Patent licensing and innovation, featuring Steve Chiang

In this episode of Innovation Capital

Host Ray Chohan is joined by Steve Chiang, Vice President and Chief IP Counsel at RPX Corporation, to discuss patent licensing, the future of patent valuation, and more.

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Episode highlights

• RPX’s evolution from defensive patent aggregator to data-intensive partner for its member companies
• The state of non-practicing entity litigation
• Best practices for patent licensing based on RPX’s unique and considerable experience in license negotiations
• The future of patent technologies such as AI-assisted patent valuation, block-chain powered innovation markets, and more
• Get our #1 Amazon bestselling eBook, The Definitive Guide to Connected Innovation Intelligence (CII). In this white paper, we explore what CII is, who it’s for, and how the world’s disruptors are using it to win in hyper-competitive markets. Download your FREE copy.

The experts

Episode transcript

Ray Chohan: Steve, welcome to Innovation Capital. We’re really excited to have you on board today. I’d love to kick our conversation off with your story and learn how you ended up in the wonderful world of IP.

Steve Chiang: Thank you for having me, Ray. I’m happy to be here. Before law school I was a software engineer. During that time, I was heavily focused on the latest enterprise software technologies, developing J2E platforms, and data buses.

While I was an engineer, I had an itch to return to graduate school. I reviewed various options including computer science, math and law. It became readily apparent to me that the lowest time investment and potentially easiest way to proceed would be under law.

I decided on law, and it has been a very satisfying journey for me — particularly in my role at RPX where we are in a somewhat different position from the typical licenser or licensee. We are effectively facilitating efficient transactions in patent licensing agreements. So, that’s a bit of my backstory.

Ray: Brilliant Steve. I first came across your organization and brand sometime in 2013 at an IPBC event in Singapore. I think I was having a beer at one of the stands when I met one of your colleagues and he described RPX and kind of positioned it as the white knight in the market.

I remember returning on the flight and spending some time thinking about how unique the mission and vision were. It’d be great to understand more about the founding story of RPX and the underlying thesis of your mission.

Steve: I joined RPX in 2013 so I wasn’t there firsthand for the founding story. But I can shed a bit of light into it. To understand the story behind RPX, you need to understand the problem.

Before RPX, there was a lot of wasteful expense in patent licensing in a variety of areas. One of them was it was very expensive to litigate patent cases. There were studies that showed the legal costs accrued in getting to dispositive motions, or getting to trial, or pretrial would be in the millions of dollars. Some numbers were showing $2 to $7 million. Even if that captures the first standard deviation, there’s a lot of volatility in patent litigation. Particularly when cases are being tried before juries, things can go in a lot of different directions.

One of the main theses behind RPX is to make patent transactions less wasteful in terms of spend of bulk transacting or licenses. This means instead of a patent owner who holds one or more patents trying to persuade Company A to take a license, and then going through maybe some litigation, and finally settling for some sort of undisclosed amount, and then doing the same thing with Company B, who has to hire their own counsel and go through the same song and dance and similarly with company C. There’s a lot of waste in this process because there are fixed costs that each company has to incur in order to understand the case and to formulate their own strategies, tactics and exit plans to that case.

Now in the kind of serial litigation I just described, it’s not always the case that Company B, can’t take advantage of company A’s work. Oftentimes they can take advantage of what will happen before. In the clearest example where a company just invalidates a subset of the patents there’s still waste generated.

In that scenario, although nothing precludes those individual companies A, B, and C, from having bilateral discussions with that patent holder, RPX offers the additional option of being able to say, “We know Company A, B, and C are interested, why not just get them licenses in one bulk transaction?”

Not only does this get rid of potential litigation expenses, but it also makes licensing simpler because we have set terms. And we know what kinds of resolutions our members often seek in terms of the scope of license language. So, that’s the thesis behind RPX — getting rid of wasteful spend.

Ray: That’s the core value prop, and have you guys evolved since then? I see some of your work in the intelligence space. I’m guessing since 2010 the platform has evolved. What does it look like in its current state?

