[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
OVERSIGHT OF THE U.S. PATENT AND
TRADEMARK OFFICE
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COURTS, INTELLECTUAL
PROPERTY, ARTIFICIAL INTELLIGENCE, AND
THE INTERNET
OF THE
COMMITTEE ON THE JUDICIARY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
WEDNESDAY, MARCH 25, 2026
__________
Serial No. 119-62
__________
Printed for the use of the Committee on the Judiciary
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via: http://judiciary.house.gov
__________
U.S. GOVERNMENT PUBLISHSING OFFICE
63-299 WASHINGTON : 2026
=======================================================================
COMMITTEE ON THE JUDICIARY
JIM JORDAN, Ohio, Chair
DARRELL ISSA, California JAMIE RASKIN, Maryland, Ranking
ANDY BIGGS, Arizona Member
TOM McCLINTOCK, California JERROLD NADLER, New York
THOMAS P. TIFFANY, Wisconsin ZOE LOFGREN, California
THOMAS MASSIE, Kentucky STEVE COHEN, Tennessee
CHIP ROY, Texas HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia
BEN CLINE, Virginia ERIC SWALWELL, California
LANCE GOODEN, Texas TED LIEU, California
JEFFERSON VAN DREW, New Jersey PRAMILA JAYAPAL, Washington
TROY E. NEHLS, Texas J. LUIS CORREA, California
BARRY MOORE, Alabama MARY GAY SCANLON, Pennsylvania
HARRIET M. HAGEMAN, Wyoming JOE NEGUSE, Colorado
LAUREL M. LEE, Florida LUCY McBATH, Georgia
WESLEY HUNT, Texas DEBORAH K. ROSS, North Carolina
RUSSELL FRY, South Carolina BECCA BALINT, Vermont
GLENN GROTHMAN, Wisconsin JESUS G. ``CHUY'' GARCIA, Illinois
BRAD KNOTT, North Carolina SYDNEY KAMLAGER-DOVE, California
MARK HARRIS, North Carolina JARED MOSKOWITZ, Florida
ROBERT F. ONDER, Jr., Missouri DANIEL S. GOLDMAN, New York
DEREK SCHMIDT, Kansas JASMINE CROCKETT, Texas
BRANDON GILL, Texas
MICHAEL BAUMGARTNER, Washington
Vacancy
------
SUBCOMMITTEE ON COURTS, INTELLECTUAL PROPERTY,
ARTIFICIAL INTELLIGENCE, AND THE INTERNET
DARRELL ISSA, California, Chair
THOMAS MASSIE, Kentucky HENRY C. ``HANK'' JOHNSON, Jr.,
SCOTT FITZGERALD, Wisconsin Georgia, Ranking Member
BEN CLINE, Virginia ZOE LOFGREN, California
LANCE GOODEN, Texas TED LIEU, California
LAUREL LEE, Florida JOE NEGUSE, Colorado
RUSSELL FRY, South Carolina DEBORAH ROSS, North Carolina
MICHAEL BAUMGARTNER, Washington ERIC SWALWELL, California
Vacancy SYDNEY KAMLAGER-DOVE, California
CHRISTOPHER HIXON, Majority Staff Director
ARTHUR EWENCZYK, Minority Staff Director
C O N T E N T S
----------
Wednesday, March 25, 2026
OPENING STATEMENTS
Page
The Honorable Darrell Issa, Chair of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of California.......................... 1
The Honorable Henry C. ``Hank'' Johnson, Ranking Member of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of Georgia....... 7
The Honorable Jim Jordan, Chair of the Committee on the Judiciary
from the State of Ohio......................................... 8
The Honorable Jamie Raskin, Ranking Member of the Committee on
the Judiciary from the State of Maryland....................... 8
WITNESS
The Hon. John A. Squires, Under Secretary of Commerce,
Intellectual Property and Director, U.S. Patent and Trademark
Office
Oral Testimony................................................. 12
Prepared Testimony............................................. 14
LETTERS, STATEMENTS, ETC. SUBMITTED FOR THE HEARING
All materials submitted for the record by the Subcommittee on
Courts, Intellectual Property, Artificial Intelligence, and the
Internet are listed below...................................... 57
Materials submitted by the Honorable Zoe Lofgren, a Member of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California,
for the record
A letter to the Honorable John Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office entitled, ``Additional Discretionary
Institution Considerations,'' from Alliance for
Automotive Innovation, Business Software Alliance, High
Tech Inventors Alliance, Software & Information Industry
Association, United for Patent Reform, and US
Manufacturers Association for Development & Enterprise
(US*MADE), Mar. 24, 2026
A report entitled, ``Analysis of Unpatentability Findings in
Inter Partes Review Final Written Decisions (2013-
2025),'' Gaetan de Rassenfosse (EPFL) & Laura Sheridan
(Google), Mar. 15, 2026
A letter to the Honorables Howard Lutnick, John Squires, Scott
Bessent, Susie Wiles, Kevin Hassett, Russell Vought, and Peter
Navarro, from Randy Landreneau, President, and Dirk Tomsin,
COO, US Inventor, Inc., submitted by the Honorable Thomas
Massie, a Member of the Subcommittee on Courts, Intellectual
Property, Artificial Intelligence, and the Internet from the
State of Kentucky, for the record
Materials submitted by the Honorable Kamlager-Dove, a Member of
the Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California,
for the record
An article entitled, ``Trump Appointees Are Hijacking the
Patent System,'' May 15, 2025, The American Prospect
An article entitled, ``Trump PTO Pick's Fortress Ties Signal
Big Tech Patent Fights,'' Mar. 11, 2025, Bloomberg
Government
Materials submitted by the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of California,
for the record
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from the Alliance for Automotive
Innovation, Business Software Alliance, High Tech
Inventors Alliance, Software & Information Industry
Association, United for Patent Reform, and US
Manufacturers Association for Development & Enterprise
(US*MADE), Mar. 24, 2026
A comment entitled, ``Comment by Anonymous,'' Dec 3, 2025,
U.S. Patent and Trademark Office
A comment entitled,``Comments of SIIA Regarding the Notice of
Proposed Rulemaking:Revision to Rules of Practice Before
the Patent Trial and Appeal Board,'' Dec. 2, 2025,
Software and Information Industry Association (SIAA)
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from Arnold Ventures, Dec. 1, 2025
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from BadVR, Inc., Nov. 13, 2025
A comment entitled, ``Comments on Notice of Proposed
Rulemaking: Revision to Rules of Practice Before the
Patent Trial and Appeal Board,'' from Business Software
Alliance (BSA) (FR 2025-19580), Dec. 2025
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from the Consumer Technology
Association (CTA) (90 FR 48,335)
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from Crypto Council for Innovation
(CCI), Dec. 2, 2025
A comment to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from Entertainment Software
Association (Docket PTO-P-2025-0025), Dec. 2, 2025
A comment entitled, ``Comment by e-td55 llc,'' to the Hon.
John A. Squires, Under Secretary of Commerce,
Intellectual Property and Director, U.S. Patent and
Trademark Office (Docket PTO-P-2025-0025-1514), Nov. 26,
2025
A comment entitled, ``Revision to Rules of Practice Before
the Patent Trial and Appeal Board,'' Generation Patient
(Docket PTO-P-2025-0025)
A letter to the Committee on the Judiciary, from Software &
Information Industry Association (SIIA)
A comment from the National Retail Federation (NRF), Dec, 2,
2025
A letter to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from Patients For Affordable Drugs
(P4AD), Nov. 21, 2025
A comment to the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent
and Trademark Office, from Senseeker Corp. (PTO-P-2025-
0025-0894), Dec. 3, 2025
A letter to the Hon. Chuck Grassley, Chair of the Committee
on the Judiciary, the Hon. Jim Jordan, Chair of the
Committee on the Judiciary, the Hon. Dick Durbin, Ranking
Member of the Committee on the Judiciary, and the Hon.
Jamie Rasking, Ranking Member of the Committee on the
Judiciary, from the Hon. John A. Squires, Under Secretary
of Commerce, Intellectual Property and Director, U.S.
Patent and Trademark Office, Dec. 9, 2025
A comment from the U.S. Manufacturers Association for
Development and Enterprise (PTO-P-2025-0025), Dec. 2,
2025
A letter to the Honorable Darrell Issa, Chair of the
Subcommittee on Courts, Intellectual Property, Artificial
Intelligence, and the Internet from the State of
California, and the Honorable Henry C. ``Hank'' Johnson,
Ranking Member of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet from the State of Georgia, from Alliance for
Automotive Innovation, Mar. 23, 2026
A letter to the Honorable Darrell Issa, Chair of the Subcommittee
on Courts, Intellectual Property, Artificial Intelligence, and
the Internet from the State of California, and the Honorable
Henry C. ``Hank'' Johnson, Ranking Member of the Subcommittee
on Courts, Intellectual Property, Artificial Intelligence, and
the Internet from the State of Georgia, from the Council for
Innovation Promotion, Mar. 24, 2026, submitted by the Honorable
Henry C. ``Hank'' Johnson, Ranking Member of the Subcommittee
on Courts, Intellectual Property, Artificial Intelligence, and
the Internet from the State of Georgia, for the record
QUESTIONS AND RESPONSES FOR THE RECORD
Questions for the Hon. John A. Squires, Under Secretary of
Commerce, Intellectual Property and Director, U.S. Patent and
Trademark Office, submitted by the Honorables Ben Cline from
the State of Virginia; the Honorables Thomas Massie from State
of Kentucky; the Honorable Zoe Lofgren from the State of
California; the Honorable Joe Neguse from the State of
Colorado; the Honorable Henry C. ``Hank'' Johnson from the
State of Georgia; and the Honorable Kamlager-Dove, from the
State of California; the Honorable Darrell Issa from the State
of California, the Members of the Subcommittee on Courts,
Intellectual Property, Artificial Intelligence, and the
Internet, for the record
No response at the time of publication
OVERSIGHT OF THE U.S. PATENT AND TRADEMARK OFFICE
----------
Wednesday, March 25, 2026
House of Representatives
Subcommittee on Courts, Intellectual Property, and
Artificial Intelligence, and the Internet
Committee on the Judiciary
Washington, DC
The Committee met, pursuant to notice, at 10 a.m., in Room
2141, Rayburn House Office Building, the Hon. Darrell Issa
[Chair of the Subcommittee] presiding.
Members present: Representatives Issa, Jordan, Massie,
Fitzgerald, Cline, Gooden, Kiley, Lee, Fry, Johnson, Raskin,
Lofgren, Ross, and Kamlager-Dove.
Mr. Issa. Good morning. The Subcommittee will come to
order. Without objection, the Chair is authorized to declare a
recess at anytime.
We welcome everyone here to today's hearing on the United
States Patent and Trademark Office, and I want to make it clear
that at the stroke of 10 we started which is practically a
record, but also that this is an extremely busy day. Most
Members serve on two or three Committees, so you will see them
coming in and out.
Mr. Squires, that is not any reflection on you because
there were equivalent people in at least two other hearing
rooms for many of our people, but I suspect you will see in and
out virtually every Member of the Subcommittee.
Also, in addition, it is the policy of the Subcommittee,
should any Members of the Full Committee come, they will be
waived on either side without objection.
I now recognize myself for an opening statement.
Mr. Raskin. Mr. Chair, just to be clear, any Member who
arrives from the Committee will be waived on.
Mr. Issa. We waive on. The specifics of the Committee rules
are that they still have to be yielded time from a Member of
the Subcommittee.
Mr. Raskin. Got you.
Mr. Issa. I always say that so that everyone understands in
advance. Also, that pursuant to the rules of the Full
Committee, we won't waive on people who are not members of the
Judiciary Committee.
Mr. Raskin. Thank you, Mr. Chair.
Mr. Issa. Thank you. We welcome the Ranking Member of the
Full Committee here, too.
Normally, I make relatively short opening statements, but
this is a particularly important hearing. It is important
because there has never been a time in our history in which
getting it right, not just on patents as we have known them,
but patents are as they are emerging. I want to thank the Under
Secretary for, among other things, clarifying in AI the pathway
to patentability. I certainly think that when we look at the
ambitious agenda set out by President Trump, he selected well
an Under Secretary to make sure that we can reach that.
One of the first actions of Mr. Squires was, in fact, as
Director, to take steps to move the President's AI agenda and
to strongly support it. This meant going above and beyond and
with some changes to the Biden era's policy which came out late
in the administration. This thoughtful change, I believe, will
bear well for the foreseeable future. Like everything else in
AI, I will expect it will not be the last time that guidance
will have to come either from the Director or, if necessary,
from Congress. In fact, as we speak, we still live with the
memory of the Copyright Office saying that AI is not
copyrightable and the idea that AI-assisted production is not
copyrightable or patentable, of course, is now in our tail
lights, but it will not leave our memory.
