Oversight hearings to examine the United States Patent and Trademark Office.

And especially to our witness, uh apologize for being a few minutes late. Um We uh I wanna start by actually thanking Director Squires for his work at the U US PTO. Um and I really do look forward to getting an update from you and um also just wanna say personally I wanna thank you for your accessibility over the over the the uh the course of your time in that role it's been uh great to uh be able to text back and forth and and get updates as you continue to do what i believe is a great job over at the uspto um as i've said many times in this subcommittee strong and predictable patent and trademark protections are the bedrock of american innovation manufacturing and investment they help inventors bring new technologies to market protect trusted american brands create jobs and sustain our global economic leadership. But our system is not perfect. We must continue improving it, especially when American intellectual property is under attack at home and abroad. Faith that our patent system must exist throughout the patent's life cycle, from examination to potential litigation. That's why I introduced the Patent Eligibility Restoration Act alongside with Senator Coons. US patent eligibility law has become confused, constricted, and unclear. That uncertainty has produced inconsistent decisions, discouraged investment, and generated unpredictable business outcomes. After pursuing multiple avenues for reform, it is crystal clear that Congress must provide a durable legislative framework. Para restores eligibility for an important invention for important inventions in fields such as medical diagnostics, biotechnology, personalized medicine, artificial intelligence, five G, and block chain. It will help ensure that the United States remains the world's innovation leader in these fields and ones that we're not even talking about yet. Also, join Senator Coons in the PREVAIL Act, the promoting and respecting economically vital American innovation leadership act. When properly administered, the Patent Trial and Appeal Board can help maintain strong reliable and predictable patent rights. But it also has been open to abuse and gamesmanship. Administrative policies may address those practices temporarily, but they can change with each new director at the USPTO. Legislation is therefore necessary to codify lasting reforms, provide stability and certainty at the PTAB. Finally, there's AI. Patents have encouraged the technologies that make AI possible. While trademarks help consumers identify business and products they can trust, as we compete with China, we cannot enter a race to the bottom that weakens IP rights, responsible for America's success. We must also allow AI to support invention, improve patent examination, and help legitimate businesses grow while protecting inventors, brand owners, and consumers from misuse counterfeiting, and fraud. Thankfully, the Senate is not alone in this work. The US Patent and Trademark Office's Office and Director John Squires have been valuable partners in maintaining America's economic leadership and strengthening our patent and trademark systems. I would also like to thank USPTO and Director Squires for his their commitment to these issues and for announcing that Raleigh will be home to the southeast location of the community. Engagement Office. This office will greatly benefit North Carolinians and inventors, as well as the USPTO. With that, I turn to my ranking member, Senator Schiff, for opening comments.

Mr. Chairman, thank you, and and I don't know whether we will have any hearing during a lame duck session, uh, so this may be my last opportunity to thank you for the way you've led this subcommittee, and to tell you how much I've enjoyed serving with you,

Thank you.

and appreciate everything you've done to make this subcommittee uh so productive and and bipartisan. Director Squires, thank you for being here, and we appreciate you joining us today for this oversight hearing to discuss the operations, policies, strategic vision, and more of the US patented trademark office. Our intellectual property system is the engine of the American economy. It provides critical incentives for groundbreaking research, protects our creative industries, and supports millions of high-paying jobs across California and the nation. At its core, our system relies on delicate balance, granting robust, reliable IP rights that reward innovation, while ensuring the public and independent inventors retain the freedom to compete, collaborate, and build upon existing ideas. Today's hearing comes at pivotal time for new technologies, as we've all seen the latest news, around the quickly evolving capabilities of artificial intelligence, biotechnology, and advanced software. Because of this, it's critical that patent quality remain paramount. The USPTO has long faced challenges regarding examiner workloads, time constraints, and the need for rigorous oversight of agency pilot programs. The USPTO is navigating a double-edged sword of AI, implementing AI tools internally to streamline an examination, while establishing clear pow- policy boundaries for AI-assisted inventorship and subject matter eligibility. Further, uh, the office must maintain vigilance in protecting the trademark system from an influx of fraudulent bad faith applications originating overseas that threaten consumer safety and brand integrity. Congress has a duty to ensure that the USPTO has the resources, administrative frameworks, and leadership necessary to meet these challenges. Director Squires, I look forward to hearing your perspective on these issues and learning how the office

