209: Patent Power: Protecting Your AI Innovations
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The AI revolution is here, and it's a gold rush. But are you protecting your valuable AI innovations? This week on The Richer Geek Podcast, we talk with Robert Plotkin, a leading AI patent attorney with over 25 years of experience. Robert helps cutting-edge AI companies worldwide secure patents that not only protect their intellectual property but also drive profit.
In this episode, we're discussing...
Patents are more than just legal weapons; they are valuable business assets that can be licensed, sold, and used to attract investment.
Patents provide a crucial deterrent against competitors, even if you never intend to initiate a lawsuit. They also significantly increase your company's valuation for potential acquisition.
AI-assisted creations, including prompts and inventions developed using AI, can be patentable, but the specifics are crucial.
Strategic IP is paramount for AI company success, impacting fundraising, profitability, talent acquisition, and exit strategies.
While copyright and trade secrets offer some protection, patents provide unique and powerful safeguards for AI innovations.
Patent litigation, though often expensive, is increasingly accessible to startups through innovative financing options.
Early consultation with a patent attorney is vital to avoid inadvertently forfeiting patent rights through premature public disclosures.
Resources from Robert
LinkedIn | Blueshift IP | The Genie in the Machine | AI Armor
Resources from Mike and Nichole
+ Read the transcript
Mike Stohler: Hey everybody, welcome back to another episode of The Richer Geek Podcast. Today we're going to talk about AI. I know a lot of your ears just perked up, all of you Richer Geek tech guys out there. Robert Plotkin, he's an AI patent attorney or lawyer behind tomorrow's AI Giants. For 25 years he's a renowned AI patent attorney. He secured patents for his client software and AI inventions. Here's probably perked up a little bit again. It's clear why cutting-edge AI companies worldwide engaged Robert to create patent portfolios that protect and profit. He first shared his AI patent strategies in 2009's groundbreaking, The Genie In The Machine. We'll talk a little bit about that, but now 15 years later, he has another publication, AI Armor Securing The Future Of Your AI Company with Strategic Intellectual Property. How are you doing, Robert?
Robert Plotkin: I'm doing great, Mike. Thanks so much for having me today.
Mike Stohler: Absolutely. I always like to start the episode with a little background about yourself. How you got from maybe some other type of tech patent stuff into the AI space, or did you just say, "You know what? That's where everyone's going and that's what I'm doing," so give us a little bit about who Robert Plotkin is.
Robert Plotkin: Yeah, I have always been working on software patents, obtaining software patents for clients. Going back, now almost 30 years, my background's in software. The first computer I touched was a TRS-80 back in the early 80s, programming in BASIC. That's what got me hooked. I went on to study computer science at MIT. Came out, went to law school and started working as a patent lawyer, always working on software patents. And then I started to see, even back in the early two thousands, how the AI back then, wasn't as powerful as it is now, but the AI back then was being used by people to accelerate the innovation process. People were using AI to help design drugs. People were using AI. Back then to design physical products like toothbrushes and antennas, and they're using AI to write software. So I saw that as a software geek, as a patent lawyer and thought, "Wow, that's pretty amazing," that people are using software to write software, using software to invent, they're using AI software to automate. Or partially automate the inventive process. What are the implications of that for patents? Can you get a patent on a circuit that was designed with a piece of software? The software, the inventor? Is AI going to replace human inventors? All that stuff. That's when I wrote that first book was called The Genie In The Machine, 2009. I've always been helping clients get patents on both new types of AI and on things that they invent using AI, right? It was a lot of work directly for clients when AI wasn't a hot topic. And then of course, just about two years ago, almost two years to the day when ChatGPT launched. And that's when AI took the world by storm. And now everyone knows.
Mike Stohler: That's when I thought it was invented. That's how much I know.
Robert Plotkin: Yeah. And since that time, there's been thousands of startup companies created developing new kinds of AI. And what's both really exciting and scary is that some of those companies have flared up and gone under. Almost as fast as they came into existence, for a couple of reasons. One is that the technology is developing so rapidly, things can become really useful and obsolete really quickly. And the second reason is that the big tech companies like open AI and Microsoft and Google, they see what a small tech company is doing with a new AI product that they've put out and they say, "Hey this would be nice for us to use." And they incorporate it into ChatGPT. Or into one of their other products, and then the small tech company can't compete with that. And over the last two years, there have been a ton of small AI companies that have launched and then been made obsolete when they've been out-competed by a big tech company. That's where I like to try to come in and help small companies by obtaining patent protection for them that they could at least use to try to defend themselves against competitors and bigger companies. And we can talk about this, use patents as an asset in the business that even if they're going to, let's say, get acquired by a Microsoft, that patent can be used as an asset to add value to the business in an acquisition. If they are going to be acquired.