Additionally, under the Director's guidance, he set forth
these clear guidelines for innovation. This, I believe, will
accelerate the examination, but it comes with a price. As we
know, AI is a wonderful tool, but AI can, in fact, extend and
elongate patents, patents that might have had ten claims and a
few dependent claims, now might have thousands of claims. That
means that one of the things that the Director has asked for
that we have to take serious consideration on is how we deal
with long or particularly complex patents should there be a
multitiered, and this will be discussed today, should there be
a multitiered process for billing?
As many on this Committee know, when the Congress on a
bipartisan basis, bicameral basis, made it two decisions. One
was that fee setting would be transferred substantially to the
Trademark Office, Patent and Trademark Office, but also that
fees collected would be embargoed, meaning they are not to be
spent anywhere else in any agency, including Commerce, in which
the Trademark and Patent Office are nestled. That means that
there is an obligation to raise enough funds to modernize the
Patent Office.
Federal workers are stressed today in the Patent Office
because they currently do not have the tools to keep up with
the demand. In 18 human hours, 17-18 human hours, the question
is do we get it all right on a 1,000 claim, including dependent
claim patent applications, and the answer, of course, is no.
One of the goals set out by the Director which I completely
agree with, and I believe everyone on the dais does, is that we
have to work hard to continue to sustain or improve patent
quality. I say sustain because as they become longer, if we do
not have the tools to allow patent examiners to do their job,
or if, in fact, we do not supplement technologies that may not
be available to the examiners, and I say that specifically
because historically, the examiners are skilled in the
technology they are evaluating.
Many of the technologies are so short of people that, in
fact, to recruiting those people or to train them in emerging
technology, is virtually impossible. That means that not only
do we have to embrace AI in the patenting process, but we have
embraced AI in the Patent Office. This will cause the Patent
Office to spend vast amounts of money, whether it is done in
concert and collaboration with other AI companies or
substantially an in-house production. It will cost a great deal
to produce and maintain.
However, when in the foreseeable future we are dealing with
more than a million patent applications a year, more than half
of which come from countries outside the U.S., the largest of
which is China, a country that does not respect the rules of
how we create and qualify inventors, we are going to need
sophisticated tools to spot whether, in fact, true invention is
being submitted to us.
Implementing the President's Executive Orders is going to
be a daunting task. Fortunately, he has selected someone that
is highly qualified, someone that has the respect in the
Senate, particularly, of both Republicans and Democrats and I
believe today you are going to see that we are very pleased
with your selection. That does not mean, Mr. Squires, that we
are pleased with everything that is going on.
Recently, you had to deal with a clear conflict of
interest, but also with a policy that was ambiguous as to where
a conflict lies. The particular case does not need to be
discussed here because it has risen to criminal activity and a
dismissal. Let's understand, patent examiners, with even a
small amount of stock, cannot and should not be evaluating a
patent that could benefit that company or that stock. That
level of conflict of interest now is zero under your
leadership, and I want to particularly commend you for that. If
somebody had asked me, as someone who has followed the Patent
Office for decades, if that was the policy I would have said
well, of course it is, only to discover that in my entire
career both in and out of government it was not. Again, I want
to commend you because that is the kind of hands on
decisionmaking that we need to have.
Additionally, I want to make it clear the President has an
agenda. That agenda is not in conflict on either side of the
dais. That is that although sometimes when you say MAGA is
pejorative in this body, that making America and keeping
America great is the goal of every aspect of this body and of
the Patent and Trademark Office. Onshoring of manufacturing of
all sorts, mining, agriculture, conventional manufacturing, and
yes, intellectual property manufacturing, is not just the goal
of this administration, but it should be the goal of everyone
that wants America to have 250 years that, in fact, resemble
the first 250 years.
Therefore, any policy that isn't helping and supporting the
ability for companies to make a decision, whether they be U.S.
companies or global companies located outside the U.S., to
make, use, and sell in the United States is adverse to the
President's policy and adverse to the best interests that we on
this side of the dais enjoy.
That brings up a particular point, and it is one that I
think is important. Under the policies of Acting Director
Stewart and quite frankly, as far as I can tell, the continued
policies, I see a real threat to that. At the end of the Biden
Administration, there were approximately 280 slots for patent
examiners under PTAB. My understanding is that more than 80 of
those slots are now vacant. The systematic change from 80-90
percent of PTAB reexaminations being granted to just the
opposite, somewhere in the neighborhood of 80 percent being
rejected, including a policy in draft form that I will push
back on is not within the discretion and I repeat, not within
the discretion of the Patent and Trademark Office, is one that
determines that if a patent is beyond a certain number of
years, it simply will be automatically discretionarily
rejected.
I was here and some others on the dais who will talk today,
we were here on a bipartisan, bicameral basis under former
Senator Leahy. We came to a compromise. That compromise was
worked out by parties far and wide, not to everyone's complete
satisfaction, but to overwhelming support. That meant that PTAB
did not completely displace ex parte reexamination, that it
still has a valid use. It also means that the so-called one and
done was never in place. To compromise between one and done
which was asked for by a number of companies, not the least of
which were the leaders in bio and pharma, we said that if you
get past the first reexamination, which was assumed, if it came
in with credible arguments, would go through reexamination,
that it would be discretionary thereafter.
The law was unclear and I have to take some credit and
blame for that, that when you look back it doesn't actually say
that the first one will automatically be more favorably
considered, but the intention was clear and the spokespeople on
both sides of the capital and on both sides of the aisle were
speaking specifically that the bias would be toward yes on the
first one and then there would be a higher standard when either
the same company or another company came in with substantially
the same information based on substantially the same patent
accusation. I say that because, obviously, sometimes you have
diverse and different views. One of them, for example, is one
patent that has been asserted against Intel Corporation and
Gillette for razors. I have to believe that the arguments in
why that would be invalid, unsupported, or unin-fringed could,
in fact, be different between a microprocessor and a razor.
When I was shaving this morning, that was all I could think
about was what could possibly be different?
The reality is we have to balance that and Director
Squires, you have the hardest job. You have to balance that
with a reasonable expectation that a patent is what it says it
is. The question is are patents, in fact, not of the quality we
would like them to be? I am going to opine for a moment that if
patents tomorrow became perfect and in no case was there any
ambiguity, it would still be up to 26 years before the last bad
patent could no longer be asserted against somebody for
damages. That is a long time.
Director Squires, if you manage to serve that long, you
will clearly be the first. That means that we have to continue
dealing with the legacy of the past with periods of time in
which new technologies came in, they were not fully understood
or, in fact, on occasion, one examiner is loose. We will always
have to deal with the reality that somebody will get a patent
which means X and then assert it maybe against Intel and
Gillette as though it means XYZ and the like. This is not
something that often is done well in Article III courts.
Article III courts, when I arrived here before the patent
pilot legislation and before modernization including PTAB, were
running as much as 40 percent reversal at the Fed Circuit. The
Fed Circuit was taking an amazing amount of cases because it
was almost a coin flip. We have been working to reduce that,
and I must tell you we are down to about 35 percent. It is not
an easy job because Article III judges, all 677 of them, almost
exclusively come from nontechnology background. They are
prosecutors. They are public defenders. They are civil lawyers,
but they are seldom patent attorneys or knowledgeable in
intellectual property. That is not their fault. On top of that,
for more than half of the Judges, they will be lucky to get one
patent case--let me rephrase that. They will be unlucky to get
one patent case. It will be their first and after that, they
will try to find another Judge to take their patent cases. That
means that the first Markman is their first Markman ever. It is
a technology they don't understand and a patent that says
things that have to be explained to them.
That is not true with the PTAB. The 200--now 180, but once
nearly 280, patent examiners are technical specialists. They
will look at dozens of cases, both sequentially and in
parallel. They adjudicate these over a year, so by the time
they have been on the job for a couple of years, they have done
60 or 70 patents. They have brought them to a close, and they
seldom have any reason at all not to meet their deadlines. That
means they do a better job. The proof of that is that they run
about a 12 percent total reversal even in part, meaning if you
lose to the Patent and Trademark Office or you win, you can
pretty well take it to the bank and either move into Article
III or move into another place with that patent. That means
that we have to find a way to reinvigorate the Patent and
Trademark Office.
As I go through my questions today, I will be asking
exactly that to the Director, how do we restore the ability for
people who have been accused of patent infringement to
rudimentary, particularly on the first time it has been
asserted, be able to get in front of an examiner?
There are other problems in the law that I want to make
clear. We never believed that it would be 100 percent
discretionary. We believe that the Under Secretary would, in
fact, at the end of the day be reviewing the work of those
Judges and expected there to be a process if there was a
disagreement. Under Trump One, we discovered that, in fact, one
person could without any explanation simply overturn a decision
by an Article I judge. That still becomes a bit of a problem,
and I know we will hear from Director Squires about how he is
determining that and handling it. Additionally, we have
discovered that a full trial that is nearing its one year, it
is ready to go to decision, can in fact be pulled back and
undone.
Director Squires, I have to tell you it is my belief and it
will be my legislative last act if I can that this either will
be undone or we will undo it. Once a process, a determination
is begun, even if you at the end of it all choose to not agree
with the decision to undo it, to in retrospect undo it is, in
fact, to have less than the fair process be appeared, and in
fact both parties have spent money in the process. It should be
allowed to go to decision. You can then evaluate the decision.
That is of particular concern, and it will be the one that I
spend most of my time on.
Last, on the dais, there will be people who don't know the
meaning of trolls, and there will be people who don't know the
meaning of trolls. It is a difficult guess. There are
nonpracticing entities who are great inventors, who invent
things sometimes that have exactly one customer. That does not
invalidate the ability for them to take their invention and say
if you would like to use it, you will, in fact, have to work
out a royalty. At the same time, there are nonpracticing
entities who are simply in the financial gain business.
Unfortunately, third-party funding has made it very possible to
buy old patents, particularly those that have been around for
more than six years and assert them either for the first time
or for the first time against a particular defendant. That
means that any deadline, any time out that says a patent can no
longer be considered, cannot possibly be accurate, not because
fair warning shouldn't cause someone to use a process earlier,
even if not accused, I share with many that view. However, you
don't know you are going to be sued in many cases until
somebody redefines what that patent means.
Again, in closing, I am going to back to, if you looked at
a patent, any one of you in this audience and thought that it
applied to Intel and Gillette, please raise your hand. If not,
then in fact, that makes my case that you cannot know that your
patent is going to be asserted against you in a particular way
until it is. Without, at least, a constructive notice, a letter
from the inventor or the like, you really are not on notice.
That is why we have laches, but it is also why 6, 8, 10, or
even in the 20th year we may need to use the ability to
properly find out if, as asserted, the patent is valid and
enforceable against that defendant.
I have taken a lot of time. I have done so for a reason for
the first and only time probably in my career. Nothing is more
important to making a decision to onshore that knowing that in
fact you are going to get a fair opportunity to defend yourself
against patent and other legal accusations. I make the case in
purely monetary terms. If 20 percent of the world's market buys
here in the United States and you are currently making a
product offshore, you have a 20 percent exposure in the U.S. if
you lose a patent case. If, on the other hand, you make, use,
and sell in the United States, even if only 20 percent ends up
in the United States, you have a 100 percent exposure. Under
the law, making in America gives you worldwide exposure in
America. Who in the world would risk 80 percent of their market
if they could make the product in a country they trust or
multiple countries where they trust they would not be shut
down?
Unfortunately, that is the world we live in. We have to
make it safe or at least predictable that if you are Intel, if
you are Nvidia, if you are any of the companies, Taiwan
Semiconductor, and you onshore here, you are not putting at
risk your worldwide sales against a nefarious and quite frankly
lengthy accusation that may or may not be valid. It doesn't
mean that you don't have an obligation to quickly dispense with
those that are valid, but it does mean that we have to maintain
a system that typically in a year gets it, more or less, 90
plus percent right. With that, I recognize the Ranking Member
of the Subcommittee for his opening statement.
Mr. Johnson. Well, thank you, Chair Issa, and Director
Squires, thank you for being here today. We customarily don't
take intermissions between opening statements, but I would be
remiss not to offer you the opportunity for at least a bathroom
break. Are you OK? All right. Thank you.
Directors of the U.S. Patent and Trademark Office appear
before this Subcommittee every two years or so and I have had
the honor of being present for many of those hearings. You are
the sixth Director I have had the opportunity to talk with in a
forum like this. Hearings like today, give us the opportunity
not just to provide meaningful oversight, but also inform the
legislative process so Members of Congress can make the best
decisions when considering legislation.
