Red Tape for Red Tape Makers

The robust economy under the first Trump administration was aided in part by an executive order that directed federal departments and agencies to eliminate two existing regulations for every one new one.

Its Trump II successor is executive order 14192, “Unleashing Prosperity Through Deregulation.” This new and improved version requires agencies to get rid of at least 10 existing rules, regulations or guidance for every new rule, regulation or guidance issued. The E.O. says this exercise must translate into marked net savings, with regulatory costs of “significantly less than zero” in the current, 2025 fiscal year.

The latest red tape on the red tape imposed by red-tape factories known as federal bureaucracies has gotten some favorable nods, such as by Susan E. Dudley in Forbes and Clyde Wayne Crews of the Competitive Enterprise Institute.

The new E.O. could take a bite out of the Administrative State. It does some housekeeping, such as empowering the Office of Management and Budget to hold bureaus accountable through use of uniform estimates and measurements of regulatory costs. And any item of red tape must have appeared in the most recent Unified Regulatory Agenda.

The effects of the changes (good-government improvements) this E.O. makes could prove to be quite constraining on the Administrative State’s minions. Consider an attorney’s explanation of the impact to 401kSpecialist:

“‘To put things in some perspective, in 2024 alone the Department of Labor issued or proposed three significant new ERISA-related regulations (a regulation on environmental, social, and governance (ESG) investing, a regulation requiring lifetime income illustrations in participant disclosures, and a proposed regulation on fiduciary advice),’ Ari Sonneberg, Chief Marketing Officer and Partner at The Wagner Law Group, wrote in a Law Alert today. ‘The cost to the Department of Labor for just three new regulations under the Trump Administration will be the elimination of 30 existing regulations.’ ”

Multiply that math by all the regulatory agencies in Washington, then think about the scale of Elon Musk’s DOGE efficiency measures and reduction in the federal workforce. Next, factor in the ramifications of the Loper Bright elimination of judicial deference to bureaucrats’ statutory interpretations.

That means the Administrative State may actually be reined in over the next four years.

Biden’s Legacy: Pretty Shabby

As Joe Biden’s presidency comes to an end, the time has come for taking stock of his performance in that position of public trust. Judged by Biden’s effect on property rights, he has done exceptionally badly.

President Biden was elected on the false notion that he would govern from the middle of the road. Instead, he governed from the far Left.

Rather than bringing in experienced moderate and centrist Democrats capable of working across the aisle, Biden handed the reins to extremist ideologues, acolytes of Bernie Sanders and Elizabeth Warren, and Left-wing political zealots. For instance, Lina Khan at the Federal Trade Commission, Tim Wu at the White House and Rohit Chopra at the FTC and the Consumer Financial Protection Bureau.

Rather than seeking consensus by forging bipartisan legislation where a foundation for such constructive efforts lies, Biden force-fed Republicans, independents and moderate Democrats the most extreme, divisive policy prescriptions. A few disreputable examples are:

• Heavy-handed rules and lavish government subsidies to force electric vehicles on the country and outlaw internal-combustion-engine-powered cars, SUVs and trucks.

• Trillions of taxpayer dollars wasted, including in the American Rescue Plan, that supercharged inflation to levels not seen in four decades. This form of hidden taxation has caused American families unnecessary economic stress and financial difficulty.

• Weak patent policies, such as the National Institute of Standards and Technology’s wholesale, deliberate misinterpretation of the Bayh-Dole Act’s march-in provision, which has loomed over technology transfer for a year, while the National Institutes of Health has issued an eleventh-hour version of price controls. Rather than standing up for the TRIPS Agreement’s IP protections, Biden went all in on adopting a patent-stealing exception.

• Imposing overly restrictive export controls that punish American innovator companies more than they bind China.

• Enacting drug price controls in the socialistic, misnamed “Inflation Reduction Act.” These threaten the continued U.S. lead in biopharmaceutical innovation because government-set prices reduce revenues that fund high-risk, high-reward R&D, which is key to American innovation.

• Income redistribution through unlawful student loan forgiveness schemes. Biden has taken from the working class, people who didn’t take on debt to go to school and other financially prudent Americans to bail out the irresponsible.

• Vast expansion of the Administrative State, multiplying the regulatory burden on many parts of the U.S. economy, businesses large and small, and American life.

• Reviving obsolete, subjective antitrust policies and procedures, and imposing sweeping measures that have assaulted objective, empirical antitrust standards. Biden weaponized antitrust against routine mergers and acquisitions that would have benefited consumers and create dynamic competition, wealth and jobs.

