Day 1, Panel 8: Fireside Chat with Andrei Iancu
December 4, 2025
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Speakers
Andrei Iancu, former Director of the U.S. Patent & Trademark Office
Panel Summary
Wayne Stacy opened by framing the conversation around the big-picture state of US intellectual property, and Andrei Iancu responded by characterizing the current moment as one of unprecedented tension in the IP system — pulled simultaneously toward pro-patent owner positions through PTAB reform, voluntary DOJ statements of interest supporting injunctions in the Radion case, and strong administration rhetoric around patent enforcement, while also being pulled in the opposite direction by Secretary of Commerce Howard Lutnick’s suggestion that the government should extract a “return on investment” from federally funded research, rumors of a broad-based patent tax on assessed patent value, and the President’s public statement that AI companies need effectively free access to copyrighted content. Iancu argued that the enforcement side of the patent system — the ability to actually stop infringers — has broken down to the point where a patent is practically unenforceable unless the owner can deploy $10 to $20 million in litigation costs over five or more years, a threshold that excludes the vast majority of individual inventors and small enterprises and forces them into third-party litigation funding arrangements that carry their own reputational and legal risks. He noted the troubling irony that American innovators are increasingly looking to foreign jurisdictions — Germany, the UPC, Brazil, Colombia, and now reportedly Nigeria — to enforce their US patents, and highlighted the Nesta v. BMW case as a vivid example of a German court being asked to apply US patent law and enjoin a German company from exporting products that infringe US patents — a development he described as both wild and deeply problematic for the long-term health of American innovation policy. Iancu also raised the geopolitical dimension, citing an Australian think tank study showing China now leads the United States in approximately 48 out of 53 emerging technology categories, and argued that without a predictable and enforceable domestic patent system, the startup economy — which he characterized as the primary engine of disruptive innovation — will lack the rule-of-law protection needed to attract investment and sustain competitive advantage.
Iancu then surveyed the three major pending patent reform bills in Congress — PREVAIL, PERA, and RESTORE — and offered a candid assessment of each. He characterized the PREVAIL Act, which addresses PTAB reform and would codify a one-bite-at-the-apple limitation on IPR challenges, as the farthest along legislatively, having already passed out of a Senate subcommittee in the prior Congress, but noted that organizations like IPO and AIPLA support the concept while urging the administration to back PREVAIL as the proper legislative vehicle rather than pursuing administrative rulemaking through the NPRM. On PERA, which addresses Section 101 patentable subject matter reform, Iancu noted that Senator Tillis — one of its primary champions — has publicly committed to bringing it to a vote before the end of the current congressional session, and that the current Director Squires’ strong public interest in Section 101 reform could align the administration behind it. On the RESTORE Act — which would create a rebuttable presumption of injunctive relief for patents found valid and infringed, effectively returning to the pre-eBay status quo — Iancu argued it is simultaneously the simplest bill, the most politically accessible concept for members of Congress to grasp, and potentially the most immediately impactful, while also predicting that if the administration publicly supported it, it could pass rapidly given the DOJ’s already-demonstrated support for injunctions. Throughout, Iancu returned to a structural critique of the IPR system itself — arguing that placing adversarial private property disputes in a politically accountable administrative agency, where policy changes every two to three years with each new director, is a fundamental flaw in the AIA that cannot be fixed by administrative action alone and requires congressional intervention to resolve.
Key Learning Points:
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The US Patent Enforcement Crisis Is Driving Innovation Abroad — and Threatening National Competitiveness: The practical requirement of $10–20 million and five or more years to meaningfully enforce a US patent has made the system inaccessible to most individual inventors and small enterprises, pushing American patent owners to seek enforcement in Germany, the UPC, and other jurisdictions — a dynamic already visible in the Nesta v. BMW case where US patents are being asserted in German national court — while China’s growing lead in emerging technologies signals that the erosion of US patent enforcement credibility is already producing measurable competitive consequences (Andrei Iancu).
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Three Congressional Bills — PREVAIL, PERA, and RESTORE — Represent the Only Durable Path to IP System Stability: Administrative action through USPTO director memos and NPRMs cannot produce the long-term predictability that patents as long-term investments require; PREVAIL addresses PTAB reform, PERA addresses Section 101, and RESTORE addresses injunctions, and Iancu argued that all three could realistically pass if the Trump administration publicly endorsed them — particularly RESTORE, which is a one-sentence bill that is conceptually easy for members of Congress to grasp and is already philosophically aligned with voluntary DOJ statements supporting injunctions (Andrei Iancu; Wayne Stacy).
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The Fundamental Flaw in the IPR System Is Constitutional, Not Administrative: Placing adversarial private property disputes between two private parties in a politically accountable administrative agency — where policy changes with every new director, creating constant unpredictability — violates the core principle behind the Founders’ creation of an independent, life-tenured federal judiciary for resolving private disputes; the Arthrex decision’s requirement that the politically appointed director have ultimate authority over PTAB decisions has made this worse, not better, and the only legitimate fix is a congressional rewrite of the statute rather than continued administrative improvisation (Andrei Iancu).
