Renewal of USPTO Fee Setting Authority: Giving Full Effect to the America Invents Act

The subcommittee will come to order. Without objection, the chair is authorized to declare a recess at any time. We welcome everyone here today for today's hearing on the United States, Patent and Trademark Office, fee setting authority. Before I recognize myself, I will note that uh as of last night we granted a short-term extension through December for the fee setting authority. So uh for everyone's deep breath, it will uh this this is a hearing sufficiently in advance of the December deadline to allow us to have this hearing and then follow up. I'll now recognize myself for an official opening statement. In two thousand eleven, Congress passed the American Invents Act on a broadly bipartisan, bicameral basis to modernize our patent system and ensure that only high quality patents were protected. I note that high quality patents are not protect- are not created initially. They are a process of initial creativity and then examination, re-examination, and the like. Ultimately, sometimes the best patent is the one that survives an Article three procedure. But to the greatest extent possible, the two thousand eleven act was designed to avoid the cluttering of our uh district court offices. I might note that at the time of the two thousand eleven act, we were running about forty percent reversal in the Fed circuit of district court cases, and the number that were going to the Fed circuit continued to rise. Since that time there's been an improvement in both. Among other things, in the Americans Invent Act, we gave the United States Patent and Trademark Office limited and temporary authority to set fees so their agency could sustain itself. We also made sure, once and for all, that the amounts collected by the Patent and Trademark Office were used extensively there and could not be taken even to other parts of the Commerce Department but definitely not taken to the general treasury. Congress temporarily extended the authority in the CR last night, as I said. That authority was granted within the full context of the American Events Act, with the understanding that the statue would be given full effect, and we want to do continue that. And while there have been welcome developments at the PTO, such as rescinding the uh previous administration's guidance on AI and tightening the confl- conflict of interest uh discipline among patent examiners, these changes still do not fully support the American In- i- i- American Invents Act as it was intended. The PTO's uh recent changes to how it handles PTAB proceedings are particularly and particularly discretionary denials, which I'm sure we'll hear more about today, of inter-party review, undercutting the statute's core purpose. As someone who was here for that, uh, lively debate, at that time there were a number of things proposed. One of them was that the - that the P tab would be a one and done, meaning you would get in there once, all - and afterwards there would not be a second event. We also considered eliminating the ex parte re-examination. All of these were rejected because good quality patents, in fact, are not made sometimes in one pass. As we all know, a patent can be dozens or even thousands of claims. One claim against one, uh, infring potential infringer is not exactly equal to another one, even if it's the same claim, but certainly not if there are other claims. Therefore, PTAB was intended to have the discretion to deny, based on the material not being sufficient or it having been truly tried and rejected previously. Discretionary denials were never intended to simply be a way to shut down PTAB, and that is what we see happening. Companies, large and small, but the large ones have a better case model, have seen as many as eighty P tab requests denied, one after another. Most companies, after a few, have simply stopped submitting them. Similarly, we it's been reported that ex parte re-examinations are also being reduced, thus eliminating the ability to ever question a patent unless you're willing to spend as much as tens of millions of dollars in a protracted Article-three procedure, They can not only last for years, but obviously means that during that time there is in fact a building potential liability. Many companies are not willing to extend that, so they settle rather than fight a frivolous patent. On the c- the discretionary denials I might note that there hasn't even been notice and comment procedures that in fact discretionary denials uh, simply give us a short-term, we're not doing it. Fewer P-Tab proceedings means abusive patent trolls bring more district litigation, uh, a- a- actions and, in fact, get a sue and settle situation. We will hear today that, in fact, the nuisance level, the fifty, hundred thousand, uh, demand, couple hundred thousand dollar demands are growing. but they're growing against dozens or hundreds of companies, meaning that millions of dollars are being raked up in amounts that in fact, by definition, are cheaper than any possibility of fighting a a completely frivolous patent. So, today's hearing on fee setting authority begs one question, which is if this function of the PTO is dramatically dropping and the revenue is dropping, Why are they asking for fee setting authority? Are they not flush with cash under the existing system? Is there a positive or negative effect to laying off hundreds of judges who were handling multiple times more cases than the federal court could? Lastly, under the fee setting authority, if they're not going to do PTAB, who is going to pay for hundreds of cases, perhaps thousands of cases, in front of hundreds of federal judges that go on for years, cost millions of dollars, and consume a vast amount of uh of court time. This committee, on a bipartisan basis, has been trying to uh increase the number of Article three judges because we are already short federal judges. Senior status judges in fact today are so essential that many judges remain out of a sense of loyalty, hoping that we will increase the number of regular uh judges so they can fully retire. That is without reducing PTAB as we've seen, and as a result the seventy-seven that are proposed in the bipartisan legislation could in fact have to be double or triple that if we're going to deal with the end of PTAB. Given this policy of discretionary den- denials, of PTAB and IPRs uh changes, we must face the responsibility the agency and its fee setting authority might in fact be in question. The fact was, we intended to have the US uh Patent and Trademark Office fee setting authority fully affect its total cost re- reimbursement for implementing the uh Americans Invents Act. Failure to do so begs the question of beyond December, can we in fact continue with fee setting authority, or should this committee, in this, in the following Congress, set about making sure that we actually make them come to us, tell us what they're going to spend it on in the future, and do an authorization of fees. That is the way it was when President George W. Bush proposed his fee changes in two thousand and one or two thousand and two. in which this committee fully rejected that that and sent them back to do their homework. That would likely be what would happen again if we cannot find a way to ensure that the Americans with Independence Act is fully implemented as part of any reauthorization of fee setting. With that, I'd like to recognize the ranking member for his opening statement.

Thank you, Chairman Issa. And uh welcome to this hearing uh all who are here, uh especially our panelists. Uh the USPTO's fee setting authority has given it the flexibility to move its workers' remote, plan its budgets ahead, and tailor fees for small and micro entities. Originally it was set to expire in just a few days, on September sixteenth. Yesterday, however, House and Senate Republicans were generous enough to kick the can down the road until after they are re-elected. The authority is now set to expire on December twelfth, twenty twenty six. Failing to reauthorize the USPTO's fee setting authority risks transforming a traditionally nonpartisan agency into one that serves political ideology, over merit. Ensuring that USPTO remains a beacon of American innovation means not just reauthorizing fee-setting authority, but ensuring USPTO advisory committees can continue to advise the USPTO without interference by this administration. Two months after he was inaugurated, Trump's Secretary of Commerce, Howard Letnick, fired every member of the patent public advisory committee and the trademark public advisory committee. A year and a half later, they finally swore in the first new members. When Congress originally authorized fee setting authority under the America Invents Act, we built in several oversight measures to ensure that this power could not be exercised without transparency. but rather with public input and independent expert review. PPAC and TPAC remain critical parts of those guardrails. Their full and independent participation is essential to ensuring that fee setting remains accountable to all who rely on our patent and trademark systems, the big and the small. That's why these committees must be fully constituted as they are a necessary safeguard for independence. And that independence matters. If we do not give USPTO the flexibility it needs to set fees, access to our patent system will be taken over by special interest. This will make it even harder for small independent inventors to protect their inventions and easier for those who can pay to play to infringe on those rights. How do we know? Because we're already seeing this happen in the rest of the executive branch. Every day we learn about how easy it's become for oligarchs and powerful companies to buy a seat at Donald Trump's table, millions of dark money in campaign contributions, lavish gifts like private chicks, jets, four hundred million dollar private jets and business deals, rampant insider trading on predictive markets, access to the Trump White House has transformed into a currency that only the rich and famous can afford. And while the wealthy are busy buying a seat at the table and in enjoying their record profits Americans across the country are left paying the price. Constituents of Georgia's fourth congressional district are struggling to afford rent or pay their mortgage. And the cost of groceries continue to skyrocket. Hard hard-working families should not have to struggle to afford health care while rich folks like Elon Musk get tax cuts while becoming trillionaires. And while Donald Trump lines his own pockets through unabashed greed built on the backs of American workers, consumers, and taxpayers. Conflicts of interest and self-dealing have become routine features in Trump's Washington, blurring the line between public service and private financial gain. This was a man who campaigned on draining the swamp. And yet all Trump has done is put up a golden gate at the swamp, and he is now charging it an admission fee to get into the swamp. And they're paying it. It's kinda like uh him charging uh his charging uh uh, you know, a entry fee at the gate to the swamp, kinda like Iran, uh, charging admission fee at the Strait of Hormuz. Because, uh, in Trump's America, money buys access. Access buys influence. And influence too often becomes the law for everyone else. Innovation should not be a luxury that only the wealthy can afford. So I, for one, am determined to not allow U. S. SPTO to be sucked into that swamp. Reauthorizing this fee setting authority with the transparency, public participation, and independent oversight that Congress intended is essential to keeping our patent system working for all, not just for those with the closest connection to big tech, the aspiring oligarch class, or the Trump White House. We have just a few months, ladies and gentlemen, to get this done. So today is not the time for members of big money special interests to advocate for changes to the way USPTO operates because they're not happy with Director Squire's patent trial and appeals board actions. Personally, I think we are overdue to examine proposals like Miss Ross, uh, Representative Ross's prevail which would reform PTAB abuses. Some of my colleagues agree with me, others disagree. That's why I'm not trying to make those changes right now. We have a program that everyone agrees has been successful. Inserting our own USPTO agendas into the debate will only serve to make this reauthorization controversial. I wanna thank the witnesses for being here today. While I think this last-minute hearing is a distraction from the disastrous policies of the Trump administration, I do believe it is vital that Americans truly understand the importance of allowing the USPTO the independence and discretion it needs to keep America at the top of our global innovation economy. Because if we want to continue to lead the world in the technological advancements of tomorrow, then we must ensure today that the institution most responsible for protecting those innovations is independent and built to last. And with that, ladies and gentlemen, I yield back the balance of my time.

