I recently had the opportunity to chat on the record with Ashley Keller, a co-founder of Gerchen Keller Capital, about monetizing patent rights and the patent market in general. Gerchen Keller provides capital and other financing solutions to companies and law firms involved in complex litigation, including patent litigation. Ashley serves as the firm’s Managing Director. Prior to co-founding Gerchen Keller, Ashley was a litigation partner at Bartlit Beck Herman Palenchar & Scott LLP, where he handled a variety of patent litigation matters, among other things. Ashley also has the distinction of being a member of a relatively small club of Supreme Court law clerks. He served as a law clerk for Judge Richard Posner at the U.S. Court of Appeals for the Seventh Circuit and Justice Anthony M. Kennedy at the Supreme Court of the United States.
What follows are excerpts from my interview with Keller, which took place on November 5, 2015. To read the complete transcript, please see The difficult environment for monetizing patent rights.
Our conversation on the high point of the patent marketplace:
QUINN: If you were going to compare it to the high point, when do you suppose the high point of the patent market was and where would you say we are compared to then now?
KELLER: I would say eBay, which was decided in 2006, marks the point where things went from pretty darn good for patentees in the U.S. to trending negative. And there have been a slew of negative decisions since then, as well as a change in attitude towards patent rights. All of that has led to where we are now, which I hope is the nadir.
Our conversation on whether Alice is a bad decision and whether the Supreme Court intended to create the fallout that has ensued:
QUINN: I initially wrote that I thought the Alice decision was atrocious and I think it’s lived up to everything that I was afraid it was going to be. And it wasn’t so much the decision itself because if you read the decision it’s not terribly bad. But I thought it was incredibly predictable how the PTAB and many district courts were going to interpret the decision. So that’s, I guess, one of the reasons why I blame the Supreme Court. Maybe they were trying to be measured…I don’t think they wanted quite the chaos that has come out of this…but I also don’t know that they really understood what chaos could wind up happening. What do you think about that? I mean do you think they were intending to cause this or they were surprised?
KELLER: No, I don’t think they were intending to cause this. Again, maybe my loyalties lie with my friends at One First Street because they were so good to me. But in assigning responsibility, I’d put it squarely at the feet of the Federal Circuit. The Supreme Court could not possibly have avoided the Alice case when you had a 6-to-6 divided en banc Federal Circuit announcing a standard that would have truly reaped chaos. And the Federal Circuit’s inability to get its act together there and articulate what the law is with respect to 101 really forced the Supreme Court’s hand. The Justices are generalists, not patent experts, and no one articulated for them exactly what the standard ought to be. So they decided it narrowly to try to just resolve that one case and not much else, and here we are. That’s not to say the Supreme Court doesn’t bear some responsibility—I mean, they decided Alice and the original 101 exception is a made-up, a textual exception. There’s nothing in the Patent Act that talks about abstract ideas not being patent-eligible. So you can certainly fault the Supreme Court for that. But I think the Federal Circuit bears at least an equal amount of the responsibility for the chaos that has ensued.
Our conversation on the changing marketplace for those who invest in patents:
QUINN: I know that your investing decisions are changing because of the difficulty in assigning risk and understanding any kind of outcomes, but do you have a sense of what that is doing to the broader market, for the people who would otherwise normally be coming to you for money or the people that you’re turning away? Where do they go or do they go anywhere now?
KELLER: From our vantage point, our quality threshold (which was always very high) has risen even higher. Cases need to be very strong for us to make an investment. And the things we’re turning away probably would have been funded in a New York minute a couple years ago, but now they are finding it more difficult to attract funding and they might not find funding at all.
Tags: Ashley Keller, interview, interviews, patent, Patent eligibility, patent monetization, patents
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