Program Transcript
Key Terms: IP System Tension, Creator Protection vs. Public Access, Pro-Patent Owner Actions, Anti-Patent Concerns, IP Balance, Balanced IP System, IP as Property, Intangible Property Rights, IP Crossroads, Innovation Economy, Free Market Economy, Rule of Law, Constitutional IP Protection, IP Predictability, Long-Term IP Investment, Patent Enforcement Cost, $10-20 Million Litigation Cost, Five-Year Litigation Timeline, Meaningful Enforceability, Small Medium Enterprise Access, Third-Party Litigation Funding, Litigation Funding Pressure, $100 Million Damages Threshold, Patent Enforcement Abroad, Foreign Jurisdiction Enforcement, Startup Economy Protection, Disruptive Innovation Protection, Garage Innovation, University Laboratory Innovation, Trump Administration IP Policy, Department of Justice Statement of Interest, Department of Commerce IP Position, Howard Lutnick ROI Statement, Radion Case Statement, Voluntary DOJ Intervention, Pro-Injunction Statements, March-In Rights, Federal Funded Research Patents, University Patent Tax Proposal, Broad-Based Patent Tax Rumor, AI Fair Use Policy, Copyright Access Policy, Drug Patent Limitations, Standard Essential Patent Policy, Nesta v. BMW Case, German Court US Patent Enforcement, UPC Enforcement Alternative, Germany Patent Enforcement, Brazil Patent Enforcement, Colombia Patent Enforcement, Nigeria Patent Enforcement, BSH Decision Impact, US Patent Foreign Enforcement, International Innovation Competition, EPO Quality Metrics, EPO Pendency Calculation, European Innovation Competition, China Innovation Lead, 48 of 53 Emerging Technologies, Australian Think Tank Study, China vs. US Innovation, Emerging Technology Competition, Centralized Government Innovation, Free Market Innovation, Technology Leadership, US Competitive Edge, China Patent System, International IP Competition, USPTO Director Tenure, Two-Year Director Average, Director Policy Fluctuation, Political Administrative Agency, Private Property Dispute Resolution, Independent Judiciary Principle, Arthrex Decision, Director Political Accountability, One-Word Institution Decisions, Settled Expectations Doctrine, PTAB Final Written Decision, 12-Month Statutory Deadline, PTAB Expert Judges, Administrative Kill of Statute, IPR Fundamental Flaw, Adversarial Private Dispute, Political Agency Resolution, AIA Statutory Flaw, IPR Additive Cost, IPR District Court Parallel, 85% Co-Pending Litigation, IPR as Substitute vs. Addition, IPR Policy Fluctuation, IPR Predictability Problem, One Bite at Apple, IPR Loopholes, Congressional Fix Required,PREVAIL Act, PERA Act, RESTORE Act, Senate Subcommittee Passage, Must-Pass Legislation, National Defense Authorization Act, Trademark Modernization Act, Congressional IP Leadership, Administration Endorsement Required, Republican Democrat Bipartisan Support, IPO PREVAIL Comment, AIPLA PREVAIL Comment, NPRM Comments, 10000 NPRM Comments, PREVAIL Act PTAB Reform, One Bite at Apple Codification, PTAB Procedure Reform, Senate Subcommittee Vote, Full Senate Vote, Administration Backing, IPO Position on PREVAIL, AIPLA Position on PREVAIL, Senators Support PREVAIL, Congressional IP Comment, Must-Pass Vehicle, Defense Bill Attachment, PERA Act, Section 101 Reform, Patentable Subject Matter Reform, Senator Tillis Signature Bill, Tillis Retirement Timeline, Section 101 Hearings, Director Squires 101 Guidance, FinTech Patents, Business Method Patents, AI Patentability, Patient Advocacy Opposition, Big Tech Opposition, 101 Political Pressure, RESTORE Act, Rebuttable Presumption of Injunction, Pre-eBay Status Quo, eBay v. MercExchange, Injunctive Relief Reform, NPE Injunction Rights, Non-Practicing Entity Injunction, One-Sentence Bill, Equitable Remedy, Balance of Factors, DOJ Injunction Support, IP as Property Injunction Analogy, Watch Analogy, Real Estate Analogy, Collector Analogy, Senator Tillis Retirement, Senator Durbin Retirement, Senator Marsha Blackburn Retirement, Senator Chris Coons, Senator Mazie Hirono, Senator Tom Cotton, Congresswoman Deborah Ross, Congressman Nathan Moran, Congressman Kevin Kiley, IP Leadership Loss, IP-Intensive Economy, Congressional IP Education, IP Sexy Issue Problem
[WAYNE STACY]
So if you’ll remember the intro I gave this morning for Mark Lemley it was, if you need an introduction to Mark Lemley, you’re at the wrong conference. The same introduction applies here. Uh, Andrei Iancu I don’t know wh– how many titles we need here, but other than former managing partner of Irell, which I think is important to this discussion because he’s been in this mix of both plaintiff side litigation and defendant side litigation for all of his career from Irell and now at Sullivan, and then of course the former director of the USPTO.
