USPTO Director Andrei Iancu on Patent Policy

USPTO Director Andrei Iancu gave the keynote address at the April 11, 2018 Patent Policy Conference hosted by the U.S. Chamber of Commerce. The following is an excerpt:

… Dr. Eli Harari … risked everything: his career, his finances, and his family. That first company actually did not work out well, but a few years later, Harari risked it all again and co-founded a new company, which he ultimately called SanDisk. At SanDisk, Harari built upon his EEPROM technology, added critically important new inventions, and perfected flash memory data storage. And he obtained patents, including on how to turn memory chips into reliable systems. Harari’s flash technology came to be used almost universally in devices like digital cameras and cell phones. In 2016, Western Digital acquired SanDisk for $19 billion. But think about it: Without patents, how could someone like Dr. Harari risk everything, put aside his secure career at an established company, and strike it on his own?

As Dr. Harari told me: “The only asset you have is your idea.  If you have no way to protect your idea, you are at the mercy of the next bad guy.  The U.S. patent system is genius, really the bedrock foundation of capitalism.” Harari’s sentiment was echoed by President Ronald Reagan, who said in 1982: “Throughout our Nation’s history, the patent system has played a critically important role in stimulating technological advances.”

How true that is.

Yet today, our patent system is at a crossroads. For more than just a few years, our system has been pushed and pulled, poked and prodded. The cumulative result is a system in which the patent grant is less reliable today than it should be. This onslaught has come from all directions: There has been major reform legislation, and proposed legislation. There have been massive changes brought about by major court cases. And the USPTO itself has taken a variety of actions in an effort to implement these changes. Plus, importantly, the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation. …

Still, we are at an inflection point with respect to the patent system. As a nation, we cannot continue down the same path if we want to maintain our global economic leadership. And we will not continue down the same path. This administration has a mission to create sustained economic growth, and innovation and IP protection are key goals in support of that mission.  So, how do we reverse the trend? The good news is that reclaiming our patent leadership status is within reach.

For today, let me focus on two principal points:

(1) Creating a new pro-innovation, pro-IP dialogue, and
(2) Increasing the reliability of the patent grant.

First, we must change the dialogue surrounding patents. … [A] successful system must be defined by its goals, aspirations, and successes. Obviously, errors in the system should be corrected. And no abuse should be tolerated. Errors and abuse should be identified and swiftly eliminated. However, the focus for discussion, and the focus for IP policy, must be on the positive.  We must create a new narrative that defines the patent system by the brilliance of inventors, the excitement of invention, and the incredible benefits they bring to society. And it is these benefits that must drive our patent policies. …

But, how exactly do we translate this into a better patent system? Here’s a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors? Whether it’s an individual tinkering in her garage, or a team at a large corporation, or a laboratory on a university campus—we must ask ourselves: are we helping them? Are we incentivizing innovation?

And that brings me to my second principal point for today: increasing the reliability of the patent grant. Because that is key to incentivizing innovation. Without reliable patents, inventors like Dr. Eli Harari are less likely to risk it all in order to bring their new concepts to the market. As I said at my Senate confirmation hearing: “When patent owners and the public have confidence in the patent grant, inventors are encouraged to invent, investments are made, companies grow, jobs are created, science and technology advance.” … [The Chamber] report identifies two principal reasons for the increased uncertainty (or lower reliability) of our patents:

(1) Patentability Standards, or more specifically, patent subject matter eligibility pursuant to 35 USC Section 101; and
(2) Opposition procedures, namely, the post-grant procedures, such as IPR, that were established by the America Invents Act.

Let me address each of these in turn.

First, our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation. Recent cases from the Supreme Court – Mayo, Myriad, and Alice – have inserted standards into our interpretation of the statute that are difficult to follow. Lower courts applying these cases are struggling to issue consistent results. Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents. And examiners at the USPTO must spend increased amounts of time addressing this challenging issue. The current standards are difficult for all: stakeholders, courts, examiners, practitioners, and investors alike. System-wide, a significant amount of time is being spent trying to figure out where the lines should be drawn, and what’s in and what’s out. And multiple people looking at the same patent claims often have trouble agreeing on, and predicting, the outcome. Something must be done. To be sure, we must and will apply Supreme Court law faithfully. This does not mean, however, that more cannot be done to increase clarity and predictability. Of course, given our statutory mandate, there is only so much that the USPTO can do. But within that mandate, we will do everything we can. Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance. Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to every new case the courts issue.

