The organizations joining this letter represent the nation’s leading microchip and technology manufacturers, automotive companies, financial services providers, Main Street retailers, construction companies, grocers, hotels, and restaurants, as well as leading think tanks and civil society groups focused on intellectual-property policy. We employ nearly 100 million Americans, invest hundreds of billions of dollars each year in research and development, and make products that are critical to the health and well-being of the American people. We represent the core of the U.S. economy.
We are thus alarmed by the nature and scope of the new restrictions that the USPTO proposes to impose on these proceedings in its April 20 notice. These new rules would make it impossible for American businesses to seek PTAB review in a large portion of the cases where they are sued on invalid patents and would seriously degrade the proceedings. In addition, much of what has been proposed violates the agency’s statutory mandate. Simply put, the proposed rules are against the law and would gut PTAB review to the detriment of American businesses and consumers. Indeed, in 2015, when Congress considered less severe restrictions on PTAB review than what the USPTO is now proposing, the Congressional Budget Office determined that the policy would cost U.S. taxpayers over $1 billion solely because of its impact on drug prices.
Ultimately, it is the American people and the U.S. economy that will pay for these ultra vires policies. When the USPTO previously arbitrarily blocked access to PTAB review, its actions allowed a foreign hedge fund to obtain over $3 billion in damages verdicts against America’s leading chipmaker—based on patents that the agency has since acknowledged are very likely invalid. A recent economic analysis also found that PTAB review has brought almost $3 billion in benefits to the U.S. economy, particularly in the manufacturing sector.
The USPTO’s PTAB rules would damage U.S. industry, discourage commerce, and place further inflationary pressure on the prices that Americans pay for goods and services—principally for the benefit of shell companies, foreign patent owners, and litigation investment funds. We urge Congress to reject the USPTO’s proposed rules and insist that the USPTO follow the statute. Instead of dismantling the process for correcting errors in the issuance of patents, the agency should focus on preventing those errors from occurring in the first place.