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Policy changes at administrative agencies like the U.S. Patent and Trademark Office (USPTO) are unlikely to lead the nightly news or appear above the fold in national newspapers. But, the USPTO might be the most important agency your average American hasn’t heard of. How it works, or doesn’t, has billion-dollar consequences for the U.S. innovation economy, and for consumers.

Last week, USPTO Director and Undersecretary of Commerce Kathi Vidal was on Capitol Hill testifying in a House Judiciary oversight hearing. Director Vidal’s testimony came hot on the heels of the USPTO releasing something they called an Advance Notice of Proposed Rulemaking (ANPRM), which contains a grab-bag of dozens of wide-ranging proposals. These rules, together and individually, represent a sweeping departure from current government practices, conflict with bipartisan laws passed by Congress, and would expose American entrepreneurs and the patent system to abuse and waste. The proposals caught most stakeholders — even those within the agency and government, it seems — by surprise.

There is bipartisan support for the view that the United States should invest in preserving its competitive advantage as a global innovation leader. There is bipartisan support for the view that the United States should take action to address the risks to competition posed by technology platforms. Yet there is virtual bipartisan silence on doing anything to bolster the United States’ intellectual property (IP) system after almost two decades of judicial, legislative, and regulatory actions to weaken it. Some are even advocating to weaken it further.

These changes would also embolden pharmaceutical companies to double down on the practice of creating patent thickets to wall off competition and generics. This is because the secondary patents that form patent thickets are typically of lower quality than a drug’s primary patent. (Primary patents cover the active ingredient, whereas secondary patents are typically related to elements like dosage, packaging, or delivery of a drug.) These secondary patents are currently more susceptible to challenge if they offer little therapeutic value above and beyond the original patent. The proposed act would make it more difficult to challenge these lower-quality, monopoly-extending patents, and the resulting broad patent protection of brand-name drugs would continue to block generic manufacturers from entering the market.

This would have a direct negative effect on consumers and the health care system as a whole. Without competition from generics, monopoly prices for the branded drugs would remain artificially high for a longer time, negatively affecting patients who rely on lifesaving or life-changing medication as well as the public and private health care insurers who share the costs of those medications. In fact, one study looking at just five drugs over 20 years found that eliminating generic competition of those drugs imposed $4.7 billion in annual costs on the U.S. health care system. Another study estimated that evergreened reformulations increased Medicaid spending by $9.35 billion from 2008 to 2016 alone.

Skyrocketing prescription drug prices remain a pressing political issue. Polls show that a large majority of voters in both parties support efforts to reduce drug prices, and President Joe Biden’s reelection campaign highlights his administration’s efforts to do so under the Inflation Reduction Act.

A major factor driving higher drug costs is the patent system, which grants pharmaceutical manufacturers a 20-year exclusive right to “make, use, sell, and import” their products. Although the government originally established the patent system to “promote the Progress of Science and useful Arts,” many patents are now deployed to protect and extend monopoly power. In the case of pharmaceuticals, complex patent strategies are regularly implemented to keep competitors and low-cost generics out of the market for as long as possible to maximize the profits of blockbuster drugs. Given this ongoing misuse of the patent system, any proposed changes to patent policy must be evaluated carefully to ensure that they deter, rather than reinforce, such practices.

On Nov 8, the US Senate Judiciary IP Subcommittee held a key hearing on the PREVAIL ACT – The “Promoting and Respecting Economically Vital American Innovation Leadership Act.” PREVAIL is a bipartisan proposal from Senators Coons (D-DE) and Tillis (R-NC) who are looking to strengthen the power of patents. The proposal here is directed toward AIA trials — generally attempting to make it more difficult to invalidate patent claims via IPR. Key provisions include:

Imposing standing requirements to restrict who can file AIA patent challenges.

During the past few months, I have had the privilege of “sitting on the wagon tongue” and visiting with farmers, ranchers, growers and agri-business regarding the obvious need for Congress to pass a new farm bill.

Normally, members of the Senate and House put aside differences, knowing a farm bill provides certainty and predictability to farmers, ranchers, and growers and the means to overcome the inflationary challenges they have faced in recent years.

