Squires Confirmed to USPTO: Recapping His Statements So Far on Plans for the Office

As we reported yesterday he would be, John Squires today was officially confirmed by the U.S. Senate to be the next Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) as part of an en bloc vote on 48 pending Trump nominees.

The 48 confirmations were made by a vote of 51-47.

During his confirmation hearing in May, Squires emphasized his goal of making patents strong up front. Since then, Acting Director Coke Morgan Stewart has taken a number of measures that many feel are patent owner-friendly and aimed at restoring quiet title to patents. She called it a “level-setting” herself at this week’s IPWatchdog Women’s Forum.

While Squires fielded criticism of his comments about the poor quality of patents currently being issued by the Office, in his written responses to the Senate Judiciary Committee in June he clarified his statements.

In response to a question from Senator Adam Schiff (D-CA), who asked, “Do you believe that approximately 68 out of 100 U.S. patents that are currently in force are defective?” Squires replied “no,” and added that “the statistics I mentioned are those published by the USPTO concerning claim cancellation upon challenge at the PTAB which are a small subset of all issued patents, not a measure of quality at the front end.”

Squires also expressed his view in his written comments that there is a need to “analyze trends in PTAB proceedings against the relevant issued patent marketplace data to better understand why IPRs have the types of numbers reported while PGRs seem less preferred; why prior art was missed in cases of invalidation and if that art is making it back to the art unit post disposition to address issues on the front end; and why industry appears to be under-utilizing third party submissions and what can be done to address this issue; among other issues.”

He reiterated his philosophy that patents should be “born strong,” including with respect to erroneously rejecting claims that should be issued. “I believe it is to the benefit of all stakeholders if prior art is identified and applied at the earliest stage of examination or post issuance, as we benefit as a society from patents ‘born strong,’ beginning with the original patent grant,” Squires wrote.

Senator Peter Welch (D-VT) noted that because of the rate of discretionary denials of inter partes reviews (IPRs) the institution rate has dropped from 68% to 43% since “the publication of a new rule,” which presumably referred to Acting Director Coke Morgan Stewart’s new interim procedure for PTAB workload Management, under which she has now denied institution on many dozens of petitions. Welch seemed concerned about the decrease and asked Squires how he would address it. “I testified that this data seems ‘skewed’ to me as between the Patent Trial functions of IPRs, PGRs and Derivation proceedings one might expect a more ‘normal’ distribution, or at least as between IPRs and PGRs,” Squires said.

“As to the drop in the rate, I would want to explore the avenues of redress where that is headed, whether it be district court or elsewhere. If confirmed, I look forward to working with stakeholders the USPTO and Congress to ensure that the PTAB fulfills Congressional intent as to all aspects.”

Senator Chuck Grassley (R-IA) asked Squires if he has intentions to “alter the PTAB’s authority or restrict access to IPRs.” Squires said he has no such intentions and prefers a “balanced approach.”

Squires was also asked by Senator Grassley whether he would keep the policies in place regarding discretionary denials that have been implemented by Stewart, including whether he agreed with the decision to rescind the 2022 memo by then Director Kathi Vidal that put at least temporary restrictions on discretionary denials. Squires was non-committal, saying he needs to understand the underlying policy changes and operational considerations, and would work with Stewart and USPTO management to ensure the PTAB meets Congressional intent to provide a faster, cheaper alternative to litigation.

Then, later in his answers, in response to a question from Senator John Cornyn (R-TX), Squires did commit to not using discretionary denial authority as previous Directors have:

Cornyn: Will you commit to requiring the agency you lead to operate the PTAB as Congress articulated in the America Invents Act and not exceed the authority granted to discretionarily deny petitions for review as previous Directors have done?

Squires: Yes.

Another area of questioning by Senators focused on litigation funding, particularly a concern raised several years ago by now CIA Director John Ratcliffe who said that foreign adversaries were participating in U.S. litigation as undisclosed third parties for the purpose of accessing confidential and sensitive technology. In one particular answer to Senator Grassley, Squires explained the need for more transparency at the PTAB relating to the real parties in interest, which should be well received by patent owners. Squires wrote:

“Allowing foreign rivals to bankroll lawsuits against U.S. companies to gain access to our technology is unacceptable. District court local rules require such disclosures and notification of the patent office of such parties in interest, the PTAB should have similar transparency requirements. If confirmed, I will work to ensure that the PTAB proceedings are used in accordance with statutory requirements.”

In other responses, Squires emphasized his interest in using AI tools to improve patent quality and examination efficiency; his commitment to investigating “patent thickets” with respect to the impact of pharmaceutical patents on drug pricing; his agreement with Senator Thom Tillis (R-NC) that eligibility law is in need of clarity and “leading to a lack of American competitiveness”; and that he will prioritize reducing the current USPTO backlog of patent applications.  With respect to the latter, he said that one solution, in addition to AI tools, is to work with the U.S. Trade Representative (USTR) “to identify and eliminate from the system cases, especially foreign-filed that are overburdening the system.”

Reacting to Squires’ confirmation today, Kristen Osenga, Chief Policy Counsel at the Inventors Defense Alliance (IDA), said in written comments sent to IPWatchdog that the confirmation “comes at a decisive moment for American innovation and economic growth.”

She added: “With his deep expertise in intellectual property law and innovation policy, Director Squires is well-positioned to strengthen the patent system, protect inventors, and foster entrepreneurship nationwide.