Steve: I can’t disclose all of the details of how it’s evolving, but what I can tell you is we’re looking forward to how we can leverage a lot of the data we’ve collected in a variety of different ways.

Going back to the core business, we were striking a lot of deals in the late 2000’s and early 2010’s. We came to the realization there’s a lot of data we’re missing out on by not collecting it in a structured manner. This data can relate to the entities involved, the judges, law firms, and all sorts of information about the patents including who they’re transacting to and when they’re transacting relative to litigation, how long cases last, and all sorts of other data points.

We decided to start ingesting the data more systematically. We invested fairly heavily in making sure that we had enough data to inform our own internal decisions. As we started doing that, we would often have conversations with people about backing up the data. Then our members naturally started inquiring about the data and asking for it.

This interest created the next evolution in RPX intelligence and research which is, how do you surface the data in a way that’s meaningful to users? So, that’s what we’re trying to figure out. We want to see how we can surface data in a way that turns information into actionable insights.

One simple example is if I’m a prospect or a licensee facing a patent case from a defensive posture and I want to be able to figure out who this plaintiff or licensor is, RPX has a lot of data on that. We’re very careful and very respectful of people’s confidential information. But there a lot of publicly available data about the law firms that they’re using, how long they spend in litigation, where they prefer to file their cases and so forth. We weave all of that information into a connected story that shows a picture of what the opponent is doing.

That information can arm the prospect or licensee coming from a defensive posture with valuable insight on how they want to approach their case. For example, with this information they can make decisions such as what counsel to hire, what petitions and motions to file (if any) and so forth. There’s lots of information that can inform the ultimate tactics and strategy in a particular case.

Ray: It’s interesting, every business fundamentally does become a data business in time, right?

Steve: That’s right!

Ray: So, going back to those formative years where you were doing something quite contrary in the market where you’re going to Company A and offering bucketed services. Was that a big mind shift, approaching the industry with that value prop? Did that require a lot of winning hearts and minds? What was it like going to the market from 2011 to 2015?

Steve: That’s a great question. I joined 2013 so I did see some of the vestiges of the early psychology we had to battle. I wouldn’t say they’re completely gone. Like any disruptive technology being introduced to the market, we faced our face share of skeptics, and that’s for good reason. One of the biggest hurdles was convincing people that RPX was not just another patent troll. RPX very early, as part of its mission, pledged to never use patents offensively from the standpoint that RPX has never and will never assert a patent against any company. It’s purely from a defensive posture.

Despite undertaking that pledge, there were still a lot of skeptics early on because patent litigation, like any form of litigation, can be emotionally draining. There are people who grew up in a career of constantly battling patent cases from a defensive posture and developed an “I have to fight” mindset.

Sometimes that works. For example, sometimes you can invalidate a patent for relatively cheap – under a million bucks. But not all the time. And although some people might never admit it, there are real inventions that manifest themselves in patents and patent claims. There are some real innovations that make it into patents.

And what happens when people start to whittle away your defenses with legitimate portfolios or even sophisticated portfolios, and litigation strategies? Unfortunately, the ‘fight hard’ strategy might not work in those scenarios.

When you’ve seen enough cases, you start to realize that you win some and you lose some. Part of the psychology that RPX had to overcome was showing people it really was a problem of economics. A ‘fight hard’ strategy may prove to be economically viable to you in the long term because you establish your company’s reputation as someone who is willing to fight hard. Thus, you deter future patent trolls and MPE’s.

But if that’s what you’re going to do, you need to decide that that’s what you’re going to do. You need to decide as an organization. It can’t just be one person that feels very emotional about it. Once you make that decision, you need to understand what your exit strategy is when you’re faced with one of those portfolios you can’t win that war of attrition because they have too many patents. So, you spend a good chunk of money to invalidate one and they come at you with five more. Then they file continuations that cost them 1/10th of what it cost you to invalidate those five.

Viewing it from the economic lens is something that’s benefited, not just RPX in terms of how we can leverage our data to determine where we can thread the needle, but also from the standpoint of illustrating to skeptics that we can offer a much more attractive economic solution than you can achieve on your own. Once people realize that I think that’s where that’s where we can have much more productive partnerships with our members.

