Episode 102 - Strategy for Intellectual Property with David Kalow - ENHANCED
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Corey Kupfer: David Kalow was a University of Chicago law graduate in 1976. He was a general litigator before focusing exclusively on intellectual property. In 1996, he started his own new IP law firm, continuing the litigation, diligence, licensing, and protection of patents, trademarks, copyrights, and trade secrets.
And then in 2013, he started a solo practice. focused on IP strategy. David and I have known each other for, I don't know, probably close to a decade. And, he is really a, I like the way his brain thinks because he's not just a lawyer and not that there's anything wrong with that, but as a dealmaker and a business guy and whatever I loved, sort of the way he thinks about leveraging intellectual property, including in deals.
So David, I'm thrilled to have you on the Dealquest podcast. I am thrilled to be here. Thank you, Corey. Fantastic. So listen, before we get into all of the great stuff that you do for folks and the insight you have on intellectual property and deals and strategy, I want to take you back to when you were growing up as a little kid, 8, 10, 12 years old.
What did you want to [00:01:00] be? Cause my guess is an IP lawyer and strategist wasn't it at that age, but maybe I'm wrong. You tell me.
David Kalow: I think the goal was to be a space pirate. I read a lot of science fiction. And I knew that someday I would command my own space vessel, either as an honest trader or raiding on others.
Corey Kupfer: I love it. I love it. And what was your first deal of any type you can think of, whether it was something small when you're younger or something early in your career, whatever comes to mind.
David Kalow: I was a very nerdy guy. I thought I was going to be a scientist or a physicist. I wasn't the business person, you know, from day age 12 that I would like to be.
So I had to learn deals slowly and academically as opposed to a lot of the people that you have on your shows that are just great entrepreneurs and business people. And the most interesting deal was, of course, starting my own law firm. And then later, you know, almost 20 years later, starting my own solo practice, because that's being an entrepreneur and not just helping entrepreneurs.
Love it. [00:02:00] So
Corey Kupfer: let's hop in, because a lot of folks, I mean, certainly people come out of. biotech spaces, you know, various kinds of, specific, areas, whether it's manufacturing processes, chemical processes, things like that, they may be more familiar, but most businesses out there, I think at least, I mean, and I'll just give my opinion, you can tell me whether you agree or disagree, really just don't fully understand and underestimate the value and the ability to leverage intellectual property.
Thoughts?
David Kalow: My thought is that most people are not taking advantage of ways of making themselves more successful and more valuable at using IP. And I fully agree with you that there's any sector broadly that does pay attention to it and does use it pretty well, though believe me, I've seen mistakes there too.
It's the pharma, medical device, biotechs that hope to go into that. That's an area where they at least appreciate that it's important, even though sadly mistakes that are avoidable could, we're all going to make mistakes. I make mistakes every day. I [00:03:00] just want clients to make new and better mistakes, not the same old avoidable mistakes.
But,
Corey Kupfer: but you're
David Kalow: right. Pharma is the place where you're often see best practices.
Corey Kupfer: So let's talk about who could leverage IP because on this show, on this podcast, there's I often have a general premise, not related to IP, but related to deals, that, you know, there's a misperception that it's only the big companies that can do deals.
You know, it's, that deals aren't just big M& A and financing deals, but there's all kinds of deals that can be done, affiliate and licensing and joint venture strategic alliance. And that, you know, a company of any size can do some sort of deal. What's your view as to that conversation, specifically as it relates to IP, or there are only certain size or types of companies that really can do, can leverage intellectual property,
David Kalow: In some ways, the most important.
For the startup, the entrepreneur, the small company, because in many ways, and for most of these companies, that's all you have. As a lawyer, you know that we tend to split up the world into three types of property, [00:04:00] land or so called real property, personal property, factories and equipment, and then intangibles, the stuff you can't see taste, you know, the ideas, creativity.
And most of the companies today are not based on owning a valuable piece of land or a unique factory or equipment inside that. That's not what gives them their value. It's intangibles. And without the protection, they don't have size to protect them. They're not some sort of giant brontosaurus that can just stomp on the predators, right?
