Expected Changes to IP Policy under the Second Trump Administration

Intellectual property (“IP”) policy does not weigh heavily on most voters’ minds, and so is not often addressed in presidential campaigns. This past campaign was no different – President-elect Donald Trump did not expressly address many IP issues during the campaign. Nonetheless, a number of changes in IP policy in the second Trump administration are expected based on actions taken during the first Trump administration, the ideologies of President-elect Trump’s political appointees for his second term, and the Trump campaign’s broader goals of U.S. economic greatness, support of cryptocurrency, and support of artificial intelligence (“AI”) innovation.¹ This article provides a brief summary of some of the expected changes to IP policy in the second Trump administration.

IP Policy under a New Director of the USPTO

During his first term, President Trump nominated Andrei Iancu as director of the U.S. Patent and Trademark Office (“USPTO”). As Director, Mr. Iancu was known to be pro-inventor and was supportive of the rights of patent owners. Director Iancu cut down on the number of AIA proceedings by supporting the NHK-Fintiv rule, which allows the Patent Trial and Appeal Board (“PTAB”) discretion to deny inter partes review (“IPR”) petitions based on several factors, including whether the challenged patent is being asserted in parallel district court litigation.² Director Iancu’s policies were a major change in direction from Iancu’s predecessor at the USPTO, Director Michelle Lee, who was nominated by President Obama. Ms. Lee adopted policies that were designed to promote patent quality and resulted in a high rate of invalidation of patents.

The USPTO changed course from Director Iancu’s inventor-friendly policies when the next director, Kathi Vidal, was nominated by President Biden. Like Ms. Lee, and unlike Mr. Iancu, Director Vidal was seen as pro-patent quality. She implemented policies that resulted in a high rate of invalidation of patents. Under Director Vidal, the PTAB’s total claims invalidation rate, or the rate at which the PTAB invalidates all of the claims of a patent, rose from 59% in 2021 to 71% in the first half of 2024.³ Director Vidal also cut back on use of the Fintiv rule. Early in her term, she issued a memorandum that narrowed the application of the Fintiv rule and caused Fintiv denials to decline sharply.⁴ Director Vidal used the new director review process from the U.S. Supreme Court’s Arthrex⁵ decision to create an additional layer of review of PTAB decisions.⁶

Based on this cyclical back-and-forth approach to USPTO policy, one might expect that Mr. Trump’s next nominee for director of the USPTO will, like Mr. Iancu, tend to be more pro-inventor, and therefore more likely to streamline the USPTO and cut down on the IPR invalidation of patents. For example, the new director may again support more discretion to deny IPR petitions based on Fintiv or other precedent. The total claims invalidation rate hovered around 60% during Mr. Iancu’s tenure as director, and therefore, it seems reasonable to expect that the total claims invalidation rate may fall back to similar levels during the second Trump administration. This line of thinking is, of course, speculative, however, and it is also possible that the next director of the USPTO will deviate from cyclical trends and lead the USPTO in a different direction. Indeed, much may depend upon the individual that President Trump chooses to fill this role. Mr. Iancu reported that while he was the director of the USPTO, he did not regularly have conversations about IP with President Trump.⁷

For now, the day-to-day activities at the USPTO will likely continue without any drastic changes. Ms. Vidal has already stepped down as Director, and it will take some time before a new Director is appointed. Director Iancu did not take office until 13 months after President Trump’s first inauguration,⁸ and Director Vidal took 15 months to be sworn in.⁹

IP Policy from Other Appointees

Beyond the leadership of the director of the USPTO, IP policy will be heavily influenced by presidential appointments to certain other government positions, including the U.S. Commerce Secretary, the head of the U.S. Department of Justice Antitrust Division, and the director of the National Institute of Standards and Technology.

