Nadler Opening Statement for Hearing on Oversight of the U.S. Patent and Trademark Office
Washington, D.C. - Today, House Judiciary Committee Ranking Member Jerrold Nadler (D-NY) delivered the following opening statement, as prepared, during an oversight hearing on the U.S. Patent and Trademark Office:
"Mr. Chairman, the United States Patent and Trademark Office plays a vital role in fostering innovation in this country. The thousands of employees who examine patent and trademark applications are truly at the forefront of helping to bring new technologies and new companies into existence, each with the potential of being the next game-changer or Fortune 500 company.
"Ms. Vidal, I want to congratulate you on your appointment last year as Director of the agency, and I appreciate the tremendous task you have undertaken to make sure that this organization functions smoothly and at a high caliber.
"And of course, the position also entails you acting as the primary voice in the executive branch on matters of patents and trademarks, both of which are receiving continued attention not just from our Supreme Court, but from countries around the world, as they seek to strengthen their own innovative landscapes.
"Consequently, it is heartening to see that you have undertaken many initiatives to engage the intellectual property community to assess where there might be improvements to the status quo—from seeing where there might be opportunities for more information-sharing between the FDA and USPTO, to analyzing if there are improvements to the patent examination process, to examining the efficacy and impact of the Patent Trial and Appeal Board—and that is only a subset of the many issues on your plate.
"But it is a subset worth highlighting given the challenges the patent system currently faces.
"First, while we need to employ a variety of tools to lower prescription drug costs in this country, I appreciate the USPTO’s recognition that the patent system has an important role to play in these efforts.
"It is critical that we preserve a robust patent system that maintains the incentive for companies to spend the millions of dollars needed to bring a new drug to market. But we also must ensure that lower-priced generic drugs are not unduly delayed, and I am encouraged by the agency’s recent initiative to collaborate with the FDA to provide patent examiners with training on the state of the art in the pharmaceutical and biological fields. This will help ensure that patents granted in this space properly comply with the requirement that patents should only be granted on new and non-obvious inventions, rather than trivial improvements that might improperly delay generic entry into the market.
"Patent examination is another area where it seems that analysis and modernization could be greatly beneficial. I am pleased to know that many of the long-promised improvements in examination technology are being introduced, but the USPTO cannot afford to get so far behind implementing advancements in the future. I am also interested to know how the USPTO intends to incorporate new technologies, including artificial intelligence, in making sure examiners have the best tools to help them with their work.
"Finally, the Patent Trial and Appeal Board, or PTAB, has been a prominent focus of the patent landscape since its implementation after the America Invents Act of 2011. After over a decade of operation, under different administrations, and with several Supreme Court rulings, the Board has been the subject of both praise and criticism from the start.
"It was certainly a disruptive presence in the litigation landscape, and its unique structure has led to a new chapter being written in administrative law in this country. I am concerned that, after a decade, there is still so much focus and attention on this new adjudicatory body, which, to me, suggests that Congress should consider whether more must be done to bring more stability and certainty to the functioning of the PTAB.
"In particular, I am concerned that the Board is becoming a political football for each administration to take in its own direction. Patent policy does not neatly fall into Democratic or Republican factions, but different administrations and members of Congress clearly have strong opinions on what is the right course.
"While I think it is fair to say that we are all united in the belief that innovation leads to human prosperity and economic growth, and that fostering American competitiveness is critical, we have different ideas on how to get there.
"But I also think that it is indisputable that if the PTAB changes with every administration, confidence in the patent system will be irreparably harmed. The rules need to be more constant and consistent, and that means that there likely is a role for Congress to play to ensure a more predictable, transparent system for review of issued patents by the agency.
"Ms. Vidal, I look forward to hearing your thoughts on these and other important matters facing the agency. Thank you for being here today, and I look forward to your testimony.
"With that, Mr. Chairman, I yield back."
Director Vidal, earlier in your tenure, you put out a request for comments on how USPTO examiners should assess patent eligible subject matter under 35 U.S.C. § 101. What caused you to issue this request for comments, and what is the current status of the review? Do you expect there to be significant changes to the agency’s policy?
Director Vidal, you have issued various guidance to the PTAB since your tenure, including guidance on the Fintiv doctrine of when the PTAB should decline review in light of pending district court litigation, and last week you issued an Advance Notice of Proposed Rulemaking on a range of proposals involving the PTAB. Leaving aside the merits of such changes, do you have concerns that the next Director will undo what you have done? Did Congress delegate too much rulemaking authority to the USPTO to modify these proceedings, to the detriment of a stable, reliable patent system?
Director Vidal, do you think the PTAB’s inter partes review, or IPR, procedures have been a success, and helpful overall to improving America’s innovation ecosystem? Why or why not?