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The invalidation rate of patents in America Invents Act (AIA) proceedings, such as inter partes reviews (IPRs), has been high since the inception of the PTAB. Just one year into the AIA, Chief Judge Randall Rader famously referred to the PTAB as a “death squad” at the 2013 American Intellectual Property Law Association (AIPLA) annual meeting because the invalidation rate was so high.

This article focuses on the “total invalidation” rate where all challenged claims are found invalid such that the patent is effectively killed off. (For convenience, we refer to “invalidation” with the understanding that the PTAB adjudicates claims as “unpatentable”).

The U.S. Supreme Court will consider whether to declare unconstitutional a system that technology companies, including Apple Inc. and Google Inc., have used to invalidate hundreds of patents and head off litigation.

In an argument at the intersection of intellectual property and the separation of powers, the justices on Monday will consider a challenge to a congressionally-created board that critics have dubbed a “death squad” because of its tendency to toss out patents.

On its own initiative, the United States can proudly bring home many of its soldiers currently serving in 800 bases ringing the globe, leaving small forces to protect commercial sea lanes. It can reorient its military, prioritizing deterrence and defense over power projection. It can stop the obscenity that America sends more weapons into the world than does any other country. It can reserve armed intervention, and warlike sanctions, for purposes that are essential, legal and rare.

Shrinking the military’s footprint will deprive presidents of the temptation to answer every problem with a violent solution. It will enable genuine engagement in the world, making diplomacy more effective, not less. As the United States stops being a party to every conflict, it can start being a party to resolving conflicts. President Obama’s nuclear agreement with Iran and, to a lesser extent, President Trump’s opening with North Korea suggest that historical enmities can be overcome. Still, these steps have not gone far enough to normalize relations and allow us to get on with living together in a world whose chief dangers — climate change, disease, deprivation — cross borders and require cooperation.

Like many believers, proponents of hegemonic stability theory base their view on faith alone.41 There is precious little evidence to suggest that the United States is responsible for the pacific trends that have swept across the system. In fact, the world remained equally peaceful, relatively speaking, while the United States cut its forces throughout the 1990s, as well as while it doubled its military spending in the first decade of the new century.42 Complex statistical methods should not be needed to demonstrate that levels of U.S. military spending have been essentially unrelated to global stability.

Hegemonic stability theory’s flaws go way beyond the absence of simple correlations to support them, however. The theory’s supporters have never been able to explain adequately how precisely 5 percent of the world’s population could force peace on the other 95 percent, unless, of course, the rest of the world was simply not intent on fighting. Most states are quite free to go to war without U.S. involvement but choose not to. The United States can be counted on, especially after Iraq, to steer well clear of most civil wars and ethnic conflicts. It took years, hundreds of thousands of casualties, and the use of chemical weapons to spur even limited interest in the events in Syria, for example; surely internal violence in, say, most of Africa would be unlikely to attract serious attention of the world’s policeman, much less intervention. The continent is, nevertheless, more peaceful today than at any other time in its history, something for which U.S. hegemony cannot take credit.43 Stability exists today in many such places to which U.S. hegemony simply does not extend.

The defense industry has continually cited inflation to justify more military spending. One group of defense contractors, the National Defense Industrial Association, has justified such requests for inflation relief by claiming the Department of Defense will lose more than $110 billion in buying power from fiscal year 2021 to fiscal year 2023.

But the Pentagon has yet to verify that claim, much less publicly advocate for sweeping adjustments to Pentagon contracts because of inflation.

The Biden administration and Congress are on track to back a record US defense budget, signaling Pentagon spending is untouchable even as Democrats and Republicans squabble over how to reduce the debt burden. The White House on Thursday is expected to request a Pentagon budget for fiscal 2024 that well exceeds the $816 billion enacted for the Department of Defense this year — the biggest-ever defense budget in nominal terms, and also one of the largest peacetime budgets when adjusted for inflation. Meanwhile, China, the biggest US peer competitor, said its defense spending would grow by 7.2% to $225 billion this year — the fastest pace since 2019 as tensions grow with the US over Taiwan and a range of security issues. Those who favor cutting defense have so far been drowned out by supporters of ever-higher defense spending to counter Russia’s invasion of Ukraine and China’s muscle-flexing in the Indo-Pacific. “There’s no appetite among Democrats or Republicans, there is no majority appetite for trimming the overall numbers” for the Pentagon budget, Roger Wicker (Miss.), the top Republican on the Senate Armed Services Committee, said in an interview. “While some people may talk about that, it’s not likely to happen.”

Inflation is an issue, to be sure, but when it comes to the Department of Defense it must be put in context. The Pentagon has received massive increases in the past few years, to the point that its budget is now substantially higher than at the peaks of the Korean or Vietnam wars or the height of the Cold War. And unfortunately, much of this money is being wasted due to price gouging on basic items, cost overruns on major weapons systems, and a failure to keep track of expenditures that is an invitation to waste, fraud and abuse.

