Peter 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!