“Genius,” Thomas Edison famously proclaimed, “is 1% inspiration and 99% perspiration.” America’s most decorated inventor may not have appreciated just how correct he was in a broader sense: Innovation in the United States depends not only on the eureka moments of our brightest minds but on the dedicated efforts of our elected leaders, appointed officials, and learned judges to nurture and cultivate those moments.
In this regard, the Trump administration has a tremendous opportunity to spark a resurgence in American innovation through judicious and energetic reform of the intellectual property, or IP, system. The key question: Will the new, and former, president embrace it?
The following are among the key IP and regulatory issues facing the Trump team as it takes office:
Will innovation PREVAIL?
In 2011, Congress enacted the America Invents Act, or the AIA, the most significant revision to the patent statute in more than 50 years. Among other things, the AIA established a Patent Trial and Appeal Board, or PTAB, within the U.S. Patent and Trademark Office designed to dispose of unworthy patent claims more cheaply, quickly, and easily. At the time, hardware and software titans such as Intel and Microsoft found themselves besieged by patent lawsuits from “patent trolls” and managed to persuade Congress to implement changes that would deter them.
And, boy, were they successful: In its first two years of operation, the PTAB wiped out more than three-quarters of the patent claims it considered. Since then, the invalidation rate has dipped a bit, but it ticked up to 71% last year. Small wonder that one patent-savvy federal judge referred to PTAB judicial panels as “death squads killing property rights.” Indeed, while many bad patent claims deservedly disappeared in the wake of the AIA, so did some good ones, baby and bathwater. Innovation has consequently suffered as patent owners, especially solo inventors and small companies, found it more difficult to vindicate their inventive rights.
Enter Sens. Chris Coons (D-DE) and Thom Tillis (R-NC), who introduced a series of bills designed to tip the scales back toward a more balanced approach. The Promoting and Respecting Economically Vital American Innovation Leadership Act, or the PREVAIL Act, which has also been introduced in the House, would beef up the standing requirement for PTAB petitioners, elevate the burden of proof for canceling patent claims, impede duplicative challenges to patented inventions, and prevent the USPTO director from influencing decisions.
The legislation aims to assist innovators ranging from inventive garage tinkerers to pharmaceutical giants. Rep. Deborah Ross (D-NC), a House sponsor, frets that the current system provides “two different venues … two standards of proof, that creates a quagmire for the small inventor.” And the deputy general counsel of Bristol Myers Squibb laments that, in the PTAB, “the primary basis for invalidating patents is based on a limited record, limited witnesses, [and] an inability to test the veracity of witnesses on cross-examination.”
Unfortunately, the PREVAIL Act has struggled to gain traction, spinning off the legislative agenda in several congressional sessions, including the most recent one. However, last November, for the first time, the bill made it out of the Senate Judiciary Committee’s Intellectual Property Subcommittee by an 11-10 margin. The measure, Coons said, “will get our innovators out of the courtroom and back to the lab or field, so they can get back to making the technological breakthroughs that push our nation forward.” So, when the bill is reintroduced yet again in the 119th Congress, will President Donald Trump take the initiative and help shepherd it through?
Eligible receivers?
Another key area in which legislation and executive action can unlock American innovation lies in reforming patent eligibility. The Constitution endows Congress with the power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” And, in 35 U.S.C. Section 101, the patent statute promulgated by Congress in 1952, an inventor may obtain a patent for “any new and useful process, machine, manufacture, or composition of matter.”
This guidance is fairly broad, and for decades, it has been understood to encompass everything from mechanical tools to pharmaceutical compositions to software. However, in a landmark 2014 case titled Alice Corp. v. CLS Bank International, the Supreme Court significantly limited the scope of patent-eligible material. In a unanimous ruling, Justice Clarence Thomas wrote that an invention must involve something “significantly more” than a mere natural phenomenon, abstract idea, or law of nature to be patentable. More importantly, Thomas wrote, “Stating an abstract idea while adding the words ‘apply it with a computer’” is insufficient to confer patent eligibility.
While the Alice ruling contains a certain surface appeal, it has, in practice, resulted in the evisceration of software patents over the last 10 years. In the four years following the ruling, roughly two out of every three patent claims challenged on eligibility grounds were vaporized, including a total of some 16,000 claims. New software patent claims, including those that “applied with a computer” various concepts that humans could perform at only a fraction of the speed, were rejected by the Patent Office at more than twice the previous rate. Diminished patent protection has, unsurprisingly, slowed the pace of innovation in software and other fields. One study found that the Alice decision had reduced investment in medical diagnostics, another field sensitive to eligibility determinations, by a cool $9.3 billion.
