In his second inaugural address, President Trump declared, “Americans are explorers, builders, innovators, entrepreneurs and pioneers.” Perhaps so, but right now, Americans’ freedom to innovate is impeded by patent predators enabled by the federal bureaucracy.
America stands at risk of losing the innovation war. Today, China leads in at least 37 of 44 technologies crucial to our economic and national security. If America is to retake the lead, Congress and the newly created Department of Government Efficiency (DOGE) must act urgently. A good start would be to trim the budget of the Patent Trial and Appeal Board (PTAB).
Created at the U.S. Patent and Trademark Office (PTO) in 2011, PTAB was supposed to resolve patent validity disputes more cost-effectively than federal district court. However, this quasijudicial board quickly morphed into a weapon by which “efficient infringers” – typically large Big Tech corporation and Chinese companies such as such as Huawei and ZTE – repeatedly and viciously challenge patent validity. Such abuse has deprived inventors of certainty, reliability, and enforceability of a property right constitutionally intended to be exclusive for a limited period of time. While China accelerates, PTAB puts American innovation into a deep chill.
As it stands, PTAB enables deep-pocketed serial infringers to file multiple petitions against the same patent. That increases costs for inventors and patent owners, who must repeatedly defend their inventions and who too often face the choice of accepting the infringement or settling for a much lower licensing fee.
Challengers need only demonstrate invalidity by a “preponderance of the evidence” standard in a PTAB proceeding rather than the “clear and convincing” standard district courts use. Plus, petitioners can simultaneously raise multiple challenges in different courts against the same patent, as has become common. About 80% of PTAB proceedings that reach a final written decision result in one challenged patent claim getting invalidation, with two-thirds of those proceedings resulting in the invalidation of all challenged patent claims. Unsurprisingly, innovators often refer to PTAB proceedings as “patent death squads.”
Several reforms have been attempted. Andrei Iancu, PTO director in Trump’s first term, proposed reforming PTAB in 2020 by narrowing grounds under which PTAB proceedings may be instituted. Ultimately, Iancu’s reasonable reforms were blocked inside the White House by patent infringer ally Vishal Amin, who ironically served as Intellectual Property Enforcement Coordinator and astoundingly is now said to be a leading contender as Trump’s next PTO director.
Congress should take up Iancu’s proposal and combine it with the PREVAIL Act, which the Senate Judiciary Committee approved in November. The PREVAIL Act makes meaningful the one-year time bar for challenging a patent and ensures that parties have just one bite at the apple, rather than never-ending challenges against a patent.
The legislation would create a standing requirement to limit PTAB challenges to a party facing a patent infringement lawsuit. It would prevent alleged infringers’ allies, such as financial partners, from leveling repeated challenges at the same patent. It would curb serial and parallel proceedings against a patent. The bill would codify the “clear and convincing evidence” burden of proof, raising PTAB’s low thresholds to the high standards applied in federal court and at the U.S. International Trade Commission (ITC).
Further, PTAB has an open secret. Its own ends don't meet. In fact, PTAB’s failure to cover its own costs not only distorts the unit’s decisionmaking, PTAB gets subsidized by the PTO fees of patent applicants and patent owners. This while PTO fees continue to rise.
Thus, DOGE should cut PTAB’s budget. Cutting PTAB’s funding would save taxpayers’ money, reduce PTAB’s workload, and confine fee monies paid to patent examination or other specific purposes.
By trimming PTAB’s budget, DOGE would pressure PTAB to limit the circumstances under which a patent may be reviewed. This would effectively reduce PTAB’s administrative costs, which now constitute a net loss, while protecting innovators from a body that today pays PTAB judges for instituting proceedings and invalidating patents.
If America is to beat China as global leader in emerging technologies, our best and brightest innovators must have the property-rights and free-market incentives and rewards to win that competition. Congress and the Trump administration must move quickly and decisively to reform PTAB and protect inventors and patent owners from predatory infringers.
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