Thank you, Senator Schiff. I also want to uh thank uh Senator Horono and and actually a number of the members of this committee. It hadn't occurred to me this the most likely the last meeting of the uh IP subcommittee, but what I find most rewarding about it, number one, is the number of people who are interested in this committee. And by that I mean it's very uncommon to see a subcommittee packed with spectators spectators but that's become common um as we've had this committee and we appreciate the engagement of uh lot of stakeholders some i see in the room that key part of why i think our committee has been successful my uh prior uh chairmanship ranking relationship with coons i want to uh stipulate but i also believe that uh senator herona may get the uh the highest participation award if i were to go back and see how many people have just uh came in and actually spoke, so I thank you all for your uh participation, hopefully we'll be able to carry on the tradition of hard work and checking the uh, the ideological jerseys at the door, uh so that we can continue to do the good work here. Uh did any member wish to speak before I introduce Mister Squires?

If I might uh, Mister Chairman I just wanted to thank you um over many congresses uh and many different bills uh we have worked very well and closely together, and I just appreciate you uh and and we'll deeply miss you uh in the next congress. Um, thank you, uh, to Director Squires for your hard work, uh, and for the strong bipartisan support you've earned. I look forward to your testimony. Thank you, Mr. Chairman.

Mr. Chairman.

Senator Harano.

We all know that the Judiciary Committee can be very exciting and contentious at times, but I'm really glad that this subcommittee, under your leadership, and regardless of whether uh this committee has been led by a Democrat or a Republican, it has been uh instructive and a pleasure to work in a bipartisan way on issues that really uh matter. to our economy and to our businesses, but particularly our uh small inventors. Thank you for your leadership.

Thank you. I appreciate it. Uh, Mister Squires, our our witness today, serves as the Undersecretary of Commerce for Intellectual Property, IP, and Director of the US Patent and Trademark Office. He was confirmed by the US Senate in September of twenty twenty five. Mister Squire Mister Squire's leads USTPO, PTO, which is one of the largest IP offices in the world with almost five billion in operating budget and uh five billion dollars in operating budget and over fourteen thousand employees located across fifty states and Puerto Rico. Furthermore, Mister Squire has advised his executive branch on IP matters through the secretary of commerce. Prior to his confirmation, Mister Squire served as partner and chair of the IP and engineering company's practice at Dilworth Paxton LLP and an adjunct law and as an adjunct law investor Professor at the University of Pennsylvania Carey School of Law. Uh, welcome, Mr. Squires. If you'll please stand, we'll administer the oath. Do you affirm that the testimony you're about to give before the committee will be the truth, the whole truth, and nothing but the truth? So help you God.

So help me God.

Thank you. You may be seated and uh begin with your opening statement.

