“Oversight of the U.S. Patent and Trademark Office”

...And with it, the American experiment itself, the American experience itself. Last month, I told the head of the UK IPO how our constitutional charge allows us to lean into AI, to quantum, to medical diagnostics, 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's why it's incumbent upon the USPTO to have an America-first IP agenda built atop the unique legacy our founders bestowed upon us. And we're doing exactly that with the urgency of now. As I'm 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'm 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 assistant delivers a top 10 list of prior art before the first office action, providing quicker pathways to allowance. And across both, AI fraud detections helped us purge 70,000 plus baseless filings in just under a year. You see, AI tools will become our examiner superpowers, supplying them with a cadre of agents to deploy as they see fit. On policy, Congress affords us discretion and 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 end with eligibility determinations and the back end as to trials and error corrections with new feedback loops in between. Mr. Chairman, I am humbled and proud to lead this unique and vibrant agency. We are back on our front foot and delivering the brilliant tomorrows 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. And with born strong protection, new ideas soon 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.

So brief, so very brief. I thank you. We now recognize the gentleman from Kentucky, Mr. Massie, for five minutes.

With the last member of the administration that I was very nice to was Kristi Noem and she was removed 48 hours later, but at that risk, I want to thank you for the great job that you're doing. I like your analogy of intellectual property to currency. But 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 patent and copyrights were the foundation that would allow our country to grow and I appreciate you doing that, but the it is an appropriate analogy because of intellectual property to currency because we've 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're called into question when you try to use that currency, you have a problem. And that's the way it's 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's created too much uncertainty. And I very much appreciate the steady hand that you've 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, but we need somebody in charge. We need somebody to exercise common sense in the application of the laws that we have passed and it seems to me that you're doing a very good job of that and could you tell us about the rule that you're proposing and the actions that you've taken in terms of exercising discretion on the IPRs?

Thank you, Congressman. I'm happy to speak to the notice of a proposed rulemaking we have put forward. Basically, it's intended to restore fairness and balance to the IPR process. There have been instances where there have been as many as seven serial filings and it's intended to be able to have the matter adjudicated once and for all early and it's been termed, I will say as one and done, but I think that's a misnomer. There's liberal joinder provisions that are carried through into the rule and so I would say it's one join and done. And the facility is provided for if there's a petition filed after there's been an adjudication, petition's filed, people can join. The answer isn't serial filings, we think the answer should be gang tackling at the time when it can be had. The preference would be to have a PGR-like process where things are laid open. That's not always possible as has been discussed, things sneak through, but there should be a point in time where there's quiet title, there's finality, and people can have that chance and do it together, but it's got to be adjudicated once and for all.

I agree. I think you once you have the imprimatur of the government and you've survived a challenge, that's important because what I've noticed the last 10 years, a lot of people are shying away from companies that would have been based on intellectual property. I've heard people, inventors say, I'm not even going to file the patent, I'm just going to try to rely on trade secrets. That creates a world of haves and have-nots when everybody can just keep all of their stuff secret and that's incentivized because of a patent system that's not working. And the PTAB, I do think it was probably at least from the people who voted on it originally intended to expedite this adjudication, but it's created uncertainty that has hurt our country, hurt our inventors, and I'm glad to see that you're exercising some common sense in the application of it. Any law can be weaponized and we saw that the PTAB law has been weaponized and I appreciate you taking it back and using it for common sense. That, I'll give you my last 15 seconds.

Thank you very much, sir. And also to be reminded, there IPRs are but one avenue. There's always reexamination, there's post-grant reviews, and there's district court. What we had found with 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 instituting an IPR.

I thank you and thank you for taking out much of the redundancy that exists because it doesn't get cheaper when people keep getting subjected to continuous IPRs or they survive the IPR and then go to court and I'll yield to Mr. Issa.

Thank you. And 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're sued. So it the chicken or egg often starts with a lawsuit and you go to the PTAB in order to shortcut the time it takes to show invalidity, correct?

Yes, sir. There's a one-year window if you've been sued in district court from which to avail yourself to the PTAB.

Thank you. We now recognize the ranking member of the subcommittee for five minutes.

Thank you, Mr. Chairman. Director Squires, I would hope that you would agree with me when I say that the greatest asset of the USPTO are its employees. And employees at USPTO have described the environment as, quote, rife with rumors, paranoia, and disillusionment, end quote. Just last week in a government-wide 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? And 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?

Thank you, Congressman. We have robust facilities for reporting violations through our EEOC department. They are fantastic as to examiners and I do agree with you, they are the crown jewel of the USPTO, they're the best in the world at what they do, and we're trying to make them even better equipped to deal with the what's become a crushing backlog of work that they've so dedicatedly and assiduously have chipped down on. We've increased awards, financial awards to examiners and we're working on the personnel.

But what factors have contributed to the dissatisfaction that is evidenced by the survey?

I'm equally interested in making sure morale improves and have offered engagement. I think the biggest factor had been the backlog getting out of control. It rose to a historic high of 837,932 applications unexamined. And this is just unacceptable as the Secretary had said.

Well, it's not the volume in and of itself, but it's must be something that the agency has done to address that that has caused the lack of morale or the morale to plummet. What are those factors?

