Statement Of Senator Patrick Leahy Hearing On: “The Patent Trial And Appeal Board: Examining Proposals To Address Predictability, Certainty, And Fairness”

. . . . Chair, Intellectual Property Subcommittee

Patents drive our economy, allowing innovators to do what they do best while knowing they can reap the benefits of their hard work.  Good quality patents thus give small businesses and inventors certainty that they can defend their inventions from others who didn’t put in the work. Without the rights guaranteed by patents, the engine of our economy, American innovation, simply would not be as strong.  

Given the power that a patent conveys, though, a patent issued by the U.S. Patent and Trademark Office needs to actually represent innovation.  There are serious consequences for our entire economy when the system permits enforcement of a patent that never should have issued.  Vermonters and small businesses all across the country have suffered these consequences.  Several years ago, an out-of-state company asserted poor-quality patents against dozens of Vermont small businesses and non-profits, demanding payments for each and every time a business scanned a document and then emailed it. It was a scam. And it was an egregious abuse of our patent system.    

That is why I am proud of the work we did in 2011to pass the Leahy-Smith America Invents Act, which allowed the public to take their concerns about a questionable patent back to the Patent Office for a more in-depth review.  Through proceedings created by the Leahy-Smith Act, the scan-to-email patents were brought back to the Patent Office and invalidated, allowing Vermont companies and non-profits to continue their important work.  The Patent Trial and Appeal Board, or PTAB, created under the Act, resolved those disputes in a way that was faster, less expensive, and more accurate than a district court because the disputes were overseen by technically trained patent judges under a strict deadline.  In the past decade of the PTAB’s existence, the public has brought thousands of patents to the Patent Office’s attention, and the Patent Office has expertly addressed validity, reinforcing the strength of high-quality patents and cancelling ones that never should have issued. 

As with any big new undertaking, that success has also brought new questions. And all enacted laws—particularly those dealing with ever-evolving technologies and science—need to be revisited and updated from time to time. That is why I am thrilled that Ranking Member Tillis, Senator Cornyn, and I just last week introduced the PTAB Reform Act of 2022.  We gathered feedback from participants in the patent system, including the public broadly and businesses across the country covering a vast array sectors and technologies.  We looked at concerns from all corners and presented a series of different options for addressing them.  This bill, the product of months of hard work and compromise, addresses the biggest concerns of stakeholders from across the spectrum.  This bill will update the PTAB so it can continue its important work into the next decade and beyond.

This is important legislation for a number of reasons.  One big question it addresses:  If a petition to the Patent Office to review a patent is meritorious on its face, should the Patent Office decline review anyway?  Many believe that all meritorious petitions should result in a review.  Many others believe that it is harassing to patent owners to have the same members of the public able to request review of the same patent repeatedly over time, when the patent owner has already defended the patent.  We addressed these issues—as we often do in the Senate—through compromise.  While meritorious petitions to review a patent should generally be granted, serial petitions over time from the same or related parties will not be allowed.

Another big question:  Who has the authority to make a final validity decision, civil-servant PTAB judges or the politically appointed Director of the Patent Office?  While the Supreme Court last year resolved that the Director is the final decision-maker, it left open questions about how the Director may make decisions.  This bill ensures that the decision-making process must be open to the public.  The public has a right to know when independent PTAB judges are making a decision, and when a politically-appointed Director is making a decision. We should not have a patent system where any given PTO Director can influence and decree decisions non-transparently and behind the scenes.

Our bill also addresses a concern raised by small business patent owners:  They had to pay to apply for a patent and then may have to pay again to defend it at the PTAB.  This is expensive, and we want to help small businesses shoulder the expense.  Thus, if a small entity has not already decided to undertake the expense of litigation, the Patent Office will cover the expense of a PTAB proceeding for that small business under our bill. 

We have here an extraordinary group of witnesses with unparalleled experience with the PTAB.  I am excited to hear from them about their experience, what has worked well and what needs tweaking, and how our PTAB Reform Act will fit into the overall picture.  David Cain, a Vermont attorney for GlobalFoundries, one of Vermont’s biggest employers, has been involved in several PTAB proceedings and can tell us about his experiences in the semiconductor chip manufacturing industry, a sector that is vital to our economy.

I know that Ranking Member Tillis and Senator Cornyn share my belief that the patent system should work well for all Americans and all sectors of our economy.  I look forward to continuing the bipartisan work of our IP Subcommittee to help deliver real improvements to our patent system. I want to leave behind an even stronger patent system that further empowers America’s greatest natural resource: our ingenuity and innovation. 

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