In the many USPTO Director hearings I have had an
opportunity to experience, I have witnessed occasional policy
missteps from USPTO Directors, and we have discussed
administrative failures, ranging from modernization growing
pains to too long examination time. We certainly have had our
differences, but never have I had reason to doubt that the
Director was acting independently from the President until
today. There was a time when the USPTO was removed from the
politics of today. Now, it has been drawn squarely into it.
I am going to take this opportunity to go over a few of the
concerns I have heard over the past year. Keep in mind this is
not in any way an exhaustive list. Under the Trump
Administration, the Patent Office's workplace morale has
plummeted, likely because of the administration's layoffs which
were bizarrely characterized as an attempt to save money, even
though the USPTO is self-funded.
You have also stood by as USPTO employees collective
bargaining rights were undermined by President Trump,
destabilizing your already fragile workforce. Under your
leadership, the USPTO has publicly explored implementing a
patent tax that by all accounts would have a devastating effect
on innovation in the United States. These are just some of the
few examples of the partisanship inserted into an agency that
prides itself on stability. When politics begin to shape a
traditionally nonpartisan agency, the result is predictable.
You are at the helm of an institution that has lost touch with
its mission. This lost mission is most obvious in the USPTO's
cancellation of its planned Southeast Regional Outreach Office
in Atlanta, Georgia. The USPTO chose Atlanta after a long
process as prescribed under the law.
Instead of going forward, the Trump Administration canceled
this outreach to the Silicon Valley of the South and instead,
opened it within USPTO headquarters in Alexandria, Virginia.
American innovation can thrive only when opportunity to
participate is accessible to all. By placing the Southeast
Office at USPTO headquarters, your agency has limited its reach
and concentrated opportunity among those already best
positioned to access it.
I encourage you, Director, to reconsider this move because
while it may not violate the letter of the law, it most
certainly violates the spirit of it.
As you can see, I strongly disagree with the Trump
Administration. I also believe you want to do right by those
who rely on the patent system. Your notice of proposed
rulemaking to reform the Patent Trial and Appeals Board
reflects ideas this Subcommittee examined when I was
Subcommittee Chair, and has similarities to those proposed in
my colleague, Congresswoman Ross' PREVAIL Act legislation.
While these administrative changes are certainly worth
discussing, agency action is not the same as legislation. When
the Director changes, so can agency rules. Patents exist to
ensure that research and development rests on firm, predictable
ground. This kind of inconsistency between Presidential
administrations undermines the stability that is essential to a
functioning patent system. Ultimately, these are questions for
Congress to decide, not the agency. They are questions I look
forward to addressing if I became Chair of this Subcommittee in
the next Congress.
A healthy USPTO requires clear rules, consistent leadership
free from political influence, and a steadfast commitment to
protecting those who take the risk to create. It is incumbent
on us to get these questions right because inventors and job
creators are not asking for favors. They are asking for a
predictable and stable system they can rely on. When policy
shifts with the political whims of an administration, it is
American innovation that pays the price.
I yield back the balance of my time.
Mr. Issa. I thank the gentleman for his brevity, and as I
go to the Chair of the Full Committee, I might note that
apparently Mr. Johnson is considering a party change, so I hope
you will favorably consider him to replace me in the next
Congress, and I recognize the Full Committee Chair.
Chair Jordan. No one can replace you, Mr. Issa, that is for
sure. I just want to thank the Chair for this hearing and I
want to thank the Secretary and the Director, those titles, for
being with us today and answering the Committee's questions.
The record will show after the comments of the Ranking Member
that the Chair's comments were the most brief--I haven't heard
from Mr. Raskin, but I will bet it will be a little longer than
my opening statement. With that, I would yield back.
Mr. Issa. I thank the gentleman. We now go to the Ranking
Member of the Full Committee.
Mr. Raskin. Thank you, Mr. Chair, and I will be somewhere
in between the Chair of the Full Committee and the
distinguished Chair of the Subcommittee.
Thank you, Director Squires, for joining us today. As head
of the PTO, your job is to promote stability in the market for
goods and services by protecting trademarks that are used in
interstate commerce. In pursuant of the mission, the USPTO has
for decades been removed from political intrigue, favoritism,
and controversy by keeping politics out. Prior Presidents and
USPTO Directors ensure that applicants had a fair and honest
system to rely on.
It seemed to change last year. You and President Trump
injected partisan politics into the work of the PTO from
working to strip trademark examiners of any right to collective
bargaining, a right that they had enjoyed for many decades, and
firing the Members of the Patent and Trademark oversight bodies
to refusing to respond to congressional requests for
information. Your tenure seems to be threatening the
traditional integrity and nonpolitical nature of our system.
You recently took an extraordinary and unprecedented
action. Earlier this year, the USPTO itself filed trademark
applications on behalf of Donald Trump's ill-defined, private,
multibillion global project called the Board of Peace.
President Trump has declared himself Chair for life of this
illusive entity. He has promised billions of dollars from the
taxpayers to the board, although Congress has not voted a
single dollar for it. He has secured billions of dollars from
mostly corrupt foreign governments including Saudi Arabia,
Kazakhstan, Azerbaijan, the United Arab Emirates, Morocco,
Bahrain, Qatar, Uzbekistan, and Kuwait.
Beyond that, there is not much we know about this shadowy
venture. We don't know its basic corporate structure. We don't
know whether it is registered anywhere in the United States or
in any other country. We don't know who controls the billions
of dollars in its bank accounts. We don't know what countries
those bank accounts are located in. We don't know who will
conduct audits and oversight of the board, if anyone. We don't
know what the President intends to do with this massive,
secret, unaccountable slush fund while he is in office and
after he leaves.
When the Board of Peace decided it wanted to secure a
trademark for its name and for its logo, a move that should
have required it to identify the legal entity that actually
runs it and controls its billions of dollars, you stepped in.
You personally filed the trademark applications allowing you
USPTO to stand in as a straw trademark holder to cover up for
this slush fund that appears to put both billions of U.S.
taxpayer funds and billions in payments from foreign
governments into the pocket of the Chair for Life Donald Trump
who will control it. The President set up a board that likely
violates both the foreign and the domestic emoluments clauses,
and now you are helping to run the operation as far as we can
tell.
What is more, I am not sure either you or the Trump
Administration realize what you are confessing by filing a
trademark application. You are admitting that the Board of
Peace is not a legitimate governmental body, but rather a
commercial enterprise set up by President Trump. Our trademark
law began in 1879 when the Supreme Court struck down a
trademark law that applied to any and all organizational
designations. The Court ruled that Congress could do so only
under the Commerce clause. When Congress passed the Trademark
Act of 1881, it was written to apply only to marks used in
interstate commerce. The modern version of the Lanham Act in
1946 makes clear it only protects trademarks used in interstate
commerce. Section 1052(b) specifically forbids the registration
of any insignia of the United States or any State or
municipality or any foreign Nation or any other governmental
body.
By filing for a trademark, you are admitting that the Board
of Peace is not really a governmental entity at all. It is a
purveyor of influence operating for profit with apparently a
billion-dollar admission fee, at least that is what has been
reported in the press. A money-laundering scheme to pocket the
billions all made in a global shakedown in the name of peace.
Now, as far as I can tell, the USPTO has just nine
trademarks. Four are various logos for your office, some of
which read USPTO, others have the full name of the agency
written out, IS Patent and Trade Office. Three more are for the
phrases Go for Real, and You're Smart Buy Smart, phrases that
were part of a public awareness campaign that the USPTO itself
ran with the National Crime Prevention Council. The other two
are now for the mysterious Board of Peace which has no
organizational relationship, I believe, whatsoever to the
USPTO. By agreeing to act as President Trump's Phone a Friend
and using the PTO to register a trademark on behalf of a third
party, it would seem you are violating a cardinal principle of
the Lanham Act which explicitly lays out in Subsection B that
only ``a person who has a bona fide intention under
circumstances showing the good faith of such person to use a
trademark in commerce who may request registration of the
trademark.'' That is quite a problem for the agency whose role
it is to administer and police the registration of trademarks
and to administer disputes about them.
One can only imagine this decision will be challenged.
There will be litigation over the mark that you have now
claimed as your own for the PTO before your agency which is
charged with being the neutral adjudicator of disputes about
trademarks. The only reason anyone ever registered a trademark
is to prevent competing uses. Why would the Trump
Administration tell you to file for this registration except to
suppress anyone else's trademark related to the word peace? The
field is crowded with existing registrations by other
educational purveyors of global peace. To give a few examples I
found online this morning: World Peace Table, World Peace
Network, Project Peace, Peace Vision Global, Global Peace
Initiative, Global Peace Foundation, International Peace
Center, Peace Network, Peace Action, the Peace Trust, and
Greenpeace. Any one of these organizations would have a strong
case to sue for cancellation of Trump's Board of Peace
trademark on the grounds that it dilutes and infringes their
own preexisting trademarks for peace facilitation services.
Also, of course, that this mark is not registerable at all
since it purports to identify a governmental entity and not an
organization in interstate commerce.
Now, only would you have to decide whether Trump has a
defense to prior users' opposition to his marks, you would have
to rule on any offensive use of trademark law by Trump against
any of the other groups. Let's say he moves to attack
Greenpeace for infringement of his commercial trademark or
opposes registration of any new organization that uses peace in
its name. Who would adjudicate this? You would, your office.
You are both the owner and you are the judge of any rights that
you have as an owner against anyone who wants to identify their
organization with the word peace. This is not just a
disreputable use of the trademark registration process; it is
the first step in giving Donald Trump and his subordinates a
monopoly on use of the word peace to make the very notion of
peace unthinkable that departs from control of the new big
brother who now owns it. If President Trump can't win the Nobel
Peace Prize he craves because he plunged us into an aggressive
toward the Middle East, now he will just own the word peace
instead.
I wrote to you last week, Director Squires, asking about
this illusive entity and unprecedented baffling situation. If
there is a reasonable explanation for the USPTO's conduct here,
we would like to hear it today because if you simply filed on
behalf of the Board of Peace as a favor to the President, then
that is a serious problem. A decision like that doesn't just
drag the USPTO into covering up for a slush fund that may
violate both the foreign and domestic emoluments clauses, it is
bad for the integrity of our trademark laws.
When people lose faith in the fairness and objectivity of
our system, it begins to fall apart. I am not just troubled
that you may be violating the basic trademark rules. I am
troubled that in violating the rules to help Donald Trump, you
may be acting as a political operative in a way that will
destroy our neutral system for regulating source identifying
trademark rights.
The trademark system is designed to protect everyone. If
applicants think that the rules change for the wealthy and the
politically well-connected, they are much less likely to
believe the system can work for them. I look forward today to
finding out how you justify your agency registering a
commercial mark for this alleged governmental entity, if that
is what it is, how you intend to resolve disputes with the
dozens of past and future registrants of peace organizations
and what you intend to do to restore the professional
nonpartisan reputation of the USPTO.
Thank you, Mr. Chair, I yield back.
Mr. Issa. I thank the gentleman. Without objection all
other opening statements will be included in the record. Before
I introduce the Director, I would ask unanimous consent that we
place into the record the Wiki delineation of the Voice of
America which is a U.S. Government owned international
broadcast with trademarks including Voice of America, VOA, VOA
News, et cetera, which is owned by the U.S. Government and was
trademarked in 2007. Without objection, so ordered.
We now introduce the Hon. Director of the Patent and
Trademark Office, the Under Secretary of Commerce for
Intellectual Property and the Director of the Patent and
Trademark Office. Prior to joining USPTO, Director Squires was
a partner and Chair of IP at emerging companies' practice,
particularly Dilworth Paxson LLP which is a longer name than
when they had three names instead of two. We welcome our
witness here and thank him for appearing.
Pursuant to the rules, I would ask you to stand and take
the oath.
Do you solemnly swear or affirm under penalty of perjury
the testimony you are about to give will be true and correct to
the best of your knowledge, information, and belief so help you
God?
Thank you. Let the record reflect the witness answered in
the affirmative.
Director, our normal rule is five minutes. Considering the
Ranking Member and myself, I will be lenient if you go over,
very lenient. Since you are the only witness, we came here to
hear what you have to say. However, your entire opening
statement, if you don't use it all, will, in fact, be placed in
the record along with any other supplemental information you
choose. You are now recognized.
STATEMENT THE HON. JOHN A. SQUIRES
Mr. Squires. Thank you, Mr. Chair. Chair Issa, Ranking
Member Johnson, Chair Jordan, Ranking Member Raskin, and the
Members of the Subcommittee, good morning. Thank you for this
opportunity to discuss the USPTO's operations and initiatives.
I thank President Trump for his confidence in me to lead
America's innovation agency, and for his steadfast commitment
to intellectual property, reaffirmed yet again with his
national AI policy framework released on Friday.
It is also the honor of a lifetime to serve Secretary
Lutnick, a phenomenal leader with boundless energy and
unparalleled experience, himself an inventor on nearly 500
patents.
