Interview transcript:

Eric White: Let’s start with USPTO, fee-funded, not affected by the shutdown. But the longer things go on, I’m sure that there’ll be some disruptions in operations. And also, you’re working with them a lot. What have you heard so far?

Jarom Kesler: So I have seen absolutely no effect whatsoever. The agency is open, it’s running and it seems to be that it could potentially run in perpetuity because it is one of the few, maybe the only profitable agency of the U.S. government. So as long as they can continue to run on the fees that they collect, they could probably run in perpetuity.

Eric White: And are they still seeing strong interest even during a government shutdown? Are they keeping busy or is there a chill effect at all that’s happening, anything like that?

Jarom Kesler: I don’t see any type of a chill effect whatsoever. Most of the people that interact with the United States Patent Office are private organizations, so they’re not affected otherwise by the government shutdown. Now obviously, if the shutdown continues, I’m sure there are organizations that rely on federal funding that would be affected. But I think that number will be relatively low in comparison to the private organizations that deal with the USPTO.

Eric White: What about before the shutdown and overall? Has there been any changes with the new administration coming in? Usually, that’s not a question that we ask, but the footprint from the White House has been so heavy on all other agencies. PTO, rather small agency compared to others, but there’s been an office closure already and I’m sure that patents and trademarks, that’s in the business world, so that’s right up their ballpark. Any changes that we’ve seen so far coming from that standpoint?

Jarom Kesler: Yeah, actually significant changes. And a lot of it just is policy-based. So many of the PTO examiners, they do something called hoteling, which is they work remotely. And that’s been an office organizational tool for more than a decade. And the PTO then doesn’t have to continue to expand and buy new offices. In fact, I think they’ve sold some of their offices that they’ve had in the last few years. But under the Trump administration, they were asked to come back in large measure to the office. I don’t think that has actually happened because my understanding is most of them are union employees and their union contract protects their ability to work remotely. So that’s been interesting. The caveat to that is there’s certain parts of the examining corps. For example, the supervisors, they’ve been called back. Many of the administration is called back. Anybody that is not a union employee has been has been called. So that’s how the employees themselves have been affected. And then in terms of policy, we’ve seen a big shift in terms of who’s running the PTO and the policies that they’re implementing. Just recently, the director of the PTO has now essentially changed how and when a certain popular process called IPRs is implemented. IPR is a way that somebody can challenge a patent at the patent office. It’s quasi-judicial. It would be an alternative to requesting invalidation in the federal court system. And that process over the last five or six years has resulted in a lot of patents being thrown out. Eighty to 90% of patents were thrown out and challenged and now that number is going plummet. I foresee under this administration that IPRs will, in large measure, dry up, I think. We’ll see how it’s implemented. Those changes have just recently come out, even just this week.

Eric White: You’ve provided me a nice segway into the federal circuit aspect of patent and trademark business. We’re hearing from different federal courts that they may not have enough money to keep going the longer the shutdown goes on. What about court litigation pertaining to patent and trademark business?

Jarom Kesler: Yeah. So a lot of the federal courts, I think, are in the same boat. And that is they have a certain amount of reserve funds that they can operate on. During the last shutdown, they were able to operate for the full 35-day shutdown. My understanding is this time, it’s going to be different. They don’t have as much in reserve. And so we’re likely to start seeing some shutdown. We’ve already seen not in the federal court system, but in, for example, the ITC, which is a quasi-judicial court system, that they’ve completely shut down and pushed all dates indefinitely until they reopen. The federal courts, I believe, are going to stay open. They’re going to have some essential staff stay on judges and likely their clerks and will continue to do some functions, but it remains to be seen exactly what they consider important enough to continue with.

Eric White: And we’ve seen backlogs really grow exponentially for other areas of federal litigation just because of the turnover at the Justice Department overall. Is that the case as well when it comes to trade law and patent and trademark law as well?

Jarom Kesler: Yes, and it really depends on the court system that you’re in. Some court systems have seen big backlogs and continue to grow mainly because they’re popular for patentees to file in. Other court systems don’t see a lot of patent filing, so they’re probably unaffected in that respect. But overall, I think our judicial system feels overwhelmed and patent lawsuits, like all other lawsuits, take longer than I think all of us would like to get resolved.

Eric White: Going to ask you a very broad question here. So feel free to just zero in on whatever aspect you’re comfortable discussing. But the patent and trademark process, where is it at right now in regards to all the new technologies that we’ve seen come online, the innovation of large language models? I’m sure that some people are not happy to see some of their creations and their intellectual property being utilized in those spaces. What can you tell me about the overall process? And even from a workforce standpoint, you talked about how a lot of patent experts were working remotely now. Is that the case overall throughout the industry? I threw a lot at you right there. Just getting your thoughts here.

Jarom Kesler: Yeah, that was quite a bit. Let me try to unpack that a little bit. So in terms of copyright and trade dress infringement for training in AI, I think that’s an open question and I think there’s going to be a lot of lawsuits and we’ll see how those lawsuits play out, right? There’s this concept of fair use where you can use people’s copyrights for fair use. It remains to be seen whether or not training in AI is considered a fair use. So I’m going to probably refrain from putting a definitive comment there in terms of, I’m sorry, maybe you could ask your following questions.

Eric White: Just how the patent process has changed overall over the past few years with, like you had mentioned, a lot of patent experts working remotely, are there any written patents nowadays? And just wondering about that process and how it’s changed overall. Not an inventor myself. So if I come up with something, I’d like to know how to do it.

Jarom Kesler: Yeah, absolutely. To be honest with you, other than the technology that enables the patenting process, it really hasn’t changed much in a very long time, probably the last 70 years. Now, politically, depending on which party is involved and who the director is, there has been a push kind of to limit patenting and to expand patenting, right? And it depends on where the economy is and there’s a lot of factors that go involved. Patents ultimately are very good for the economy and are constitutionally protected. And so I think, hopefully, we will all see a strong patent system where innovation is protected because it encourages innovation and growth in the economy. And right now we’re seeing, at least in the current administration, a trend towards stronger patent protection. And so I would encourage, if you’ve got some innovation, even in AI, particularly in AI because the current PTO director has specifically said we want to encourage patenting and innovation in the AI space, become a leader there. So the patent system overall is becoming healthier and stronger and we’ll see that continue at least for the next four years.

Eric White: You’re telling me that even the patent process has become involved in partisan politics. I thought that was maybe one area that would be immune to it, but apparently, that’s not the case.

Jarom Kesler: Now, it’s not always the case. Now, there’s only so much that a politician can do on the patent process, but yes, you can feel some shifts in trends, depending on who’s in charge.

Eric White: Are we going to see patent policy discussed on the debate stage anytime soon?

Jarom Kesler: Probably not, but I would love to see that. I think that’s important.

Eric White: That would get you out of the seat.

Jarom Kesler: Patents are massively undervalued and underappreciated in the economy.

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