PTAB harms U.S. competitiveness. It undermines secure, private property rights vital to our competitiveness in innovation.

The Patent Trial and Appeal Board has upended quiet title to patented inventions. This rogue body of the Patent and Trademark Office institutes proceedings against around 70 percent of challenged patents.

Then, 84 percent of patents that PTAB reviews are invalidated entirely or in part. By contrast, federal courts invalidate about 30 percent of challenged patent claims.

These stark differences in outcomes stem from fairness and due process afforded under sound procedures in real courts but a tilted playing field, unfair rules and multiple, nearly unlimited attempts at PTAB.

For example, PTAB has no standing requirement and a low standard of proof, preponderance of the evidence; courts require parties to have a dog in the fight and apply a high standard, clear and convincing evidence.

About three-quarters of patents challenged in PTAB must simultaneously fight challenges in federal court. So much for faster and cheaper and an alternative, while quiet title is out the window.

The 2011 America Invents Act created PTAB. It was spun as a faster, cheaper alternative to federal court. Proponents claimed there were all these “weak” patents being exploited in a purported litigation explosion. These were at best exaggerations by Big Tech and others.

Sen. Pat Leahy bought the spin. He still believes it. Leahy and the Obama-Biden administration gave Big Tech undue influence in the AIA debate. Big Tech continues to enjoy outsized say-so.

Patent infringer-friendly PTAB creates huge problems. One observer cites two of them: “The first problem is ‘patent mercenaries’ attacking patents for the sole purpose of harassing patent owners to earn a profit from their funders. The second problem is the financial strain on small and medium sized patent owners defending [interpartes review] suits.”

Unsurprisingly, Big Tech firms and Chinese and others’ national champions use PTAB the most. They target innovative inventors and the most valuable patents.

The gamesmanship at and weaponization of PTAB turn this U.S. government body into a powerful tool against American innovators—and against U.S. technological leadership and industrial competitiveness.

Gross abuse and harassment of patent owners goes on at PTAB. For example, VLSI Technology prevailed in a jury trial. It proved patent validity and that Intel infringed its patent. A court awarded VLSI an infringement verdict of $2.2 billion.

Then, newly founded OpenSky and Patent Quality Assurance challenged the same patents at PTAB that Intel had infringed. The LLCs hadn’t been charged with infringing VLSI’s patents themselves. The LLCs allegedly went to PTAB in order to shake down payments in exchange for dropping the cases. OpenSky and PQA filed “copycat” submissions of Intel’s previously rejected PTAB petitions.

Another example is cybersecurity firm Centripetal Networks. A court found Cisco infringing four of Centripetal’s patents, with Cisco’s patent infringement deemed “willful and egregious.” The court ordered Cisco to pay damages of $2.75 billion for willful misconduct.

Palo Alto Networks, an unrelated party involved in separate litigation with Centripetal, filed PTAB challenges against Centripetal’s patents. PTAB granted Palo Alto’s request. Centripetal requested review of PTAB’s decision to grant because it amounts to harassment of a judicially prevailing patent owner.

Meanwhile, the Federal Circuit Court of Appeals tossed the verdict against Cisco for flimsy, tangential reasons. That ruling is under appeal.

Sen. Leahy is retiring at the end of this year. His last hoorah is making PTAB even more biased in favor of patent infringers, Big Tech and foreign competitors. His “PTAB Reform Act” subverts Article III courts. It puts patent owners at even greater threat from multiple administrative challenges.

Former Federal Circuit Chief Judge Paul Michel warns, “. . . Congress is pushing forward a bill that would effectively overturn the USPTO’s efforts to balance the patent system. . . . But far from improving the legal landscape for small inventors, it will render patent owners powerless to fend off duplicative petitions at the hands of Big Tech.” Or by Chinese national champions.

Brian Pomper of the Innovation Alliance has said our patent system should be “a key part of our arsenal of democracy.” But the imbalances between real court and PTAB make our patent system AWOL in our technological competition with China.