I thank the gentleman. I might note for the record that we waited uh almost a year and a half to get uh Director Squires here uh as we requested the acting and then him. So this was not rushed, but in fact was scheduled as soon as we'd finished with uh Director Squire's, his presentation, but I thank the gentleman for his uh opening statement. With that, I will introduce uh today's witnesses. Miss Theresa Ray is a consultant at Ray Consulting, LLC, where she consults on intellectual property issues and strategy and provides other services. She also is a professor um and lecturer in law at George Washington University Law School, where she teaches an advanced IP seminar. She was previously a partner in a Washington DC office of Cronwell and Mooring LLP, and a director at CNM International. Thank you for being here today. Pardon me. Oh, and didn't say, but I mean, she was a former acting uh head of the PTO. So thank you. Um, uh, Mister Morgan Reed, Mister Reed is president of the Association for Competitive Technology, a trade association comprising comprised of small uh, appli- you know, app makers or, you know, programmers, uh, and connected device manufacturers. The Association for Competitive Technology associate as associates for policies that and advocates for policies that reward and inspire innovation. Professor uh Melissa Wasserman is an Associate Dean of Research at the Charles Tilford McCormick Professor of Law at the University of Texas Law School. Her research focuses on innovative policies and particularly Patent and Administrative Law. Mister David Campos is a Partner and Co-chair of the Intellectual Property Practice at the uh Swine and More L LLP, where he serves as Chairman of the Board of the Council for Innovation Promotion. He has previously served as the Under-Secretary of Commerce and Director of the United States Patent and Trademark Office. from two thousand nine to two thousand thirteen. We welcome all of our witnesses, and pursuant to the committee rules, I would ask that you rise to take uh an oath. And please raise your right hands. Do you solemnly swear or affirm under the penalty of perjury that 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 witness may s- uh be seated, let the record reflect that all witnesses answered in the affirmative. Many of you, including David, are pros at this, um but for the uh for the record any material you bring or want to insert, including your opening statements, will be placed in the record. So that allows you, the five minutes we're allocating, to go off script if you choose to to provide us information as you see fit, knowing that your entire statement will be in the record. Uh With that, I will uh begin and you all know about red red, yellow and green, uh e- we still have those even if you have a testless self-driving car. Uh so uh we'll begin with Professor uh uh I'm sorry, we'll begin with Miss R- Miss Ray.

Uh, good morning, subcommittee chair Issa, ranking member Johnson, and members of the subcommittee. Thank you for the opportunity to provide my views on the scope of the USPTO's fee setting authority under section ten of the AIA which is set to lapse absent reauthorization and also decide whether Congress should now revisit any guardrails surrounding that authority. I testify today solely on my own behalf, the USPTO is a creature of Congress. As such, its power to promulgate procedures and rules flow from congressional authority. The USPTO has long had some feast setting authority under thirty-five USC section forty-one. Congress also, as noted, granted the office broader feast setting authority in section ten of the AIA. When they granted that authority, Congress did so in an era of broad judicial deference to agency expertise. It was against that backdrop that the agency exercised feast setting when I was at the office. At that time under Chevron, courts routinely upheld an agency's reasonable interpretation of ambiguous statutory grants. Congress, too, often reasonably assumed, a level uh level of deference to the agencies. Loper Bright challenged some of those assumptions. Courts now exercise far more independent judgment on the meaning of statutes without deferring to an agency's technical explanation. The legal and regulatory landscape are always changing, besetting decisions that might once have survived judicial review on the strength of agency expertise. must now stand or fall on the plain terms of the statute itself and on whatever guardrails Congress has written into the statute. That has direct consequences for fee setting. The statute's operative language is broad enough that reasonable people can disagree about what it permits. Under section ten, that ambiguity has been substantially the agency's to resolve. under low per bright, it is at least potentially the court's. And Congress has a duty to ensure that the agency's fees, policies, and actions are kept within their proper scope and power, and that the agency is enforcing the will and direction Congress intended. With the foregoing in mind, I offer a few suggestions. Congress could consider revising section ten so that aggregate costs and the use of fee setting authority are defined with sufficient clarity to implement with less subjectivity. Congress could also consider other limits, such as limiting fee increases beyond a clear inflation index, with or without additional congressional reporting. The office has recently stopped issuing written decisions in certain congressionally mandated functions, Reasoned written decision making helps agencies stay accountable to the public when it makes important decisions tied to congressional mandates like the AIA. Reauthorization could be tied to a requirement that the office issue written reasoned decisions for all types of proceedings, or it could require the agency to regularly report to Congress. The public advisory committees required by statute each have a statutory total of nine voting members with five members constituting a quorum. Congress could reiterate that fee setting authority requires a full sitting TPAC or PPAC to review fee setting. Congress could also require further agency deference to the advisory committee recommendations or empower other types of public review, of fee setting. Additionally, I would recommend continuing the practice of a subset or re of a sunset or reauthorization mechanism which would give Congress the ability to oversee the correct course based on actual fee setting experience. The office's professional staff do this hard, difficult work carefully. Their ongoing efforts should be commended, and I have no doubt that just as they did when I was there, the agency will work to the utmost to be responsive to the public and Congress. I appreciate the subcommittee's attention to this issue, and I'm pleased to answer any questions. Thank you.

Thank you.

Chairman ISA ranking member Johnson, I'm Morgan Reed, the president of the Association for Competitive Technology. My members are small and medium tech companies from your districts and around the world. They write the apps you use on your phone, and build the medical diagnostics, the agricultural sensors, and the connected devices in your district's factories and in your fields. And I'm here to tell you, my members love patents. They hold them, they license them, they raise capital with them. And done correctly, the patent system rewards an invention and teaches everyone else how the invention works. Consumers get a better product, and in exchange the inventor who improved the world gets paid. That's the deal. And it's a good one when the patent meets the criteria for validity. But no examination system is perfect. When a patent issues that never should have, the burden falls disproportionately on the thousands of businesses that make and do things in the real world. And with foreign filers holding a massive share of US patents, a real slice of that invalid patent money flows straight out of the country to the second largest patent filer, China. Fifteen years ago, post-state street, Some of you met with me and my members when we talked about the need to staunch the bleeding caused by the fool's gold of questionable software patents, an over broad claim. You took on that task and passed the America Invents Act. You set up the PTAB and Interparty's review, a faster, cheaper way to put a questionable patent in front of expert judges. In the same law, you lent the office fee setting authority that expires now in December. Um, we had a good run. Uh, but recently that trust has been broken. Let me describe what the office has done with that trust around PTAB and discretionary denial, using a trip to the doctor. Imagine you have acute chest pain. You call a cardiologist. The insurance company says no. Not because your heart is fine, but because a general practitioner has an opening the same week or ten weeks later. You promise in writing never to ask your GP about your heart. Denied anyway. That's discretionary denial. Small companies that stipulate away every overlapping argument. are still turned away from specialist judges. No reasoned explanation, no right of appeal. And there's more. The office now treats patent age as a shield, calling it " settled expectations". So it doesn't matter if the patent is poor quality and never should have issued, if you can keep your mouth shut for six years, the bank vault is now open. That's a statute of limitations Congress never wrote. The pending rulemaking would force a company to surrender its invalidity defenses in district court just for asking for a review. All while PPAC, the statutory advisory committee that reviews these policies and fees, has just barely appointed its fourth member in a body that's supposed to have nine. You will hear that PTAB puts every American patent under siege. The numbers say otherwise. Fewer than three hundreds of one percent saw a PTAB case in twenty twenty three, and nearly three quarters of challenged patents were challenged exactly once. And on the flip side, many of my small members have faced abusive patent demand letters from law firms that have picked up older patents and are systematically going after them, because my members have enough money to pay, but not enough money to fight. And don't take my word for it. I'd like to submit for the record some discovery documents in a case in Western Washington that has pages and pages of dialogue between lawyers where they acknowledge they've got a p- a questionable patent. But you know what? For twenty-five K, a small business is

Without objection, so ordered.

Thank you. The timing on the USPTOs and transigents couldn't be worse. State Street is about to happen again, and at machine speed. Generative AI patent filings nearly tripled in two years. And more concerning, AI has erased the friction that keeps the flood in check. And don't be confused, my members love AI. But it's turn drafting a patent that used to take weeks and an expensive attorney into a turnkey operation. So while AI can help legitimate small businesses with their patents, unscrupulous filers are using AI to map every existing patent and churn out look-alike AI slot filings by the thousands. So the AI moment makes this the wrong time to abandon a PTAB system, serves at a backstop to correct mistakes. So here's our ask. Do not re- review this authority on autopilot. You have multiple paths to deliver what Congress required and what US business and manufacturing needs. You can renew it, but put USPTO on a leash, a real sunset, a functioning PPAC, and clear limits on discretionary denial. Because our members can forgive a patent office that makes mistakes. What a small business cannot survive is an office that issues poor quality, questionable patents, closes the door to correcting them, and keeps the fee for telling us no. So, thank you, and I look forward to your questions.

Thank you, Miss Walsh Walshman.

Um, Chairman Issa, Ranking Member Johnson, and members of the subcommittee, thank you for the opportunity to testify. I'm the Charles Tilford McCormick Professor of Law and Associate Dean at the University of Texas School of Law.

Uh-huh.

