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Why do many businesses prefer lawsuits over licensing deals — and what does IP capital mean for innovation?

Phil Hartstein, co-founder of Soryn IP Capital and former CEO of Finjan Holdings, shares insights from orchestrating almost $500 million in licensing deals. He explains why patent licensing has shifted from corporate boardrooms to courtrooms, and discusses the economics of patent enforcement, the role of litigation finance in supporting legitimate innovators, and how AI is transforming IP strategy. 

Phil reveals what makes patents valuable, why most portfolios contain only single-digit percentages of enforceable assets, and his perspective on patent monetization as a strategic responsibility rather than defensive last resort.

Key Takeaways:

• Most patent portfolios derive value from only single-digit percentages of total assets
• Corporate defendants now manage 50-100 active patent lawsuits simultaneously
• Patent litigation costs range from $2-20+ million and take 3-5+ years to resolve
• Licensing discussions once happened in boardrooms over 9-12 month periods
• Modern product cycles compress multiple technology clusters into shorter timeframes
• IP capital helps innovators compete against well-funded corporate defendants
• AI tools like ChatGPT are transforming patent analysis and claim construction workflows
• Patent monetization strengthens both business balance sheets and the broader innovation ecosystem
• The U.S. patent system's constitutional foundation drives American technology development
• Strategic patent enforcement requires demonstrating credibility, capability, and resources

About the Guest:

Phil Hartstein is a technology investor, inventor, and intellectual property strategist. He co-founded Soryn IP Capital and previously served as CEO of Finjan Holdings, a public company now owned by Fortress. At Finjen, he oversaw licensing and enforcement of pioneering cybersecurity patents, orchestrating more than $300 million in licensing deals. Phil holds more than two dozen pending and issued patents and has been twice recognized as a top 40 IP dealmaker.

00:00 - Introduction to Phil Hartstein 
01:44 - Why companies prefer lawsuits to licenses 
03:03 - Boardroom licensing era vs today 
04:16 - Soryn IP Capital's role in leveling field 
06:35 - Corporate litigation dockets explained 
08:47 - Patent lawsuit economics and timelines 
10:23 - Funding plaintiffs vs bad actors debate 
13:10 - Making capital available for innovators 
15:36 - Patent quality and portfolio value 
18:07 - Supreme Court's Unwired Planet decision 
20:16 - The Alice decision's ongoing impact 
23:40 - Patent valuation and market adoption 
26:25 - PTAB's role in patent examination 
29:14 - Working with litigation finance 
31:40 - Evaluating patent portfolio strength 
34:22 - International IP enforcement landscape 
37:08 - Germany's patent system advantages 
39:30 - AI's impact on patent prosecution 
42:42 - Racing vintage cars as analog escape 
44:40 - Patent monetization as strategic duty

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Allison Gaul, senior counsel at BCG-X, an invention development and commercialization company, discusses the evolving AI landscape, where intellectual awareness meets real-world strategy.

As both a former patent examiner and litigator with a Harvard graduate degree in business analytics, she offers insider perspectives on how companies secure IP rights, why investors now prioritize AI risk policies, and how open source licensing drives market adoption.

The conversation explores copyrighted training data challenges, how small learning models compete with foundational LLMs, and why publicly available doesn't mean free to use. Gaul shares practical IP protection strategies for startups and established companies navigating content attribution, energy-efficient blockchain solutions, and the misconceptions engineers hold about software patents.

Key Takeaways:
• Small, targeted-use models (SLMs) trained on specific datasets are gaining traction because of their relevance and efficiency
• Investors are now scrutinizing AI startup' risk and compliance policies more carefully
• Open source licensing has become a significant tool for capturing market share
• Publicly available content is not automatically free to use; not all LLMs ascribe to this
• Blockchain offers potentially reliable solutions for IP tracking despite energy concerns
• IP and AI strategy require balancing innovation with responsible ethics
• Gen AI adoption began with easy productivity wins across industries
• Businesses that are mindful of AI risk are in a better position to attract capital

Subscribe to Understanding IP Matters on your preferred platform or visit understandingip.org for more episodes exploring intellectual property with leading innovators and experts.

00:00 - Introduction to Allison Gaul
01:07 - AI race and investor expectations
02:36 - Risk policies investors demand
03:01 - How companies leverage Gen AI
04:21 - Working with foundational model providers
05:34 - Day in the life of a product attorney
06:40 - Multi-dimensional AI competition
08:34 - Open source as market strategy
09:10 - Small learning models vs LLMs
11:02 - Copyright challenges in AI training
13:29 - Content attribution and data rights
15:41 - Licensing deals and fair use debate
17:34 - Legal frameworks catching up
19:20 - Transparency in AI systems
21:25 - Attribution standards discussion
23:38 - Geographic variations in AI law
25:44 - EU regulations and global impact
27:50 - Cross-border compliance challenges
29:33 - Energy concerns in AI development
31:18 - IP education for engineers
33:11 - Patents in software development
35:27 - Ethical IP strategy and responsibility
37:54 - Patent troll misconceptions
39:50 - Attribution vs permission clarified
40:54 - Blockchain solutions and limitations
42:08 - First exposure to IP rights

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When creativity meets intellectual property, innovation has no boundaries.

