IP Questions in Lutnick Hearing Focus on Risks from China, Backlog

The U.S. Senate held a nomination hearing to vet Donald Trump’s pick for Secretary of Commerce, Howard Lutnick, this past week. While much of the hearing focused on issues outside of the U.S. Patent and Trademark Office (USPTO), Lutnick touched on several key points relevant to the intellectual property system.

First, Senator Marsha Blackburn (R-TN) asked Lutnick about China’s leadership in 57 critical and emerging technologies and the role the USPTO’s growing backlog has played in that. “[China was] the leader in three [emerging technologies] in the mid to early 2000s – 2010, and now they’re leading in 57,” Blackburn said. “Many of the innovators in Tennessee talked to me about the frustration that they have with trying to get a patent…the amount of time it takes. I don’t know if you’ve looked at the USPTO, the backlog of applications there is 820,000.”

On Trump’s first day in Office, one of his executive actions included implementing a hiring freeze across the federal government, thus knocking out the USPTO’s key tool for decreasing the backlog for now. The current backlog stands at 826,736 unexamined applications/ 26.1 months total pendency for patents. The Office’s April 2024 Notice of Proposed Rulemaking (NPRM) on Setting and Adjusting Patent Fees predicted the backlog to increase to only 820,200 by FY 2026 before decreasing to 780,000 by FY 2029, and in July, former USPTO Director Kathi Vidal said the Office was tackling the backlog in part via a concerted hiring effort.

More recently, former USPTO Deputy Director Derrick Brent, prior to his resignation and Coke Stewart’s appointment to take his place as Acting agency head, penned a Director’s Blog post explaining that the Office is “now at an inflection point that requires us to build examination capacity to achieve our long-term pendency goals.”

Lutnick told Blackburn that “the backlog is unacceptable and my pursuit will be the rigorous reduction of that to get it down,” but did not say how precisely he would achieve that. Lutnick continued:

“I am a patent holder, I’ve used the patent office over many years, it could be much more productive but the Chinese are abusing us. They don’t give us protection in China and they come in and use our patent office against us. This is going to end, we are going to study that, and we are going to work on ending that and making sure our American inventors get taken care of quickly and effectively.”

Lutnick holds more than 400 U.S. patents and 800 worldwide, and has been involved on both sides of extensive patent litigation over the years.

The Commerce Secretary nominee also fielded a question from Senators Ted Budd (R-NC) and Todd Young (R-IN) about threats posed by China and vowed to crack down hard on IP enforcement abroad. He specifically addressed the recent news about the Chinese AI model, DeepSeek, which performs as well as the top U.S. AI models but at a much lower cost. “How?” asked Lutnick during the hearing. “By leveraging what they’ve taken from us, stolen from us, or leveraged from us—it’s outrageous and it needs to be addressed.”

A full committee Executive Session will be held on Wednesday, Feb. 5 at 10 a.m. to vote on Lutnick’s confirmation.

RFK Addresses March-In  

Also this week, according to the Bayh-Dole Coalition, Secretary of Health nominee Robert F. Kennedy, Jr. said in his written response to a question from Senator Elizabeth Warren (D-MA) during his nomination hearings that using march-in rights under the Bayh-Dole Act to lower drug prices is not appropriate. Below is the written question and answer in full:

Question 108: The Bayh-Dole Act, codified in 35 U.S.C. § 203, gives the federal government the right to grant licenses to “responsible applicant[s]” for patented inventions developed with federal funds if those inventions are not “available to the public on reasonable terms,” which includes price. Do you support the use of march-in rights to help lower drug costs for Americans? Do you believe that a drug’s price is an appropriate factor to consider in determining if the government should exercise march-in rights? If confirmed as Secretary of HHS, would you commit to strengthen and finalize the Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights?

Response: This would not be an appropriate use of march-in rights under Bayh-Dole.”