Trench Warfare over Trump’s Common-Sense PTAB Reforms

On March 25, Patent and Trademark Office Director John Squires will appear before the U.S. House Judiciary Committee for an oversight hearing. The Intellectual Property Subcommittee chairman, Rep. Darrell Issa, seems intent on using this forum to advance the weakening of the American patent system.

PTO proposed a rule last fall to rectify a situation that for more than a decade has hampered American inventors’ reaping the fruits of their labor. Frequent users of now-notorious “patent death squads”—namely, Big Tech companies and a few Chinese and other foreign state-owned or -subsidized national champions—easily get away with patent infringement by wiping out the issued patents they are infringing.

The Coming of Patent Death Squads

The 2011 America Invents Act established an administrative forum for challenging patent validity: the Patent Trial and Appeal Board. PTAB has demolished quiet title in patents—essentially deeds to property that didn’t previously exist—that, typically, are being infringed by deep-pocketed bullies employing predatory, or “efficient,” infringement.

PTO’s proposed rule would for the first time make PTAB operate as AIA advocates claimed it would. Congress said of its intent for the new administrative venue:

“The intent of the post-grant review process is to enable early challenges to patents, while still protecting the rights of inventors and patent owners against new patent challenges unbounded in time and scope. . . . The Committee recognizes the importance of quiet title to patent owners to ensure continued investment resources. While this amendment is intended to remove current disincentives to current administration processes, the changes made by it are not to be used as tools for harassment or a means to prevent market entry through repeated litigation and administration attacks on the validity of a patent. Doing so would frustrate the purposes of the section as providing quick and cost effective alternatives to litigation. Further, such activity would divert resources from the research and development of inventions.” H.R. Rept. 112-98 (June 1, 2011), at 47–48.

My book To Invent Is Divine explains:

“PTAB was promoted during AIA debate as a faster, cheaper, more efficient alternative to litigating in federal court to resolve patent validity disputes. Its advocates asserted PTAB would give patent challengers ‘one bite at the apple.’ Proponents claimed ‘weak patents’ and a ‘litigation explosion’ driven by ‘patent trolls’ weighed on the patent system and innovators. Those claims were little more than spin.”

Instead, PTAB provides infringers virtually unlimited bites at invalidating an infringed patent in both court and PTAB throughout the entire patent term. We can be certain that the administrative postgrant review scheme’s purpose has been “frustrate[d]” and real innovators’ R&D resources “divert[ed].”

Battle over PTAB Reform

Such predatory infringement would be curtailed by the PTO proposed rule. That’s why the infringers’ lobby is aggressively trying to derail or water down the proposal. Opponents unleashed bots to deliver thousands of copycat comments in the public comment docket. They are also attempting to arm-twist the Trump administration into withdrawing the threat to the key to predatory infringement.

Their generic pharmaceutical allies don’t do R&D to discover and develop novel medicines, but merely produce copies of innovator companies’ products after the latter have taken all the risk, raised the investment capital and made a new product of great value. Generics and others perpetuate false claims about new medicines’ patents.

They assert that PTAB access is crucial for the generics sector and less than carte blanche PTAB access will lift drug prices, but those assertions are false. Just 3 percent of PTAB filings involve patent validity challenges related to standard medicines while 2 percent involve biologics. In fact, less than 20 PTAB cases in 2024 involved a pharmaceutical patent.

Lies, Damn Lies and Statistics

Similarly, bogus assertions and suspect statistics about drug patents’ effect on the price of a medicine are likely to be raised to Director Squires in the hearing. As PTO said in connection with its enlightening study Sen. Thom Tillis requested, “simply quantifying raw numbers of patents and exclusivities is an imprecise way to measure the intellectual property landscape of a drug product because not every patent or exclusivity has the same scope.”

Those trafficking in flimsy, exaggerated drug patent numbers, such as the Initiative for Medicines, Access & Knowledge, or I-MAK, and R Street, have done more to mislead lawmakers and the public than to enlighten those who should be committed to making policy based on valid, credible evidence. Illustrating the problem, some on Capitol Hill have bought into the misinformation. Lawmakers have sponsored legislation that swallows myths like “product-hopping” and “evergreening” lock, stock and barrel. Their credulity leads to their wielding antitrust sledgehammers at pharmaceutical patents based on false narratives.

Thankfully, Sen. Tillis’s suspicions have prompted truth-seeking. Prof. Adam Mossoff’s 2022 report “How Unreliable Data Have Infected the Policy Debates Over Drug Patents” fired a broadside. He cited the PTO study in another Hudson Institute missive, further lacerating I-MAK’s and others’ phony patent counts.

