Over the course of my 20+ years practicing law, I have had the honor of working with many individuals at the cutting edge of all aspects of intellectual property. I consider myself very lucky that most of these folks, in addition to being luminaries in the industry, are good people and have welcomed me into their professional world with open arms. To celebrate these individuals, I am inaugurating a series of interviews.
My next interviewee is best described as the nicest person in patent monetization and intellectual property strategy I don’t mean that in a milquetoast kind of way. He can be as forceful and combative as the best of them. Rather, his essential decency as a human being shines through everything he touches. I have met many, many people through Ozer, and I have introduced him to a few – and to a person – they all have utmost respect for him both as a professional and as a person.
I first met Ozer Teitelbaum just over 5 years ago when he was at Alcatel Lucent and I was at Vringo and I was exploring ways to increase Vringo’s IP offerings.
Ozer currently has a myriad of early stage ventures and has a host of collaborators, but he operates predominantly from the law firm Sutton Magidoff in midtown Manhattan
I am honored he agreed to this interview.
Tell me about yourself and include 2 obvious things and 2 things a casual observer would never have guessed
I was fascinated by math, music and science as a child, which lead me to pursue a Bachelor’s Degree in electrical engineering with a focus on semiconductors and communication theory. I am a highly analytical person who relies on data and perceptions to try and think 3-5 moves ahead whenever I can. I have dyslexia, which I learned to manage in law school. My dyslexia has made me a very extra careful reader of the written word. I am passionate about music and composition probably from being introduced to the piano at age 2 by my parents.
What do you think are the two or three most important skills you bring to patent monetization and where and how did you acquire them?
I believe that creativity nurtured at a very early age helped my “out of the box” thinking and I have applied this attribute to strategic decisions, dealmaking, as well as monetization. I think my ability to communicate complex ideas concisely and simply has helped in M&A negotiations and patent assertion – perhaps these were a side effect from my reading challenges as a young person. I am a balance of polite for engendering trust and disarming people with a purposefuly timely streak of passionate assertiveness for persuasiveness, which I attribute to the personalities of both my parents.
What are two of the biggest challenges facing patent owners seeking to monetize their patents today?
Firstly, American jurisprudence with respect to patents has become less predictable, leaving owners to also look to German courts for injunctive relief to drive negotiated settlements.. This is unfortunate given that the US is the biggest single market and patent damages are the only real remedy available to US owners as a consequence of eBay v. MercExchange and its progeny. The trickle down from this is that patents in the US are viewed increasingly as a commodity for purposes other than enforcement. The second challenge is the efficient infringement, given the state of patent enforcement in the US. Given the uncertainty in American courts, it has become a financial decision whether it is cheaper to infringe when compared with execution of an inbound patent license. This has its own trickle down effect, including the stifling of engineering innovation and even more so, fundamental research. But, American history, including patent enforcement, is like a swinging pendulum and a snap back can happen rather quickly.
What is the next big technology that will be the subject of patent monetization attempts and why?
I believe that may well be CRISPR. The ability to edit genome sequences has enormous potential in broad spectra of applications. And, we have seen that the PTO, through the PTAB as supported by the recent CAFC ruling (University of California v. Broad Institute) ,and EPO both willing to embrace broad claim grants for editing all kinds of cells. As CRISPR grows in the path of genetic engineering vis-a-ví humans, there will be public policy issues for governmental bodies to wrestle with in the West, but not as likely in China.
What excites you about patent monetization today?
We’ve been in a buyer’s market for an extended period now. Despite these dynamics, we are increasingly seeing a steady stream of investment grade opportunities with strong enforcement histories available for acquisition from high pedigree owners. This, in my view, reflects a recognition that the market bottom is behind us and with that, confidence in investing. Over the past few years, we’ve seen the transaction I was involved in with TnT – Blackberry spin off assets to Fundamental Innovation Systems International – Broadcom spin off assets to Hilco’s Bell Semiconductor, Nokia’s spin off of Alcatel Lucent assets to Provenance, private equity HGGC take PIPCO RPX private and the OnStream’s divestment deal.
What advice would you give inventors?
I would explain that In the universe of innovation, there are a number of tools for protection including patents, trade secrets and copyrights as well as trademarks to some degree. Patents are most beneficial for protecting detectable inventions. If an invention is deeply buried in code and difficult to nearly impossible to detect, using trade secret law, through The Defend Trade Secret Act, may well be the more optimal choice — of course, unless the objective is other than patent enforcement. Each path for protection has its place and I would encourage inventors to work with an fully versed intellectual property lawyer to properly formulate the strategy or strategies best suited for her or his needs and objectives.
