January Highlights: Looking Ahead for 2025
January marked the beginning of a new presidential administration and Congress, ushering in continued opportunities for meaningful policy advancements in the years ahead. C4IP extends its congratulations to our newly elected and appointed leaders and looks forward to collaborating with them to strengthen intellectual property rights and reinforce America’s position as a global leader in innovation.
This month, C4IP focused on key policy priorities for 2025, which include the following legislative reforms:
- The Patent Eligibility Restoration Act (PERA), which would revitalize innovation and investment in crucial high-tech sectors by reversing arbitrary, judicially created exceptions to patent eligibility. You can find additional resources on PERA here and below:
- C4IP Blog: Why C4IP Supports the Patent Eligibility Restoration Act (PERA)
- Myths vs. Facts: PERA – Diagnostics and Life Sciences
- Myths vs. Facts: PERA – Software and Technology
- C4IP Blog: Why C4IP Supports the Patent Eligibility Restoration Act (PERA)
- C4IP Letter to Senate Judiciary IP Subcommittee on PERA
- C4IP Letter to Sen. Thom Tillis in Support of PERA
- The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act, which would level the legal playing field for small inventors and give them a fair chance to defend their patents from theft by larger competitors. You can find additional resources on the PREVAIL Act here and below:
- The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act, which would reestablish injunctive relief as the main legal remedy for patent infringement, thereby protecting innovators’ constitutional rights to the exclusive ownership of their inventions. You can find additional resources on the RESTORE Patent Rights Act below:
Additional Coalition Updates
- On March 3, C4IP Co-Chair Andrei Iancu will feature on an IPWatchdog panel about the inner workings of the Trump administration’s Commerce Department, the ongoing efforts to pass patent reform in Congress, and which issues patent advocates can expect policymakers to prioritize in 2025.
- On February 3, C4IP Executive Director Frank Cullen released a statement applauding Zoe Lofgren (D-CA) for introducing the Foreign Anti-Digital Piracy Act (FADPA) to protect American artists’ and creators’ copyrighted works from foreign thieves.
- C4IP’s statement was mentioned in a Forbes article on the legislation.
- On February 3, C4IP Board Member Judge Kathleen O’Malley (ret.) published an opinion essay in IAM correcting inaccuracies in the ongoing policy discussion regarding Bayh-Dole march-in rights authority.
- On January 27, C4IP Co-Chair David Kappos and C4IP Board Member Judge Paul Michel (ret.) participated in an IPWatchdog discussion focused on the PREVAIL Act and what PTAB proceedings might look like under the leadership of the second Trump administration.
- On January 22, C4IP Co-Chairs Andrei Iancu and David Kappos published an opinion essay in the Well News highlighting the findings of the Sunwater Institute’s recent study on patent quality, which determined that the USPTO grants very few invalid patents and is significantly more likely to wrongly deny valid ones.
“The United States stacks up well against our peers when it comes to keeping out “bad patents.” But to succeed in the battle for 21st century technological supremacy, we’ll also need to ensure that we do not keep out good patents.”
- On January 21, C4IP announced that we are once again accepting applications for our selective summer internship, which is open to all students enrolled at ABA-accredited law schools. Applications will be considered on a rolling basis, and more information can be found on our website.
- On January 14, Inc. columnist Madeleine Key published an analysis of President Trump’s nomination of Howard Lutnick for Commerce Secretary, concluding that his leadership could usher in a new era of pro-IP policy at the USPTO.
Government Rundown
Confirmation Hearing of Howard Lutnick as Secretary of Commerce:
On January 29, the Senate Committee on Commerce, Science, and Transportation held a hearing to consider the nomination of Howard Lutnick to lead the Department of Commerce. The Committee ultimately advanced Lutnick’s nomination to the full Senate by a vote of 16-12 on February 5.
Appointment of Coke Morgan Stewart as Acting USPTO Director:
On January 20, Coke Morgan Stewart was sworn in as Deputy Director of the USPTO and Deputy Under Secretary of Commerce for Intellectual Property, having previously served in the same roles at the end of the first Trump administration. Stewart will serve as Acting Director and Acting Under Secretary of the agency until a new director is nominated and confirmed. (USPTO, 1/20)
119th Congress Organization:
The House and Senate are finalizing committee assignments for the 119th Congress. Accordingly, membership and ratios of the respective Judiciary Committees and Subcommittees are also ongoing. Below are the expected leadership assignments for the Senate Judiciary Committee, along with updates on the House Judiciary Committee’s organization:
Expected Senate Judiciary Committee Leadership:
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- Chairman: Chuck Grassley (R-IA)
- Ranking Member: Dick Durbin (D-IL)
- IP Subcommittee Chairman: Thom Tillis (R-NC)
- IP Subcommittee Ranking Member: Adam Schiff (D-CA)
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House Committee on the Judiciary Hearing: Organizing of the Committee on the Judiciary:
On January 15, the House Judiciary Committee held a hearing to organize itself and appoint leadership for the 119th Congress. Committee Chairman Jim Jordan (R-OH) and Ranking Member Jamie Raskin (D-MD) introduced the committee’s new members.
