[Senate Hearing 118-109]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 118-109

                     OVERSIGHT OF THE UNITED STATES
                      PATENT AND TRADEMARK OFFICE

=======================================================================

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON INTELLECTUAL PROPERTY

                                 OF THE

                       COMMITTEE ON THE JUDICIARY
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 26, 2023

                               __________

                          Serial No. J-118-28

                               __________

         Printed for the use of the Committee on the Judiciary
         
         
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                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
53-504 PDF                  WASHINGTON : 2024                    
          
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                      COMMITTEE ON THE JUDICIARY

                   RICHARD J. DURBIN, Illinois, Chair
DIANNE FEINSTEIN, California         LINDSEY O. GRAHAM, South Carolina, 
SHELDON WHITEHOUSE, Rhode Island             Ranking Member
AMY KLOBUCHAR, Minnesota             CHARLES E. GRASSLEY, Iowa
CHRISTOPHER A. COONS, Delaware       JOHN CORNYN, Texas
RICHARD BLUMENTHAL, Connecticut      MICHAEL S. LEE, Utah
MAZIE K. HIRONO, Hawaii              TED CRUZ, Texas
CORY A. BOOKER, New Jersey           JOSH HAWLEY, Missouri
ALEX PADILLA, California             TOM COTTON, Arkansas
JON OSSOFF, Georgia                  JOHN KENNEDY, Louisiana
PETER WELCH, Vermont                 THOM TILLIS, North Carolina
                                     MARSHA BLACKBURN, Tennessee
             Joseph Zogby, Chief Counsel and Staff Director
      Katherine Nikas, Republican Chief Counsel and Staff Director

                 Subcommittee on Intellectual Property

                 CHRISTOPHER A. COONS, Delaware, Chair
MAZIE K. HIRONO, Hawaii              THOM TILLIS, North Carolina, 
ALEX PADILLA, California                 Ranking Member
JON OSSOFF, Georgia                  JOHN CORNYN, Texas
PETER WELCH, Vermont                 TOM COTTON, Arkansas
                                     MARSHA BLACKBURN, Tennessee
                 James Barton, Democratic Chief Counsel
               Seth Williford, Republican General Counsel

                            C O N T E N T S

                              ----------                              

                        JULY 26, 2023, 2:30 P.M.

                    STATEMENTS OF COMMITTEE MEMBERS

                                                                   Page

Coons, Hon. Christopher A., a U.S. Senator from the State of 
  Delaware.......................................................     1
Tillis, Hon. Thom, a U.S. Senator from the State of North 
  Carolina.......................................................     3

                                WITNESS

Witness List.....................................................    21
Vidal, Hon. Katherine, Undersecretary of Commerce for 
  Intellectual Property and Director of the United States Patent 
  and Trademark Office, Alexandria, Virginia.....................     5
    prepared statement...........................................    22

                               QUESTIONS

Questions submitted to Hon. Katherine Vidal by Chair Coons.......    37
Questions submitted to Hon. Katherine Vidal by Ranking Member 
  Tillis.........................................................    40

                                ANSWERS

Responses of Hon. Katherine Vidal to questions submitted by Chair 
  Coons..........................................................    50
Responses of Hon. Katherine Vidal to questions submitted by 
  Ranking Member Tillis..........................................    58

                MISCELLANEOUS SUBMISSIONS FOR THE RECORD

Submitted by Chair Coons:

    Unified Patents, letter, July 26, 2023.......................    73
    United States Chamber of Commerce, letter, July 26, 2023.....    76

Submitted by Ranking Member Tillis:

    Unified Patents, letter, July 26, 2023.......................    73
    United States Chamber of Commerce, letter, July 26, 2023.....    76

Submitted by Senator Hirono:

    Leahy, Hon. Patrick J., a U.S. Senator from the State of 
      Vermont, letter, December 21, 2022.........................    88

 
                     OVERSIGHT OF THE UNITED STATES
                      PATENT AND TRADEMARK OFFICE

                              ----------                              


                        WEDNESDAY, JULY 26, 2023

                      United States Senate,
             Subcommittee on Intellectual Property,
                                Committee on the Judiciary,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:30 p.m., in 
Room 226, Dirksen Senate Office Building, Hon. Christopher A. 
Coons, Chair of the Subcommittee, presiding.
    Present: Senators Coons [presiding], Hirono, Padilla, 
Welch, and Tillis.

        OPENING STATEMENT OF HON. CHRISTOPHER A. COONS,
           A U.S. SENATOR FROM THE STATE OF DELAWARE

    Chair Coons. This hearing will come to order. We are here 
today to conduct oversight of the U.S. Patent and Trademark 
Office. 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 2 weeks, our third in 2 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 
percent 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 2021 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 an adjusted patent and trademark phase 
six times under its important fee setting authority that the 
American Invents Act 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 is 
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 have 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 is why I have 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 challengers 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 diagnostics, software, 
and core AI are not eligible for patent protection here in the 
United States under our 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 Act last month. That bill will 
turn eligibility--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 percent 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 are more than just fake sports gear or fake watches. 
As Co-Chair of the Congressional Trademark Caucus, along with 
Senator Grassley, 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--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 am 
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 will introduce you in a moment, 
but first, I want to turn it over to my Ranking Member and 
friend, Senator Thom Tillis.