Mike Stohler: Let's talk about that a little bit because I think that if you are small you have two choices. You either get an IP or you hope that a Google or someone buys you and all of a sudden you become the next billionaire or at least, a lot of money. So let's talk about the fact that I didn't know that you could have a patent of any kind and then still get passive income from it. Talk a little bit about how that works.
Robert Plotkin: Yeah, it's true. A lot of people don't think about patents that way. They think that if you get a patent on a mousetrap, you sell the mousetrap and if a competitor knocks you off and sells a mousetrap, you can use the patent to sue them and stop them from selling. Which is true. That is one thing, but what you can also do is the patent itself. It's like a derivative almost, like a stock, right? It is a separate asset that you own, a piece of property, which you could sell the patent, which is different from selling the mousetrap. You can license the patent, which is like renting it in a sense. You can say to another company, "Oh, you want to manufacture this mousetrap? You're going to have to pay me a fee, a royalty on the patent in order for me to give you permission to manufacture that mousetrap." A way of generating licensing revenue from the patent. And as you said, a lot of small companies don't either even know that you can do this with patents, or they don't think about generating a separate stream of revenue from patent licensing. And I'm not saying it's easy to do, it takes an effort. You need to have patents that are valuable to competitors and to bigger companies. But once you have them, you can. Generate revenue from patents separately from the sale, the revenue you generate from the sale of your products and services. It's a really important thing to think about from the beginning as part of your overall business strategy.
Mike Stohler: Yeah, that's very interesting. So you can patent and here's a question. For example, I use OpenAI to create a product. I patented that product. I made a lot of money with that product, but it was 100 percent made by OpenAI. Can OpenAI come and say, "Hey, wait a minute. That's actually mine, not yours?"
Robert Plotkin: Great question. Lots of products out there in the software and non software world build on others. Existing technologies as a foundation, right? And you think about any software that you write on a windows platform, right? You could say it runs on windows. It requires windows to work. Maybe you wrote it using Microsoft visual studio, right? You used all kinds of Microsoft technology to build it. But once you create that new software, if it includes some patentable algorithm, you own the patent. Microsoft doesn't own the patent, but it might be the case that to sell a product that makes use of the patent, you've got to make use of Microsoft technologies, in which case you might be in a situation where you, as the patent owner, you have a right to stop other people from selling your patented software, but you may have to license certain technology from Microsoft. It's very common that both of those things are true.
Mike Stohler: Yeah, I can see that. Microsoft or AWS, there's some of the big ones where, "Hey, look, you got to run AWS or Microsoft in order for this thing to work because it's built on their platform and that makes sense. The questions you have, if the AI company doesn't intend to sue the competitors for infringement. Then why do they need the patent? Can they just get rid of it? How does that work? So I'm not going to assume.
Robert Plotkin: Yeah. I'll tell you that probably 99 percent of my clients obtain patents and don't intend to ever sue. And so you might say why do that? One is that you use the patent to walk softly and carry a big stick. By having the patent, hopefully you never need to sue, but you use it as a deterrent against your competitors selling products that would infringe your patent, but that and they know that if they ever did knock you off, you would be able to sue more importantly for most of my clients that are small startups, right? As you said the two two things they want to do is either go public or get acquired 99% of the time some of them want to become the next Microsoft or Google. There's very few companies that will achieve that in a generation, right? So they want to be acquired or go public or merge or something like that. In that case, the value of the patent is that, again, it's an asset. It adds value. If you go to Microsoft, you show them your patent portfolio and they see that portfolio and see that it's something that will help them protect themselves against their competitors. Then it makes you more attractive and more valuable to them to acquire.
Mike Stohler: Now, how does it work? Mike Stohler just created something out of the blue. I patent it and Microsoft, some big wigs come and here I am with my one attorney. They bring in 30 or 40 people, for that intimidation factor. It seems like that litigation would be just a game of, "I've got a bigger stick. I've got 30 or 40 at 3,000 an hour, 4,000 an hour." You've got your, is it a game of kings? How in the world could I ever compete in something like that?
Robert Plotkin: Let me first acknowledge that U. S. patent litigation is very expensive, there's no question about it. It's long. Often if you really go to court and want to go through a trial, it's going to take several years. And how could a small company do that? Fortunately, in the U. S. There has built up a market for both financing for litigation and law firms that will take on strong patents. on contingency fee. So what that means is you're an individual, you've got a patent portfolio, you're not going to be able to shell out millions of dollars for patent litigation. But if you have a strong case that a big company is infringing your patent portfolio, you can go to a litigation law firm, go to a litigation funder and get funding for this litigation. Everyone's going to take a cut of the proceeds. Okay, there's no way around that, but it means that you don't have to pay anything up front. And it means the funder, the law firm will only get paid if and when they can generate a successful outcome for you and a payout for you. And I have had clients do it. I'm not recommending it. It's not fun. It's not easy. No one gets involved in patent litigation for the fun of it. But I have had clients who have done that and have done it successfully against the biggest companies. I had one client just come out of five years of litigation against Google for patent infringement. It was in the news went to trial in Boston there was three weeks of trial. They settled right before closing arguments. And so it does happen and it is now possible even for an individual or a small company to engage in that game of Kings against the biggest companies.