I am honored today to provide the Subcommittee an overview
of the USPTO's recent activities and accomplishments. America's
innovation agency has two founders. For patents we have
America's Invention Agency, and for trademarks we have
America's Branding Agency. Together we function as the
Department of Commerce's central bank of innovation.
Every unit of intellectual property we put into circulation
is a potential job, a new business, a competitive advantage, an
investible asset, a lifesaving drug, all flowing into the real
economy, into the real world. In its scale, American ingenuity
means national prowess and global reach.
I can't thank USPTO's highly educated and talented
workforce enough for their dedication and commitment. I say to
everyone they are the best in the world at what they do
because, quite simply, they are. None of this would be possible
without the fee setting authority so thoughtfully provided by
Congress, allowing us to operate like a business, maintain
long-term financial stability, and achieve our statutory
mission.
We also greatly appreciate the continued authority to spend
anticipated fee collections which lies at the heart of our U.S.
global leadership. We look forward to working together to
maintain both it and our global lead. Indeed, we lead today
because our Founders did the extraordinary two centuries ago,
enshrining IP protection into our Constitution and, with it,
the American experiment itself, the American experience itself.
Last month, I told the head of the UKIPO how our
constitutional charge allows us to lean into AI, to quantum, to
medical diag-
nostics, wherever the onrush of technology is going. His candid
reply: I know. Wish I had that.
Think about that. The very empire we won our independence
from, two democracies, two outcomes, but only one clearly atop
the IP world today. That is why it is incumbent on the USPTO to
have an America First IP agenda, build atop a unique legacy our
Founders bestowed on us. We are doing exactly that with the
urgency of now.
As I am before you today, our first priority was slashing
the unacceptable backlog by 50,000; another 100,000 to come
this year. By the end of my tenure, and with your continued fee
setting authority, choking backlogs will be a thing of the
past, and improved quality a confidence indicator.
I am confident because we just announced our first agentic
AI trademark classification tool. Five months of manual
searching is now a five-second outcome. In patents, our AI
search system delivers a top ten list of prior art before the
first office action, providing quicker pathways to allowance.
Across both, AI fraud protections helped us purge 70,000-plus
baseless filings in just under a year. You see, AI tools will
become our, our examiners' superpowers, supplying them with a
cadre of agents to deploy as they see fit.
On policy, Congress affords us discretion. Our North Star
to its exercise is always both the letter and the spirit of the
AIA, balancing, as instructed, economic impact, resource
efficiency, and the integrity of our IP system. We are
restoring balance and fairness on both the front ends with
eligibility determinations, and the back end as to trials and
error corrections with new feedback loops in between.
Mr. Chair, I am humbled and proud to lead this unique and
vibrant agency. We are back on our front foot and delivering
the brilliance tomorrow's American ingenuity affords, tinker by
tinker, breakthrough by breakthrough, dream by dream.
Just as a Central Bank stabilizes the flow of capital into
the real economy, the USPTO stabilizes the flow of innovation
into the knowledge economy. With Born Strong protection, new
ideas can blossom in a marvelous virtuous cycle that has
delivered prosperity and bettered people's lives for over 250
years like no Nation before, like no Nation ever.
Thank you again, and I look forward to your questions.
[The prepared statement of the Hon. Squires follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Mr. Issa. Briefly, so very brief. Thank you.
We now recognize the gentleman from Kentucky Mr. Massie for
five minutes.
Mr. Massie. Well, the last Member of the Administration
that I was very nice to was Kristi Noem. She was removed 48
hours later.
At that risk, I want to thank you for the great job that
you do. I would like your analogy of intellectual property to
currency. Let's don't compare the Central Bank to the Patent
Office because some of the Founders, all of the Founders were
unanimous in understanding that the patents and copyrights were
the foundation that would allow our country to grow. I
appreciate you doing that.
It is an appropriate analogy because of intellectual
property to currency because we have had a crisis in our
currency over the last decade, I believe, of intellectual
property. If your currency is called into doubt, if the Federal
Reserve Notes in your wallet when you present them, even though
they were issued by the government, if they are called into
question when you try to use that currency, you have a problem.
That is the way it has been with patents. The PTAB
ostensibly was created to make it easier to adjudicate validity
on the back end of a patent issuance and enforcement. The
problem is it has created too much uncertainty. I very much
appreciate the steady hand that you put on the tiller.
I would disagree with my Democrat colleague who said that
policy shouldn't change when administrations change. I would
argue that elections should matter. Laws should not change. The
patents that have issued should not change, they should still
be valid. We need somebody in charge. We need somebody to
exercise commonsense in the application of the laws that we
have passed.
It seems to me that you are doing a very good job of that.
Could you tell us about the rule that you are proposing and the
actions that you have taken in terms of exercising discretion
on the IPRs?
Mr. Squires. Thank you, Congressman. I am happy to speak to
the notice of a proposed rulemaking we have put forward.
Basically, it is intended to restore fairness and balance to
the IPR process.
There have been instances where there have been as many as
seven serial filings. It is intended to be able to have the
matter adjudicated once and for all early. It has been termed,
I will say, as one and done.
That is a misnomer. There are liberal joinder provisions
that are carried through into the rule. I would say it is one
join and done. The facility is provided for if there is a
petition filed after there has been an adjudication that--
excuse me, petitions filed, people can join. The answer isn't
serial filings. We think the answer should be gang tackling. At
the time it wasn't to be had.
The preference would be to have a PGR-like process where
things are laid open. That is not always possible. As has been
discussed, things sneak through. There should be a point in
time where there is quiet title, there is finality, and people
can have that chance and do it together, but it has got to be
adjudicated once and for all.
Mr. Massie. I agree. Once you have the imprimatur of the
government and you have survived a challenge that is important.
Because what I have noticed in the last 10 years, a lot of
people are shying away from companies that would have been
based on intellectual property. I have people, inventors, say I
am not even going to file the patent, I am just going to try to
rely on trade secrets. That creates a world of haves and have
nots when everybody can just keep all their stuff secret and
that is incentivized because of a patent system that is not
working.
The PTAB, I do think it was probably, at least from the
people who voted on it, originally intended to expedite this
adjudication. It has created uncertainty that has hurt our
country, hurt our inventors. I am glad to see that you are
exercising some commonsense in the application of it.
Any law can be weaponized. We saw that the PTAB law has
been weaponized. I appreciate you taking it back and using it
for commonsense.
I will give you my last 15 seconds.
Mr. Squires. Thank you very much, sir. Also, to be
reminded, there--IPRs are but one avenue. There is always
reexamination. There are post-grant reviews of the District
Court.
What we had found was, particularly with respect to IPRs,
that it was intended to be an alternative to litigation, yet 80
percent of the filers already had a District Court action with
also doing an IPR.
Mr. Massie. Thank you for taking out much of the redundancy
that existed. Because it doesn't get cheaper when people keep
getting subjected to continuous IPRs or to survive the IPR and
then go to court.
I will yield to Mr. Issa.
Mr. Issa. Thank you. Just to clarify, that 80 percent
includes a dramatic amount who have been sued and then come to
the Patent Office, because that is the first notice of
infringement is when they are sued. The chicken or egg often
starts with a lawsuit and you go to the PTAB to shortcut the
time it takes to show invalidity. Correct?
Mr. Squires. Yes, sir. There is a one-year window if you
have been sued in District Court from which to avail yourself
of the point.
Mr. Issa. Thank you. I now recognize the Ranking Member of
the Subcommittee for five minutes.
Mr. Johnson. Thank you, Mr. Chair. Director Squires, I hope
that you will agree with me when I say that the greatest asset
of the USPTO are its employees. Employees at USPTO have
described the environment as ``rife with rumors, paranoia, and
disillusionment.''
Just last week in a governmentwide survey, only 13.8
percent of PTO employees reported that they were satisfied with
their job. What factors have contributed to such
dissatisfaction by your employees? What specific actions have
you taken to address this collapse in employee morale?
My office received a call just the other day echoing these
and other troubling allegations. What mechanisms are in place
to ensure employees can report issues without fear of
retaliation?
Mr. Squires. Thank you, Congressman. We have robust
facilities for reporting violations through our EEOC
department. They are fantastic as to examiners.
I do agree with you, they are the crown jewel of the USPTO.
They are the best in the world at what they do. We are trying
to make even better equipped to deal with the what has become a
crushing backlog of work that they have so dedicatedly and
assiduously have chipped down on.
We have increased awards, financial awards for examiners.
We are working on the personnel. I have myself--
Mr. Johnson. What factors have contributed to the
dissatisfaction that is evidenced by the survey?
Mr. Squires. I am equally interested in making sure morale
improves and have offered engagement. My, I think the biggest
factor has been the backlog getting out of control. It rose to
a historic high of 837,932 applications unexamined. This is
just unacceptable, as the Secretary had said.
Mr. Johnson. It is not the volume in and of itself, but it
must be something that the agency has done to address that this
has caused the lack of morale, or morale to plummet.
What are those factors?
Mr. Squires. The specific factors, we just concluded an
employee survey last week and we will be working on those and
examining them.
I, myself, hold, host a, I am using I did them weekly, now
monthly, for people to tell us what they think. That has been
my mantra coming in. There's forums for people to tell us where
there are problems.
One of the issues that has been unhappy that caused some
unhappiness has been not deploying people on the frontlines,
the primary examiners and having oversight and training and not
having signature authority at that point in time.
We have found that this is the first interaction that the
applicants have had with the office. Supervisory has been very
important. It is consistent with other international offices.
There has been some adjustment to that. There is some initial
unhappiness with that, but we have been at that now for over
six months and I think morale is getting better.
Mr. Johnson. OK. I am going to move on. After the success
of the four regional offices created in the America Invents Act
of 2011, Republicans and Democrats worked together to pass the
Unleash-
ing American Innovation Act in 2022 to establish a Southeast
regional outreach office, among others.
Atlanta, Georgia was chosen as the Southeast location after
a lengthy process. Last year the Trump Administration reversed
course, announcing that the Southeast office would instead be
at USPTO's headquarters. This change was announced with no
explanation, and no search process was conducted, as required
by law.
Director Squires, regional offices were created to expand
access and reach a more diverse set of stakeholders on a more
local scale. How does placing the Southeast regional outreach
office at headquarters advance that mission? Isn't it true that
placing a regional outreach office in the literal headquarters
of the PTO undermines the very purpose Congress had in creating
it?
Mr. Squires. Congressman, that decision, of course, was
made and effectuated before I took office. I took office in
September. However, my ongoing responsibilities are, as you
have indicated, access, making sure there is access. Now, we
have little compliance with the regional office footprint in
having four. We recently had five and the Denver office was
closed down, resulting in savings of over 3.8 million per year.
Savings are not the issue, access is. In favor of that we
have launched a Community Engagement Office model. We have just
released a Request for Comment to the Southeast region,
including Georgia, including all the States that were part of
that defined region.
We have had great success with the Mountain West region in
this, to the tune where we are able to increase access, engage
with universities, widen our footprint, and be able to do it at
little or no cost to the office.
We are moving to a model of the future. We are hopeful I--
Mr. Johnson. You are doing it based on executive authority,
undermining legislative authority. That is a trend in your
agency that is upsetting. With that, I will yield back.
Mr. Issa. I thank the gentleman. I am going to just join
the queue on one thing.
Director Squires, would you agree to have a separate
lengthy briefing for the Ranking Member and myself on that
plan, how it is to work, and how it can accomplish what was
legislatively in place?
I, for one, would not want to see San Jose closed for
savings purposes, no matter how it might be without
congressional approval. Would you agree with that?
Mr. Squires. We would be happy to work with the Chair and
the Ranking Member.
Mr. Issa. Then we will make that arrangement. We now go to
the gentleman from Wisconsin for five minutes.
Mr. Fitzgerald. Thank you, Chair. Director Squires, thanks
for being here today. Last Congress I introduced legislation to
limit the enforceability of patents by entities on certain
national security-related sanctions lists. This is because I
believe, I think many Members believe, State-sponsored entities
like Huawei can and do use protected patent litigation to slow
or stop critical technologies from being developed in the U.S.
Do you see that as the present or future national security
threat? Where do you stand on limiting enforceability of
patents in those types of cases?
Mr. Squires. As to limiting enforceability, one thing I
would point to is we recently--a couple things in the PTAB. We
restored the real party-in-interest requirements. With that, we
just issued a decision called Tianma last week which includes
under the AIA, as with American Government entities and
agencies are not persons and cannot be in the PTAB, neither may
foreign sovereigns or State actors.
If a real party-in-interest is identified they are not
allowed to be in the PTAB and they can't bring challenges.
To protect, with that, in the discretion of instituting
IPRs we have also just released guidance that look to whether
it is a small business in the U.S. or American manufacturing,
manufacturing that is occurring in the U.S., as part of whether
a challenge should be instituted, so to protect American
manufacturing and have them choose here.