Second, your report also mentions our “patent opposition procedures” as a reason for the increased uncertainty of our patents. This refers primarily to our Inter Partes Review, or the IPR system. This was a creation of the America Invents Act, and since its introduction five and a half years ago, we have now conducted more than 8,000 such proceedings. It’s been a very popular proceeding. Opinions on this new system diverge widely. Yet each opinion is passionately held by its supporters. Pointing to the high invalidation rates in IPR proceedings, some hate the new system with vigor, arguing that it’s an unfair process that tilts too much in favor of the petitioner. Others love the system, and think it’s the best tool we have to correct errors, eliminate “bad patents,” and improve patent quality. Who is right? Well, both arguments have legitimate elements. But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges. This is what we are now doing at the USPTO.  Indeed, it’s one of our highest priorities. We need to carefully balance rights-holder’s and rights challenger’s interests. On the one hand, for example, this proceeding can come years after issuance, when the patent owners and the public may both have relied on those rights and made investments accordingly. On the other hand, we do want to execute the statutory mandate and help maintain the quality of patent rights. And – assuming the Supreme Court does not declare it unconstitutional – we do want the IPR system to effectively address invalid claims, but at the same time, we don’t want to throw out the baby with the bathwater. The filters need to be appropriately set.  And so, among various other things, we are now examining: how and when we institute proceedings, the standards we employ during the proceedings, and  how we conduct the overall proceedings.The goal, with whatever action we take, is to increase predictability of appropriately-scoped claims….

We have a remarkable patent system, born from our Constitution and steeped in our history. It is a crown jewel; a gold standard. We have a unique opportunity to ensure it meets its full Constitutional mandate to promote innovation and grow our economy.

I look forward to working with all of you in support of that great endeavor. Thank you again for the invitation to participate in this important discussion.

42 thoughts on “USPTO Director Andrei Iancu on Patent Policy

  1. 11

    “Here’s a start: when we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors?”

    What a lovely sentiment. It gives me chills. It is so refreshing to see somebody with their hands at the wheel that gets this.

  2. 10

    I believe in the intent of the Patent system wholeheartedly, I have patents myself; if it is done properly, starting with the patent approval. But it seems the patent reviewers have been letting way too much nonsense through as there are too few of them so things slip through way too often that shouldn’t. Overly wild conceptual fantasy ideas, overly broad and obvious, making the patent claims so vague, not even a technical mind in the business can understand what exactly the patent teaches, if anything.

    So, Non Practicing Entities (NPEs) set up shop just to litigate, never intending to make anything, or to protect an active business and its products (which in my opinion is what patents are for), but rather to abuse healthy existing businesses with ridiculous patent lawsuits, funded by shadow organizations of “investors” that are in it for a return on their “investment”.

    As the Federal District Courts where shopped by these “investors” for the highest percentage of positive plaintiff outcomes, Eastern Texas was re-born, accommodating fake offices for NPE plaintiffs, and practicing defendant abusive of early discovery and much more. Plaintiffs win at fantastic odds of nearly 80%. Great odds for “investors”. In the meantime, defendants, usually snagged because of no real infringement, suffer, and healthy functioning businesses are often destroyed or greatly diminished.

    It seems that, as these patent lawsuit factories like Eastern Texas and Delaware exploded in popularity, and overwhelming numbers of cases continued to be brought (after all, more and more “investors” wanted in on the action), jury pools grew thin, stretching out way beyond normal areas near or around the courts. These, mostly layman juries in many cases, have no clue about the technical jargon and overwhelming amounts of information being thrown at them. Way more often than it should, juries just check the boxes of “damages, and royalties” no matter how ridiculous they are. In the SmartFlash v. Apple case they awarded $504M after only 3 hours of deliberation!! Of course it was tossed at appeal after actual judges with technical knowledge reviewed it. Just think of the millions spent on that whole charade for NOTHING. Of course lawyers love it. I guess one positive result would be that another NPE got one of its nonsense patents tossed so they can’t abuse more innocent defendants with it.