They're little defenseless hairy new mammals that are, three inches high. And if they don't use, understand and appreciate IP. Evolution will take care of them. And it's so sad because these people are smart. They're solving problems. They deserve rewarded. Their investors deserve to be rewarded.
And by missing opportunities in IP, at least in the way I think about the world. Value is wasted, left on the table, not exploited. That's a shame.
Corey Kupfer: So let's talk about some of the ways [00:05:00] that people can exploit that, you know, in, in a good way. That IP, I mean, obviously, there's trademarks, copyrights, patents those are all different things and applicable to different types of businesses.
What are some of the ways that you think companies can exploit, or use a license or whatever the kind of deal is with IP that they're not doing as much as they should be? Thank you.
David Kalow: The way I encourage people to think about this is by recognizing that they ought to use an appropriate for them blend of patent, trademark, copyright, trade secret, along with the big four, whatever lesser rights such as privacy, publicity, trade dress, plan protection, semi conductor chips, design patents, database rights, cybersecurity as part of their trade secret precautions, antitrust standards.
There's more than the big four, but using the big four as representative. You need to think about how is that going to work if you have to fight, if you have to litigate, not in the hope of never doing it, but of gaming out how that would work, then looking for licensing type relationships. Maybe it's standard setting.
Maybe it's a [00:06:00] big company making a strategic investment in you because they're interested in the technology. Maybe it's working with someone who'd otherwise own a key patent that you deed and would otherwise sue you. Lots of possibilities exist. And then getting protection, which is the first in time thing, having thought out these later stages, as opposed to saying to the average, fine, honest lawyer, what can you do to protect me?
And the answer to that is I can spend an awful lot of money and do all sorts of things that may never pay off for you. And if you aren't thinking the downstream usage of the IP, the least, most boring, most stupid use of your IP is to be in a litigation. But nevertheless, it's the base case because if the person on the other side of the table isn't thinking, you know, I would lose a lawsuit, so I better take the deal, whether it's a license or something more interesting and complicated, then you don't have anything to offer.
So you have to think through the fight to avoid the fight.
Corey Kupfer: So give us a couple of examples where companies have used [00:07:00] various types of IP, you know, trade That, people might be a little better, not the normal, or that'll get people's brains starting to think more creatively.
David Kalow: You have many a rock band that's broken up.
You have many a rock band that signed away their publishing. I had the privilege of representing some of the members of the young rascals as against the others looking at this somewhat closely at one point in time. And again, missed opportunities to have these great songs, more fully exploited and more money for everybody.
Because of improper planning, improper usage of the rights. You have one of my favorite examples, though, again, it's perhaps can be characterized as a core area, DNA synthesizers, which are some revolutionary technology to be able to build a 20 or 30 or 40 piece long of AGCT, you know, whatever you wanted.
And you just punch it into the machine. And a couple of hours later, it would come out, used to take several [00:08:00] PhDs, several years sitting around, like stirring the pot, like Shakespearean witches in order to build these things. And you could imagine when you're trying to cure a virus in real time or deal with other serious conditions, whether you're born with them genetically or it's a bacteria, it's a virus, being able to build the pieces, it's huge technology.
And the company had used a combination of patents over the chemistry, the equipment and the valves and the way that was put together, the software, trademarking it, having strategic alliances with leading universities so that improvements would constantly flow in. And they originally sued to stop other people from using this groundbreaking, absolutely terrific technology, and people couldn't settle.
The technology was too good. There was no other way to do it. And one of the things that I'm very proud of is I convinced the client to start licensing now to have a hefty royalty fee. And for 20 years, they collected royalties on this technology. I think it [00:09:00] may still be used today. I mean, it's a really incredible breakthrough.