An important corollary to this observation is that the new statute is similarly silent on a variety of controversies that were at the forefront of patent law during the reform process. For example, there is an ongoing and highly contentious question, both in the United States and abroad, regarding the scope of patentable subject matter. Recent judicial decisions, at both the trial and appellate level, have grappled with whether patents should be available for biological materials such as genetic sequences. The Supreme Court and lower courts have considered and reconsidered the availability of patents for so‐​called “business methods” and the proper extent of patents on computer software. These issues were not only under active consideration in the courts, but also in the Patent Office, and commentary on the question has become a cottage industry among academics and members of the practicing bar.

One might have expected Congress to weigh in on these questions, to help resolve the controversy and uncertainty. But with only very slight exceptions, it remained silent on the subject‐​matter question. Given the debates over software and gene patents, the sparse and narrow subject‐​matter changes in the AIA are comparatively trivial. The AIA does change the patent statute to state explicitly that human beings are not to be patentable subject matter, but this as a practical matter is nothing new, as it had been Patent Office policy for literally decades not to issue patents with claims that would encompass human beings. The AIA also precludes from patentable subject matter business methods directed to taxation procedures. But the many other questions involving software patents, or patents regarding genes, or other “products of nature” are left unaddressed by the new statutory provisions.

Love the products, hate the companies — that’s the way many Americans think about Big Tech. Which is why it looked like a good bet when Congress convened in 2021 that Washington might finally rein in the companies that many believe have grown too big, too rich and too powerful — even as their products and services have become ever more indispensable to our lives. Here, it seemed, was the rare issue on which both Republicans and Democrats, House and Senate, could agree.

In the end, however, Congress failed to act. And in that failure is a case study of how Congress has lost its ability to address the most pressing problems facing the country.

In 2020, the Patent Office sought to rein in this abuse, establishing a so-called "Fintiv" rule. This allows PTAB judges to refuse to hear cases when a court is likely soon to rule on the validity of the same patent. But last year, the Patent Office reversed course, issuing new guidance severely limiting the discretion of PTAB judges to make such decisions. Not surprisingly, this reversal has led to a notable increase in PTAB cases. Meanwhile, Big Tech companies have been lobbying Congress for legislation that would permanently repeal the Fintiv rule.

Fortunately, there are still at least a few members of Congress who see this Big Tech lobbying for what it is—a blatant effort to further weaken patent rights so they can continue stealing the technology of smaller competitors and maintain their market advantage.

Now, the question is what can be done to improve the situation. The Supreme Court's jurisprudence is problematic in several areas, most particularly in patent eligibility, but the Court has little apparent interest in fixing its troubling precedents. The mega-corporations' lobbying efforts continue, with their apparent goal being to diminish the force of patent rights and to prevent start-ups from threatening their market dominance with innovative new technologies-even though companies like Google and Amazon used their own patents to protect their own early-stage innovation and get their market edge in their early years.34 Plus, Congress's experiment with the AIA has caused far more problems than it has solved-unless of course one enjoys litigating arcane administrative law issues.

Courts and agencies each have their own institutional plusses and minuses. Administrative agencies have somewhat greater ability to gather facts, although the evidence‐​gathering capacity of a court system is typically very substantial. Agencies tend to suffer from the problem of capture, often developing too cozy a relationship with those they regulate. Agencies may also be subject to the same lobbying that afflicts legislatures; indeed, they may be under considerable political pressure from the legislature that controls the agency budget. Courts are not free from these problems, but they can largely be insulated from influence peddling by mechanisms such as life tenure. This of course means that they are also insulated to some degree from popular sentiment, making them often the least democratic option.

In sum, the PREVAIL Act proposes numerous changes that may increase the efficiency of PTAB proceedings while remedying financial concerns for both the USTPO and patent owners. However, it may be necessary to rein in some of the requirements that potentially alter the functionality of raising a challenge before the PTAB. If patent challengers are restricted to the point where an action before the PTAB becomes less desirable than an invalidity challenge in another forum, then the overall purpose of the PTAB is lost.

Patent owners and challengers should not hold their breath waiting for the Act to come into effect nor should they proceed differently in anticipation of the proposed changes to the PTAB process. The STRONGER Patents Act (which the PREVAIL Act intends to supplement) has remained dormant since its introduction as a bill in July 2019.[6] Comparably, the text of the Prevail Act has yet to be submitted to the Library of Congress;[7] thus, the Act is in its infancy and will likely grow into a different form should it become law.