The specific factors we just concluded an employee survey last week and we'll be working on those and examining them. I myself hold host a musing, I did them weekly now monthly for people to tell us what they think. That's been my mantra coming in. And there's forums for people to tell us where there are problems. One of the issues that's been unhappy was that caused some unhappiness has been not having deploying people on the front lines of 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 and supervisory has been very important, it's consistent with other other international offices and there's been some adjustment to that. There's some initial unhappiness with that, but we've been at that now for over six months and I think morale is getting better.

Okay, I'm going to move on. After the success of the four regional offices created in the American Invents Act of 2011, Republicans and Democrats worked together to pass the Unleashing 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, and 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 at a more local scale. How does placing the Southeast regional outreach office at headquarters advance that mission, and 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?

Congressman, the that decision, of course, was made and effectuated before I took office. I took office in September. However, my ongoing responsibilities are, as you indicated, access, making sure there's access. Now, we have literal compliance with the regional office footprint in having four, and we recently had five, and the Denver office was closed down, resulting in a savings of over $3.8 million per year. But savings isn't the issue, access is, and in favor of that, we've launched a community engagement office model. And we've invited just released a request for comment to the Southeast region, including Georgia, including all the states that were a part of that part of that defined region. And we've 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 literal no cost to the office. So we're moving to a model of the future. We're hopeful...

And you're doing it based on executive authority, undermining legislative authority. And that's a trend in your agency that is upsetting. And with that, I'll yield back.

I thank the gentleman, and I'm going to just join with you in 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 to that?

We would be happy to work with the chairman and ranking member.

Then we'll make that arrangement. We now go to the gentleman from Wisconsin for five minutes.

Thank you, Chairman. 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, and where do you stand on limiting enforceability of patents in those types of cases?

As to limiting enforceability, one thing I would point to is we recently a couple things in the PTAB. So we restored the real party in interest requirement. And with that, we just issued a decision called Tianma last week, which concludes 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. And so 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 looks to whether it's a small business in the U.S. or American manufacturing 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. So both sides of the equation, we're trying to take into account what the real world is and the process for filing petition, we say tell us your story so we can take these into account.

Very good. Another area where I know many members have concern is about foreign exploitation, and it's all about the patent prosecution highway, right, as it's referred to. Under this program, the USPTO will expedite 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 expedited examinations of its patents so long as it first gets a favorable exam in China, which is effectively a rubber stamp, right? So shouldn't we not kind of allow or shouldn't we be concerned, I guess, about kind of the way that's playing out?

Thank you for the question, Congressman. That is of great concern, and on and it's a bilateral concern. In general, when cases come in through the patent prosecution highway, they've already been examined, but there always is the risk of rubber stamping. But 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 PPH has helped them in other countries. So we're trying to always maintain that balance where American companies going into other offices are receiving the favorable treatment, they have behind them the examination that's occurred and hopefully, you know, born strong in the U.S., but we're always on the watch for incoming low-quality patents.

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. And assuming that that could be true, did the USPTO take into consideration increased litigation costs when conducting an economic analysis of your IPR rule, and if you didn't, then how did you handle that and why didn't you maybe look at that?

Thank you for the question. Yes, we have we are still in the process of finalizing the rule. We have received over 11,800 comments, which we're very excited about because people care. About 2,800 were unique, you know, clearing out all the the me-too ones or clearing out the ones that, you know, we don't like the patent office. But substantively, there are about 2,800. And by under the AIA, we are required to consider economic efficiency, resource allocation to the office, and effects of those sort. And so by all means, we are looking at what the costs are in the rule. I think I'm optimistic the rule will be finalized and I believe people will be very happy with the outcome.

What about judges' caseload? Did you take a look at that as well?

Yes, we are looking at all of that in the rule. Judges' caseload, but it's also not just district court forum, what's the effect on reexamination, what's the effect on PGR, and what's the effect also on ITC cases.

Thank you. I yield back.

I thank the gentleman, and my understanding is it was about nine to one opposing the rule in that 2,800, 2,500 to about 300. Sound about right?

Again, we're still working through it, but no, I've seen those numbers. I've seen 97 to three, I've seen 80-20. Our role under under the rulemaking process is to go through and respond substantively to the comments. The comments have been very helpful, and again, I'm I'm of the firm belief that we're going to see a rule that will be workable.

Okay, hopefully the ranking member of the full committee has read all 2,800 and can opine on what he saw as the ratio. Recognize the gentleman from Maryland.

Mr. Chairman, thank you. Director Squires, how did you come to file those trademark applications for the Board of Peace?

Thank you for the question, Congressman. We came to file I had them filed in response to a immediate cybersquatting land grab of the domain name. And for those who are unaware of the term cybersquatting, it's like identity theft.

So were you acting as a lawyer for the Board of Peace at that point?

No. That is my understanding. It was a very narrow filing for the logo and the name, and again, it was an intent-to-use application.

So in what capacity were you acting?

Well, the Board of Peace, this this is exactly the issue, and I'm glad to have the opportunity to explain it and respond to your letter. The Board of Peace has has not yet been formed as an international organization. And the cybersquatters eight minutes into the president's speech announcing it registered the domain name. And so that...