Both sides of the equation we are trying to take into
account what the real world is. The process for filing a
petition we say tell us your story, and so we can take these
into account.
Mr. Fitzgerald. Another area where I know many Members have
concern about foreign exploitation. It is all about the patent
prosecution highway, right, as it is referred to.
Under this program the USPTO will expediate review of
certain patent applications that have received a favorable exam
in a foreign patent office. We know that China participates in
the program and, therefore, an entity like Huawei could receive
expediated examinations of its patent, so long as it first gets
a favorable exam in China, which is effectively a rubber stamp;
right?
Should we not allow, or shouldn't we be concerned, I guess,
about the way that is playing out?
Mr. Squires. Thank you for the question, Congressman.
That is of great concern. It is a bilateral concern. In
general, when cases come in through the patent prosecution
highway they have already been examined, but there always is
the risk of rubber stamping. We do an independent analysis. If
it doesn't pass the smell test, then we kick it and it goes
back in line and the prosecution is lost.
On the other side, we found for U.S. companies the PTH has
helped them in other countries. We are trying to always
maintain that balance where American companies going into other
offices are receiving a favorable treatment. They have behind
them the examination that has occurred and, hopefully, Born
Strong in the U.S.
Mr. Fitzgerald. Right.
Mr. Squires. We are always on the watch for incoming low-
quality patents.
Mr. Fitzgerald. Very good. Let me quickly turn to kind of
another area. According to American Intellectual Property Law
Association the average cost of patent litigation in a District
Court is $5 million, whereas the cost for adjudicating patent
disputes before the Patent Trial and Appeal Board on average is
about 10 times less, or around a half a million dollars.
Critics of the proposed changes to the PTAB process have
said the result will be more patent cases being litigated by
the courts. Assuming that could be true, did the USPTO take
into consideration increased litigation costs when conducting
an economic analysis of your IPR rule?
If you didn't, then how did you handle that, and why didn't
you maybe look at that?
Mr. Squires. Thank you for the question. Yes, we have. We
are taking, we are still in the process of finalizing the rule.
We have received over 11,800 comments, which we are very
excited about because people care. About 2,800 were unique
clearing out all the me too ones or, clearing out the ones that
are we don't like the Patent Office. Substantively there are
about 2,800.
By under the AIA we are required to consider economic
efficiency, resource allocation to the office and effects of
that sort. By all means we are looking at what the costs are in
the rule. I am optimistic the rule will be finalized. I believe
people will be very happy with the outcome.
Mr. Fitzgerald. What around judge's caseload, did you take
a look at that as well?
Mr. Squires. Yes, we are looking at all that in the rule.
Judge's caseload, but it is also not just District Court forum,
what is the effect on reexamination, and what is the effect on
PGR, and what is the effect also on ITC cases.
Mr. Fitzgerald. Thank you. I yield back.
Mr. Issa. I thank the gentleman. My understanding is it was
about nine to one opposing the rule in that 2,800: 2,500 to
about 300. Sound about right?
Mr. Squires. Again, we are still working through it. I have
seen those numbers. I have seen 97 to three. I have seen 80:20.
Our role under the rulemaking process is we go through and
respond substantively to comments. Comments have been very
helpful.
Again, I am of the firm belief that we are going to see a
rule that will be workable.
Mr. Issa. OK. Hopefully, the Ranking Member of the Full
Committee has read all 2,800 and can opine on what he saw as
the ratio. I recognize the gentleman from Maryland.
Mr. Raskin. Mr. Chair, thank you. Director Squires, how did
you come to file those trademark applications for the Board of
Peace?
Mr. Squires. Thank you for the question, Congressman.
We came to file, I had them filed in response to an
immediate cybersquatting land grab of the domain name. For
those who are unaware of the term cybersquatting, it is like
identity theft.
Mr. Raskin. Sure. Were you acting as a lawyer for the Board
of Peace at that point?
Mr. Squires. No.
Mr. Raskin. In what capacity were you acting?
Mr. Squires. Well, the Board of Peace, this is exactly the
issue. I am glad to have the opportunity to explain it and
respond to your letter.
Mr. Raskin. Please.
Mr. Squires. The Board of Peace has not yet been formed as
an international organization. The cybersquatters eight minutes
into the President's speech announcing it registered the domain
name. That is--
Mr. Raskin. Is it a public entity, the Board of Peace, or
is it a private entity?
Mr. Squires. At this point I am not sure if it is formed or
not. We acted as a custodian, so that they could have the
mark--
Mr. Raskin. How did you come to act as a custodian for that
trademark?
Mr. Squires. Under 35 U.S.C. 3 it is my responsibility to
advise the President through the Secretary of Commerce on
matters of national security and all matters of intellectual
property. That is the--
Mr. Raskin. The Board of Peace is a public entity, it is a
governmental organization even though Congress has not created
it? Is that right?
Mr. Squires. Sir, I don't know the status of whether it is
an entity formed or not.
Mr. Raskin. OK. Well, how did you get involved in it? Did
the President call you about the cybersquatting incident?
Mr. Squires. No, the President did not call me. It came up
through several organizations about the cybersquatting. The
action needed to be taken to address the harm.
Mr. Raskin. When you talked about the cybersquatting you
noted that there were lots of other organizations that were
already using some variation of Peace Organization, Peace
Committee, World Peace, and so on; right?
A dozens of them. I found them this morning just on the way
in.
Mr. Squires. Well, again, reference was made to shakedown.
This was registered, this particular boardofpeace.org. Without
that you don't have--
Mr. Raskin. You registered that?
Mr. Squires. No, no.
Mr. Raskin. Oh, who registered?
Mr. Squires. A cybersquatter did. Eight minutes into the
President's speech.
Mr. Raskin. Oh, but you don't have to talk about a
cybersquat-
ter, there are dozens of other groups that have peace in their
name; right?
Well, look, where did your legal authority come from to
file trademark applications on behalf of this Board of Peace,
whether it is a public or a private group?
Mr. Squires. It comes from the combination of 35 U.S.C. 3
and 35 U.S.C. 2 under the Lanham Act. In your opening
statement--
Mr. Raskin. Well, wait. Do you usually act as a custodian
for the intellectual property rights of other entities or is
this just for President Trump?
Mr. Squires. This was to protect the name Board of Peace as
the entity gets booted up, to act as custodian in a very narrow
capacity with a bona fide intent to use the name. Then, its
attempt to use application to be changed forward.
Mr. Raskin. Who has the bona fide intent to use it?
Mr. Squires. The USPTO.
Mr. Raskin. The USPTO is. What are you going to do with it?
Mr. Squires. In the very limited services that we define
there, which are fraud prevention, misuse.
Mr. Raskin. Is that a service you offer to all American
citizens? In other words, if I am thinking about maybe creating
a group one day and we might want to have a trademark, and I am
afraid somebody else has a competing trademark, you will go
ahead and file the application for me?
Mr. Squires. My responsibilities are, again, under 35
U.S.C. 3 to advise the President on matters of national
security.
Mr. Raskin. So, this is a matter of national security?
OK, let me ask you this. You have emphasized today, and
rightfully so, the importance of people who are applying for
patents or trademarks to pay a fee, because yours is a fee paid
office. How much does it cost for someone to seek a trademark?
When you applied for that trademark for the Board of Peace, how
much does that cost?
Mr. Squires. It is, it is not an expensive fee. Depending
on--
Mr. Raskin. The website says 350 bucks. Is that right?
Mr. Squires. Generally, yes.
Mr. Raskin. It was not expensive. OK. My one of the able
lawyers on my staff just passed me this, that you filed a
petition on January 21, 2026, to waive that fee for the Board
of Peace. Then you granted that petition the very next day,
which underscores the bizarre conflict of interest you are in,
now acting both as a representative of the Board of Peace and
also the Trademark Office that is going to pass on the
petition.
Why did you seek a waiver for the $350 for the Board of
Peace? Why did you grant it?
Mr. Squires. The waiver was sought under the particulars of
the intent to use application as the custodial filer. I did not
grant my own application.
Mr. Raskin. Well, your signature, as I am reading it you
filed this on the 21st, and then you approved it on the 22nd.
Mr. Squires. Well, I would like to see the document to
which you are referring.
Mr. Raskin. OK. We will get you those documents. Are you
saying you would not have approved of it had you seen it?
Mr. Squires. I am saying I don't recall this particular
situation.
Mr. Raskin. OK, but your signature--
Mr. Squires. I do believe it is in my authority. Yes.
Mr. Raskin. OK, it was approved by Dan Vavonese but your
signature is on the petition. I guess--
Mr. Squires. Yes.
Mr. Raskin. --well, why did you request that waiver of the
$350 payment for the Board of Peace?
Mr. Squires. Again, given that this is going to be an
international organization and given the situation with intent
to use and the bona fide limited scope that we had, I made that
petition just as I signed the application. It was granted by
someone else.
Mr. Raskin. OK. Then, finally, you know that the, the
Lanham Act forbids anyone from submitting an application unless
they are the owner of the mark or the legal representative of
the mark. Were you representing yourself as the owner of the
mark or the legal representative when you filed the petition?
Mr. Squires. No. We are very clear it is on a custodial
basis. We are not the owners. It will be transferred to the
entity once it is formed.
Mr. Raskin. OK. Well, you are listed as the owner on the
petition both for the waiver and also the application.
That is the way the Lanham Act works. In other words, if I
am asking for your advice could I get another company to apply
for a trademark for me? What is the answer to that?
Mr. Squires. If you are the President of the United States,
yes.
Mr. Raskin. The President of the United States could have
somebody else--the President of the United States has tons of
trademarks. You are saying that he doesn't have to submit
himself? Where does it say in the Lanham Act that the President
of the United States is exempt from the general rule that you
cannot have a third party seeking an application on your
behalf?
Mr. Squires. I am, again, directing you back to U.S.C. 35,
35 U.S.C. 3, where it is the Under Secretary of Commerce and
Director of the Patent Office shall advise the President on
national and certain international intellectual property
policies.
Mr. Raskin. Those are matters of public policy, they are
not questions of representing the President before the
Trademark Office which, obviously, creates a stark conflict of
interest.
Mr. Issa. The gentleman's time has expired, but you may
answer.
Mr. Squires. Sir, I was not representing the President of
the United States in this regard, I was representing a--filing
an application to address a cybersquatting issue under my
authority under 35 U.S.C.
Mr. Raskin. I appreciate it. Thank you. I yield back, Mr.
Chair.
Mr. Issa. I thank the gentleman. Just one question for
understanding. The gentleman from Maryland mentioned a number
of other uses for peace and so on. Under both common law and
any marks they have, those marks are previous, superior, and
are not eclipsed by this new mark. Is that correct to your
understanding?
Mr. Squires. That is my understanding. It was a very narrow
filing for the logo and the, and the name. Again, it was an
intent to use application. If nothing happens, it expires of
its own weight. It just goes away.
Mr. Issa. One thing, because I am a little new to
government, but you are, you are in the Article II, you are in
the government that is headed by one person, the President;
right? No matter how many pockets you have in your suit it is
still one suit jacket; right?
The $350, if it had to be paid for by the government, can
you tell me the difference between all these different places
in the government that would transfer $350 to another pocket of
the same suit? Because I am just, I am not quite understanding
the gentleman's question.
Mr. Raskin. Mr. Chair, are you saying that it is a
governmental body in that case?
Mr. Issa. Well, it appears as though the President of the
United States made a statement that either it would be a
Government entity or, like Voice of America and many of these
other entities that are government-sponsored, it would be
government-sponsored. There has been no assertion that this was
a for-profit private entity or anything of the sort.
Mr. Raskin. The Voice of America doesn't get a billion
dollars from the Saudi Government. That would make it an
illegal, unconstitutional foreign emolument. This is just
getting more confusing by the moment here.
Mr. Issa. I share with the Ranking Member questions of
other moneys that are not necessarily associated today. I am,
quite candidly, willing to participate in all the fact finding
on anything related to money.
The gentleman came here with tremendous expertise. Your
line of questioning was very good as to how at times the
Trademark Office does in fact institute protection against
cybersquatting. You were also very helpful in delineating the
fact that there are these entities that aren't quite
government, that are government, that have trademarks, one of
which is the Voice of America and many other highly recognized
U.S. entities which are solely funded by the Federal
Government.
It has been productive. I will join with you to continue
looking at questions of moneys from other governments, whether
or not they are coming to the government or whether they are
going to a third party because I think that is fair area. I
just don't think it is within the gentleman's expertise.
Mr. Raskin. All right. Well, I would welcome a thorough
ventilation of all these issues just so--
Mr. Issa. Like we don't go down a dark road here. Thank
you.