Thank you very much, Chairman Tillis, Ranking Membership, Senators Coons and Aronno, uh, and um, Chairman Grassley, Ranking Member Durbin, and members of the subcommittee. Thank you for today's opportunity to discuss America's innovation agency, the USPTO. Let me begin by again thanking President Trump for his confidence in me, his steadfast commitment to intellectual property, and his clarion call to usher in a golden age of American innovation. i am tremendously thankful also to secretary lutnick for transforming the department of commerce his balanced energy his unparalleled vision with an understanding of intellectual property unique he himself having uh inventor uh being inventor on over five hundred patents and finally thank you to our amazing and so talented us uspto team almost fourteen thousand strong for your dedication for your commitment and for your service i say always that they are the best in the world at what they do because quite simply they are and they prove it everyday inscribed atop the department of commerce herbert hoover building is president lincoln's famous quote the only us president who is a patent holder mind you that the patent system adds the fuel of interest to the fires of genius he refers of course to the exclusivity incentive our founders inscribed uh first in the history of nations as the only individual right in the seven articles of the constitution proper. Then and there, American exceptionalism was born strong. As President Lincoln explained before then, any man might instantly use what another had invented so that the inventor had no special advantage from his own invention. The patent system changed this. Indeed, it did. This year, we celebrated America's two fiftieth, starting with America's first patent, signed in seventeen ninety, by george washington. around this time next summer i'll be proudly presenting patent number thirteen million and trademark registration number nine million to president trump for his signature each celebration was a fresh reminder that strong ip protection affords greatness we celebrated alexander Graham bell's telephone patent and what the world's sturdiest protection made of his genius in chapel hill at the g twenty we celebrated even British s- subject Henry Bessemer's success, which he found only on America's shores after receiving a US patent. And not lost on us as we signed the Carolina principles in person, was that the marvel of human flight, invented by two irrepressible American brothers, one hundred and twenty-three years earlier and nearby Kitty Hawk, literally brought our nations together. President Trump is calling for a golden age of innovation. America's innovation agency is answering that call, and we're answering it with the urgency of now. Atop the broad shoulders of our genius giants, we've rededicated ourselves to American exceptionalism so that American ingenuity can stand tall again. Today, I am proud to tell you that we have turned the corner. Inheriting an unheard-of backlog crisis, now, for the first time in ten years, output e- exceeds intake, and we've achieved a three-year low on backlog. Quality is improved, and assets are getting to market faster. Each week sooner, potentially increasing correlated sales by approximately fifty thousand dollars. We are avid SI adopters, generating hundreds of thousands of application summaries summaries with LLM tools and with SI agents, slicing through months of red tape in seconds with nearly half a million cases analyzed in under six months. As to SI, i've reminded the world that our doors are wide open just as they were one hundred and eighty six years ago to samuel morris's code we've looped in back-end challenges to improve front-end quality and restored p tab to its rightful place as a fair and efficient litigation alternative i've banned foreign state actors attacks on american patents created american manufacturing incentives and given hungry american small businesses a leg up in global standard setting With new local engagement offices, our nationwide footprint is more nimble and includes a groundbreaking partnership with HBCU's. Finally, we are one hundred percent user-free-based and have been recognized, yet again, as dependable financial stewards. I sincerely thank Congress for extending our fee setting authority to December eleventh, and I'm looking forward to working together to extend it far into the future. In closing, while we have much much much more to do we are notching wins wins wins and for ip intensive industries that means jobs jobs jobs now we are rapidly scaling to liver to deliver on president trump's golden age and we are all in full stop to fire up america's genius full throttle thank you

thank you mister squires um first uh uh again as i was saying i really appreciate the the way that you proactively communicate it as uh we've gone through the process and one of your very well received text from your communications was when uh the decision was made about the public engagement office and uh Riley um and uh the the mere fact that uh Mister Squire's contacted me to confirm that kinda proves that I wasn't doing the lobbying you know most of give me an idea of how you went into finding these public engagement offices and and why you made decisions you did about certain locations.

Thank you.

