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Sharon's project flags five basic, fundamental impediments to uniformity in a given federalized IP regime, and one complicated, but arguably more marginal impediment. I discuss each below.

(1) Non-Preemption and Substantive Divisions in the Law

The third limitation is that legal reforms through the court system can lead to insufficient participation from stakeholders. Local stakeholders, especially those who have not instigated these cases, have limited opportunities to influence judicial interpretation directly. This is because courts base their decisions primarily on the legal arguments that the parties involved in the litigation present. Conversely, stakeholders can offer direct input that helps to shape local legislation, ensuring that patent laws reflect their priorities and needs. Some critics argue that the Federal Circuit's patent jurisprudence has become isolated and disconnected from the technological communities it affects.236 Comparatively, when local governments have legislative authority, as is the case in China, local citizens can also advocate for legal reforms that are tailored to their specific needs by influencing local legislation through public consultations,237 expressing views to representatives,238 and collaborating with NGOs.239 This approach allows for more informed legislation. Moreover, Article 87 of the Legislative Law of China requires local legislators to make drafts public and to solicit the public's opinions.240 Stakeholders can also influence legislation by providing comments.

The successful local patent-law-reform movement highlights the role of localities as laboratories and agents for change that impacts both local and national levels. The successful results from judges and local bar associations working together to control patent litigation, curb tactical abuses, reduce costs, deliver swift justice, and enhance judicial expertise in patent cases demonstrates why true patent reformers should recognize the positive steps taken by the local level forge a major national overhaul of the patent system. Reform at the local level is even more important given that Congress has not been able to revamp the patent system in the last couple of years, and the Supreme Court is unpredictable in its injection into patent reform. Local patent reform is an example of dynamic federalism at work.

Madison's point would seem equally applicable to other varieties of intellectual property. Indeed, today, most commentators would acknowledge the national government's authority to regulate all forms of intellectual property by virtue of the constitutional grant to Congress of the power "to regulate Commerce ... among the several States. " 5 But the existence of authority is one thing, its exercise quite another. Here the historical dynamics of American federalism are important. The vast domain of federal power has not been fully occupied, and accordingly, outside the realm of patent and copyright, the states do play a role in the regulation of intellectual property. Moreover, state-based protections have occasionally penetrated even these core federal areas. There are various reasons for continued state intervention in at least certain intellectual property areas. Some stem from the states' established role in governing property rights and relations in general. Another, which forms one focus of this paper, derives from the U.S. tradition of looking to the states as "laboratories" for the development of the law and social policy. 6 According to this tradition, state courts and legislatures experiment locally with evolving rights and modes of regulation. Subsequently, the local experience may form the basis for adoption of the same or similar laws by other states, and perhaps ultimately by the national legislature.

The bitter harvest of the nationalist revolution was gathered in this century with the slaughter of the First and Second World Wars and with the fifty-year Cold War that then followed. These events finally made clear to the great-great-grandchildren of the Enlight- enment that celebration of the nation state could lead to Nazism and Stalinism, to war and genocide, and to totalitarianism and the most complete loss of freedom humankind ever experienced. By 1945, the democratic revolution was still in full flow, but the nationalist revolution was not. World leaders scrambled to replace the still collapsing colonial, imperial transnational structures with new federal and confederal transnational structures.

The fifty years since then have seen the birth of the United Nations, the North Atlantic Treaty Organization (NATO), the European Union, the European Convention on Human Rights, the British Commonwealth, the Confederation of Independent States (CIS), the GATT, the NAFTA, and countless other transnational "federal" entities of varying degrees of importance.24 Many of these were openly inspired by the success story of American federalism, which, for example, led many Europeans to want to build a Common Market that could become a "United States of Europe." While many of these new democratic transnational entities are very weak, they nonetheless have developed important powers: they have helped to keep the peace, and in some instances, as with the European Union, they show real potential for some day attaining essentially all the attributes of sovereignty commonly associated with a federal nation-state, like the United States. The growth and success of transnational confederal forms since 1945 is truly aston- ishing and rightly is viewed by many - either with alarm or with hope - as holding out the eventual prospect of a future global fed- eral government or at least the prospect of several continental-sized federal governments.