Mr. Raskin. Thank you.
Mr. Issa. With that, we go to the gentleman from Virginia,
Mr. Cline.
Mr. Cline. Thank you, Mr. Chair. Director Squires, third-
party litigation funding allows outside investors, including
foreign entities and sovereign wealth funds, to finance patent
litigation in exchange for a share of any recovery with no
disclosure to the court or defendant.
You called foreign-backed litigation funding at the PTAB
unacceptable during your confirmation and committed to stronger
transparency requirements. This is an important concern. When
disputes are pushed out of PTAB and into District Court,
discovery becomes a weapon.
Yangtze Memory Technologies, which is on the BIS entity
list as a national security threat, is currently suing Micron
and has used discovery to compel disclosure of highly sensitive
trade secrets.
Does the USPTO support transparency requirements for third
party litigation funding? What role should the office play in
preventing foreign adversaries from using opacity in litigation
funding to drive American companies into discovery that exposes
sensitive technology?
Mr. Squires. Thank you for the question, Congressman.
In terms of litigation funding and disclosure for District
Courts, those would be my understanding would be handled by
local rules and requirements.
For the PTAB what we did is imposed real party interest
disclosure requirements by reinstituting the Corning Optical
precedent. Then, ensuring when real parties are identified and
they are foreign sovereigns or State actors they are not
allowed to participate in the PTAB because they are not
persons, just as the U.S. Government is not considered a person
in the PTAB.
RPIs are critically important. They go to issues of
estoppel, they go to issues of fairness, and they also go to
issues where foreign sovereigns or State actors under--try to
undermine the U.S. patent holders and the system.
Mr. Cline. OK. Nonpracticing entity District Court filings
rose 18.7 percent in 2025, two consecutive years of increases
before your proposed IPR restrictions have even taken effect.
Consider who benefits from that. Four of the top five U.S.
patent recipients in 2025 were foreign entities. Huawei, which
previously sued Verizon for over a billion dollars, has
transferred nearly 1,000 U.S. patents to assertion entities
targeting American companies. BOE, Tencent, and CATL, all
formerly designated by the Department of War as Chinese
military companies, are also among the top recipients.
What evidence does the USPTO have that the proposed
rulemaking will not further drive-up patent litigation costs
for American innovators and manufacturers?
Mr. Squires. Thank you for the question. Again, we are
working through all the comments and rules, including the
justifications that we are required to under the AIA such as
economic theft.
To your question, at the PTAB we have considerations which
was just instituted in the guidelines for people to tell their
story if they are American manufacturers and they are being
pursued by foreign entities or these holders of patents
entities in particular, foreign entities. Tell us your story
and we can make sure that this is considered in instituting a
proceeding or not instituting a proceeding. It works both ways.
We are trying to look at the real-world picture on the
ground and take that into account when a request comes for a
proceeding to be instituted or not.
Mr. Cline. OK. Switching to trademarks, you may know I am
the Cochair of the Trademark, the congressional Trademark
Caucus. I hear concerns from American brand owners about the
growing backlog in processing trademark applications and the
impact on the ability to secure foreign trademark priority
rights under the Paris Convention.
As I understand it, to benefit from a U.S. filing date
under the Paris Convention an applicant has to file a foreign
trademark application within six months of the U.S. filing date
forwarded by a PTO-issued certified copy of the U.S.
application.
I am told the PTO's stated goal is to issue such certified
copies within seven days, but that current processing times
exceed three months. That appears to be getting worse.
I am concerned that the inability of the PTO to timely
process these requests threaten to jeopardize the ability of
American trademark owners to claim and defend foreign trademark
priority rights.
Can you tell us what you are doing to reverse the
disturbing trajectory of this backlog, and to ensure that the
ability of American companies to protect their trademarks
against foreign competitors is not jeopardized by staffing
issues at the PTO?
Mr. Squires. Thank you for the question. That has been a
concern. It has been unacceptable as the backlog has increased.
One area we have had, as I understand, and we looked into it,
data processing issues that have been remedied. I have invited
people to send me the request for the copies directly, and they
have done so.
The word has gotten out among paralegals that there is
redress here. I get half a dozen emails a week which we get
through.
Longer term we just announced--and I think you will be
happy with this--our international search classification tool
which takes five months' worth of work, normally leading up to
that six, down to five seconds, literally.
These are going to be the sort of first agentic entry to
equip our examiners with these types of tools. International
search classification is just a bear, especially if you have
pseudo marks and the like. The future looks very bright there.
We have to make sure our house is in order and our own blocking
and tackling and getting certificates out.
Mr. Cline. Thank you very much.
Mr. Issa. Would the gentleman yield for just a second?
Mr. Cline. I yield.
Mr. Issa. If I could clarify or have you clarified what you
answered the gentleman. You talked about some of these
protections, rules, and so on. You seem to be talking both
about defendants and plaintiffs.
Some of the things that I heard which sounded like
protections, in fact are limitations on the defendant in PTAB
proceedings.
Mr. Squires. Again, the--
Mr. Issa. American manufacturing and foreign entity and the
like were the question.
Mr. Squires. If there is a petition filed against a patent
holder in the PTAB, and part of the complexion there is that
this is an action against a U.S. manufacturer, we want to know
that. Tell us that and that will go to the discretionary
component of the decision whether to institute or not.
Mr. Issa. I understand. It is just that it also works for
Huawei effectively when they have a strong manufacturer and
they say, well, here it is, but it is still a Huawei patent.
Mr. Massie. Point of order. How many times does the Chair
get to take five minutes?
Mr. Issa. I only asked the gentleman to clarify what he had
answered to the other gentleman. I appreciate you can take it
up at a future time if Mr. Massie is in a hurry.
With that, I go to the gentlelady from California for her
questions.
Ms. Lofgren. Thank you, Mr. Chair and Director Squires.
Under prior practice, decisions were made by the PTAB. When an
IPR petition was filed a three-member panel of expert
administrative patent judges decided whether to institute a
review under the AIA's reasonably likelihood standard.
You first centralized power over discretionary denials in
the director in March 2025. Then last October 17th, your
memoranda went further by consolidating authority over
institution decisions in the director as well.
As you know, we only have five minutes here, so these two
questions really have either a yes or no answer.
Do you intend to continue this policy instead of restoring
that responsibility to a three-member PTAB panel of expert
judges? Would that be a yes or a no?
Mr. Squires. I can give you a maybe.
Ms. Lofgren. OK. We would like to know further if you
ponder this, because under your current policy I am wondering
whether you consult with at least three PTAB judges before
making an institutional decision?
Mr. Squires. Yes.
Ms. Lofgren. OK. That is helpful. What concerns me is not
just the centralization of the authority and, therefore,
potential for abuse. It is that the office now regularly denies
requests through PTAB review of patents that may have been
improperly granted, without giving any written explanation.
I have an example. This is a denial. It is two pages, and
it just says no. Right? Here is the way it used to be, which is
yes or no and the reasoning. People knew where they stood.
I am just sort of wondering, under the standard operating
procedure manual it says the significant writing assignments in
AIA proceedings include decisions on institutions. It goes on
and on.
The expectation is that there will be a detailed
explanation for whatever the decision is. Now, I am just
wondering in these bare bones summary denials where someone
would find the reasoning in the arguments raised by
petitioners. Do you think that practice is really consistent
with principles of transparency and fairness?
Mr. Squires. I do think so. There is a body of over 600
decisions that have been issued. Where there is matters of
where we have something to say, or if a story needs to be told,
we do issue those decisions and opinions so to provide
guidance.
The Revvo line of cases has been one where there have been
inconsistent claims offered from District Court. There is, in
fact, unsettled expectations, it has worked the other way where
a patent holder had their patent lapse before it was served
against the defendant.
Ms. Lofgren. I would just like to ask unanimous consent,
Mr. Chair, to put into the record a letter from the Alliance
for Automotive Innovation, the Business Software Alliance, the
High Tech Inventors Alliance, United for Patent Reform, SIIA,
and U.S. Made, along with a study that really shows their
dissatisfaction with the current practice.
Both on the winning end and the losing end, if you don't
have insight into the reasoning of the decision it is
problematic.
Mr. Issa. Without objection, so ordered.
Ms. Lofgren. I would like to just recall creating the
patent law was, the America Invents Act took a long time. It
was not easy. I participated in it. Some other Members of the
Committee did as well.
The idea was really straightforward: High quality patents
drive innovation and growth; low quality over broad patents do
the opposite, they drive up prices, they impede competition,
they expose businesses to abusive litigation. We designed IPR
as a streamlined, expert-driven mechanism that attacks the
patents that should never have been granted to begin with. It
ensured the kind of efficient, targeted administrative
correction that good government looks like.
Now, if there are flaws with that system, we are willing to
address those flaws and work through them. The agency's
institution rate has lapsed, not because the petitions lack
merit but there are barriers that are being applied that
Congress never authorized. Just as never, Congress never
envisioned that the IPR process that we crafted and are willing
to work on further if it is flawed, would be supplanted by the
director just seizing control of the whole operation.
I see my time has expired. You have discretionarily denied
64 percent of all petitions, and the institution rate sits at
about 20 percent.
Mr. Chair, although my time has expired, I am looking
forward to delving into this further because I do think there
is a problem here, not only in the administration of the office
but the lack of enthusiasm for the process among innovators in
America.
With that, I yield back my time.
Mr. Issa. I thank the gentlelady. The gentlelady yields
back. We now go to the gentleman from Texas for five minutes.
Mr. Gooden. Thank you, Mr. Chair. Unlike everyone before
me, I will be under the time limit.
Director Squires, I would like to inquire about an IPR that
was recently brought to my attention. This IPR concerns a
challenge against a patent owned by VLSI on behalf of NXP,
which is a semiconductor based in Texas.
Based on the record, it seems this case might have been
mishandled by the previous administration. Does this ring a
bell?
Mr. Squires. I have read in the papers about that.
Mr. Gooden. OK, I will keep going. Under this IPR, VLSI's
patent was challenged by two entities called OpenSky and PQA
continues to be tied up in proceedings. These entities were
formed around the same time VLSI won a jury trial before a U.S.
District Court in Texas regarding the same patent that OpenSky
and PQA challenged later.
PQA and OpenSky's founders and backers remain largely
unknown to the public. Director Vidal found this to be an abuse
of process, but the cases were still allowed to continue. Since
that Director Vidal is no longer in charge, would you happen to
know who is behind PQA and OpenSky?
Mr. Squires. I do not know. That is one of the reasons we
instituted the RPI process.
Mr. Gooden. Your answer is the same as mine because I don't
know and neither do anyone I have spoken to. People keen on
using the American patent system are worried about the safety
of their patents, especially those in Texas.
If unknown entities backed by unknown individuals start
emerging out of thin air and tying up patents in endless
proceedings it is not a good look for transparency and
reliability of the American patent system. I believe you have
been acting in the interests of promoting American innovation.
I thank you for that.
We would really appreciate it if you would look into this,
take appropriate action, and get back to me with the answers I
can't seem to find.
Mr. Squires. Thank you for the question. We will look into
it and be happy to speak further.
Mr. Gooden. Thank you. We have also heard concerns from a
lot of folks in the patent process about the lack of
predictability between administrations. Is there something
Congress can do or should do to help with transitions in the
future?
Mr. Squires. Well, one of the things that would be of great
value would be to continue with the fee setting authority and
fee collection authority, which will be expiring in September.
We especially saw that to the dramatic benefit of our
stakeholders this year with the government shutdown of 43 days.
The Patent Office did not shut down. We operated on
reserves because we were able to do so, running like a business
from this fee setting authority. My No. 1 ask would be for that
to continue.
Mr. Gooden. Noted and thank you. Thank you for all the work
you are doing. I yield back. I will yield to Mr. Massie the
balance of my time.
Mr. Massie. I thank the gentleman. Can you talk about how
important it is that patent holders are able to get injunctions
that the relief that comes after years of finally recovering
some kind of royalty isn't enough to dissuade infringers?
Mr. Squires. Thank you for the question. It is very
important. We have said so now on three instances. We formed a
Standards Essential Patent Working Group. Before that we have
come in three cases as partners with the Department of Justice,
or co-filer with the Department of Justice Antitrust Division
regarding the injunctive factors.
We intend to use our office as a policy voice for what is
important for strong patents. To not only be Born Strong but to
remain strong because they can get injunctive relief across all
the factors.
We filed in the ITC. We filed in District Court. I will
expect to see us there to articulate the reasons why strong
patents and strong injunctions for valid patents are important.
Mr. Massie. Isn't it true that the situation we have now is
the result of court rulings and not congressional action? Is
there something that Congress could do to restore injunctive
relief?
Mr. Squires. We are aware, certainly, of and have looked
into the provisions of the RESTORE Act, as I understand it is
called, which would rebalance injunctive relief considerations.