Cases in point include the Transdigm Group, which has overcharged by as much as 3,800 percent for spare parts, to the tune of $20.8 million in overcharges on just a small sampling of its business dealings with DoD: $13 billion aircraft carriers, and the notorious F-35, which is the most expensive program in the history of the Pentagon and may never be ready for prime time, as documented in a series of analyses by the Project on Government Oversight; and the fact that the Pentagon is the only major federal agency that has never passed an audit.

One familiar argument is the so-called diversionary (or “scapegoat”) theory of war. It suggests that leaders who are worried about their popularity at home will try to divert attention from their failures by provoking a crisis with a foreign power and maybe even using force against it. Drawing on this logic, some Americans now worry that President Donald Trump will decide to attack a country like Iran or Venezuela in the run-up to the presidential election and especially if he thinks he’s likely to lose.

This outcome strikes me as unlikely, even if one ignores the logical and empirical flaws in the theory itself. War is always a gamble, and should things go badly—even a little bit—it would hammer the last nail in the coffin of Trump’s declining fortunes. Moreover, none of the countries Trump might consider going after pose an imminent threat to U.S. security, and even his staunchest supporters may wonder why he is wasting time and money going after Iran or Venezuela at a moment when thousands of Americans are dying preventable deaths at home. Even a successful military action won’t put Americans back to work, create the sort of testing-and-tracing regime that competent governments around the world have been able to implement already, or hasten the development of a vaccine. The same logic is likely to guide the decisions of other world leaders too.

The bottom line: Economic conditions (i.e., a depression) may affect the broader political environment in which decisions for war or peace are made, but they are only one factor among many and rarely the most significant. Even if the COVID-19 pandemic has large, lasting, and negative effects on the world economy—as seems quite likely—it is not likely to affect the probability of war very much, especially in the short term.

On balance, however, I do not think that even the extraordinary economic conditions we are witnessing today are going to have much impact on the likelihood of war. Why? First of all, if depressions were a powerful cause of war, there would be a lot more of the latter. To take one example, the United States has suffered 40 or more recessions since the country was founded, yet it has fought perhaps 20 interstate wars, most of them unrelated to the state of the economy. To paraphrase the economist Paul Samuelson’s famous quip about the stock market, if recessions were a powerful cause of war, they would have predicted “nine out of the last five (or fewer).” Second, states do not start wars unless they believe they will win a quick and relatively cheap victory. As John Mearsheimer showed in his classic book Conventional Deterrence, national leaders avoid war when they are convinced it will be long, bloody, costly, and uncertain. To choose war, political leaders have to convince themselves they can either win a quick, cheap, and decisive victory or achieve some limited objective at low cost. Europe went to war in 1914 with each side believing it would win a rapid and easy victory, and Nazi Germany developed the strategy of blitzkrieg in order to subdue its foes as quickly and cheaply as possible. Iraq attacked Iran in 1980 because Saddam believed the Islamic Republic was in disarray and would be easy to defeat, and George W. Bush invaded Iraq in 2003 convinced the war would be short, successful, and pay for itself.

Reasonable people can disagree about whether US disinflation is actually stalling and what it might mean for Federal Reserve monetary policy. But it’s getting much harder to deny the underlying strength of the economy, suggesting central bankers can afford to wait before reducing benchmark interest rates.

New data Friday from the Bureau of Economic Analysis showed that even after adjusting for inflation, personal spending climbed 0.4% in February, comfortably exceeding the median estimate of economists surveyed by Bloomberg for a 0.1% increase. A day earlier, separate reports showed that consumer sentiment increased to the highest since July 2021, weekly initial jobless claims fell and pending home sales bounced back in February from a decline in January. In an economy that has consistently outperformed and is constantly being scoured for cracks, it’s hard to find any faults in the latest data.

This is not hyperinflation, thank goodness. It’s just a good old-fashioned double-digit across the board price increase. The same kind of inflation Americans saw in the 1970s and 1920s and throughout the 19th century, and it’s the same inflation that millions of business owners from ancient Egypt to medieval Florence saw before that.

But we’re not Venezuela. We’re the U.S., and the good news is that the U.S. economy is the largest in the world, and with that comes lots of buyers and sellers. People don’t go into caves when prices rise. They still buy and sell.

The Fed’s largest and fastest rate-hike cycle in 40 years—a 5.25% fed-funds rate increase between March 2022 and July 2023—was widely expected to generate a recession in 2023. Yet, real gross domestic product growth defied expectations by accelerating to 2.5% in 2023 from 1.9% in 2022.

So why has the economy been so resilient to these higher interest rates?

The Federal Reserve has briskly raised interest rates to rein in red-hot inflation brought on during the pandemic, and investors have been on edge trying to assess the impact of the central bank's efforts.

But through it all, GDP numbers have come in hot, consumer spending has been strong, and the job market is showing few signs of weakening.

