Navigating Legal Uncertainty: An Intellectual Property Law Perspective


I’m fascinated by earthquakes.


I know they’re bad and destructive, so maybe just the little ones. Still, the New

Madrid Fault line notwithstanding, living in Chicago, I’m resigned to probably never

experiencing an earthquake, which oddly disappoints me.I’m absolutely sure this has nothing to do with Lex Luthor’s plan in the first Superman movie to cause a massive earthquake to break off part of California to create more beachfront property, which, to my mind, was actually a pretty clever idea and kudos should be given to him for turning potential natural disaster lemons into lemonade. Sure, it was awful that Lois Lane fell into a massive fissure and got buried alive, but I always thought Lois was pretty insufferable, and anyway, Superman did the whole spin the world backward thing and it all turned out fine.


But back to earthquakes.


My primitive earthquake safety tip is that you are supposed to stand in a

doorway. While I’ve heard that this is just a way to make it easier for the rescuers to find

people by just looking for doorways, I think the point is you find the most stable part of

the house to brace yourself against. As lawyers, we like to think that we’re experts at dealing with volatility and risk, that we’re who the client needs to see when chaos and uncertainty arise. Of course, we’re also quick to not take a position if there’s the slightest bit of

doubt about the outcome. We decry the unpredictability of our craft. Ask most lawyers

about their likelihood of success in a particular case, and they will confidently say, “This

looks like 50/50 to me.”


And yet, we can’t avoid instability.


The law is always changing, and of course, it’s the lawyers and their creative arguments that are often the engines for that change.



As a society, there is no doubt that we can identify laws that should be changed, that

sound public policy says need to be different, or a party who has been wronged in a

way that screams out for fundamental fairness. But even then, without lawyers to bring

those cases, and to get judges to side with us—in an adversarial process so that no

matter how “right” we feel, we have to contend with the other side—nothing changes

without the lawyers picking up the mantle.


Which is to say, we made our bed, and now we have to lie in it.


To say “change” is inevitable implies that the change is complete. I don’t think

we’ve finished experiencing change. The world of intellectual property hasn’t changed.

It’s changing right before our eyes.


The patent system is struggling to keep pace with technology. More and more of our economy is a service economy, yet recent laws and Supreme Court decisions have made it harder and harder to get patents right where the most innovation is happening—software, new business processes, Internet of Things, financial products, financial technology, and artificial intelligence. Consider this: the current technological revolution is the first one to be completely out of step with the patent system. There was never a debate that the technology in tangible machinery and manufacturing that fueled the Industrial Revolution of the late 19th century could be protected by the patent system. The computer age of the mid-20th century into this century (at least the hardware innovations in computers, automation, and machinery) were indisputably supported by the patent system. The technological revolution of the day has, historically, never not been supported by the patent system.



Until now. Patents on innovations in today’s high-tech service economy—assuming they can be gotten to begin with—are susceptible to serious challenges, and more and more are not surviving them. Whether it’s good policy or not, it is unprecedented to have a patent system that is completely out of step with the technological revolution of the day. It’s simply an experiment that hasn’t been tried. Where will it lead? Can the paths of technology and patents continue to diverge as rapidly as they are? Assuming recalibration will need to occur at some point, when and how is anybody’s guess.


Back in 1978, Congress studied whether artificial intelligence could ever “invent”

anything, and concluded: (1) computers are nothing more than passive tools of creation;

(2) the development of artificial intelligence is too hypothetical to raise concerns; and (3)

there is no reasonable basis to believe that a computer could actually contribute the

necessary “authorship” to invent something. (Check out the study here)


Prescient, I know. But two weeks ago the U.S. Patent and Trademark Office completed a nearly year-long study of the intersection of artificial intelligence and intellectual property law, and very little has changed. The report reflected that most of the participants in the study still believed true inventorship by artificial intelligence to be remote and hypothetical. (Check out the report here) No wonder the legal system is struggling to adapt to change—it’s not paying attention.


If I’m in this new economy, what do I do? From a purely legal strategy standpoint,

how do I assess what I should be doing while I feel the ground beneath me is shifting?

