Just before Congress recessed for Thanksgiving, the U.S. Senate Judiciary Committee moved the most proproperty-rights legislation in years.
The committee reported out, on a bipartisan 11-10 vote, the Promoting and Respecting Economically Vital American Innovation Leadership Act, or PREVAIL Act (S. 2220, H.R. 4370). Sens. Chris Coons and Thom Tillis, with cosponsors Dick Durbin and Mazie Hirono, lead this propatent rights bill.
PREVAIL codifies Trump-era Patent and Trademark Office administrative reforms. It makes other rule-of-law changes to a biased tribunal of the Administrative State whose job is to deprive inventors of private property rights that patents supposedly secure.
Gene Quinn, founder and chief editor and commentator on IPWatchdog.com, calls PREVAIL’s Senate committee passage “a long-awaited victory” for its lead sponsor.
The Patent Trial and Appeal Board has become a tool for predatory patent infringement. Rather than streamlining patent validity reviews, PTAB has been weaponized.
"Every day PTAB remains tilted against patents, PTAB kills not only patents, but associated startups and the jobs, wealth, consumer benefits, new knowledge, new products and technologies they would have created"
Mr. Quinn notes “a growing understand[ing] in the U.S. Senate that the PTAB is being abused by big-tech giants using various tactics.” An infographic compiled by the Innovation Alliance shows that more than half of the top 20 most frequent filers at PTAB are Big Tech behemoths that routinely practice predatory patent infringement. Other regular PTAB users include Chinese national champion firms.
The Alliance of U.S. Startups and Inventors for Jobs (USIJ), a strong supporter of the PREVAIL Act, says, “Rather than curbing unnecessary litigation, the PTAB has multiplied proceedings and costs for all involved.”
PTAB from its beginnings in the early 2010s has operated by rules and procedures that vary dramatically from those governing patent validity analysis in federal court and the U.S. International Trade Commission. PTAB invalidates contested patent claims three-quarters of the time. About seven of every 10 patents brought before PTAB are fully invalidated. And PTAB cancels at least one patent claim in 85 percent of the patents it reviews.
“The PTAB is harming innovation in America because it is making it untenable for individuals and small entities to even get started,” Mr. Quinn observes. Another way to put it is that every day PTAB remains tilted against patents, PTAB kills not only patents, but associated startups and the jobs, wealth, consumer benefits, new knowledge, new products and technologies they would have created.
This evidence is overwhelming. Anyone of open mind can’t fail to understand the urgency of reforming PTAB in the manner PREVAIL would do.
Which brings us to the committee vote. Most Democrats voted for PREVAIL, several of them expressing their remaining concerns. Almost half of Republicans voted for PREVAIL. Unrelated issues factored into several GOP votes against, while some voiced substantive concerns.
The most frequent concerns heard from senators on both sides of the aisle at the Judiciary Committee related to pharmaceutical patents, drug prices and PTAB. These concerns are unfounded. The special interests trafficking in such nonsense seek to mislead, confuse, spread false narratives and unjustifiably tie PTAB reform to the hyper issue of drug costs.
First, a USIJ white paper rebuts the false claim that PTAB denials of certain requested patent challenges often involve pharma patents. In fact, USIJ finds that PTAB declined to institute proceedings on four patents—less than half a percent of the 604 denials—on pharmaceuticals. Moreover, only 6 percent, or 73 petitions of the 1,288 fiscal year 2024 petitions for PTAB institution, pertained to pharmaceutical or biotech patents. Most filings challenged patents in other technological areas.
Second, research from George Mason University’s Center for Intellectual Property x Innovation Policy disproves the assertion that pharma patents delay generic competition’s entry into the marketplace. C-IP2’s analysis finds that a drug’s effective patent life averages 13.35 years. And regardless of any patents and exclusivities placed on the FDA’s Orange Book after a drug’s market entry, those additions don’t extend its effective patent life, C-IP2 reports. Thus, patents don’t cause drug prices to rise.
In other words, concerns over alleged abuse of the patent system through “evergreening” or “patent thickets” lack a factual basis. False claims and unwarranted worries should be dismissed, particularly in relation to the urgently needed PREVAIL Act.
Rather, lawmakers should remember that our Constitution dictates that patents secure private property rights in one’s inventions. The right to exclude others from using, making or selling one’s invention is balanced by publication of the patent so that other innovators may learn the teachings of the new invention. Those inventors may learn and invent around the state-of-the-art invention.
The PREVAIL Act will begin to restore weakened U.S. patent rights while fostering dynamic competition, technological progress and the incentive to take economic and entrepreneurial risks. Congress should make this legislation a top priority in the new year.
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