I'm sorry they didn't win the Nobel prize because the people were just spectacular who did it and made it sort of a standard. And again, things got improved, things moved on. People that dented other technologies. But this one was just terrific. And by using patents and trademarks and using them across the physics and biology and software and chemistry of the invention, not just looking at it one dimensional, but a really three dimensional, four dimensional look at the IP, they were able to do very well for a very long period of time.
Philips Electronics that I had the honor of representing in a couple of small matters, calls their IP department IPN Standards, and they have done a wonderful job. Quite brilliantly, CD ROMs are an easy famous example where they set a standard with Sony and for years, you know, all the computers had those things that you could joke about.
There were cup holders and this, you know, everybody's CD could run everyone else's machine and money loading in a very good way. [00:10:00] And, everybody had a technology. We'd have to buy six different readers. I don't know if you remember all the different backup technologies that used to be out there 20 years.
Nothing worked with anything else. It was terrible. And they've done that in multiple areas. Cartier, Van Cleef Pell's, the Richemont Luxury Group managed in their Cartier watches to have such a strong design element for the look of their watches that we were able to litigate with my former partner, back when I had the law firm, a trade dress case that even though the counterfeit watches had a different name on them, they were still infringing.
Just by the look of the watch. And so they were using trade dress, the appearance of the goods as the trademark, in a very creative and powerful way.
Corey Kupfer: Many examples. I mean, it's interesting because I had somebody on a prior episode, Bill Cates, I don't remember the episode number. And he does a lot of licensing as a speaker, much more simple.
Right. IP, kind of DL, right. You know, as opposed to most speakers who will do a program for somebody. In fact, I actually just saw a post on one of the speaker sites, you know, on LinkedIn or Facebook, [00:11:00] one of those today where, person was saying, Hey, you know, the client is virtual world. The client wants to record, my talk and wants to be able to use it going forward.
And, what should I do? And I'm thinking license it, you know, they want to use it. You know, like let them use it, but you know, for an annual license or whatever it is, and if they don't want to pay it anymore, they can't use it anymore. I, you know, people sell off their IP or just do the work for hire in the small level so often.
And, you know, licensing is so underutilized
David Kalow: in my mind. And it's one of the advantages of obviously of being it. Independent contractor having your own operation as opposed to employee on the employer company side By the way, you mentioned work for hire It is one of the great classic traps that work for hired act doesn't actually mean as you probably know What it sounds like if you've hired some guy in india to write software for you, you've hired them you paid the money You don't own it, they do, unless you get proper assignment agreements from them.
So one of the great simple checklist things is [00:12:00] to make sure you have the right agreements with employees and with contractors to get the IP to flow into the company because even bad due diligence, the stuff that I fight against is going to detect that flaw and kill off any chance of your company succeeding because you don't own your own rights because you thought it was a work for hire.
But you're exactly right. As people create stuff. Now, that doesn't mean you can't like, I think, Saban and the polio vaccine, he chose to make it public and give it away. The IP does not require that you be maximally scrooge and greedy and evil and raise the price of EpiPens to a thousand dollars. And I was just talking about that.
Reading the antitrust suit against that. So hopefully it'll be a remedy, you know, but you can choose to use it in a good way. And what, you know, Congress realized, 20, 30 years ago is that the federal inventions, which were open to all, no one picked them up because no one had exclusivity. And that by indeed engaging in licensing to, you know, one company or a few companies, those people then had an incentive to invest in it, take, good [00:13:00] basic technology, build it out to practical commercial products.
And everybody won. That's why there's university, licensing departments all over the place. There's why a lot of these advances exist. Without a property right, you have the sort of, why communism doesn't work, why when the pilgrims landed, everyone would farm, they'd all share the food, and they'd share it equally, and everyone went, Oh, I have a headache.
Oh, I don't feel like, I don't get, I know this is true, but it's a wonderful story. I don't feel like working. And the colony was starving. So they said, okay, each of you get a plot of land and you get to eat whatever you make. Suddenly everybody wanted to work, you know, and I'm not saying that IP requires that you not have charity or not be generous.
