Senator Thom Tillis: If IP Stakeholders Can’t Find Consensus, Congress Can’t Help

Senator Thom Tillis (R-NC), Chairman, Subcommittee on Intellectual Property

Senator Thom Tillis (R-NC) arguably has more pressing issues to focus on than intellectual property at the moment, as the nation scrambles to find solutions to the many economic and health crises caused by the coronavirus pandemic and COVID-19. And yet, Tillis has somehow managed to remain focused on IP, with recent movement in the areas of copyright and trademark modernization, as well as exploration into the implications of Allen et al. v. Cooper, Governor of North Carolina, et al.

I recently had the opportunity to catch up with Senator Tillis on the record, discussing his interest in intellectual property, the status of patent eligibility reform, the COVID-19 outbreak, copyright modernization, trademark modernization and the harm done by counterfeiting.

Without further ado, here is my conversation with Senator Thom Tillis, Chairman of the Senate IP Subcommittee.

You have focused extensively on IP; why? Where does this interest stem from? 

Before I ran for office, I worked for a number of years in technology and management consulting where I saw firsthand the value of intellectual property to businesses and the overall American economy. My private sector experiences taught me that intellectual property is fundamentally tied to American creativity and innovation. Our intellectual property system is one of the biggest reasons that the United States is the entertainment and technology capital of the world.

As you know, Gene, the state of North Carolina plays a major role in medical and technological innovation, as well as in publishing, music, and other areas of creative expression. Many North Carolina companies and institutions not only produce world-renowned products but also provide good, high-paying jobs to tens of thousands of North Carolinians. The American IP system provides crucial incentives to these North Carolina authors, inventors, entrepreneurs, and a fleet of other entrepreneurs.  Without strong intellectual property protections, why would anyone invest the substantial time and money to innovate pharmaceutical solutions to deadly diseases or develop a life-changing new technology or create a culturally enriching piece of entertainment?

You’ve indicated elsewhere that, without compromise, patent eligibility reform is “dead on arrival,” and now the Supreme Court has effectively indicated that it will not fix any of the problems either, having denied 50 or more petitions for certiorari, including cases asking the Court to reconsider its prohibition on patenting medical diagnostics. What do you say to patent owners and stakeholders who are left to struggle with the confusion in the meantime? Is there any recourse/ hope for them?

This is an important issue and I am glad people are still asking this question, however, my answer has not changed. Last year, Senator Coons and I led an extensive effort to lay out a framework for Section 101 reform. At the end of the day, that process stalled because stakeholders refused to compromise. They let the great and perfect get in the way of the good.

Stakeholders must find a consensus amongst themselves. The way the current jurisprudence sits, there’s almost no incentive to develop new, innovative diagnostic testing methods or other life-saving treatments. As the COVID-19 pandemic is unfortunately showing us, having these tests in the pipeline are crucial for public and economic health, well-being, and safety. I hope stakeholders will come together and compromise. I’m ready and willing to work with them to address all legitimate equities and fix this problem.

But, until that happens, I do not see our Subcommittee spending any more time on the issue.

Do you think the COVID-19 outbreak could potentially lead Members of Congress to rethink patent eligibility for life science related innovations in general? For at least medical diagnostics, specifically?

Right now our focus is on preventing the spread of this virus and making sure people can afford to buy food and pay rent. But what I do know is that without the life sciences companies who have stepped up to the plate and worked tirelessly to develop diagnostic tests, therapeutics, and eventually a vaccine to COVID-19, America would be in a much worse position than we are today.

I hope Congress realizes now, more than ever, how important a role America’s life science and biopharmaceutical companies play in our national well-being. We have to make sure we have smart policies in place that both promote innovation and development in this area and provide Americans access to crucial, life-saving drugs and treatments. We’ve got to get the balance right, and we have to keep America as the number one innovator in this space. Our national security, our economy, and our health depend on it.

What was most surprising/educational for you about the process of trying to reform the patent system? 

What most surprised me was the argument by some that the question of subject matter eligibility is more appropriate for the courts to answer, and not Congress. I fundamentally disagree with that argument. It is Congress’ job to legislate and decide what’s worthy of patent protection. This is especially true in an area as technical as subject matter eligibility. For years we have seen that courts are not equipped to answer this question, and only Congressional action is going to fix this mess.

In November, the House IP Subcommittee held a hearing to consider appropriate actions in response to the Federal Circuit’s decision in Arthrex v. Smith & Nephew, which found that Patent Trial and Appeal Board judges had not been constitutionally appointed. Does the Senate IP Subcommittee plan to hold any such hearings or otherwise take any action to address this?

Not at this point. The IP Subcommittee began 2020 with an ambitious agenda focused on copyright review and reform, including eight hearings on the Digital Millennium Copyright Act. DMCA reform is an issue of critical importance to copyright owners, but it’s also incredibly complicated and requires careful attention. So that is what the Subcommittee began the year focused on.

What outside of patent reform are you currently most concerned about with respect to U.S. IP rights and protection?

