White House Framework for AI Regulation to Set the Stage for Congress

President Trump has released a framework for AI regulation for Congress.  The Press Release states:

The Trump Administration is committed to winning the AI race to usher in a new era of human flourishing, economic competitiveness, and national security for the American people. Achieving these goals requires a commonsense national policy framework that both enables American industry to innovate and thrive and ensures that all Americans benefit from this technological revolution.

The Administration recognizes that some Americans feel uncertain about how this transformative technology will affect issues they care about, like their children’s wellbeing or their monthly electricity bill. These issues, along with other emerging AI policy considerations, require strong Federal leadership to ensure the public’s trust in how AI is developed and used in their daily lives.

Today, the Trump Administration is demonstrating that leadership by issuing a comprehensive national legislative framework  that addresses the most pressing policy topics that AI presents. This framework addresses six key objectives:

1. Protecting Children and Empowering Parents: Parents are best equipped to manage their children’s digital environment and upbringing. The Administration is calling on Congress to give parents tools to effectively do that, such as account controls to protect their children’s privacy and manage their device use. The Administration also believes that AI platforms likely to be accessed by minors should implement features to reduce potential sexual exploitation of children or encouragement of self-harm.
2. Safeguarding and Strengthening American Communities: AI development should strengthen American communities and small businesses through economic growth and energy dominance. The Administration believes that ratepayers should not foot the bill for data centers, and is calling on Congress to streamline permitting so that data centers can generate power on site, enhancing grid reliability. Congress should also augment Federal government ability to combat AI-enabled scams and address AI national security concerns.
3. Respecting Intellectual Property Rights and Supporting Creators: The creative works and unique identities of American innovators, creators, and publishers must be respected in the age of AI. Yet, for AI to improve it must be able to make fair use of what it learns from the world it inhabits. The Administration is proposing an approach that achieves both of these objectives, enabling AI to thrive while ensuring Americans’ creativity continues propelling our country’s greatness.
4. Preventing Censorship and Protecting Free Speech: The Federal government must defend free speech and First Amendment protections, while preventing AI systems from being used to silence or censor lawful political expression or dissent. AI cannot become a vehicle for government to dictate right and wrong-think. The Administration is proposing guardrails to ensure that AI can pursue truth and accuracy without limitation.
5. Enabling Innovation and Ensuring American AI Dominance: The Administration is  calling on Congress to take steps to remove outdated or unnecessary barriers to innovation, accelerate the deployment of AI across industry sectors, and facilitate broad access to the testing environments needed to build and deploy world-class AI systems.
6. Educating Americans and Developing an AI-Ready Workforce: The Administration wants American workers to participate in and reap the rewards of AI-driven growth, encouraging Congress to further workforce development and skills training programs, expanding opportunities across sectors and creating new jobs in an AI-powered economy.

Importantly, this framework can succeed only if it is applied uniformly across the United States. A patchwork of conflicting state laws would undermine American innovation and our ability to lead in the global AI race.

The Federal government is uniquely positioned to set a consistent national policy that enables us to win the AI race and deliver its benefits to the American people, while effectively addressing the policy challenges that accompany this transformative technology. The Administration looks forward to working with Congress in the coming months to turn this framework into legislation that the President can sign.

U.S. House of Representatives Passes Marijuana Banking Law

Congress is one step closer to resolving one of the very thorny issues concerning the legal marijuana business in the United States—access to banking because of its illegal status at the Federal level.  The SAFE Banking Act of 2019 has reportedly passed the U.S. House of Representatives and must then be passed by the Senate.  Of course, the bill will still have to be signed by President Trump, which may not be a sure thing.  He seems to change his mind on this issue frequently, and we are approaching an election year. There is also speculation that because of the current impeachment controversy in the Congress concerning President Trump that very little will be accomplished from a legislative perspective—that could also impact passage of patent eligible subject matter reform and drug pricing legislation.  A summary of the Safe Banking Act of 2019 states: 

This bill generally prohibits a federal banking regulator from penalizing a depository institution for providing banking services to a legitimate marijuana-related business. Specifically, the bill prohibits a federal banking regulator from (1) terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution provides financial services to a legitimate marijuana-related business; (2) prohibiting or otherwise discouraging a depository institution from offering financial services to such a business; (3) recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder solely because the account holder is affiliated with such a business; (4) taking any adverse or corrective supervisory action on a loan made to a person solely because the person either owns such a business or owns real estate or equipment leased or sold to such a business; or (5) penalizing a depository institution for processing or collecting payments for such a business.