There is power in capitalism and private property and ownership. And owning what you create is really, really important. The other thing I want to say about that is particularly when it comes to patents and software and everything should be public domain, people forget that the real reasons for the patent system in particular is not [00:14:00] Just to reward the inventors, I'd argue that's the third most important purpose.
The second most important is to reward the investors who, without some chance of getting their money back 10 X, a hundred X, you know, they might as well invest in pet rocks or something that's been done before. And it's safe, you know, to take the chance and then get that because inventors will often event writers will write creators will create perhaps without IP.
Who knows at what level, but in order to get it to go somewhere and do something to make real world goods and services that make people's lives better, you need the investors. But the first most important purpose of the patent system is to discourage the use of trade secrets and to enrich the libraries and not to have the lost knowledge that goes along with trade secrets.
Like for instance, Damascus steel, Roman flexible glass, Stradivarius violins, the library of Alexander, Greek fire, or the cotton gin mass production methods. All of which were secrets. And then they're lost either forever or for years and years before they're rediscovered. So [00:15:00] even bad patents, they're in the, they put in the libraries.
Someone has an exclusive right for 20 years that in God's ultimate judgment, they shouldn't have had. But still the knowledge is out there. People can start improving on it, inventing around it. Licensing it, and if the guy earns a little bit of money, he shouldn't. That's much better than creating incentives for everybody to keep everything secret and not use the patent system.
Mm-hmm. So there's a huge public policy issue, but again, the entrepreneur has to live with whatever law we have. Good or bad, we have a goof up patent system, I think right now that's weaker than it should be. You're stuck with it. So decide what to do across patent trademark copyright trade secret based on what the law is, not what Kalo thinks it should be.
Corey Kupfer: And when you say it's weaker than it should be, what, in what ways, do you see that? There was
David Kalow: a BlackBerry case back in the early 2000s, where a small company that invented some basic technology used by BlackBerry in terms of, you know, moving pagers to email and so on and so forth had sued.
And BlackBerry, instead of doing an honest evaluation of the patent [00:16:00] saying, okay, you know, might be valid, it might be invalid, it might be this percentage of our profits. Here's 10 million, you know, or 5 percent royalty, whatever the right numbers would be. They started wiggling and squirming like a stuck pig.
They were writing editorials on the Wall Street Journal. The patent system is evil. These guys win. Every member of Congress is going to have their Blackberry snatched out of their hands. These are patent trolls who lurk under bridges and they aren't really operating companies and we're the guys that did everything valuable and these patent holders are just exploiting us.
The plaintiff, which was a small company that was real to my best understanding. Suiting district court, which is not an easy thing to win a patent case, and won. It was taken up to the federal circuit. They won. It was put into reexamination in the patent office. They won a lot. Okay. Eventually, there was a 50 million verdict along with the judge saying that BlackBerry's litigation tactics in trying to defend were in such bad faith that the damages would be enhanced or attorneys fee, some other remedy.
Eventually, they also [00:17:00] managed to get an injunction so that BlackBerry settled for a half a billion dollars. If that had been a U. S. company, I would argue that they just violated Sarbanes Oxley by grotesquely mismanaging their assets at the board and CEO level. I think BlackBerry is a Canadian company and I don't know whether or not SOX applies.
And I thought SOX mismanagement of IP was the next thing. But again, it's complicated. You can't see and taste this stuff. It's not well taught in business school. Accountants don't have a proper, as opposed to the equipment and the land and the tangible assets, then they go goodwill, everything else.
I'm told that, you know, it used to be 80 percent of this S& P 500 was intangibles. I've told recently now it's 90%. And you know, most of the interesting new big and growing companies, big and small. It isn't the land, it isn't the factories, you know, there's Exxon and there's Ted Turner with his, thousands of acres of Buffalo and there's, you know, land hasn't vanished.
You know, it's been a form of wealth for a [00:18:00] thousand years or whatever. Factories and equipment haven't vanished. 50 and a hundred years ago when you had, you know, Rosie the Riveter and P52s being made by Ford and GM, it was the key to the world, but it isn't anymore. And if you don't have an IP or intangible asset strategy, you don't have a business strategy because that's what your assets mostly are.
