we get because that’s how we monetize the inventions that we develop.
From your viewpoint as an innovator and entrepreneur, how do strong patent rights practically help promote innovation?
I’ve been an entrepreneur since college. So, for 30 years plus I’ve been starting businesses. But when you start a business if you’re an entrepreneur or an inventor, it’s all about managing a relationship between risk and reward. There’s obviously a huge amount of risk and uncertainty in starting a company or developing a product. But the reward, the ability to get a patent to be able to monetize that idea through a patent and through licensing or bringing the product to market, is the reason why entrepreneurs and inventors are willing to assume that risk. With a strong patent system, there’s greater certainty that a patent is going to issue and then that patent is going to kind of stand the test of time, and give you the ability to get the value that you need to justify the risk that you’re assuming. When the patent system is tested and challenged and when there’s uncertainty as to the validity of a patent, that’s what messes up the formula. Because if, all of a sudden, the likelihood of success is decreased, then there’s less incentive for entrepreneurs or inventors to go out and innovate to begin with.
How have innovators and entrepreneurs been impacted by developments in patent law over the last decade?
The high invalidation rate that’s occurring at the Patent Trial and Appeal Board (PTAB) is definitely having an impact on small innovators because they’re starting to question whether or not the prize was really worth the efforts. When you see inventors’ patents invalidated at some point after issuance, infringers using inter partes reviews as a way either to game the system or to force inventors into licenses, or in some cases to kind of willfully infringe on their patents, that has a chilling effect on whether or not inventors are going to innovate. If there’s no reward for the risk, then there’s no incentive for starting the journey in the first place.
The patent or patent portfolio has always been what levels the playing field. It gives the solo entrepreneur or inventor the ability to compete with the biggest companies in the marketplace—because the ability to prevent others from making use of or selling what they’ve created gives them that license, that ability to go into a marketplace where there may be a more established player, a more recognized brand, but that patent gives them ability. And, same thing from a licensing standpoint. A lot of times companies or individual inventors see their innovations not as a way to make a product or deliver a service, but as a way to license that product or that technology to another company and monetize it that way. When there’s uncertainty as to whether or not the patent will actually issue or whether or not it will be upheld, it completely changes the dynamics in that decision-making process. It may make a company less likely to negotiate from a licensing standpoint, and they would rather just infringe and let the courts or the PTAB make the final decision. Or, in some cases, it may be that a person decides not to start a business because he or she realizes that the likelihood of prevailing is too distant.
How have you managed to remain so optimistic in face of these developments?
I think we’ll eventually get back to the equilibrium that we need to be at. I think the pendulum had swung a little too far to one side and it will start moving back toward center.
But what’s encouraging to me, and what gives me hope, is that innovation is alive and well. You’re seeing it not only within big companies, but also within the universities, within entrepreneurs. Because consumers today demand it. Innovation is happening at a pace that’s faster today than at any time in our nation’s history, and it’s that innovation that is disrupting industries. It’s bringing new products and services to the marketplace, and it’s allowing startups to compete in an industry that was once dominated by established companies and brands.
The patent is still the safest way to protect that innovation. I think we’ll all see hopefully soon a shift back to where patents are looked at as more of an asset than a liability, and where the rights of a patent owner will trump those who try to infringe.
What has your experience been trying to educate people in government regarding intellectual property issues?
I think it’s hard to argue with or vote against anything that impacts or harms individual inventors or discourages innovation and entrepreneurship. I think that there’s a lot of rhetoric out there. Some of it is based on kind of shaky data. For example, when everyone was afraid of the trolls or the bad behavior that was exhibited by some bad actors in the industry, the rush to judgment was okay, well, let’s burn everything down to solve that problem. But the reality is it requires more of a precise surgical approach to prevent the bad behavior while at the same time not discouraging the innovation and entrepreneurship that’s happening all across the country.
So, I think there’s a lot of people who believe in innovation within our government. They just need to kind of all work together to make sure that a patent system is strong and vibrant and encourages innovation.
Who do you look up to for advice about the IP field?
I’ve been very fortunate in the years that I’ve been on the IPO board to meet and get to work with some really tremendous individuals, guys like David Kappos and Chief Judge Paul Michel. Their experience is just incredibly valuable not only to the IP industry, but also to our board in our organization.
Any final hopeful words about the future?
I think that innovation is still something that people talk about and that they practice every single day. There isn’t a day that goes by that we don’t receive dozens, if not hundreds, of new invention ideas to our firm. When we produced the TV show Everyday Edisons, thousands of people would line up for the opportunity to pitch their invention ideas to us.
Innovation is alive and well. Consumers demand new and improved products and services. So, there won’t be a chilling effect on it as long as we don’t kind of take away the incentive to innovate.