This Article compares the patent legislative power allocation models in China and the U.S. In terms of evolutionary paths, the U.S. transitioned from a decentralized model where patent legislative power resided with the states, to a centralized model which consolidated this power at the federal level. Within the realm of patent legislation, there is no collaboration between the federal and state governments. Conversely, China moved from a centralized model, where patent legislative power was concentrated in the central government, to a semi-decentralized model, with coexistence between the patent legislative power of the central and local governments.

This Article posits that China's semi-decentralized patent legislation model manifests key elements of cooperative federalism, embodying power sharing between central and local governments as they collaboratively address issues related to innovation. However, the nature of the cooperation between China's central and local governments is distinctive. Unlike the U.S. federal system, where states enjoy significant autonomy, China's central government assumes a dominant role, a consequence of its unitary state structure. Local governments supplement the central government's constructed system by further developing it, tailoring it to local conditions under the central government's guidance and supervision.

On May 5 the Biden administration announced that it would support waiving intellectual property protections for COVID-19 vaccines under the World Trade Organization’s Agreement on Trade-Related Intellectual Property Rights (TRIPS). Predictably, the move drew fiery condemnation from drug companies. In addition, many disinterested observers criticized the support for a TRIPS waiver as empty symbolism, arguing that vaccine patents are not the major obstacle hindering the currently flagging drive to make vaccines available around the world.

Waiving patent protections is certainly no panacea. What is needed most urgently is a massive drive of technology transfer, capacity expansion, and supply line coordination to bring vaccine supply in line with global demand. Dispensing with patents in no way obviates the need for governments to fund and oversee this effort.

It follows from these observations that one could remove the correlative conjunction in the lexicographic definition and reconstruct it more succinctly as follows: ‘An event X is an existential risk if and only if X could permanently prevent humanity, broadly defined to include some possible posthuman descendants, from attaining a stable state of technological maturity.’ This is the essence of Bostrom’s first definition: the ultimate goal of civilizational development should be producing mature technology in a sustainable manner, so any event that prevents this from happening must be avoided at all costs.

This definition handles Scenario 1 from above without difficulty. As Bostrom (Citation2013) writes, ‘the permanent foreclosure of any possibility of this kind of transformative change of human biological nature may itself constitute an existential catastrophe.’ Bostrom also suggests that all four scenarios – and thus both disjuncts – are ‘of comparable seriousness, entailing potentially similarly enormous losses of expected value.’ Once again, this contrasts with the second definition in which the second disjunct has far less severe moral implications than the first disjunct, given certain assumptions.

The Federal Circuit’s recent decision in Douglas Dynamics, LLC, v. Buyers Products Co. (Fed. Cir. May 21, 2013) is very important given the widespread, albeit mistaken, belief today that the Supreme Court’s decision in eBay v. MercExchange (2005) established that damages and not injunctions are the presumptive remedy for patent infringement. For those in the know, the four-factor “eBay test” for awarding an injunction now governs whether a plaintiff who has proven patent infringement will receive as a remedy either an injunction or a court-determined “reasonable royalty.”

In Douglas Dynamics, the Federal Circuit reversed a district court’s denial of an injunction under the eBay test and thus reaffirmed the basic legal principle that violations of property rights are generally best remedied with injunctions (which then permits the parties to negotiate for licenses, as the infringer should have done in the first place). The district court had rejected Douglas Dynamics’ request for an injunction, and instead awarded it a compulsory license via Judge William Conley’s determination of an “ongoing reasonable royalty rate.”

