Today, Congressman Jerrold Nadler (NY-10), the Ranking Member of the House Judiciary Subcommittee on Courts, Intellectual Property and the Internet, delivered an opening statement at the subcommittee’s hearing on “The U.S. Patent and Trademark Office: The America Invents Act and Beyond, Domestic and International Policy Goals.”

“As we examine the continued implementation of the America Invents Act, we will study what changes if any, are needed for the patent system as a whole,” said Congressman Jerrold Nadler (D-NY). “In recent years, there has been an increasing awareness about abusive patent litigation.  There has also been a public and private effort to combat abusive patent litigation. We need to continue to develop other creative solutions to deal with instances of abusive patent litigation without diminishing the rights of legitimate patent holders.”

The following is the full text of Congressman Nadler’s opening statement (as prepared for delivery):

            “Today we will conduct an oversight hearing of the Patent and Trademark Office (PTO). 

            “A strong patent system is important to foster innovation.  Patents serve as one of the key drivers in the nation’s economy.  I hope that today we will consider what steps we can take to continue to improve the patent system.

            “To do this, we will examine the implementation of the Leahy-Smith America Invents Act of 2011, which was the largest modification to U.S. patent law in more than 50 years. 

            “The America Invents Act was designed to help process patent applications faster, reduce the application backlog, increase patent quality through expedited patent challenges, and improve examiner recruitment and retention. 

            “The PTO is a fee funded agency, and the American Invents Act provided a model for funding to ensure that the USPTO receives access to the user fees collected each year.  As we study these issues today, I want to stress that I believe it is very important that the PTO continues to receive all of these funds so that it can continue to issue high quality patents.

            “The bill gave the PTO fee-setting authority, which has allowed the PTO to develop an operating reserve.  This enables the PTO to launch new initiatives in response to their customers’ needs.

            “To date, the PTO has implemented most of the provisions of the American Invents Act, of the 37 America Invents Act provisions, 28 were delivered on time. 

            “Though this implementation rate has been a success, I would like to hear today about the planning and implementation of the Patent Review Processing System.  The Patent Review Processing System was launched for the new Patent Trial and Appeal Board, and is the Board’s e-filing and case management system for trial proceedings. 

            “The America Invents Act required the PTO to establish three or more satellite offices by September 16, 2014.  The PTO opened one satellite office in Detroit in July 2012, and recently opened another one in Denver.  I would like to hear how these offices are helping to reduce the patent backlog and how their operations have been running so far. 

            “As we examine the continued implementation of the America Invents Act, we will study what changes if any, are needed for the patent system as a whole.

            “One of the key goals of the America Invents Act was to help the PTO quickly review patent applications.  Another goal was to establish higher quality patents, and the PTO has worked to achieve that goal. 

            “I am happy that the PTO has made improving patent quality a top priority.  I would like to hear how the PTO plans to improve patent quality as it continues to implement the America Invents Act.  Also, as patent quality continues to improve, we expect this will play a large role in curtailing abusive patent litigation.   

            “In recent years, there has been an increasing awareness about abusive patent litigation.  There has also been a public and private effort to combat abusive patent litigation.

            “We need to continue to develop other creative solutions to deal with instances of abusive patent litigation without diminishing the rights of legitimate patent holders.

            “In particular, the House passed the Innovation Act last December with strong bipartisan support, to address many of the concerns that have been raised about abusive patent litigation. 

            “During our work on the bill, we heard from many stakeholders about how the bill could be modified and improved, and we attempted to work with all interested parties.  The Senate continued work on this important issue, but the bill has been put on hold as stakeholders continue to attempt to work out their differences.  We must not become discouraged as we continue to attempt to find common ground to deal with abusive patent litigation. 

            “Last year the Administration announced seven legislative recommendations designed to increase transparency of patent ownership information, curtail abusive patent litigation, and ensure high quality patents.  We should continue to study these recommendations as we continue to develop ways to improve our patent system.

            “I would also like to hear today about efforts, such as the Intellectual Property Rights attaché program, that the PTO has taken to work with our trading partners to improve intellectual property rights and enforcement. 

            “The Supreme Court has recently issued several opinions that impact some of the legislative issues we will discuss today.  For example, in the Octane and Highmark cases, the Court issued opinions lowering the standard for awarding attorneys’ fees in patent cases. 

            “I would like to hear how the PTO is working on Executive Actions to address the question of overly broad patent claims, particularly in the context of software.  The Administration has called on the PTO to provide new targeted training to its examiners on the scrutiny of these types of claims.  I commend the PTO for developing four training modules focused on functional claiming under section 112(f), which is often used in software patents.  This is an important step in taking the Executive Action to increase patent claim clarity seriously.

            “Finally, we should make sure that American companies continue to receive adequate patent protection in key overseas markets. 

            “This hearing will provide us with an opportunity to evaluate the efforts of the PTO to implement the America Invents Act, and provide suggestions of how we can improve the patent system going forward.  I look forward to hearing from the witness and I yield back the balance of my time.  Thank you.”

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