Thank you, Senator. This is one of the most exciting things presently going on at the USPTO. We've re-imagined our national footprint and are being at the top of the funnel, with universities, start-ups, ecosystems, and have had uh RFC processes where we've asked for engagement, uh received uh amazing proposals, and we are looking to be a mirror kind of local innovation systems and their personalities so we have a uh community engagement office at montana state we have one now at uh n c state north carolina we have the hbcu partnerships we have just announced uh usf in tampa we have um as well uh utah uh the university of utah and uh we are this close to signing uh a engagement at the university of colorado boulder for nil um which uh the um coach that reports to coach prime which will be very exciting

mmm well thank you for that we should probably continue our discussion you you probably know north carolina is home to probably second only to alabama in terms of uh hbcus and down the road with the uh nanotechnology center in collaboration between unc greensboro and a and t there's a lot of good things maybe we can build on there starting with the uh the the great choice of n. c. state um You know I'm not gonna go through a hearing with you at the table without talking about para for a minute. Um, can you, you know, one of the things that we've we've tried to explain to people about para, it's not really guaranteeing that any patent is gonna be awarded, it's opening the aperture for patent eligibility. What sorts of in your opinion, a quick swat on what we need to do to get para right what the department thinks about it now and how would you describe the benefits if you do agree that directionally we're going in the right direction the benefits of implementing and codifying para

thank you very much uh the administration hasn't officially taken a position uh as you know on on para however the work that's being done uh is dressed to an area that is in dire need of clarification from the agency's standpoint uh to send the message that um as we look at the uh precedent on subject matter eligibility the first two patents i signed in my tenure my first full day in office were a crypto related patent as well as a medical diagnostics patent and we implemented uh from an agency perspective several

mmm

um uh mechanisms for to take in market information and have the applicant explain to us how their idea is applied and how it's um going to uh improve the system so we've created what's called a subject matter eligibility declaration in the old days there used to be a model requirement in fact one of the honors of being the director's office as i have on my desk literally uh the replica of thomas alva edison's incandescent light bulb

mmm

so providing a model is quite difficult when you have software ai but what we can do is intake a declaration voluntarily uh from the applicants that tells us how the claims make the system better better cheaper faster is always a hallmark of patentability but the point is and this is where i think para uh is making the uh well um well placed point that eligibility is different and distinct from patentability mmm eligibility is what comes the door uh in the door there is uh judicial exceptions those are narrow uh and patent eligibility should not be confused with patentability which is the work done and borne by sections one O two novelty one O three non-obviousness and a one twelve in the written description requirements to ensure that the uh inventions uh exclusivity granted uh is enabled and then when the patent expires, it passes appropriately into the public.

Well one thing, I know the administration hasn't taken a position, but one thing, even the remainder of this congress, if we could get some feedback on other proposals or recommendations that get to the heart of what we're trying to do, We would really appreciate that feedback so that we get this committee ready to uh continue its productive history in the next congress.

Thank you, Senator. Yes, uh we would welcome that, we welcome working together. In fact, um my belief is that uh the the policy changes can also be effectuated through the courts. Uh, I am uh delighted to have joining me starting Monday and squaring in, Professor John Duffy from the University of Virginia School of Law, who is one of the foremost experts in the country and the world. uh, including patent eligibility. We had the private sector privilege of working together, uh, in bringing, um, a eligibility case up to the Supreme Court about twenty years ago. And now we're, the band's back together again, and we look forward to working with you.

Thank you. Senator Schiff.

Uh, thank you, Chairman. Uh, Director Squires, following a January twenty twenty five blanket return to office mandate, the USPTO began systematically unwinding a very successful remote work model which was in place well before the pandemic. To circumvent collective bargaining agreements that protected examiner telework through twenty twenty nine, the agency took the unprecedented step of eliminating the patents units union representation entirely. An April twenty twenty five GAO report then indicated that many patent examiners felt pressured to prioritize examination output over the thoroughness of their reviews due to strict time limitations and complex technologies. Examiners surveyed in GAO's study cited significant hurdles, including strict time limits, growing application complexity, receiving application assignments outside their specific areas of technical expertise, and more. Additionally, GAO found that half of USPTO's pilot programs lacked formalized evaluations to determine whether they should be scaled or integrated, And that the office was not tracking indicators to measure the economic or scientific value of patents. In response, the USPTO committed to several corrective steps, including establishing a formalized framework to evaluate pilot programs, updating supervisory review guidelines to improve error transparency, and random sampling, and setting an overall statutory patent quality compliance goal. However, internal workforce changes since last year. driven in large part by the doge and administration directives appear to contradict these goals. Concurrently, the agency implemented historic layoffs, raised examiner production quotas, and strictly limited the time examiners are compensated for applicant interviews. So, let me ask, what concrete steps has the USPTO taken to implement GAEO's recommendations? How is the office adjusting examiner production goals? and time allocations so that volume metrics do not inadvertently compromise the thoroughness and quality of patent reviews. Uh, how can you be sure that laying off staff, eliminating remote work, and raising production quotas will not exacerbate the time constraints the GAO report warned about? And how are you gonna prevent the exodus of some of the most experienced technical experts which would degrade the quality of issued patents? So if you could address those questions.