Is it a public entity, the Board of Peace, or is it a private entity?

At this point, I'm not sure if it's formed or not. We acted as a custodian so that they could have the mark.

How did you come to act as a custodian for that that trademark?

Under 35 USC Section three, it's my responsibility to advise the president through the Secretary of Commerce on matters of national security and all matters of intellectual property. That's the...

So the Board of Peace is a public entity, it's a governmental organization even though Congress has not created it? Is that right?

Sir, I don't know the status of whether it's an entity formed.

Okay, but how did you get involved in it? Did the president call you about the cybersquatting incident?

No, the president did not call me. It came up through several organizations about the cybersquatting and the action needed needed to be taken to address...

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?

The...

There are dozens of them. I mean, I found them this morning just on the way in.

Well, again, reference was made to shakedown. This was registered, this particular boardofpeace.org, and without that, you don't have the ability...

You registered that?

No, no. A cybersquatter did. Eight minutes into the president's...

Well, but you don't have to talk about a cybersquatter, there are dozens of other groups that have peace in their name, right? Well, look, where does your legal authority come from to file trademark applications on behalf of this Board of Peace, whether it's a public or private group?

It comes from the combination of 35 USC three and 35 USC two under the Lanham Act and in your opening statement...

Well, wait, do you usually act as a custodian for the intellectual property rights of other entities, or is this just for President Trump?

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 and then its intent to use application...

Who had the bona fide who has the bona fide intent to use it?

The USPTO.

The USPTO is going what are you going to do with it?

In the very limited services that we defined there, which is fraud prevention, misuse, and...

But is that a service you offer to all American citizens? In other words, if I'm thinking about maybe creating a group one day and we might want to have a trademark and I'm afraid somebody else has a competing trademark, you will go ahead and file the application for me?

My responsibilities are again under 35 USC Section three to advise the president on matters of national security.

So this is a matter of national security? Okay, let me ask you this, you've 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?

It's it's not an expensive fee depending upon...

The website says 350 bucks, is that right?

Generally, yes.

It's not expensive. Okay, and my one of the able lawyers on my staff just passed me this, that you filed a petition on January 21st, 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're in now acting both as a representative of the Board of Peace and also the trademark office that's going to pass upon the petition. But why did you seek a waiver for the $350 for the Board of Peace and why did you grant it?

The waiver was sought under the particulars of the intent to use application as the custodial filer, and I did not grant my own application.

Well, your signature as I'm reading it, you filed this on the 21st and then you approved it on the 22nd.

Well, I would like to see the document to which you're referring, but...

Okay, we we will get you those documents. Are you saying you would not have approved it had you seen it?

I'm saying I don't recall this particular situation. But I do believe it's in my authority.

Your signature, okay, it was approved by Dan Vovonisi, but your signature is on the petition and I guess why did you request that waiver of the $350 payment for the Board of Peace?

Again, given that this is going to be an international organization and given the situation with the intent to use and the bona fide limited scope that we had, I made that petition just as I signed the application and it was granted by someone else.

Okay, and then finally, you know that the Lanham Act forbids anyone from submitting an application unless they're the owner of the mark or the legal representative of the mark. So were you representing yourself as the owner of the mark or the legal representative when you filed the petition?

No, we are very clear it's on a custodial basis, we are not the owner, it will be transferred to the entity once it's formed.

Okay, well you're listed as the owner on the petition both for the waiver and also the application. So I mean that's the way the Lanham Act works. In other words, if I'm asking for your advice, could I get another company to apply for a trademark for me? What's the answer to that?

If you're the president of the United States, yes.

The president of the United States could have somebody else, the president of the United States has tons of trademarks, you're 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?

I'm again directing you back to USC 35, 35 USC section three where it's the Under Secretary of Commerce and Director of the Patent Office shall advise the president on national and certain international intellectual property policy.

Those are matters of public policy, they're not questions of representing the president before the trademark office which obviously creates a stark conflict of interest.

The gentleman's time has expired but you may answer.

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 USC.

I appreciate it, thank you, I yield back Mr. Chairman.

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?

That is my understanding, it's a very narrow filing for the logo and the name and again it was intent to use application, if nothing happens it expires of its own weight.

And just one thing because I'm a little new to government but you're in the article two, you're in the government that's headed by one person, the president, right? And no matter how many pockets you have in your suit, it's still one suit jacket, right? So 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'm just not quite understanding the gentleman's question.

Mr. Chairman, are you saying that it is a governmental body in that case?

Well, it appears as though the president of the United States made a statement that either he 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. I think there's been no assertion that this was a for-profit private entity or anything of the sort.

The Voice of America doesn't get a billion dollars from the Saudi government, that would make it an illegal unconstitutional foreign emolument. Where I mean this is just getting more confusing by the moment, is it a public...