Ray: Steve, in the simplest terms can you explain to our audience what it means when you go into Company A and look at their portfolio and want to portion it into buckets? Can you give us a 360-degree view of what this process looks like, how long it takes and the stakeholders involved?

Steve: You’re referring to the patent holder, right?

Ray: Yes, correct.

Steve: Typically, the patent holder comes to RPX or they file a case and we see an opportunity. Before any decisions are made, we do our homework. We need to know who is involved, where they came from, the other cases they filed, what their litigation character is as well as whether we have a productive relationship with respect to potential licensing resolutions, and the market for the portfolio they’re asserting or shopping.

Additionally, we need to understand the scope of that market and if these patents are reading on a fringe feature that’s optional or if they’re core to a standard. We’ll also ask ourselves, is the patent family open? How many patents are there? How good are the claims? What are some of the defenses to the claims and can we find prior art for them?

A lot of homework goes into analyzing a particular case. Once we start to formulate our view of that particular case, we generally enter into discussions to try to understand whether there’s potential for a deal. That involves being armed with all of the information and approaching each discussion in a way that maximizes the possibility of getting the plaintiff or licensor to a rational point. That’s not always feasible. But it’s what we try to do.

Ray: Makes sense. Now, in the 2011 to 2016 time period, there was an extraordinary amount of NP action in the marketplace. I’m guessing your team was busier than ever. But it seems like it has tapered off in 2017 and onwards. Has that caused you to evolve your business strategy? What does the lay of the land look like right now in terms of business and the marketplace? The sentiment is quite different now in 2021, and onwards in terms of your business model and annual value props?

Steve: It is, and it isn’t. It is from the standpoint that the tenor of patent litigation in licensing has changed significantly. This happened around 2012 and onward. What we saw was in addition to the AIA introducing post-grant administrative proceedings whereby a filter (defendant) could file a petition to try to invalidate a patent.

We also saw the Supreme Count hand down this decision in Alice vs. CLS bank which had a big effect on the market. Many people think this was just a case about patent eligibility. And it was — especially to academics and the folks like examiners at the USPTO. But, in terms of patent licensing and litigation, what it did was move some of the goal posts. It would turn some of the medium nuisance cases into a smaller nuisance case. What used to cost a defendant somewhere in the range of the high six figures or low seven figures to invalidate by getting to claim construction and early dispositive motions, now you can do a motion to dismission or motion for judgement under Rule 12 for less than $100,000. In some cases, it may be much less — around $50,000 and in extreme cases less than $20,000.

Those developments along with a lot of the interim developments have changed the economic landscape of patent licensing and litigation. In the past few years, we’ve seen somewhat of a push in the opposite direction. For example, the Federal Circuit has issued a couple of presidential opinions in cases called Berkheimer and Aatrix. These opinions essentially moved those goalposts back to where they used to be. Basically, what they’re saying is, “If the plaintiff is making their case correctly, then defendants are going to be much less likely to resolve patent eligibility questions on early dispositive motions.”

Instead, they’re going to have to go through claim construction and a variety of additional hoops which just means more cost.

We’ve also seen the USPTO pushback, there’s a very famous line of cases known as the NHK-Fintiv rule where basically the Patent Trial and Appeal Board says it has discretion to deny on the basis of things that are unrelated to the merits of the patent. Now, they have statutory authority that perhaps supports that position, but really what it does is it changes the economic landscape of filing a case. When the AIA first came out when people were invalidating patents at a rate of 80 to 90% because it was all about the merits of your petition.

Now that line of administrative law has developed to a point where as a filer or defendant, you can’t be guaranteed that if you bring the best art, you’re going to have good solid chance anymore. There are things outside of your control related to district court proceeding and other things.

What we’re finding now is a strong pushback against some of the policies that undermined the economic calculus from the licensor perspective. Now, we’re seeing a lot more cases being filed that are actually somewhat more difficult to manage from the standpoint that you don’t have as many options as a defendant to get rid of the case on an early dispositive motion, or with an IPR kind of automatically anymore. That’s not to say that those tactics are completely off the table. It’s just to say that they’ve been somewhat diluted by a lot of the recent policies.