And for more than fifteen years my research has examined patent office funding and patent quality. And my bottom line is straightforward. I support renewing the PTO's office fee setting authority with the sunset provision and continued oversight. So fee setting authority is valuable because the patent office is funded almost entirely by user fees. In twenty twenty five, patent fees made up about eighty-seven percent of the USPTO's fee collections, and giving the office authority to adjust those fees helped it respond to costs, workload, or revenue change, and supports the resources needed for high quality examination. But how the office collects those fees also matters. Applicants pay examination, search, and filing fees up front, an issue fee when the patent is allowed, and maintenance fees periodically over the lifetime of an issued patent, so the patent stays enforceable. But the up front examination fees only cover about half the cost to the PTO to um, that they pay to examine the patent. And as a result, the office is heavily reliant upon pa- post-issuance fees to subsidize the patent examination costs. And in fact those post-allowance fees currently account for sixty-two percent of patent fee collections. Now there are good reasons for that fee structure. Lower upfront fees promote access, and maintenance fees allow owners to let patents expire, which dump them into the public domain, when they're no longer um worth keeping. But that structure also ke- um creates a financial risk to the patent office and a potential incentive once that risk materializes. Rejected applications um produce no issuance fee or future maintenance fees and a granted application does. So Professor Michael Frakes of Duke University and I studied studied whether that difference mattered when the agency was financially constrained. And we found that when fee revenue was insufficient, the office became relatively more likely to grant patents expected to generate greater revenue when the agency was financially constrained. Now, today's Patent Office is much better protected against those pressures, right? Um, fee setting authority is one of those reasons. The office also has substantial operating revenues and other financial safeguards. And a twenty twenty-four study commissioned by the PTO concluded the current fee structure does not distort examination. And those are important reasons to renew fee setting authority. But they do not fully answer the empirical question weighs by our earlier work. Fee study or fee changes take time and reserves are finite, and new technology can change workloads quickly. For example, if AI decreases the costs of preparing patent applications, filing values can increase rapidly. And the twenty twenty-four study also did not actually test post-AI granting behavior, when the agency was financially constrained. So I have three recommendations, right? First is to renew the fee setting authority with a sunset provision, and second is to ensure that the patent public advisory committee is fully functioning. Congress gave PPAC an important role in renewing proposed fees, holding public hearings, and making recommendations, and that statutory safeguard should be operational with major fee changes that are considered. And third is just to consider the i- offices' dependence on revenue that arises only after allowance. Congress could require a greater share of examination costs to be recovered before allowance while preserving reduced fees for small and micro entities. Now there's also the issue of the AIA's broader quality framework, right, fee setting supports patent quality before issuance, while PTAB provides a mechanism to correct errors afterwards. And the AIA created Interparty's review because even well resource examination is gonna make mistakes. Recent discretionary denial practices have substantially reduced the number of IPR petitions reaching merits review, and that means fewer petitions reach the stage where PTAB evaluates whether challenge claims satisfy patentability requirements. And I therefore think this committee should continue reviewing how that part of the AIA is functioning. So thank you and I look forward to your questions. Thank you.

Mr. Campos.

German ISA, ranking member Johnson, members of the subcommittee, thank you for the opportunity to testify. I'm appearing on my own behalf here today. No one is compensating me. I served as director of the Patent and Trademark Office from two thousand nine to two thousand thirteen. And over that time I ran the agency for more than two years before before it had fee setting authority, and then for, um, about a year and a half afterwards. In twenty ten, I told this committee that the USPTO could not manage effectively without the ability to align its fees with its costs, and fifteen years since have confirmed that judgment. Congress should renew the USPTO's fee setting authority for another substantial term. Three points are critical. First, the US PTO is entirely fee-funded. It's not partially fee-funded, it's entirely fee-funded. Its net appropriation is zero. Patent and trademark applications and other user fees finance its operations. So the question is not whether taxpayers should spend more on the office. The question is whether a self-funded agency can adjust its fees to recover the aggregate costs. Second, the fee setting authority is bounded and transparent. The AIA limits fees to recovering the office's aggregate estimated costs. It requires advisory committee review, a public hearing, notice and comment, notice to Congress, a forty-five day layover before fees take effect, and despite all of that, Congress can still disapprove any fee change by law. In fact, the most recent fee rule took twenty-one months from initial advisory committee notice to its effective date. This is a highly deli- deliberative process, not unchecked discretion. Third, fee setting has materially strengthened the office. I remember what came before it. When collections fell during the two thousand nine downturn, we had no flexibility, no reserve. We froze hiring, we suspended training, cut overtime and reduced contracting. By May twenty ten, we'd lost a hundred and twenty-seven examiners that fiscal year alone, and replaced only nine of them. N- uh, long-term investments stopped, however, the patent and trademark applications did not stop. The lesson is simple. When funding is unstable, long-term investments go and come back last. Feesetting authority together with the AIA's uh funding r- reforms gave the office the ability to build substantial operating reserves and plan across years. Those reserves kept the USPTO operating through the forty-three day funding lapse last year. Stable revenue has also supported replacement of legacy IT systems and investment in AI-enabled examination tools. These are multi-year commitments that require predictable finances. Stable funding also supports steadier hiring and training. USPTO's principal asset is its people, a workforce of roughly ninety-five hundred, highly skilled, highly educated, highly effective, patent examiners and trademark examining attorneys. They take time and money to recruit and train, stop and start hiring creates costs, longer application pendency that can last for years. Now, none of this means execution will always be perfect. Management problems can occur at any large organization and Congress should oversee them but taking away fee sitting authority does not solve those problems. It makes them harder to solve. And one additional point, the patent and trademark public advisory committees provide a critical statutory safeguard. They scrutinize fee proposals, convene public forum, give the director independent feedback. That mechanism works only if the committees are fully constituted and able to perform the role Congress has assigned to them. And I encourage the subcommittee to ensure their continued vitality. So my recommendation is simple. Renew the authority for a substantial term. Seven or eight years would be consistent with Congress' prior approach. And renew it cleanly. separate policy disputes can and should be addressed separately. Let's not turn back the clock to a time when the USPTO lacked the consistent and predictable funding needed to deliver for the American people and fuel investment in American technologies. Thank you, and I look forward to questions.

And thank you for being the uh the voice of the transition that uh I think those of us who were here saw what you had to deal with and how you handled it, so I I wanna personally thank you for that, uh, in addition to your testimony. And with that, we go to the f- uh, questions under the five minute rule, and we'll begin with the gentleman from Wisconsin, Mister Fitzgerald.

Thank you, Chairman. Uh, Professor Wasserman, um, i- in I kn- I know that you covered some of this in your opening statement, but um, you've written extensively over the years about the USPTO's budgetary incentive to grant more patents. Um, Can you briefly explain to us uh how that agency's fee structure encourages and kind of rewards the grant and maintenance of the of the patent?

Um, yes. So, basically, um, a substantial portion, about eighty-seven percent of the fees that they get right now on the patent side come from three fees, right, basically an examination, search and filing fee, which you pay up front. Second is issuance fee. which you pay when the patent gets issued. And third are maintenance fees that you pay periodically over the lifetime of the patent, right? Um, so the the issue is that the examination fees that you pay basically cover about half of the cost to the PTO to examine patents. So the agency is, uh, dependent upon post-issuance fees granting patents to subsidize examination. Um, and so there's a good reason, as I said, for that fee structure, because maintenance fees are good for the public, right? If we have patents and they're no longer beneficial, you don't want them, you don't pay the maintenance fees, and it gets dumped in the public domain. But the issue for the agency basically is if somehow they get into some sort of financial strain and they don't have enough money, right, it could create an incentive for them to grant more to get the issuance fee, right? And that was much worse pre-AIA, cuz they didn't have fee setting authority and they didn't have these financial reserve that they have today. And so when I studied, the PTO was in that pre-stage. Um, and and what I w- and and so it's just this inherent fee structure, basically, if you cross-subsidize by post-allowance fees, if you get into this financial constraint, it could create an incentive to grant. But what I'm saying now is that the agency is in a much better financial position because they have fee setting and because they have reserves. Um, they have these reserves set up that they didn't used to have pre-AIA.

So do you have any ideas on things that this subcommittee should consider or could consider in the change of uh the mix that you just described?

Yeah, I mean, I think one one thing, right, that they could consider is is moving some of the fees, um, more towards examination, especially for large entities. I do think for small entities and micro-entities, we keep the fees low for access, right? Those uh those um need smaller fees to access the patent system, but for large entities we think a lot of the fees they pay for access to the patent system are for attorneys, right? They're paying many more fees um for attorneys to prosecute their patents than they are the two thousand dollars for maybe examination search fees. at the PTO so one thing you could consider is simply having the examination fees come closer to matching the costs for um those and then keeping the fees subsidized for small and micro entities and the one thing I would note if that's the way that you move

Okay.

is um consider that in the statute you have it as fifty percent and I think a seventy five percent reduction for small and micro entities you might wanna adjust that Right? Because right now, um, if you wanna keep the small and micro entity fees the same, you'd have to adjust that downwards, right, if you increase it for large.

Very good. So you just kind of touched on one of the - on the second half of my question. So, um, last month Small Business Administration, uh, issued a proposed rule seeking overhaul in small business size standards. Uh, the USPTO is relying on the SBA's definition of a small business to determine fees assessed, to what it calls The smaller micro, right? Which you referred to. So, um, let me go to uh Miss Ray and Mister Kapos. I'll include you in this. If the SBA broadens the definition of the small business as it has proposed now, uh, what impact might that have on USPTO's fee revenue? Uh, Mister Kapos, can you go first on that?

Yeah, sure. Thank you for the question. So, um, a little difficult to say not being inside the agency at I would expect that um with the discounts already being granted by the PTO at seventy-five percent and fifty percent for um small and micro entities, um the impact probably wouldn't be huge because they're not a m- a major source for collections at this point, but there would be some impact and the agency would certainly need to study that. And that in turn may bring about a need for some incremental fee changes, which is exactly why Congress should approve PTO having that fee setting authority returned to it.

