Tillis Addresses Criticism of His Eligibility Reform Bill, Warns WD of TX Not to Backtrack on Standing Order

Senator Thom Tillis (R-NC)

Senator Thom Tillis (R-NC) has been perhaps the most active and passionate Congress person when it comes to intellectual property (IP) rights, and patents specifically, in recent history. In early August, he released the first draft of the Patent Eligibility Restoration Act of 2022, which if enacted would abrogate the Supreme Court’s decisions in Ass’n for Molecular Pathology v. Myriad Genetics, Inc., 133 S.Ct. 2107 (2013) and Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S.Ct. 1289 (2012). He has also been closely involved with oversight of the U.S. Patent and Trademark Office (USPTO) on topics such as patent quality and has written numerous letters to the Biden Administration on issues including the waiver of IP obligations under the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement, the theft of U.S. IP by Chinese companies, and more.

While he seemed fairly exasperated by the end of his last attempt at eligibility reform in 2019, he explains below that the Supreme Court’s refusal to fix the problem by denying the American Axle case inspired him to revive his efforts. In the below interview with IPWatchdog, the Senator expands upon his vision for and criticism of the Patent Eligibility Restoration Act, criticizes the Biden Administration for having “unnecessarily politicized” IP, and addresses rumors that judges in the Western District of Texas may be poised to reverse Chief Judge Orlando Garcia’s standing order to more “equitably distribute” patent cases, which Tillis supports.

You can read Tillis’ comments in their entirety below.

The Patent Eligibility Restoration Act has been both welcomed and criticized by the IP community. Some say it will further complicate things in areas such as software (for instance with respect to the language excluding process claims embodied in a machine or manufacture if the machine or manufacture is “merely storing and executing the steps of the process” and the lack of a definition for “technological”). How do you respond to the critics?

 As I’ve said before, this is just the beginning of the process – all ideas can and should be on the table. I’ll be the first to admit that this bill is just a starting point for a broader discussion and isn’t final. If someone doesn’t like the compromise that I’ve come up with so far, tell me. But don’t just tell me that you hate it – give me ideas on how to write a better bill that will, in your opinion, result in a better outcome that promotes innovation and restores certainty.

With that said, I do believe that my bill provides an appropriate and balanced framework to provide further clarity around eligibility for computer-implemented inventions. This provision makes clear that simply instructing that an otherwise non-technological process be performed “on a computer” will not render a claim eligible, but important information technology-based inventions in cutting edge fields like, for example, natural language processing and artificial intelligence are patent-eligible.

My bill also makes clear that the exclusion for non-technological processes can be overcome where the steps of such a process are integrated on a machine or manufacture (such as a computer) beyond merely storing and executing the steps. Requiring that an information technology invention is claimed in a manner integrated into a computer system, and not merely as stored and executed on a computer system, helps to clarify this important dividing line between eligible and ineligible subject matter and, more importantly, true technological innovation.

While I don’t foresee patent eligibility legislation passing this year, what I have done is place a marker that will hopefully serve as a signal to all sides of my sincerity in addressing this very important and complex issue in a thoughtful way. I hope that all stakeholders will come to the table with reasonable and workable solutions in mind and with an eye toward building consensus.

In 2020, you told IPWatchdog that until consensus can be reached among stakeholders on patent eligibility, you didn’t foresee the Subcommittee spending any more time on legislation. What has changed since then?

Well, first, I have continued to work behind the scenes with all interested stakeholders to try and find consensus. I have spent the last 18 months in conversations with stakeholders big and small across all industries. This bill is a result of those conversations. But, to your specific question, a significant catalyst for this change was the U.S. Supreme Court’s refusal to hear American Axle & Manufacturing, Inc., v. Neapco Holdings LLC.

Patent eligibility law in the U.S. has become confused, constricted, and unclear and this culminated with American Axle. As I’ve shared with others, I was surprised and disappointed that the Supreme Court didn’t take up this important case. As you may recall, alongside my good friends David Kappos and Judge Paul Michel, we filed an amicus brief with the Supreme Court begging them to take up the case.

I consider the Court’s decision in this case to be a missed opportunity to provide much needed guidance for our patent system. So now, it’s clearer to me than ever that it’s time for Congress to step in and fix this issue. My goal with the Patent Eligibility Restoration Act is to provide the leadership necessary for building consensus so that predictability and certainty can be restored to our patent eligibility laws.

If Republicans reclaim the majority in November and I become the Intellectual Property Subcommittee Chairman next Congress, the first thing that I plan on doing is holding another marathon series of hearings on patent eligibility reform, and this bill in particular. I am committed to working day and night on this issue until we pass a legislative solution. And I will do everything in my power to pass a reform bill before the end of my second term.

Can you explain your motivation for introducing the Patent Examination and Quality Improvement Act of 2022? While it is hard to argue against raising patent quality, the definition of “patent quality” is controversial, and even more so when the words are flipped and the term becomes “quality patent,” which sometimes has even morphed into terms like “legitimate patent,” for example.