Ray: What’s the backstory regarding that flip-flop back to the 2013 posture?

Steve: It does seem like a step backward. The short answer is that there’s somewhat of a pendulum effect. It’s constantly swinging between making it easier for licensors or making it easier for licensees. There are a lot of factors that go into that. One of the biggest ones is how vocal the proponents on either side are for either their position or against the other side’s position.

Since the AIA and the Supreme Court’s Alice decision, I’ve seen the patent owner lobby become more vocal. They’ve shown more of a concerted effort. Since the days of Senator Patrick Leahy and other of our legislative representatives viewing the patent troll or MPE problem as a significant inhibitor of American innovation.

What we’ve seen is that the innovators or patent holders have taken a much more concerted effort to raise their hand and point to stories of how patents were invalidated under patent eligibility and question why. There are a lot of anecdotes that people were able to choose from and say, “Wow, maybe the pendulum shifted to far in that direction.”

That’s not to say that on the defensive side there haven’t been loud, vocal voices and action on that front. But it’s been more muted relative to the patent owner side. I think that’s part of the reason for the shift. But obviously that’s barely scratching the surface.

Ray: There are a lot of angles and perspectives on that front, but that context is really useful. Now, switching lanes slightly and thinking about the brighter side of things — RPX offers an exceptional experience around patent licensing. Can you talk about best practices regarding patent licensing and methodology? One or two simple tips would be ideal.

Steve: It depends on whether you’re talking on the licensee or licensor side. We could talk all day about best practices for either side and dependent. But I would say in terms of general advice:

1.) Don’t act irrationally: You want to avoid having deeply emotional conversations with people. As I mentioned earlier, litigation is usually an emotional practice and it consumes you, in part because oftentimes very smart people on the other side are looking for every opportunity to blow up your case. And you become very invested in it. It can be hard to take a step back and understand how to view the case from a non-emotional lens, and see it from an economic lens instead.

Having emotionally-based conversations with folks can turn things personal quickly, and if you piss someone off, you might be doing your company a disservice or your client a disfavor. Always have a voice of reason — this helps to set up and structure with your teams so that someone who is decoupled from the day-to-day emotions can touch base with you regularly. If you’re in the trenches and are starting to show too much emotion, having that voice of reason come and say, “Hey, is this really the best economic decision for us?” That structure is helpful in licensing negotiations.

2.) Know your market and the solutions available to you: As the business of patent licensing evolves, you need to educate yourself on what services are available, and what might be valuable to your company. For example, patent pools have evolved pretty significantly since the days of MPEG LA.

On the flip side, with respect to aggregating interest of licensees, there are a lot of resources available including companies like RPX, unified patents and patent pledges. There are a lot of innovative folks developing these solutions.

Know your market and when to engage on solutions and opportunities. There are so many options, and you can tap into the power of the collective. Don’t try to do everything on your own. From an engineering standpoint, if you try to do the lone wolf strategy, you become your own single point of failure. But if you join a collective, you can find a solution that will benefit many people. There’s not a single point of failure, and in essence you have a failsafe mechanism.

Ray: Thank you for that insight, it will be very useful to our audience.

Now switching gears to another part of the marketplace — IP valuation. I’ve had many discussions over a few beers, and let me tell you Steve, this one gets the sparks flying in the room! Some people get angry, others get excited, and some are neutral. Now at RPX, you guys have done a great job – I think $3 billion dollars in transactions over the years. This is great considering the macro context in this messy and confusing space. But where are we right now? I’m still bloody confused.

Here at PatSnap we offer a patent valuation capability. Clients like it, and it’s appreciated. We’ve seen it receive good acceptance over the years, but we’re still early in having some methodology really accepted and crossing the chasm on that front.

Do you think we’ll ever get there, Steve? Because it seems like the Holy Grail. What’s the future of that space (IP valuation)?