Chairman, can I get Ms. Ray's thoughts on that question?

Briefly.

Thank you. Um, so it the the the numbers of the discount afforded small entities and micro-entities couple of years ago became sixty percent discount and eighty percent discount. And so we already helped the smaller entities at that time, would further cost reductions benefit or encourage more filing, or help small businesses, I don't know. I will defer to Professor Wasserman to do one of her fabulous studies on something like that. Um, from my own personal perspective, I think that the lower the fees are, it encourages more innovation, more patenting, more creativity. Um, so anything that would reduce fees would be good, but of course the agency doesn't take any money from the American public. We are - it's entirely tel- self-funded. and it should remain so. But I I think that for the small and micro entities, I will also defer to Mister Reed because his member companies oftentimes fit in that category, but how much less would change their behavior, how much less would help them, it's difficult for me to say.

I thank the gentlelady, and with that we go to the ranking member, Mister Johnson.

Thank you, uh Director Kapos, Secretary Letnick, when he came in in a fit of doge. uh ridiculousness. Uh he

What do you really think?

he recklessly fired every member of the advisory committees of PPAC and TPAC soon after he was sworn in. But these boards were crucial to ensuring feast setting worked for everyone. It's my understanding that the union president was a non-voting member of PPAC. What was the role of unions in PPAC?

Yeah, thank you. Um ranked member Johnson for that question. So the union uh Patent Office Professional Association, POPA, um and its president plays a crucial role on the PPACT despite being a non-voting member. The union president carries the views, the concerns, the issues of the entire union, of many thousands of skilled uh patent examiners. And certainly speaking, for the period of time that I was there, uh played a crucial role in representing those folks on the PPAC and enabling the PPAC then to be effective in uh performing its role of advising the Under Secretary of Commerce and the office on setting good direction that took into account the needs of the examiners. So I would tell you that that is a very important role that needs to be maintained for the um uh the POPA president to be present and working as part of the PPAC.

Yeah, because if they're not permitted to uh if if if the patent examiner union representative is not uh able to convey uh the thoughts and uh uh opinions of the patent examiners uh how if the union can't do it, how can those voices be heard?

Well, that's exactly right. So the other members of the PPAC are coming from the public. Right? They're not inside the office, they're not in the building, they're not experiencing and working with examiners on any basis regularly, much less on a day-to-day basis, which is exactly why it was so important to have the POPA president um in there with the PPAC to be doing her or his job, and helping the PPAC g- give good advice to the Under-Secretary.

So that quality, high quality patent issuance can remain uh the the um outcome of um the business of the USPTO. But let me move on. Nineteen of the top twenty most frequent PTAB petitioners are big tech companies and prior to USPTO action on multiple challenges patent holders had been forced to defend some patents numerous times. Isn't the patent system better for our country if patent owners can have quiet title to their patents after just one challenge at the most.

Well, that's exactly right. And and when we um created the AIA and the PTAB as part of it, this committee being a major player in that, the premise was that the PTAB would act as an alternative to district court litigation, not an addition to district court litigation. Unfortunately, eighty percent of all patent cases that are brought are brought in both the PTAB and in district courts, which is not what was intended. And that's a byproduct, um, Rank Member Johnson, as you say, of having, um, uh, the PTAB not perform the role that we had originally intended, putting many good faith patentees through multiple challenges.

In addition to renewing the USPTO fee setting authority, which we should have taken care of months ago, What other steps should the subcommittee take to get back on track promoting American innovation?

Well, I would point to um uh something that's come up already, which is the need to support the Patent, Trial and Appeal Board. And the way to do that and to eliminate um duplicative challenges is through supporting the Prevail Act, which is already mentioned is bipartisan legislation has been taken up by this subcommittee, and would help uh the director, the PTO in general, the PTAB, the public, patent challengers and good faith patentees by ensuring that the PTAB finally meets its original vision of a of providing a form to challenge a patent as an alternative to district court once at the choice of the challenger um and to do its job effectively.

Thank you. If a fee setting authority expires uh the responsibility would fall back on Congress to um uh determine what the fees would be. Do you think Congress is is in a position uh given the hyper-partisanship and gridlock to actually uh accomplish that objective?

I think looking historically, uh this is why we needed the AIA and fee setting authority fifteen years ago, and why it's worked so well. Um the Patent Office is a very dynamic organization. with its fees fluctuating, its expenses fluctuating almost in real time, um and it requires a s- uh uh an opportunity to run itself like a business does. It's got an - it's got inputs, fee, service requests that are paid for by applicants and others. It's got outputs, you know, providing those - those services, and to do that in a business-like fashion, it needs to be able to plan on a multi-year basis and have some reserves available. The AIA accomplished all of that. Congress and and this subcommittee did a great job of putting fee setting authority into place. If that lapses and we're back in a world in which the PTO cannot conduct multi-year planning cannot have control of its funding cannot set its own fees, we'll be right back to the world that I described in my opening statement, which was unfortunately very dysfunctional.

Thank you. I yield back.

Thank you. Well, we uh, this subcommittee misses Howard Berman. With that, we go to the gentleman from Kentucky uh for his five minutes.

Thank Thank you, Mr. Chairman. Um, any time I sense unanimity or consensus among four witnesses, I try to pounce on it. But, um, I wanna ask all four of you in a speed round, do you support reduced fees for micro-entities and small businesses, regardless of what the fee structure is? Miss Ray. Mister Rhee.

Yes, but I don't wanna get it so clo- so low that it's cheap. You know, if you go on Facebook Messenger, I mean Facebook Marketplace, if you put something for zero, it doesn't go. It needs to have enough of a cost that as a business owner I think,

Right.

okay,

I agree.

this means something.

Thank you, Professor Wasserman.

Yes.

And Mister Kapos.

Sure, at the at the current level, if further changes are going to be made, those need to be studied.

Okay, great. Um, there's there's some discussion about the rule that um, Director Squires has proposed. And I just wanna establish one other thing in a speed round if I can. I know this could be tempting to give a long answer, but if you could give me a a yes or no. Um, nobody here is arguing that the the Director of the Patent Office has no discretion over whether to issue or not. Like, he he doesn't have to I'm sorry, issue, not issue, so in the context of PTAB, what I'm talking about. to recognize a challenge and to give it, if you will, uh, an audience in the P tab. I mean, we all recognize, right? That Congress said that he may issue and d- and doesn't have to issue in every instance where the challenge might qualify. I'll start with you, Mister Kapos.

So the, and the question is?

The question is, do you agree that he has some discretion that he doesn't have to issue in every instance where it qualifies.

Yeah, yes, that was the plan from the AIA from the beginning, yes.

Okay, Professor Wasser.

Yes.

Mister Reid.

Yes.

Mister A. Okay, thank you very much on that. Um, I actually associate myself with the comments from uh Hank Johnson from Georgia, um, in that, you know, the directive to Congress is to promote progress in the sciences and useful arts. And so, uh, I think everything that we're considering here, whether it's fees or rules or anything like that, the directive to me as a congressman from the founders was make sure whatever you're doing promotes that. And I think access to the patent office with the low fee for first time inventors or micro-entities does that. I also think that, um, we're not doing service or justice to that directive when we subject patent holders to multiple and sometimes parallel challenges to the validity of their patent um and so I I actually like the rule that uh Director Squires has put forward I think it will bring some clarity to the system and I'm hearing f- from the we'll call them stakeholders these are people who hold patents and apply for patents um most of them are uh happy with the changes that have resulted from that. I know we don't have unanimity here uh based on the opening statements, but um the ones that I'm hearing the most complaints from are big tech. I would just like to ask you, Mr. Kapos, um you eh did in the past express concern about multiple challenges and parallel challenges do you still have that concern?

Yes, I do.

Um And you may disagree with Mister Squires about how the factors are being weighted, but it's a s- that's a separate legal question of whether he possesses that institutional discretion, isn't it?

I- it is, yes.

Yeah. So, um, I wan- just, I've got one minute left, say why I like the - the rule that he's put forward. It protects patent holders against repetitive challenges by requiring PTAB petitioners to forego future challenges to the same patent. It prevents multiple challenges against patent claims previously upheld as valid. And it would ensure patents are challenged at the PTAB only when faster than district court or the ITC. And it requires extraordinary circumstances to overcome other bars to institution. I think these are, uh, all noble things, all good things that we want. We w- I think the gold standard here, and I know it's

I I thank the gentleman. I I thank the gentleman. Those are good comments. Those are good comments. I might only ask Mister Campos to uh clarify that it is three fourteen a that sets out the limitations. It is not discretionary. It is discretionary pursuant to that provision in the law. Isn't that correct?

Sure, yes.

Thank you. With that, we go to the ranking member of the full committee, the gentleman from Maryland, for five minutes.

Thank you kindly, Mr. Chairman. Uh, Mister Campos, when President Trump announced the Board of Peace in January, it looked to me like a money laundering scheme for countries with dubious human rights records and a lot of oil money to use to curry favor with the president. Um, and we didn't know a lot about this board of peace, its structure, its organization, its operations, other than the fact that, uh, it had declared that Donald Trump would be president for life of the organization, which didn't give us much comfort that this would be a legitimate public project under the rule of law. Nine months later, we still know next to nothing about the Board of Peace. I'm still following up with America's agencies to make sure that taxpayer money is not being funneled to a group that exists under the apparently lawless discretion of its president for life but we were all seriously disturbed to learn um, that Mister Squires, the USPTO director, had tried to obtain trademark rights to protect the Board of Peace name and logo. My understanding was, and it is only strengthened, that this is not something allowed under governing law, for one person to seek, who's not acting as a lawyer or representative, to seek uh a trademark for someone else, much less for the director of the office to do it. in breaking USPTO rules to benefit the president, I think inserts a level of politics into an agency that's historically been apolitical. Do you agree that the USPTO should not be involved in partisan political work?