The USPTO is subject to the policy direction of the Secretary of Commerce because it is an agency within the U.S. Department of Commerce.¹⁰ The USPTO’s authority to establish regulations for the conduct of proceedings is subject to the Secretary of Commerce’s policy direction.¹¹ Mr. Trump has selected Howard Lutnik to be the Secretary of Commerce.¹² Mr. Lutnik has a background as an inventor and innovator and has his name listed on hundreds of patents and publications.¹³ Currently he is the CEO of Cantor Fitzgerald, a financial services firm with experience on both sides of IP litigation. Based on this background, one might expect Mr. Lutnik to be supportive of strong IP rights and an efficient system of granting IP rights, and as the Commerce Secretary, he will be well-positioned to shape the policy direction of the USPTO.

The Antitrust Division of the U.S. Department of Justice, along with the Federal Trade Commission, is responsible for overseeing federal competition law and policy. During his initial term, President Trump’s former Assistant Attorney General, Makan Delrahim, introduced an approach to antitrust and IP called the “New Madison Approach,” which held that there is no duty to license patents and that standard essential patents should get the same protections as other patents.¹⁴ This policy was withdrawn under President Biden in a joint statement by the Department of Justice and the USPTO, but no policy was implemented to replace it.¹⁵ It is possible that Mr. Trump’s pick for the new Assistant Attorney General for the Antitrust Division, Gail Slater, will bring back the New Madison Approach, which would strengthen the rights of patent holders. Mr. Trump announced Ms. Slater’s selection for Assistant Attorney General with the promise that Ms. Slater would fight against the “stifling [of] competition in our most innovative sector” by “Big Tech.”¹⁶

The National Institute of Standards and Technology (“NIST”) influences IP by facilitating governmental research and the patenting and licensing of the U.S.’s patent portfolio. In particular, the NIST has influenced IP through releasing guidance on march-in rights under the Bayh-Dole Act, which means that federal contractors can be required to grant licenses to third parties in certain circumstances.¹⁷ In 2021, during President Trump’s final days in office, the NIST requested public comments on a proposal to formally revise the Bayh-Dole regulations to state that march-in rights would not be exercised exclusively based on the contractor’s pricing of its commercial goods. However, the final rule issued by the NIST in 2023 did not include the proposed revision. In late 2023, the NIST under President Biden instead proposed a new framework that would allow pricing to be a consideration for march-in right determinations.¹⁸ The Biden administration pushed this framework as a strategy for lowering the cost of drugs. Given the NIST’s proposed regulation under President Trump in 2021, the Trump administration is unlikely to pursue a final version of the Biden administration’s march-in rights framework. Additionally, neither march-in rights nor drug pricing were featured in the Trump campaign, so the second Trump administration is unlikely to be the first in the 40-plus year history of the Bayh-Dole act to exercise these rights.

Pending Patent-Friendly Legislation

In the last session of Congress, there were three patent reform bills that could be reintroduced in the new session of Congress and gain support from President Trump and the Republican-controlled legislature. The Patent Eligibility Restoration Act (“PERA”) would have changed patent eligibility law under Section 101 by eliminating all judicially created exceptions to patent eligibility and defining the statutory exceptions to eligibility.¹⁹ The Promoting and Respecting Economically Vital American Innovation Leadership Act (“PREVAIL”) would have restricted simultaneous actions in the PTAB and the district court to challenge patents, would have restricted PTAB challengers by requiring standing for these challengers, and would have matched the PTAB’s standards to those of district court.²⁰ The RESTORE Patent Rights Act of 2024 would have established a rebuttable presumption that a permanent injunction should be granted for infringement.²¹ It would have reversed the precedent created by the U.S. Supreme Court’s eBay decision, which uses a four-factor test to determine whether a permanent injunction is warranted in infringement cases.²² All three of the proposed bills would have strengthened the rights of patent owners. Additionally, all three bills have received bipartisan support in the past. None of the bills made it to a floor vote under the previous Congress, and none of the bills have been reintroduced to Congress yet; however, it is possible that one or more of the bills may be reintroduced during this session of Congress.

Artificial Intelligence

Mr. Trump has pushed to be the international leader in AI. Speaking on the Impaulsive podcast in June, Mr. Trump said, “We have to be at the forefront…We have to take the lead over China.”²³ Much of Trump’s policy regarding AI can be expected to support and drive AI innovation in the U.S. and to help the U.S. be at the forefront of the technology worldwide.