I share with the ranking member questions of other moneys that are not necessarily associated today and I'm quite candidly willing to participate in all the fact-finding on anything related to money. But the gentleman came here with tremendous expertise and I think 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 but are government that have trademarks, one of which was is the Voice of America and many other highly recognized US entities which are solely funded by the federal government. I think it's been productive, I will join with you to continue looking at questions of moneys from other governments whether or not they're coming to the government or whether they're going to a third party because I think that's a fair area, I just don't think it's within the gentleman's expertise.

All right, well I would welcome a thorough ventilation of all these issues just so we don't go down a darker road here, thank you.

Thank you, and with that we go to the gentleman from Virginia, Mr. Cline.

Thank you, Mr. Chairman. 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. But 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 and 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?

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 but for the PTAB what we did is impose the real party in interest disclosure requirements by reinstituting the Corning Optical precedent and then ensuring when real parties are identified and they're foreign sovereigns or state actors, they're not allowed to participate in the PTAB because they're not persons just as the US government is not considered a person in the PTAB. So 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 try to undermine the US patent holders and system.

Okay, non-practicing entity district court filings rose 18.7 percent in 2025, two consecutive years of increases before you proposed IPR restrictions have even taken effect and consider who benefits from that, four of the top five US patent recipients in 2025 were foreign entities. Huawei, which previously sued Verizon for over a billion dollars, has transferred nearly 1,000 US patents to assertion entities targeting American companies. BOE, Tencent and CATL, all formally 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?

Thank you for the question. Again, we're working through all the comments on the rules including the justifications that we're required to under the AIA such as economic effect. But to your question, at the PTAB we have considerations which we just instituted in guidelines for people to tell their story if they're American manufacturers and they're being pursued by foreign entities or these holders of patents, NPEs in particular, foreign entities, tell us your story and we can make sure that that's considered in instituting a proceeding or not instituting a proceeding, it works both ways. So we're 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.

Okay, switching to trademarks, you may know I'm the co-chair of the Congressional Trademark Caucus and 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 the US filing date under the Paris Convention, an applicant has to file a foreign trademark application within six months of the US filing date supported by a PTO-issued certified copy of the US application. I'm 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'm concerned that the inability of the PTO to timely process these requests threatens to jeopardize the ability of American trademark owners to claim and defend foreign trademark priority rights. Can you tell us what you're 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?

Thank you for the question, that has been a concern, it's been unacceptable as the backlog has increased in one area. We've had as I understand and we looked into it data processing issues that have been remedied, I've invited people to send me their requests for the copies directly and they've done so, I think the word has gotten out among paralegals that there's redress here and so I get half a dozen emails a week which we get through. But longer term, we just announced and I think you'll be happy with this, our international search classification tool which takes five months' worth of work normally eating up that six down to five seconds literally. And so these are going to be this is our first agenic entry to equip our examiners with these type of tools, international search classification is just a bear especially if you have pseudo-marks and the like, so the future looks very bright there but we have to make sure our house is in order on our own blocking and tackling and getting certificates out.

Without objection, so ordered.

I'd like to just recall, I mean, creating the patent law was the American Invents Act, took a long time, it was not easy. I participated in it, I think some other members of the committee did as well. And the idea was really straightforward: high-quality patents drive innovation and growth, low-quality overbroad patents do the opposite. They drive up prices, they impede competition, they expose businesses to abusive litigation, and we designed IPR as a streamlined, expert-driven mechanism to catch the patents that should never have been granted to begin with. It was, in short, the kind of efficient, targeted administrative correction that good government looks like. Now, if there are flaws with that system, we're willing to address those flaws and work through it, but the agency's institution rate has, I think, collapsed, not because the petitions lack merit, but there are barriers that are being applied that Congress never authorized, just as Congress never envisioned that the IPR process that we crafted and are willing to work on further if it's flawed would be supplanted by the director just seizing control of the whole operation. So, I see my time has expired, but you have discretionarily denied 64 percent of all petitions and the institution rate sits at about 20 percent. So, Mr. Chairman, I think although my time has expired, I'm 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.

Thank you, would the gentleman yield for just a second?

Yield.

If I could clarify or have you clarify what you answered the gentleman, you talked about some of these protections and rules and so on, but you seemed to be talking both about defendants and plaintiffs. So some of the things that I heard which sounded like protections in fact are limitations on the defendant in PTAB proceedings.

Again, the...

American manufacturing and foreign entity and the like was the question.

So, if there's a petition filed against a patent holder in the PTAB and part of the complexion there is that this is a patent 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.

I understand, it's just that also works for Huawei effectively when they have a straw manufacturer and you know, they say well, you know, here it is, but it's still a Huawei patent.

Point of order. How many times does the chairman get to take five minutes?

I asked just... 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.

Thank you, Mr. Chairman and Director Squires. You know, 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 reasonable likelihood standard. You first centralized power over discretionary denials in the director in March of 2025 and then last October 17th, your memorandum 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?

I can give you a maybe.

Okay. We'd like to know further if as you ponder this, because under your current policy, I'm wondering whether you consult with at least three PTAB judges before making an institutional decision.

Yes.

