AI patent policy should promote economic growth and innovation

Artificial intelligence is “technology that enables computers and machines to simulate human learning, understanding, problem solving, decision-making, creativity and autonomy. » AI will play an increasingly important role in driving innovation and economic growth. Strong patent protection can encourage AI-related inventions and the transmission of AI-specific technological improvements throughout the economy.

As a result, the Trump administration may want to focus on developing a strong AI patent policy as a key part of its economic growth agenda. Specifically, it could consider supporting efforts to strengthen legislative protection of patents generally and to remove unjustified regulatory barriers to AI development.

Strong patent protection promotes economic growth

The US Constitution gives power to Congress authorize the grant of patents, which confer property rights of limited duration for new inventions. Congress passed the first patent law in 1790, and over time, patents have been instrumental in the growth of the American economy, particularly in high-tech sectors.

I explained how strong patent protection promotes the diffusion of new technologies and economic growth in a Forbes online article from June 2024:

“Technological innovation generates new products and processes, thus contributing powerfully to economic growth. Many economic studies find that patents help drive the R&D that fuels all of this. In effect, patent rights create a “market for inventions”.

Licensing agreements allow patent owners to transfer their rights to third parties. This allows inventors, who may not be experts in manufacturing or marketing, to make a profit while enabling widespread adoption of their new technologies that drive economic growth. Professor Daniel Spulber, an expert in innovation economics, describes this process in detail in his 2020 book. The case of patents.”

U.S. patent law essentially provides that “anything under the sun” can be patented, if it is new and inventive.

The Supreme Court, however, created judicial exceptions to this broad principle more than ten years ago in its ruling Alice And Mayo decisions. These exceptions arise from the application of “Alice/Mayo”, which denies the granting of patents to inventions “directed toward” an ineligible concept (a law of nature, a natural phenomenon, or an abstract idea), unless that concept is “transformed” into an eligible application to the patent.

These ambiguous exceptions have created a lot of confusion about what is patentable. In January 2024 Senate TestimonyPatent law expert Professor Adam Mossoff explained:

“(They) have created enormous uncertainty for innovators and have severely restricted patent eligibility for high-tech and biopharmaceutical innovations… (They have) had a negative impact on both inventors and companies working in innovation industries that invest millions of dollars. dollars in the creation of new products and services that stimulate economic growth, job creation and improved standards of living. Thus, (they)…undermine the United States’ long-standing comparative advantage in the world by ensuring reliable and effective patent rights for all innovators.

Disincentives were also created by a 2006 Supreme Court decision, eliminating the long-standing presumption that the owner of a valid patent that has been infringed is entitled to an injunction against the infringer (who used a technology patented without authorization). As Professor Mossoff said this in a 2021 articlethis “resulted in a significant reduction in the availability of injunctive remedies for patent infringement.”

Recent bipartisan bills which would reject these judicial interpretations, restoring broad patent eligibility and presumptive injunctive rights, could be reintroduced in the next Congress.

Stronger AI patent protection needed

Like other types of innovation, AI benefits from a dynamic patent system. This is especially true of generative AI, which uses machine learning to create new content like text, images, music, audio and videos.

Studies indicate that the economic gains from increased incentives for AI are likely to be enormous.

Studies show AI drives economic growth

Economic research predicts that AI innovations will have a major positive impact on economic growth.

A 2024 assessment by economists Annalisa Lusardi and Bastien Drut notes that:

“AI has the potential to significantly increase total factor productivity across the economy, impacting a wide range of industries across multiple channels – such as the labor market, l investment and productivity – which may not be fully captured by official statistics. »

An Accenture study recently cited by a European Parliament One report estimates that by 2035, AI could double annual economic growth rates.

An analysis from January 2024 published in the Journal of Financial Economics “documents that AI is strongly associated with higher business growth, and that this growth comes primarily from companies’ use of AI technologies for product innovation.”

Many other studies have reached similar results.

A renowned researcher, Professor Daron Acemoglu, winner of the 2024 Nobel Prize in Economics, is a little more reserved. He estimates that AI will increase “GDP by 1.1 to 1.6 percent over the next 10 years, with an annual productivity gain of around 0.05 percent.”

AI’s status under US patent law is uncertain

As a new report from the Congressional Research Service explains that in 2024, the United States Patent and Trademark Office issued separate guidance documents, addressing (1) whether inventions made using AI (“title of inventor of AI”) are patentable; and (2) whether AI inventions (i.e. new AI technologies) are patentable.

The PTO’s AI inventiveness guidelines state that AI-assisted inventions can be patented provided that at least one natural person has “significantly contributed” to the claimed invention. It also requires patent applicants to provide any evidence demonstrating that “the named inventor’s purported contribution(s) were made by an AI system.” Dozens of stakeholders from the patent community provided comments, raising serious concerns about the uncertainties associated with the “significant contribution” and “non-contribution by an AI system” requirements.

The PTO’s guidance on the patentability of new AI technologies focuses on how to apply the Alice/Mayo test. Commenters also expressed various concerns regarding this document. Some have argued that the guidelines make it “unnecessarily difficult” to obtain patents by treating AI like a generic computer. Others have claimed that the guidance ignores technical considerations specific to AI and could conflict with the reasoning of Alice/Mayo.

Overall, PTO advice is of very limited usefulness. As highlighted by the Innovation Policy Council“The non-binding nature of the USPTO’s guidance to the courts contributes to a false sense of security for AI patent applicants. These potential validity issues threaten investments in a technology area critical to U.S. competitiveness.” In accordance with this observationa “coalition of former judges and government officials concluded (ended their comment) by urging the PTO to take a proactive role in promoting legislative reform.”

What comes next

To strengthen incentives to promote AI innovation, the Trump administration could consider a five-pronged strategy, involving:

· Possible active support for legislation that would (1) eliminate judicial exceptions to patentable subject matter; and (2) restore the patent owner’s presumptive right to an injunction when a court finds that its patent has been infringed.

· In the meantime, possible withdrawal of the October 2024 PTO guidance on the eligibility of AI patent subject matter and replacement with new guidance that clarifies the eligibility of AI-related patents. The guidance could, for example, avoid confusing questions about AI’s role as inventor, by simply treating AI as just another innovation that is ultimately supported by a human inventor. In reality, however, even the best guidance will provide only limited assistance to inventors in the absence of clarifying legislative reform.

· Potential for aggressive international advocacy for the protection of U.S. AI-related patent rights, considering new targeted trade sanctions against foreign infringers.

· Possible repeal of Biden administration law highly regulatory October 2023 Executive Order on AIwhich involves new legal risks which could blunt innovation by AI developers.

· Possible issuance of a new executive order that directs agencies to study and, to the extent legally possible, repeal excessive federal regulatory barriers to the creation of AI.

Taken in tandem, these initiatives could play an important role in fostering U.S. AI-related innovation, benefiting the U.S. and global economies.