Down to Brass Tacks

Now with the live prospect of delivering PTAB reforms, Conservatives for Property Rights and other conservatives among other parties strongly support PTO’s proposal, saying so in distinct comments, and communicating that support to the White House.

What may transpire at the House hearing is a Republican leading the charge against a proposal by a Republican administration. It’s unlikely many committee Republicans or Democrats will take the bait.

The problem for Mr. Issa and his allies, many of whom were party to PTAB’s creation—aside from risking President Trump’s wrath—is that the facts are decidedly against them. PTAB reform stands out as crucial for American invention, and thus U.S. global innovation leadership, competitiveness, and economic and national security. There’s no good reason not to adopt the proposed rule—other than flacking for Big Tech and other serial patent infringers.

SOTU Review

President Trump’s State of the Union speech contained much to like. He touted One Big Beautiful Bill Act tax cuts. He cited several initiatives to right-set the country: an effective focus on reducing crime and securing the border, several foreign policy accomplishments, efforts to remove DEI radicalism and initiatives to prevent the criminally easy access of unqualified foreign truck drivers in obtaining commercial driver’s licenses.

He announced a renewed focus on ferreting out health care waste, fraud and abuse—though care must be taken to avoid past mistakes, such as going primarily after small-fry cheaters instead of large-scale fraud operations and overrelying on the False Claims Act and statistics reflecting certain patients and institutional expertise instead of fraud.

Of course, Mr. Trump bragged about his tariffs. He cast most of his talking points in the superlative, overclaiming his actions’ benefits. There was no admittance that tariffs may have helped keep Americans’ cost of living elevated and “affordability” at bay, even after other means, especially deregulation, were bringing down a good bit of the terribly painful Biden inflation we all endured.

Mr. Trump merely pitched drug price controls, “most favored nation” pricing. Behind that short mention, though, lies an epically reckless, destructive proposal that’s right out of the Huey Long school of socialist economics. The Trump administration recently put forth MFN rulemakings called GLOBE and GUARD.

The Trump plan for drug price controls is every bit as extreme socialism as former Louisiana governor and U.S. Sen. Huey Long’s 1934 “Share the Wealth” plan. Long advocated redistributing wealth and setting a top income level.

Conservatives for Property Rights filed comments opposing GLOBE and GUARD and urging their withdrawal. Here’s our argument:

“The MFN model CMS proposes raises very serious concerns from a property rights perspective. The chief concern is that the ‘most favored nation’ (MFN) model employed in both GLOBE and GUARD imposes foreign governments’ price controls. The lowest prices foreign freeloaders get away with paying result in great harm and adverse consequences for their own citizens. Importation of foreign government-run health programs’ artificially low payments will cause the same adverse consequences for millions of private U.S. citizens and leading American entities in medical innovation — both startups and established manufacturers. It is not an overstatement to say the MFN models of GLOBE and GUARD will ultimately cost many Americans their lives, their health, and their livelihoods.”

The SOTU speech included some heart-warming moments: the U.S. men’s ice hockey team, fresh off its Olympic gold medal victory; a veteran of World War II, the Korean War and the Vietnam War belatedly presented the Medal of Honor; and the Coast Guardsman who last year rescued more than 160 campers from floodwaters at a Texas camp and one of the rescued campers.

There were tear-jerking moments: for instance, a 7-year-old California girl who was badly injured in a highway crash caused by an illegal alien driving an 18-wheeler with a CDL he shouldn’t have been issued; a young woman who’d been swept into the coercive transexual surgery system when she wrestled with feelings of masculine gender; the wife of murdered conservative leader Charlie Kirk; and the wounded national guardsman and parents of the murdered Army National Guard specialist, both shot while on duty in downtown Washington.

To be honest, the number of shout-outs to such guests was too many. The more these occurred, they tended to diminish the honor afforded the many deserving individuals. Something uplifting and uniting took on the air of a spectacle, which was unfortunate.

Then there was the deplorable conduct of many of our nation’s “leaders.” The Left-wing Squad wins the prize for most unbecoming conduct. Democrats on the whole embarrassed themselves. Democrats’ vast majority refusing to stand and applaud at those moments, such as recognizing our Olympic hockey team or the badly wounded pilot whose successful mission snatching Venezuela’s Maduro came at personal cost.

You don’t have to agree with the Commander in Chief’s policy decisions to show respect for someone who wears the uniform of the United States and suffered injury in combat. To stand and applaud isn’t compromising your principles, it’s doing your duty as a U.S. official by showing due respect to a fellow American who answered the call of military duty. You don’t have to agree with Charlie Kirk’s politics to show respect for, sympathize with and express consolation toward his widow.

