LIVE 2025 Day One: Backlogs and Healthcare and AI, Oh My!

Gene and Renee Quinn welcome attendees

IPWatchdog LIVE opened today with a sneak preview of the latest episode of the IPWatchdog Unleashed podcast, which will be published Monday, and where IPWatchdog Founder and CEO Gene Quinn will examine the current state of the U.S. Patent and Trademark Office (USPTO) in light of developments having to do with both the Trump Administration and the U.S. Court of Appeals for the Federal Circuit (CAFC). The combination of a patent application backlog that some now estimate to be 1.2 million, the administration’s potential firing of a large number of examiners, and CAFC cases that have held prosecution laches is presumed if it takes more than six years to obtain a patent, thus making a patent unenforceable, has led to a patent system Quinn said “feels to me an awful lot like the Titanic right now, and like we’re fast approaching an iceberg, with disaster imminent.” The CAFC will hear two cases dealing with prosecution laches this week: Sonos v. Google and Hyatt v. Stewart.

While Trump’s changes to the federal government are highly controversial, Quinn said “whether you agree or not it doesn’t matter—they’re doing it.” Similarly, whether or not you may think the USPTO should be exempt from the Trump/ Musk cuts to government agency spending because it is fully self-funded is also beside the point—it isn’t. Quinn urged panelists to keep these points in mind throughout the meeting and to ponder whether “with the patent backlog as large as it is and how it will inevitably grow in the coming year, innovators are going to need to seriously consider whether it even makes sense to apply for a U.S. patent anymore.” Listen to the full podcast episode for more.

U.S. Patents are No Longer the Gold Standard in a Global Portfolio

In a subsequent panel on day one, speakers discussing “The Future of Patent Dealmaking, Monetization and Licensing,” noted that the role of U.S. patents in global patent portfolio transactions has been essentially flipped. “U.S. patents used to be the yardstick; now this has been basically turned on its head,” said Louis Carbonneau of Tangible IP. “It’s really hard to transact a U.S. patent portfolio that does not have European counterparts.”

Daniel Papst of Papst Licensing GmbH & Co. added that “20-25 years ago we never even looked at a German patent, but these days it’s really turned around.” Due to uncertainty around validity of U.S. patents in light of factors like eligibility law and the Patent Trial and Appeal Board (PTAB), “now it’s a matter of thinking twice or three times about using the U.S. patent,” Papst added. Carlos Olarte of OlarteMoure in Colombia agreed, saying “the U.S. is still key in a global assertion campaign, but adding other countries is now important.”

U.S. Healthcare and the Villainization of Pharma Patents

Later in the day, Sherry Knowles of Knowles Intellectual Property Law Strategies and Corey Salsberg of Novartis joined a panel moderated by Christine McDaniel of the Mercatus Center to discuss another challenge for the patent world—the effects of the Biden Administration’s Inflation Reduction Act (IRA) on investment into R&D on innovative drugs. While it’s no secret that the cost of prescription drugs is more than anyone wants to pay, higher than desirable drug prices is a multivariable function of a broken U.S. healthcare system.

Knowles provided attendees with a handout to better visualize the complexities of the U.S. healthcare system.

A case in point is the existence of middlemen known as pharmacy benefit managers (PBMs). PBMs, along with various other market entities, receive approximately 50% of the value of a drug. So, when a particular pharmaceutical costs $100, generally $50—and sometimes more—goes back to those other entities; not to the pharmaceutical innovator that paid for the research and development, clinical trials and ultimately took the drug to market. Patents are largely blamed for high drug prices, but rather than address PBMs or these other issues, the U.S. government has opted to impose government price controls via the IRA on critical medical treatments. Salsberg told attendees that, despite the IRA’s medicare pricing program being dubbed a “negotiation,” if Novartis had refused the government’s price for their drug Entresto, for example, the fees imposed by the IRA would have amounted to $90 billion—about twice the company’s global revenue. These tactics are going to ultimately result in less investment in the kinds of treatments that will be used for the medicare population, said the panelists.

AI in Flux

The final panel of the day compared approaches to artificial intelligence (AI) regulation in the EU and the United States. The European Artificial Intelligence (AI) Act officially came into force on August 1, 2024, with most provisions of the regulation applying as of August 2, 2026. However, the regulation states that compliance for prohibited practices should be in effect by February 2, 2025, considering “the unacceptable risk associated with the use of AI in certain ways.”

The European Parliament approved the Act, a major piece of legislation that lays the legal foundation of the European Union’s (EU) regulation of AI platforms, in March. Most of the provisions of the Act are aimed at protecting EU citizens from the worst safety and security risks that have become associated with the use of AI systems. The AI Act bans several uses of AI technologies, including the untargeted scraping of images to create facial recognition databases, emotion recognition in workplace and school settings, and social scoring systems. For EU law enforcement, the AI Act forbids predictive policing and also bans real-time biometric identification (RBI) applications with narrow exceptions for missing persons investigations and terrorist attack prevention.

In the United States, however, although the USPTO and Copyright Office have issued guidelines on various aspects of AI in the patent and copyright contexts, there is not yet legislation that has been passed. There are a number of cases pending, with the most recent decision, brought by Westlaw legal research service provider Thomson Reuters against a competing artificial intelligence (AI) search tool developed by Ross Intelligence, holding that Ross’ use of copyrighted headnotes that summarize legal decisions was not transformative fair use.

Panelist Nikos Minas of Wesco International said “we live in a state of flux” when it comes to AI. Guidelines, regulations and technology are both constantly changing and AI still cannot be relied upon completely, Minas said. He compared it to the early days of the internet and said that, as the use of AI becomes more prominent and widespread, we will have to know exactly how we’re using it. Transparency will become more important as well, the panelists said.

“Right now there’s a lot of willful blindness going on” on the part of AI companies, said IPWatchdog Founder and CEO Gene Quinn.