Leahy’s legislation will make things even worse and further jeopardize U.S. competitiveness against China, whose aggressive strategy is taking big strides to overtake America as the world’s innovation leader.

* * * * *

Two member organizations of Conservatives for Property Rights are hosting timely events that highlight the importance of innovation leadership, the roles of patents and the U.S.-China competitiveness contest.

On Sept. 20, Tea Party Patriots will premier its new documentary film, Innovation Race, in Washington, D.C. More information is available here.

On Sept. 21, Eagle Forum Education & Legal Defense Fund will put on a program, “Strong Patents: The Key to Our National Security,” in Washington, D.C. More information is available here.

From a property rights perspective, the Democrats’ budget reconciliation bill that Sens. Joe Manchin and Chuck Schumer brokered turns out to be pretty much as bad as Build Back Better 1.0 a year ago. Call this one the “Build Back Manchin Act.”

Here are some of the worst-of-the-worst provisions of the Manchin-Schumer-Biden tax-and-spend bill:

  • It worsens inflation by handing billions of taxpayer dollars to future Solyndras—“green” energy fraudsters and opportunists—and subsidizes Obamacare premiums for 3 years—a downpayment on permanent subsidies of health insurers’ ever-rising premiums. Its electric vehicle subsidies disadvantage gas and diesel engine vehicle purchasers and manufacturers. All this is government picking winners and losers—something Manchin has opposed.

  • Its drug price controls—government dictating the price it will pay biopharma innovators for certain drugs, with a 95% punitive tax as the gun to their heads—will actually result in fewer new medicines, less innovation, higher initial new drugs’ prices, shifting $40 billion in new Medicare Part D costs to taxpayers and reducing generic drug competition.

  • It inflates American families’ and businesses’ natural gas bills with a tax on natural gas. Increasing households’ and businesses’ natural gas costs is effectively an increase of inflation--having to pay more for the same thing.

  • It threatens America’s energy supply, reliable power grids and thousands of existing energy jobs. This means more blackouts and higher power bills across the country. The Texas blackout-electicity-bill-spike fiasco and California’s overloaded power grids are going national.

  • It weaponizes the IRS and sics the tax enforcers on self-employed, small businesses and low-income earners who file for refundable tax credits. There’ll be many more IRS audits and related unpleasantness.

And this is what the “moderate” Democrats are fine with!

What the Dems do hiking taxes and spending speaks louder than empty rhetoric about wanting more domestic manufacturing and shorter, more reliable supply chains, or not taxing anybody earning less than $400,000.

The Wall Street Journal sums up the legislation well: “New taxes and price controls to pay for green corporate welfare for the politically favored.”

House Energy & Commerce GOP leaders warn, “The Democrats’ latest tax and spending spree will weaken our economy, kill American jobs, and make energy less reliable, less secure, and more expensive.”

Apparently, no Democrats in Congress or the Biden administration grasp the foreboding situation in which they giddily aim to increase taxes and manipulatively spend taxpayer money.

  • The Fed’s rapidly raising interest rates—the price of borrowing money.

  • The economy’s sputtering into recession.

  • Inflation is outpacing wage gains and purchasing power.

  • The Biden administration—aided and abetted by the Democrat Congress—has deliberately blocked, frustrated and refused to allow the private sector to ramp up things like building pipelines, increasing oil and gas exploration and production, and mining critical minerals needed for batteries, electric vehicles, green energy, etc.

  • Democrats are hitching their wagon to President Biden, whose approval ratings rival Jimmy Carter’s unpopularity during ‘70s stagflation. The RealClearPolitics average for Biden job approval is 39.5%; 72.8% of Americans think the country is on the wrong track.

  • Generally, the tax hikes and other nasty stuff in Build Back Manchin start immediately, while supposed benefits are several years in the future. Early pain, later-if-ever gain.

In short, Build Back Manchin doubles down on wrong-track policies. The whole country will pay for their hubris.

Attention, congressional Democrats: Y’all fixin’ to get schooled!

Thanks to Sen. Joe Manchin, other politicians in his party have seen item after socialist item fall from the budget reconciliation package to the cutting room floor. Thank heaven!