• Forcing unionization, PRO Act style, through regulatory actions, even in right-to-work law states.

These examples beg the question: How much damage to private property rights has Biden’s wrong-headed policies caused?

How much innovation has his administration murdered in the crib? How much wealth was never created because the economic activity that otherwise would have occurred never did? How much has Biden-caused heightened risk and uncertainty frozen entrepreneurs, investors and corporations from pursuing the most economically and strategically sensible paths forward that would have yielded the greatest benefit?

The Biden legacy is one of leaving the nation less well off, less prosperous, less free, less thriving, less united. America is left with less secure property rights, less economic freedom, and less security — a sorry place to be just one year before the United States’ 250th anniversary of declaring our independence from a tyrant. In a sense, we may be repeating that exercise at this very time.

Dear Santa: Bring Us Sound IP, Trade, Tax and Competition Policy

Oh, no! Only a few shopping days remain before Christmas.

It’s vital that the United States outcompete China (and other adversaries and competitors) and reclaim the lead in global technological innovation. Our economic and national security rely on that outcome.

To achieve this, we must reverse the slide of weakening property rights in inventions. We need sound patent policies that restore quiet title to patents, retain the patent system’s democratized and merit-based nature, and ensure that U.S. patent rights are robust, reliable and enforceable.

Moreover, we also need smart trade, tax and antitrust policies that benefit America’s competitiveness. To ensure U.S. success in its mission to promote and protect American innovation, the private sector must be empowered to outrun Chinese, European and other competitors (and trade partners).

American businesses, not government, are the true champions of inventing and spreading American scientific and technological breakthroughs, and their global adoption.

So, here’s my Christmas list for Santa Claus:

• Codify the 2019 Joint Policy Statement on Remedies for Standards-Essential Patents. The Justice Department, PTO and NIST affirmed access to injunctions and all available remedies for SEPs. Leadership in standards development and SEP licensing is a competitive advantage that America must own.

• Protect the U.S. International Trade Commission from being defanged, as Big Tech and predatory infringers seek.

• Design carefully tailored export controls over U.S. innovative technologies that maximize American innovators’ ability to license IP to and collect revenue from foreign firms. We must avoid the extremes of decoupling from China and exporting highly security-sensitive technology. Getting it wrong may spark Chinese retaliation, as it did this year against the American memory chipmaker Micron.

• Restore the Hatch-Waxman and the Biologics Price Competition and Innovation Acts’ balance between innovation and return on investment on one hand and timely generic drug and biologics market entry on the other. That is, innovation and access.

• Return sensible merger and acquisition rules that incentivize startup activity, allow exit strategies for startups while derisking R&D for large acquirers that have the wherewithal to scale a startup’s innovations. Timely M&A is a critical element of commercializing innovations and sparking dynamic competition.

• Build upon the Trump tax cuts with investment tax incentives, such as R&D credits. Tax incentives that fuel investing in R&D will help recalibrate our policies to empower American businesses as key allies in achieving our economic and national security goals.

• Codify former PTO Director Andrei Iancu’s administrative reforms to PTAB proceedings and denials, and his 2019 Revised Patent Subject Matter Eligibility Guidance.

• Enact into law then-Assistant Attorney General Makan Delrahim’s New Madison Approach as doctrine for navigating the nexus of patent rights and exclusivity with antitrust.

Additional pro-patent, pro-innovation legislation to put into law:

• The RESTORE Patent Rights Act, which overrules the 2006 eBay v. MercExchange jurisprudence. eBay has fostered predatory patent infringement. The RESTORE Act would restore access to the customary equitable remedy of injunctive relief for proven infringed patents.

• The PREVAIL Act, which would codify beneficial PTAB administrative reforms that add greater fairness and due process for those whose patents are hauled before that body. These include standing, the same burden of proof courts and the ITC apply, and other standards and procedures federal courts and the ITC observe.

• The Patent Eligibility Restoration Act, which abrogates judicially created exceptions to patent eligibility. PERA restores patent eligibility for computer-enabled inventions and life sciences patents at the heart of medical diagnostics and gene therapy. Certain exclusions would clarify that naturally occurring matter and laws of nature aren’t patent-eligible.

• The Restoring America’s Leadership in Innovation Act, which is the most comprehensive bill, would reset the above three and more aspects of our patent system that have weakened U.S. patents, patent rights and our patent system itself—to America’s competitive and economic detriment.

Please, Santa, help the American innovators on your “nice” list.