What are you seeing in the secondary market for patents?
I continue to see a buyer’s market for patent assets. That being said, I do see a clear increase price stabilization and, as a consequence, an uptick in the quality of assets for sale.
What makes a convincing claims chart?
While beauty may be in the eyes of the beholder, evidence of infringement is not a work of art. A convincing claim chart is one that captures each and every bit of evidence to substantiate each limitation and nuance recited in the claim. There should be no “hand waiving” or need to perform additional research to fill any gaps. While an expert may sometimes be needed to translate some of the more deep technical aspects of the claim chart, a convincing claim chart is one that should truly limit the need for an expert to a narrow, focused set of questions if that. Photographs, screen captures, scanning electron microscope images are bolster the infringement story.
What do you think will happen with China as it relates to IP in the next five years?
Hmm…can I get my crystal ball out first? Ignoring the unpredictable variables, such a trade war, a global recession or another financial crisis including the real estate bubble in China, I think it is highly reasonable to conclude that equitable relief will increasingly be employed by the Chinese court system. I also expect that damages will continue to move closer to alignment with European awards, though at what pace of change is very hard to speculate. I believe that Chinese government has a strong desire to make their judicial system one of premier pathways for all patent dispute resolution, which we just might begin to see, ever so slightly, at the tail end of the next five years. I do not however expect this goal to be realized rapidly as I suspect there will be continued sensitivity to enable the local economy to develop into a greater position of strength beforehand. The prospect of ex-Chinese companies successfully using the local Chinese court system against Chinese merchants and manufacturers seems well beyond the 5 year horizon.
“Stairway to Heaven” vs. “Taurus” — Copyright Infringement?
This is a fascinating copyright dispute. As you may know the Court of Appeals for the Ninth Circuit ordered a new trial in September 2018 after a federal jury in Los Angeles found that no substantial similarity between Led Zeppelin’s classic musical work “Stairway to Heaven” and the lesser known song “Taurus” by the band Spirit. The Appellate Court’s rationale for a new trial was the district court’s erroneous and prejudicial jury instructions. In particular, that the selection and arrangement of musical elements, which may be unprotectable individually, can be afforded protection under U.S. copyright law. The Ninth Circuit expressed concerns over the use of an extrinsic test for determining substantial similarity between both musical pieces, pointing to its previous affirming holding in 2000 (Three Boys Music Corporation v. Michael Bolton) where a jury concluded that there was substantial similarity based on the combination of five elements which are otherwise unprotectable by themselves. The Appellate Court also found the district court’s instructions erroneous with respect to originality component. Since then, an eleven judge panel of the 9th Circuit agreed to re-hear the copyright case and review its decision on whether the opening portion of “Stairway to Heaven” copied the 1968 song “Taurus” from the and Spirit. It appears that the 11 panel court will consider whether to expand copyright protection for the song “Taurus” per Spirit’s counsel – while lawyers representing the former band Led Zeppelin, have advanced that by the re-hearing, the 11 member panel will be setting aside the prior Ninth Circuit ruling .
The 3 member Appellate Court disagreed with the original trial court’s adherence that musical scales, arpeggios and/or short sequences of three notes aren’t protectable by copyright. Additionally, the original Ninth Circuit holding found the trial court’s instructions omitted that an original part of a work needn’t be new or novel so long as it is not copied. The trial court went further in its instructions by with the misleading statement that elements of prior works or those in the public domain do not rise to copyright protection because, according to US law, they can be arranged or modified in a creative, original way. Interestingly, there is some inferential evidence to support that that Led Zeppelin may have had access to a “Taurus” performance at least before releasing Stairway to Heaven in 1971. Led Zeppelin performed on the same stage as Spirit on July 4th and 5th in 1969 at the Atlanta International Pop Festival and August 30th through September 1st in 1069 at the Texas International Pop Festival where “Taurus” was performed.
Regardless, I think the original Ninth Circuit panel communicated that the bar for copyright protection based on originality for musical works is much lower than perhaps previously perceived. Right or wrong, this may, in fact, increase the number of prospective copyright infringement claims for musical works going forward. How this affects public policy is an interesting question and perhaps the basis for the re-hearing including the 11 judge panel though that is hard to conclude with certainty.
As an interesting dicta note, Led Zeppelin in 1987 settled a copyright dispute brought by Willie Dixon over songwriting credits to two of their songs — “Bring It Home” and “Whole Lotta Love.” The settlement’s financial terms are not known publicly though songwriting credits exclusively reverted to Mr. Dixon for “Bring It Home” and added Mr. Dixon as a songwriter for “Whole Lotta Love.”
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