So Andrei, thank you for joining us.
[ANDREI IANCU]
Great to be here. Thanks for the invitation. S–
[WAYNE STACY]
So Andrei, I wanna start with you. You’ve seen the discussions today. You know, of course most of this is a defense-oriented crowd, but we’ve had a fair amount of, let’s say counter discussion today. Um, but a lot of it comes up on, you know what is the current state of the IP system in the United States?
And so, looking beyond kind of the nuances of injunctions or looking beyond the nuances of just the, what’s going on at the PTAB, what do you see is the big picture IP issues facing us as a nation right now?
[ANDREI IANCU]
Yeah. Well just sitting in the audience and listening a little bit to the various panels, it was the best part of the day was hearing that, huh, the FinTEF actors look pretty good right now.
(laughter)
Who knew? But yeah. So look um, IP is at the significant crossroads, I think, in the United States and globally. So just looking at it from, you know 30,000 feet, there is a very significant tension on IP.
It’s being pulled from multiple sides. It’s now, that tension has always existed.
From the very beginning of IP, back you know, when Jefferson was reviewing patents, from the very beginning of IP, you, you know, you have this tension between the need to protect the creator versus the access to that by, o– of the public to that creation. That’s why IP needs to be balanced and have in mind both sides, ’cause that’s the whole point of IP. Protect and provide public disclosure and therefore access to the innovation or to the creation. Now, that tension is on steroids right now.
So we can see it in the discussions that you all have had during the day today. Uh, so I’ll, I’ll give you just the example from the current administration’s perspective and what we see coming, coming from, from this administration. On the one hand, you see a lot of what can be characterized as pro-patent owner actions, right?
So you know, a couple of panels ago, we talked about events at the PTAB and all the actions the director is taking and the prior acting director took vis-a-vis IPRs, which seem to be very pro-patent owner. Uh, there is a new NPRM, the Notice of Proposed Rule Making, that is floating out there that also can be characterized as very pro-patent owner, and we can talk about that.
They have made statements, strong public statements, in favor of injunctions. The administration, not just the patent office, but the patent office together with the Department of Justice, put in a statement of interest, completely voluntary, voluntary. They injected themselves in an actual patent case in Judge Gilstrap’s court. At the preliminary injunction phase where the plaintiff was a non-practicing entity and said, “Preliminary injunctions and injunctions in general are really important for the patent system, even if the plaintiff is a non-practicing entity.”
Uh, that’s in the Radion case. And again, you can characterize that as a very pro-IP, pro-patent owner action. You see comments from the Department of Justice in with respect to standard essential patents and, and the like that seem to all go in that one direction. So that’s on the one hand.
On the other hand, you have many statements from the same administration that can be characterized as being very concerning to IP owners. For example, the Secretary of Commerce Howard Lutnick, has said that that the United States government needs to get a, quote, “return on investment,” as if the United States government is a hedge fund to get the return on investment from from various patents out there that are generated at least in part with government funds. So they’re talking about potentially exercising margin rights with respect to university patents and other federal funded research, which would be a big concern to the startup economy and to the innovation economy in general. There are rumors about a broad-based patent tax on all patents, by and large based on some assessed value, of the, of those patents even if they’re not actually monetized.
So again, I emphasize that’s just a rumor. There is nothing concrete on it. So you see those are can be viewed on the other side of this. Then on the copyright side, you have the president has opinion on fair use now, and said publicly that for AI companies to be able to compete they need to have effectively free access to content, which would be a very significant concern to content owners and copyright owners.
There is this huge tension going on. You can see this manifested on drug patents. And, you know there’s a very significant push to create more and more innovation in the United States, onshore innovation and development into the United States yet at the same time, there’s all sorts of talk about limiting patents in various ways when it comes comes to drugs.
Same thing in the standard essential patent area. So it’s not a very concrete answer, Wayne, but only to say that we have, you know, if we’re thinking at the high level, we have this constant tension, at least in the United States, and that gets magnified when you look internationally and see what the European Union is doing, the Chinese and others as well.
[WAYNE STACY]
You know, so it’s easy, and today you saw lots of people take shots at the administration, and it’s not just this administration. You know, four years ago when you were director, people were here taking shots at that administration.
[ANDREI IANCU]
Unfairly.
[WAYNE STACY]
Unfairly, of course. But, you know, FIN-TIB was terrible.
Those kinds of things happen, but I wanna ask about something else, if there’s something that we’re not talking about enough, and we saw a little bit of it today, but any kind of IP system, a patent system is two parts. It’s like the old Seinfeld, you know, there’s the two pieces. You gotta take the reservation and keep the reservation.
Least people in here still remember Seinfeld. I can’t use that with students anymore. But for a patent system, you need the procurement piece, which the USPTO does a good job, but you need the enforcement piece. And the administration has very little control over the enforcement piece, at least when it comes to district courts.