How do I assess a proper long-term approach when I can’t really predict what the world

will look like down the road? Assuming I pick a lane, or even multiple lanes to hedge

against the risk of a changing landscape, how do I sell the strategy to my client? How

do I make them feel confident in my judgment?


To adapt to any changing circumstance, you need to identify what things are absolutely constant, no matter what happens around them.

Those are the principles that will guide in times of uncertainty. These are your anchors of stability, your doorways in an earthquake. No matter what changes, there are always some fundamental principles.


If I apply that notion to intellectual property law, that means I have to identify fundamental principles that I can hold on to. If I’ve identified those correctly, then those things I do as an IP lawyer should work, no matter what changes in the law come.


Here is what I consider our basic principles of intellectual property law:


1. Inventors merit exclusivity to their innovation;

2. Innovation must advance society; and

3. The IP system must protect the consumer marketplace.


The first two come from the U.S. Constitution, Article 1, Section 8, Clause 8, and are

the foundation for patent and copyright law: “the Congress shall have the power to

promote the progress of science and useful arts, by securing for limited times to authors

and inventors the exclusive right to their respective writings and discoveries.” The third

comes from federal trademark law, which is essentially a law to prevent consumer

confusion over brands, goodwill and false advertising.


How do these things guide us? How do we protect innovation where the protection itself is uncertain?


First, regardless of the intellectual property protection we seek, we have to frame the innovation in a way that lines up with our core principles. If we do, then theoretically at least, there should be some way to protect the innovation. It may not be perfect, but this is all about adaptation and making the best of the circumstances that exist.


Starting with all those hard-to-get patents in new technology, they are usually

rejected for being nothing more than an “abstract idea.” That boils down to a belief that certain innovations fail on the second core criterion—if the innovation is an “abstract idea,” then it cannot, by definition, advance society. In fact, the Supreme Court has

required that patents require an “inventive concept” to avoid being abstract, and in that

context, actually contrast the “inventive concept” with technology that is “well-

understood, routine, [and] conventional activities previously known to the industry.”


In other words, asking whether an invention is abstract is really asking whether we are advancing society.


So, when we seek patents from the Patent Office now, perhaps we have to write them differently and really focus on telling more of a story about the innovation, and how it advances society. Maybe that tactic cuts against our traditional patent-drafting grain, but maybe this is where we accept what is and adapt. That’s what finding stability when the world changes around you means.



How about those artificial intelligence inventions? I think in that case we have to

figure out how to address our first fundamental criteria that inventors merit exclusivity for

their innovations. Nobody seems interested in giving computers rights to anything.

(We’ve seen The Terminator. It doesn’t seem to end well.) But, we can’t deny change is

happening. We have to find a way to adapt. We need to be creative about getting

Congress to come up with a solution that awards someone the right to AI-generated

innovations. Who should own them? I don’t know, but it’s clear that the Patent Office

does not have a reliable pulse on the need to find a solution. More importantly, it doesn’t

appear the Patent Office considered this issue in the context of fundamental principles.


I wish every hard question had an easy answer, but most don’t. What most hard

questions do have, however, are rules you have to follow to solve them. That’s where

having the right lawyer comes in.


For help with your intellectual property issues, contact the author, Dan Shulman,

Shareholder at Vedder Price P.C. at +1 312 609 7530 or at dshulman@vedderprice.com.


ABOUT THE AUTHOR

Daniel Shulman is a Shareholder at Vedder Price and a member of the firm’s Intellectual Property Group in the Chicago office, who focuses on all aspects of intellectual property acquisition, monetization, and enforcement, including complex patent litigation, trademark litigation, copyright litigation, trade secret litigation and all aspects of patent and trademark prosecution and portfolio management. He also advises clients on intellectual property transactions including technology development agreements, confidentiality, and joint development agreements, licensing, and mergers and acquisitions. As an in-house attorney, Mr. Shulman developed a keen insight into the challenges businesses face, what constitutes quality service from outside counsel, and how to meet or exceed a client’s budget expectations. Mr. Shulman was named one of the Top Forty Lawyers Under 40 in Illinois in 2013 by the Law Bulletin, Managing IP Top In House IP Star every year from 2015 through 2018 and received the First Chair Award Top In-House Intellectual Property Counsel in 2015, 2016, and 2018. Reach out to him at dshulman@vedderprice.com.

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