    Thus, our wonderful and honorable patent system became a money game, not meant to protect anyone’s idea, or invention, but a tool leveraged against functioning businesses to extort money through exorbitant judgments brought on by juries that have little or no understanding of the technology, or patent validity. Plus, defendants, after spending insane amounts of valuable time and money, still only have, at most, a 20% chance to prevail in the end.

    That is why the IPR process and Alice are so important. These overly broad and obvious fantasy-made up patents churning around in the system waiting to get bought up by “investor” groups just for litigation, with no real teaching or resulting products, that are usually haunted by massive amounts of prior art, need to be culled out of the system and the practice of “investors” trying to cash in on the abuse of innocent defendants, needed to be reined in. What better place to do it than in front of knowledgeable judges/boards, that can separate the facts from fiction quickly. The reason there are high rates of patent invalidity as a result of an IPR challenge, is because those patents should have never been issued in the first place.

    The TC Heartland v. Kraft decision was also way overdue; ten years overdue, allowing defendants to avoid Eastern Texas and Delaware, and fight in their own State of headquarters. Also, preventing plaintiffs and their “investors” from venue shopping for their high odds of success no matter what nonsense is in their patent.

    1. 10.1

      I weep at your fiction – soemof the best Efficient Infringers’s mantra writing in some time.

  3. 9

    Having made at one time an earnest good-faith attempt to engage in debate here, I will never post anything of substance to this sewer of a so-called blog, as it more resembles a kangeroo court in the forum of public opinion. The auto-censor bots walling this garden, allow only heavily sycophantic views to be emitted from the keboards of johnny-come-lately joiners.

    I will however say that it is utterly hilarious to see the intensely corrupted, odious “MM”” be so triggered’, as the new SJW parlance goes.

    LMAO at the not-so-slow burn, of this bonfire of the vanities. The U.S. has already been shoved too far down the shitter on this one to recover at any time in the next generation: get ready to cal China “MASTER”.

    But not to worry, “MM”: the likes of you, will always have a seat in the new van, that reserved for traitors of old regimes vanquished.

  4. 8

    The patent system in the U.S. needs a massive PR campaign. The only time most people care about the patent system is when a maker of a beloved service or gadget is sued. When you combine with the perception that these patent assertion companies also use poor quality patents to target “mom and pop” operations, you can see why the average person does not care about the patent system.

    Unfortunately, all we’re likely to get in a PR campaign is something between cheesy and transparently awful. Maybe the USPTO should sponsor an OWL team (the Alexandria Edisons?)

    1. 8.1

      The only time most people care about the patent system is when a maker of a beloved service or gadget is sued.

      What “must-make” nonsense.

      Clearly, you have not been paying attention.

    2. 8.2

      It is not the “only” time, since huge patent suit jury awards and very high patented drug prices also get media coverage. But a famous example of “the only time most people care about the patent system is when a maker of a beloved service or gadget is sued” was back when all the members of Congress then using Blackberrys were threatened by a patent suit injunction shutting them down.

    3. 8.3

      It is a good point Ordinary. I think it similar to the problem of infrastructure spending/investment. There aren’t many advocates for patents but there are companies with lots of money that don’t want patents.

      I think a lot of this has to do with money imbalance. We have a bunch of monopolies now and they have lots of free cash. They can pump money into K Street (or pump up unethical professors like Lemley) to burn the system down and there are few countervailing forces.

      I think we are seeing this with a lot of public common areas.

  5. 7

    Of course, given our statutory mandate, there is only so much that the USPTO can do. But within that mandate, we will do everything we can.

    Great – start with establishing per your own MPEP and the APA a proper factual and evidentiary basis for the (currently handwaiving) “conventional” aspect of 101 examination, noting that both “official notice” is not allowed for state of the art purposes and that “conventional” requires more than (far more) merely being known or even obvious.

    You have your examiners follow the existing rules for an administrative agency on that regard, and I can guarantee that you will achieve a level of clarity that the asinine ping-ponging CAFC does not even bother with.

    1. 7.1

      But won’t 37 cfr 1.2 save us all?

      1. 7.1.1

        Thanks T – the Office does need to abide by that as well.

        (Sunshine is always the right answer, eh? – or do you think otherwise)

        1. 7.1.1.1

          Just curious as to what a lay person thinks 37 cfr 1.2 means. Pretend you are in law school. Fill the room with your intelligence.

