Leveraging Big Data, AI, and Patents for Business Growth

Leveraging Big Data, AI, and Patents for Business Growth

This is a summary of the lecture by Michael Dzwonczyk and Hyunseok Park both Sughrue Mion PLLC and Tim Hwang, FiscalNote, TaeSoo Sean Kim, Ice Miller LLP hosted by the Korea Society and Korea Trade-Investment Promotion Agency (KOTRA) about leveraging big data, AI, and patents for business growth. The content is fully aligned with the joint CEIPI European Patent👉 A legal right granting exclusive control over an invention for a limited time. Office Diplom Universitaire IP Business Administration and can be used to supplement the diploma content.

The webinar aimed to provide insights for businesses, particularly small and foreign companies, on navigating regulatory uncertainties and leveraging data-driven strategies for innovation👉 Practical application of new ideas to create value. and growth. The discussions highlighted the importance of intellectual property👉 Creations of the mind protected by legal rights. protection and strategies for managing patent disputes.

Session 1: Conversation with Tim Huang, CEO of FiscalNote

The first session featured a conversation with Tim Huang, CEO of FiscalNote, moderated by Tae Soo Kim, a partner at Ice Miller LLP. Huang shared his journey in building FiscalNote, a company that leverages big data and AI to provide policy information and insights.

From Politics to Data Intelligence: Huang’s Journey

Huang’s background is unique, starting in politics, working on President Obama’s 2008 campaign, and later serving on the Montgomery County Board of Education at the age of 17. This experience exposed him to the inefficiencies of government and the challenges of tracking regulatory information.  Recognizing this need, he founded FiscalNote in 2013, aiming to build a technology company at the intersection of technology and politics.

Building FiscalNote: Addressing Information Asymmetry

FiscalNote’s core mission is to address the information asymmetry in the legal and regulatory landscape. The company collects legislation, statutes, regulations, court cases, and government filings from numerous countries, using natural language processing, machine learning, and AI to analyze and structure this information. This enables clients to access critical legal data and gain insights into policy trends.

FiscalNote’s Growth and Customer Base

From humble beginnings with limited capital and living in a motel, FiscalNote has grown significantly, now serving over 5,000 customers, including government agencies (US Army, CIA, NSA, CDC, SEC, FDA), large corporations (half of the Fortune 500), and law firms (two-thirds of the Am Law 100). This diverse customer base demonstrates the broad applicability of FiscalNote’s data intelligence platform.

Acquisition Strategy: Expanding Data and Media Reach

FiscalNote’s growth strategy includes strategic acquisitions.  In 2018, the company acquired Congressional Quarterly (CQ) and Roll Call from The Economist Group. CQ provides legislative data directly from Congress, while Roll Call offers political news and updates from Washington D.C. These acquisitions expanded FiscalNote’s data and media capabilities, aligning with its goal of becoming a comprehensive information provider.

Core Product: Data, Content, and Workflow Software

FiscalNote’s core offering combines data and content with workflow software. The data and content component provides access to primary legal documentation, including statutes, case law, and regulations, from various government agencies worldwide. Proprietary news, analysis, and research are also integrated to provide practical insights into the legal landscape.

The workflow software includes alerts, notifications, dashboards, and reporting capabilities, enabling users to track regulatory changes, manage interactions with regulators, and centralize regulatory filings.

AI and Natural Language Processing: The Engine Behind FiscalNote

Huang explained FiscalNote’s AI algorithm using an analogy to the oil or mining industry.  The company “extracts” raw legal data, “cleanses” and refines it using text processing to add metadata, and then uses a “data pipeline” to transform the data into a usable format for web applications and APIs.  AI plays a crucial role in processing, summarizing, and classifying the text, automating these tasks and enabling efficient data analysis.

Challenges and Capital Raising

Huang shared the challenges of starting FiscalNote with limited resources, living in a motel to save money.  The initial capital raise was a pivotal moment, with Mark Cuban making the first investment after Huang cold-emailed him.  Subsequent investments from venture capital firms like NEA and First Round helped fuel the company’s growth.  FiscalNote has raised approximately $230 million in venture capital.

Ventures in South Korea

FiscalNote has expanded its presence in Asia, with offices in Seoul, Gurgaon (India), and Hong Kong. Seoul serves as the hub for its Asian operations. The company launched Data Hunt, a subsidiary that spins out FiscalNote’s core technologies into separate horizontal technology companies. This subsidiary focuses on data labeling and text processing technologies, serving clients in healthcare, e-commerce, oil and gas, telecom, and financial services.

The Importance of Patents

Huang emphasized the importance of building an intellectual property portfolio. He stated that FiscalNote started filing patents around the Series A and Series B funding stages. He highlighted the value of patents for strategic legal defense and for licensing👉 Permission to use a right or asset granted by its owner. technology.

He stated that a patent is only as useful as its ability to be enforced. He added that as FiscalNote expands and acquires other businesses, the company can enforce the patents to fend off competitors and to license the technology into the horizontal businesses.