The U.S. economy has proved far more resilient than anyone could have expected despite the Federal Reserve’s efforts to cool it to rein in inflation. The Goldilocks outcome of strong growth and lower inflation was achieved by a timely expansion in the supply side of the economy—mainly better-than-expected gains in the workforce and productivity. This explains our updated economic forecasts anticipating stronger growth, a sturdy labor market, stubborn inflation, and a Fed that will move cautiously toward its first rate cut—including the possibility of not being able to cut interest rates at all this year.

Supply-side forces in the driver’s seat

The tension created by the Second Circuit’s application of the willful blindness doctrine, together with already-divergent standards amongst the circuit courts of appeal, causes confusion for all parties that play a role in trademark enforcement.10 This confusion increases costs, which the parties pass on to consumers.11 The lack of a clear and uniform liability standard, from either the legislature or judiciary, clouds the decision-making of both trademark registrants and online marketplace operators.12 The lack of clarity makes it difficult for companies to make decisions as to their obligations to each other, their obligations to consumers, and the resources they are each obligated or willing to devote to policing trademark infringement.13

Yet, giving trademark owners a greater obligation to prove infringement would result in greater costs since it is often impossible to prove infringement absent direct evidence.120 Under this framework, trademark owners would likely need to buy the product first and prove that it is a counterfeit that infringes on their mark.121 They would then pass this extra cost on to the consumers in the form of higher prices.122 However, apart from trademark owners, no one has the same expertise in determining the authenticity of a product.123 Given this expertise, trademark owners need to bear at least some responsibility in spotting or proving infringement.

In Tiffany, there were concerns about who should be responsible for finding counterfeits.149 Tiffany argued if eBay were not held liable, the ruling would require rightsholders to police online marketplaces "24 hours a day, and 365 days a year," and many rightsholders would be unable to bear this burden.1 5 ' Rightsholders have, in fact, encountered several hurdles after the Tiffany ruling. In holding online sellers accountable, existing laws tend to shield foreign counterfeiters from liability because they are often outside of U.S. jurisdiction. 15 1 Thus, rightsholders often turn to either continuously taking down listings or suing for trademark infringement.15 2 Ultimately, the burden is on rightsholders to police and report infringement, 153 creating financial and time-consuming costs.

The time-consuming burdens on rightsholders are significant. The Tiffany decision, arguably, shifted the burden away from the ecommerce platform and placed it onto the rightsholder to find and police counterfeits,154 engaging in a continuous game of whack-a-mole. 155 For example, Wish.com blocked infringement requests by legitimate owners against sellers, and Amazon, too, has denied legitimate infringement claims. 156 Additionally, when Mindy reached out to third-party sellers, she never received a response.15 7 As a result, counterfeits destroy products' quality, making it impossible for small businesses to address. 158

Additionally, there has been discussion that this bill would negatively impact small business owners.[26] In my opinion, this is no more burdensome, and perhaps less so, than any paperwork that might be required for a small business to operate in a brick-and-mortar setting and in the long run can protect a small business, particularly with just a few product lines or trademarks whose business line could be destroyed very quickly by counterfeits.

Finally, some argue that this bill would hurt e-commerce platforms by giving trademark owners “absolute control over online marketplaces”.[27] The current state of law for brick-and-mortar stores, malls, and flea markets requires that those making profit and creating a space for third party sellers have to exercise some responsibility toward their structures and marketplaces that they have created,[28] SHOP SAFE extends a similar and appropriate framework on e-commerce providers, not giving them control, but requiring them to have reasonable response for the safety of consumers.

This example suggests that liability can also be introduced to induce some agents to take actions that stop or mitigate the harmful conduct of other players. The setting we have discussed is quite traditional, rooted around the bilateral relationship between buyers and sellers or manufacturers. In markets featuring the presence of online intermediaries, a prominent role can be played by the platform’s owner. This is especially true if direct enforcement of primary liability becomes too expensive (e.g., millions of buyers and sellers in a marketplace). One possible way to deal with this problem is to impose liability on the party that can help to prevent an accident or, in the case of illegal activities, misconduct. The law and economics literature has referred generally to these cases as secondary, indirect, or collateral liability. Most relevant for our analysis is the notion of “gatekeeper liability” (Kraakman, 1986). This is a special case of liability imposed on intermediaries whose characteristics and role enable them to disrupt misconduct by “withholding support” and prevent any infringement. Undoubtedly, platforms are nowadays key players that have developed tools and capabilities to monitor, identify, and to some extent, mitigate illegal activities and misconduct in their ecosystem.13 Moreover, introducing liability for intermediaries might lead to a considerable reduction in enforcement costs. Landes and Lichtman (2003) discussed whether a manufacturer producing a decoder box should be held liable for third parties’ infringements of copyright. According to the authors, holding the manufacturer liable would result in substantial enforcement and administrative savings for the harmed party, which would therefore directly sue the manufacturer rather than multiple infringers.14 Fagan (2020) showed instead that lawmakers’ decision about the introduction of a liability regime for platforms relative to a safe harbor provision depends on the relative size of different costs, such as the cost of enacting and enforcing a new law versus the cost of maintaining existing law.15