Hearings to examine genes to machines, focusing on the patent eligibility debate.

Good morning. We welcome everybody to this important hearing. We're here to discuss a cutting edge question. What inventions should be eligible for US patent protection? But first, as you can see on my right, the absence of very important member of this committee for decades. I think it's important that we take a few minutes to remember and honor our friend and colleague, Senator Lindsey Graham. He passed away over the weekend, as we all know. He leaves behind a distinguished career as a US Senator and former Chairman and ranking member of this committee. Lindsay was a resounding voice in this judiciary committee, especially through the high profile and successful confirmations of Justice Brett Kavanaugh and Justice Amy Barrett. He saw many conservative judges appointed to all levels of the federal court. Notably, he did this and more through the COVID pandemic. Public service was Lindsay's calling. He approached it with enthusiasm and energy and tireless dedication. His leadership to this committee in the Senate and for this country will be missed. So I'm just wanna take a moment of silence to remember Senator Lindsey Graham. Thank you very much. Our nation's founders understood the importance of patent protection to the economy and growth of our newborn nation. They guaranteed this protection in our constitution. And then at the earliest time in seventeen ninety, the first patent law was passed. The task before us today isn't an easy one. Patent eligibility is a multi-layered legal issue with detailed tests and case-by-case rules created by the Supreme Court. This law must be called and glean from many pages of the court's nuanced opinions. Next we tie in science, all scientists from genes to machines to artificial intelligence. Then we mix in insatiable human curiosity and boundless creativity. We begin to understand why this area of the law is so challenging and so relevant this very day. It is rules trying to keep up with scientific development and human imagination. There's much debate about how this deal how to deal with this complex patent issue. Senator Tillis has done excellent and diligent work, including holding multiple hearings in the Intellectual Property Subcommittee. And I believe this is the first hearing we're holding on legislation at the full committee level. We may or may not agree on this bill entitled Patent Eligibility Restoration Act. I don't yet know. Most of us are still studying and trying to understand the bill and the effects it'll have in order to determine what's the best path forward. That's why we're here today, to study and understand this important issue that has had tremendous impact on the well-being of humanity and the success of our economy. We have four experts joining us today. Thank you for being here. and others who are submitting written testimony for the record to help us understand this with insights and experience. The stakes couldn't be higher. Our country's leads the world in cutting edge inventions and technology. This momentum fuels our economy and advances our society. It cures diseases and helps us grow enough food to feed people throughout the world we have a responsibility to americans to hold this lead and to the world to fulfill our potentials uh the question we ask today is how we do what we how we do maintain this momentum and while also making sure that all americans can benefit from these advances learning how to strike this balance while we're holding the hearing today we'll have a fascinating discussion senator durbin

thanks mr. chairman i know this is a meeting of the senate judiciary committee but something's missing lindsey graham is missing after all these years of working together with him his absence is felt personally by so many of us for four years i chaired this committee he said next to me We were adversaries on many issues and many nominees. He would never known it if he'd seen us outside this chamber, because we were trusted friends of one another. His word was good. When he told me he'd do something, he did it. And I tried to keep that same trust, feeling of trust w- dealing with him. He ended up voting for seventy five percent of the Biden judicial nominees, seventy five percent. Wasn't easy, but he said from the beginning, I think Republicans have to vote for Democrats and Democrats have to vote for Republicans. That's the way it's always been. I've tried to look a little bit at the standard ever since. He was part of something called the Gang of Eight, which is really unique uh in the history of the Senate. There were literally four Democratic senators, myself included, four Republican senators, including John McCain and Lindsay, who sat down to rewrite the immigration laws of America. And that's long overdue. Well, we spent months at it. Every night after the session, sitting down and going through another section, we finally put it together on a bipartisan basis. Lindsay was a critical element of the, a critical part of that, uh, as was, or so many of the member members of my colleagues. And we put it to the floor. Business supported it, labor supported it, the groups across the board supported it. It was thoughtful, it was balanced. It was a remarkable achievement on a bipartisan basis. It passed in the Senate with an overwhelming vote, but unfortunately was killed in the House of Representatives. Lindsay was part of that gang of eight. Lindsay was part of every gang. He couldn't be kept away. And he was invited in because he was always trying to find that bipartisan position, that resulted in a new law, a new idea, a new solution. It was very important to him. Over twenty years ago I introduced in this committee a bill called the Dream Act. The Dream Act said if you came to this country, if you, your mother and father brought you here as a kid, you ought to have a chance to work your way to legal status and citizenship in this country. I introduced it over twenty years ago. It's passed on the Senate floor once in a while, on the House floor once in a while, never in both chambers. Each year, I would introduce the bill. I would look for a Republican cosponsor. In the beginning it was a lot easier. Then it became harder and harder. Eventually the one person I could count on to me be a bipartisan co-sponsor was Lindsey Graham. And he did it at political peril. It wasn't a very popular position among some very conservative Republicans. But he did it for me, he did it for those kids, and I'll never forget that he was there when we needed him. Last week, uh, we were in Turkey at the NATO summit. Chris Koontz and I and several members came together We arrived to find of course, Lindsey Graham, who got there before us, was working every crowd in every room, you'd think he was running for office. He had some ideas on how to end the war in Ukraine and he wanted to share them with everybody there. Uh, through the course of the week we met with President Zelensky and many other leaders on a bipartisan basis. Each one of them greeted Lindsey b- by first name, Lindsey, it's great to see you. It just shows you his reach uh of influence and his involvement in the key issues including war and peace of his day. Uh, I'm sorry, uh, uh, to say that Wednesday was the last time I saw him. I think the same for Senator Coons last Wednesday. And then the terrible news came through on Sunday morning. Uh, I'm gonna miss this man. He was an important part of the Senate, an important part of American government. He reached way beyond any definition of the job of senator. He was really a person you could trust on a personal basis. You could confide in it as he confided in you i'm happy that his uh sister is going to take his place for the remainder of this year he loved her and when his parents passed away he became legal guardian of his thirteen year old sister it meant so much to him i know he'd consider this only right as she being chosen to fill the vacancy loretta and i send our condolences to her and lindsay's family and the legion of friends in South Carolina and literally around the world, who worked with this great man. I'm gonna miss him. Thank you, Mr. Chairman.