Steve: If the question is, “Will we ever get a magic button where you input a patent number, click this button and it tells you everything that will happen with that patent?” the answer is no.

Even if our current machine learning and AI proceeds at an exponential rate, I don’t think we’re going to get there. Part of the reason for that is because the value of a patent is not just within the four corners of the patent. There are so many factors involved, and those factors are constantly changing based on the patent law.

Now if you could have a button that takes this input and tells us where patent policy and patent law is going, maybe. But until you start reading judges and legislators minds, it’s not going to happen.

Judges and legislators are going to be reactive as well. They’re going to be looking at problems that people are bringing to them, and they’re going to try to make the best decision based on the information that’s available to them. It’s an imperfect practice, by any stretch of the imagination. There are going to be mistakes, and not only are there going to be mistakes in creating those rules, laws, regulations, but just by virtue of the fact that you have people with vested interest in either the value of a patent or upholding their company’s right to practice that technology without having a patent asserted against them.

You’re having a lot of smart people come together and pick holes in all of these words that you’re saying forms the basis of your opinion or your law. You can’t draft perfect laws, you can’t write perfect cases, and you can’t predict where patent policy is going. So that’s why the answer is no.

Now, can we get to a place where we can give people better tools? Absolutely. Here at RPX we are happy PatSnap clients, and we definitely appreciate the value we receive in being able to bring together a lot of different data points to inform our decisions. Like I said earlier, the more tools and data points you can give to people about not just the patents themselves and mining all of the wonderous deep rich data patents bring with them, but also looking at who’s involved, the frequency of the transaction, and what things are happening in this technology space, what products and services the patent can be asserted against, where the industry is going, the judges who are involved in patent licensing and so forth. Taking into account all of that information is something that can help people better make their decisions, right?

Ray: It’s definitely a journey, isn’t it? We’ve come a long way in the last three years, and we’re seeing a lot of shifts in the market.

Now switching lanes, this is another one that drives me nuts, and it’s still open for debate. I’d love your professional opinion. IP in the boardroom, in terms of getting everyone involved and having skin in the game, maybe one day even padding the IP department into a revenue center.

There have been so many technological developments around blockchain and NFT’s and you’re probably familiar with the headline about intangible assets making up 90% of the S&P 500’s value in 2021. That’s a blend of patents, brand value, customer data software and so forth. Now, do you think we are moving quickly enough where the board and C-level executives understand that asset class and the value of it in terms of impact on share price and growth of business?

Steve: I think on the whole IP is an asset class, and in particular, patents for technology-based companies, are appreciating the greater value patents can bring. In some historically patent-entrenched fields such as the pharmaceutical industry, you’re not going to have pharmaceutical or biomedical startups that don’t understand the value of patents. That’s a given.

But there are some softer tech or information tech-based companies where the startup market is highly saturated. As those companies start to develop from nascency into adolescence, we are starting to see more C suites appreciate the value of investing additional dollars in their patents.

It’s born out of a couple things, the first being when they first get sued by a patent troll or one of their competitors it immediately lights a fire. They say, “What don’t we have more patents?”

Alternatively, there are lots of folks who recognize earlier on as they move into adolescence and already have fairly sizable patent portfolios. We’ve seen plenty examples of that. In those cases, they’re much better equipped to fend off any other hostile commercial transactions by their competitors.

I think we are starting to see it improving and we’re seeing people appreciate the value of IP and more specifically, patents as an asset class. I think what’s helping is the rise of third party litigation funders. Which during the Covid-19 pandemic has really started to burgeon. Traditionally, IP and patent licensing is a relatively recession-proof asset class. Everything is done digitally – papers are filed electronically in court, you can appear by hearings over Zoom. It’s not like a restaurant business where if you tell people they can’t go outside, they’re not going to be able to do it.