In response, numerous members of Congress introduced the Patent Eligibility Restoration Act, a bipartisan, bicameral bill designed, according to its sponsors, to “bring vital clarity for inventors and innovators and ensure the United States maintains its competitive edge.” The measure would effectively override Alice by restoring the status quo ante and articulating specific, narrow exceptions to the eligibility standards. In particular, PERA defines “useful” to mean, simply, that “the invention or discovery has a specific and practical utility from the perspective of a person of ordinary skill in the art to which the invention or discovery pertains.”
When I testified before the Senate Judiciary Committee’s Intellectual Property Subcommittee about patent eligibility, I praised the “practical utility” approach favored by PERA. “Codifying that phrase into the statute,” I said at the time, “would significantly help decision-makers — examiners, judges, patent prosecutors, litigators, and innovators — attain a measure of certainty in how they proceed. It is a substantial but supple doctrine that can accommodate the future development of technologies and their applications of which we currently are unaware, such as the exploding fields of artificial intelligence and machine learning.”
However, PERA has not yet advanced out of committee in the House or Senate and will need to be reintroduced in the 119th Congress. Large technology companies have pushed back vigorously against its advancement. Will Trump exhibit leadership by promoting it and the supercharged innovation its passage would spark?
Inventing robots … and robots inventing
The recent explosion of artificial intelligence has created significant opportunities and challenges for policymakers. As I explain in my forthcoming book about understanding and managing AI, we must devise policies that spur continued breakthroughs in machine technology while employing thoughtful, customized checks and balances to mitigate their possible harm.
Two examples of how not to strike an appropriate balance are the European Union’s AI Act and then-President Joe Biden’s executive order on artificial intelligence. Both measures imposed top-down, one-size-fits-all mandates on AI developers that risk stifling the striking advances we’ve seen in the past several years.
My American Enterprise Institute colleague Bronwyn Howell expressed well-justified skepticism that the EU measure would “effectively protect citizens from real harms that may unexpectedly emerge from the use of AI technologies.”
Likewise, my AEI colleague Brent Orrell lambasted the Biden order as “a tsunami of heavy-handed, poorly considered regulation, which can breed regulatory capture, stifle innovation, and deprive the nation’s businesses and workers of critically needed opportunities to boost sluggish productivity.”
A far better approach would entail rigorous, voluntary standards administered by independent industry groups. These trade alliances — such as the Partnership on AI formed by Amazon, Meta, Microsoft, and others, or the AI Alliance, comprising dozens of companies, universities, and foundations — are already working hard to develop ground-up guidelines that can flexibly accommodate the various stakeholders in the debate and channel the best of robotic technology while curbing its downsides.
So, when it comes to handling AI’s manifold challenges, the Trump administration should espouse what Howell calls “regulatory humility.” Will it?
On a related note, as part of my book research, I visited Missouri-based engineer Stephen Thaler, who created a machine, the Device for the Autonomous Bootstrapping of Unified Sentience, or DABUS, that he claims has itself invented a unique liquid container. Thaler has applied for patents around the world naming DABUS as an inventor, but thus far, he hasn’t managed to obtain protection in the U.S. “The Patent Act,” a federal appeals court held in 2022, “requires that inventors must be natural persons; that is, human beings.” And it’s not just DABUS who has been thwarted: The German conglomerate Siemens apparently had to abandon patent protection for automotive inventions developed by one of its own computers. Trump’s next Patent and Trademark Office director could create a process for the recognition of robot inventions. Will he or she?
Marching in place?
A final area in which Trump can ensure innovation thrives involves life-saving pharmaceutical breakthroughs. The Biden administration cravenly acceded to a push at the World Intellectual Property Organization in 2021 to extinguish patent protection for COVID-19 vaccines and treatments, which undermined the incentives of innovators such as BioNTech and Pfizer and left the entire world vulnerable to future pandemics.
Biden also threatened on several occasions to invoke “march-in rights” provided by the 1983 Bayh-Dole Act. The White House aimed to use this executive prerogative, which has never before been exercised, to force pharma companies that have produced key medicines to lower prices by scrapping otherwise binding patent licensing agreements. Needless to say, such recklessness would gravely impair future drug development.
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Trump has the chance to make sure we don’t fall into the same traps sprung by his predecessor. Will he and his nominee for secretary of health and human services, Robert F. Kennedy Jr., a foe of vaccines and Big Pharma, have the courage to stand up for innovation in the life sciences?
The opportunities here are vast and manifold. It may take some time to resolve all of these questions. But hopefully, Trump will embrace the spirit of Edison and apply the perspiration needed to ensure the flourishing of our innovators’ inspiration.
Michael M. Rosen is an intellectual property attorney and writer in Israel, a nonresident senior fellow at the American Enterprise Institute, and author of the forthcoming book Like Silicon from Clay: What Ancient Jewish Wisdom Can Teach Us About AI.