I very much agree with that.

Um, did President Obama ever ask you to apply for a trademark on his behalf?

No, he did not.

Did you ever apply for a trademark on his behalf?

No.

Did you ever act as a lawyer or a representative for anyone in your capacity as director?

No.

Um, two months into the Trump administration, Trump's secretary of commerce, Howard Lutnik, fired every member of the PPAC and TPAC, the Patent and Trademark Advisory Boards. He finally swore in four new members and two new members uh not long ago. Um, If PPAC and TPAC uh had not been dissolved, what would their responsibilities have been over the last year and a half?

Well, they would have been advising the office, the Under Secretary of Commerce, on matters of uh operations of the office, everything from policy to patent and trademark examination if you're talking about the PPAC and the TPAC, and even coming to the purpose of this hearing potential fee setting, the PPAC and the TPAC play a statutory essential role in the fee setting process.

So would patent holders have benefited from adjustment of patent fees conceivably over the last year and a half?

They they would have benefited from the advice of the PPAC and the TPAC.

Could you explain what that oversight role is that those, uh, entities play?

Yeah, so they meet, uh, multiple times a year. They're, you know, statutory part-time government employees. They come to the office. They study the office's operations and finance, everything from uh patent filings to trademark filings, as was mentioned before. Their non-voting members, the president of the Patent Office Perpe- Professional Association who represents all of the examiners, participates. And so the uh PPAC and the TPAC for their part have a very intricate knowledge of what's going on in the office, and they bring in the this the user community, right? They're employees of corporations. In one case they're statutory um small business person. So they bring in diverse external perspectives and advise the undersecretary on operating the PTO using those perspectives.

IP experts have criticized a reputed loyalty test being used in the hiring for new patent examiners. There are also uh reports that Secretary Letnick is subjecting prospective PPAC members to a similar oath of loyalty to the Trump administration. When you were U USPTO director, did your secretary of commerce require partisan or political loyalty pledges from people who participated as members in BVAC?

No.

Um, do you think that's appropriate to impose such a loyalty test?

You know, I I hesitate to speculate about what's going on in the administration now, but I do agree, Congressman Raskin, with the statement you made at the beginning, the USPTO is best kept nonpartisan and nonpolitical.

Thank you very much. And, Mr. Chairman, I go back to you.

I thank the gentleman. We now go to the gentleman from Virginia, Mr. Klein, for his questions.

Thank you, Mr. Chairman. And I appreciate the timely hearing. Mr. Reid, Huawei, a sanctioned entity list company, reported roughly six hundred and thirty million in global patent licensing licensing revenue in twenty twenty four and has run assertion campaigns against American firms. What should the PTO be doing with its fee and examination tools to stop subsidizing it?

Well, the reality is is the US patent system is the gold standard of the world, and so everyone comes to the US to file their patents. I think your your the the the basic question is really the question of what do we do with the fact that basically every foreign country wants to have a patent issued here in the United States and the reality is is that uh Chinese entities can be inventive, But this gets back to the core issue, which is higher quality patents make it good for everyone. And that actually benefits American companies. But the worry that we have is the way in which the lack of transparency at the USPTO is actually kind of allowing the Chinese to game the system. And so I also appreciate the fact that both you, Mister Klein, and the chair, uh, Mister Issa have worked on some issues around third-party litigation funding, where we see this explosion of patents, um, that provide the source material for uh basically aggressive sue and settle. And so I think that if you want to do some pressure on on international, you have to understand at the root what we all want is a high quality patent that teaches us how to do something new and inventive. And we don't really care about where it comes from, but we do know that if you don't do it right, the money does flow out of the United States and into other buckets.

Well, I would assume that you share our concern that the PTO has granted more patents to Huawei than any other applicant with the

Yes.

exception of Samsung TSMC and QualComm despite the fact they've been sanctioned by the US government for being a threat to national security. Um, if Congress renews the fee setting authority, would you support directing the office to front load more cost in the examination fees rather than back loading on the issuance and maintenance? So foreign filers who file in volume in a band and are not subsidized by US inventors who see their patents through.

Well I I I know this will sound weird, but I actually think that some of the big tech companies, um, it's reasonable for them to uh pay more in maintenance fees and others going forward to do what you just highlighted. The best way to get quality is actually a quality examination. So the ideal goal is to make sure that the fees are available, to make sure that the patent office has high quality examination. We never have to have a PTAB conversation if in fact every patent is, you know, brought down for a from a line from um from Talladega Nights if it's you know blessed by pound six ounce baby Jesus then if willows through the patents that we're getting then that's great but that's not the reality so in fact what we do need is to make sure that the fees are appropriately going to fund and support examination first and then that we have not the kind of blind side um discretionary denial which leaves us with no insight in what to do better the next time so a hundred percent I resist the temptation to respond to a quote from Talladega Nights. No, but they're getting better. No, but they're getting better. That's the hope. That's the hope. The tools that the USPTO needs to have to handle this flood, uh, I likened it in my opening remarks to, um, it's a repeat of what we saw after State Street. There will be an enormous gold rush. Some of them will be good patents. A lot of them will not be. And if the money isn't there, the examination isn't there, that's why having the USPTO lose fifty percent of - of its examiners over the last two years makes it impossible. So you can't both cut off the PTAB, which is the backstop, and have reduced morale and a loss of fifty percent of examiners at the same time, that you are getting flooded by AI patents. And a lot of those AI patents are coming internationally too.

Mm-hmm. Thank you. Miss Ray, Director Squires has said the office needs continued fee authority in part to invest in AI and he's touted an AI tool that cut a trademark classification task from five months to five seconds uh if AI is genuinely slashing the office's costs in section ten caps fees it costs recovery to American applicants. see those savings as lower fees?

I am not an AI expert, but I don't think we can make that generalization, because I still am hesitant to think that AI can solve all of our problems. Um, I also, if you might, wouldn't mind me commenting on the front-loading of fees.

Please.

I'm always cautious when you think about front-loading fees, because that will may hamper innovation and patent filing, and that is the engine on which our innovation runs. So if you if we did front-load fees, it would have to be done very cautiously and with true ec- economist input.

Thank you. You're back.

We now go to my friend, the gentlelady from California, Miss Lofgren.

Uh, thank you, Mister Chairman. Uh, the American Invents Act was really built on a straightforward premise, which is that high quality patents drive innovation and growth. and that low quality or over broad patents do the opposite. They drive up prices, impede competition, expose businesses to abusive litigation. Now, those of us on the committee worked through all of this, but uh when practically every coffee shop in America was sued for WiFi patent violation, the rest of Congress got interested as well. Um It seems that the USPTO director has drastically changed the IPR process. The numbers tell a story. Uh, in fiscal year twenty twenty four, PTAB instituted about sixty-eight percent IPR petitions, um, and that fell to thirty percent October twenty-five to August twenty-six. As a result, many parties, uh, n- are not even bothering to challenge, uh, and the number of, uh, new IPR petitions fell from one hundred and thirty-one in January of twenty-five to just twenty-two. in June of this year. Now, I think it's important to drive down how did we get here. When we passed the AIA, we took some care to make sure that the process wasn't automatic, that, uh, three fourteen sets a merit threshold. Uh, you have to, uh, demonstrate a reasonable likelihood that you would prevail on at least one challenge claim. And that's not insignificant. I mean, maybe we could re- review it and - and make it better. But the USPTO director has increasingly inserted a whole series of discretionary considerations that are not in the statute. Uh, that includes age of the patent, so-called settled expectations, most recently, considerations about whether the accused's products are manufactured in the U, US, uh, investments in American. None of those are provided for in the statute. The use of discretion is a finding of whether there's a meritorious claim. So, uh, Mister Reid, if a a petitioner has, uh, made a a a showing that Congress required that there's a reasonably likely petition that one of the claims, shouldn't that petition receive a review on the merits rather than being cut off with these extraneous measures?

One hundred percent.

It seems to me that one approach that the committee might look at is clarifying section uh three fourteen A. of the aia and s- instead of saying that the director may not institute unless a reasonable likelihood standard is satisfied congress could say that the director shall institute when the petitioner satisfies that standard. He would still have the discretion on whether or not there was a meritorious claim because the judgment has to be exercised but I think uh the bar wouldn't be any lower than it is today you'd still have to show reasonable likelihood Uh, mister Reid, do you think that would help restore the IPR as a meaningful mechanism for policy?

A- absolutely, and I think at the core of your question is we also ha- it's opacity. We don't know why he's denying them,

Correct.

we don't know what the origin is, so the transparency itself becomes part of the problem.

It is a part of the problem. And I was looking at um for years uh institution decisions were made by the three-member panel of expert uh administrative patent judges, applying the AIA's reasonable likelihood standard, and those decisions explain why the review was granted or denied. Now, under Director Squire's current policy, the director makes the decision and the routine denials are generally issued through a summary notice. It doesn't provide any s- case specific. Here's one. It's a one page thing saying you're denied.

Exactly.

That's it. You don't know what the merits were. Were there merits? What was the consideration? Here's an example of what the the the decisions used to be. You know, eighty, hundred pages of thoughtful reasoning, and no one gets that anymore. That's not what really what we attended. Uh, do you think that that shift is really consistent with fundamental fairness, Ms. Ria?

No, absolutely not, because one, it the the primary mission of the USPTO is to um provide a time-limited monopoly, but on the condition that you teach us something.

Right.

That's the core of the bargain. And what these denials show us is we're not being taught anything even on how to make sure that we're applying in the right way.