My motivation for advancing this common-sense legislative solution is to ensure that the patents issued by the USPTO meet all the requirements of patentability and are indicative of true technological innovation.

To me, a quality patent all boils down to the following basic principle – high quality and thorough patent examination. It’s imperative that a quality patent meet all of the requirements of patentability. Patents which are rigorously examined and meet these standards not only give the public the benefit of true technological innovation, but also instil faith and confidence in the intellectual property system. That’s why this legislation is so important.

It’s important to understand that there’s no single “silver bullet” to achieve this goal. That’s why this legislation takes into consideration the many component parts that comprise quality (e.g., clarifying how patent quality is defined within the USPTO, evaluation of prior and current patent quality-related pilot programs within the USPTO, consideration of additional examination time for patent examiners, ensuring that clear and thorough searches are performed by patent examiners throughout prosecution, etc.) that when individually evaluated and, where necessary, improved upon will as a whole help to improve patent quality.

You have been extremely active in writing letters to U.S. government agency leaders and organizations requesting information and/or studies into a number of areas, such as data around the role of patents in drug pricing, for example. You were disappointed by I-MAK’s response to you on that issue; what’s the latest on that, and do you think your inquiry and the publicity around this had an impact on reliance on I-MAK’s data by your colleagues in Congress?

On August 3, 2022, the USPTO and [Food and Drug Administration] FDA wrote a joint letter to me regarding prior requests that I made that the agencies conduct an assessment regarding the data raised by I-MAK. I made these requests to the USPTO and FDA due to the alarming false narrative raised by I-MAK that patent protections are to blame for high drug prices. Policymakers must be able to rely on accurate information so as to make informed decisions and researchers who have analyzed I-MAK’s claims have pointed out what appear to be serious flaws with the methods and calculations supporting I-MAK’s claims. The agencies informed me that they welcome the opportunity to work together to conduct such an assessment and analysis of patent, exclusivity, and drug approval data to help inform our shared goals of fostering affordable access to medicine while incentivizing innovation. The agencies informed me that that they believe that assessing a representative sample will provide valuable insight into the complexity of this landscape and that the FDA will provide data to assist the USPTO, as needed, to conduct this analysis in the timeframe that I requested.

Regardless of any action taken by the USPTO and FDA, if I am Subcommittee Chairman next Congress, I intend to hold a hearing on I-MAK’s flawed data. 

You have also written to the USPTO and Supreme Court about your concern over trial dates and concentration of patent cases in the Waco division of Texas – what do you think about the recent Order by the Chief Judge of the WD of TX that will “equitably distribute” cases among 12 judges?

I was and remain concerned about the open solicitation of patent cases in the Western District of Texas. The active and open solicitation of patent cases by a single judge, a judge who openly billed himself as a trial lawyer’s judge, gave the appearance of impropriety, if not bordered on actual impropriety. Given all these concerns, the Order by Chief U.S. District Judge Orlando Garcia was a welcome and important step. Unfortunately, I am hearing rumors that certain parties and perhaps even this single judge may be trying to get that standing order reversed. I hope that’s not true and that the Chief Judge and, ultimately, the Chief Justice, realizes the seriousness of this situation. If they don’t, then I’m more than happy to work in a bipartisan manner with my colleagues in the House of Representatives to explore the necessary and appropriate constitutional remedies.

Many in the IP community were very critical of the Biden Administration’s position regarding the TRIPS waiver of IP rights relating to COVID-19 vaccines. Skeptics were told this was an extraordinary health crisis, but already UN Secretary-General Antonio Guterres is calling for all intellectual property on clean energy technologies to be waived because the removal of IP barriers is “crucial for a rapid and fair renewable energy transition.” An open-ended question: what are your thoughts on how this played out with the vaccines and will continue to play out with other technologies? 

I was and I remain one of those critics. The Biden Administration’s decision was a travesty and nothing short of selling out American companies and American workers in order to pander to activists. I’ve consistently advocated for a robust, coordinated, and sufficiently resourced international response to the pandemic, and I believe we can assist other countries in a way that is mutually beneficial and does not detract from our broader domestic and international policy objectives. I don’t agree with the premise that IP rights is the root cause for the supply issues we’ve seen with global vaccine access. Nor do I see the weakening of IP rights as a means by which to solve this problem.

I do not agree with the WTO’s choice to move forward with at least a partial waiver of IP rights for COVID vaccines. This decision serves only to weaken our ability to protect IP and it leaves the U.S. vulnerable to bad actors, such as China, who have consistently attempted to steal U.S. intellectual property. All the Biden Administration’s disastrous decision will do is ensure that America is unprepared to respond to future pandemics with the lightning-fast leadership and resourcefulness we’ve seen over the past two years.