             OPENING STATEMENT OF HON. THOM TILLIS,
        A U.S. SENATOR FROM THE STATE OF NORTH CAROLINA

    Senator Tillis. Thank you, Mr. Chairman. It has been about 
4 years, a little over, since we had a USPTO oversight hearing, 
so I welcome the opportunity to engage the USPTO. But I also 
have to say that you have already demonstrated a willingness to 
engage, hearings and oversight are important, but I want to 
directly thank you for your leadership in the USPTO, and your 
dedication to work in this agency and work with our offices.
    We get consistently good reports from our staff. And we 
also appreciate, it is not lost on me that detailees from the 
USPTO are also a very important part of us getting to, I think, 
a good outcome in this Congress. We are back to the same thing, 
strong, reliable, predictable IP rights are paramount to 
incenting U.S. innovation.
    This innovation, which fuels economic growth for our great 
country, and innovation is critical to our national security. 
We want to encourage future inventors, big and small, to come 
forward and embrace our patent system.
    We also want to encourage interest in serving our patent 
system by encouraging the next generation of patent examiners 
and trademark examining attorneys.
    We want to take a moment to thank them for all of their 
hard work. They are in the trenches, and they have got a lot 
stacked against them. But I think our faith in the patent 
system has to exist at all stages of the patent lifecycle, from 
examination to potential litigation.
    That is why I introduced, along with Chairman Coons, the 
Patent Eligibility Restoration Act. I have a handout here 
suitable for framing. I will let you be the first recipient. So 
that we can start communicating this.
    We pursued multiple avenues to encourage patent reform, but 
it is crystal clear that a legislative solution is necessary to 
provide an appropriate patent eligibility framework to ensure 
the future of American innovation and American leadership in 
the world is secure. U.S. patent eligibility law has become 
confused, constricted, and unclear, and has led to inconsistent 
case decisions, uncertainty in innovation and investments, and 
unpredictable business outcomes.
    This bill, I believe, restores patent eligibility to 
important inventions across many fields, such as medical 
diagnostics, biotechnology, personalized medicine, artificial 
intelligence, 5G, and blockchain, to name a few. This will 
ensure that the U.S. remains the world's innovation leader in 
the years to come.
    To help support U.S. innovation, I also joined Chairman 
Coons on the PREVAIL Act--we will get you one suitable for 
framing, too--which is also good, sound policy worked out on a 
bipartisan basis.
    When properly constructed and administered, the PTAB can 
play a vital role in maintaining strong, reliable, and 
predictable IP rights. However, the PTAB has been subject to 
practices that have been abusive and open to gamesmanship. 
While a number of policies have been put into place to crack 
down on abuses of the PTAB, practices can be changed with each 
new USPTO director.
    That is why I think legislation is necessary to codify some 
of these reforms to provide long-term stability and certainty 
at the PTAB, and to permanently end some of the abuses that we 
have seen in the past. So, Director Vidal, thank you for being 
here, and I look forward to your testimony and our continued 
partnership as we move forward. Thank you.
    Chair Coons. Thank you, Ranking Member Tillis. I would like 
to turn to our witness. I will offer a brief introduction, if I 
might.
    Today, we welcome the Honorable Katherine, Kathi, Vidal, 
Undersecretary of Commerce for Intellectual Property and 
Director of the United States Patent and Trademark Office. In 
addition to leading the PTO, Director Vidal serves as the 
Principal Advisor to the Secretary of Commerce on both domestic 
and international IP policy matters.
    Prior to joining PTO, Director Vidal served as managing 
partner of Winston & Strawn's Silicon Valley office, where she 
represented clients ranging from large and well-established 
companies to small startups in patent litigation. Earlier in 
her career, she led Fish & Richardson's litigation group of 270 
attorneys and 11 offices worldwide.
    Previously, Director Vidal was an engineer for both 
Lockheed Martin and General Electric, working on aircraft and 
engine control systems before going on to pursue a career in IP 
law.
    Director, after I swear you in, you are going to have 5 
minutes for an opening statement, then we will proceed to 
questioning. Each Senator gets 5 minutes. We will likely do a 
second and even a third round just depending on attendance and 
timing.
    Director Vidal, could you please stand to be sworn in? 
Please raise your right hand after me: Do you swear or affirm 
that the testimony you are about to give to this Committee will 
be the truth, the whole truth, and nothing but the truth, so 
help you God?
    Director Vidal. I do.
    Chair Coons. Thank you, Director Vidal. You may proceed 
with your opening statement.

 STATEMENT OF HON. KATHERINE VIDAL, UNDERSECRETARY OF COMMERCE 
  FOR INTELLECTUAL PROPERTY AND DIRECTOR OF THE UNITED STATES 
       PATENT AND TRADEMARK OFFICE, ALEXANDRIA, VIRGINIA