As specified by the bill, a depository institution shall not, under federal law, be liable or subject to forfeiture for providing a loan or other financial services to a legitimate marijuana-related business.

The bill is available, here.  I’ve previously written on this issue, here. 

Judges Lourie and Newman of the Federal Circuit Critique Alice/Mayo and Myriad

The U.S. Court of Appeals for the Federal Circuit, in AatrixSoftware, Inc. v. Green Shades Software, Inc., recently denied a rehearing en banc concerning two cases that may make it more difficult to dismiss a claim challenged for lack of patent eligible subject matter under the Alice/Mayo test because of factual issues.  This leaves intact the ability of counsel to raise factual issues which may avoid early resolution of a patent infringement action on patent eligible subject matter grounds.  Notably, Judges Lourie and Newman, both of whom have graduate degrees in technical fields and are very experienced members of the Federal Circuit, requested in a concurring opinion that the U.S. Congress revisit patent eligible subject matter, particularly in light of the Alice/Mayo test and the U.S. Supreme Court “abstract idea gloss.”  Judge Lourie states:

The case before us involves the abstract idea exception to the statute.  Abstract ideas indeed should not be subject to patent.  They are products of the mind, mental steps, not capable of being controlled by others, regardless what a statute or patent claim might say.  Gottschalk v. Benson, 409 U.S. 63, 67 (1972) (“[M]ental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work.”).  No one should be inhibited from thinking by a patent.  See Letter from Thomas Jefferson to Isaac McPherson (Aug. 13, 1813) (“[I]f nature has made any one thing less susceptible, than all others, of exclusive property, it is the action of the thinking power called an Idea.”).  Thus, many brilliant and unconventional ideas must be beyond patenting simply because they are “only” ideas, which cannot be monopolized.  Moreover such a patent would be unenforceable.  Who knows what people are thinking?  

But why should there be a step two in an abstract idea analysis at all?  If a method is entirely abstract, is it no less abstract because it contains an inventive step?  And, if a claim recites “something more,” an “inventive” physical or technological step, it is not an abstract idea, and can be examined under established patentability provisions such as §§ 102 and 103.  Step two’s prohibition on identifying the something more from “computer functions [that] are ‘well-understood, routine, conventional activit[ies]’ previously known to the industry,” Alice Corp. Pty. Ltd. v. CLS Bank Int’l, 134 S. Ct. 2347, 2359 (2014) (alteration in original) (quoting Mayo, 566 U.S. at 73), is essentially a §§ 102 and 103 inquiry.  Section 101 does not need a two-step analysis to determine whether an idea is abstract.   I therefore believe that § 101 requires further authoritative treatment.  Thinking further concerning § 101, but beyond these cases, steps that utilize natural processes, as all mechanical, chemical, and biological steps do, should be patent-eligible, provided they meet the other tests of the statute, including novelty, nonobviousness, and written description.  A claim to a natural process itself should not be patentable, not least because it lacks novelty, but also because natural processes should be available to all.  But claims to using such processes should not be barred at the threshold of a patentability analysis by being considered natural laws, as a method that utilizes a natural law is not itself a natural law.

Judge Lourie also criticized the U.S. Supreme Court’s decision in Myriad Genetics:

[F]inding, isolating, and purifying such products are genuine acts of inventiveness, which should be incentivized and rewarded by patents.  We are all aware of the need for new antibiotics because bacteria have become resistant to our existing products.  Nature, including soil and plants, is a fertile possible source of new antibiotics, but there will be much scientific work to be done to find or discover, isolate, and purify any such products before they can be useful to us.  Industry should not be deprived of the incentive to develop such products that a patent creates.  But, while they are part of the same patent-eligibility problems we face, these specific issues are not in the cases before us.   Accordingly, I concur in the decision of the court not to rehear this § 101 case en banc.  Even if it was decided wrongly, which I doubt, it would not work us out of the current § 101 dilemma.  In fact, it digs the hole deeper by further complicating the § 101 analysis.  Resolution of patent-eligibility issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to bear on the subject.

There are numerous proposals for changing patent eligible subject matter before the U.S. Congress, for example, see the AIPLA proposal, here.