I I note that we have had a drastic reduction of administrative uh patent judges. Um, there were two hundred and thirty at the beginning of twenty twenty five. We're down to a hundred and sixty now. And it just seems to me, if workload was asserted as a reason for this, which I think the director did assert that, the answer wouldn't be to reduce the number of experts in the agency, it would be to increase the number of it. And by the way, I think, you know, having higher fees for big companies, that's absolutely appropriate. They can afford it, they should help fund it.

Yep.

I agree with my colleague, Mister Massey, a very nominal fee for start-ups to encourage them is ho- wholly appropriate. Uh, but I just think we're in a real world of hurt now in the patent office, and it's gonna do damage to our innovation economy. I see my time is up, Mister Chairman, I yield back.

But the time was well spent by the gentlelady. And with that, I ask unanimous consent to place in the record the uh appropriate files related to the uh discretionary retroactive discretionary denial of Termino BCT, Inc. versus Hermanotics uh Corporation. Without objection so ordered. And we now go to the gentleman from South Carolina for five minutes.

Thank you, uh, Mister Chairman, the America Invents Act gave the US Patent and Trademark Office authority to set its own fees, uh, and adjust them, uh, which of course that authority expires this month. As Congress considers the future of that authority, I think it's also important that we r- uh, examine the recent policy changes at the USPTO, particularly those involving inter-party review and discretionary denials. Uh, these changes have generated significant debate. Uh, some believe they're provide greater certainty and protection of patent owners, while others are concerned that they could make it more difficult to challenge the patents that should not have been issued. Congress should hear obviously from both sides, and we are, uh, and consider whether additional guardrails should accompany any renewal of that authority. A strong and predictable patent system is also a national security issue. Uh, the United States is competing with China for leadership in five G, six G telecommunications, pharmaceuticals, advanced manufacturing, and other critical technologies. So we need that patent system, uh, that protects American innovation while maintaining fair mechanisms uh to challenge potentially invalid patents. Um, Congress obviously cannot and should not micromanage every decision by the Patent Office but when Congress delegates significant authority to an agency, there's also a responsibility to ensure that that authority is exercised consistently with congressional intent. Um, uh, Director Capos, in light of recent changes to the Interparty Review and discretionary Do you believe the existing statutory framework provides sufficient discretion to the USPTO? Or should Congress consider clearer guardrails, uh, as it e- evaluates the renewal of fee setting authority?

I think the the AIA provided, um, a very deliberative set of guardrails around fee setting. And Congress has done its job, the USPTO has set fees seven times in the in the years since it's had that authority. There's never been a single instance where Congress needs to step in. Uh, so I think that system works well. Regarding other guardrails, um, uh, the one that's come up the most at this hearing appears to be the Patent Trial and Appeal Board and its operation. And of course there are two sides to that story. So as you mentioned, uh, it's it's your job to hear both of them. You know, the other side i- involves um, good faith patentees having their patents challenged repeatedly in the PTAB, uh, and in court. But there's a solution, and this, um, subcommittee has already looked at it. That's the Prevail Act, which will, um, reset some aspects of discretion, enable patent challengers to have their say as to where they challenge, PTAB or or court, but challenge patents once and enable the AIA to achieve and the PTAB to achieve the goal that Congress set out for it in the first place.

Director Ray, would you also uh echo that or do you have anything to add to that um over here? Um, director.

So, um, I think that I still

Could you put your mike on, please?

I still would prefer to see a written, well-reasoned decision if the director elected to use discretionary denial, just so that the user community gets a clearer idea of what petitions are appropriate and what's the proper tool and way to use the IPRs and PGRs.

Uh, Director Kapos, uh, in addition to renewing that fee setting authority, um, for the long term, how else can Congress help inventors and bolster U. S. innovation leadership?

Well, there's some other legislation that's pending that, um, that I would mention. The the Restore Act is a very positive piece of legislation that would, um, restore the injunctive right of a patentee once a patent has been shown to be valid and infringed. Um, I would certainly commend that legislation, um, to this subcommittee. And then third, um, the Patent Eligibility Restoration Act, uh, is, uh, has been considered by this subcommittee, uh, and on - on the Senate side, and that would restore, um, sensibility to, um, patent eligibility considerations, the question of whether a new invention is even eligible for patent protection. In that regard, there's been a lot of mention of China.

I I Thank you for that real quick. I got brief time. Mister Reid, I wanna go to you. Um, your testimony, you talk about how bad actors are taking advantage of an overly broad uh overly broad patents and that it is emboldened abusive patent licensing scheme. So I just wanna boil this down for, you know, the the people back home in South Carolina. How does this affect the people of South Carolina or California or New York or Florida, uh and uh or South Carolinians generally. How would we boil that down?

Well, first of all, it costs you jobs and it costs you it costs you time. Um, I think it's interesting that he's mentioning the Restore Act because, uh, there was recent discovery in a case in Western Washington where a patent rule, and I'll use that as opposed to NPE, um, looking at their internal discussion, they referred to if if the Restore Act gets passed it will be quote, a jackpot for us. So the patent troll community is looking at the Restore Act and saying this is exactly what we need and the reason that they see it that way is also in the discovery documents from this case um in this case called the Landmark case, um it turns out that they know they don't have a particularly good patent. Uh a quote from them is "this could all unravel at claims construction, and we have substantial risk, so why potentially stop the money train with negative rulings in this case? Therefore, we should charge at twenty five thousand dollars or below. And that's what my members face. Dozens of my members have gotten letters, and there's pages of these letters that are coming from these trolls, and they're saying, give us twenty five K, give us fifty K, give us a hundred K. And we have to pay those, and we don't have any option because it costs too much even at the PTAB to fight it.

Thank you for that, Mister Chairman, my time has well expired.

Sorry.

I I thank the gentlemen, we now go from South Carolina to North Carolina,

Thank you, Chairman Issa and Ranking Member Johnson, for organizing this hearing and thank you to the witnesses for your testimony today. I'm proud to represent North Carolina's research triangle, home to companies and startups that have built thriving businesses and, um, have done this from just a single idea or an invention. This type of innovation and growth could not happen without the strong intellectual property protections we enjoy in the United States. And certainty on how you file for a patent for your invention and how much it will cost help inventors plan for the future and attract investors. And yet, the Trump administration has tried to sabotage this system with Commerce Secretary Luttnick floating the idea of value-based patent fees last summer. Last fall, I led a bipartisan letter, the these issues are very bipartisan, with several members of the subcommittee to Secretary Ludnick urging the department not to move ahead with a patent tax that would hurt small inventors. Thankfully, Director Squires responded, letting us know that the proposal is dead and, we hope, buried. And though I'm thankful that we stopped this threat to small inventors, there are other threats to small inventors. In recent years, small inventors are having a much harder time defending their patents. As you heard from ranking member Johnson and also from Mr. Massey, who I don't think is here anymore, many start-ups and inventors face repeated attacks on their PTAB, um, on their patents at the PTAB, and, contrary to congressional intent, Some large companies have used repeated duplicative challenges at the PTAB in federal court to stifle competition from startups. It's past time for course correction to ensure that no one can use PTAB to bully small inventors. Mister Kapos, I know you've been talking about the Prevail Act, which I also love because I'm a cosponsor of that, um but how would USPTO's proposed PTAB rule if we don't get Prevale right away, help return it to its original purpose of providing faster, cheaper alternatives to federal court.

Right. Well, thank you, Congresswoman Ross. Um, that's a great question, and - and the PTO's, um, rules which are not yet, um, put in place but have been proposed, um, in many ways is consistent with the Prevale Act, um, in ensuring that good faith patentees are not subjected to repeated challenges of their patents in the PTAB and, um, uh, and - and will not have to face the prospect of - of defending a patent both in the district court and in the PTAB.

And then, because so many of, um, these entrepreneurs, particularly in my district, are serial entrepreneurs, could you discuss how important that patent is because most of them are not going to take this to market. They're gonna get that patent and then they're gonna find a way to commercialize it. And if somebody steals that patent away from them, that might be their entire source of income. So could you just give a little flavor for how um these smaller inventors are really just set back when they c- are consistently challenged by bigger folks?

Yes, sure. So so getting a patent turns out to not be the end of a process, it's the beginning of a process. It's the gateway to getting funding, um, or to licensing a patent to a a manufacturing and a producing entity. And small businesses like the great ones in Research Triangle Park and all over the country, when they get a patent they need to have some confidence and assurance, and their investors are the funding sources, whether VCs, friends and family, private equity, whatever it is, need to have some confidence that the patent is something real. When a patent can be challenged so easily and repeatedly, right, uh, in in the P tab and is challenged so easily, confidence is lost, investors will not move forward, and the patent winds up not being worth very much. So this is why Congresswoman Ross, your proposal for Prevail is so important and your suggested reforms are so important. They enable patentees and their investors to have enough confidence to move forward, putting funding against ideas that create innovation and jobs and marketplace outcomes.

Well, thank you so much, and again, as a reminder, all of these initiatives, these legislative initiatives have been completely bipartisan and bicameral. Thanks so much, and I yield back.

Thank you, and um, I recognize myself for five minutes. Miss Ray, all excess collections by the USPTO are deposited in the patent and trademark fee reserve fund which can be accessed only through a formal congressional reprogramming process. The USPTO has expressed desires and advocated for an authorization to spend all fees deposited in this fund in its annual appropriations. How are these funds going to be used by the USPTO in the future plans, and how would that benefit the American people?

I apologize. I'm not familiar with the current administration, what they plan on doing with the fees with the reserve fund. I do think the reserve fund is important. It's useful. Um, when I was at the agency, there was a a government shutdown, sequestration. Um, we could still accept money, uh, couldn't spend money. But I think the reserve fund is something that's very important for the USPTO, but I'm not familiar with specifically what how this administration would like to use it.