Thank you, uh, Senator Tillis, for opening statement.

Thank you, Mr. Chairman, um, and I wanted to echo everything that's been said about Lindsey. He was a great man. Um, Mr. Chairman, uh, you may not realize this, but in in some respects, Lindsey Graham's sort of responsible for this hearing today, uh, because it was in two thousand and Nineteen, one of your former staffers, Ted Lehman, who became my chief, suggested that we re-establish the intellectual property subcommittee. And uh, Senator uh, uh, Graham authorized that. And the work of the subcommittee is now um, coming before the full committee for the first time. And, and, Mister Chair, I also have to say that I know that uh, you may have some questions and concerns. You're still examining this legislation. I think it's a real testament to your leadership to be willing to elevate something to the full committee that you, you yourself are still trying to work through some of the issues, and I appreciate your leadership. Um, you know, it's uh, our

Sure.

patent system, as uh, Senator Grassley commented, is a part of our founding. I mean, we're the first nation to enshrine in our constitution this concept of intellectual property. And I actually believe It's one of the reasons why we have become the innovator that we are. We started out thinking that thinking was important, and then being able to take that thought and put it into something that uh the person who invested their time and treasure could recover, is the, I mean, it's, it's what innovation is all about. It was such a brilliant idea. And it's not lost on me that some of the founding fathers were inventors themselves and I don't know if it was a combination of vision, our uh self um um you know maybe some self-interest there, but either way we got it right, like so many things in our constitution. But the problem that we have with patent eligibility today is that we lose we are at on the brink of losing our innovation advantage if we don't figure out that the world has changed since the founding of the constitution. Um, and that things that we could not possibly have conceived of need to be considered, potentially, for a patent. And Para is not guaranteeing that you're gonna get a patent. It's simply saying the world has changed. The jurisprudence is all over the place. Twelve judges have lamented the fact that they even have to deal with it when rendering a decision. And and other jurisdictions are looking at experiencing and have expanded eligibility, why would the United States fall behind? I am not requesting legislation that guarantees anything can get a patent. At the end of the day, what Para is trying to do is simply open the aperture to what may be patentable. And so today, we get to take, what I was telling the witnesses beforehand, the debate club up to another level. Uh, in my committee, some of y'all may have figured out I'm not overly formal, Um, and I think we're at our best when we're doing work groups and we're having an exchange between the uh the thought leaders directly. And so at then this hearing, the chair has uh has uh allowed me to chair it, and I believe the chair is gonna be leaving. You four should be taking notes, or your staff. Because at the end of this hearing, when everybody else is probably worn out, uh I will stay here and we will drill down a bit on topics where that interchange is so critical. Because I believe, regardless of what side of the issue you are on right now, there is a path forward. And we can help those who are concerned with changing the status quo, but at the same time have a remarkable impact on on really stimulating and fostering creativity going forward with a very different way of looking at eligibility. And I look forward to this committee uh, the committee hearing and to your your feedback. And, Mister Chair, again, I appreciate you holding the hearing. Thank you all.

I wanna introduce our distinguished panel.

Senator Coons.

I oh I I apologize. I was told you didn't wanna speak. Please proceed.