And it pisses me off, you know, that they, it's not being thought about better. And it's not that hard and it's not that expensive, which are the two
Corey Kupfer: easy objections, especially on the patent side. People think it's very expensive, right? And it is more expensive than patents than it is in copyright trademark.
That's for sure.
David Kalow: And for sure. And there are ways of doing it cheaper. There are ways of starting cheaper and there are ways of being smart about doing. You know, on an ongoing basis, a little, and then a little more and blending it with the other rights and being thoughtful about it. I suppose just gain, what's the thing where you stick your fingers in your ear and you go, la, la, la, la.
I don't want to think about that. [00:19:00] You know, I'll think about that tomorrow. I'll never be hungry again, holding the carrot and the dressman out of the curtain. Gone with the wind. You can do stuff at any budget. Indeed, one of the keys to my process is it starts with budget. If you're a hundred thousand dollar a year spend, maybe some number like 10%, 10, 000, I don't know, 5%, 20%, you know, some fraction of your total spend should be IP.
And start with the number and then build a strategy within it, as opposed to saying, again, what can you do for me? Because I can file dozens of patents. I can file them internationally. I can, waste every penny you have and then some. Sure. It's the wrong question. What can you afford to do? How much justice can you afford is the New Yorker cartoon says.
Corey Kupfer: You mentioned patent trolls before. People who are on in this space have heard that term, people complain about them.
You sort of, said this small company of BlackBerry was, it was called a patent troll, but you know, it didn't seem that they were. Talk to me a little bit about patent trolls, because there are real patent [00:20:00] trolls out there, right? There are real patent trolls
David Kalow: out there. I mean, people Abuse stuff, right?
I don't know the actual story of the EpiPen going from, you know, a hundred dollars per dose to a thousand dollars per dose, but it gives me the sense that the rights there are being abused and that's probably out of patent because it's now old enough. So people do the wrong thing sometimes, but the patent troll is a way for companies Well, let's take IBM, for example, IBM, long as brag, we get more patents per year than anybody else.
And I am told by smart people who actually read those patents, that most of them are quite mediocre, but there are a lot of them. And that means that Fujitsu or Hitachi or General Motors or General Electric, someone comes after IBM and says, you're infringing my patents. IBM can say, let me look through my thousands and tens of thousands of patents.
I bet you guys can find some stuff you're infringing. Okay. We aren't going to hurt each other. Let's cut a deal.
Corey Kupfer: Right.
David Kalow: And this worked great for IBM and now Microsoft, Google, [00:21:00] Apple, Facebook, big companies. If you come after them, they'll come after you.
Corey Kupfer: It's the IP equivalent of what I learned as a political science major, MAD, Mutually Assured Destruction in the U.
S. and Russia, right? In the Cold War.
David Kalow: In fact, and I'm sorry if this sounds technical, patents are never a right to use or a right to operate or a right to make. They're always a negative. exclusionary right to sue other people for doing stuff, which means that when the Wright Brothers invented the airplane and Glenn Curtis invented the better airplane with ailerons instead of warping the wings and retractable or landing gear or wheels instead of skids, No one could make a good airplane.
The Wright Brothers couldn't make a good airplane because Curtis had the improvement patents. Curtis couldn't make his better airplane because the Wright Brothers had the basic patents. And the U. S. rolls into World War I unable to make airplanes. So they forced licenses from everybody and eventually These two companies that hate each other and had their hands around the other guy's throat [00:22:00] created a solution, perfect, you know, deal quest solution that we all know because there's the Curtis Wright Corporation.
They merged. That's one way of solving these patent problems. But if you're a little company, Or a university, or just a research operation, where you're a guy in your basement and you invent some great piece of software improvement, and you sue Apple and Google and Microsoft for stealing your invention.