Future Plans and Vision

Huang’s vision for FiscalNote is to become a billion-dollar revenue company by diversifying its datasets and expanding into new vertical markets, including healthcare, oil and gas, construction, and real estate. The company aims to collect legal data from every country, solidifying its position as a global leader in legal data.

He mentioned that he has challenged the internal teams to launch 20 new businesses in vertical markets to continue innovating the business.

Challenges in Data Collection

Huang acknowledged the challenges in collecting legal information from certain countries, especially those with unstable political structures. FiscalNote works with organizations like the World Economic Forum, the World Bank, and the United Nations to promote government standards for publishing laws and regulations.

People and Innovation

He discussed the challenges of maintaining innovation as a company grows, emphasizing the importance of hiring innovative people and fostering a culture of entrepreneurship. He stated that that he is making a big push to hire extremely innovative employees who can be founders in waiting.

Korean-American Identity

When asked about being a successful Korean-American founder, Huang highlighted the strength of diversity. He stated that diversity is a core fundamental strength for business, because the company needs to have a good understanding of different languages, cultures, and political structures. He noted that while being Asian-American can present challenges, it also provides advantages in globalizing the business and building relationships in Asian markets.

Session 2: Patent Challenge Proceedings at the USPTO

The second session featured Michael Dwanzik and Hyunseok Park, attorneys at Sughrue Mion, PLLC, who discussed strategies for challenging patents at the USPTO. They focused on Inter Partes Review (IPR), Post-Grant Review (PGR), and Ex Parte Reexamination, comparing these proceedings to patent challenges in district court.

Why Challenge Patents?

The speakers highlighted the reasons why companies might challenge patents, including identifying competitive patents relevant to their products or business methods, during due diligence, freedom to operate analysis, or patent prosecution.

Initial Steps When Faced with a Patent

The first step to take when faced with a patent includes determining whether the company’s product or method infringes the patent, estimating when the patent expires, and determining whether the company can design around the claims. Only after these steps should a company seek to challenge the validity of the patent.

District Court vs. USPTO Proceedings

Dwanzik and Park contrasted patent challenges in district court with those at the USPTO.

District court litigation allows challenges under any legal theory, offers extensive discovery, and provides opportunities for equitable remedies. However, it requires standing, has a higher burden of proof (clear and convincing evidence), and involves non-technical judges and juries. District court cases are also more expensive and time-consuming.

Inter Partes Review (IPR)

IPR is a popular vehicle for challenging patents at the USPTO. Any patent can be challenged under this process, but the challenge is limited to the grounds of novelty👉 Requirement that an invention must be new and not previously disclosed. and obviousness. The challenger participates throughout the trial, which is presided over by three administrative law judges. The IPR process has a limited duration, with a final decision due within 12 months of institution. Since 2012, there have been more than 10,000 petitions filed. The timeline includes a petition, patent owner response, board decision on institution, and a final written decision.

Post-Grant Review (PGR)

PGR is available only for patents with an earliest filing date on or after March 15, 2013, and must be filed within nine months of the patent grant. The challenge can be based on any ground of patentability, and the trial is presided over by administrative law judges.

Factors to Consider: District Court or USPTO?

Speakers discussed a number of different factors to consider when deciding where to challenge the patent. These factors include decision-makers, claim construction, evidentiary burdens, nature of evidence, discovery opportunities, settlement opportunities, and claim flexibility.

Settlement in IPRs and PGRs

The presentation highlighted that proceedings in IPRs and PGRs have high settlement rates.

Settlement generally happens before the Final Written Decision is issued, because IPRs and PGRs give the challenger an opportunity to mount a very credible threat to the validity of a patent.

Statistics and Outcomes

The speakers discussed statistics for institution rates, broken down by technology area. The success rate of final written decisions was also presented, showing the percentage of cases where all claims, some claims, or no claims were canceled. They noted that settlement rates are higher after institution.

Ex Parte Reexamination

Park then discussed Ex Parte Reexamination. Created in 1981, ex parte re examination has been used as a proceeding to change the pattern. The number of filing of this proceeding has been increased until 2012, but started decreasing since 2013. Reexamination provides only an anonymous mechanism that may be employed at the USPTO to challenge a patent.

The USPTO filing fee for the re exam is about $1,200. No legal STPEL is created by the reexam proceeding. The grounds for challenging patent in the re exam are novelty and obviousness. The average pendency of the re exam is about twenty six months. In this proceeding, The third party petitioner cannot submit an additional argument in response to the patent owner’s argument during the procedure.

Statistics showed that in the re exam, about ninety percent of the initial request is granted.

Hypothetical Scenarios

Park presented three hypothetical scenarios to illustrate the key features of the proceedings and guide decision-making. He discussed whether reexamination, district court litigation, IPR, or PGR would be most appropriate based on specific facts related to each scenario.