Rather, we should think more broadly about how new technology might affect global politics, and, for this, it is helpful to turn to scholarly international relations theory. The dominant theory of the causes of war in the academy is the “bargaining model of war.” This theory identifies rapid shifts in the balance of power as a primary cause of conflict. International politics often presents states with conflicts that they can settle through peaceful bargaining, but when bargaining breaks down, war results. Shifts in the balance of power are problematic because they undermine effective bargaining. After all, why agree to a deal today if your bargaining position will be stronger tomorrow? And, a clear understanding of the military balance of power can contribute to peace. (Why start a war you are likely to lose?) But shifts in the balance of power muddy understandings of which states have the advantage. You may see where this is going. New technologies threaten to create potentially destabilizing shifts in the balance of power. For decades, stability in Europe and Asia has been supported by US military power. In recent years, however, the balance of power in Asia has begun to shift, as China has increased its military capabilities. Already, Beijing has become more assertive in the region, claiming contested territory in the South China Sea. And the results of Russia’s military modernization have been on full display in its ongoing intervention in Ukraine. Moreover, China may have the lead over the United States in emerging technologies that could be decisive for the future of military acquisitions and warfare, including 3D printing, hypersonic missiles, quantum computing, 5G wireless connectivity, and artificial intelligence (AI). And Russian President Vladimir Putin is building new unmanned vehicles while ominously declaring, “Whoever leads in AI will rule the world.” If China or Russia are able to incorporate new technologies into their militaries before the United States, then this could lead to the kind of rapid shift in the balance of power that often causes war. If Beijing believes emerging technologies provide it with a newfound, local military advantage over the United States, for example, it may be more willing than previously to initiate conflict over Taiwan. And if Putin thinks new tech has strengthened his hand, he may be more tempted to launch a Ukraine-style invasion of a NATO member. Either scenario could bring these nuclear powers into direct conflict with the United States, and once nuclear armed states are at war, there is an inherent risk of nuclear conflict through limited nuclear war strategies, nuclear brinkmanship, or simple accident or inadvertent escalation.

The United States is engaged in a global competition for innovation, with critical implications for the nation’s continued technological leadership, competitiveness, and security. To win, the United States will need to leverage its advantages at home, including its robust intellectual property (IP) rights system and the innovative zeal of its entrepreneurs. It should also look abroad—setting the pace for scientific cooperation with allies and strategic partners, as well as developing shared international technical standards through the contributions of experts from around the globe. Most pressingly, the United States should not adopt policies that weaken protection of U.S.-owned patents—which would both disincentivize innovation in the United States and support Chinese efforts to dominate critical standards and other advanced technologies.

Yet a recent proposal of the Antitrust Division of the U.S. Department of Justice (DOJ) does just that. Launched as a consultation, its Draft Policy Statement on Licensing Negotiations and Remedies for Standards-Essential Patents Subject to F/RAND Commitments is promoted as an effort to encourage good-faith licensing negotiations and to address the scope of remedies available to patent owners who have agreed to license their essential technologies on fair, reasonable, and non-discriminatory (F/RAND) terms. While this draft policy seems like an innocuous administrative change, it has the potential to do significant damage to the United States’ innovation engine and, by extension, to its national security.

Ranjan Narula & Survarna Padney 23, Founder and managing partner RNA, Technology and IP Attorneys Suvarna Pandey Patent agent RNA Technology and IP Attorneys, 11/30/23, WTR, “Understanding Damages and the Obstacles in Recovering Them”, https://www.worldtrademarkreview.com/guide/india-managing-the-ip-lifecycle/2024/article/understanding-damages-and-the-obstacles-in-recovering-them, kcab

The object of damages is to compensate for loss or injury. In most intellectual property (IP) law disputes, the degree of harm done to the plaintiff is key to evaluating how much they must be compensated through damages. In India, the focus in the early stages of any IP dispute is to seek an injunction to stop the infringement, other than in SEP disputes where the plaintiff would insist on a pro-tem security deposit.

Another rationale for statutory damages is that, in many copyright cases, proving actual damages is a difficult undertaking. By contrast, statutory damages provide an alternative path for rights holders to obtain redress.180 Thus, statutory damages are highly attractive to rights holders because they spare them the cost and complexity of proving actual damages, while providing both meaningful compensation and deterrence.181

The broad discretion and little guidance given to courts regarding the award of statutory damages, and the immense consequences of awarding multiplied damages in cases of online infringement, are the focus of a fierce debate. One common objection is that statutory damages generate overdeterrence because they function primarily as a punitive mechanism, with no correlation between the actual injury to rights holders and the amount of damages awarded.182 Consider an example of unlicensed online file sharing: For the infringing use of twenty songs, the copyright owner may recover damages of up to $600,000 under the basic track.183 This award far exceeds what the owner would be entitled to recover in actual damages—even assuming the damages could be proven—which are generally calculated based on the licensing fees the owner could have charged for the use of those twenty songs.184 This framework generates a windfall for rights holders, who are awarded damages that are disproportionate to their actual losses.185 As a result, the incentive to file claims even in questionable cases has increased.186 Commentators have thus argued that the availability of statutory damages heightens the chilling effect187: the specter of a significant damages award causes users to refrain from using copyrighted works in uncertain cases, even if fair use may be claimed.188 To offset this chilling effect, Congress exempted typical risk-averse users such as librarians and educational institutions from liability for statutory damages, assuming they have reasonable grounds for believing that their infringing conduct constitutes fair use.189 Other good faith risk-averse users, however, remain exposed to statutory damages awards.