He’s given reality checks to extremist mischief. The past several months, Senate Majority Leader Chuck Schumer has wisely listened to and heeded the demands of his colleague from red state West Virginia.

Sen. Manchin’s prudence deserves praise. He’s carefully scrutinized the excesses his colleagues of the Left have pushed and pushed, much of it outright socialism.

Another item that amounts to socialistic policy remains on the budget reconciliation table. The wisest Democrat in the Senate hasn’t yet recognized its danger.

The Manchin goal is to help seniors struggling to pay inflation-fueled costs for their health care, food, gas and housing. The senator supports provisions sold as reducing prescription drug prices through direct negotiations. He’s also on board with extending extra Affordable Care Act premium subsidies ostensibly for two more years.

His goals are laudable. The problem and danger are the approach taken to reduce drug costs.

This pernicious policy—socialist policy—is the government dictating the price it pays for certain medicines.

It ensures a my-way-or-the-highway situation: The government sets the price. The brand drug company either takes the dictated price or faces punitive taxation.

There’s no level playing field. There’s no honest negotiation. There’s only artificially low payment for a valuable medicine used to treat patients for serious conditions or else a 95 percent inflation penalty on those drugs’ sales above inflation. This tax applies to sales not only in Medicare Parts B and D, but also in commercial markets.

Sen. Manchin’s crafty colleagues who concocted this scheme apparently haven’t given him the full picture.

Beyond the arming of bureaucrats with socialist price-control and tax weapons, other crucial aspects deserve sound-minded lawmakers’ consideration.

First, drug costs comprise less than 10 percent of U.S. health spending. Prescription drug prices have risen 2.5 percent over the past year, compared with 17.3 percent for health insurance and high cost increases for other health services. Medicaid and Part D average net prescription prices have fallen since 2009.

Second, price controls harm patients. The proposed vise will reduce development of new cures and treatments. The Congressional Budget Office underestimates 10-15 fewer new drugs over a decade due to price dictation. The innovation loss will be worse than that, and harshest for rare diseases and hard-to-treat cancers.

Diseases without early pharmaceutical interventions will require more patients’ use of hospitals and doctors’ offices for more extensive, expensive care as diseases progress.

Third, drug price controls will flow to medical providers. The government-set prices will lower provider reimbursement rates. Hospitals will charge commercially insured patients more for the same medicines.

All this comes amidst skyrocketing inflation that’s top of mind for Sen. Manchin. This “hidden tax” stands at 9.1 percent and likely worsening. The Federal Reserve is aggressively raising interest rates, risking recession.

Meanwhile, one-party-ruled Washington has overregulated, overspent, and threatens to do more of the same, with overtaxing on top. The reconciliation bill adds fuel to the raging fire.

The Obamacare subsidies shift costs to other Americans struggling under the highest inflation in 40 years, and carry other economic maleffects. They increase demand. Heightened demand drives politicians to impose price controls, here on the sector that's getting us through COVID. Next stop, rationing access to care and limiting patients’ coverage options.

Subsidies fund health plans that, instead of containing patient costs the past two years, have raised premiums and consumer cost-sharing. The extra monies do nothing to reduce inflation.

These subsidies may modestly improve affordability for some working-age people. It’s not free-market economics, it’s mainly political medicine for vulnerable Democrats potentially at risk when constituents see rising 2023 health premiums, though it isn’t naked socialism.

From the partisan budget reconciliation’s optimistic start a year ago, much of the original “Build Back Better” extremism has failed the Joe Manchin test. He and Sen. Kyrsten Sinema have courageously been the grown-ups in Democratic caucus meetings. They’ve protected America from parts of the Leftist policy agenda—at great personal risk and threats.

For the sake of the seniors and others Sen. Manchin wants to protect, for the integrity of the Medicare program, for the future of medical innovation and its health benefits and long-term cost savings, for the respect of private property rights and U.S. global competitiveness in biopharma, here’s hoping Sen. Manchin reapplies his test to the drug price-fixing-confiscatory-tax scheme.

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