That’s a great question, Gene. Copyright reform is at the top of my list. With the exception of the important changes brought by the Hatch-Goodlatte Music Modernization Act in 2016, most aspects of the U.S. copyright system are based on understandings of the creative content industry that are nearly half a century old; the technological assumptions of U.S. copyright law aren’t much more contemporary: the DMCA was enacted in 1998, but most of the statute’s technological assumptions date back to the 1970s, and even the DMCA’s solutions to adapting to technological changes – revolutionary at the time and critical to the early development of the internet – have in recent years shown significant wear and tear.

Senator Tillis at Halloween Dog Parade in the Hart Atrium

In addition to the DMCA reform, I have also been very concerned with modernizing the U.S. Copyright Office so that it can better serve authors and copyright owners as well as the public. Another copyright issue I’m concerned about relates to the gap in criminal copyright law that treats criminal streaming as a misdemeanor but criminal reproduction or distribution as a felony – I’m hoping to patch this loophole, particularly as illicit streaming has become the most pervasive and costly form of copyright piracy. Finally, prompted by a Supreme Court decision in March, Senator Leahy and I just asked the U.S. Copyright Office and the U.S. Patent and Trademark Office to study the frequency with which States infringe copyrights, patents, or trademarks and then claim State sovereign immunity under the Eleventh Amendment of the U.S. Constitution.

Does it worry you that it has become so easy to pirate and counterfeit and plagiarize? It seems as if many are growing up in a world that simply doesn’t respect intellectual property rights specifically, or content creators and inventors more generally. Do you think more than legislation is needed to counter such a cultural shift? 

We lose a lot as a society when we don’t value the hard efforts of creators, entrepreneurs, and innovators. As the United States economy moves up the value chain in products and services, much of the value add comes from the original creative side, in the product origination and development. These inventors and innovators are the people that in many ways embody the American spirit – the desire to create or innovate where no one has before, the eyes to identify a demand or need, and the intellectual ability to turn an idea into something that can change lives and fuel economies. Congress plays an important role in crafting the IP system, but I don’t necessarily think that cultural shifts can – or should – be corrected by government regulation. Nor do I think that Americans on the whole now support piracy or devalue the intellectual creations of others. Rather, our American values cherish the ingenuity of innovators and our laws are, on the whole, designed to promote intellectual output while leaving space for appropriate uses by others. The culture of piracy remains an aberration from these American values, and one that can be appropriately curbed by strong IP protection, including periodic updates to our IP laws.

Will the Senate IP Subcommittee be looking into counterfeiting issues at all this term, and what might that look like?

Though the IP Subcommittee currently has no hearings planned on counterfeiting, I remain very concerned with the dangers that counterfeits impose on American businesses and individuals. Thousands of American businesses suffer billions of dollars in losses every year due to counterfeits. But counterfeits also endanger public safety, whether we’re talking about a flimsy knockoff bicycle helmet or phony personal protective equipment (PPE) such as N95 masks. As our country battles the COVID-19 pandemic, the dangers of counterfeit goods are particularly poignant. I have been encouraged by efforts from the Department of Justice and Department of Homeland Security to seize counterfeit PPE coming in from China. Even before the coronavirus was detected within our borders, I joined Senators Chris Coons, Bill Cassidy, and Mazie Hirono to introduce bipartisan legislation to ensure that U.S. Customs and Border Protection has the authority to seize merchandise that infringes on design patents so we can take steps to stem the flow of counterfeit goods and protect American interests. The Counterfeit Goods Seizure Act of 2019 would help reduce the importation of counterfeit goods and in doing so protect U.S. consumers and businesses from dangerous, harmful, and illegal products.

Some, perhaps including myself as a publisher and content creator, think the only way to really address the issues of pirating and counterfeiting and plagiarism that are so rampant on the Internet is to reconsider the immunity granted to platforms. That obviously opens up a can of worms for many reasons, but is that something that will be on the table for discussion?

As I stated in an op-ed last December announcing the DMCA review, the IP Subcommittee is looking to re-forge the consensus that originally powered the DMCA and craft new legislation to modernize the DMCA for today’s internet. My goal is to revise the DMCA so that technologists and copyright owners have a shared stake in each other’s success. This was a goal of the DMCA when Congress enacted it in 1998, but many feel that the balance of interests has gotten way out of whack. I’m not sure what that will end up looking like – we’re two hearings into this process – but it will be something that works for both copyright owners and online service providers.

If you had a magic wand and could make it so, what specific IP successes do you hope to deliver over the short-term? What specific IP successes would you like to achieve longer term?

Over the short-term, I plan on introducing the Copyright Office Modernization Act, and would like to see that become law. Likewise I am co-sponsoring the Trademark Modernization Act, and would like to see that enacted.

Over the longer term, I still would like to see patent-eligibility reform and DMCA reform. At this point, patent-eligibility reform will need that magic wand. Everyone needs to compromise if we are going to get any patent-eligibility reform done, and I encourage stakeholders to work on a consensus-driven approach with Sen. Coons and me. DMCA reform also will require compromise from stakeholders if we are going to eventually move forward with consensus-driven legislation that balances the interests of copyright owners and online service providers. But I’m optimistic that we can get there, and I’m looking forward to learning a lot from witnesses at our upcoming hearings.