    Director Vidal. Thank you. Chairman Coons, Ranking Member 
Tillis, and Members of the Subcommittee, thank you for this 
opportunity to discuss the great work the United States Patent 
and Trademark Office, USPTO, is doing.
    I must start by thanking you for your unwavering commitment 
and focus on our IP ecosystem. I am confident that together we 
can shape IP policy and practices to be an even greater 
catalyst for job creation and opportunity in each of your 
States and across our great Nation.
    In addition to the transparent, data-driven, and surgical 
changes we have made and intend to make this Administration to 
better support our stakeholders and the issues they face, there 
are a few key areas of focus I would like to highlight.
    First, the USPTO, like you, is focused on AI, including as 
related to patent protection and the copyrighted works that 
drive so much of our economy. I am working with the White 
House, the rest of Commerce, the Copyright Office, and across 
Government on AI policy and see it as one of our greatest 
challenges and opportunities.
    Second, as you well know and have said, we need robust, 
reliable, and transparent IP rights, and efficient and 
effective enforcement, not just here but across the globe. The 
USPTO is working globally to strengthen the innovation, 
creativity, and entrepreneurship ecosystem, to hold competitors 
to their agreements, to curb abuses and unfair practices, and 
to directly assist stakeholders facing IP issues abroad.
    At home, we are ensuring that the patents we issue continue 
to incentivize innovation, and the trademark register is 
accurate so that businesses can assess and rely on those 
protections of our trademark laws.
    Third, we are working across Government on the intersection 
of IP and competition policy, including, as related to 
standards, to promote a strong IP ecosystem while maintaining 
the U.S. as an entrepreneurial Nation that promotes startups, 
small businesses, and small enterprises.
    We are collaborating with the Food and Drug Administration 
and the United States Department of Agriculture to take into 
consideration the needs of small family farmers and the 
concerns of patient advocacy groups.
    Fourth, the USPTO is committed to an all-of-Government 
approach to leveraging IP rights to catalyze U.S. economic 
competitiveness and national security. We are doing that 
inclusively, and forming the partnerships, relationships, and 
alliances that will help us reach every corner of our country, 
including our schools, our military, military spouses and 
veterans, as well as opening new outreach offices under the 
Unleashing American Innovators Act passed by Congress last 
year.
    Mr. Chairman, I am honored and proud to be a part of the 
USPTO, an incredible agency with dedicated and knowledgeable 
public servants. As a steward of the agency, I must add, as a 
fifth and last point, that we are also working on reshaping the 
USPTO as a workplace centered around the values of purpose, 
opportunity, equity, inclusion, and wellness.
    To better serve the American public and stakeholder 
community, we are innovating America's innovation agency. We 
cannot do all we are doing without your collaboration. The 
USPTO is grateful that Congress continues to provide it with 
fee setting authority, which enables the USPTO to continue to 
build, retain, and effectively manage its workforce. We look 
forward to working with this Committee to ensure USPTO 
maintains that authority.
    In closing, we look forward to continuing to work with you 
and alongside you to use our intellectual property system to 
grow jobs in every community and to foster economic prosperity 
and innovations that will benefit all across our great country. 
Thank you, again, for the opportunity to testify today, and I 
look forward to your questions.
    [The prepared statement of Director Vidal appears as a 
submission for the record.]
    Chair Coons. Thank you, Director. I appreciate your update 
on the USPTO, its operations, and processes. I am going to 
start by exploring the importance of a reliable and effective 
patent system, as well as PTAB reform. And then, in a second or 
third round, we will talk about patent eligibility as well as 
counterfeit goods and other issues.
    In January, the ITIF issued a report entitled, ``Wake Up, 
America,'' that found China is likely to overtake the U.S. in 
innovation and advanced industry output.
    What patent system reforms do you think should be part of a 
meaningful and effective strategy to ensure we maintain our 
competitive edge in global technology leadership?
    Director Vidal. There--so, first of all, thank you for that 
critically important issue. That is one of our main areas of 
focus. I will say there is a lot of work that the USPTO is 
doing right now in view of stakeholders' concerns in regard to 
China. Part of it relates to counterfeiting, which I know we 
will take up later.
    Part of it relates to ensuring that U.S. companies have 
fair treatment in China, or, at least at a minimum, get the 
assistance from our IP attaches in our China group as they 
navigate China when it comes to intellectual property.
    In addition to that, we at the USPTO have been engaged 
interagency with the rest of Government to deal with Chinese 
threats. We have also been engaged with the IP office and with 
government in China to hold them to the commitments that they 
have already made to the United States.
    And regularly, we are involved with engaging them on new 
reforms that they may be proposing within China to make sure 
that our stakeholders' views are considered alongside that.
    Chair Coons. Let me mention one of the efforts that I have 
undertaken with Senators Tillis, and Hirono, and Durbin, the 
PREVAIL Act. It is a bill that includes measures to align the 
PTAB and its practices with Congressional intent, to have an 
alternative to litigation to decide validity of a patent.
    Your ANPRM, your advanced notice of proposed rulemaking, 
includes several proposals that overlap with that bill 
positively. I was pleased to see that. But several of your 
Director Review decisions and guidance on how the PTAB ought to 
exercise discretion on institution, on beginning a patent 
validity review, have narrowed practices that previously helped 
curb multiple attacks on the same patent.
    Some of the ANPRM proposals indicate similar direction 
toward policy reversals. Is the Office seriously considering 
rolling back these previous improvements?
    Director Vidal. The intent behind the ANPRM is to, number 
one, memorialize some of the efforts that are working 
productively, including on serial and parallel attacks.
    We recently did a study on serial and parallel petitions 
which shows that the guidance that we have offered, the 
precedential decisions that we have offered is--they are 
working. And so, part of the ANPRM is to memorialize that. The 
rest of the ANPRM has proposals that came out of stakeholder 
feedback so that we can gather additional data in deciding what 
to move forward with and what, importantly, not to move forward 
with.
    So those are not per se proposals from the USPTO in terms 
of what we believe are the best avenues for moving forward. It 
is more an attempt to gather additional data so that we can 
either move forward with some of the proposals or variations of 
the proposals.
    Chair Coons. Would you just, as a matter of general 
principle, agree that if you have got a proceeding in the 
district court and the PTAB at the same time, covering the same 
topic, addressing a patent validity, that that doesn't really 
fulfill congressional intent for the PTAB to be an alternative 
and more efficient form for patent review.
