“The PTO we will work to provide more concrete tests – to the extent possible given Supreme Court precedent,” Director Iancu said speaking about patent eligibility. “This is an area we must all address, and one on which we will continue to engage this Committee…”
This morning USPTO Director Andrei Iancu appeared before the Senate Judiciary Committee to testify at an oversight hearing.
Senator Chris Coons (D-DE) lead off for the Democrats after Chairman Chuck Grassley (R-IA) made a brief opening statement. Coons rather quickly moved his remarks toward the recent report from the U.S. Chamber of Commerce, which now ranks the U.S. patent system 12th in the world. “One cause is the impact of the new post grant proceedings before the Patent Trial and Appeal Board,” Coons said. “The current review system is systematically biased against patent owners based on statistics from its first five years.”
Coons would go on to succinctly explain at the very real threat posed by the PTAB — with the omnipresent threat of an overly active body that is aggressively destroying patent rights investors are becoming increasingly reluctant to invest in early stage technologies and start-up companies.
With respect to the drag the PTAB is having on the patent system and investment, Coons said.
This dynamic has left investors with a growing impression that putting money behind innovative ideas backed only by a patent may not be a wise investment strategy, to the detriment of innovators and ultimately to the entire American economy. Another critical problem facing our patent system is the lack of clarity on which invention are and are not eligible for patent protection recent supreme Court decisions have called into question whether patents are appropriate to protect innovations in some of the most dynamic areas of our economy; software developments and medical diagnostics. While the impact may be noticeable to patent practitioners and inventors, if corrective action isn’t taken, in years to come the broader public may be asking why all the newest and most advanced innovations and products in these areas are created somewhere other than the United States.
Director Iancu’s prepared remarks were entered into the record, and he was offered some time to make a brief statement. During this time Iancu specifically spoke about several important issues, including PTAB proceedings and patent eligibility.
With respect to PTAB proceedings, Director Iancu told the Committee:
We are reviewing [PTAB proceedings] carefully to ensure that the Agency’s approach to these critical proceedings is consistent with the intent of the AIA and the overall goal of ensuring predictable, high quality patent rights. We are currently studying, among other things, the institution decision, claim construction, the amendment process, composition of judging panels, the conduct of hearings and the variety of standard operating procedures.
While this is largely a summary of his written testimony, it does go further. In his written testimony Director Iancu wrote that the Office is studying issues that “include the institution decision, claim construction, the amendment process, and the conduct of hearings.” Adding the composition of judging panels to the list could well signal that Director Iancu is specifically considering the possibility of separating the institution decision from the merits decision, which critics of the post grant process have urged. Similarly, reviewing standard operating procedures could mean many things, but suggests that there is some appreciate for structural issues and a lack of transparency that has dogged a stubborn PTAB that at times almost seems to willfully have a tin ear.
“The patent eligibility legal landscape is also a critical area we are exploring,” Director Iancu told the Senate Judiciary Committee. “We are considering ways to increase the certainty and predictability of the eligibility analysis.”
Director Iancu also went on to acknowledge that the statute in question, 35 U.S.C. 101, has not changed in decades but that the Supreme Court has recently infused uncertainty, which must be addressed. Iancu said:
While the statutory language of Section 101 has not been substantially changed for decades, in recent years the Supreme Court has issued decisions on patentable subject matter that have introduced a degree of uncertainty into this area of law. At the PTO we will work to provide more concrete tests – to the extent possible given Supreme Court precedent – that guide examiners and the public toward finding the appropriate lines to draw with respect to eligible subject matter. This is an area we must all address, and one on which we will continue to engage this Committee, stakeholders and the public, and should Congress decide to explore a legislative adjustment of Section 101 we would work with this Committee and with stakeholders to explore viable options.
It sounds as if Director Iancu is laying the foundation for legislative changes to 101. What a change in tone compared with the previous Administration.