A lot of well-capitalized funds have started to recognize that if we can develop our expertise in calling winners for certain patent portfolios cases, then perhaps we can generate some revenue from this asset class. What that’s meant is in the past year, we’re seeing a lot more cases that are brought in that are much better capitalized than the plaintiffs otherwise would have been. Having more money is always nice, but what does that really mean? It means a few things – first of all, you have to pay someone else which isn’t a plus for you if you’re a patent holder. But it does give you the ability to make the case further, to pay counsel a bit more to explore additional exits. And it also perhaps gives you the ability to pick out assets in the portfolio that might be more resistant to an Alice challenge. Maybe. If the litigation funder knows what they’re doing. That’s not to say it changes the true eligibility of any particular patent, but if you have 50 patents and you don’t have the expertise of trying to figure out which one you should asset first and against whom, you know, perhaps somebody with who’s developed that expertise can bring that to the table and help you and thus potentially generate more licensing revenue early on. That’s the idea behind it anyway.

Ray: Yeah, this is definitely something we could talk about for the whole evening because it’s top-of-mind for our team, customers, and passionate leaders around the world who are trying to beat the drum and win hearts and minds across different departments. Some industries like life sciences are further along, and then you go to the food and beverage industry and it’s a mixed bag.

We’re going to switch lanes again and talk about something trending across mainstream news. Across CNBC and other networks, we’ve seen the price action in Bitcoin, digital assets – all those fun headlines. But we are seeing some interesting developments with some big names and big capital behind them around NFT’s (non-fungible tokens). Some very strong business leaders worldwide, are saying it will completely revolutionize IP from a monetization standpoint and completely flip the model on its head.

Fundamentally, if you look at it maybe long tail, this is the blue sky and fun part of our conversation — in terms of wild thinking, but what does this mean for a patent system? Because if you’ve got this programmable intellectual property, which you can pre-program pre-secure or secure on the blockchain for royalties, payments and protection covenants, then what’s the need of a patent?

Are you guys looking at that? Because it’s moving really fast. There are already folks looking at a marketplace around NFT and patents, and there’s a marketplace called OpenSea and I think a patent is being placed on that marketplace. So I’m curious, is this something you guys are observing or do you have a macro general view on that shift?

Steve: I’ll say my two cents on it, and then I’ll turn it back on you, Ray.

So yes. I think what you’re referring to is an organization called IPwe, which was founded by Erich Spangenberg who ran one of the most notorious MPE’s back in the day. IPwe has effectively released a patent marketplace that relies on people putting their agreements on the blockchain. They’ve partnered with IBM because IMV has the most patents on the blockchain space out of any US company.

I think my two cents on the potential for it is that there are a lot of questions they need to get through. There are a lot of smart people at IBM so I wouldn’t put it past them. But, fundamentally, one of the issues with putting patents on a blockchain is, if you’re starting with the premise that we want to be able to track rights, licenses and encumbrances and how they flow through a patent and through different hands, that’s something that’s going to be hard to do without incentivizing the rights conveyor or the rights conveyee to do it.

Patent transactions are historically a very opaque process. It’s effectively a commercial transaction between two private properties. Giving away the secret sauce or the amount of money and licensing a certain asset has generated potentially undermines future transactions, both from the licensor and the licensee side.

But the idea is that you want to choose when you’re going to be using that information. You don’t want everybody else to get a free ride on that information. That’s one of the challenges that people are going to have to overcome in creating a marketplace where you’re putting rights conveyances on the blockchain. Another one is going to be security, and how non-fungible tokens are actually regulated. Right now, It’s the Wild West. If you were trying to rely on the blockchain on this distributed ledger blockchain to know what rights who has and when, the problem with that is it can lead to disastrous results if ever gets hacked or manipulated.

Or if it’s regulated in a way that you have to disclose it to people you don’t might not want to disclose it to. And then the question becomes, “Well, if you always have the backup of the agreement, then what’s the purpose of putting something on the blockchain? What’s the incentive?”

And that brings us back to that question. So, I think there are quite a few challenges these folks will have to work through, and we’re just barely scratching the surface. They will have to figure out what incentivizes people to get us to a point where we have some kind of critical mass.

Ray: It’s interesting, I mean we’re literally in the first innings of this paradigm. What’s happening right now is probably the real promise of the internet so I’m always optimistic on that. But yeah, it’s the Wild West, so many unanswered questions. To be frank with you, I think no one really knows but everyone is exploring and trying.