And we heard today that the numbers of what people can expect to pay, and litigation funders aren’t interested in any case that doesn’t have $100 million damages numbers. And I’m not talking about the low ends, patent enforcement entities.
I think Mark refers to them as smash and grab. We’re talking about real innovators, but it’s 100 million. You heard Boyce Schiller say that that’s their entry level number, and a lot of people, I heard groan some kind of in disbelief, but I think that number is pretty close to correct. So are we now looking at a system, I don’t care how good your patents are in the US, that you’re stuck with needing $100 million to actually do anything with them?
[ANDREI IANCU]
Yeah, look, I think that’s approximately right, you know, the, at least on the order of magnitude. Look, litigation in the United States is extraordinarily complicated and and expensive.
You know, when I was at the PTO, I used to say that there is an unwritten statute on patents, Section 101.5 or something, that mandates patent law in the United States shall not be simple. And if you try to simplify it, you’re violating that statute somehow. It only gets more and more complicated, and therefore more and more expensive. And frankly, it gets to the point where patents are not meaningfully enforceable.
If it costs 10, 15, $20 million to enforce a patent, and it takes five, 10 years to get to a final resolution if you’re gonna go through the court system and not have a settlement, very few inventors, patent owners can actually afford to go through that exercise on their own, whether it’s financial or whether it’s the span of time. By the time you get to resolution, the competition will have killed you.
For a patent to be, have any value, obviously, as you say, you have to procure it. That’s the first step. Great.
And the PTO, you know, does a good job at that. And, you know, they’re not as fast as they could be, but, but, you know, you still can get a patent in about two years plus, give or take. Okay?
But then if you cannot meaningfully enforceable, it’s as if you really don’t have a patent. And the small-medium enterprises, I think have a very difficult time in this environment. So what happens? So they have to resort at least on a financial, from a financial perspective, they have to resort to third party funding, which has its own issues.
A, that money is very, and B, you see the public pressure that’s now being put on that system, both publicly and in courts, like in, in Delaware and in Congress right now. But it’s hard to understand what other options you might have if you don’t have at ready disposal 10, 15, $20 million. Look, even if you get beyond the finances, who has the wherewithal to stay with it for five years plus in a fast-moving technological landscape?
So now, that’s why, and you’ve heard on prior panels, that’s why you know, patent owners look at other jurisdictions to try to enforce perhaps in a more reasonable way financially, and also faster. The UPC is a good example.
We’ll see how that plays out. It’s very young. But people think that, you know, that could be, or is already a much more reasonable jurisdiction.
Germany is another one, has been for a long time. Brazil of all places, Columbia. I heard Nigeria today, I haven’t heard that before.
So people are trying to see if there is — which is shocking, right? You have American industries or international companies that do big business in the United States whatever, you know, American innovators looking elsewhere to enforce their IP.
I think it cannot lead to good things in the United States. By the way, is shockingly there don’t know if folks have heard maybe it came up on one of the panels there’s a case currently against BMW. Did people talk about this today? There’s just, just for a minute.
Okay. There’s a case against BMW in German court where they’re enforcing United States patents. Uh, so the German lawyers need to explain to us how how that is gonna work.
But that type of expansion. So just think about the options here.
If you have a good US patent and you want to enforce against a German company, you know, why would you sue them in the United States? It has basically no injunction and or very difficult, takes a long time, it’s very expensive. Might as well go to Germany and enforce your US patent.
It’s wild times. So, a lot of the European attorneys that I’ve been, been talking with have been talking about not enforcing US patents abroad, but what happens with the next generation of innovators if patent systems matter?
If they’re really a boost to innovation, if you can’t predicts or there’s no predictability in enforcement in the US, are we at risk of falling behind Europe with their new system?
[WAYNE STACY]
The EPO does good work. If the UPC covers 340 million people in 12 months at 20% of the cost and has an injunction, does that new generation of innovators, small, medium enterprise type innovators, do they come out of Europe for the next 25, 30 years?
[ANDREI IANCU]
Look, I mean, the patent system is one component of the innovation economy. But it’s a very important one. And, you know, I think it’s very problematic. By the way, you say that the EPO does a good job and they do, but really not as good as the USPTO.
Uh, I’ll just say that because the EPO guys, I don’t know if anybody’s here from the EPO, they just tout themselves that they’re so fast and so good. They have good quality metrics, which they themselves generate. They’re so fast and they seem faster than the USPTO because they only count the number of days a patent is with them.
When the application is with the applicant for the responses, they don’t count the, that as pendency. So I’m just just saying. Not because we’re competitive or anything. But the bottom line is, if you don’t have in the United States a good enforcement mechanism and other jurisdictions, Europe, China have good enforcement mechanisms, everything else equal, okay?
Because again, there are multiple prongs here to innovation. But all else equal, you will have less innovation in the United States than in these other countries. There’s no question about it.