thank you senator the um we have uh formed a quality review board and uh do have uh several uh mechanisms for uh looking at quality and ensuring consistency uh the review board can take random samples which i believe is an implementation of uh the recommendations in the gao report which i believe was from um twenty twenty one to twenty twenty four and we are also look at uh a transactional basis uh of uh office actions a sampling done against um uh quality measures our quality has improved um our throughput has improved in fact uh and the use of tools i think is helping greatly i mentioned that uh we've had um our uh office uh deploy llms large language models internally and we've seen uh uh almost seven thousand examiners order a hundred and twenty thousand uh application summaries at this point so it's helping the workload and uh throughput and i would like to show a chart that um is i call my head and shoulders chart this was the all time backlog high uh crisis we inherited and we've driven it down wall streeters might recognize this as a a typical head and shoulders peak um and uh which is a bearish sign i think it's a bullish sign because again output has uh has um has overtaken uh intake um without diminishing in quality and the trend is unmistakable and we are driving backlog down with tools

if if i can interrupt you say without compromising quality and you say quality is approved by what measures though um one of the things that geo found gao found was that with respect to the pilot programs in particular there weren't really formalized evaluations to determine whether those programs were working. So, by what measure are you um making the representation that you have improved quality the same time you've laid off people, um curtailed remote work and more?

Uh, uh, thank you, I'll I'll give you an example of a pilot program uh that we implemented called ASAP, which is a pilot to provide top ten references to applicants before the first office action so they have agency in what wanna do uh and we set up metrics around that and we did two phases of it we learned that the uh examiners were not utilizing the references generated for them using ai tools and providing to the applicant as much as they had their own uh favorite uh uh list of prior art and the reason was the tool was not um being able to uh generate art off the claims it was using the spec so we

if if i just cause i'm out of time um i'll ask you to respond

yes

uh in writing then um because that's not really an answer to how you can back up your claim that quality is improved um even as speed is improved and ease even as the workforce has declined um and i would ask for a responses in writing uh thank you mr. chairman

thank thank you mr. chairman uh the p tab was uh intended to provide a faster cheaper alternative to going to court but what we have been told is that um from inventors that their patents are being challenged repeatedly uh across the p tab and uh federal courts so that these concerns um about how the p tab is being um used in this way what what what is happening is one of the reasons that uh a number of us have signed on to the prevail act as i have so that maybe we can have some common sense changes to p tab and i understand that uh you are p tab is proposing a rule to address some of the concerns relating to what's happening with t p tab but do you think that uh in and i don't know what the status of the rule is are you proceeding with that it is is it gonna happen what's the time frame

yeah

for the rule

thank you senator the uh rule right now uh we received over eleven thousand comments uh twenty eight hundred uh approximately which were uh unique uh we've uh been through the comments uh with our uh our team including p tab judges and that rule now sits over at onb in their process

so what kind of time frame are you looking at to go over all of the comments and then coming up with a final rule

uh our our review uh has been done so we're waiting for omb to come back and evaluate uh and see what kind of comments they have uh for the process as the rule gets finalized