Have you met a senator who doesn't wanna speak? Uh, Mister Chairman, thank you uh for your graciousness and um to you and ranking member Durbin uh for uh your long and deep uh friendships with Senator Graham. Um, I had the blessing of having dinner with him. uh last Wednesday night in Ankara uh with some of our staff. Uh he talked about how excited he was for this coming Congress and for the way we might continue to do good things together legislatively on this committee and on others. Uh my Chief Counsel just reminded me, he was my lead cosponsor of a bill signed into law by President Trump earlier this year, uh not widely remarked, but that extended the terms of bankruptcy judges in my state, his state, and many others. Uh, we were at times fierce partisan adversaries. Um, but we also at times uh passed some really significant legislation. Whether it was in immigration or innovation, whether it was advancing our national interests or our core values, Lindsay fiercely loved this country. Uh, and I am um uh uh excited that his sister, um whom he dearly loved, will be filling his seat for the remainder of this Congress, uh and grateful that I had the blessing of knowing this remarkable man. um, who described himself as simply a country lawyer. Uh, but so often with his brevity, uh, and his incisiveness, and his incredible humor, um, got to the core of an issue and drove it forward. And then also, Senator Tillis, thank you so much for your incredible partnership on this bill and on this topic. Uh, it has confounded many efforts, uh, at clearing the underbrush and clarifying the thicket. Um, as you said, um, about fifteen years ago, the Supreme Court started weighing into an area section one O one, patentability jurisprudence, that was previously relatively clear. There have been huge changes in technology. Every member of the federal circuit at at some point has reached out and asked us, uh, for guidance. Solicitors general have repeatedly requested that the Supreme Court, um, revisit patent eligibility, um, but they have refused, denying a hundred, nearly a hundred cert petitions. Um, and this isn't an academic exercise that Senator Till just laid out. Developments in artificial intelligence and blockchain and medical diagnostics and five G, um, are patentable in China and in Europe and not patentable here. And I view this as critical for us to address in order to restore American leadership and innovation and to advance our national security. Uh, if the court won't clean up this mess, Congress needs to act, and that's why Senator Tillis and I have been advocating for PARA over many Congresses, Uh, we at one point had fifty witnesses over three hearings on the subcommittee. Senator Tillis has been tireless and and determined. I'm grateful this bill has the endorsement, the support of Senators Hirono and Blackburn, and the support of many other members of this committee. And, Mister Chairman, thank you for elevating this important topic to a full committee hearing. Uh, and I so look forward uh, to this hearing today, to these four very talented witnesses. Um, and just wanted to close by thanking Senator Tillis for his tireless engagement on this important issue. Thank you, Mr. Chairman.

Thank you, Senator Coons. I have the privilege of introducing these witnesses. Mister Andre Iancu. Uh, he's a, uh, Co-chair of the Council of Innovation and Promotion. A partner at the law firm Sullivan and Cromwell. Between eighteen and twenty-one, he served as director of the us patent and trademark office mister ianku earned his j d his m s in mechanical engineering and a b s in aerospace engineering from ucla mister john lee is senior director and head of intellectual property policy at the computer and communications Industry Association. He previously served as Chief Counsel for Intellectual Property on the House Judiciary Committee. Before that he worked as Lead Administrative Patent Judge on the Patent Trial and Appeal Board at the US Patent and Trademark Office. Mister Lee received his law degree BAS in Bioengineering. and b. a. in biology and neuroscience from university of pennsylvania doctor debra leonard phil's no i'm sorry i skipped one here uh sue peshin uh serves as president ceo of the alliance for aging research she also serves on many boards including the association of black cardiologist national health council voices of alzheimer's and others miss passion received her master's degree in health policy john hopkins bluenberg school of public health and her bachelor's degree in sociology brandeis university doctor deborah letter fills out the panel She currently Professor of Pathology and Laboratory Medicine, MRAD at the uh Robert Larner uh MDs uh College of Medicine. That's at the University of Vermont. She serves as Chair of the Department of Pathology and Laboratory Medicine. Until last year, Doctor Leonard earned her MD degree and her PHD. in biochemistry from new york university and her bachelor's degree in biology from smiths college now before you testify we have a practice here of swearing people so would you please stand do you do you swear or affirm that the testimony you're about to give before this committee will be the truth the whole truth and nothing but the truth so help you god You've all responded in the positive. And so we'll start out with Mister Ioncube. Please proceed.