Okay, that's helpful. What concerns me is not just the centralization of the authority and therefore potential for abuse, it's that the office now regularly denies requests for PTAB review of patents that may have been improperly granted without giving any written explanation. I have an example. This is a denial, it's two pages and it just says no, right? Here's the way it used to be, which is yes or no and the reasoning and people knew where they stood. So, I'm just sort of wondering, under the standard operating procedure manual, it says significant writing assignments in AIA proceedings include decisions on institutions and it goes on and on. The expectation is that there would be a detailed explanation for whatever the decision is. Now, I'm just wondering in these bare-bones summary denials where someone would find the reasoning in the arguments raised by petitioners and do you think that practice is really consistent with principles of transparency and fairness?

I do think so. There's been a body of over 600 decisions that have been issued and where there's matters of where we have something to say or a particular story needs to be told, we do issue those decisions and opinions so as to provide guidance. The Revo line of cases has been one where there's been inconsistent claims offered from district court and there's in fact unsettled expectations. It's worked the other way where a patent holder had their patent lapse before it asserted against the defendant.

I'd just like to ask unanimous consent, Mr. Chairman, 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 US-MADE along with the study that really shows their dissatisfaction with the current practice. I think, you know, both on the winning end and the losing end, if you don't have insight into the reasoning of the decision, it's problematic.

I thank the gentlelady. Gentlelady yields back. We now go to the gentleman from Texas for five minutes.

Thank you, Mr. Chairman. And unlike everyone before me, I will be under the time limit. Director Squires, I'd 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. And based on the record, it seems this case might have been mishandled by the previous administration. Does this ring a bell?

I've read in the papers about that general...

Okay. I'll keep going. Under this IPR, VLSI's patent was challenged by two entities called OpenSky and PQA and 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. And Director Vidal found this to be an abuse of process, but the cases were still allowed to continue. And since that, Director Vidal is no longer in charge. Would you happen to know who is behind PQA and OpenSky?

I do not know, but that is one of the reasons we instituted the RPI process.

Your answer is the same as mine because I don't know and neither does anyone I've spoken to. And 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's not a good look for transparency and reliability of the American patent system. And I believe you've been acting in the interest of promoting American innovation and I thank you for that and we'd 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.

And thank you for the question. We will look into it and be happy to speak further.

Thank you. We've also heard concerns from a lot of folks in the patent process about the lack of predictability between administrations. Is there something Congress can or should do to help with transitions in the future?

Well, one of the things that would be of great value would be to continue the fee-setting authority and fee collection authority, which will be expiring 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, run like a business from this fee-setting authority. So, my number one ask would be for that to continue.

Noted and thank you. And thank you for all the work you're doing. I yield back. I will yield to Mr. Massie the balance of my time.

I thank the gentleman. Can you talk about how important it is that patent holders be able to get injunctions and that the relief that comes after years of finally recovering some kind of royalty isn't enough to dissuade infringers?

Thank you for the question. I think it's very important and we've said so now in three instances. We've formed a standards-essential patent working group, but before that, we've come in in three cases as partners with the Department of Justice or co-filers with the Department of Justice Antitrust Division regarding the injunctive factors. So, we're intending to use our office as a policy voice for what's important for strong patents and to not only be born strong, but to remain strong because they can get injunctive relief across all the factors. So, we've filed in the ITC, we've filed in district court, and expect to see us there to articulate the reasons why strong patents and strong injunctions for valid patents are important.

Isn't it true that the situation we have now is the result of court rulings and not congressional action and is there something that Congress could do to restore injunctive relief?

We're aware certainly of and have looked into the provisions of the Restore Act as I understand it's called, which would rebalance injunctive relief considerations. It's been hodgepodge in district court and that's been part of the problem, especially if you're in arms-length negotiation and there's, you know, the holdout problem as it's called in standards-essential patents. Having predictability I think would have a great market effect, but the provisions like those in the Restore Act I think is something that only Congress can take up and we'd be willing to have further dialogues as to what that might look like.

Thank you. I yield back.

I thank the gentleman for the yield, Mr. Gooden. Yeah, just one question very quickly. You said a hodgepodge of district court. Isn't the eBay decision a high court decision?

Yes, it is.

So, the high court has ruled on injunctive relief and we live under a guideline produced in interpretation of law and the Constitution, right?

The eBay case sets forth the factors which the district courts have to apply. They've applied them in a hodgepodge fashion.

Now, that's where we like PTAB. With that I recognize the gentlelady from North Carolina for five minutes.

Thank you, Mr. Chairman and Ranking Member Johnson for organizing this hearing and thank you Director Squires, both for your service and your testimony today. I'm 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. And yet, small inventors are having a much harder time defending their patents. The PTAB allows, as we've heard, multiple challenges even from the same party to a patent's validity, forcing a 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've heard about, hedging their bets and hoping to get a finding of invalidity in one venue or the other. And of course, the challengers have more money to get to do that. And as we know, and we've discussed, the USPTO filed a notice of proposed rulemaking last fall to help address this problem of repeated challenges to a patent's validity. And 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've heard about the difficulty of defending their patent in different venues or having multiple parties come after them.

