The Trump administration has fostered a breathtakingly fast news cycle coupled with a policy landscape fraught with uncertainty. Setting aside trade, immigration, and health care issues on which President Trump has made firm, repeated commitments it can be difficult to glean from the little information available exactly what policy directions this administration will take. Certainly, that much applies with respect to Trump's views on intellectual property.
Thus far, President Trump has not done much to directly articulate his patent policy, and many maintain, based on the administration's silence on these issues thus far, that intellectual property will be a low priority for the Administration, despite Trump arguably having more experience with IP than any other president.1 But most data points suggest that Trump likely brings a pro-patent protection perspective to the White House perhaps a welcome change in the eyes of patent stakeholders.
The 2012 America Invents Act ("AIA") the most dramatic patent reform in at least a half century has had profound impacts on the patent litigation landscape, particularly for patent assertion entities ("PAEs", otherwise more disparagingly known as "patent trolls"), whose sole functions are to hold and enforce patent rights. That legislation was in part crafted to curb abusive patent litigation, and has been by all accounts on-the-mark in that respect.
Patent holding company Intellectual Ventures, for example, has seen several rounds of layoffs in recent years,2 and a number of other patent holding companies have fallen on hard times.3 The landscape has become so unfriendly to PAEs that some have even decided to retool their business models. As one example, publicly-traded patent licensing entity WiLAN announced a real operating company business acquisition, and confirmed it is attempting to diversify away from patent licensing; its CEO, Jim Skippen, said he "[is]
not sure that investing significant amounts of capital in patents really makes sense",4 as the current environment has simply become "too difficult".
"The landscape has become so unfriendly
to PAEs that some have even decided
to retool their business models."
Certainly, and through a confluence of factors including passage of the AIA and a heightened level of Supreme Court of the US (SCOTUS) intervention, patent enforcers have taken a beating in recent years, and, perhaps as an innocent bystander, arguably so have patent rights more broadly. One key indicator: after many years of consistently-increasing patent litigation activity dating back to the 1980s, the number of patent infringement cases declined the year after passage of the AIA. That downward trend continued into 2016,5 primarily in the first quarter, which showed the lowest patent litigation level to that point in years. Notably, 60% of the cases filed were in high-tech, which some infer correlates to an uptick in the economy. Patent litigation has over time tended to trend against the broader economy when business is good, corporations tend to focus on that business rather than litigation and licensing; while in
times of economic challenge, corporations are more apt to mine their portfolios for value.
The economy aside, some also attribute the recent decline in patent activity to an Obama administration that was generally considered softer on IP issues; others say the timing is mere coincidence, and that SCOTUS' reining of patent rights is the root cause; still others call it just the natural state of things, the ebb and flow in patent rights over years that some have referred to as the natural swinging of the "patent pendulum".
Regardless of the cause, most indications are that Trump will likely lean in favour of stronger patent rights, particularly to the extent that stronger US patent rights would further his policy objective of helping US companies get a leg up on competition from abroad.
Some notable indicators of Trump's likely pro-patent bent include: The GOP campaign. Although Trump's
campaign website did not provide much information on its goals with respect to innovation or technology, the 2016 GOP platform acknowledged the vital importance of IP, as "the wellspring of American economic growth and job creation".6 The GOP's take on IP included two planks: (1) like land, patents are a private property right protected by the Constitution; and (2) theft of IP is a national security issue.7 Trump's own business-driven views on IP. Trump the businessman developed his brand into a wildly valuable intellectual property asset, and he seemingly appreciates that intellectual property can drive business and promote economic gain and ultimate job growth. Trump the real estate mogul surely understands the value of real property, and as a result he may bring a more traditional property rights perspective to IP. Trump is the first presidential name that is also a registered trademark in fragrances, eyewear, and apparel.8 Notably, Trump's business holdings at the time he entered the White House included thousands of domain
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name registrations reportedly numbering approximately 4,000.9 All in the family. Trump's family members are also said to be some of his closest and most trusted advisors. Eric and Ivanka Trump, and son-in-law Jared Kushner, all retain substantial real estate holdings, and likely each bring a real property perspective similar to their father's. In 2012, his son Donald Trump Jr published an editorial piece that defended what he called "genuine" patent enforcement (distinguishing those efforts from the efforts of traditional patent trolls).10 Pence and other key pro-patent advisors. Trump's advisors have advocated for a more pro-patent stance as compared to the prior administration. Vice President Pence, who appears to be pro-patent, sat on the House Judiciary Committee and was a member of the IP Subcommittee. Pence, initially reluctant about patent reform, eventually voted in favour of the AIA. Ken Blackwell, domestic advisor to Trump's transition team, authored "The conservative case against patent reform." He has consistently argued against patent reform and in favour of stronger patent rights. Similarly, Stephen Bannon is a founding member of Breitbart News, which ran several articles advocating for a stronger patent system. As Commerce Secretary, Wilbur Ross now has ultimate authority over the US Patent and Trademark Office. A coauthored Washington Post op-ed11 in September 2016 noted that Trump will crack down on theft of intellectual property. Ross has also called for a "zero tolerance" policy on intellectual property theft.12 SCOTUS Justice Neil Gorsuch. Particularly given SCOTUS' increased interest in IP cases in recent years, which has in part caused a shift in the litigation landscape, Trump appointee Justice Gorsuch may also help to shape the court's intellectual property policies going forward. All expectations from practitioners and academics are that like Trump Gorsuch will support strong IP rights, including patent rights, with deference to the statutory language, historic precedent, and case law.13 Trump's policy concerns on China and elsewhere. On the campaign trail and since, Trump often commented on US competition with China, and it would be no surprise to anyone for Trump to take a harder line protecting US IP in and against China. Trump has repeatedly singled out China's loose adoption of intellectual
property laws and cited piracy concerns and "rampant theft of intellectual property" in China. His campaign website had called for the US to fight China and others for stealing US intellectual property, and to force those nations to pay for piracy. Trump may well view strong US IP rights as another policy tool he could deploy against competition from China and others abroad, in favour of domestic investment and job creation.