have you reviewed the prevail act

have i reviewed yes

the prevail act that that's been introduced

i'm familiar with it yes

so um are there major differences between your proposed rule and and what is in the prevail act

um i wouldn't say major differences the uh intention as i understand the prevail act um from what i've read and the intent of the rule is to limit repeat challenges to have quiet title sooner um and the rule is intended to achieve that uh codify it and so make it last more than the the the direct discretion currently there um and that's what i understand the prevail act is is directed to as well

so uh actually if we wanted to have a permanent uh kind of a change uh then i would say that the the legislation is uh probably um a a good way to proceed so we'll keep track of how the rule is uh be is proceeding because there are issues that need to be resolved regarding the pta process uh i wanna talk about pto's fee setting authority which is uh due to expire december

eleven

eleventh and um uh um i don't know if if you are contemplating i mean assuming that we reauthorize the fee um authority that uh you are gonna need to decide what you gonna do or what kind of uh fees you gonna put in place but uh what is your view about the the uh the fees being um just enough to pay for pto's operations versus charging more and the the excess if you wanna call it that goes into commerce for whatever use they have because i mean i let me just show you my view that that uh it the fee should be in line with what it costs to actually run pto what is your view

uh thank you senator yes uh we're under section ten um where the fee setting authority is i believe uh it is uh feasibly based upon operations um and uh we look forward to working with members on extending fee setting authority um we're asking for uh i'd i would love to see nothing more than uh permanent fee setting authority uh but that might be a last ask i'm also in companion with that looking to um have something in the way of what was done in two thousand two with the uh pay parity act for the securities exchange commission and relieving caps we have um uh provided great incentives for our examiners and they are uh are oil drillers they're they're they're earning money

mmm

um but then they reach the cap and we we start to run out of incentives on things so uh the pay parity act in two thousand two recognize wall street was competing sec was competing with wall street we're competing with stem we're competing with the legal market and those are things that we'd like to see but to answer your question um directly uh there biannually um we reevaluate what our fee posture is uh there's some discussions that need to be had because if we uh see uh continue to see an intake uh increase of for example ai uh applications patents that technology cycles very quickly so we might not see maintenance fees out in the outer years

mister chairman i have an important relatively short question that i i'm running out of time but could i ask it because it's important to uh some of my constituents and this has to do with um protecting trademarks for indigenous communities uh and so what happens is uh the trademark application does not require applicants to indicate the original language of a mark so there are lot of hawaiian words that uh can be submitted for trademark protection but all they have to do the applicant needs to do is provide a definition and uh so uh this makes it hard for say uh hawaii uh corporations to to check to see if names or or well names that that they are interested in is even being uh trademarked so would you work with my office to address some of the concerns that they that indigenous communities have with regard to uh the use of indigenous words without any identifying that this is uh by the hawaii hawaiian based or uh it can be any language but would you work with us to address this issue and see what we can come up with that is uh um that make sense

uh uh thank you absolutely senator we would be uh delighted to work with you in that regard i think there is some things that can be done i have looked into it quite a bit i have been told there is some problems with forms and this uh it it's solvable and uh we would look forward to working with you

that's good and i just assume we addressed this in an administrative level as opposed to trying to pass legislation thank you mister chairman

senator brit

Thank you, Mr. Chairman. Appreciate you holding this hearing today and thank you to uh Director Squires for being here. I wanna discuss how artificial intelligence is impacting USPTO and the patent system more broadly. I know that you've implemented several AI fraud detection tools to help speed up the USPTO's review process and to quickly eliminate groundless filings. Uh, you've the technology helped us PTO find about seventy thousand, I believe it was, baseless filings, and I think that's excellent work. Uh, one of my concerns, though, is how AI can be used by filers to undermine the patent system, particularly when it comes to bio-pharmaceutical innovation. Um, that entire space, I I worry about being generative AI actually being used, um, for an adversaries p- potentially mass-producing filings at very little cost, essentially undermining the work that you've done to - to address this patent backlog and then potentially preempting real innovation from American companies. So can you talk a little bit about both this practice, kind of what you're seeing, and then obviously how it's undermining American inventors and, um, what you're seeing on the ground as far as AI-generated filings and where you think we go from here?

