Sen. Coons on the U.S. patent system: "If corrective action isn't taken in years to come, the broader public may be asking why all the newest and most advanced innovations and products…are created somewhere other than the United States"

Statement

U.S. Senator Chris Coons (D-Del.), a member of the Senate Judiciary Committee, today delivered remarks and questioned witnesses at the U.S. Patent and Trademark Office oversight hearing.

"Yet, notwithstanding widespread and clear evidence of the value of a robust, intellectual property system, the system in the United States has experienced significant upheaval, particularly with respect to patents in recent years," said Senator Coons. "In the past decade, there have been a variety of actions on the part of the judicial, executive, and legislative branches, which have had the cumulative effect of significantly weakening patent rights. And, the impact of these changes is becoming apparent. Last year, the United States fell from 1st place to 10th place in the ranking of the U.S. Chamber of Commerce on the strength of each country's patent system and, this year, it fell to 12th."

Full audio and video of Senator Coons' opening remarks available here.

Full audio and video of Senator Coons' Q&A available here.

Senator Coons' opening remarks are below:

Thank you very much, Chairman Grassley. Thank you both for holding this hearing and for your serious engagement in intellectual property matters. And, to Director Iancu, I want to begin by recognizing the exciting, the critical, the vital work of the U.S. Patent and Trademark Office and to thank you for your role in its leadership. You have the vital task of overseeing an office employing more than 12,000 people with the key mission of granting patents and registering trademarks. In fiscal year 2017, that meant receiving 650,000 patent applications and 600,000 trademark applications. And, as we know well, these are not just empty statistics but the lifeblood of innovation and thus of the American economy.

The Department of Commerce stats show that in 2014 IP-intensive industries contributed to 28 million jobs and $6 trillion in value to our national GDP. Research shows if a startup receives a patent, its chance of securing venture capital increases by over 50% and it's likely to have better growth in employment and sales. Yet, notwithstanding widespread and clear evidence of the value of a robust, intellectual property system, the system in the United States has experienced significant upheaval, particularly with respect to patents in recent years. In the past decade, there have been a variety of actions on the part of the judicial, executive, and legislative branches, which have had the cumulative effect of significantly weakening patent rights. And, the impact of these changes is becoming apparent. Last year, the United States fell from 1st place to 10th place in the ranking of the U.S. Chamber of Commerce on the strength of each country's patent system and, this year, it fell to 12th.

One cause is the impact of the new post-grant proceedings at the USPTO before the Patent Trial and Appeal Board, something I look forward to discussing today. While some form of post-issuance review at the USPTO is desirable, the current review system is systematically biased against patent owners based on statistics from its first five years. This dynamic has left investors with a growing impression that putting money behind innovative ideas backed only by a patent may not be a wise investment strategy to the detriment of innovators and ultimately the entire American economy.

Another critical problem facing our patent system is the lack of clarity on which inventions are and are not eligible for patent protection. Recent Supreme Court decisions have called into question whether patents are appropriate to protect innovations in some of the most dynamic areas of our economy -- software developments and medical diagnostics. While the impact may be noticeable now to patent practitioners and inventors, if corrective action isn't taken in years to come, the broader public may be asking why all the newest and most advanced innovations and products in these areas are created somewhere other than the United States.

Corrective action is partly the responsibility of Congress and to that end, I've introduced legislation designed to take the first steps at restoring the United States patent system to being the world's gold standard, along with Senator Hirono who is with us today and my lead cosponsors, Senators Cotton and Durbin. I've reintroduced the STRONGER Patents Act, which aims to restore balance to the post-grant proceedings before the PTAB among other things. It does this by aligning PTAB standards to district court standards, better accounting for the fact that issued patents have already gone through a significant examination by a governmental agency. It also aims to correct some of the apparent abuses of post-grant proceedings including strict limits to curb repetitive abusive petitions and a standing requirement to ensure petitioners have a legitimate interest.

Additionally, along with my friend and colleague Senator Hatch, I've introduced the Big Data for IP Act, which encourages PTO to complete its ongoing IT upgrades and explore how new tools like machine learning and big data can improve the patent examination process. The universe of prior art continues to expand the volume of patent and trademark applications continues to rise, these are good things, but we need to ensure our examination systems keep pace. In exchange, PTO would receive an extension of its fee-setting authority, critical statutory authorization that gives the PTO the ability to anticipate an account for infrastructure development through responsible price setting.

Both of these bills have a thing in common. They recognize the centrality and importance of the U.S. Patent and Trademark Office to providing the foundation of our country's innovative ecosystem. In fact, many of the proposals in the bill I just referenced, the STRONGER Patents Act, could be accomplished through the rule-making authority vested in you, Mr. Iancu, as the director. It was by design of the landmark Leahy-Smith American Invents Act of 2011 to ensure the agency could fine-tune these proceedings without required congressional intervention. I think the time for agency action to take such corrective measures is long overdue. I was encouraged by your recent speech before the U.S. Chamber of Commerce where you said we need to have a new dialogue in our country focused on the benefits of the patent system rather than solely the abuses. I could not agree more.

I look forward to beginning that dialogue today and to hearing your thoughts on what actions you think might be appropriate for the agency to take, so we can make our nations patent system better for today's and tomorrow's innovators. Again, Mr. Chairman, thank you for convening this hearing.

Source