"In light of the expected pro-patent leanings of Trump and his administration, reinvigorated patent rights may well be on
Thus far, whether by causation or correlation, the Trump administration has been a boon for the economy, coinciding with a continued falloff in patent litigation (driven, at least initially, by the obstacles posed to patent holders by the Patent Trial and Appeal Board the reputed "patent death squad" and recent SCOTUS decisions like Alice v CLS). In fact, patent litigation filings in the first quarter of 2017 were the lowest since the third quarter of 2011.14 Whether the upward trend in the economy and corresponding downward trend in patent litigation will continue in the Trump era, and whether these traditional relationships between the economy and patent litigation will hold, is yet to be seen.
Ultimately, as the US forges ahead into unpredictable times, IP may in the short-term take a backseat to more pressing concerns, and patent practitioners and stakeholders will probably have a chance to enjoy at least for now the satisfyingly slightly-more-predictable status quo provided by the US Court of Appeals for the Federal Circuit and our increasingly interested SCOTUS. However, in light of the expected pro-patent leanings of Trump and his administration, reinvigorated patent rights may well be on the horizon.
Footnotes 1.Samson Vermont, The fate of intellectual property
under Trump, PatentAttorney.com (8 Mar 2017), www.patentattorney.com/the-fate-ofintellectual-property-under-trump/ 2.Ashlee Vance, Mass layoffs hit Intellectual Ventures' patent factory, Bloomberg News, 19 Apr 2014, www.bloomberg.com/news/ articles/2014-08-19/intellectual-ventures-layoffshit-a-fifth-of-its-workforce 3.Joseph Marks, Non-practising entities face financial woes, Bloomberg BNA, 21 June 2016, www.bna.com/nonpracticing-entitiesface-n57982074502/ 4.Richard Lloyd, We're not sure that investing significant amounts of capital in patents really makes sense, says Wilan Ceo; Iam Media Blog, 18 Apr 2017, www.iam-media.com/blog/ detail.aspx?g=269aba10-bb5c-49a7-99bc962024b56523. 5.2016 Patent Litigation Study: Are we at an inflection point?, PWC (May 2016), www. pwc.com/us/en/forensic-services/publications/ assets/2016-pwc-patent-litigation-study.pdf 6.John Woolley & Gerhard Peters, Political Party Platforms, The American Presidency Project (18 July 2016), www.presidency.ucsb.edu/ ws/?pid=117718 7.Id. 8.Jorge Espinosa, Intellectual property under a Donald Trump presidency, Law360 (14 Nov 2016), www.law360.com/articles/858675/intellectualproperty-under-a-donald-trump-presidency 9.Jose Paliery & Tal Yellin, Trump has 3,643 websites that range from TrumpEmpire.com to TrumpFraud.org, CNN (21 Feb 2017), http:// money.cnn.com/2017/02/20/technology/trumpwebsites/ 10.Joseph Allen, Will the Trump administration be pro-patent?, IP Watchdog, 27 Feb 2017, www.ipwatchdog.com/2017/02/27/will-trumpadministration-be-pro-patent/ 11.P eter Navarro & Wilbur Ross, How Trump would stimulate the US economy, The Washington Post (23 Sep 2016) www.washingtonpost. com/opinions/how-trump-would-stimulatethe-us-economy/2016/09/23/b889458e-80ef11e6-b002-307601806392_story.html?utm_ term=.598229f13007 12.W ilbur Ross & Peter Navarro, Wilbur Ross: We need a tough negotiator like Trump to fix us trade policy, Yahoo! Finance (29 July 2016), http:// finance.yahoo.com/news/wilbur-ross-toughnegotiator-trump-120622270.html 13.See, eg, Dennis Crouch, Justice Neil Gorsuch, Patently-O (7 Apr 2017), https://patentlyo.com/ patent/2017/ 04/justice-neil-gorsuch.html 14.Ryan Davis, Patent suits fall, IPRs spike at start of 2017, Law360 (12 Apr 2017), www.law360. com/articles/912673
Baker Botts IP practice group partner Robert Maier and associate Jonathan D Cocks are based in New York.
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