Mike Stohler: Yeah. And it got in my brain with some past podcast episodes, ladies and gentlemen. And I've actually had some people on the podcast that invest. They bring in investors that say, "Hey, did you know that you could even invest in the courtroom?"
Robert Plotkin: Yes.
Mike Stohler: So there are actually companies out there that bring in investors because they're the ones that are funding what you just said. And that just piqued my brain a little bit. So I come to you and say patents are expensive and things like that just to do that. And I already have a copyright, I already have my little trade secrets and all that sort of stuff. That's not enough. You need to go through the whole process.
Robert Plotkin: Patents are best for certain types of technologies and situations. Because they are relatively expensive, I would never recommend that a company just patent everything that it develops. Some things are best kept for copyright protection or trade secret protection. But where a patent is best is when you've developed a new algorithm in AI, it might be a way of training a model, for example, or a new application like a new kind of a chat bot in the case of AI. . Or a new medical application that uses AI. Mm-hmm . And if what you have was difficult to develop or required some real ingenuity to develop and if once your customers and competitors see it, it's easy for them to copy. That's a good combination of factors that weigh in favor of patent protection. Because otherwise, if it's easy to copy, once people see how it works . Then they'll just copy it right. And compete with you and you'll have put all that investment in and won't be able to recoup it. And the patent can protect you against that. And lemme just say a couple things about a patent that are more powerful than a trade secret or copyright. Someone can infringe your patent. Even if they're on the other side of the country and they don't know that you exist. They don't know about your product. They don't know about your patent. They come up with the same idea as you. They start selling your AI software to do the same thing. They're still infringing your patent. Patent doesn't require that someone else copy you. And a patent, if it's well-written, can cover the same basics. process algorithm idea, even if someone implements it in slightly different ways, different than a copyright or a trade secret. Although it's expensive to invest in, it's worth it for those situations where it has high value.
Mike Stohler: Yeah, that makes sense. Cause I might be somewhere in Arizona, I might just create something. I have no idea if someone in New Jersey did the exact same thing, unless I hire a bunch of people to look it up, things like that, but I may just be all excited and I may be, have been working on it for 10 years. And finally, and just someone beat me, and then you're like going, " If I just hadn't slept, I might've beat the people." Trademarks, it doesn't have to be like a big thing. I created this big thing. It can be just a little prompt that you need to. How small and minuscule of a thing can you, do you need to patent?
Robert Plotkin: Yeah, that's a really good question. A lot of people think you have to come up with something that's completely a hundred percent new, which is not true. An invention has to be. The easiest way to think about it is that it has to solve some technical problem. When I'm talking to an inventor or a company and they're thinking about patenting something, they've got a new way of training a model. I say, "Why couldn't you just use the model from OpenAI off the ChatGPT or something?" What was it that couldn't be done using existing technology that caused you to try to create this new thing? And if there's a really good answer to that, then they might have something patentable. And then I say, "What was difficult or challenging about inventing, creating this thing that you've got, was there some challenge you had to overcome?" And if they say, "Oh yeah. And we came up with an idea originally and it did not work. And then we investigated it and we went back to the drawing board and we came up with a different approach and we tried that and that didn't work. And we did a bunch of experiments and eventually we figured out it had to work this other way." Then I say, "You know what? Then you probably have something that's patentable.
Mike Stohler: Okay, there you go.
Robert Plotkin: So it doesn't matter how big the improvement is.
Mike Stohler: Yeah.
Robert Plotkin: It matters whether it was unusual or unexpected or required overcoming some challenge that other people hadn't overcome before.
Mike Stohler: Yeah, I know a lot of entrepreneurs started something because it's, man, I wish I could do this. Why can't I do this? And those people with those types of brains, they create it. Me, I just keep wishing that I could do something. That's why there are Elon Musk and normal people like me. Again, everybody's Robert Plotkin with the Blueshift IP Software Patent Experts, blueshiftip.com. Let's talk a little bit about AI Armor. I bought the book. What is in the book? What am I going to find?