Thank you and uh Chairman Grassley, Ranking Member Durbin and members of the committee, thank you for the opportunity to testify today. Before I begin, I want to say that I am heartbroken about Senator Graham's passing. I was Very much looking forward to seeing him on the dais today. He chaired this committee when I was PTO director, and I have only fond memories of our meetings. He was gracious, smart, witty, and he loved this country. He was a statesman in the best sense of the word. He fought hard for his beliefs, and he reached across the aisle when it served America's interests. May others follow his lead. And may his memory be a blessing. My message for this hearing is simple. Congress has not meaningfully updated the basic statutory categories, defining what kinds of innovations and technology may be patented since seventeen ninety-three. Technology has changed a bit. Since then, indeed it has changed beyond recognition. The statute has not. What belongs in the patent system is a major policy question. The Constitution assigns that question to Congress. I urge Congress to answer it. And because Congress has not done so, co- courts have filled the void. And over the past fifteen years, courts have expanded judicial exceptions that Congress never wrote. and that lower court judges say they cannot administer consistently or fairly. The consequences are real. The result is uncertainty in the technologies that will define this century. Computing, meg- medical diagnostics, biotechnology, artificial intelligence, and so much more. For example, courts have rejected tests that diagnose serious disease diseases as laws of nature. They have rejected improved digital camera technology as an abstract idea. And they have treated the collection, analysis, and presentation of information as categorically suspect, and likely not in the patent system. The resulting uncertainty discourages the resource-intensive research America needs to confront its greatest challenges, from detecting and treating thousands of diseases that remain without effective therapies, to equipping our military with the most advanced computer-assisted technologies. Meanwhile, Europe, China, Japan, and South Korea, the biggest other IP jurisdictions, protect inventions that American courts turn away. That is a self-inflicted competitive disadvantage in precisely the fields in which the United States is competing for technological leadership at this time. The burden falls especially hard on small innovators. Large companies can rely on scale, secrecy, and litigation budgets. For start-ups and other small businesses, patents may be their principal asset, the foundation for attracting capital, hiring employees, and bringing a product to market. Reliable patent rights also encourage inventors to disclose their breakthroughs rather than keep them secret, allowing others to learn from and build upon them. And they help attract manufacturing and investment to the United States. PERA would restore clarity. It preserves the broad technology neutral framework that has served the country since seventeen ninety-three, while replacing unpredictable judicial exceptions with a defined list of matter that Congress decides to exclude from the patent system. One clarification is essential though. The patent laws impose several distinct requirements. Section one O one asks only a threshold question. Is this the kind of technology the patent system may protect? Other provisions determine whether the invention is new, non-obvious, and adequately disclosed. Eligibility is not patentability. Passing through the gate does not guarantee a patent. Para is only about eligibility, and leaves the patentability standards. unchanged. The American patent system is a powerful engine of investment and growth, but only when its rules are clear, predictable, and properly balanced. Today, at the threshold, they are not. Congress should decide what belongs in the patent system and give American innovators the confidence to invest to build to disclose, and to keep the next generation of breakthroughs here at home. Thank you. And I look forward to your questions.

Uh, thank you. Just at the at the outset, uh, the great privilege of meeting Senator Graham a few times in my career. And I just wanted to briefly say that I join with countless Americans in offering my deep condolences to Senator Graham's family, uh, and to his friends and his colleagues for your for your tragic loss. Uh, Chairman Grassley, Ranking Member Durbin, members of the committee. My name is John Lee, and I am the Senior Director and Head of IP Policy at the Com- Computer and Communications Industry Association. Our members include some of the most innovative and prolific patent owners in the world. And they depend on a strong, balanced patent system to support innovation, protect IP, and encourage economic growth. It's a great privilege to be invited to testify here today. And I appreciate this opportunity to share our insights on this important topic. In my opening remarks, I'd like to focus on three key points, predictability, innovation, and protection. First, predictability. Now, despite some claims that the sky is falling when it comes to patent eligibility, uh, the current state of that law in the United States is cogent and consistent. And and how do we know that? Empirical data has revealed that patent eligibility decisions today are remarkably reliable, and are seldom reversed, or even draw dissent on appeal. A recent study in the Iowa Law Review found that since twenty twelve, district court decisions on patent eligibility have been affirmed more than eighty-five percent of the time. And d- decisions from the USPTO have been affirmed more than ninety-five percent of the time. usually unanimously. This and other data shows that courts understand the patent eligibility rules and apply them accurately to reach correct result, reach the correct result in the vast majority of cases. And this shouldn't be that surprising because patent eligibility law has actually been largely consistent for over one hundred and seventy years. Which brings me to my second point, innovation. Consistent predictable patent eligibility rules have contributed to more than a century of American innovation and technological leadership. And more importantly, current law continues to support robust innovation, including in many of the areas we've been talking about already, like artificial intelligence. If the current patent eligibility framework were suppressing innovation, as some say, we'd expect to see it reflected in the data, but in fact we see the opposite. For example, the USPTO issued approximately fifty thousand artificial intelligence patents last year alone. That's almost double since the Supreme Court's Alice decision. R and D spending is also increased in that time period, including in the industries most affected by section one one, such as software, including AI. Venture capital investment in AI has also skyrocketed. with the united states receiving seventy five percent of global v c funding in the ai sector just last year total of about two hundred billion dollars importantly the united states received about twelve times as much v c funding in ai as the eu which came in second place and fifteen times as much as china in third which casts doubt on those who claim that the supreme court's sexual section one O one cases are disadvantaging US companies. And that brings me to my third point, protection. One of the ways patent eligibility rules contribute to innovation is by shielding innovative US businesses from low quality patents. Without reasonable limits on patent eligibility, litigation brought by rent seeking patent assertion entities is likely to rise. Patent assertion entities often wield low quality patents on abstract ideas, like sorting or organizing information, with only token recitations of generic computers or devices. It's exactly what section one O one is designed to address. Section one O one protects US businesses targeted by such low quality patents, which frees resources and reassures investors to boost innovation. For example, a recent study found that v c funding to the industry's most affected by the supreme court's alice decision actually increased by forty two percent after the alice decision uh this study also revealed that the reason for that increase was directly related to the protection provided by section one O one against spurious litigation on low quality patents in closing we are living through one of the most consequential periods of technological advancement in our nation's history with american leadership in areas like artificial intelligence biotechnology and advanced computing reshaping our economy society and the world section one O one is part of that success due to the three key points about patent eligibility that i described predict predictability which boosts innovation including by protection of us businesses all creating the balance that the patent system needs to continue promoting these and future innovations as it has for well over a century. I commend the committee for taking a thoughtful approach to understanding patent eligibility, and thank you for inviting me to testify on this important topic.