Mr. Trump is expected to take a deregulatory approach to AI. He has promised to repeal President Joe Biden’s Executive Order on AI, which Mr. Trump criticized as hindering the development of the technology. Repealing this Executive Order was also part of the Republican Party platform in July 2024.²⁴ However, some parts of the Executive Order seem to align with Mr. Trump’s platform, and so Mr. Trump may not completely change course on AI policy. In a Time magazine article, Samuel Hammond, a senior economist at the Foundation for American Innovation, said, “It would not surprise me if a Trump executive order on AI maintained or even expanded on some of the core national security provisions within the Biden Executive Order, building on what the Department of Homeland Security has done for evaluating cybersecurity, biological, and radiological risks associated with AI.”²⁵

Mr. Trump has appointed David Sacks to serve in the brand new role of White House “AI & Crypto Czar.” This is widely viewed as a sign that the Trump administration will fulfill its promise to take a pro-industry, deregulatory stance on AI. In a Truth Social post, Mr. Trump said that Mr. Sacks “will focus on making America the clear global leader” in both AI and cryptocurrency.²⁶ Mr. Sacks, a tech entrepreneur who recently launched an AI-powered workplace chat app called Glue, has often expressed support for an ecosystem that is more conducive to the growth of AI companies. It is unclear what Mr. Sacks’s responsibilities will be or how much power he will wield in this new position. However, Mr. Sacks has been outspoken against regulating AI too tightly and will instead likely favor growth for AI companies and startups.²⁷

Though international competition, especially with China, is likely the primary driver behind Mr. Trump’s policies on AI, Mr. Trump also seems to have mixed views on the technology. He has described AI as a “superpower” but has also described its capabilities as “alarming.”²⁸ Mr. Trump’s advisors also hold a wide range of views on AI: these include Marc Andreessen, a staunch supporter of AI who wrote an article called “Why AI Will Save the World,”²⁹ and Elon Musk, an AI regulation supporter whom Trump appointed to run a proposed presidential advisory commission called the Department of Government Efficiency. It remains to be seen how this group of advisors, especially Mr. Sacks, will shape AI policy in the second Trump administration.

Cryptocurrency

Mr. Trump advocated strongly for cryptocurrency during his campaign. During the campaign, he said, “I’m laying out my plan to ensure that the United States will be the crypto capital of the planet and the bitcoin superpower of the world.” Mr. Trump also unveiled plans to create a strategic reserve of bitcoin in the U.S. Treasury.³⁰ Following Mr. Trump’s election win, the price of bitcoin surged to over $100,000 for the first time ever.³¹

Mr. Trump has picked Paul Atkins, a conservative proponent of cryptocurrency, to run the Securities and Exchange Commission. Mr. Trump wrote that Mr. Atkins “recognizes that digital assets & other innovations are crucial to Making America Greater than Ever Before.”³² Mr. Atkins is expected to review or revise much of what the SEC did under the Biden administration. He has questioned the SEC’s regulation of cryptocurrency in the past, saying that more of the cryptocurrency market would take place in the United States “[i]f the SEC were more accommodating and would deal straightforwardly” with cryptocurrency companies.³³ Mr. Trump has not yet announced his pick for chair of the Commodity Futures Trading Commission (“CFTC”), but the frontrunners for the appointment are supportive of digital assets.³⁴

Mr. Trump wrote in a Truth Social post that Mr. Sacks, his new AI and Crypto Czar, will “work on a legal framework so the Crypto industry has the clarity it has been asking for, and can thrive in the U.S.”³⁵ It is unclear what the extent of the power of the new AI and Crypto Czar will be, but Mr. Sacks has long been an advocate of cryptocurrency. In a post on X, he promised that the cryptocurrency industry would get the clear legal framework that it desired, and that more innovation will happen in the U.S.³⁶

Conclusion

Though it is impossible to predict exactly how IP policy will evolve in the U.S. during Mr. Trump’s next term as President, in general we can likely expect stronger rights for owners of patents, more streamlined proceedings at the USPTO, and increased support for and less regulation of AI and crypto currencies. Ropes & Gray will be monitoring these developments as they arise.