The Biden Administration has unnecessarily politicized IP, for use as a partisan political weapon, and in doing so it has only served to further obfuscate the real problem and to delay the necessary work that needs to be done to resolve this global delivery problem. This waiver is a slippery slope and it should come to no one’s surprise that this misguided tactic is now being leveraged on other technologies.

Are you satisfied with the work of the Patent Trial and Appeal Board (PTAB)? Do you think the PTAB is accomplishing the goals for which it was created?

The PTAB exists as an alternative to district court litigation and as a mechanism to weed out patents which should never have been issued. And while we can and must continue to improve the patent examination process, such problem patents will always exist to some degree. That’s just the nature of our examination process.

With that said, when properly constructed and administered I believe that the PTAB can play a vital role in maintaining strong, reliable, and predictable IP rights. Unfortunately, for far too long the PTAB hasn’t been the fair and impartial forum that it should be – instead it has served as a death squad for patent rights and it has been weaponized by big tech companies to bankrupt opponents. Worse still, it’s been subject to abuse and gamesmanship. You only need to look at what happened to VLSI to get a sense of how corrupt the PTAB is/was; and that’s just the tip of the iceberg.

During the last Administration, a number of policies were put into place to crack down on this sort of abuse by my good friend and past USPTO Director Andrei Iancu – policies which I still strongly support. Andrei’s reforms ensured that the PTAB was a truly fair and impartial forum for all parties and not simply a place where patent rights go to die. That’s why I’ve long supported trying to codify some of these reforms, because as good of a job as Andrei did, a future PTO Director could undo all of those positive changes with a snap of their fingers.

My goal is to provide long-term stability and certainty at the PTAB, and to permanently end some of the abuses that we’ve seen in the past. That’s why I’ve partnered with my friend Senator Leahy to introduce our compromise legislation – the PTAB Patent Reform Act of 2022. This legislation will ensure that that inter partes disputes remain an alternative to litigation, while affording predictably, certainly, and fairness to the process for both the petitioners and the respective patent owners.

Like any piece of legislation, passing PTAB reform requires compromise. Legislatively, we can’t operate in the world of absolutes. And no compromise is perfect. But I’m committed to making sure the PTAB is and remains a fair and impartial forum and doesn’t return to simply being a death squad for big tech’s competitors and independent inventors.

At the risk of sounding naïve, China generally, and Hong Kong specifically, overwhelmingly account for global supply of counterfeit products, which are sold via online platforms who seem to have no liability and less responsibility. Counterfeiting has become big criminal business that according to government sources fund organized crime and terror networks due to the low risk of getting caught and insignificant penalties for those who do get caught. What can Congress do?

Counterfeit goods sold online pose serious risks to the health and safety of American consumers. Dangerous counterfeit products are a threat to consumers, to brand owners, and to national security. I agree that Congress must act to protect the US from counterfeit goods, and I have supported multiple pieces of legislation to crack down on abusive counterfeiters.

I am proud to be a leader on this issue as the Senate co-lead on the SHOP SAFE Act with Senator Coons and as an original cosponsor of the INFORM Consumers Act with Senators Durbin, Cassidy, Grassley, Hirono, and Coons. Both of these bills would ensure that online marketplaces hold third-party sellers accountable for selling counterfeit goods online. I also previously introduced the Counterfeit Goods Seizure Act which would extend Customs and Border Protection authority to seize infringing goods. I continue to work closely with my colleagues in the Senate and our external stakeholders in an effort to reach consensus and enact these commonsense anti-counterfeiting proposals.

What other major IP issues are on your radar right now, and what actions are you taking to address them?

As you well know Eileen and Gene, reforming the Digital Millennium Copyright Act has probably been my top legislative priority outside of patent eligibility reform. I’m proud to have worked with my good friend Senator Leahy on this issue and I believe that our SMART Copyright Act is a small but important step towards ending online commercial piracy. I will miss Senator Leahy when he retires, and I look forward to working in a bipartisan manner with my other colleagues on this important issue.

I’m also very interested in and concerned by the White House’s Office of Science and Technology Policy’s recent guidance on open access to scholarly journals and federally funded research. While I appreciate the Administration’s goal – ensuring public access to federally funded research – I worry their revisions to previous guidance is going to harm America’s scientific publishing community. The COVID-19 pandemic demonstrates why it is critical that America remains the world’s leading innovator in all sectors, and a strong, robust scientific publishing industry is critical to that innovation. I will always do what I can to protect this critical industry, and you’ll be seeing more action from me on this policy change in the coming weeks.

Finally, I look forward to continuing my work on the bipartisan, bicameral Creative Rights Caucus to promote strong copyright protections. I’m looking forward to working with Caucus Co-Chairs Senator Hirono and Representatives Chu and Ferguson, plus my good friend Ruth Vitale at Creative Future, to educate staff and members about the vital role that copyright plays in America’s innovation economy.