Uh, thank you, Senator. Yes, uh, we're confronting a, uh, major, uh, issue with the ability of AI to generate, um, you know, massive amounts of filings at low, virtually low cost. Uh, one of the issues that's come to our attention that's been written to us about is, uh, so-called scraping. And scraping is a particular problem because when a application will publish, uh, then AI is utilized to generate, um, you know, many, many, many uh additional applications uh and then filings occur and often they'll try to have filings go into countries where the patent will issue sooner than the original application

mmm

so it's a problem where i've appointed a task force to uh analyze that a tiger team if you will

ok

and we are evaluating uh scraping issues we're meeting with stakeholders regularly on that and one of the ways that we're looking at combating it is with uh inventorship requirements in the us you have to have a human being as the inventor

ok

and the other uh way i think we can try to get at the problem is if we can get patents to issue sooner uh within uh that window before they publish that could stem the problem but uh we

so are those things you can do on your own or are those things i mean talk to me about how

yes

how you have or will implement that and and what that looks like

those are things we can do on our own

ok

um i i especially the inventorship uh uh component um for example uh there's a number of applications that have uh listed seven or more inventors not that there's anything wrong with that but uh cause the average uh number of uh inventors in a application is three point two or four so we've got two standard deviations of um

mmm is there any reason what would people when if and when you implement this which i'm hopeful we can find a pathway to to to make sure that um we're shoring this area up but uh what would be the down the the downside of of doing that anything

uh well there's always um you know a balancing to be done um we don't want to uh for example uh be too broad and where ai can be a pair of hands or a tool assist inventors

mmm

uh um have applications not get through because of that but we also don't wanna have uh the scraping and other practices that are going on

So, and then what about the, you said obviously, um, being able to do this sooner, and that's just something internally that you're able to do to speed up that process.

Yes, we're driving down the backlog aggressively, uh,

Right.

I can envision pilot programs that do that even further.

Um, and can I get your commitment to, to work on those two things?

Yes, you have my commitment.

Absolutely. OK, great. And then tell me this, is there any new cost that would be associated to either one of those two things? And, um, would it, do you, would you need additional investments in any kind of sort of technology or personnel to combat those bad filings or you're able to do this without without anything from us

uh i think we're able to do uh without from uh without any additional resources we have um you know we're a hundred percent user feed based and we're able to uh because we get to run ourselves like a business we get to um go where uh be go where the puck is going to go and develop resources to things just like this

right ok excellent well um can you speak lastly in in my last just what you've seen in in particular with the biopharmaceutical um area and anything that you're concerned about with their regenerative AI. Because I've heard some anecdotal stories that give me great pause about um the work that we're being done here obviously, what scraping is ultimately doing and how um these bad actors are getting ahead in other areas and other countries, and I didn't know if you have anything you can share with the with the entire committee.

uh it um we do uh we're working on ai system tools that uh we have our phd's or be able to look at molecules uh you know generally takes about five minutes with the system of ai and get it down to five seconds so we can get throughput uh sooner quality decision sooner more robust um uh art and uh and claims um uh uh uh negotiation analysis done with the applicant Um, so these are the type of things where we think AI, you know, while it's, uh, being able to generate problems at a great rate at low cost, it also helps us in pattern detection, uh, and, uh, tools to assist our AM uh, examiners to get, uh, to market faster and to have higher quality.

Thank you so much, and I appreciate your commitment to working on this and working with me on it.

Thank you, Senator.

Thank you.

Senator Coons.