This is a free market economy. And people say, “Well, it doesn’t really matter because these are international companies.” Well, but no, the startups are not international companies. The disruptive innovation happens by and large on the edges.
And by and large disruptive innovation happens in the startup economy, in the garages, in the university laboratories and the small startups. The real disruption you know, Apple was once a startup and, and you know, the first Macintosh and whatnot, that’s disruptive innovation. Um, now of course Apple kept innovating, but, but the real disruption is at the beginning.
Google, I mean all of these companies began as startups. The same thing happens, you know in the pharma space.
And, you know, inventors, their first market is the domestic market. It’s hard to say to an inventor that, you know, might have a garage enterprise like the famous Hewlett-Packard Garage here in Palo Alto back in the day.
It’s hard to tell them, “Okay, well yeah, you can work here in Palo Alto, but you know what? As soon as you get successful, you’re gonna have to go fight your competitors, I don’t know, in Nigeria.” I mean like, it makes no sense.
You want to protect your own domestic market first. If you don’t have that on the edges, you’re gonna have less innovation in your domestic market. So it’s critically important.
It’s especially important here as compared to China. In a free market economy where there is no centralized government that tells, dictates where we shall invest our money. That investment needs to feel that it’s protected and enforceable if successful by the rule of law.
And if we don’t have that, we’re gonna lose. And by the way, this is already happening.
It’s not a mystery. You know, there are studies from various think tanks, one of the more recent one is from an Australian think tank that shows that China is leading in something like 48 out of 53 merging technologies.
Those numbers are approximate. I don’t remember exactly, but it’s of that magnitude. We’ve lost the edge already in the majority of new and emerging technologies, and if we’re not careful, we’re gonna lose the edge in the rest of them.
[WAYNE STACY]
Well, as we go back and talk about the AIA and, IPRs, but there’s a bigger picture to that. When you go back and look at the legislative history, one of the goals was to help reduce the cost of litigation, and there’s not a whole lot of debate about that.
It really hasn’t helped on that front. What do you see the future on this needing to be if post grant procedures are actually going to reduce costs for especially small-medium enterprise type inventors?
[ANDREI IANCU]
Yeah. So, look, there’s a lot of debate right now as to what’s happening with IPRs. And IPRs have been at the forefront of conferences like this ever since they came to be about 15 years ago 13 years ago. The whole point of IPRs was to create an alternative, less expensive way to challenge a patent than in district court litigation.
So it had, you know, the goal was to be an alternative to district courts and less expensive. It hasn’t happened from at least that perspective. It is almost always in parallel with district court litigation.
85% or so of IPRs have district court, co-pending district court litigation, and it hasn’t– of that, it hasn’t become cheaper. The IPR itself is certainly cheaper than the district court, but it’s additive. It’s not the substitution most of the time. Now, there are many– at least from that perspective, I don’t think the goal has been achieved.
There are definitely goals that have been achieved. You know, I think that the PTO did a good job hiring very good judges over the last decade and they’re specialists.
They never miss their deadlines. You know, they issue their decisions, final written decisions always under the statutory 12-month period. They’re detailed and reasoned and thoughtful and so if you want expert opinions on the validity of patents it, you know, definitely achieved that goal. But there’s so many in my personal view, there, you know, there are so many loopholes and flaws in the statute and the way it’s been implemented, it’s caused this constant debate.
Constant. And I don’t think it’s healthy. It– and with different PTO directors, it goes back and forth and back and forth, and it’s just an unhealthy situation. The reality is that patents are a long-term investment, and you have to have some predictability.
And just look at the panel you had here just two panels ago. Nobody really knows what’s what’s coming next.
It’s like and, and we just had, you know You had the system we had when Michelle Lee was the director, then I came in and I made some changes, and then Director Hirshfeld made changes, you know, and, and then Acting Director Hirshfeld made changes that are completely different than the prior director. And now, you have Director Vidal making even more changes and they’re proposing an NPRM that got, well over 10,000 comments yesterday But it’s unclear if that’s gonna be the end all and be all.
For example, everybody on the panel talked about settled expectations. I don’t know why anybody here thinks that that’s still being used. Maybe it is. How do you know?
How do you know? It’s not in the decisions obviously, since it’s a one-word decision now, and it’s not in the NPRM. So, we just don’t know. And even if they know today, let’s assume that it was crystal clear the way they’re applying their procedures now.
You know, the director comes and goes. The average tenure of a director is about two years, maybe three. What’s gonna happen next? We don’t know.
It’s very unhealthy, and it’s caused, in my opinion, by the way the statute was written in the first place. There’s a flaw in it that’s allowing for all of this, and, you know, because IP is long term, we need to finally find a solution here for the system, so it just stops fluctuating. So, just give us the rules of the road, so we all know. We like them.
We don’t like them. We debate, but then come up with a set of rules, and then now we all know how to advise our clients on that, on a long-term basis. I think the statute has failed in this regard, and it’s a major, major failure in my opinion as a result.