    Director Vidal. We hear that very often from stakeholders, 
Senator.
    Chair Coons. And can you share with me what your views are 
on that?
    Director Vidal. So, my views are going to be informed by 
the responses to the ANPRM. I do think that there are concerns 
with overlapping proceedings in the PTAB and with district 
court.
    In terms of where the USPTO draws that line, whether we 
continue on with the Fintiv guidance, whether it is a--whether 
we evolve that in some way to better serve stakeholders and 
better serve the intent of the AIA, my views on that will be 
informed by the responses to the ANPRM.
    Chair Coons. You got over 14,000 comments to the ANPRM, 
which speaks to the degree of awareness and engagement, and I 
think PTO regulations can address some of the concerns that I 
hear about PTAB.
    Do you have a sense of timeline for when you might issue a 
notice of proposed rulemaking and then be able to implement a 
final rule?
    Director Vidal. In terms of the timeline, we are working on 
the NPRM now. There may be two of them. We haven't decided 
whether to put everything in one package, or given the breadth 
of the ANPRM, whether we break it up into two NPRMs--one more 
procedurally focused and one more substantively focused.
    So, we are still in the process of analyzing that and 
analyzing the comments. We realize that we need to move as fast 
as possible, while being very deliberate about what we are 
doing moving forward.
    I do plan soon to announce some of the initiatives that we 
will likely not move forward with so that we can keep 
everybody's focus on the initiatives that we do plan to move 
forward with.
    Chair Coons. One potential way to address some of the 
issues in PTAB that is in the PREVAIL Act, is a standing 
requirement for inter partes review. It is my concern, anyway, 
that there have been a significant number of companies formed 
specifically just to attack patents that have already received 
district court damages awards.
    You have taken some steps to address this, which suggests 
you may share these concerns. How would implement--just broadly 
speaking, how would implementing a standing requirement help 
address some of the current abuses of PTAB?
    Director Vidal. So, in terms of a standing requirement, 
that is something that stakeholders have brought to our 
attention, that they believe that will help. That what we are 
seeing in terms of practice before the PTAB is when the parties 
do have what would be--might qualify as a standing requirement, 
their activities tend to align with their business purposes.
    When parties don't have what might be a standing 
requirement, we have seen parties take advantage of the system. 
There have been recent instances of that where the parties are 
trying to monetize and otherwise use the PTAB process for 
personal gain as opposed to its original intent.
    Chair Coons. Well, thank you for your testimony so far. I 
look forward to our second round of questioning, and I will 
defer to the Ranking Member, Senator Tillis.
    Senator Tillis. Thank you, Mr. Chair. I think the patent 
system works best when there are clear rules of the road to 
guide inventors and businesses when they are considering 
obtaining a patent and protecting the fruits of their labor in 
research and development.
    Following a series of Supreme Court cases though, one 
critical requirement for obtaining a patent, whether a patent 
is eligible in the first place for patent protection under 101, 
has become the opposite of a model of clarity, in my opinion.
    So, I know you stated during your confirmation hearing that 
you thought that more clarity around Section 101 would be 
helpful. Do you still think that is true?
    Director Vidal. I do, Senator Tillis. And you will see that 
view articulated in the Government brief in the Tropp and 
Interactive Wearables case, where we set that forth.
    You will also see it in the 2022 report to Congress, where 
in both of those we articulated that we do need a very 
predictable, reliable system in order to encourage investment, 
in order to encourage the fruits of labor that result in 
innovation, and in order to bring products to market.
    We need a system that the public can rely upon when they 
get an IP right.
    Senator Tillis. Can you cite any examples of work that you 
are in process of or work that you have done to try and help on 
this issue already within your authority?
    Director Vidal. So, one example is our engagement at the 
Supreme Court level with the Department of Justice. We work 
very closely with them on these issues. We are also trying to 
identify other mechanisms within the judicial system to bring 
more clarity when it comes to 101 law.
    In addition to that, the guidance, the 2019 guidance and 
the additions that we have made under my tenure provides at 
least some certainty within the United States Patent and 
Trademark Office in terms of whether somebody is able to obtain 
a patent. We issued a request for comment on that guidance to 
receive feedback on whether we should modify that guidance.
    We have not made a final decision on whether to modify 
that, but we continue to provide additional training based on 
cases that we are seeing. But as you may recognize, within our 
purview, there is only so much that we can do.
    Senator Tillis. What about the--I have a belief that 
Congress probably needs to do something, too. Do you have any 
opinion on that? I know you are not telling us how to implement 
policy, but what sort of enablers or things that we should be 
thinking about? Anything you may have heard that wouldn't be 
particularly helpful?
    Director Vidal. So, I want to commend the attention that 
you have placed on this area of law. To me, it is one of the 
critical areas that we need more clarity in to really have a 
more robust economy and to incentivize innovation. As you 
recognized, if Congress were to step in, you could really 
impart the clarity that is needed that would take perhaps much 
longer through other mechanisms.
    Senator Tillis. I know you haven't, and it may be a matter 
of policy, you haven't taken a position on any of the bills 
that we are proposing, but not necessarily expecting a response 
here, but I would be very interested in engaging with the 
Office, if there are any concerns with it, to get to a point to 
where you all are comfortable that what we are doing on the 
legislative front is matching with what you believe is an 
enabler that will help us get to where I think we both want to 
be.
    I did--I am going to wait and ask a couple of other 
questions in a second round, Mr. Chairman, but I did want to 
reemphasize the counterfeit goods.
    One of the hearings that just sticks in my mind--I ride 
mountain bikes, and it is like cars and everything else, 
everybody has their preferred products. I happen to use 
Specialized equipment, and I saw a very--relatively small 
person take about a one foot step in the air and absolutely 
crush a helmet on that floor. That was counterfeit.
    I have broken--in my mountain biking, I am better than this 
may suggest, but I have broken two helmets mountain biking. And 
if it would have been one of those helmets, I probably wouldn't 
have made it.
    And we need to really do a better job, I think, of 
America--of educating the American public that whether it is 
batteries, it is safety equipment, the Chinese are willfully 
allowing companies to counterfeit products, send them here, 
sell them at the price--same price point, and potentially 
creating life-ending consequences as a result.
    So, I look forward, as we have future hearings, to shine 
light on that. I yield back, Mr. Chair.
    Chair Coons. Thank you, Senator Tillis. Senator Hirono.