Okay, I uh will also ask, keeping suggested modifications or improvements aside, what carries a greater long-term risk, not renewing the fee setting authority or renewing it without the additional safeguards?

Uh, what was the last part of your question?

Not renewing the fee setting authority or renewing it without safeguards uh that we've talked about.

So that's up to Congress.

What's a

I do think it needs to be renewed.

Sh-

The USPTO absolutely needs fee setting authority. Whether or not you design some guardrails is entirely up to Congress. Um, I do think that in terms of the PTAB and, um, the clarity that I think could be offered by well-reasoned written decisions, um, determining whether or not a particular petition is instituted, where right now the director tends to, um, use his discretion to deny institution. I think that any action the USPTO takes I think the transparency and a written insight as to the thinking process would benefit the user community, the American public, and innovation.

Appreciate that. Professor Wasserman, the Supreme Court's ruling in Loper Bright, how does that affect the USPTO's scope of interpreting its fee setting authority, if if it does at all?

So, uh, I'm not sure that it does, right? I mean, how I read the statute, uh, um, giving fee setting authority to the PTO is it's whether discretionary, as to how much, right, as how it's written. Um, and to me, when Congress gives the agency discretion, right, to set its fees within certain guidelines, right, it has to set, obviously, aggregate fees to cover aggregate costs, right? Um, as long as they hit those particular guardrails that you guys have set, um, then I think, um, the agency has, discretion to set their fees within the guardrails that you've set. Um, if if they don't um do the guardrails that you've set, then um I think they're they're violating the statute.

Appreciate that. I'll yield to Mister, I. Sophia has anything more?

Uh, thank you, Chairman. Um, Mister Campos, I know you said earlier you didn't want to uh talk particularly about the current administration, but I think there's an important area in which you are an area expert. And that is that under three fourteen A, the discretionary denials, you've seen the denials that have gone on over the last many months, uh, including broad denials of first time patents. Are those consistent with the way you would interpret, uh, your discretionary denial or and or the history you've seen between your time and now?

Well, I think they certainly are a broadening of the interpretation. So far they've been supported by the courts. So it's hard for me to say they're

When you say supported by the courts, are you saying that the uh dozens in a row that Samsung and Intel saw denied uh have been gone to the courts? Or are you saying they haven't yet been seen by the courts?

They s- some of the denials have been appealed to the federal circuit, and so far the federal circuit has supported the USPTO's discretion in every case, I believe. So it's hard to say that they're illegal.

I didn't say they're illegal, I just said were they consistent with your interpretation of three fourteen A? Are they consistent with that? Obviously, most of these it's too soon. It'll be years before the Article three courts uh ta- take down some parts of patents that were with the same evidence that was not considered by the uh PTO. So, back to the question. Do you think you would have had as broad an interpretation since you were the first to see this act and implement it?

Yeah, we well, we we did did not try to push the discretionary denial point or director

Right. So isn't it true that no one has had anywhere close to this many denials,

support.

particularly first time denials, in the history since the act was passed?

Yeah, that certainly is true.

Thank you. I yield back.

Thank you, Mister Issa. And the chair recognizes Mister Moskowitz for five minutes.

Uh, thank you, Mister Chairman. Uh, since this is my first hearing on this subcommittee, I wanted to start by thanking uh the ranking member and my colleagues for welcoming me. I'm still getting up to speed on many of the complex issues that come before this subcommittee and I appreciate the opportunity to learn from members on both sides of the aisle who have spent years working on intellectual property patents and innovation policy. Uh, these are incredibly important issues, maintaining a strong and effective intellectual property system is critical to American innovation, our c- our economic competitiveness, and our ability to continue leading the world in emerging technologies. The discussion today about the USPTO, uh, the America Invents Act, and the future of our patent system is an important one, and I look forward to continuing to engage on these issues as a member of the subcommittee uh and with that uh at this moment,

Thank you, uh, Representative Moskowitz, and welcome to this subcommittee. We look forward to your, uh, participation, and I thank you for yielding the time. The USPTO was one of the first agencies to offer remote work and it was a resounding success. How did feast setting authority help the USPTO explore new ways to approach to federal workforce. Uh, Mister Kapos.

Yeah, thank you, um, uh, Ranking Member Johnson. That is a great point. And indeed, we could not have, um, achieved anywhere near the success in both remote work and therefore employee morale, employee retention, and overcoming the backlog, um, during the time I was at the USPTO had it not been for fee setting authority, because that was what unlocked the ability to issue the equipment to examiners so they could work remotely and to set up the office's internal IT infrastructure so that it could handle remote work. Transformative.

Thank you. Uh, the USPTO has closed or canceled plans for several offices across the country, including in uh my state of Georgia, where the goal was to meet investors where they're at. and encourage new innovation across the country. Why is USPTO outreach important to fostering small and micro entity participation in the patent system?

Well, as we learned from setting up the first three uh satellite offices that were sanctioned by the American Events Act, uh the USPTO needs to meet inventors where they are, where the inventors are, not just in in Alexandria, Virginia. And having those satellite offices and now outreach offices, which is an a nice innovation by the the USPTO, enables the agency to be relevant to people where they are in Atlanta, right, to be able to interact with people locally, um, in person, right, uh, in their, uh, area, have outreach programs, education, all the things the office does to help inventors and brand owners, um, uh know about and understand and interact with the office and use it. Super important.

Thank you. Uh, innovation often requires companies to make substantial investments years before they know whether a technology will succeed commercially. How important is it that the costs associated with securing and maintaining intellectual property rights sufficiently uh uh remains sufficiently predictable during that period.

Well, the investments made by by innovators um in their innovation and uh then taking that into the marketplace are the lifeblood of the American um uh innovation economy so predictability is at the core of enabling innovators right to get into the marketplace if they have no idea whether their intellectual property is going to be upheld as valid what the

Thank you. How important is the director's fee setting authority to use the uh, excuse me, how important is the director's fee setting authority to the USPTO's ability to develop a reliable multi-year budgeting financial plan.

It's it's um essential, it's fundamental. We we we know what the world looks like without it, that was the world before twenty eleven, and we had no ability to make multi-year plans, to invest in information technology, to invest in employee development. Um and we had a mess on our hands, quite frankly. The AIA and fee setting authority were instrumental. to enabling the office then to act like a business, to run itself like a business and make plans.

Thank you, sir.

I thank the gentleman. We now go to the gentleman from California for five minutes, Mister Keiley.

Thank you, Mister Chair, uh Mister uh Kapos, uh Mister Johnson actually touched on uh the uh number of the themes that I was uh intending to raise, so maybe I'd just give you an opportunity to connect the dots a little bit more, uh that uh if this fee setting authority uh were not there with what you describe as a disruption to the hiring training, or technology investment, uh what might that mean for American innovation?

Yeah, thank you for the question Congressman Keilly. So what it will mean is uh the agency almost certainly losing employees, being unable to keep up with its workload, being unable to invest in artificial intelligence and other um informat- critical information technologies, we know from history that will lead to the to attrition, causing the backlog of unexamined patent applications to skyrocket again, like it did, um, uh, when I was running the agency, and will cause, um, inventors to not be able to get access to patent protection, uh, brand owners to not be able to get access to trademarks, um, and therefore the inability to go into the marketplace to create products and services and to bring jobs to our country. All bad news.

It seems like it might be particularly problematic uh right now at this kind of technological moment we're in. Would you agree?

Oh, of course. Uh, AI investment, which I commend the office for doing right now, using the funding mechanism of fee setting authority is absolutely critical to the US PTO. We need to do it for ourselves, for our own country, for our innovators, but we need to lead the world at it as well.

Yeah, your uh testimony, your written testimony, you say that uh this stable funding provides the ability to hire nimbly, application volumes,

Yeah, that's exactly right. And AI is a great example where application rates are surging, and the office therefore needs to hire and redeploy resources almost in real time against that um bolus of applications. with fee setting authority, it's got the reserves and the nimbleness um to do that, and without it we'd just returned to the to the age before twenty eleven where it had no such ability.

Yeah, and just to put kind of a fine point on it, at a time when maybe there's n- nothing of greater geopolitical significance than uh our ability to innovate on AI uh you know in a way that stays ahead of China uh do you think that uh there could be consequences, uh as far as that's concerned?

you know, f- for sure, uh, both the operation of the office in general and its ability to support AI-based um innovation by the great American companies that are leading the way in that regard are very much hanging the balance with the office being able to keep up um with these dynamic changes in demand.

So it seems like, as you said, uh, before, that, you know, regardless of any of the other disputes that exist right now, far as uh as a i p policy uh and uh operations of of the p t o it seems like all of us on on either side of any of those issues should be able to agree that weakening the capacity of the us patent and trademark office to make timely investments to have stable funding is not in anyone's interest so we should kind of put those other disputes to the side when it comes to the issue of fee setting is that right

right it that's my belief exactly right and and i wouldn't say the congress needs to give a blank check far from it I would suggest reauthorizing for a period of time along the lines of what was done in the past seven to eight years so that Congress uh retains the step in right um

yeah that's one of the things about the PTO is it essentially funds itself right

oh one hundred percent fee funded it uses no taxpayer funding

so this isn't uh an appropriation you're asking for it's simply asking for the ability to um self-generate revenue uh in a stable way

Yeah, keep and use those funding those funds in order to operate the agency.

Right. Uh, thank you very much. You're back.

Uh, t- uh, would the gentleman yield?

Sure.