Additionally, the Subcommittee on Courts, Intellectual Property, Artificial Intelligence and the Internet — formerly the Subcommittee on Courts, Intellectual Property, and the Internet — selected the following members to leadership positions:
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- Chairman: Darrell Issa (R-CA)
- Ranking Member: Hank Johnson (D-GA)
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(House Judiciary Committee, 1/15)
USTR Releases 2024 Review of Notorious Markets:
On January 8, the Office of the United States Trade Representative (USTR) released its 2024 Review of Notorious Markets for Counterfeiting and Piracy, an annual list of physical and online markets that are known to engage in IP rights violations. The report found that 96% of online pharmacies violate the law, with nearly a quarter of online pharmacy customers reporting being exposed to harmful or counterfeit medication. These alarming findings underscore why enforcement of IP rights—which protect against counterfeit trademarks illegally used on illicit fake pharmaceuticals—is critical to Americans’ health and safety. (USTR, 1/8)
Fact Check
Opponents of patent rights continue to propagate the false narrative that large numbers of “bad patents” pose an existential threat to inventors and the future of our innovation ecosystem. The 2024 “Year in Review” article published by the Electronic Frontier Foundation (EFF) is a notable example of this. It claims that to combat a glut of low-quality patents, the USPTO should be stricter about what types of inventions it finds eligible for patents and make it easier to invalidate “dubious” patents. It also argues that inventors should oppose the Patent Eligibility Restoration Act (PERA) to keep bad patents from being issued.
However, the EFF’s arguments rest on a false foundation. Recent research has demonstrated that the U.S. patent system is highly effective, with the USPTO mistakenly granting invalid patents at a very low rate — and that, if anything, excessive restrictions on patenting prevent too many valid patents from being issued:
| Claim: The USPTO has a “persistent problem” with “issuing a countless number [of] dubious patents each year.” |
| In reality: The nonpartisan Sunwater Institute recently conducted a study aiming to count the number of “dubious patents” granted by the USPTO — and found that the percentage of invalid patents granted was very low, in the single digits. Compared to the patent offices of the European Union, Japan, and South Korea, the USPTO boasted the lowest rate of wrongly granted patents. The evidence gathered by the study discredits the idea that the USPTO grants many patents that do not meet statutory criteria. In fact, the more “persistent problem” identified by the study was the number of valid patents that were wrongly denied. The Sunwater Institute found that nearly one in every five valid patent claims was wrongly denied by the USPTO — a troubling statistic indicating that the USPTO’s evaluation of patent applications is often overly harsh. This suggests that patent reforms should focus on ensuring more valid patents are granted, rather than further restricting the patenting process. |
| Claim: The fact that the Patent Trial and Appeal Board (PTAB)’s system of inter partes review has “led to the cancellation of thousands of patents” is evidence of an epidemic of bad patents. |
| In reality: While the high patent invalidation rate at the PTAB is often cited as evidence of the problem of “bad patents,” the Sunwater Institute’s study highlights why this reasoning is fundamentally flawed. Only a small number of issued patents are challenged, and most patent challenges are resolved via settlement rather than by a final judgment. Moreover, because settling is a rational decision whenever the outcome of a case appears fairly certain, the only patents that reach a final judgment are the most uncertain and contentious ones. Therefore, it is to be expected that about half of the challenged patents that do reach a final judgment will be invalidated, and recent years’ PTAB invalidation rates — which range from about 40% to about 60% — reflect this. Additionally, because of the way that patents are selectively filtered throughout the inter partes review process, the patents that reach a final judgment are an inaccurate, biased sample of the larger population of granted patents. That means that the percentage of final judgments resulting in invalidation cannot be used to draw conclusions about the overall percentage of patents that are invalid. |
| Claim: The Patent Eligibility Restoration Act (PERA) “would bring the worst patents back into the system.” |
| In reality: This is inaccurate — the Patent Eligibility Restoration Act would simply reestablish patent eligibility for certain categories of inventions that have wrongly been denied eligibility for the past 15 years. The bill would not alter any of the Patent Act provisions designed to preclude old, unfounded, or “bad” patents from being issued. The bill’s provisions would instead ensure that certain types of inventions, such as medical diagnostics, that were eligible to be patented for all of U.S. history until several misguided Supreme Court cases were decided in the 2010s are again allowed for consideration for patenting—provided that they also meet all of the other statutory criteria. The recent Supreme Court cases that limited eligibility (which PERA would fix) have allowed other countries to surpass the United States in important emerging technology fields. Passing PERA is necessary to ensure America’s continued global competitiveness. At the same time, it presents no danger of increasing the prevalence of “bad patents,” because the inventions it would make patent-eligible would still need to satisfy all current statutory criteria in order to be granted. |
Celebrating American Innovation
Inventor Spotlight
This month, C4IP is recognizing Warren S. Johnson (1847-1911), who helped millions of Americans live in comfort with his invention of the first temperature regulation system.
- Growing up in rural Wisconsin in the mid-1800s, Johnson’s passion for learning led him to embark on a career as a teacher and school administrator despite lacking a formal education.
- As a professor at the State Normal School, Johnson invented an efficient heat regulation system to keep the building warm in winter, which he patented in 1895.
- A relentless innovator, Johnson received more than 50 patents in his life, which also included the first thermostat.
- He later founded a company to commercialize his inventions, which is now known as Johnson Controls and employs over 100,000 people
- Johnson’s inventions were soon implemented in buildings around the world, where they revolutionized the productivity of indoor work.
- Today, Johnson Controls supports over 40,000 buildings in North America, including the U.S. Capitol and New York Stock Exchange.
- The technology pioneered by Johnson has now become ubiquitous: Over 80% of U.S. buildings incorporate heating technology, and the global market for heating and cooling services is projected to generate over $270 billion in revenue this year alone.
[PHOTO: Johnson Controls]
What’s Happening in Congress
With the 119th Congress underway, Democratic and Republican lawmakers are weighing legislation to prioritize. For those following intellectual property policy, top of mind is the potential reintroduction of three significant bills from the previous Congress addressing patent eligibility, patent validity challenges, and injunctive relief:
- The Patent Eligibility Restoration Act (PERA)
- The Promoting and Respecting Economically Vital American Innovation Leadership (PREVAIL) Act:
- The Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act
We will continue to track movement on these bills and provide updates on legislative developments in upcoming editions. In the interim, you can find resources on these key issues here.