Like this little company which was, you know, 30 people or 50 people sued BlackBerry. You can't be countersued. You either aren't making anything or you aren't making very much of anything. Your royalties are an infinitesimal fraction of what they have to pay. Or you might have gone out of business, you entrepreneur you spent a couple years You burned through some vc and now that all that's left is the patent portfolio, which is a pure patent quote troll All you have is this right to assert against others.
And suddenly this huge portfolio that you've accumulated for years, it's like, I don't know, a medieval knight suddenly faced with guns or, whatever example you'd like, it doesn't [00:23:00] work. And so you're pissed off. So what do you do? You call them ugly, evil, bad guys, you know, scummy contingency lawyers just coming after the companies that are productive.
It's just an insult. And the question in each case is, is this patent or trademark, copyright, trade secret, whatever's being asserted, is it in fact any good? Do you in fact infringe it? Those answers aren't black and white, they're percentages, but there are plenty of stories of the Apples and Googles and IBMs and GEs and big companies taking a little innovator and saying, eh, we can outweigh you.
We can outspend you. We're not going to pay you a cent or we'll pay you, one cent on the dollar. All right. And the intermittent windshield wiper is a great example of that. A movie was even made about it and they had a terrific firm in Texas that I, my buyer greatly. It's one of the reasons I got into this business, litigate that inconsistency and win substantial money.
Right? It's just an [00:24:00] insult the big user gets a little to say. Don't bother me. And you really got to be, which is to say that some people aren't abusing it, but there are stories also of IBM, et cetera. So the size doesn't determine the abuse. It's the, what you do with it.
Corey Kupfer: That's right.
David Kalow: That's my view of patent troll.
Corey Kupfer: Yeah.
David Kalow: Interesting.
Corey Kupfer: What else, is interesting in the IP world to businesses today? Any new evolutions, anything, that, you know, trends you're seeing?
David Kalow: Well, as part of this patent troll trend, we in the United States passed reform to our patent law about eight years ago. And this allowed people to go back to the patent office and say, you know what, patent office, you shouldn't have granted that guy's patent.
Let's re examine it. Let's rehear it. Let's have post grant proceedings and maybe we can kill off the patent. And those have been hugely successful for the big companies. The patent office proceedings are sometimes known as death panels because of the huge invalidity rate. And of course, if you're an entrepreneur that invested very precious money, you know, some 10, 000, 15, 000 to get a good patent [00:25:00] application written.
And you've got a couple of been there and then you had to respond to office actions, thousands of dollars, and then suddenly the investors invested thinking you had this right. Right. And so you're upsetting expectations. And one of the things the law should do is not lightly upset people's expectations.
And so we've made patents much weaker than we needed to. We also have a series of Supreme court decisions that I think are terrible in the sense that the Supremes unsurprisingly are not particularly scientists or engineers or entrepreneurs for that matter, and don't appreciate the patent system.
And they use sort of wordplay games without really thinking about the policy implications. So that diagnostics. Software, business methods are all either difficult to patent or impossible to patent or very, very narrow pathway to getting patent in ways that are completely foolish where you want all sorts of engineering, all sorts of applied science to solve real world problems.
You want there to be patents. So, let's do 2. 1 0. 3, 2. 1 0. 3. Now, I've already done [00:26:00] a video about this. But, you cannot just rely on big five companies, or big pharma companies, or big anything companies. You want to encourage the constant ferment and disruption of the entrepreneurship. Plus, if you're in a ignored or bad neighborhood, if you're a woman, if you're a person of color or racial or bias or whatever, and you can't get a job with one of these big companies, you could start a company.
But if you don't have rights to it, you're like the old farmer that after you farm the field, your neighbor comes by. So that looks nice and takes it. That's not good law. And so people have to be much more creative in how they use patents and trademarks and copyrights and trade secrets to build an IP strategy that makes sense, knowing that it's always going to be tough to be an entrepreneur.
Right now, the patent law is weak. People want to fight to make it stronger again. We've done this. We've gone back and forth with the pendulum over, you know, 200 years in this country. You can cope with it. But it hurts America. It hurts, you know, it makes it more sensible to do things in Europe and China [00:27:00] outside of America in ways that we shouldn't be encouraging.