Chairman Grassley, uh, Ranking Member Durbin, and members of the committee, thank you so much for the opportunity to be here. Um, uh, before I get started, I also wanna join others in saying I'm deeply sorry for the loss of your long-time colleague and friend. Uh, Senator Graham and Senator Durbin, thank you for sharing your personal stories. Uh, my name is Sue Peshin, and I serve as President and CEO of the Alliance for Aging At the alliance, we are changing the narrative to achieve healthy aging and fair access to care. Personally, I'm also a family caregiver to my mom. who is eighty-five and lives with kidney disease, arthritis, and dementia. Today's hearing is not an abstract policy debate for older patients and family caregivers like me. This is about lives, choices, and hope. It's important to understand why passage of the bipartisan Patent Eligibility Restoration Act, or PARRA, has become urgent. For fifteen years, the US patent system has struck down thousands of patents and failed to protect some of the most transformative innovations in diagnostics. Not because they weren't new or useful, but because a series of Supreme Court rulings created confusion when broadening patent ineligibility and invalidation. The problem is especially severe in medical diagnostics. The Supreme Court's expanded exceptions for laws of nature, natural phenomena, and abstract ideas, have made many diagnostic inventions ineligible for patents. As a result, the Patent Office often rejects applications for methods that detect disease, measure biomarkers, or convert biological discoveries into practical clinical tools. A twenty twenty-two study in the Washington and Lee Law Review found that within only four years after one of the key cases, investments in diagnostics fell more than nine billion dollars short of what it otherwise would have been. The cost of lost diagnoses for families is why the Alliance for Aging Research strongly supports PARA. The bill would restore clarity to the eligibility section of the Patent Act, so that inventors of medical discoveries can reliably make their way from the lab to doctors and their patients. And I wanna note that patent eligibility doesn't guarantee patent approval, it just lets the Patent Office consider an invention. Without patent protection, many of these tests are never developed or they sit on a shelf. One of the clearest examples is in Ariosa diagnostics versus Sequenom. Sequenom developed a non-invasive prenatal test that could detect fetal am abnormalities from a simple maternal blood sample, sparing moms and babies the risks of amniocentesis. It was a genuine scientific breakthrough. Yet the federal circuit invalidated the patents. Judge Richard Lind stated in his concurrence that the invention was exactly the kind of advance the patent system is meant to encourage and protect. But the Mayo decision compelled him to strike it down. And he actually called on Congress to resolve the confusion. A similar situation arose when university researchers developed biopsy tests that could predict brain metastases in melanoma patients. But patient, but but patents on these methods were denied. under the Mayo and myriad standards, forcing researchers to abandon their efforts. And as a result, many melanoma patients learn their cancer has spread to the brain after the fact, when they may only have weeks to live. Para would largely eliminate those barriers and let those diagnostics be judged under the normal patentability rules. What we stand to lose in the near future is a con- is as concerning as what patients have already lost. Researchers are developing detection tests that have the potential to identify several cancers at once through a simple blood draw. These tests look for patterns in DNA and protein markers that can indicate the presence of early stage cancer cells. Catching these cancers earlier will improve survival rates and reduce the burden of treatment for older adults. The promising work in development for bio biomarker based diagnostics in Parkinson's is also critical. As seniors facing Parkinson's often endure years of visiting doctors before receiving a di- a diagnosis and today there's no single definitive test. This is exactly the kind of innovation America should be leading. But if diagnostic patents remain unpredictable in the US, investor capital will move elsewhere. Members of the committee, it's encouraging to see bipartisan leadership. on this issue, their shared agreement that something's wrong, and their shared commitment to fix it. On behalf of the Alliance for Aging Research, older patients and caregivers across the country, I respectfully urge this committee and Congress to pass PARA before the end of this year. Thank you so much.