So look there is a proposed bill out there, the PREVAIL Act. I think it’s a good bill. I think that would go a long way to fix this and make things clear. And we can talk about that but that’s just the, that’s one possible solution.
I’ll say this about IPRs. I think, you know, not to be provocative, but you know, I’m not in office anymore, so who cares?
(laughs)
I just think that there is a fundamental flaw with the concept of the statute, and the fundamental flaw is this, you’re putting an adversarial procedure between two private parties, over private property that’s very meaningful and valuable in a political administrative agency. I don’t think you can find other examples in government. Maybe Professor Lemley here will know.
I don’t think that you can find other examples in government where you have private disputes over private property resolved by political appointees. And there is a reason why the Founders created an independent judiciary that is decidedly non-political with lifetime appointments so that the private disputes like this are resolved in a non-political, non-fluctuating way. And, you know, when you have this dispute over such important issues between private parties in front of a political agency that changes policy every four years by definition and probably more often than that.
You have all the problems that we have right now. And one side or the other is not satisfied.
And then, you had take it to the political extreme, where, you know, the Supreme Court says that you have to have, in the Arthrex case, you have to have ultimate responsibility lie with the political appointee the director. Because the director is accountable politically, and as if, you know, anybody votes for President based on what the PTO director does.
(audience laughing)
But whatever, that’s our system. So you have to have the politic, so now, the political appointee decides to make all the decisions himself in a black box system, and you don’t even know if in addition to policy issues, what other considerations might be in play. But that’s just the result of a political system. That’s why these issues have to be decided by the judiciary in general.
But here we are, we have the statute and the statute, since it’s on the books, needs to be enforced. It should not be administratively killed, because that’s improper. If you don’t like the statute, go change it. Have a debate in Congress.
Everybody come. Have the debate with your members of Congress.
Have hearings. Get rid of the statute or change the statute, you know, or if you don’t want it, fix it in other ways. But that in my opinion, is where this needs to be fixed. It’s a congressionally generated statute.
Congress needs to fix it. That’s why I think PREVAIL, the bill is the right way to go. I also happen to think it’s balanced and it will achieve the original goals of the AIA. But either way, if you don’t like it then, you know, people should express their views or if they like it, they should also express their views, but that’s where, in my opinion, the debate should be.
[WAYNE STACY]
So, if the only solution that I guess stops this gyration is a congressional fix, what’s your thought on kind of this loss of IP leadership at the congressional level? We’ve got Tillis retiring, Les Leahy. Anybody else care?
[ANDREI IANCU]
Well, we’re also losing Durbin from Illinois, who’s the number two Democrat and cares a lot about IP. We’re losing, I think, Marsha Blackburn from Tennessee, who I think wants to run for governor of Tennessee and she also cares a lot about IP.
And we begin with not very many people caring in the first place. But, you know, we still have folks, we definitely do. Senator Coons is a big champion and he’s still there and will continue to champion IP, I’m sure. We have good members.
The Senator Hirono also very good on this, Senator Cotton on the Republican side. And then, in the House, we have a good number of leaders, Congresswoman Deborah Moran, Democrat from North Carolina, I’m sorry, Deborah Ross from North Carolina, Nathan Moran from Texas, Republican.
From the East of district, actually. They care a lot. Kevin Kiley from here, from California. So look, there are a few, but not all that many.
But that’s not new. It’s always been the case, which is odd because, you know half, at least half of the U.S economy is IP-intensive, you know, and according to the studies from the USPTO. And you would think that members would care at least about half of the economy, but, you know, it’s not a sexy issue. It’s really hard to discuss, you know, Section 101 with them and PTAB, like, “What?”
[WAYNE STACY]
You know. Well, looking at a few, well, actually, let’s just go to the PREVAIL Act.
Probably not going through this cycle, but it does get recycled from year to year, and we start seeing key concepts in it. Maybe it’s fair to characterize it as Big Tech has got its problems with PREVAIL, and smaller, medium-sized enterprises seem to be more supportive.
[ANDREI IANCU]
Yeah, look, there’s three bills, major bills pending in Congress right now, PREVAIL, PERA, and RESTORE. PERA is Section 101.
Restore is injunctions. You heard Ellison talk about that. And PREVAIL is on the PTAB.
Of all three, PREVAIL on the PTAB is the farthest along. In fact, there was a hearing in the subcommittee in a year ago, in the last Congress, and the bill passed the subcommittee. So that’s a big, that was a big step.
It needs to be brought to the full to the full Senate for a vote. You know, do I think it’s gonna pass?
I don’t think they can pass, you know, naming a new post office nowadays. But yes, I think all these bills actually could pass. Here’s the sure way it’s gonna pass, all these bills. Okay?
You get President Trump to put out a tweet or whatever channel he uses nowadays, Truth Social, I guess that says something like, “Stop China’s theft of American innovation. Vote yes on PREVAIL.” Or RESTORE, something like that. I’m kidding a little bit, but the reality is if the administration gets behind one or more of these bills, then the Republicans will almost for sure get behind them, and there are enough Democrats who support this, like Senator Coons, Hirono, et cetera, Durbin and I think it can pass.