Thank you for the question. Before I took office, I represented startups and small entities and small inventors for about 10 years. I may be the only director who's had that direct experience. And it's been a terrible problem, as you've referenced. Sometimes we've seen as much as seven petitions keep coming in waves. That's why under the NPRM, we're saying we have to have some clarity, quiet title finally. And if you want to still have multiple filings or multiple parties, join it. One join and done. But to your question on the individual small inventor's experience, it's a killer. People are not able to become... I'm aware of a funny little patent emanating out of Stanford in 1999, the PageRank patent, that is now, of course, Google. So, you know, 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're small inventors and they need to have the same respect as afforded everybody in the system.

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. And we're hoping that that bill will get a hearing and 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. And last fall, I led a bipartisan effort with several members of this subcommittee to Secretary Lutnick, urging the department not to move ahead with a 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 the 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 the PTO, have you considered this value-based patent tax and how would you implement it if you did it?

Thank you for the question. I echo Secretary Lutnick's statements. He explained, how would you do that? How would you value that? So no, I have never been in those discussions where value had any consideration. It's not something that's on the table or even could be done, I think. And certainly the Patent Office would not be in the business of providing market valuations for people on their patents. We're in the business of granting them, making sure they're born strong, and letting the market work.

Well, thank you, and I hope it remains that way. I yield back.

I thank the gentlelady. Now recognize the gentlelady from Florida for five minutes.

I have unanimous consent, please.

The gentleman's recognized for unanimous consent.

Ask unanimous consent to submit a five-page letter from US Inventor to the record.

Without objection, so ordered. Now the gentlelady may proceed.

Thank you, Mr. Chairman. And 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. So 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?

Thank you for the question. And the high cost of litigation is, of course, a concern and that's why under the AIA, IPRs were designed as an alternative to litigation, lower-cost litigation. But IPR is not the only game in town. People also tend to conflate PTAB, limiting PTAB, and that's not what's intending to happen. That's not what we're intending with the rule. There's always the avenue of reexamination. We would love to see people utilize PGRs more effectively, sooner in time, clearer title. In general, we're preferring a more late-open model where you take your shot, but take it now and take it once and for all. And as I said, instead of one and done, people need to think about as one join and done. So there's the ability for collective action and there's also then, of course, district court, but there's at least three alternatives available under the PTAB.

And 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, and that really is the quality of the initial examination. And I'd 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'd like to hear, you've emphasized human-in-the-loop approach, using AI but also having humans involved. Tell us a little bit more about that and what safeguards you have in place to ensure that using AI tools is not introducing any sort of bias or narrowing the scope of prior art considered.

Thank you for the question. It has multiple touchpoints, of course, in the office, but I'll give you one example. We have launched a what we call ASAP, AI-generated pilot program, which takes the prior art, gets it to the applicant before the first office action. So literally the examiners and the applicant are on the same page with the prior art beforehand. So 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're not going to waste our resources and refile with something, direct resources to something that might be more productive. So we're trying to get information in the hands of people at the soonest possible point where they can do something with it and have people be on the same page. On the eligibility side, we've formed a 101 working group and we've starting to deploy AI agents to assist in some of the areas where they're the thornier issues to decide on 101 and to give some assistance to the examiners. Always will be human-in-the-loop. The larger vision is, as I mentioned in my opening statement, to have the examiners be able to manage a cadre of agents, deploy them as they see fit to their cases, and be able to do thousands of hours in the 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.

Thank you, Director. I yield the balance of my time to the Chairman.

I thank the gentlelady. Couple of quick things. You know, 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's 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's a one-sided process that favors dramatically a same or substantially same patent. It's not an even playing field. The PTAB exists because ex parte was ending up almost always successfully favoring the reinstatement or the continuation of the patent compared to the outcome of PTAB. Isn't that true? It's not a place that really, if you've been accused, it makes any sense to throw it and hope for the best without seeing anything until it comes out.

Pardon me. That may have been the case in the past with reexamination. I don't believe it's that case now. In fact, it's become a quicker and almost the same outcome experience as the PTAB has been.

I appreciate that. I'd love to have a longer dialogue, but I don't own the time. The gentlelady from California is recognized for five minutes.

Thank you, Mr. Chair. Director Squires, before we get into your recent policies, I just want to make sure that we're grounded in the basics because much of this debate seems to move past them too quickly. So 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. And instituting a review means the board agrees there's enough merit to examine the challenge, while denying institution means the challenge does not move forward. Is that correct?

In general, the IPR process has two components, one discretionary and one merits.

Right. Okay. But at the end of the day, it is ultimately about protecting U.S. companies, inventors, and those patents. I mean, that's what we're here to...

We're trying to make sure where there's been, especially when there's been error in the examination, there's redress available.

Okay. So there are concerns raised that IPR may disproportionately impact individual inventors and small entities. There's been discussion about non-practicing entities, entities that assert patents but do not manufacture products, and their role in patent litigation, including some that may have foreign ownership or backing. So does the USPTO distinguish between different types of patent holders when evaluating how PTAB policies affect stakeholders?

It's 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're patent holders and there's petitions filed against us, tell us about that. We want to know. Conversely, if they're state actors or foreign sovereigns, they can't be in the PTAB under the recent return mail application to foreign sovereigns and state actors. So we need to know who's 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, whatever side you're on, is before instituting proceedings.