Robert Plotkin: Yeah, so the book really talks about a lot of the things we've been talking about, which is why are patents valuable, particularly for startup companies that are developing new types of AI? One of the reasons is that there's so much competition from their peers. So many other startups are trying to tackle the same challenges. Agent based systems are the big one right now. Everyone's trying to create the best, biggest, most successful agent-based system. And there might be one big approach that surfaces as the right one, maybe there's going to be a bunch of different approaches, but when there's a lot of competition, it can be really valuable for a startup company to get a patent on their approach to things to help protect them against their competitors. And then the other thing is to protect them against. I call them the big AI, the giants of AI, Microsoft, Google, Meta, Amazon, OpenAI, because those are the companies who are constantly looking at what the startups are doing and deciding, what are we going to incorporate into ChatGPT? What are we going to incorporate into Microsoft CoPilot and if what the startups are doing isn't patented, then those big companies just incorporate what they want for free and basically free ride off the backs of small innovators. And without patent protection as a small innovator, there's virtually nothing you can do to stop a big company from doing something like that. So that's the first thing I will talk about an AI Armor. And the second thing I talk about is all of the uses of patents. I talk about what it is that you can patent in AI? It can be training a model. It can be applications based on a model. It might be the model itself. It might be the products you design using AI. There's all different types of things you can patent. And then what are the uses? You can license, you can sell, you can use it to increase the value of your company for an acquisition or an IPO. You can litigate. All of these different things that people don't often think about as part of the strategy. And then I talk about depending on how you're going to use patents. What do you need to do in the beginning to choose what it is you're going to patent to maximize the value of that patent and to maximize the return on investment that you have really scarce resources as a startup. You need to decide really carefully where to put your money and where to focus it. So I talk all about that in the book. It's very practical. Practical, strategic and tactical.
Mike Stohler: Yeah, there you go. And ladies and gentlemen, if you are developing new AI. Make it sound like a real human being as far as like when I rewrite a paragraph using AI nobody talks like that. It's not even Shakespearean. I don't even know what it is, but I like going because it's so AI. So let's develop something, ladies and gentlemen, that sounds like you and I. That's my biggest thing when I'm writing things. I'm like, if I ever talked like that, no, I'd have no friends, hilarious. Rob, before I let you go, is there anything that I did not cover today that you'd like to talk to us about?
Robert Plotkin: No, I think, we've really covered all of the important bases. The soapbox I'm always on is to preach to startup companies who might think patents are too expensive. Don't have any value for us. We're just going to be first to market and use that first mover advantage or use other things, which are all valuable. I'm not denigrating them, but who aren't aware of the important, valuable role that patents can play in their overall business strategy. So now we've talked about all of that. And I think the last thing I would say is that in the patent world, if you launch a product, if you release a demo, if you market, if you publish a paper, those can result in you forfeiting your patent rights. You can't wait forever to patent. It's ideal to file a patent application before you make things public. So I suggest that people always at least consult with a patent attorney. Fairly early on. I often have people come to me. I have a consultation with them and then I don't speak to them for another year or a year and a half, but at least they understand what they should avoid doing so they don't shoot themselves in the foot when it comes time to file a patent application. I think that's the last thing.
Mike Stohler: And when they do that demo, is it good enough to say patent pending?
Robert Plotkin: Yeah, patent pending is really valuable. So just what patent pending means is that you have filed a patent application and that it's pending at the patent office. It's waiting to be examined or it's in the process of being examined at the patent office. And if you have a patent pending patent application, you can say that publicly and that can be valuable. It can add some value to your company, has marketing value, and sometimes it can also deter competitors. If they see. Now that thing's patent pending, maybe I shouldn't launch a product that does the same thing as that patent pending product.
Mike Stohler: Yeah, there you go. Everybody, Robert Plotkin at BlueShift IP Software Patent Experts. If you're thinking about it, give them a call. How can people find you, Robert?
Robert Plotkin: Go to blueshiftip.com. I'm also on LinkedIn all the time. I post all kinds of stuff about patents, AI, software patents, AI patents linkedin.com/robertplotkin. Just my whole name. Follow me there and message me there. I'm on LinkedIn all the time.
Mike Stohler: All right, Robert, thank you so much for coming on The Richer Geek. Everybody, this concludes another episode of The Richer Geek Podcast. Take care
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ABOUT ROBERT PLOTKIN
Robert Plotkin is a renowned AI patent attorney with 25+ years of experience securing and leveraging patents for software and AI innovations. He has helped clients win landmark patent licenses and litigation battles against industry giants. Author of The Genie in the Machine (2009) and AI Armor (2024), Robert’s expertise in strategic IP protection helps AI companies raise funds, scale profitably, and secure successful exits. His MIND process offers a systematic approach to turning patents into a competitive advantage in the fast-evolving AI landscape.