    Senator Hirono. Thank you very much, Mr. Chairman. Ms. 
Vidal, it is good to see you. A recent World Intellectual 
Property Organization study found that the U.S. lags behind 
China and much of the world in our efforts to fully mobilize 
the inventive talent of our Nation's women.
    Recent reports by the National Bureau of Economic Research 
and Citigroup estimate that closing our racial and gender 
patent gaps would add $1 trillion--$1 trillion to our annual 
GDP. This is to say nothing of the growth that could be 
unleashed by expanding opportunities to underserved geographies 
and veterans.
    Unleashing this potential is why we passed Senator Leahy's 
Unleashing American Innovators Act last year. Mr. Chairman, I 
ask unanimous consent to place a letter Senator Leahy sent to 
me about the importance of that legislation into the record.
    Chair Coons. Without objection.
    [The information appears as a submission for the record.]
    Senator Hirono. Unleashing our country's full potential is 
also why last Congress I worked with Senators Tillis, Coons, 
and other colleagues to introduce the IDEA Act, which directs 
the PTO to collect demographic information that patent 
applicants submit on a volunteer basis--voluntary basis, so 
that we have data to rely upon as we make certain decisions.
    So, my staff is now working with you, with your staff, on 
some technical changes to the bill that I referred to, and I 
hope to reintroduce it soon. Can you speak about how important 
it is to unleash our country's full innovative potential, 
meaning women and minority persons?
    Director Vidal. Thank you for that question. That is a very 
key focus of mine through the work that I am doing for the 
Council for Inclusive Innovation, to the work that I am doing 
across the United States Patent and Trademark Office. I am 
focused on that for the very reasons that you note, that not 
only is it a matter of equity, it is a matter of--it is a 
national imperative that we do this.
    It is going to unlock innovation. In terms of demographic 
information, I agree that collecting it would be extremely 
helpful to inform our policies, to inform our actions. That is 
why, in view of the Act that you introduced, I have been 
working separately at the USPTO to find ways to be able to 
satisfy the Paperwork Reduction Act requirements, while still 
being able to collect that data. So, we are working in parallel 
to try and make that happen.
    Senator Hirono. Do you have any specific kinds of 
programmatic changes or whatever you are pursuing to, for 
example, focusing on women to submit their patents?
    Director Vidal. I do, Senator. The Secretary of Commerce 
and I founded the Women's Entrepreneurship Initiative, and 
through that initiative, we are working to help women across 
the country learn about the innovation ecosystem, learn the 
value of intellectual property, and learn the resources that we 
have available.
    That is everything from trainings that we offer, to pro 
bono help if they are under-resourced, to our pro se offerings, 
where if people are filing on their own, we provide additional 
assistance. So, we are trying to provide all of that 
information. In addition to that, we are trying to figure out 
where women might opt out of the process.
    We have seen studies that suggest that when women receive a 
rejection letter as part of the patent process, they are more 
likely to opt out than men. So, we are creating additional 
language around that.
    We are creating cover letters that welcome people, 
everyone, not just women, to the United States Patent and 
Trademark Office, that let them know of the available 
resources, and that encourage them on their way and really put 
some of these objection letters and final rejections into 
context so that they will persist in obtaining patent 
protection.
    Senator Hirono. We were told the story of Sara Blakely, the 
inventor of Spanx. She talked about how she had her invention, 
and she went to all these male attorneys to ask them for help 
and patent it, and they basically laughed in her face. And it 
was when she went to a female patent attorney that she was able 
to patent her product or her invention.
    So, I think that the idea of expanding and diversifying, it 
runs across all gamuts, including lawyers, you know, to be able 
to know a product when they see it. But when it comes to 
diversifying the ecosystem for patents, we really have to be 
intentional about it.
    And whatever you can do to get across to women in our 
country, girls in our country, that they can invent things and 
that they can be part of a huge economic--make a huge economic 
difference to our country. So, I would like to continue to hear 
what you are doing and be as supportive as I can be.
    Director Vidal. May I address that briefly?
    Senator Hirono. Yes.
    Director Vidal. So, I do want to let you know that in 
addition to the efforts that I explained, we are also 
broadening the bars to practice before the United States Patent 
and Trademark Office. We believe that will have an impact on 
diversity as well.
    We are broadening the patent bar. We are in the process of 
setting up a design patent bar so that people who do not have 
electrical engineering degrees can still practice before us if 
they are practicing in the area of design patent protection. 
And we are also looking at broadening the PTAB bar.
    Senator Hirono. Thank you.
    Director Vidal. Thank you.
    Chair Coons. Thank you, Senator Hirono. Senator Padilla.
    Senator Padilla. Thank you, Mr. Chair. On April 21st, the 
Patent Office published an advance notice of proposed 
rulemaking that proposed substantial changes to the rules 
governing administrative review proceedings before the Patent 
Trial and Appeal Board. To say that this rulemaking is of 
intense interest to many of my constituents would be a dramatic 
understatement.
    Ms. Vidal, you noted in your testimony there were over 
14,000 public comments from stakeholders, which I understand to 
be an unusually large number. I know you referenced--you 
responded earlier to questions from the Chairman that spoke to 
not just a large number, but thoughts on how to address many of 
the concerns expressed in that public comment, pathways 
forward, and the timing of proposed rulemaking.
    So, I won't be repetitive with those questions, but I do 
want to also acknowledge our former colleague, Senator Leahy, 
who recently wrote two op-eds critiquing the rulemaking as 
exceeding the Patent Office's statutory authority and 
conflicting with the America Invents Act.
    And I will quote from Senator Leahy--he says, ``I can say 
with absolute certainty that the proposed rules directly 
conflict with the legislation on a variety of matters, 
especially on provisions that limit access to the PTAB.'' And 
he points to the proposed standing requirements for PTAB 
proceedings and shortened the deadline for filing a petition 
for review from 1 year to 6 months.
    So, just given that and more of the concerns I am sure you 
have heard, I wanted to afford you an opportunity to respond to 
those viewpoints.
    Director Vidal. Thank you, Senator. In terms of what was in 
the ANPRM, they all fall within the USPTO's authority, 
including those under 35 U.S.C. 2(b), 2(a), 314(a), 316(a)(2), 
(a)(4), (a)(6), (b), 317(b), 324(a), 326(a)(2), (a)(4), (a)(6), 
(b), and 325(d). That said, it is not clear that we are moving 
forward with all of those proposals. As I mentioned earlier, 
the proposals in the ANPRM serve two purposes.
    Some of those proposals really codified our existing 
practices, which we have received positive feedback on, and 
which are actually becoming very effective. And they provided 