So it really is up to the administration in my opinion. And it’s really interesting to watch, I mean, to review the comments on the NPRM.
The deadline was yesterday. As I said, thousands of comments. But look at the ones from the major organizations.
Okay? IPO is an example. AIPLA, okay?
They don’t really support it, per se. They say they support the general concept that you should have only one bite at the apple and the like, and they support the director’s, you know, drive to strengthen the IP system.
But there should be many changes. But then the key is that they say that the better course of action is to go with PREVAIL and encourages the administration to get behind PREVAIL. The senators that I’ve mentioned and the House members also put in a comment along the same lines.
You know, “We generally support your efforts, but you should just get behind PREVAIL.” So if the administration does that, it can definitely pass. And by the way, you don’t even need a full Senate vote.
It can be attached to a must-pass piece of legislation such as the annual National Defense Act. You know, it’s not unheard of.
The Trademark Modernization Act in December of 2020 it was the biggest piece of trademark legislation in 50 years was just tacked on to the defense bill, and it passed without, with a bill, obviously you have to pass the defense bill. Um, unclear what trademarks had to do with that defense bill, but that’s the way, you know bills work in Congress. So it is possible that that happens, but it will not happen without the administration getting behind it.
[WAYNE STACY]
So to push back on that a little bit, when you look at what’s happening with the PTO now, it doesn’t look to be anything close to the PREVAIL Act and what’s being pushed on that side. And is there any way that the director is acting without knowledge that there are already several senators backing the PREVAIL Act, and is this already kind of a thumb at, at the Senate saying, “No, this is not the way I’m going”?
[ANDREI IANCU]
Well, I don’t know. I can’t really speak for them. I don’t really know what they’re thinking.
But I’m sure that they know about the PREVAIL Act. I’m sure the director knows. There’s no question.
The bill I’m sorry, the NPRM definitely goes beyond PREVAIL. You know so I don’t know if they have, maybe they’re positioning to actually pass PREVAIL, you know, So as a compromise bill. So I, you know, hard to speculate.
[WAYNE STACY]
So the other one you mentioned doesn’t get a lot of press in the last several months. And that’s PERA. And how does PERA relate to what you see the administration talking about on AI?
[ANDREI IANCU]
Yeah, so PERA is on Section 101. You know, there have been hearings on PERA.
There’ve been at least two hearings already in the last couple of years. I’ve testified at them.
And, you know, it’s more controversial. It’s more difficult to explain.
You know, and it’s a fundamental shift in policy and there’s a lot of political pressure on PERA from patient advocacy groups and obviously from big technology companies et cetera. So I don’t know. We’ll see.
You know, with the last hearing, which was just a month ago Senator Tillis, who’s retiring at the end of next year, and this is one of his signature bills, he said that one of his main goals is to get PERA to a vote before this congressional session ends. Hence. So, we’ll see if he manages to do that. I do think, you know, the administration could get behind it for sure.
It is in line with the director’s, the director just today put out a Section 101 piece of guidance. I dunno if you’ve seen it. It was this afternoon. So he’s very interested in Section 101.
He’s already given at least a speech on Section 101. He wants, especially from business method perspective, you know, FinTech, he wants patents on that stuff, so he’s definitely interested. So, I think theoretically they could get behind it. And so, the last piece, you notice how these start lining up with what we talked about today is the RESTORE Act, which is dealing with this issue of injunctions and how injunctions are fairly difficult here in the United States now.
Right. So, RESTORE basically would go to status quo anti-eBay effectively. It would create a rebuttable presumption that a patent that’s been found valid and infringed should be entitled to an injunction. But again, it’s an equitable remedy, so it’s rebuttable and so on.
It’s, you know, believe it or not, first of all, it’s third in line behind these first two that I’ve mentioned, just chronologically. It hasn’t had as much airtime in Congress yet, but believe it or not, I think it’s simpler. It’s a one-sentence bill.
It’s really easy to understand. And of all three, a member of Congress can really easily understand this.
If you just walk down the halls of Congress and you mention Section 101 or PTAB, you know, their heads will explode. They won’t even stop on their way to the bathroom. But if you mention injunctions, and you say to a member just walking by, “Hey, Senator, do you know that you cannot get an injunction on a patent?
You cannot stop an infringement of a patent?” Now, of course, that’s an over exaggeration, but let’s just assume you say that. They will say, “What?
Patents, of course, are about stopping other people. What do you mean we cannot do that anymore?” So they get it. That’s an easier lift. I also think it’s an easier lift in the administration, believe it or not.
I think it’s a really easy lift in the administration. And here’s proof positive.
Unprompted by anyone, the Department of Justice, okay? The whole department, which means, you know, it’s the Antitrust Division, but they don’t do it if, if the Attorney General would say no. So you have the Department of Justice and the Department of Commerce voluntarily drop into this case and put in a statement of interest, as I mentioned in the Radion case, that injunctions are important. So their head is already there.