Corey Kupfer: Yeah. You said earlier about, you know, you've made the case largely for the societal benefit of patents and, creating some transparency, things that people can build on after 20 years, all that kind of stuff. Yeah. Yeah. Yeah. What are the situations on a micro level where it does make sense for companies to keep something as a trade secret?
Sometimes you hear, and I'm sure, you know, the easy response is, well, that's a bad patent choice, but sometimes you hear, oh, you shouldn't, file for a patent because it gives, it does give away, your secrets. What are the situations where it does make sense for companies to keep something as a trade secret and not patent it?
David Kalow: There's a series of factors that you think through in terms of, can you detect the other guy's infringement? Is this the sort of thing that patents are being granted for? Strong or weak? Is the knowledge going to come out any way? How much is there going to be pub talk between your employees and theirs where it's going to leak?
How good are your security precautions? You should use trade secrets a lot as an entrepreneur. And trade [00:28:00] secrets and trademarks are two Transcribed ancient forms of IP. I represented Conan the Barbarian for many wonderful years. My senior partner did. I got to work on it. I got to read every Marvel comic that came out.
Conan's dad, the sword maker, had trade secrets, how he made great swords. He had trademarks, you know, plaque above his hut that said, Conan's dad, maker of great swords, buy from me, not the other guy. He didn't have patents and copyrights. Those are much more recent creations of statutes. So they've been around forever and they should Absolutely be used and having the right precautions in place and non disclosure agreements and most important not just cyber security but physical security and program you can point to.
There's now a crown jewel insurance program that I've talked to the creators of and it's a brilliant idea. They will, with an automated sort of AI tool, help you evaluate what secrets you have, the precautions, tune it up the way good underwriting do, the same way that for a factory, you know, you should say, Oh, get rid of that pail of kerosene over there.
It's dangerous. Then we'll write you the boss. They'll help you clean up what you're doing, evaluate. And then if they get [00:29:00] stolen, you know, you've got a lawyer to represent you, they'll get your damages. If the other guy goes bankrupt, they'll pay you with the. Guy publishes them and leaks them. It's a terrific idea.
I want them to extend it to all of IP from crown jewels, but absolutely use trade secrets. Also in areas like software, where most things go very, very fast, a patent that issues three years from now, by then the technology is obsolete. Right. Not true for spreadsheets, certain forms of database management.
There are things that are worth patenting in software, but there are things where maybe you just write your own patent and put it in. So you can say, I have a patent and come back to it later if there's money to do it, do it very, very cheap. It's just a backup strategy or do it us only. So it doesn't publish in 18 months and applications usually do, but absolutely use changing.
The other thing is imagine you're DuPont or you've invented some new Teflon polypropylene, whatever thing. What you do is take the, you know, the 20 stages of your factory process with different heats and pressures and inputs and this and patent one, three, five, and seven and trade secret two, four, six, and eight.
[00:30:00] Now you have a group of patents and a group of trade secrets and neither one being stolen, any one of them. Doesn't give you the whole thing and getting through the whole thicket of multiple secrets and multiple paths really very difficult
Corey Kupfer: One of the last questions I want to ask you here is we heard your bio that you went from you know Being a partner and in a law firm and focusing on legal work and now there's a focus on IP strategy And you know, that last thing you just said is an IP strategy, right?
David Kalow: As is applying U. S. only, so it doesn't publish. You can keep the option of treating secret ORPAT. Right. Right.
Corey Kupfer: So yeah, talk about that distinction, like, you know, when people come in and, and they want to work with you as a strategist, You know, what is it that you bring that might be different than an IP lawyer who says, Oh, you need to file a patent or trademark.
I can put in that application for you.
David Kalow: So there are companies, HP comes to mind, guy named Joe Byers, a long time engineer was asked by the CEO president, be our chief intellectual property officer, our CIPO, CIPO. [00:31:00] And what I am is a CIPO for hire, you know, going from company to company, the way, you You or others might be general counsel for multiple companies.