I’m still on the learning curve, but you mentioned incentive structure, from what we’re observing you can preprogram the holders incentive structure into an NFT environment. Whatever you want, as the holder, you can preprogram. So be it an X royalty or something in perpetuity, is baked into the code is law. But it’s interesting, obviously, there are a lot of hurdles to overcome. You’ve got to win hearts and minds, but it’s definitely an interesting space.

This segues into another holy grail which I’ve seen come and go, and you guys can definitely comment because you guys do some brilliant work in this space for your methodology. The marketplace holy grail. I’ve seen a bunch come and go, you have, Ocean Tomo that’s tried different things with IP Xi back in the day. Do you think that’s ever going to happen, Steve? I know it’s a broad question – but in the next four or five years do you think we’re going to have some form of innovation marketplace?

Steve: Maybe.

I think the innovation that’s happening right now, with respect to the blockchain technology, holds some potential. But I don’t think that’s going to be happening in the near future. In part because patent litigation in licensing itself is somewhat of a Wild West. I believe part of that reason is because you get these unicorn stories that are widely publicized, which for example is like the billion-dollar trial verdicts or a defendant going on a war path and invalidating countless patents. You get these outliers that cause everyone to stray away from a global marketplace, so to speak. They want to always do things their way, which is fine because oftentimes people who do that can be very successful. In terms of a global marketplace, I think there are so many challenges to numerate and overcome. At the end of the day, few people want to rely on a single marketplace and a single entity controlling that.

Ray: Speaking broadly, if it does happen, what do you think the first niche will be?

Steve: I would say right now the global patent marketplace, based on blockchain technology, might have the most potential. But you know, having said that and talked about it, there are a subset of challenges it has to overcome first. I think we’re quite a ways away from it.

Ray: I’ve really enjoyed the exchange with you today, Steve. Now, let’s have a bit of fun with our quickfire round. What are the two top books you recommend or most often gift?

Steve: Oh, geez. I would say Frank Herbert’s Dune is a must read. I re-read it every few months. There’s so much embedded in there — it’s so deep and awesome. There’s a light hearted one by Graeme Simsion. It’s a series about this autistic genius who struggles with his romantic life and being a dad. As a father myself, I can appreciate a lot of the travails he goes through. One of the books is called the Rosie Project, then there’s the Rosie Effect and the Rosie Result. The series is a lighthearted and fun read.

Ray: Now what about crypto, Bitcoin, a new monetary system — are you a believer or non-believer?

Steve: Skeptic believer. I have no doubt that there’s a lot of potential there, provided you know, people can get on the same page and overcome a lot of the challenges there. I think what people often underestimate is once you digitize something, the security ramifications and how difficult it is to unravel those. There are a lot more people smarter than us in the security field who are looking at these problems, but you still occasionally see even more creative people go out and create flaws on certain kinds of technologies. And part of the thing that we’re learning, at least in the US with respect to cyber security infrastructure is that you don’t know what’s there. Something could be lurking, and it could just be a time bomb, or several time bombs lurking in your chain, and you just have no idea. A good piece of advice for anybody who’s looking to invest is don’t invest your life savings in it!

Ray: Final question — extraterrestrial life, believer or non-believer and why?

Steve: Absolute believer. The statistics bear it out. There’re 400 billion stars by modest estimates, in just the Milky Way alone. In our visible universe, we have many galaxies, many of which dwarf the Milky Way. We’ve also been discovering that there are so many planets that are in the habitable zones of their solar systems. So, for us to be the only life form just doesn’t seem feasible. What’s more likely feasible is that we are being watched in some way or we’re maybe an ant farm experiment for another alien civilization. So, I’ll just put it out there and let people’s imaginations fly.

Ray: Brilliant, nice one Steve. Well, I really enjoyed the conversation today. Hopefully we can catch up for maybe a face-to-face beer part two one day when we can all fly, but you stay safe buddy and it was great to connect.

Steve: Likewise, Ray, thanks for the time.