          1. 7.1.1.1.1

            ?

            I think that it is pretty clear on its face. Where do you think that there is ambiguity?

          2. 7.1.1.1.2

            Plus, you kind of ducked the sunshine point there…

    2. 7.2

      Btw. Lawyers say “hand waving.” Not “handwaiving.”

      1. 7.2.1

        btw, blogging does NOT have that level of “correctness.”

        Even this blog’s editor came out and stated such.

        But please, focus on form and not content, because as we have seen, you have no handle on the content.

  6. 6

    As a start, Director Andrei Iancu could change the boiler plate on the first page of the final written IPR decisions to read:

    UNITED STATES PATENT AND TRADEMARK OFFICE
    ____________
    BEFORE THE PATENT TRIAL AND APPEAL BOARD
    ____________
    WE DON’T WANT TO THROW OUT THE BABY WITH THE BATHWATER
    ____________

    1. 6.1

      What he is really saying is that there ain’t nobody here but us galliformes.
      link to youtube.com

      And soon his boss (Trumo) will be singing:
      link to youtube.com

      (But not dancing.)

  7. 5

    Re “..the IPR system. This was a creation of the America Invents Act, and since its introduction five and a half years ago, we have now conducted more than 8,000 such proceedings.”
    That would be more than 1,455/year, so he must have been referring to the total number of petitions filed, not to the number of IPRs declared [much less the smaller number of formal post-trial decisions], and considering decisions not to declare an IPR as having been fully conducted to the benefit of the patent owner?

    1. 5.1

      OMG!! He accidentally leaked out the thousands of “secret proceedings” !!!

      SOMEBODY CALL MOM HANNITY THIS IS TEN TIMES WORSE THAN STALLIN

      1. 5.1.1

  8. 4

    Currently, we’re actively looking for ways to simplify the eligibility determination for our examiners through forward-looking guidance.

    Then just declare logic patents ineligible for patenting because that’s the future.

    Recent cases from the Supreme Court – Mayo, Myriad, and Alice – have inserted standards into our interpretation of the statute that are difficult to follow.

    They’re not “difficult to follow”, Iancu. You just have difficulty accepting the result because the US patent system became addicted to “do it on a computer” g@rb@ge and you refuse to take the blame for that and you refuse to accept the inevitable. On the contrary, you choose to stick your head in the sand and pretend like the last quarter century of patent grants is “normal” when it’s anything but.

    our current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation

    Complete unadulterated horseshirt. Show us the evidence for any of these things, Iancu.

    Patent lawyers trying to advise their clients are, in turn, struggling to predict the outcome with respect to certain patents.

    LOL Really? I can predict the outcome in at least 90% of the cases. Maybe the problem is shirty patent lawyers and shirty PTO directors who coddle them.

    multiple people looking at the same patent claims often have trouble agreeing on, and predicting, the outcome

    ROTFLMAO “People who refuse to understand the basic principles have ‘trouble’ agreeing with people who accept the basics.” What a huge problem! Clearly we must coddle those people who refuse to understand the basic principles.

    1. 4.1

      YOUR “basic principles” Malcolm ARE the problem.

      They don’t need coddling – they need expungement.

      Not surprising then (at all) that you cannot see (or accept) the points being presented.

    2. 4.2

      The pendulum is swinging back and MM is upset.

      1. 4.2.1

        The pendulum is swinging back

        Now is the time to invest in bingo management futures.

    3. 4.3

      The amount of willful ignorance in this comment is incredible, even for MM. But at least it provides some fun entertainment.

      1. 4.3.1

        The amount of willful ignorance in this comment is incredible

        And yet you can’t identify a single incorrect statement.

        1. 4.3.1.1

          LOL! How about all of them! Your ignorance on computer technology has been demonstrated by anyone who reads this blog. Your dismissals of anything that contradicts your narrative is hilarious to anyone who understands basic legal and logical reasoning. As I said, your presence on this blog does provide for some entertainment at least. So thanks again for the laughs.

  9. 3

    It’s a nice speech but mostly obvious platitudes. IP rights are a balance. Too little protection and you’re not encouraging innovation. Too much protection and you’re encouraging a bunch of bad things in addition to innovation.