And what I used to do was build castles and battle enemies. You know, I would erect moats, I'd dig ditches, I'd shoot flaming arrows into the heart of invaders. What I do now is I architect castles and I take all of that battle experience knowledge, not just, I've read a bunch of books and I say, here's what we need to do today.
So that if we get faced by the barbarian hordes or invader, we haven't put all the money into the North wall and nothing into the South. We haven't put all the money into the wall, but none into the moat. We haven't dealt the situation where there's a lot of excellent, good, honest lawyers out there.
They're going to Bill the moats, dig the ditches, do all that stuff. But when the lawyer says a three foot wall, thick wall would be good, but four foot thick is better. And a 10 foot high wall is good, but 12 foot is higher. Keep in [00:32:00] mind, he's charging by the brick and he's just thinking about the wall. And if you exhaust your entire treasure, the thing you're trying to protect in spending it on too much wall, you actually haven't done a smart strategy.
You've got a triage, too much, too little, and then Goldilocks the right amount. And regular lawyers typically exist in, you know, a few of the 64 boxes of IP space. Think of a four by four by four patent trademark copyright trade secret. By litigation licensing protection deals by physics, chemistry, biology, software, and design technologies, activities, and rights, you know, their biotech litigators, their music copyright lawyers that do, you know, they don't look at the whole thing on a 360 basis.
I've had this strange, wacky, odd career where I've jumped around from thing to thing to thing, which puts me in a, if not unique, rare position of understanding well enough almost all of it and appreciating all of it, how to [00:33:00] use all of it. And then by all means, hire regular lawyers to do the right amount of work and the right work.
With me as your virtual inside IP counsel coming around to your side of the table saying what's going to serve you best. Then let's get it done.
Corey Kupfer: Love it. So if people want that kind of strategy, help, advice, service, that you've so, wonderfully demonstrated here, what's the best way for them to, get in touch with you?
David Kalow: Easiest is [email protected]. I'm also up on LinkedIn messaged me there, which is delightful as well. And if that doesn't work, they should contact you.
Corey Kupfer: I'll let you know when to find the guy. No
David Kalow: problem. Exactly.
Corey Kupfer: Fantastic. So David, my final question on the podcast is always about my highest value in life, which is freedom.
And I probably heard me say this is all the context where we've had conversations. For me, that applies to freedom from all people, from oppression to the reason I'm an entrepreneur. And I, you know, don't have a boss. What does freedom mean to you and how does it [00:34:00] apply to your business in life?
David Kalow: Let me answer that first by saying, Having gone now solo, my boss is still an idiot and my employees are incompetent, but now it's a hundred percent my fault.
I really am excited about using the IP tools and, you know, I've put some of them up online. They're there to use, even without me, please just, You go as far as you can with this to enrich people's lives, both in terms of the solutions that entrepreneurs create, which helps, all of their customers and the jobs and businesses and sources of incomes that it creates for the entrepreneurs and their company.
To me, it's an absolute good and sort of empowers people to achieve what's important to them, where the entrepreneur can look at a situation, thinking, thinking of those. Peace Corps jokes where they go into a country and they start building dams or something else totally inappropriate as opposed to empowering the people to say, what we really need is X, let's build X.
Corey Kupfer: Yes.
David Kalow: You know, that type of thing. And, without a job and [00:35:00] the self respect and the production to help others that, that come with that. And you and I have that through our jobs and we're very lucky, you know, what are you doing with your freedom? Matt, how much freedom are you really enjoying? The more people that can be entrepreneurs and build new and great things, terrific.
And these tools help them do it.
Corey Kupfer: Love it. David Kalow, thank you so much for being a guest, a wonderful guest on the podcast.
David Kalow: Not as good as a recent guest. I think her name was goddess. Anyway. ,
Thank you so much.
Corey Kupfer: Little last minute plug there for my wife. I love it. Thank you so much, David.
