Patent Office Director Pick Iancu Calls for Balanced IP System

Access practice tools, as well as industry leading news, customizable alerts, dockets, and primary content, including a comprehensive collection of case law, dockets, and regulations. Leverage...

By Malathi Nayak

President Donald Trump’s nominee to lead the Patent and Trademark Office, Andrei Iancu, told a Senate panel Nov. 29 that he would work towards achieving a “balanced” intellectual property law framework.

Iancu said in a Senate confirmation hearing that he would work with the rest of the administration to strengthen intellectual property rights to return to a higher level of predictability in the system.

Iancu, an intellectual property attorney and the former managing partner of Los Angeles-based Irell & Manella LLP, told lawmakers that having represented clients on all sides of intellectual property disputes, he understands the needs of various stakeholders. “The playing field must be even for all,” he said.

The hearing conducted by the Senate Judiciary Committee comes at a time when the office’s patent validity proceedings face criticism that they are unfair to patent owners—and possibly unconstitutional. The U.S. Supreme Court heard arguments Nov. 27 over the constitutionality of the PTO’s patent validity challenge process in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC.

Iancu declined to comment, saying, “I would not presume to prejudge what the justices have to say,” when committee chairman Charles Grassley (R-Iowa), asked him for his perspective on the case.

The main theme in Iancu’s responses to lawakers’ questions was the need for equitable intellectual property policy.

“It is important to have a well-functioning, balanced IP system,” Iancu said when asked questioned by Grassley on his views on abusive patent litigation, such as by those acquiring patents and threatening to file infringement suits to extort settlements. “To a large extent we should see how the recent development in the case law and some of the recent acts of Congress are working out, and take stock of that,” he said.

Patent Owner Concerns

The America Invents Act of 2011 created administrative patent reviews—such as inter partes review—conducted by the PTO’s Patent Trial and Appeal Board as alternatives to more costly district court litigation.

U.S. patent owners complain that PTO patent validity challenges, which require a lower burden of proof to prove invalidity and have different patent claim interpretation standards compared to the federal courts’ standards, have made it too easy for alleged infringers to knock out patents.

Sen. Christopher Coons (D-Del.), who has introduced legislation to rein in the PTAB, asked Iancu if he shared patent owners’ concerns.

“I am very much aware of, shall we say, strident criticisms of some of the proceedings,” Iancu responded.

“Strident and well-founded or strident and baseless?” Coons interjected.

Iancu said it was important to carefully parse through statistics used by some critics to support their objections. “I think we have to be careful because the system needs to be very well balanced,” Iancu said.

However, he added it’s important for inventors to have confidence in the IP system to encourage innovation, investment, and economic growth. Iancu said he would work with the PTO leadership, Congress, and the administration to identify what PTAB improvements need to be made and implement them accordingly.

Patent Eligibility

Coons also questioned Iancu on what he would do to address the issue of recent case law creating uncertainty, especially in software and biotechnology industries, around what inventions are patentable under Section 101 of the Patent Act.

Lower courts are still working through how to follow the Supreme Court’s patent eligibility-related rulings, Iancu said. “It’s important to see how that develops,” he said.

The patent office has already issued some guidance on how examiners should evaluate claims for subject matter eligibility to take court rulings into account, Iancu said. Working with the patent office to determine if further guidance is needed on Section 101 is a priority, he said.

Shared Services Initiative

Another issue confronting the PTO is the implementation of the Department of Commerce’s “shared services initiative,” which some industry stakeholders warn would hinder the PTO’s information technology and human resource operations.

The initiative, which the department announced in 2015, is aimed at making its agencies, including the PTO, more cost-efficient by sharing administrative services, such as financial management, information technology and human resources, where they have similar needs.

Iancu said it was important to fully finance the office. “The office is fully funded by user fees, those fees should be used for the activities of the office for the benefit of those users,” he said.

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bloomberglaw.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bloomberglaw.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Intellectual Property on Bloomberg Law