Okay. So you're saying if there are sovereigns funds, if there are foreign actors, you do want to know.

What we need to know because they're not allowed in the PTAB.

Okay. And so that means that you also have collected this data. So you do have... You've done data collection on this, so you know?

There's a real party in interest requirement. So the RPIs have to be identified at the time of filing. And so that's a disclosure if it can be raised by a patent holder in response to a petition. And so it's a disclosure-type process. But we do have data on the number of foreign state actors who collectively from foreign countries who've appeared in PTAB historically, and if you aggregate them, they would rank number four.

Okay. So 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?

I don't know the extent of what granularity we have, but I can provide you a list of who the filers are. Yes.

All right. Well, that would be helpful because I think the question is, are different entities treated differently? And I think small versus big is always going to be an issue. But when there's also concern that a company has foreign backing, for me, that also raises national security concerns, right? And 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.

Understand. We're happy to work with your office. I would direct your attention to a the Corning Optical memo that I issued, which did have a list, listing of IPR petitioners in aggregate by IPR petition.

Okay, great. So we are on the record as saying we're requesting that information and we'd love for you to be able to share that with the committee. And I do have...

Oh, sorry. Unanimous consent?

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.

With some objection, so ordered.

And next one enter into the record, Trump's PTO picks Fortress ties signal big tech patent fights.

Without objection, thank you. At this time I'll also put into the record by unanimous consent a copy of the docket for the Patent and Trademark Office revised proposed rules that we've been alluding to. Additionally, a number of letters and I'll ask them be placed in block, which they do include but not limited to patents for affordable drugs, general action patent, crypto consul on innovation and a number of others. Without objection, so ordered. We now go to the gentleman from South Carolina for his...

Mr. Chairman, I have a unanimous consent I'd like to enter into the record a letter from the Council for Innovative Innovation Promotion dated March 24, 2026 addressed to yourself and me regarding this hearing.

Without objection, so ordered. The very patient gentleman from South Carolina is recognized.

Thank you, Mr. Chairman. Director, thank you for being here. The PPAC and TPAC have served as effective vehicles for the private sector and subject matter experts to offer specialized guidance to the PTO. I'd 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?

Thank you for the question. Very soon. As you've seen both on the PPAC and TPAC side is really an all-star roster and we just extended an offer last night to the individual inventor, which is the statutorily required person that crystallizes everything. So we're hopeful very soon.

Great, thank you for that. I'm going to move on to a separate issue on U.S. research and development. Obviously we're competing with China on any number of things across many fields, medicine, telecommunications, manufacturing, emerging technologies. In the context of patents, how do China and foreign competitors undermine our system in your view? Very briefly.

Brief as I can. In several ways. One is is known as flooding the zone. We've seen a lot of low quality applications emanating from areas. Others are fraudulent filings, which we've deployed some AI tools and identified. As I said, we've removed especially on the trademark register tens of thousands of fraudulent applications. And the third arrow in our quiver we just announced is a rule that you must be a U.S. practitioner before the patent office and to file papers. So accountability is of course important and those are ways we're trying to address these issues.

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?

Again, our number one goal is to have patents born strong, make sure they receive rigorous and thorough examination and get to market in a timely manner.

Switching gears again on the IPR, I know we've talked about that a lot today. How is the office thinking about striking the right balance related to IPR, ensuring that manufacturers in strategic industries can effectively defend against questionable patents while also preserving the strong protections and access for small businesses, startups, and independent inventors?

Thank you for the question. Yes, it's balance is the key word. It's a unitary system. I like to quip sometimes that means that someone is always unhappy. But nevertheless we're trying to strike the balance, especially on the discretionary side as I mentioned where there are small business factors or manufacturing that cuts both ways. Tell us a story. We've even had issues where things that have been controversial like settled expectations cut both ways. There have been assertions where patents have lapsed and then come into being and against or licenses have been issued against the settled expectations and those get taken into account whether to institute or not.

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?

They have, but the new precedent will end that practice.

Okay. How do we deal with domestic companies that do that? I'll give you an example. So Monster Energy drinks is like the number one filer against trademark existing trademark applications. They're like far and away above everybody else. They've been labeled as a trademark bully of the year by multiple times at least since 2012. And I don't want to single them out, but I do think it's real problematic like some of these cases like a camping gear because the name is for Monster, a craft brewery company. What I am concerned about is like big companies with a lot of assets that come in and swing at small restaurant owner. I guess there was a restaurant in Ohio, it's a shawarma restaurant and they they're called the Monster Shawarma and somehow that's like a patent or a trademark infringement on Monster. It's just really aggressive. And so how do how do we protect small businesses against trolls like Monster Energy drinks?

It's a difficult question. The way we protect them is early access file as they can. Monster of course has a famous mark and has a wider berth in courts and assertion. But trademark system is a registration system. It levers off of use in commerce often from state rights and the register federalize that. So part of the solution is to let people know we're here, you should file.

What about Rule 11 sanctions? I mean if if they're filing frivolous things and they're obviously like I'm not I'm not suggesting that all of their cases are not meritorious. What I am suggesting is it's a little bit alarming that they're the number one company in the country filing against small business. They're really aggressive on their tactics. And when I what I'd like to know is like you've got tools at your tool belt to rein some of these practices in. You've already got a full docket. So how do we rein in companies like that from abusing the system?