    Plus, importantly, the rhetoric surrounding the patent system has focused relentlessly on certain faults in, or abuses of, the system—instead of the incredible benefits the system brings to our nation.

    Who is right? Well, both arguments have legitimate elements. But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges.

    Iancu has insufficient sympathy for people and companies on the losing end of these defects in the patent system. The patent system is eroding from both ends. East Texas, to put it extremely mildly, gives patents a bad name. The backlash to East Texas shenanigans (eBay, Uniloc, IPRs, aggressive mandamus review of transfer denials, venue reform, arguably the new 101 cases from the Supreme Court) is weakening patents across the board.

    1. 3.1

      The backlash to East Texas shenanigans (eBay, Uniloc, IPRs, aggressive mandamus review of transfer denials, venue reform, arguably the new 101 cases from the Supreme Court) is weakening patents across the board.

      As a reminder, that “backlash” was utterly predictable. Just wait and see whether IPRs are deemed “unconstitutional.” The “backlash” against that is going to be a hundred times worse.

      As for “weakening patents”, yes, that’s what’s happens when patent rights are maximized beyond all reason, which was the inevitable result of State Street and Diehr and the churning out of a zillion logic patents that were examined by people determined to play a part in the farce (“this word has a completely different structure from that word — even the letters are different!”). Of course patents were going to be “weakened” after some semblance of a gate was put in place again.

      But here’s the deal: people are still seeking patents like there’s no tomorrow. And they are getting them. So plainly these “weak” patents are still incredibly desirable for some mysterious reason. It’s almost as if these “weak” patents are still enforceable, or maybe (omg!) a lot of the patents are just as strong as ever.

    2. 3.2

      “Iancu has insufficient sympathy for people and companies on the losing end of these defects in the patent system.”

      I think it’s a bit early to say that. Talk is cheap.

  10. 2

    [O]ur current law surrounding patentable subject matter has created a more unpredictable patent landscape that is hurting innovation and, consequently, investment and job creation.

    Too true. I wish that there were more that Iancu could do to fix this. Unfortunately, this is mostly a mess of the courts’ making, and it will require the courts (or Congress) to fix it. There is not much that the PTO can do on this score.

  11. 1

    [W]hen we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping these inventors?… Are we incentivizing innovation?

    Yes, yes, and a thousand times, yes. This is exactly the question that everyone charged with administering the patent system should ask themselves at every single opportunity. We should have this question printed as a wall-paper banner and used to decorate the office of every examiner, every SPE, every APJ on the PTAB, and every CAFC judge and law clerk. It is encouraging to see that the PTO director is asking this question.

    1. 1.1

      Really? You think “Are we helping these inventors?” is a more important qurstion than “Are we helping all Americans?”

      1. 1.1.1

        I confess, I do not see much daylight between the two categories. Americans as a whole benefit from the work of inventors. To help the one is to help the other.

        1. 1.1.1.1

          Ben has imbibed the Kool-Aid that anyone filing a patent application is out to rip off “all Americans.”

      2. 1.1.2

        Incidentally, as between those two questions, I think that “Are we incentivizing innovation?” is more important than “Are we helping these inventors?”.

        1. 1.1.2.1

          Incidentally, protecting the rights of Ben or anyone to own for a limited time the inventive fruits of their own mental labor is not contingent upon whether they have as of yet heretofore exercised that mental labor, or have as of yet done anything yet to be considered an inventor.

          Your right to buy and own property is not something which somehow is denied to you, not yours, not a form of the “Good” for you as an individual, unless and until you actually own property.

          As for the “goodies” and gadgets of innovation whose existence flows from your having rights, the latter is not justified by the former being the “Good”, the latter actual “Good” is what makes the former possible.

          1. 1.1.2.1.1

            Careful there Anon2, as you might expose the fallacy of the “must make” crowd…

            1. 1.1.2.1.1.1

              Thank you for the reminder, anon.

              I always endeavor not to expose any fallacies whatever.

              BTW all always your posting here and elsewhere is stellar

          2. 1.1.2.1.2

            For aught I know, you could be making a worthy point. It is so well concealed—-whatever it might be—-that I cannot tell.

    2. 1.2

      [W]hen we write, interpret, and administer patent laws, we must consistently ask ourselves: Are we helping ,these inventors The American people?… Are we incentivizing innovation?

      Fixed it for him.

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