The president’s conduct too often stooped to too many Democrat attendees’ despicably low level. Name-calling, chiding, insults. Berating Supreme Court justices over a legal ruling that was widely expected because the language of an emergency powers law had been stretched far beyond reason.

The chance to unite at least the more rational among the opposition party was lost. This was the prime occasion to rise above opponents’ rudeness and display presidential demeanor and self-control. It was a missed opportunity in that respect.

The state of our union? It remains deeply divided, volatile, and, while seeing a range of improvements, stands under threat of reversal. If adopted, socialist price controls will hand China the global leadership and clear competitive edge in biopharmaceutical innovation the United States holds today. While neither party won the occasion, the whole nation stands to lose if MFN becomes law.

Technological Progress or Retreat: A New Year’s Resolution

“One sub-part of God’s grace is found in the jawdropping advances science has made the past few years in immunotherapy and more,” writes former U.S. Sen. Ben Sasse in his announcement that he has advanced-stage pancreatic cancer.

These words of appreciation for modern medicine’s many achievements and growing prospects come in an essay that reflects on a remarkable individual’s acknowledgement that every human being faces “a death sentence.” Sobering thoughts in the days between Christmas and New Year’s Day. And seemingly at odds with the promise of health improvements, overcoming diseases and creating cures.

Still, such technological and scientific successes are happening, not only in medical science, but in many areas, including semiconductor chips, energy (including nuclear) and advanced manufacturing.

For me, Mr. Sasse’s essay brought to mind several thoughts. First was a recent reminder of the state of the art in medical technology. This fall, I judged the semifinal round of healthcare contestants for the Cade Prize for Inventivity, sponsored by the Cade Museum for Creativity and Invention.

A contestant in this category was a startup that’s commercializing a discovery of follow-on use of an existing drug, mRNA COVID-19 vaccine. It causes a patient’s immune system to fight various types of cancer. The startup applies research from the University of Florida, where Mr. Sasse served as president, and the University of Texas MD Anderson Cancer Center. The remarkable evidence was reported soon after the Cade contest.

The other Cade Prize semifinalists in this category were also remarkable. There were a novel regenerative therapy for glaucoma (the category winner) and a CRISPR application editing genes in transplant organs to remove viral infections and decrease organ rejections. These three discoveries and inventions represent just a few of the scientific leaps forward occurring across the country and beyond. The rate of progress is indeed “jawdropping.”

Second, Tomas Philipson’s December 1 Wall Street Journal op-ed "Biden’s IRA Is Harming Cancer Patients” highlights one of the most detrimental of the multiple harms the Biden-Sanders-Manchin “Inflation Reduction Act” has inflicted on our nation.

Mr. Philipson’s research findings show how the IRA’s government price controls, regulatory hurdles and other measures reduce follow-on discoveries and inventions that benefit cancer patients. To wit, the IRA’s drug-price-fixing disincentivizes biopharma research and development and innovation, as well as investment in related R&D and commercialization.

The IRA ties an anchor, which becomes progressively heavier year by year, to the heretofore “jawdropping” pace of medical progress and its wondrous health benefits Americans have enjoyed until now and would derive from foregone innovation. He notes how the IRA’s government interventions—in the name of lowering drug prices—lead to more human suffering and greater healthcare costs in the long term.

The Cade contestant’s follow-on use of COVID vaccine, an existing drug, is exactly the type of important medical progress the IRA places at risk and Mr. Philipson discusses. Misguided socialist and populist policymakers miss the forest for the trees by resisting repeal of the harmful IRA.

Also, some Trump administration policies and proposals fall into the same misguided rut as the IRA. “Most favored nation” reference pricing, patent valuation taxes, mandatory “affordability” clauses in federal technology licensing contracts, government expropriation of a share of research institutions’ patent licensing royalties, for instance. We all suffer from bad law and ideologues’ bad judgment.

The Small Business Administration’s chief counsel for advocacy responded to the Philipson op-ed in a letter to the editor. Casey Mulligan writes that “government-imposed price ceilings curtail investment in maintaining and improving the quality of consumer products.” This results in “fewer new drugs to improve health and longevity, and fewer discoveries of how to use existing medicines better.”

Mr. Mulligan adds that small businesses, including the nearly 3,000 small U.S. biotech firms, “are the least able to survive a policy that shortens effective patent lives and caps prices as their discoveries approach the market.” From his pen to the White House’s eyes.

My book To Invent Is Divine explains that secure ownership must be connected to creativity in order to foster human flourishing. Attenuated property rights, which U.S. intellectual property law is supposed to secure exclusively, do exactly what Mr. Philipson finds the IRA does to cancer drug development.

Reversing course on these wrong-headed policy fronts would be a highly constructive new year’s resolution—and to keep to it through the year and beyond.