Thank you. Doctor Leonard.

Chairman Grassley, who is not here. Mister Tillis. Miss uh ranking member ranking member Durbin and other members of the committee, my deepest sympathies to all of you who are grieving the loss of Senator Graham. Thank you for the opportunity to testify today. My name is Deborah Leonard and I have spent my medical career developing and overseeing clinical genetic testing used to diagnose disease and guide treatment. I want to share with you my experiences with gene patents prior to the Myriad decision. The University of Pennsylvania health system received seven gene patent enforcement letters between nineteen ninety-seven and ninety-nine, and again in two thousand two. The enforcements stopped my laboratory from performing four of our tests that we had been performing, and another clinical laboratory from performing one of their tests. We obtained a license to perform the other two tests, one of which led to increased costs for our patients. The medical consequences of gene patents are many. If testing for a disease is monopolized by one company, that company sets all the rules for access to testing, such as not accept not accepting certain forms of payment, or not performing prenatal testing or testing for other purposes. The company can charge any price. The company decides how the test will be performed, which can result in incomplete testing. We lose the innovation in testing methods that happens when many laboratories are performing the test, which often results in tests that are faster and at lower cost. Health care systems pay for the added costs and time of shipping specimens for testing. One company obtains all the specimens from across the country, thereby limiting further research. on the disease and testing methods. A gene patent holder may allow broader testing, but charge any level of licensing and royalty fees. Please understand that in the current medical practice, we routinely test many genes in a single test, or even the entire genome. Therefore, elimination of one or more genes by one or many patent holders makes the test incomplete, or requires multiple tests, which increases costs. By contrast, the University of Michigan University of Michigan gave free licenses for their patent on the most common variant that causes cystic fibrosis to any not-for-profit clinical laboratory performing the test for their patients. My point is that a gene patent holder has the legal right to totally control the use of the gene without regard for the impact on patients and medical care. Physicians are increasingly using genetics in health care with amazing innovations. We can sequence a sick newborn and parental genomes, identifying the genetic cause for the sickness in the baby in about twenty-five percent of the babies. For cancer patients, we can identify the genetic changes or biomarkers causing a patient's cancer to grow, which can allow treatment with genetically targeted therapies that achieve cures and remissions more successfully than standard chemotherapy. I could go on and on about all the incredible advances we've seen in genomic medicine since twenty thirteen, but the important point is that all of this success occurred under the current patent eligibility framework, not despite it. We continue to reward true innovation through patents on novel technologies, therapies, and laboratory methods, while ensuring that the building blocks of biology remain available for researchers, clinicians, and patients. Having experienced both worlds, I can say with confidence that the current framework serves patients and drives innovation far better than the one that existed before amphimiriad. I want to be very specific about my concerns with Para. We have a fundamental disagreement in that the medical community holds that any part of the human genome, any disease biomarker, any pathogen genome should not be patent eligible. We are not opposed to patenting any innova innovation or invention that uses a sequence found in humans or pathogens, without then claiming a patent on the basic sequence or biomarker. These foundational building blocks needed for medical care should remain available for everyone for innovation and invention. Please do not go back to dividing up the human genome by patents that restrict medical practice, increase costs of care, and limit patient access to lifesaving tests and therapies. To be clear, Para is bad for patients, bad for health care, and bad for innovation. Thank you for the opportunity to testify, and I look forward to answering your questions.

Thank you, Doctor Leonard. I um, I noted during the opening statements there was a lot of so i'm looking forward to the debate round uh that'll end after all my other colleagues had a chance to ask questions uh real quick one um from each of you do you uh believe that the court specifically the supreme court has turned section one O one from a historically coarse filter to a fine filter doctor ianku

uh well first of all thank you for the elevation to the doctor um

You should. I'm not an inferior.

Appreciate the honorary degree.

Not a doctor on the back yet, sorry.

Uh, yes, I believe.

I meant to say director, by the way.

Yes, thank you. Uh, yes, uh, Senator, I do believe, uh, that that's exactly what the Supreme Court has done.

And Mister Lee.