Thank you, Chairman Tillis, Ranking Member, uh, Schiff. And, uh, thank you, Director Squires. Great to be with you again. Appreciate your update. uh, on your leadership at PTO. Um, a number of topics, so I'll move through them fairly quickly if I can. Um, I agree with Senator Britt that, uh, in the age of AI and given the critical nature of our competitiveness with China, uh, it's essential that the, uh, PTO, um, utilize AI effectively. But I had some questions about how you're balancing the reduction of the patent-reviewing backlog while maintaining quality examination. I'll commend you on reducing the backlog by nearly a hundred thousand. um, but had some questions about staffing, ai. i just if you could briefly, how are you reducing the backlog in the wait time in patents, and what's the role of ai in achieving that?

thank you. So, our mantra is examiner's lead, tool support. Um, examination as you know is is one of the hardest jobs in government. Uh, I think if we could bring up uh, Albert Einstein he'd probably tell you that, a patent examiner himself. But the uh, by providing the best in the world at what they do with the best tools in the world, allows them to free themselves up to chew through uh much information we use it to uh do pattern detection and as i mentioned uh almost seventy five percent of our examining corps has utilized a large language model and they get to select what they like uh from the available models uh to prepare one hundred one hundred twenty thousand application summaries so you get an application that's a hundred and fifty pages uh it will summarize it for them they know where to go look to uh do their their job so we get a great throughput that way

uh specific question if i might about fee setting something senator herono asked about before it is my hope um that after we hit december eleventh and uh it expires that we will extend it um you said maybe permanently that would be wonderful uh in my view um i think we need to be clear um that we will reject uh the value-based fee model that was rumored and that i believe both you and the secretary secretary lutnick have wisely rejected as a possible model for fee-based uh review. Um, I I had some concern about uh two bodies, uh the Patent and Trademark Public Advisory Committee, the PPAC um and the TPAC uh which were created by the AIA. Um, they both have vacancies, um the secretary uh fired uh those members uh a year and a half ago I think in March twenty-five. Um, to get fee setting moving you have to consult with them. How will you consult with them when they're not fully staffed? What's the path forward um for having a full complement of members for peapack and teapack

thank you the we have constituted the boards uh they are vacancies our plan is to make sure they're filled uh as soon as possible we have many resumes in uh are interviewing people and uh the plan would be uh and i my personal commitment to our stakeholders is that these boards will be filled and ready to go

thank you um and i look forward to seeing who you gonna choose um on peatab reform efforts uh you've implemented a number of important changes uh to p tab proceedings uh to make them more fair and efficient. Um and I want to make sure that the changes that you've implemented actually end up being in rule um or in statute through action by uh this committee and the congress. Um are you considering are you considering implementing further improvements or changes to the p tab process and how proceedings um are being used by the office?

Uh we we have um yes we have s- made some changes uh we've instituted what i call uh what we call the loop program which takes back-end learnings and injects them back in the front-end we have the um the judges and examiners sitting uh together on certain cases and learning from each other we're one system uh that's improved quality we've had great uptake on that uh over eighty six percent of the people who have gone through the training the trainings have been three modules of of approximately seven hundred people each have said this is this is fantastic they're really excited about it um more uh directly uh as you know i consolidated the discretionary decision i disclosed decision into the director's um chair which uh was our read of the original intent of the n a uh aia what we're considering doing is um i would maintain the discretionary portion of it we bifurcate it and returning the um uh merits portion to the panels uh in this way we believe we get the best of both worlds we don't have a signaling problem or a preview problem uh we've trained up all uh we've spent a year long on a program called p tap strong to uh understand what the a a uh was about when it was enacted from people there with legislation judges academics and we've also then trained ourselves up on the standards which are are difficult i used to teach at the university of pennsylvania but you have a district court standard you have a pgr uh standard which is different than a uh ipr standard which is different than a re-exam standard Um, but we have all gone through the training, myself included. Uh, folks in the office are general counsels, and we feel like we're ready to go. Um, and, uh, really, uh