And, you know, and so I think theoretically it’s doable, and I’m telling you, if the administration affirmatively says that they’re supporting the RESTORE Act, that can, that can happen in a blink. Now, of all three, it would have the most meaningful impact. It’d have, it would be a dramatic impact immediately. And that’s also why, you know, if it were to happen, you would have huge, you know, voices speaking for and against, you know.
People would start making a huge deal out of this because, you know, obviously it’s very consequential. Now, I’ll say this about injunctions.
I heard some, on the previous panel about, you know, NPEs and, you know, and maybe they should get different treatment and, and all of that. It really is weird to have an intellectual property system without a robust system for injunctive relief. Obviously, it has to be equitable and there have to be balance of factors and whatnot, but it’s odd to have that and, and to say that if you’re a non-practicing entity, you presumptively shouldn’t have an injunction, and that’s basically the situation we have here in the United States. The, it’s not on a competitor to competitor issue, but, but, but, if, if you, if you’re not practicing, it’s really almost impossible to get an injunction.
That’s odd in, in, in my view, if you think about it just, just logically assuming that patents are property. What other property comes along with this system? So, you know, f– first of all, let, let’s assume I like your watch, which I don’t actually like it very much, but
(audience laughing)
But let’s assume you wore actually a nice designer watch, And I like it. I come and take it off your wrist, and I just take it. And you sue me and you say, ‘I want my watch back.’ And I say, “Well, just sue me and we’ll litigate, and at the end of it, I’ll just give you some money for it.
If you win, if you prove everything, I’ll just give you some money for it, but, you know, you can’t have your watch. You know, you can’t enjoin me from keeping your watch.” That’s odd. Now, you’re wearing that watch, so you’re a practicing entity in that example.
But assume that you’re a collector, and you have your watch at home, and you have five watches at home, and you just never wear them, and I know some people like that, and you don’t wear your watch. I can give a better example, you know, an automobile. You know, you have a collector of automobiles, and they just don’t drive this particular car, and somebody comes and takes it, and says, “Okay, I’m gonna use it, I’m gonna use, I’m gonna be an Uber driver and use that car, and I’m gonna really put it to good use for society, not like you who’s hoarding all this stuff, and you’re never driving your vehicle or wearing your watch.
I’m just gonna take it, and you know what? At the end of a five-year litigation, if you succeed and spend $10 to $20 million, I’ll just pay you some money for that.” What are they?
Basically, it’s inconceivable. Nobody, it’s like it’s laughable. Nobody even thinks about having these discussions about private property.
Same thing with real estate. Just because you don’t live in a building and you’re renting it out, nobody says you can’t, you know, you don’t have the right to evict a trespasser just because you personally don’t live there. This concept seems to be applicable only to intellectual property, and I think that’s a newish thing in the West, especially in the United States. It’s newish, past couple decades or so and it goes back to that tension that people have about IP, that it’s on the one hand, people do want to, and systems want to protect the innovator and the creator.
On the other hand, there’s this whole concept of access that people struggle with, and because it’s an intangible property, and it’s a non-exhaustive property, right? Because, you know, these are concepts, they’re not exhaustive like personal real property, tangible property that is, people can resolve these things, and it all comes down to this breakdown in how you think about IP as property, and it’s manifesting in these issues, and we go to these extremes. A much better system is to be a balanced system, to obviously allow for injunctions, but obviously have, you know, go through the various analyses and see if it’s applicable, but you can’t just say in a de facto way that, you know, you know, a non-practicing small inventor cannot exclude. And it’s having perverse results, you know?
It lengthens litigation, it makes it more expensive to get to the end of the day. So anyway, so I think, you know, folks are, that’s one of the RESTORE Act.
We’ll see where that goes.
[WAYNE STACY]
So, last question. I’m gonna give you the President’s phone. You get to send one tweet or, Truth Social out on patents. We’re gonna stay away from everything else. What’s the one thing you would want to have changed, kind of for long-term stability? You just get 142 characters.
(audience laughing)
[ANDREI IANCU]
Oh my God, I mean, there’s so many things. Look, the ultimate goal is to make patents and IP steadier. We need to steady the ship, and one way or another, and there’s many levers that go into that. I don’t know if I can just do one thing.
Everything we discussed about goes into it. I’ll throw in one more thing. You know, the PTO director changing every two or three years is insane. You know, this fluctuation in direction and policy is very damaging in effectively non-political entity.
But look ultimately if there is one major top level thing that I would hope legislators and the public understands goes back and hearkens to the Constitution. If I’m the president, I would really tweet out one thing, respect IP, you know, protect IP, make it meaningfully enforceable. But at the same time, keep a balanced system. Don’t have these wild swings from one side to the other.
So I think I can get that in 140 characters, but I have to work on it.
[WAYNE STACY]
Later on people can ask you which ones you bold and put in caps, so. With all that we’re out of time. Andrei, thank you so much for joining us again.
[ANDREI IANCU]
Pleasure.
(audience clapping)