Uh, thank you for the question, Senator. Uh, respectfully, I I I don't think that's the case. I think the Supreme Court's recent cases in section one and one have been mischaracterized a bit. I think they're, generally speaking, procedural. They they describe a process in which you conduct a section one to one inquiry, but that the substance of the inquiry is consistent with it hundred and seventy years.

I got a yes and a no. We'll get back to that in the debate round. Miss Peshin.

Yes.

Doctor Leonard.

No.

Uh. Um. Director Ioncourt, when you when you were I I did say director that time. Um. Your at your time at the PTO, you issued guidance. uh, around section one O one. And I felt like the guidance did a lot of good. Um, certainly instructed some of our thinking. Uh, but guidance alone is not gonna get the job done, right? Tell us why.

Well, um, given the separation of powers, obviously courts, uh, are not bound by administration guidance. Um, they do what, uh, they think is, is right, independent of what the administration says. And, um, and in fact, uh that's uh that's what they've done um i will say that um that the guidance has indeed done a lot of good at the uh at the uh pto and the practice before the pto what the guidance did the twenty nineteen guidance what it did is it took the body of law uh that the supreme court and the federal circuit has created in this area and synthesized it in a way that examiners and applicants can understand and follow a very specific process. And the result has been in the one year, immediately following the guidance that the um, that the uh consistency of decisions in this area went up by forty- four percent. Um, and I, you know, I, a- and as Mister Lee noted earlier, uh, the federal circuit affirms over ninety-five percent of decisions in this area from the PTO. So therefore the guidance uh basically follows the law given by the by the courts. Two points are important here. There's two problems with the court's uh jurisprudence here. Number one, it's substantive. The courts have took upon taken upon themselves to exclude from patentability major areas of technology without Congress ever saying it should do that. It's excluding, for example, the medical diagnostics And for example, it's excluding the analysis of, heavy-duty analysis, a technological analysis of information and data. There's other examples. If there is some exclusions of major areas of technologies that are to be done, this Congress needs to debate that, and make that decision for the country. That's a substantive problem. There is a procedural problem. By the way, the substantive problem Congress needs to fix. There is a procedural problem, which is that the courts have created an inconsistent framework that is difficult to follow and predict in the court system itself. That problem is solvable by the administration for processes in front of it, like we did with the twenty nineteen guidance. And we solved the inconsistency problem. Courts could do the same thing if they wanted to. But again, they're not bound by it. What Para does, it addresses the substantive problem and the procedural problem, and they would do a lot of good that way.

I'm gonna hold some of my questions for the second round for me, uh, Senator Durbin.

Thanks, Mister Chairman. Uh, bear with me. I'm a liberal arts lawyer who spent a lot of my life in politics. Uh, I wouldn't know what to do in a laboratory. Uh, I don't know much about genetic testing. But I take it that that is one of the issues that we need to discuss. And I'll start with Doctor Leonard. When I read that the Supreme Court has said, law that, when it comes to striking down patents on human genes and on abstract ideas. Laws of nature, natural phenomena and abstract ideas are not patentable. That seems to be the general conclusion of the court. They go on to say, or at least in Funk and other cases. Natural phenomena, similar to abstract ideas, are not patent eligible, whereas the application of natural phenomena in a man-made invention is eligible. Doctor Leonard, what you described was genetic testing. And you were saying that some entities believe they have a patentable right to forms of genetic testing to the exclusion of other people who wanna use it. Is that correct?

Yes.

And why is that a problem?

The wording in para is such that a gene is protected as long as it remains in your body, in my body, in mister Tillis's body. However, as soon as you purify or enrich a gene, then it is patent eligible. I can't tell the difference in the laboratory from the genes in your body and the genes that I make in a test tube. they are identical. So basically, by saying when you make copies of a gene, you are changing that gene, you're not really. And you are controlling the medical use of essential information for caring for patients. So, the basic building blocks, DNA, when, when I have a patient who has a mutation in a gene, that mutation exists in that patient, I simply read it. It is a discovery. It - it is a - an uncovering of what exists in a patient. It is not an invention or an innovation and should not be patent eligible. So I have no problems with new testing methods, new sequencing is- instruments, new, you know, long-range sequencing, which you don't know what that means but would be highly innovative and hasn't yet reached the clinical market. So, all I am asking is that those basic building blocks be not controlled by any patent holder. They can use those sequences in a patent, but then that sequence is still open for anyone to use for further invention, innovation, competition, which in medicine is so important. for controlling costs, for getting better therapies, better diagnostic tests. That's what I'm asking for.

Mister Lee, when I was a kid, people were scared to death of polio. We have a colleague who's now suffering from some long-term issues he's had with polio, uh, and many of us knew personal stories. Along comes Jonas Salk with the vaccine. I didn't care for the shot in the arm, but my mom was finally relieved and I realized later how important it was in my life. Doctor Salk said at the end of the day, I'm not gonna patent this vaccine. I want everybody to have it. I think it's important for public health. When I listen to Doctor Leonard, I hear her saying my research is going to be restricted by the patent rights others are claiming. Do you feel the same?