the option for stakeholders to suggest changes to those 
existing practices.
    The other proposals in the ANPRM were ones that came from 
stakeholders. And instead of the USPTO making a decision 
without data, we decided to float all of those in the ANPRM so 
that we could receive data from stakeholders and determine what 
to move forward on.
    So, in terms of where we are going from here, we do plan 
to--I plan to release something soon on what we have decided 
based on the comments we're not moving forward on, so that 
people can focus on the areas where we are planning to 
potentially make a difference, and then we will move forward 
with the NPRMs on those topics.
    Senator Padilla. Okay. That is helpful. Thank you for that.
    Director Vidal. Thank you.
    Senator Padilla. I also want to ask a follow-up question on 
something Senator Hirono raised, and that is the value of 
diversity in inventorship. She spoke to gender and ethnic 
diversity. Research has also found that inventors are becoming 
increasingly geographically concentrated.
    A National Science Board found that in 2020, 41.6 percent 
of U.S. counties had zero patents granted to people residing in 
that county. And as a representative of California, I know that 
the general Bay Area and the Central Coast appears to be very 
well represented in terms of patenting.
    The Central Valley of California, and other regions in our 
State for that matter, are not. So could you speak about the 
importance of meeting potential inventors where they are, with 
research showing that inventors are increasingly concentrated, 
as I mentioned? What steps are being taking to extend 
participation in inventing and patenting in communities across 
the country?
    Director Vidal. I am very focused on that issue. I will 
just tell you some of the things we have done already. So, I 
brought together our regional offices in Colorado in July to 
talk about how we could better use the regional offices to have 
more reach within the regions.
    Beyond that, as part of our Council for Inclusive 
Innovation, we are starting an IP ambassadors program so that 
we can use all of our great employees in every State. I know we 
have 385 employees in the State of California dispersed 
throughout the entire State. They could then work as 
ambassadors and work with communities to be there and support 
innovation.
    In addition to that, we have Patent Trademark and Resource 
Centers in libraries around the country. I started sending 
individual letters to each of the libraries where we don't have 
a PTRC and asking them to join the PTRC program so that we can 
bring patent and trademark resources into communities.
    I immediately got a response from Virginia Tech, who signed 
up immediately. They are a minority serving institution, and so 
I am looking forward to doing more and to making sure that I am 
reaching every university and--or every university that has a 
library, including community colleges and ones in remote areas 
so that we can bring those resources to them. That is just a 
little bit of a flavor for the work that we are doing, but we 
are very adamant that we need to get everywhere, including, I 
will note, onto military bases.
    I am going to military bases across the country. And I am 
going to Delaware soon. I have been to North Carolina. I have 
been to a number of States. Not hit California yet, but I have 
been to Hawaii, and met with military bases, worked with the 
schools on innovation training, worked with the military 
service people, their spouses, veterans on how to be part of 
the innovation ecosystem.
    Senator Padilla. Well, you have an open invitation to come 
to California. Look forward to welcoming you there.
    Director Vidal. Yes. I get there once in a while.
    Senator Padilla. Thank you, Mr. Chair.
    Chair Coons. Thank you, Senator Padilla. Senator Welch.
    Senator Welch. Thank you very much. There are no two 
stronger champions of the intellectual property rights of 
innovators and patent holders than the two leaders of this 
Committee, Senator Coons, Senator Tillis, and I support your 
efforts in that respect. I do have a different concern that I 
want to talk about.
    [Poster is displayed.]
    Senator Welch. It is really important, your responsibility, 
to have patents issued timely, appropriately, for innovators. 
It is your responsibility to help enforce those patents so that 
the innovators get the benefit of the intellectual property 
that they created. But what I have seen is, in particular in 
the drug industry, an abuse by patent holders of that period of 
exclusivity.
    That is an extraordinary benefit that is provided to the 
innovator who comes up with a drug. They get a period of 
exclusivity, essentially monopoly, and it involves something 
that is absolutely essential and vital to the well-being of 
American citizens. But as you know, many of these patent 
holders then use devices to extend that period beyond the 
original grant of exclusivity.
    And I just want to give an example of AbbVie and HUMIRA. 
That period of exclusivity was supposed to expire in 2016--in 
Europe it did. But by creating a patent thicket and using the 
term of art that AbbVie in its own documents used, a ``patent 
estate,'' they were able to create litigation obstacles to 
biosimilars and competitors coming on the market, at the time 
that their period of exclusivity ended.
    And what that meant--I am just showing this chart, 2016, 
this is what the price was of the HUMIRA--$1,870 bucks. They 
have extended the patent all the way through 2023--it is now 
almost $3,200. During that time, there was an extra cost to 
U.S. taxpayers and folks who are purchasing healthcare, $19 
billion, $100 billion in additional revenue.
    And where you have a patent system that can be abused by 
the patent holders, and they go beyond the period of 
exclusivity, it is brutal on the cost of healthcare for 
American employers who are providing healthcare through 
employment, to taxpayers through the Medicare and Medicaid 
program, into private payers.
    HUMIRA, in the U.S., is $3,000. Right now, in Sweden it is 
$225, $10 bucks in Germany.
    So, the question I have, and I am sure this is a concern to 
you, is: What is the ability and the commitment of the Patent 
Office to stop the extension of that period of exclusivity and 
monopoly power that has been so consistently abused by the drug 
companies to rip off American taxpayers, American employers, 
and American consumers?
    Director Vidal. Thank you, Senator, for shedding light on 
that critically important issue. As you know, President Biden 
has made lowering prescription drug prices in America a key----
    [Technical problems experienced.]
    Senator Welch [continuing]. We all want the prices lower. I 
want to know what you see as the obligation of the Patent 
Office to not--on the one side, protect the patent rights of 
the intellectual property holders, I get that, but the abuse by 
the patent holders to extend beyond the period of exclusivity 
so they can rip off American consumers.
    Director Vidal. So, I can let you know what the USPTO is 
doing in that regard. You know, certainly patents cannot be 
extended themselves, the actual patent, unless there is a 
patent term adjustment.
    We are looking into those patent term adjustments. Indeed, 
our Office of Patent Quality Assurance is reviewing 
applications that have the highest risk for unwarranted 
extensions of the patent term.
    In addition to this, we issued a request for comment for 
robust, reliable patents to get feedback on what more we can 
do, including with regard to obviousness-type double 
patenting--that is one of the reasons that U.S. patents can 