Again, thank you for the question. On the Rule 11 basis, that's 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 type of matters. And again, just like the patent side, tell us a story. That is often compelling. We're trying to be responsive to the real world dynamics.

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're doing to undermine our competitiveness, but we also have some some problems domestically too, some of these people that abuse the system. So thank you, Mr. Chairman.

It's great. Just one clarification. You used the term famous mark. IBM's a famous mark. Ford Motor is a famous mark. Monster drinks doesn't meet that requirement, does it? You used it, but I don't think you meant to use it.

I have not come to that conclusion.

In order to be a famous mark, the word Monster all by itself would have to be have secondary meaning, right?

That would be for a court to decide, but those are the parameters, yes.

Okay. So Monster movie, Monster cable which every every professional musician uses and predates Monster drinks. I'm trying to understand because it's important for this hearing. Do you want to go back and revise for the record your statement that that Monster drinks is somehow a famous mark? Because it it obviously is a huge difference in how you and the courts deal with an allegation, right?

I would revise my sentence if Monster is a famous mark, then these are the these are the type of things that they could do in court.

I absolutely agree with you. I've certainly seen a blue oval without the word Ford be considered as important because it is a famous mark and I appreciate that. I now ask unanimous consent in block that a number including of submissions including from Arnold Ventures, from Entertainment Software Association, from the ES... that's the same one. Hang on one second. Yeah. Okay. 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 opines in the negative to say the least. And others too numerous will be giving them all to you without objection, so ordered. I now recognize myself for a number of of questions. Isn't it true that the number of so-called serial applications, the repeat use of PTAB was less than one percent? And yet your rule applies to 100 percent. Is that correct? The historical serial attacks using PTAB is less than one percent. The rule applies to 100%, is that correct?

The historical serial attacks using PTAB is less than 1%. Of PTAB actions filed? Of IPR actions filed? I don't know the exact figure.

Okay, that's the figure that staff on this side comes up with. Please give us your answer for the record. I already discussed ex parte. We are going to agree to disagree that you've reformed anything simply because it is still a process that there's only two people in the room and one of them is not the person who submitted the documentation. They're not part of the process. That's why it's ex parte, correct?

That's correct, ex parte.

The I've got a great many items to say the least as you could tell. But probably the the largest one is currently when I mentioned that you've taken cases in which they were discretionarily allowed, process had nearly reached a conclusion and then you've pulled them back, essentially retroactively discretionarily said they never existed. Where do you believe you get that authority?

I don't know which specific cases you're referring to or the particular facts of the matter, but as the Federal Circuit has...

It would be the Interactive Communications is one example that we have that you did that too. And and 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's not without paper. When you simply do a denial, there's no paper as we've seen today. So retroactively doing it makes a huge difference because that discretionary denial after the fact, after the facts have been laid out, after it's 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.

Again, I'm not familiar with the underlying case even by caption. However, there is wide discretion afforded and I believe the discretion would include changing your mind.

Well, I don't believe you have that discretion once a process begins. And so we'd like you to cite as you did very eloquently in others where you believe in the America Invents Act that that you believe you have that discretion because we disagree. And additionally, since that discretion is not challengeable in court and yet the final decision would be, do you see where the ambiguity is? You've taken away the ability to have additional appeals because you've denied them by using the discretionary denial after the fact, which takes away their ability to actually have any further redress, correct?

I don't agree with that. The authority is 316, 35 U.S.C. 316(b), and I'm required by statute and rulemaking, and we use this in our decisions, to take into account the economy, integrity of the patent system, and the efficient use of resources in the discretionary part of what we do. The merits part is different, of course, but the discretion piece is the one component before you get to the merits.

Okay, I'm 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?

I'm recalling days of eSpeed and BrokerTec, and there were several suits back in the 2000s around then.

But it's fair to say that from a 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 on board, directing the acting... Have you had any discussions with the Secretary concerning any of these policies?

The NPRM that we've issued is the Secretary's first and signature rule. So he was absolutely behind this.

Okay, so 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?

I have no knowledge one way or the other. I would welcome the chance to interact with this.

Okay, would you to the best of your ability answer for the record, or perhaps we'll ask the Secretary directly by subpoena? It is my understanding that he may not have eliminated all of his holdings and 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's a lot more to ask. I'll 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's actually a question we normally do at the end by unanimous consent, but if you'll agree to take written questions from the record from all members. Thank you. In conclusion, this has been an illustrative hearing. I will say, and this is usually something a minority would be saying, that it's been too long, it took too long. We are now over 15 months into an administration and this is the first visit 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 follow up on them. It is the normal practice to have a regular dialogue with the Patent and Trademark Office, and it is my personal hope, and I believe the ranking member's personal hope, that that dialogue will continue so that by the time we come to the next one, we won't be talking in single digits how often we've been able to have interactions with your office directly. And with that, I am required to say, this concludes today's hearing and 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 to the witness and additional materials for the record. And without objection, we stand adjourned.