That certainly can occur depending on how the patent is scoped, and depending on how you look at section one O one. Um, obviously there's some views that the aperture should be increased we've heard that and what that would do is allow more patents on things that the supreme court has said

mmm

are basic fundamental building blocks of research and innovation the laws of nature mathematical relationships that exist uh these are things that are part of the storehouse of knowledge for all men is what the supreme court has said and because of that those things have been restricted from patenting by the supreme court section one one law uh if that is changed and more of that material is allowed to be patented and thus owned by exclusively by one patent owner then it's gonna be much harder to use those building blocks for further innovation

are you agreeing with doctor leonard

i am agreeing with doctor leonard

so you're opposed to the bill that's pending is written

i i think PIRA uh has its issues uh and and certainly could use some refinement to make sure that some of these dangers don't happen

Thank you. Thank you, Mr. Chairman.

Senator Dermott, could I clarify?

Sure.

I am not talking about research. I am talking about medical care for patients.

I see. Thank you.

Said bye, Byrne.

Thank you, Mr. Chairman, and uh thank you to each of you. When I talk with Tennesseans, they want to make certain that we stay on the cutting edge. When it comes to medical innovation and utilization of healthcare technologies. And, Doctor Leonard, as you were just mentioning, uh, talking about patient care and making certain that that care is available to Tennesseans. Um, Director, let me come to you and thank you for the work that you were doing. We had looked at a State Department's China is now leading the US in fifty seven of sixty four critical and emerging technologies. That's, does that compute with what you hear?

Yes, indeed.

And in this they're also leading in AI. Is that accurate?

Uh, my personal understanding is that with respect to AI, AI is a very broad field. Um, many different technologies within it. They are leading in many of them. and their neck-and-neck with us and others. And I believe that if we don't do something about uh uh our patent system, uh here in the United States, we will eventually lose that race.

Well, Senator Welch and I have been on this issue of protecting intellectual property, and um making certain that we reign in the virtual space. We've been working on that since we were each over in the house. And we um have legislation, the Leadership in Critical and Emerging Technologies Act, which would expedite patent exams for AI, semiconductor, quantum computing. So, you've just touched on this. How would resolving this uncertainty that really surrounds these emerging technologies and the patent system, how would that strengthen our ability for keeping that innovation us-based.

yeah thank you senator uh uh great question here and the bunch of issues um first of all for the united states as a free market economy to maximize its innovation output it needs reliable intellectual property laws that apply in a predictable way to uh to the the entire scope of technology Right now, there are major areas of technology that are basically not eligible for patent. OK? Um, medical diagnostics we've discussed, but a lot of information-based technologies. And we live in the information age. And courts took upon themselves to effectively exclude from the patent system the technological processing of massive amounts of data in innovative ways. That's another example. Without that, you surely, we will have some innovation here, and we do. And there is investment in innovation, some of it, and we do have that. But if we want for the United States to maximize its potential, the only way to do that reliably, in a free market economy, is through intellectual property laws which our founders understood from the very beginning. And without that, we will, we already have fallen behind China, as you have indicated, Senator. Um, but imminently we will fall far behind and it will be very difficult to uh to catch up for the rest of of the century.

Let me ask you this, uh just following on to this and para um section one O one of the the Patent Act, the Supreme Court has refused to revisit that. Why do you think para is the appropriate solution to bring some clarity some continuity and some confidence to that issue

because only congress can do that um through statute um the constitution empowers congress to define the patent laws and this and section one O one for all practical purposes was written in seventeen ninety three the four categories of patentability was were written when jefferson and madison were writing laws in seventeen ninety three. Congress has not changed the categories of patentability effectively since then, and courts are having a difficult time um figuring out how to apply an eighteenth century statute to twenty first uh twenty first century law. And I just want to emphasize how important this is for the United States. Yes, we will have a Doctor Salk every now and then inventing unbelievable technologies and dedicating that to the public. And people can choose to do that as they wish. But if for the United States, if we want investment and innovation at scale, they can compete with a very determined China and others, we need reliable intellectual property laws.

And do you

And Barra does that.

Yes. And do you agree that denying patent protection for AI innovations effectively forfeits American excellence and leadership? to our competitors.

I very much do that, and more than that, Senator, what it does is um uh in in addition to that, it concentrates um uh technology in the big and the and the established corporations, it allows the big to get bigger, and it also pushes development towards trade secrecy. And if anything, we want more transparency in artificial intelligence development, not less and the patent system a patent means to lay open that's what the word patent means the patent system encourages public disclosures for all of those reasons para would help um uh enable the united states innovation system to maximize its potential