Thank you. Uh, every minute counts. Uh, uh, Professor Rossman, uh, fee setting authority. We've talked a lot about m- m- micro and small entities. Uh, currently the PTO considers you a micro entity. even if you've done thirty-five patents. You're a small entity, even if you've done thirty-five patents. In fee setting, should the PTO consider the question of whether a professional patent a- a- applicant at some point particularly when they may in the past, or even if going to assign their patents, um, and I ask that because it's such a large discount that isn't there money left on the table inappropriately, unless we make sure that these heavy discounts are consistent with effectively the first time with a true micro-inventor not a sequential inventor of dozens or even hundreds of patents.

No, I think that's a good point. I would have to think about that more, exactly what the definition should be of micro-entity and small entity, um, because I do think there could be a more careful definition to capture what we're really concerned about, right, with respect to innovation.

And I'm gonna recognize myself for questions now. Mister Reed, would you also say that the uh the proliferation of AI uh favors a micro-entity that might might in fact abuse these incredibly small file filing fees, uh and so on.

Yes, that's exactly what what our concern is is, and you understand this because of your background as well, AI reduces friction. And so it now becomes much easier to kind of create AI slot patents. And that's why you started this hearing talking about patent quality being the most important issue. And I'll refer back to it. So everything we've talked about, about fee fees fees and et cetera, needs to stay primed around the idea of quality, which was your first point. Um.

Mister Campos, you've uh you've been very generous with your comments too. You actually had to look at this uh early on um in light of the fact that patents are increasing thus the losing application is occurring while the money flow will come years later um isn't this an appropriate time to look at um those discounts and whether or not uh there should be scrutiny over them or at least

Yeah, yeah, great point. So I would um agree that it is appropriate for Congress and the PTO uh to be looking occasionally regularly at small entity and micro-entity status, as they have in the past, um in recalibrating them. I would take that up separately from uh this fee setting issue, uh just to keep the USPTO on a on a stable.

Sure, no, no, it was it's more a ma- question of guidance and to that extent the absence of nine uh dedicated individuals providing that guidance uh do you think it's appropriate for us to potentially link the existence of that consultation, thus the existence of the full committee or substantially full committee to uh the origination and processing of any new fee proposals.

Well, I think uh yes, and Congress has already done that because the f- the agency, the USPTO cannot uh undertake a fee setting exercise without the PPAC and TPAC being constituted.

They can't originate it, but under the current rule essentially they could get to five, a working quorum, originate it, and then fire them the next day. Not saying they would, but I'm saying that the linking of the existence throughout the process, uh, would be a a change over the original Americans in Events Act, thus that the, quite frankly, uh, you know, we don't want this to be a fee setting of one person. Miss Wass- Wass- Professor Wasserman. I saw a a yes, but I thought I'd hear it too.

Uh, no, I I was disagreeing.

Thank you. Uh, Mister Reed, um, obviously, uh, you're one of the per- people who arrived here with direct evidence of the impact of the dramatic reduction in the acceptance of cases uh under PTAB. But let me let me go through something, and Mister Campos is a very wise and well-educated man, but I think he misled us inadvertently. uh when mister uh Johnson was was asking questions, he talked about well you know we never intended to have duplicate uh article three and PTAB, but isn't it true that in fact PTAB is originated by the the accused defendant and article three is by the patent holder plaintiff, so with two clearly different individuals, one who is already facing normally an article three uh case, um, before he even has an opportunity to realize that he's, uh, uh, he's gonna need a PTAB case, isn't it true that under the American Events Act, that obviously Congress intended PTAB as an alternative, but not to the exclusion of the idea that you'd be in both courts at once? And isn't that the reason that PTAB has this very fast rocket docket of a year?

Yes. I could talk longer, but you've only got thirty seconds. So, yes, a hundred percent agreed.

I might run over a little.

Oh.

Uh, Miss Ray, uh, you know, you've looked at it too, um, isn't it true that the PTAB was working exa- under uh Cathy Vidal and other previous uh uh undersecretaries, was working well and the number of cases being handled and the success of those cases relieving from the federal court was working.

I believe it was. I believe it was. And I'd also like to point out that the PTAB is very limited in their review. They only make decisions with prior art essentially, the obviousness and anticipation, and generally cases when they're litigated there are many other issues, for instance, patent eligibility, inventorship, obviousness type double patenting. There's other nuances that are also concurrently handled by the district court that the PTAB does not handle. The PTAB is an expert in the technology, so they primarily look at prior art. And if I could also mention one other thing in terms of small entities, and micro-entities, if one of those companies that's a small entity or a micro-entity assigns their patents or uh undertakes certain types of collaborations with large entities, that small entity or micro-entity then has to pay the higher, larger entity fees

Right, if they formally assign.

Correct.

Uh, Mr. Campos, I uh commented on - on the inconsistency without asking you, but Would you like to elaborate on whether or not that's a fair statement that since two different parties bring them and the first party usually goes t- goes to court to article three no I never saw a plaintiff go to PTAB uh as a patent holder uh so wouldn't you say that that in fairness these were always intended to be c- potentially concurrent?

Uh no, I I don't believe that at all.

So how would they not be concurrent if if in order to

In fact

in order to go to PTAB you have to be accused, uh you know, uh you you at least you have to be aware that somebody is asserting their patent against you, uh or at least that they're asserting it and you're you're think so, where did you think that people would go and and commit to the dollars to change or invalidate a claim particularly when the patent itself versus the alleged uh infringement really aren't defined until a case is brought?

you know, the way this frequently happens, I would say even possibly usually happens, is where the good faith patent holder approaches an infringer uh to discuss the infringement situation, offer a license, or ask the infringer to go do something else. The infringer then files a PTAB proceeding,

No, I understand that, but

which is

even in even in Article three, cour- cases, and I'll speak from personal experience in this case with thirty-seven patents, and many others of other peoples that I've been involved in as a plaintiff or a defendant, nobody tells you what you're infringing. We tried to put that into the law explicitly. They in fact say, " Look at the patent you're infringing." Uh, no, we're not gonna limit, uh, the interpretation of our claims. No, we're not gonna tell you all of that. You go through hundreds of thousands or millions of dollars before a judge gives you that. So in fairness, The the patent accusation is you infringe and you look at the patent. That's the uh the idea of specificity that you're able to interpret comes later, and in the P tab it comes specifically because it's being asked for. So with your years as a uh a practice practicor, am I inconsistent or did I just simply have hundreds of uh or dozens of cases that were inconsistent with the norm?

Yeah, I think there's a lot of variation that occurs in that regard. There's a back and forth necessary between the patentee and the potential licensee. But look, it was in this very room where we had discussions leading up to the AIA, multiple statements in the record by people, by members who were on the scene at the time, saying that PTAB is absolutely intended as an alternative to district court litigation,

Right, and isn't it true that

not as an overlap.

often, with the exception of East and uh Eastern and Western uh districts of Texas,

Texas.

that basically they stay the case and allow for that decision to be made. So in fact, the Article Three case comes to a pause very often and allows for this so that the federal judge doesn't have to have such a complicated mark. Isn't that effectively what happens in most districts?

It it it varies in my observation, quite a bit. Sometimes that does, but in other cases, It doesn't, and we've wound up with a situation where it tr-

But when it does, in fact, your duplicate statement no longer is there, that in fact the rocket docket of the uh P-tab in fact clears the slate and makes it easier if it goes forward, and i- and I'm just gonna close, this is my quick end of closing statement, I thank the gentleman for his understanding. Um.

Mm-hmm, under the wrist.

Um, the um, the the f- is this is this can be frustrating simply because the reality is that judges do not want to have the all the elements of these cases. Judges are thrilled when it's a PTAB, but more importantly they're thrilled because when you've had a PTAB and your patent has survived all or part, you generally get a settlement, not a further Article three. And when it goes away, You can go to the Fed circuit and have an argument, but the reality is the federal judge doesn't have to handle a bad case. So, uh, I'm being told Oh, just mention.

I'm now required?

I'm now required to do a piece of of homework as we close. Did I have the, uh, for the record

And, Mister Chairman, I have a unanimous uh consent request.

D- uh the chair please state your unanimous consent.

And uh and I will uh refrain from asking for a second round of uh questions for fear that we would go for another hour or so. You can laugh.

I'm gonna la- I'm gonna you can all laugh at that, go ahead. Anyhow, for the record.

Yeah.

Uh, I ask unanimous consent to enter into the record a letter from the Intellectual Property Owners Association. a letter from us inventor a letter from the us chamber of commerce a letter from the council for innovation promotion and also a letter from the business software alliance

without objection so ordered I now ask unanimous consent to put into the record a statement for the record from the high-tech innovation alliance without objection so ordered lastly I will place in the record and comment in closing on the eighty-two principal letters and over two hundred if you include the uh the sub ones, each of which is an independent letter, uh sorta like patent claims, the you know it's you gotta add them all together. We have over two hundred questions of the PTO that Mister Squire has agreed to answer, none of which have been answered. So when people ask why did we hold this hearing and why are we questioning reauthorization, questions a i could answer in a nanosecond but as i close the idea that the under secretary has ignored two hundred questions and by the way if miss Ross were still here she would mention many of them were hers this is not a partisan issue as i thank my witnesses for clarifying the record and giving us every reason across the board to know that it is extremely uh uh important for us to have the nonpartisan advisory committee. It is extremely important for the uh Patent and Trademark Office to have fee setting authority to not shut down when government shuts down the government. Uh and therefore it we will use every effort to resolve the issues that were spoken of here today so we can do a full reauthorization I thank uh all of you for your your comments and would remind you that there will be an ask if you would accept questions that will come in afterwards to answer for the record. So, without objection, the record will remain open officially for five days, but they'll be remain open for your questions to be answered as long as necessary. And with that, we stand adjourned.