Eric Bear has licensed intellectual property to all major U.S. studios and Fortune 500 companies while maintaining a successful acting career. With over 100 patents covering software and video technology, Eric's seamless expansion invention was popularized by The Matrix and licensed to Disney, Fox, and other major studios. This conversation explores how he balances roles as inventor, entrepreneur, actor, and university professor while navigating patent litigation and startup IP protection. Discover how unconventional career paths can drive business trademark protection and commercial success.

Key Takeaways:

• How Eric licensed technology to all major Hollywood studios
• The connection between acting, invention, and entrepreneurial thinking
• Navigating patent litigation while maintaining creative pursuits
• Building companies around intellectual property course principles
• The role of performance capture technology in modern filmmaking
• Protecting IP rights while collaborating with Fortune 500 companies
• Career advice for young creators balancing art and business
• How AI impacts creative industries and performer rights
• The importance of following passion over financial incentives
• Screen Actors Guild protections for digital likeness rights

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Ruth Vitale, Oscar-winning producer and CEO of Creative Future, reveals the devastating impact of copyright piracy on America's entertainment workforce. Piracy costs the economy up to $71 billion annually and threatens 560,000 jobs across film and television. Ruth explains how small business IP protection matters for the 122,000 companies serving Hollywood, why copyright law basics must evolve for the digital age, and what IP protection strategies could save the industry. From malware risks on pirate sites to AI's threat to actor rights, this conversation exposes hard truths about intellectual property education and the urgent need for site blocking legislation.

Key Takeaways:

• Piracy costs the US economy between $29 to 71 billion annually
• Film and television employ 2.3 million Americans (down from 2.7 million)
• 92% of entertainment businesses employ fewer than 10 people
• Google receives 58 million takedown requests weekly—yet pirate sites flourish
• 60 countries have site blocking laws; the US does not
• Visiting pirate sites carries a 30%+ risk of downloading malware
• Movie theaters keep 50% of box office revenue
• Average entertainment industry salary: $141,000 vs $94,000 nationally
• Independent filmmakers finance projects with credit cards, can lose everything to piracy
• AI companies train models on copyrighted content without permission

Listen to discover how intellectual property course advocates like Ruth are fighting to protect creative workers and why copyright training matters for every entrepreneur.

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Award-winning educator and IP advocate Daryl Lim joins Bruce Berman to explore the intersection of artificial intelligence and intellectual property education. Broadcasting from Singapore, Daryl shares his global perspective on how AI is reshaping IP frameworks, from the $1.5 billion Anthropic settlement to the emergence of new data rights. This conversation examines IP leadership challenges, the role of blockchain in patent processes, and why marginalized communities need better access to intellectual property protection. Daryl discusses China's rapid IP development, the importance of equity by design in technology governance, and practical startup IP strategies for navigating an increasingly complex landscape.

Key Takeaways:

• AI and IP rights are fundamentally interconnected and evolving together
• The $1.5 billion Anthropic case settlement sets precedent at $3,000 per book
• IP leadership requires moving ahead of trends, not following them
• China has transformed from IP pirate nation to major player in 20 years
• Blockchain technology can reduce friction in IP transactions
• Universities became IP believers after the Bayh-Dole Act enabled monetization
• Content creators must embrace technology as ally, not enemy
• Government frameworks should align AI development with societal values
• Patent education and copyright training need to be more inclusive
• Small creators need better tools to participate in large-scale licensing

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Join host Bruce Berman for an illuminating conversation with Henry Hadad, Head of Intellectual Property Rights at Bristol-Myers Squibb. This episode explores how intellectual property education and strong patent protection drive medical breakthroughs while addressing common misconceptions about IP rights. 

Hadad shares his unique journey from a creative family background—his uncle wrote disco classics like "It's Raining Men"—to becoming a leading voice in pharmaceutical patent strategy. Learn how the patent process explained through real-world examples demonstrates why IP protection strategies are essential for developing life-saving treatments. Discover insights on startup IP challenges, the role of university research, and why patent basics matter more than ever in our innovation-driven economy.

Key Takeaways:

• Strong patent systems drive innovation by providing investment certainty
• University research partnerships create vital public-private innovation bridges
• Patent licensing enables smaller inventors to monetize their discoveries
• AI-generated inventions pose new challenges for patent eligibility
• China's improving IP system creates competitive pressure for US innovation
• Clear communication about IP benefits counters harmful misconceptions
• Patent certainty affects venture capital investment decisions
• Pharmaceutical patents enable continued research into new disease indications

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Michael Cima is a researcher, inventor and entrepreneur who has spent 40-years creating advanced medical devices that focus on diagnostics and treatments for cancer, metabolic diseases and trauma. He is also devoted educator mentoring the next generation of creators about the broad benefits of IP rights. 

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Julie Zerbo is an editor, lawyer and business analyst who covers the business of fashion, including its evolving use of licensing and IP rights. 

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Author Jonathan Barnett argues that tilting the IP playing field to the benefit of the biggest companies is a much greater threat to innovation, business and democracy than we are willing to admit. 

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Brandie Nonnecke heads the CITRIS Policy Lab, a tech research center at UC Berkeley that focuses on IT and deep tech and explores topical issues, including personal data privacy, digital access equity, AI bias, and the influence of social media on democracy.