continue to issue where they don't in other countries.
    Senator Welch. Let me just ask this. I don't get it where 
you get a patent, let's say for 20 years and it goes on for 30 
years or 35 years. I mean, 20 years is easy enough to figure 
out. That is when it should end. And there has got to be some 
capacity on the part of our system to deal with that extension 
abuse. So, I really welcome some concrete suggestions or 
legislative proposals you think may make sense to enable you to 
enforce that side of the patent exclusivity period. Thank you.
    Director Vidal. Thank you.
    Senator Welch. Yield back.
    Chair Coons. Thank you, Senator Welch. I am going to yield 
to Senator Tillis for the first of a second round of questions 
because his schedule requires him to depart relatively soon. 
Senator Tillis.
    Senator Tillis. Yes. Thank you, Mr. Chair. I have got to go 
to a Veterans' Affairs Committee, but I want to thank Senator 
Welch--we have had several different discussions about how we 
go about attacking and creating a sustainable change in the 
trajectory of drug pricing in this country.
    There is a markup, just got completed in Finance, which I 
think is critically important. It relates to the PBMs' 
contribution to the escalation of cost. So, I look forward to 
working with you.
    My question, it wasn't prompted by Senator Welch's, but my 
final question, I want it for you: I sent two letters to the 
USPTO about the findings published by the Initiative for 
Medicines, Access, and Knowledge, I-MAK, on drug-related 
patents that appear to overstate the periods of exclusivity 
based on their analysis of relevant patent protection. I think 
one thing we've got to do here is just make sure that we are 
all talking from the same set of facts.
    If, in fact, this is true--and there is data supporting the 
fact that maybe this is wrong--I just want a good independent 
assessment of data so that when people quote a source, we know 
it is a reliable source. I haven't--I don't think we've got 
feedback yet, but I was wondering if you could give me any 
update on the progress of our letter.
    Director Vidal. I appreciate that. That is one of the 
initiatives we are working on with the FDA. So that is a 
collaborative effort that we are working on with them.
    Senator Tillis. Good. Well, I think that will get our facts 
right. My final question is just a simple one. I think you are 
doing a good job. I have a variety of reasons why I am pleased 
with your work. I am glad to support your confirmation. But 
what more do we need to be doing--this has less to do with the 
policy discussions that we were talking about here.
    But as you are looking ahead to the USPTO and you are 
looking support for Congress, something that is going to 
require either appropriations or authority, can you give me 
some insight, if any, into what you would like for us to 
consider other than what is moving through this Committee at 
this time?
    Director Vidal. Yes, certainly anything related to the 
USPTO's fee setting authority would be very helpful. We also 
have approximately $1.2--$1.3 billion locked up that we have 
not been able to get access to. Getting access to that money 
would let us move to updated IT systems, would help us enable 
our outreach.
    There is much we could do with that money without having to 
impose the fees on consumers. So, I would say both of those are 
top of mind.
    Senator Tillis. Good. We will keep those in mind, but just 
make sure you communicate with mine and Senator Coons' office 
on other things that we should be doing, that just give you 
more tools to continue to improve. And I appreciate you being 
here today.
    Director Vidal. Thank you, Senator Tillis.
    Chair Coons. Thank you, Senator. And I know you and Senator 
Welch and others have a markup you need to get to. Thank you 
for working so collaboratively on this hearing.
    Director Vidal, I think we certainly agree that the current 
framework for determining which inventions are eligible for 
patent protection is just not working.
    We see remarkable developments in artificial intelligence 
and medical diagnostics.
    What changes, in your view, to the patentability framework 
would provide greater certainty to inventors around what can be 
eligible for patent protection?
    Director Vidal. In my view, and a lot of this was 
articulated in the Tropp and Interactive Wearables case, we 
need more certainty and clarity. Right now, the biggest issue 
is that beyond that, certainly there are categories of 
inventions like patent diagnostics, if those were singled out 
as areas that could be patentable, certainly, that would also 
provide additional clarity.
    Chair Coons. I was struck the Federal Circuit held that the 
guidance that you offered was not binding on courts. I think an 
obvious implication of that is that Congress has to step in. Am 
I wrong? Can the USPTO take further steps to tackle patent 
eligibility that I'm missing?
    Director Vidal. Changing the guidance, I don't believe, 
would be of any help when it comes to tackling it at a higher 
level. Certainly, that would control the patents we issue, but 
what happens with them when they leave our doorstep is beyond 
our control.
    So, beyond that, we are engaged with the court system to 
try and make positive change there. Be more than happy to work 
with you and Senator Tillis' office on the proposals that you 
have out there and provide technical assistance on that.
    Chair Coons. Well, we invested a huge amount of time in 
trying to sort of square the circle of patent eligibility, and 
we intend to take another strong run at it and would be 
grateful for your close cooperation.
    The areas that are currently outside the ambit of patent 
protection have become more and more critical to our country, 
our competitiveness, our economy, and I am afraid we are 
creating a critical vulnerability for our competitiveness.
    Let me talk about counterfeit goods for a moment, if I can.
    What is the Patent and Trademark Office doing to address 
the rapid proliferation of counterfeit goods, especially those 
marketed online? And what do you think Congress could do to 
address the sale of counterfeit goods online?
    Director Vidal. Starting with the second question, anything 
that Congress could do to create laws and create rules that 
would cut down on counterfeiting would be much welcomed.
    I am very concerned about the effect that counterfeit goods 
not only have on our economy, same thing with pirated goods 
have on our economy, but also, as you mentioned, on the health 
and safety of our people. In terms of what the USPTO is doing, 
you mentioned the ``Go for Real'' campaign, that has been a 
real successful campaign. We have also created online games 
that have been downloaded by 17,000 educators to educate them 
about counterfeit goods.
    We teach children through our ``Camp Invention''--280,000 
children last year--about counterfeit goods and the dangers, 
and help teach them the reason why they want us to respect IP 
because they have great ideas that they want respected. Beyond 
that, we work both domestically and internationally on policy.
    We just--and we are going above and beyond when it comes to 
counterfeit goods. I made that clear as soon as I came on board 
that that was something that I wanted to tackle. We just issued 
a ``Federal Register'' notice, trying to find out from our 
stakeholders future strategies when it comes to anti-
counterfeiting and anti-piracy, and what more the USPTO and 
U.S. Government can do to help.
    We work with law enforcement agencies. We work with other 
countries to help set up infrastructures and laws within their 
countries. Even as I sit here today, we have over 50 judges 