It has been hodgepodge in District Court and that has been part
of the problem. Especially if you are in an arm's length
negotiation and there is the holdout problem as it is called in
Standards Essential patents.
Having predictability would have a great market effect. The
provisions, like those in the RESTORE Act, is something that
only Congress can take up. We would be willing to have further
dialogs as to what that might look like.
Mr. Massie. Thank you. I yield back.
Mr. Issa. Would the gentleman further yield, Mr. Gooden?
Mr. Gooden. Yes.
Mr. Issa. Just one question very quickly. You said a
hodgepodge in District Court. Isn't the eBay decision a high
court decision?
Mr. Squires. Yes, it is. The--
Mr. Issa. The high court has ruled on injunctive relief. We
live under the guideline produced in interpretation of law and
the Constitution; right?
Mr. Squires. The eBay case sets forth the factors which the
District Courts have to apply. They have applied them in a
hodgepodge fashion.
Mr. Issa. Well, that is why we like PTAB. With that, I
recognize the gentlelady from North Carolina for five minutes.
Ms. Ross. Thank you, Mr. Chair and Ranking Member Johnson,
for organizing this hearing. Thank you, Director Squires, both
for your service and your testimony today.
I am proud to represent North Carolina's Research Triangle,
home to companies and startups that have built thriving
businesses from a single idea or an invention. This type of
innovation and growth couldn't happen without strong
intellectual property protections that we enjoy here in the
United States and that came from our Constitution.
Yet, small inventors are having a much harder time
defending their patents. The PTAB allows, as we have heard,
multiple challenges even from the same party to a patent's
validity, forcing the patent holder to defend their invention
again and again, often until the patent holder gives up and
settles, mostly because they don't have the resources.
Not only that, but challengers often file parallel suits
against the patent's validity in Federal District Court, which
we have heard about, hedging their bets and hoping to get a
finding of invalidity in one venue or the other. Of course, the
challengers have more money to get to do that.
As we know and we have discussed, the USPTO filed a Notice
of Proposed Rulemaking last fall to help address this problem
of repeated challenges to a patent's validity. I really
appreciate Mr. Massie's comments on this earlier in this
hearing.
I just want you from the perspective of a small inventor to
tell us what you have heard about the difficulty of defending
their patent in different venues or having multiple parties
come after them?
Mr. Squires. Thank you for the question. Before I took
office, I represented startups, small entities, and small
inventors for about 10 years. I may be the only director who
has had that direct experience.
It has been a terrible problem, as you have referenced.
Sometimes we have seen as many as seven petitions keep coming
in waves. That is why under the NPRM we are saying that we have
to have some parity, quiet title finally. If you want to still
have multiple filings or multiple parties, join it. One join
and done.
To your question on the individual small entities'
experience, it is a killer. People are not able to become I am
aware of a funny little patent emanating out of Stanford in
1999, the PageRank patent. That is now, of course, Google.
Where our next Googles are coming from, where our next big
companies and big tech are coming from start in someone's
garage, and they are small inventors and they need to have the
same respect as afforded everybody in the system.
Ms. Ross. Great. Well, I am a cosponsor of the bipartisan,
bicameral PREVAIL Act along with Congressman Moran from Texas,
and then, of course, Senator Tillis and Senator Coons. We are
hoping that bill will get a hearing. Then Congress can have its
say.
I do want to ask a question that was mentioned in some of
the opening statements.
As we know, there have been reports that the USPTO and the
Department of Commerce are considering plans to institute a
value-based patent fee. Last fall I led a bipartisan effort
with several Members of this Subcommittee to Secretary Lutnick
urging the Department not to move ahead with the patent tax
because, again, I believe it will hurt small inventors more.
Although Secretary Lutnick recently said in a Senate
hearing that this was not a plan, his answer appeared to leave
open the possibility of extracting more value from patents by
other means.
At any point in your tenure at Commerce or with PTO have
you considered this value-based patent tax? How would you
implement it if you did it?
Mr. Squires. Thank you for the question. I echo Secretary
Lutnick's statements. He explained how you would do that, how
you would value that.
I have never been in those discussions where value had any
consideration. It is not something that is on the table or even
could be done.
Certainly, the Patent Office would not be in the business
of providing market valuations for people on their patents. We
are in the business of granting them, making sure they are Born
Strong, and letting the market work.
Ms. Ross. Well, thank you. I hope it remains that way. I
yield back.
Mr. Issa. I thank the gentlelady. I now recognize the
gentlelady from Florida for five minutes.
Mr. Massie. I have an unanimous consent.
Mr. Issa. The gentleman is recognized for a unanimous
consent.
Mr. Massie. I ask unanimous consent to submit a five-page
letter from a U.S. inventor to the record.
Mr. Issa. Without objection, so ordered.
Mr. Massie. Thank you.
Mr. Issa. Now, the gentlelady may proceed.
Ms. Lee. Thank you, Mr. Chair. Director Squires, thank you
for being here with us today.
The work of the U.S. Patent and Trademark Office plays such
a critical role in supporting innovation, protecting
intellectual property, and ensuring our patent system functions
effectively for businesses and inventors. I appreciate your
time with us here today.
I continue to hear from retailers and manufacturers, and
Main Street businesses that they are being sued for widely used
off-the-shelf technology like Wi-Fi systems or point of sale
devices, and being forced into settlements because the expense
associated with litigating in our Article III courts is simply
too high.
How do you respond to concerns that limiting access to PTAB
is increasing litigation costs and forcing small businesses
into these settlements?
Mr. Squires. Thank you for the question. The high cost of
litigation is, of course, a concern. That is why under the AIA
IPRs were designed as an alternative to litigation, lower cost
litigation. The IPR is not the only game in town. People also
tend to conflate PTAB, limiting PTAB. That is not what is
intending to happen, that is not what we were intending with
the rule. There is always the avenue of reexamination. We would
love to see people utilize PGRs more effectively, sooner in
time, clearer title.
In general, we preferred a more laid open model where you
take your shot but take it now and take it once and for all. As
I said, instead of one and done, people need to think about as
one join and done. There is the ability for collective action
and there is also, then, of course, District Court. There is at
least three alternatives available under the PTAB.
Ms. Lee. One of the other things I think is important on
that front in trying to minimize that down the road litigation
you touched on in your opening testimony. That really is the
quality of the initial examination.
I want to hear more about what you are doing with
artificial intelligence and how AI is being used on the initial
patent examination.
Particularly I would like to hear you have emphasized
human-in-the-loop approach using AI but also having humans
involved. Tell us a little bit more about that and what
safeguards do you have in place to ensure that using AI tools
is not introducing any sort of bias or narrowing the scope of
prior art consideration?
Mr. Squires. Thank you for the question. It has multiple
touch points, of course, in the office. I will give you one
example.
We have launched what we call ASAP!, an AI-generated pilot
program which takes the prior art, gets it to the applicant
before the first office action. Literally, the examiners and
the applicant are on the same page as the prior art beforehand.
They have some agency as to what they want to do. They can
make an amendment. They can marshal their arguments or decide
this is not going to go well, we are not going to waste our
resources, and refile with something direct to their resources
to something that might be more productive.
We are trying to get information in the hands of people at
soon as possible point where they can do something with it and
have people be on the same page.
On the eligibility side we have formed a 101-working group.
We had started to deploy AI agents to assist in some of the
areas where there are the thornier issues to decide on 101 and
to give some assistance to the examiners. Always it will be a
human in the loop.
The larger vision is, as I mentioned in my opening
statement, to have the examiners be able to examine a cadre of
agents, deploy them as they see fit to their cases, and be able
to do thousands of hours in hundreds of hours' time but still
remain expert in their field, and be just as equipped as the
private sector applications coming in to meet the examination
challenge.
Ms. Lee. Thank you, Director. I yield the balance of my
time to the Chair.
Mr. Issa. I thank the gentlelady. A couple of quick things.
You keep talking about these off-ramps, these other
opportunities. Just between two people who have dealt with
patents for a long time, an ex parte reexamination is exactly
that, it is the inventor and an examiner, sometimes the same
examiner, sometimes someone different, talking about whether or
not some third-party allegation is correct or not.
It is a one-sided process that favors dramatically the same
or substantially same patent. It is not an even playing field.
The PTAB exists because ex parte was ending almost always
successfully favoring the reinstatement or the continuation of
a patent compared to the outcome of PTAB. Isn't that true?
It is not a place that really if you have been accused it
makes any sense to throw it and hope for the best without
seeing anything until it comes out?
Mr. Squires. That may have been the case in the past with
reexamination. I don't believe it is that case now. In fact, it
has become a quicker and almost the same outcome experience as
the PTAB has been.
Mr. Issa. I appreciate that. I would love to have a longer
dialog, but I don't own the time. The gentlelady from
California is recognized for five minutes.
Ms. Kamlager-Dove. Thank you, Mr. Chair. Director Squires,
before we get into your recent policies, I just want to make
sure that we are grounded in the basics because much of this
debate seems to move past them too quickly.
To my understanding IPR is an administrative process
allowing parties to ask the Patent Trial and Appeal Board to
reexamine whether an already-issued patent is valid. It was
created to provide a faster, more cost-effective alternative to
litigating patent validity in Federal court, recognizing that
initial patent review can be imperfect.
Instituting a review means the board agrees there is enough
merit to examine the challenge, while denying institution means
the challenge does not move forward. Is that correct?
Mr. Squires. In general, the IPR process has two
components, one discretionary and one merits.
Ms. Kamlager-Dove. Right. OK. At the end of the day, it is
ultimately about protecting U.S. companies, inventors in those
parents? That is what we are here to.
Mr. Squires. We are trying to make sure where there has
been, especially when there has been error in examination--
Ms. Kamlager-Dove. Right.
Mr. Squires. --there is redress available.
Ms. Kamlager-Dove. OK. There are concerns raised that IPR
may disproportionately impact individual inventors and small
entities. There has been discussion about nonpracticing
entities, entities that assert patents but do not manufacture a
product, and their role in patent litigation, including some
that may have foreign ownership or backing.
Does the USPTO distinguish between different types of
patent holders when evaluating how PTAB policies affect
stakeholders?
Mr. Squires. It is certainly a discretionary consideration
that we invite people to tell their story. As I said, we just
recently announced guidance that for American manufacturers, or
if they are patent holders and there are petitions filed
against us, tell us about that. We want to know.
Conversely, if they are State actors or foreign sovereigns
they can't be in PTAB under the recent return mail application
to foreign sovereigns or State actors. We need to know who is
there and what their particular situation is.
Also, with the guidance on the manufacturing we reference
small businesses. We want to know what the dynamic of whatever
side you are on is before instituting proceedings.
Ms. Kamlager-Dove. OK. You are saying if there are
sovereigns, if there are foreign actors, you do want to know?
Mr. Squires. Well, we need to know because they aren't
allowed any feedback.
Ms. Kamlager-Dove. Yes. OK. That means that you also have
collected this data. You have done data collection on this so
you know?
Mr. Squires. There is a real party-in-interest requirement.
Ms. Kamlager-Dove. Uh-huh.
Mr. Squires. The RPIs have to be identified at the time of
filing. That is a disclosure.
It can be raised by the patent holder in response to a
petition, and so it's a disclosure type process. We do have
data on the number of foreign State actors who collectively
from foreign countries who have appeared in PTAB historically.
If you aggregate them, they would rank No. 4.
Ms. Kamlager-Dove. OK. If I asked you to provide to this
Committee a breakdown of that data, so, broken down by entity
type, domestic versus foreign ownership, whether the patent
holder manufactures anything, you would be able to do that?
Mr. Squires. I don't know the extent to what granularity we
have.
Ms. Kamlager-Dove. Uh-huh.
Mr. Squires. I can provide you with a list of who the
filers are, yes.
Ms. Kamlager-Dove. All right. Well, that would be helpful
because I think the question is, are different entities treated
differently? Small versus big is always going to be an issue.
When there is also concern that a company has foreign backing,
for me that also raises national security concerns; right?
I wouldn't want a Huawei, for example, getting in the mix
and playing a role in seeking or holding a patent that should
be for a U.S. inventor or company.
Mr. Squires. I understand. We are happy to work with your
office. I would direct your attention to the Corning Optical
memo that I issued, which did have a listing of IPR petitioners
in aggregate by IPR petition.
Ms. Kamlager-Dove. OK, great. We are on the record as
saying we are requesting that information. We would love it for
you to be able to share that with the Committee.
Mr. Squires. Thank you.
Ms. Kamlager-Dove. I do have--I am sorry.
Mr. Issa. Do you have an unanimous consent?
Ms. Kamlager-Dove. Yes, I do, Chair. Ask unanimous consent
to enter into the record, ``Trump appointees are hijacking the
patent system.'' This is dated May 2025 prospect.