The Federal Circuit initially reversed the award of lost profits in WesternGeco, holding that Section 271(f) does not allow recovery for lost foreign sales, but the Supreme Court disagreed. Instead, the Supreme Court concluded that the award of lost profits was appropriate under the second step of the Court’s two-step analysis for determining questions of extraterritoriality.[16] Skipping the first step about “whether the presumption against extraterritoriality has been rebutted,” the Court focused on “whether the case involves a domestic application of the statute.”[17] And the Court answered this question in the affirmative—the award of lost profits was a domestic application. “[T]he focus of § 284, in a case involving infringement under § 271(f)(2), is on the act of exporting components from the United States,” which is a domestic act.[18] Finally, the Court alluded to potential questions about “the extent to which other doctrines, such as proximate cause, could limit or preclude damages in particular cases,” but declined to address these issues. [19]

Justice Gorsuch, joined by Justice Breyer, dissented. While acknowledging Section 284’s provision of “damages adequate to compensate for the infringement,” Justice Gorsuch viewed the foreign lost sales as an improper expansion of U.S. patent rights because using the subject of a U.S. patent to compete with the patentee in a foreign country is not “infringement” under U.S. patent law.[20] The dissent further hypothesized scenarios where a company makes an infringing prototype microchip in a U.S. laboratory and becomes liable for lost foreign profits because making the prototype enabled foreign competition.[21] In response to these concerns, the majority noted that the dissent “wrongly conflates legal injury with the damages arising from that injury.”[22]

A planet governed by a single decision-making body could have many appealing benefits. Such a system could prevent arms races and races for other powerful technologies. It would be a solution to the coordination problem for addressing global risks. If humanity does become a space-faring species, it could help to address the expected “tragedy of the commons” but in space (Hanson 1998). The distribution of powerful emerging technologies could be controlled so that no single group has exclusive access and control over them. If humanity does find a way to survive for millions of years, it would likely need to start guiding its genetic evolution because there would be no reason to believe that the evolutionary pressures of the past would be sufficient for such a future (Bostrom 2006).

It is clear that the coordination problem exists and is central to safeguarding the future of humanity. These threats are impetus enough to decide how effective global governance systems should be built before a bad singleton finds its way to the seat of power. The future is time sensitive. Efforts toward global governance could prevent a small group from developing powerful technologies and leveraging themselves into a totalitarian singleton. If this group were to get those technologies beforehand, stopping them would likely be difficult. If humanity may soon need to deal with the issue of black ball technologies and turn-key totalitarianism is a possible solution, it is important to have considered this problem on the global level ahead of time.

The history of industrial revolutions provides valuable insights into how patents and patenting systems influence innovation. It also reveals the extent to which inventors have relied on other ways to protect their ideas, including secrecy, sharing and showcasing them at international exhibitions.

We are now firmly in the middle of the fourth industrial revolution, according to the World Economic Forum. This is a period of rapid and widespread technological change characterised by the development of cyber-based and digital innovations (World Intellectual Property Office, WIPO, 2023).

The United States lost its once-dominant position in semiconductor research and manufacturing thanks largely to shortsighted policy decisions. Thankfully, Congress, rightfully alarmed over the potential economic and national security implications, passed last year’s bipartisan CHIPS Act — which invested $52 billion in domestic semiconductor research and manufacturing — to regain a foothold.

And yet, when it comes to our currently world-leading biotechnology industry, our leaders are repeating many of the same mistakes that ceded our leadership in semiconductors. They’re creating an inhospitable policy environment that may well lead to the United States losing our preeminent position in that field as well.