from the Indo-Pacific region over at the USPTO engaged in 
dialog with a judge on the Federal Circuit and other judges in 
the United States on issues like this so that we can have a 
common ethos when it comes to counterfeit goods and the 
importance of IP enforcement, as well as IP protection.
    Chair Coons. I have to say, Director Vidal, I just, I am 
impressed with the range, the scope, the ambition of your 
outreach. Just because I am not asking a question about 
inclusion and outreach as Senators Hirono and Padilla and 
others have, doesn't mean I don't value it. It is a valuable 
part of the tireless work you are doing.
    The SHOP SAFE legislation that Senator Tillis and I are 
seeking to move would actually hold online platforms liable for 
harmful counterfeits unless they adopt a set of best practices. 
I recognize that is a step the USPTO can't take, and I would 
welcome input or technical assistance on that.
    Let me just reference PTO fee diversion, something I have 
been passionate about for a very long time, because the PTO is 
funded with fees, not tax dollars. At different points over the 
last 25 years, more than $1 billion in user fees have been 
diverted to other Government agencies from the PTO.
    I think giving the PTO rate-setting authority is a key part 
of legislative engagement with the Congress. How important is 
it for you to be able to keep all of the fees that you collect? 
And have you given any thought to whether or not changing the 
fees for IPRs, for PTAB proceedings, so that they at least 
capture your actual costs--might also make sense as a way for 
you to--I mean, it seems odd to me for inventor application 
fees to be subsidizing, to some extent, challenges to those 
very patents.
    Director Vidal. Well, I appreciate the feedback on the IPR, 
and PTAB fees. We are going through fee setting right now, both 
on the patent side and the trademark side, so that is something 
that we are looking into when it comes to those fees.
    In terms of how important it is for us to keep all our 
fees, we are not funded by U.S. taxes. So in order for us to 
operate, in order for us to bring down pendency, to be 
innovative and creative, and to stay agile, which is especially 
important now as we are seeing artificial intelligence in over 
half of our technology groups and patents and we are seeing new 
scams on the trademark side of the house, we really need the 
ability and flexibility to be able to allocate fees and 
allocate our workforce so that we can keep on top of the most 
pertinent issues at the time.
    Chair Coons. I must say, I am struck by the reach of some 
of the trademark scams. My folks shared with me a scam in which 
a Chinese company filed 2,000 trademark applications under the 
name of a dead American lawyer.
    You have certainly warned about scammers calling trademark 
holders, impersonating examiners, demanding payment not to 
cancel registrations. What more could we do together to 
identify fraud and make the trademark registry cleaner, better, 
more accessible, but also more protective for legitimate rights 
holders?
    Director Vidal. I am happy to take that back to my team and 
talk to you. I know that every time we see something, we make 
changes.
    So, in view of the latest scam, which is, as you mentioned, 
is people impersonating the USPTO and watching when trademarks 
are filed and immediately reaching out and say, if you want to 
get your trademark, you have to pay us money, we are now 
putting a cover letter on trademarks as well.
    I don't believe it has gone out yet, but we have crafted 
one that lets people know that we are not going to ever call 
them and ask for fees. And so, we are always--it is a little 
bit like whack-a-mole, but we are always trying to figure out 
what is the best response and how quickly can we put it into 
effect.
    And then also, as you recognized, we communicate with our 
stakeholders directly and try and get the message out. But it 
is just really important that we inform our stakeholders, and 
then take any action we can.
    We have taken a lot of actions with regard to sanctions, 
with regard to sending lawyers to our Office of Employment--
Enrollment and Discipline, and we are doing everything we can 
at every stage, and we are investigating, you know, all of 
these types of activities to make sure we stay on top of it.
    But to the extent that we might be able to work together on 
that, I would love to talk to the experts in my office and see 
what great ideas they may have.
    Chair Coons. Thank you. This is my last question. Our first 
Subcommittee hearing was on foreign competitive threats to 
innovation, and it highlighted China's abusive practices, with 
a particular focus on standard essential patents, or SEPs.
    Given that ongoing challenge, or that abuse, I have been 
following, with genuine concern, recent proposed regulations by 
the European Union for what would essentially be an SEP rate 
court.
    That regulation, I am concerned, validates China's 
practices that have also harmed U.S. patent holders, and I have 
shared those concerns with Secretary Raimondo during an 
Appropriations hearing, and she agreed the proposal is 
problematic.
    What steps has the USPTO taken to communicate concern to 
our European colleagues, and what steps do you think the 
administration can and should take to guard against 
restrictions on SEP licensing in the EU and globally?
    Director Vidal. As I mentioned in my opening remarks, that 
is one of the things that I am keenly focused on, is standards, 
because I think it is critical to our economy. I will say that 
when we withdrew the 2019 policy statement around SEPs with 
NIST and DOJ, it was because we see standards as an 
international issue, that individual countries weighing in, in 
these ways, could be extremely problematic.
    So, what we have done when it comes to the EU directorate 
is, I have met with the EUIPO in Geneva just a week and a half 
ago. I have also spoken to other stakeholders in Europe about 
this.
    We also are issuing soon an FR notice, a ``Federal 
Register'' notice, to seek feedback from U.S. stakeholders on 
international SEP policy so that we can inform an all-of-
Government approach. That is going to be not just the USPTO--I 
am doing that with NIST, our standards and technology group, 
and ITA, our international group within Commerce, so that we 
can get an all-of-Government approach to this that is data 
driven by feedback.
    Chair Coons. Well, Director Vidal, I appreciate your 
participation today. Thank you for your perspective and the 
work that you are doing, and all the folks at the USPTO, to 
promote and protect innovation.
    I am grateful to the Members who were able to attend, and 
in particular to Ranking Member Tillis for being a great 
partner. We will continue to hold hearings, as the year goes 
on, on some of the more thorny issues that we explored today--
patent eligibility, PTAB reform, and others. We welcome your 
partnership and engagement as we move forward.
    I think we do have a genuine opportunity for bipartisan 
progress in this Congress and we are going to work hard to 
achieve that with the legislation I referred to: PREVAIL, PERA, 
and others.
    Just for the record, Members may submit questions for our 
witness. They are due at 5 p.m., 1 week from today, on August 
2nd.
    I want to thank you, again, for participating today, 
Director Vidal. I very much look forward to continuing to work 
with you.
    And with that, this hearing is adjourned.
    [Whereupon, at 3:28 p.m., the hearing was adjourned.]
    [Additional material submitted for the record follows.]

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