WASHINGTON–U.S. Senator and Chair of the Senate Judiciary Subcommittee on Intellectual Property Chris Coons (D-Del.) chaired an oversight hearing to review the operation and management of the U.S. Patent and Trademark Office (USPTO). Kathi Vidal, USPTO Director, appeared on behalf of the USPTO.
The hearing, entitled “Oversight of the United States Patent and Trademark Office,” also explored efforts to reform Patent Trial and Appeal Board (PTAB) practices, as well as concerns about the current state of patent eligibility standards. At the hearing, Senator Coons discussed Director Vidal’s support for the USPTO’s recent advance notice of proposed rulemaking proposals; the bipartisan PREVAIL Act that Senator Coons introduced with Senators Thom Tillis (R-N.C.), Dick Durbin (D-Ill.), and Mazie Hirono (D-Hawaii); the need for additional legislative measures like the SHOP SAFE Act to keep American consumers safe; and the USPTO’s efforts to make U.S. innovation more inclusive.
Senator Coons has been a longtime advocate of protecting U.S. intellectual property rights and introduced several bills during the last two Congresses that would make U.S. intellectual property law more reliable, effective, and predictable, including the SHOP SAFE Act.
A video and transcript of Senator Coons’ opening remarks are available below.
WATCH HERE:
Senator Chris Coons: I want to thank Director Kathi Vidal for participating today. I also want to thank Ranking Member Thom Tillis and his staff for putting this hearing together on a consensus basis. This is our second hearing in two weeks, our third in two months, and Senator Tillis, you and your team continue to be great partners. There are, in fact, more to come.
Director Kathi Vidal leads one of the largest intellectual property offices in the world, with more than 13,000 public servants, an annual budget of roughly $4 billion. Last year, the USPTO received about 460,000 new patent applications – a 1.5% increase over the number filed in 2021. The agency expects about 730,000 unexamined patent applications by the end of the year – an increase of roughly 40,000. Trademark application filings increased to over 940,000 in ’21, before dropping a little bit back to more normal levels – around 800,000. The surge in 2021 caused an increase in application pendency, for which the agency has hired 92 trademark examiners to address. The USPTO has set and adjusted patent and trademark fees six times under its important fee-setting authority that the American Invents Act [AIA] established in 2011. The agency is currently engaged in another round of adjustments to help it fulfill its mission of fostering innovation, competitiveness, and economic growth.
U.S. global leadership and competitiveness depend on our ability to foster and protect innovation and creativity at home and abroad. Ensuring the predictability and the reliability of our patent system incentivizes innovation, rewards ingenuity, and improves our global competitiveness. Over the last decade, however, changes to our patent laws have chipped away at that system, threatening long-term investments in research and diminishing our stature on the global stage. To take one example, consider the introduction of the Patent Trial and Appeal Board, or PTAB, created by Congress in 2011. The PTAB, under proceedings that are known as AIA reviews that determine patent validity, have made it far easier to challenge an issued patent at the USPTO than in district courts. AIA reviews were intended to be a faster, cheaper alternative to district court patent litigation, but that’s not exactly how it has worked out. Eighty-five percent of PTAB reviews are also the subject of parallel patent litigation in federal court. This means patent owners have to defend their rights on two fronts at the same time. Rather than making litigation more streamlined, the PTAB system in its current form has just made it duplicative. These AIA reviews in the PTAB aren’t being filed by small or innovative companies. Typically, large and well-established companies have filed thousands of AIA reviews against patents they’ve been accused of infringing, hoping to strip those patents away from their holders.
Director Vidal, I support your recent efforts to use administrative rulemaking to address issues like these: to minimize inefficiencies, to provide additional protections to under-resourced inventors. I hope that you turn around the proposed rule quickly. In my view, however, Congress also needs to step up to the plate and act. That’s why I’ve introduced, along with Senator Tillis and Senators Durbin and Hirono, the PREVAIL Act, a bill that would make some commonsense reforms at the PTAB to protect inventors from costly, unnecessary, and duplicative proceedings. These commonsense reforms include establishing a standing requirement to file an AIA review, limiting the number of challenges that can be brought against the same patent, and barring challenges from pursuing parallel challenges at the PTAB and in federal district court.
I also remain concerned about the scope of subject matter that is eligible to be patented. Many witnesses appeared before this subcommittee over the last few months and have highlighted the uncertainty in our patent eligibility laws. Why does this matter? Critical technologies, like medical diagnostic software and core AI, are not eligible for patent protection here in the United States under current law, but do qualify for protection in Europe and China. So, I was happy to join Senator Tillis in introducing the Patent Eligibility Restoration [PERA] Act last month. That bill will return eligibility to important inventions while resolving legitimate concerns over the patenting of ideas, discoveries of what already exists in nature, and social or cultural content that everyone agrees is beyond the scope of patent protection.
I look forward to working with my colleague Thom Tillis and others and with stakeholders to move PREVAIL and PERA through Congress to restore predictability and reliability to the patent grant.
We also – last topic – need to be concerned about counterfeit goods from abroad. In 2021, more than 80% of counterfeit goods entering the United States originated in China. Although we seized more than $3 billion of counterfeit goods at the border, that number amounts to only a fraction of the total value of counterfeits. These counterfeits can be unsafe and harm consumers. They’re more than just fake sports gear or fake watches. As Co-Chair of the Congressional Trademark Caucus along with Senator [Chuck] Grassley [R-Iowa], I know how dangerous counterfeit goods can be. To give just one example, fake lithium batteries that have exploded or caught fire caused 70 deaths and more than 350,000 serious injuries just last year. I applaud the PTO’s efforts, under Director Vidal’s leadership, to teach younger Americans about the differences between real and fake products and the potential harms of purchasing counterfeit goods and the importance of buying real with the so-called “go for real” trademark campaign. The USPTO can’t solve this problem alone, however, so I’m planning to soon reintroduce, along with Senator Tillis, the SHOP SAFE Act to protect consumers from harmful counterfeit goods sold online. I look forward to hearing from you, Director Vidal; to exploring your efforts to address these issues at the PTO; and discussing the work we intend to do here in Congress to promote America’s innovation economy. I’ll introduce you in a moment, but first, I want to turn it over to my Ranking Member and friend, Senator Thom Tillis.