I. Patents Facilitate Investments and Exchanges in Some of the Most Dynamic Sectors of the Economy

As suggested above, patents likely play an important role in providing inventors with incentives to innovate. But the role of patents in the commercialization of ideas is probably even more important. Property rights in general, and patent protections more specifically, reduce the cost of transacting, thus enabling firms to specialize.[12] Critically, this means that the patent system encourages and enables not just invention but also innovation by providing the basic, enforceable property rights that facilitate (theoretically) efficient organizations of economic resources and the negotiations necessary to coordinate production among them. F. Scott Kieff, a United States Federal Trade Commissioner, explained it well when he argued that IP rights are akin to “beacons in the dark, drawing to themselves all of those potential complementary users of the IP-protected-asset to interact with the IP owner and each other. This helps them each explore through the bargaining process the possibility of striking contracts with each other.”[13]

Conclusion Patent trolls pose a threat to innovation. It is difficult to enact legislation that prevents the trolls from attacking these patent holders without simultaneously limiting an individual or property rights. Being a patent holder should not be impaired at the mere cost to prevent trolls from making a profit off of a patent which they have no intention of practicing. Reform limiting the actions of trolls comes from the AIA Act, SHIELD Act, PLI Act and prior 158 Octane Fitness, LLC v. ICON Health & Fitness, Inc., 134 S. Ct. 1749, 1756 (2014). 159 Id at 1756. 160 W. Keith Robinson, Attorney Fees and Deterring Lewis & Clark Law Review, Vol. 20:1., at 292. 161 eEltech Sys. Corp. v. PPG Indus., Inc., 903 F.2d 805, 810 (Fed. Cir. 1990). 162 Loctite Corp v. Fel-Pro, Inc., 667 F.2d 577, 584-85 (7th Cir. 1981). 163 Bianco v. Globus Med., Inc., No. 2:12-CV-00147-WCB, 2014 WL 1904228, at *2-3 (E.D. Tex. May 12, 2014). 39 cases which have been decided by the court. Each case plays a critical role in limiting parts of the patent litigation process which makes it more difficult for trolls to file frivolous lawsuits for a financial gain. In an effort to preserve the property rights of patent holders it is therefore critical for further reform to be implemented. The prospective pieces of legislation should be precise to ensure that their purpose is to limit trolls from flooding the patent litigation system and to continue to preserve a patent property right. Without a patent system, there is less economic incentive to invent and innovation would come to a standstill. The preservation of innovation must remain paramount when thinking of prospective avenues of reform when it comes to patents and patent trolls. Therefore, it would be impossible to remove the threat of patent trolls from the patent litigation system without jeopardizing an rights to their own innovation.

The trends post AIA Act-era have demonstrated that even with reform, it is difficult to slow down patent trolls and keep them out of the litigation system. There are various external factors such as emerging innovation by way of the infinite pockets of technology, as well as the low risk of which makes it difficult to stop these patent trolls without conservative reform. However, at what cost to an American citizen do these restrictions come? It would be unconstitutional to take away an property right for the sole purpose of stopping patent trolls. Patent trolling is a biased practice perpetuated by people who exploit legal operation for personal financial gain. The major obstacle at the legislative level is the lack of substantial examination when issuing patents. Ensuring that an application aligns with all the requirements, including paying for patent receipts, will reduce the number of patent trolls flooding the litigation system. Although prospective reform is a solution to limiting patent trolls, further research will be required to determine the efficacy of potential reform.

Recently, the U.S. Supreme Court resolved a split between the circuit courts over whether the Copyright Act’s three-year statute of limitations limits the damages a plaintiff may recover to a three-year period. The Court ended the dispute in Warner Chappell Music, Inc v. Nealy and held a copyright plaintiff may recover all damages flowing from a timely filed infringement claim, even if the infringement occurred more than three years before suit.

The case stems from a music publishing company founded by the plaintiff, Sherman Nealy, and a former business partner, Tony Butler, in 1983. The company recorded and released one album and multiple singles but subsequently dissolved. In 1989, Nealy went to prison and, upon his release in 2016, discovered that his former business partner had entered into licensing agreements with Warner Chappell Music, Inc. for the works their music publishing company had released in the 1980s. Nealy filed suit in 2018 for copyright infringement, seeking damages back to 2008. The district court found that the Copyright Act’s three-year statute of limitations barred damages occurring more than three years prior to filing suit and limited Nealy’s damages from 2015 to 2018. On appeal, the Eleventh Circuit reversed, finding the statutory language created no such limitation on damages. In a 6-3 decision, the Supreme Court sided with the Eleventh Circuit.