OPINION:
The primary goal of any patent system should be to encourage innovation.
The way to accomplish this is to set a high standard for issuing a patent and then protect the patent’s value by preventing others from infringing upon it.
The U.S. system is lacking on both fronts. It sets the bar too low for patent issuance and grants patents, including those that should not have been granted in the first place, too much protection.
Unfortunately, it appears that a move touted as a reform of the status quo may take us in the wrong direction. The Commerce Department recently proposed changes to the U.S. Patent and Trademark Office that would give low-quality patents even more protection.
In the 1990s, the U.S. Patent and Trademark Office was unprepared for the deluge of patent applications it received during the information technology revolution, and it hastily approved thousands of patents for processes that were elementary and virtually indistinguishable from existing patents. Obtaining a patent was an almost trivial exercise at the time, something I know because I obtained a couple of patents myself.
With so many dubious patents in existence, firms began to see patent infringement everywhere they looked, and the number of patent infringement lawsuits skyrocketed. Companies fought back by amassing even more patents and filing their own infringement lawsuits.
Then, businesses sprouted up that did nothing but amass patents, which they monetized by filing infringement lawsuits indiscriminately. If the company being sued did not pay a settlement, then it faced significant litigation costs and a slight risk that a judge would rule against it and potentially bankrupt the company by assessing damages for the supposed infringement.
Companies responded by obtaining even more patents to protect themselves, and the patent litigation morass threatened to throttle the IT revolution.
Congress eventually passed the Leahy–Smith America Invents Act to address this problem. One thing the legislation created was inter partes review at the Patent Trial and Appeal Board, which Congress intended to provide an efficient mechanism for challenging patents that never should have been issued. Its hope was that the process would be faster, more rigorous and less costly than federal court litigation.
Yet recently proposed changes to the inter partes review process threaten to blow up this key safeguard by substantially revising how petitions are instituted and tightening when and how inter partes reviews can be brought.
If the U.S. Patent and Trademark Office turns away meritorious petitions based on vague or inconsistently applied standards, then it will signal to bad actors that weak patents will avoid scrutiny. Weakening inter partes review would benefit patent trolls and their litigation funders at the expense of actual manufacturers.
The rise of third-party litigation funding agreements compounds the need to maintain a robust inter partes review process, as the entire business model is predicated on exploiting patent enforcement inconsistencies. Entities that do neither manufacturing nor research and development, such as hedge funds and other speculative ventures, can extract lucrative payouts from aggressive patent litigation against U.S. companies without revealing their involvement.
Undisclosed litigation funding structures also create an opportunity for foreign actors to conceal their investments in coordinated litigation campaigns that harm American innovators, including businesses crucial to U.S. national defense capabilities. In an era of strategic competition with China, policymakers should be especially wary of financial structures that allow foreign capital to influence and exploit the U.S. legal system. Transparency in litigation funding is a national security imperative.
The Trump administration has rightly emphasized rebuilding American manufacturing and securing leadership in cutting-edge industries. A strong and sane patent policy is central to this agenda.
IP frameworks shape global capital allocation. Companies decide where to build and scale, in no small part, on the reliability of legal protections, and eroding Patent Trial and Appeal Board guardrails has increased uncertainty in precisely the sectors that President Trump and the U.S. are trying to strengthen.
Innovation cycles are long, and patent policy should be stable enough to keep pace with them. Semiconductor fabrication facilities, advanced materials plants and biotechnology manufacturing hubs require billions of dollars in up-front capital. Investors evaluating those projects assess litigation exposure and IP durability. Weakening inter partes review injects greater uncertainty into such investments.
The path forward is not to weaken patents or eliminate safeguards against abuse. It is to preserve balance by maintaining strong, enforceable rights, protecting inter partes review and ensuring transparency in litigation funding. Lawmakers and the Department of Commerce should resist pressure from narrow interests seeking to tilt the system toward enhancing litigation leverage and away from innovation merit.
A patent system that rewards genuine invention, deters abuse and provides stable rules is essential to American competitiveness in the 21st century. If the U.S. wants to lead in artificial intelligence, advanced energy, biotechnology and next-generation manufacturing, then it must ensure its patent system promotes productive investment.
• Ike Brannon is a senior fellow at the Jack Kemp Foundation.
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