The next one, enter into the record ``Trump's PTO Pick's
Fortress Ties Signal Base Tech Patent Fights.''
Mr. Issa. So ordered.
Ms. Kamlager-Dove. Without objection. Thank you.
Mr. Issa. At this time, I will also put into the record by
unanimous consent a copy of the docket for the Patent and
Trademark Office, the revised proposed rules that we have been
alluding to.
Additionally, a number of letters. I will ask them to be
placed en bloc which they do include, but not limited to,
patents for affordable drugs, general action patent, Crypto
Counsel on Innovation, and a number of others.
Without objection, so ordered. We now go to the gentleman
from South Carolina for his five minutes.
Mr. Johnson. Mr. Chair, I have a unanimous consent. I would
like to enter into the record a letter from the Counsel for
Innovation Promotion, dated March 24, 2026, addressed to
yourself and me regarding this hearing.
Mr. Issa. Without objection, so ordered. The very patient
gentleman from South Carolina is recognized.
Mr. Fry. Thank you, Mr. Chair. Director, thank you for
being here. The PPAC and TTAC have served as effective vehicles
for the private sector subject matter experts to offer
specialized guidance to the PTO. I would like to commend you
and Secretary Lutnick for appointing new members to these
bodies last fall.
When do you anticipate the remaining vacancies to be filled
and the Committees will reconstitute and begin their work?
Mr. Squires. Thank you for the question. Very soon. As we
have seen both on the PPAC and TTAC side there is really an
all-star roster. We just extended an offer last night to the
individual mentor which is the statutorily required person that
crystalized everything. We are hopeful very soon.
Mr. Fry. Great. Thank you for that. I am going to move on
to a separate issue on U.S. research and development.
Obviously, we are competing with China on any number of
things across many fields: Medicine, telecommunications,
manufacturing, and emerging technologies. In the context of
patents, how do China and foreign competitors undermine our
system in your view, very briefly?
Mr. Squires. As brief as I can. In several ways. One is
known as flooding the zone. We have seen a lot of low-quality
applications in different areas. Others are fraudulent filings
which we have deployed some AI tools and identified.
As I said, we have moved, especially on the trademark
register, and tens of thousands of fraudulent applications. The
third arrow in our quiver that we just announced is a rule that
you must be a U.S. practitioner before the Patent Office and to
file papers. Accountability is, of course, important. Those are
ways we are trying to address these issues.
Mr. Fry. Regarding pharmaceuticals, what steps has your
office taken or plans to take to ensure that the U.S. remains a
global leader in pharmaceutical innovation?
Mr. Squires. Again, our No. 1 goal is to have patents Born
Strong, make sure they receive rigorous and thorough
examination, and get to market in a timely manner.
Mr. Fry. Switching gears again, on the IPR, we have talked
about that a lot today, how is the office thinking about
striking the right balance related to IPR, ensuring that
manufacturers and strategic industries can effectively defend
against questionable patents while also preserving the strong
protections in access for small businesses, startups, and
independent ventures?
Mr. Squires. Thank you for the question. Yes, it is,
balance is the key word. It is a unitary system. I like to quip
sometimes that means that someone is always unhappy.
Nevertheless, we are trying to strike the balance, especially
on the discretionary side, as I mentioned, where there are
small business factors or manufacturing, it cuts both ways.
Tell us your story.
We even had issues where things that have been
controversial, like I said, all expectations cut both ways.
There have been assertions where patents have lapsed and then
come into being, or licenses have been issued against the
expectations, and those get taken into account whether to
institute or not.
Mr. Fry. Thank you for that. You would agree that China--
you said flood the zone earlier--so you would agree with me
that nation-states like China challenge current patents or
trademarks pretty frequently. Is that fair to say?
Mr. Squires. They have. The new precedent will end that
process.
Mr. Fry. OK. How do we deal with domestic companies that do
that?
I will give you an example. The Monster Energy drink is
like the No. 1 filer against existing trademark applications.
They are far and away above everybody else. They have been
labeled as a trademark bully of the year by multiple times, at
least since 2012.
I don't want to single them out, but I do think it is real
problematic. Some of these cases are like camping gear because
the name is 4Monster; a craft brewery company. What I am
concerned about is big companies with a lot of assets that come
in and swing at small restaurant owners.
I guess there was a restaurant in Ohio, it is a shawarma
restaurant and they are called the Monster Shawarma. Somehow
that is a patent or a trademark infringement on Monster. It is
just really aggressive.
How do we protect small businesses against trolls like
Monster Energy drinks?
Mr. Squires. It is a difficult question. The way we protect
them is, I early access files if they can. Monster, of course,
has a famous mark and it has a wider berth in courts in
assertion. A trademark system is a registration system. It
levers off of use in commerce, often from State rights. They
register Federal as that.
The part of the solution is to let people know we are here.
You should file.
Mr. Fry. What about Rule 11 sanctions? If they are filing
frivolous things and they are, obviously, I am not suggesting
that all their cases are not meritorious, but I am suggesting
that it is a little bit alarming that they are the No. 1
company in the country filing against small businesses. They
are really aggressive in their tactics.
What I would like to know is if you have got tools in your
toolbelt to rein some of these practices in. You have already
got a full docket. How do we rein in companies like that from
abusing the system?
Mr. Squires. Again, thank you for the question. On the Rule
11 basis that is, of course, more of a District Court
litigation dynamic.
In terms of utilizing our office in terms of oppositions
per se, those are something that we do have a TTAB and we do
have discretion around those types of matters. Again, just like
the patent side, tell us your story. That is often compelling.
We are trying to be responsive to the real-world dynamics out
there.
Mr. Fry. I appreciate you doing that. This isn't a
criticism of you or the office. I just want to make sure.
Obviously, we want to focus on China and the things that they
are doing to undermine our competitiveness. We also have some
problems domestically, too, some of these people that abuse the
system.
Thank you, Mr. Chair.
Mr. Issa. That is great. Just one clarification. You used
the term famous mark. IBM is a famous mark. Ford Motor is a
famous mark.
Monster Cable doesn't--Monster drinks don't meet that
requirement, does it? You used it but I don't think you meant
to use it.
Mr. Squires. I have not come to that conclusion, but--
Mr. Issa. To be a famous mark, the word monster all by
itself would have a secondary meaning; right?
Mr. Squires. That would be for a court to decide. Those are
the parameters, yes.
Mr. Issa. OK. Monster movie, Monster Cable, which every,
every professional musician uses and predates Monster drinks, I
am trying to understand because it is important for this
hearing.
Do you want to go back and revise for the record your
statement that Monster drinks is somehow because it, obviously,
is a huge difference in how you and the courts deal with that
allegation; right?
Mr. Squires. I would revise my saying and say if Monster is
famous mark then these the types of things that they could do
in court.
Mr. Issa. I absolutely agree with you. I have certainly
seen a blue oval without the word Ford be considered as
important because it is a famous mark. I appreciate that.
I now ask unanimous consent en bloc that a number including
submissions includes from Arnold Ventures, from Entertainment
Software Association, from the ES--that is the same one. Hang
on for one second.
Yes, OK, from the Business Software Alliance. Some of these
are long. They really have things to say to you, Mr. Secretary.
From the most famous of all, the CTA, the Consumer
Technology Association, who opined in the negative, to say the
least.
There are too numerous. We will be giving them all to you.
Without objection, so ordered. I now recognize myself for a
number of questions.
Isn't it true that the number of so-called serial
applications, the repeat use of PTAB, was less than one
percent? Yet, your rule applies to 100 percent. Is that
correct? The historical serial attacks using PTAB is less than
one percent?
Mr. Squires. Of PTAB actions filed, of IPR actions filed?
Mr. Issa. Correct, sir.
Mr. Squires. I don't know the exact figure. I will--
Mr. Issa. OK. That is the figure that staff on this side
comes up with. Please give us your answer for the record.
I have already discussed the ex parte. We are going to
agree to disagree that you performed anything, simply because
it is still a process that there are only two people in the
room and one of them is not the person who submitted the
documentation, they are not part of the process. That is why it
is ex parte; correct?
Mr. Squires. That is correct, ex parte.
Mr. Issa. OK. I have got a great many items to say the
least, as you could tell.
Probably the largest one is currently when I mentioned that
you have taken cases in which they were discretionarily
allowed. Process had nearly reached a conclusion and then you
pulled them back, essentially retroactively, discretionarily
said they never existed.
Where do you believe you get that authority?
Mr. Squires. I don't know which specific cases you are
referring to or the particular facts of the matter, but the
Federal Circuit has--
Mr. Issa. It would be that Interactive Communications is
one example that we have that you did that to. I cite this
because when it goes to a final decision, if you want to
reverse it you can, but there has to be, essentially, it is not
without paper. When you simply do a denial there is no paper,
as we have seen today.
Retroactively doing it makes a huge different because that
discretionary denial after the facts have been laid out, after
it has gone through the process and expense then denies the
individuals either an outcome, possibly reversible, or an
explanation, which you did not give in that case.
Mr. Squires. Again, I am not familiar with the underlying
case even by caption. However, there is wide discretion
afforded. I believe the use of discretion would include
changing your mind.
Mr. Issa. Well, I don't believe you have that discretion
once a process begins. We would like you to cite, as you did
very eloquently in others, where you believe in the America
Invents Act that you believe you have that discretion. Because
we disagree.
Additionally, since that discretion is not challengeable in
court and, yet, the final decision would be, you see where the
ambiguity is. You have taken away the ability to have
additional appeal because you have denied them by using the
discretionary denial after the fact, which takes away their
ability to actually have any further redress. Correct?
Mr. Squires. I don't agree with that. The authority is 316-
35 U.S.C. 316(b). I am required by statute in rulemaking, we
use this in our decisions for to take into account the economy,
integrity of the patent system, and the efficient use of
resources in the discretionary part of our what we do.
The merits part is different, of course. The discretion
piece is the one component before you get to the merits.
Mr. Issa. OK. I am going to use my final time to ask some
very tough questions. You mentioned Secretary Lutnick having
500 patents. Is it true that, to your knowledge, that the
Secretary during his tenure was often a plaintiff suing in
District Court, directly or indirectly?
Mr. Squires. I am recalling days of eSpeed and BrokerTec,
and there were several suits back in the 2000s around that.
Mr. Issa. It is fair to say that from the monetary
standpoint he benefited from lawsuits and may or may not have
an opinion on whether he likes PTAB or not, since he began
reducing PTAB's effectiveness during his tenure before you came
onboard directing the acting?
Have you had any discussions with the Secretary concerning
any of these policies?
Mr. Squires. The NPRM that was issued is the Secretary's
first and signature rule. He was absolutely behind those.
Mr. Issa. OK. As you sit here today the Secretary has a
role. Let me ask one last question. To your knowledge has the
Secretary eliminated all owned assets that could in any way
benefit from these changes?
Mr. Squires. I have no knowledge one way or the other.
Mr. Issa. OK. Would you to the best of your ability ask for
the record, or perhaps we will ask the Secretary directly by
subpoena. It is my understanding that he may not have
eliminated all his holdings. Therefore, there could genuinely
be a conflict as you, whether right or wrong, whether you have
authority or not, dismantle PTAB cutting by 80 judges and
continuing to cut by discretionary, both regular and
retroactive.
There is a lot more to ask. I will ask the rest of them for
the record and ask that you agree to answer them if we send
them to you within five days?
That is actually a question we normally ask at the end by
unanimous consent. If you will agree to take written questions
from the record from all Members?
Mr. Squires. I would welcome the chance to interact with
this body.
Mr. Issa. Thank you. In conclusion, this has been an
illustrative hearing. I will say, and this is usually something
the Minority would be saying, that it has been too long, it
took too long. We are now over 15 months into an
Administration, and this is the first visit of a Committee that
to the Committee of jurisdiction.
It is our hope that prior to the close of this Congress
that we will have you back for at least one additional hearing,
not to repeat the subjects but to followup on them. It is the
normal practice to have a regular dialog with the Patent and
Trademark Office. It is my personal hope, and I believe the
Ranking Member's personal hope, that this dialog will continue
so that by the time we come to the next one we won't be talking
in single digits how often we have been able to have
interactions with your office directly.
With that, I am required to say this concludes today's
hearing. I want to thank our witness for appearing before the
Congress.
Without objection, all Members will have five legislative
days to submit additional written questions, and to the
witness, and additional materials for the record.
Without objection, we stand adjourned.
[Whereupon, at 12:08 p.m., the Subcommittee was adjourned.]
All materials submitted for the record by Members of the
Subcommittee on Courts, Intellectual Property, and the Internet
can
be found at: https://docs.house.gov/Committee/Calendar/ByEvent
.aspx?EventID=119088.
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