Let’s be clear—there is more than enough in both the Senate and House proposals for our legislators to find common cause. As with all serious legislation, compromises will be made. Republicans will most likely budge on food assistance, as Democrats may pare down some of their asks for new offices and resources. But such deals are made in a world where differences exist. Our Farm Bill could serve to illustrate that point, not only for those interested in the future of agriculture, but for how to move past gridlock and get things done.

After more than a year of hearings and listening sessions, House Agriculture Committee Chairman Glenn T. Thompson (R-PA) has released a title-by-title overview of his draft farm bill and scheduled a markup of the legislation for May 23rd. The announcement marks a major milestone; however, the road to a new farm bill is going to be a bumpy one.

While draft text is not yet available, according to a high-level summary of Chairman Thompson’s proposal, the committee seeks to increase farm safety net programs, enhance crop insurance, and expand conservation programs. Nutrition funding would not be cut, but changes to how the benefits are calculated will be included.

Biden also summarized his administration’s priorities with the farm bill, including support of new and beginning farmers, shoring up commitment to government research, addressing climate change by protecting and enhancing investments in conservation, climate-smart agriculture and forestry and clean energy, strengthening local and regional food supply chains, continuing efforts to reduce food loss and waste, supporting competition by increasing transparency, continuing to support small and independent processors and opening new market opportunities.

“In addition, the administration supports improvements to crop insurance, proactively managing risk from natural hazards, including the permanent authorization of the cover crop incentive program,” the budget states. “These administration priorities can help create a stronger safety net and better markets for consumers and producers of U.S. agricultural products through the farm bill, which is one piece of the puzzle for how USDA helps people across America and the globe.”

It took approximately 13 hours, but the House Agriculture Committee sent their version of the farm bill from Committee Chair GT Thompson to the full House for a vote. Joe Gilson, director of government affairs for the American Farm Bureau, says it was quite a process to get the bill out of committee.

“Last week, Chairman Thompson had a markup of the Farm, Food, and National Security Act of 2024. It was a 13-hour day for the chairman and all committee members, but at the end of the day, they passed the bill out of committee with a bipartisan vote, and that means it moves to the House floor.”

Former House Agriculture Committee Chair Collin Peterson sees a path forward for the farm provisions of the bill. “The way the debate happened did not put anybody into any corners that they couldn’t get out of,” said Peterson. “Most of the divisiveness was over how to pay for this; it was over food stamps; it was over the sideboards on conservation; it was over the CCC. Those are things I think can be worked out.” It will likely be September before this bill advances to the House floor. Peterson, who now leads the Midwest Council on Agriculture, says more work will happen ahead of that vote. “The fact that we got four Democrats that voted for the bill gives us a place to start to build a bipartisan coalition that can get this bill through the floor of the House. There are a lot of Republicans that are going to vote against this on the floor so we’re going to need 20, 30 Democrats at least to get this bill passed.” Listen to the full interview with Collin Peterson.

The House version of the Farm Bill has made it through a pivotal phase, after passing the Ag Committee. We are now hearing from leaders on the Senate side.

Chairwoman Debbie Stabenow expressed optimism about advancing the 2024 Farm bill but acknowledged challenges in achieving consensus. Ranking Member John Boozman praised progress but emphasized the need to address inflation and market challenges. House Ag Chair GT Thompson says he will coordinate with the Senate and hopes to have a floor vote by September.

U.S. Senator Chuck Grassley says movement on the Senate’s version of the farm bill isn’t likely to happen this month.

“We’ve got a couple of no-vote Mondays,” he said. “We’ve got a Juneteenth day off, and then we have the last week of June off. So I don’t think there’s enough days even if there’s an agreement made today.”

Pahnke, 5/28/2024 (May 28, 2024, ANTHONY PAHNKE, “Bipartisan Support for Small-Scale Farmers Could Advance the Farm Bill; Supporting such farmers would keep working people on the land while also showing what political maturity could look like as partisan squabbling too often stymies serious work from getting done in D.C.,” https://www.commondreams.org/opinion/small-scale-farmers-farm-bill, JMP))

Much has been made about how the U.S. House’s draft of the Farm Bill—that massive omnibus legislation that governs our food system—stands little chance of advancing. Whether the potential cuts to food assistance, or its lack of attention to climate change, the 900 page-plus bill moving through the House is being slammed by Democrats in the Senate and House alike.