This transcript is from a CSIS & LeadershIP event hosted on December 4, 2023. Watch the full video here.
Sujai Shivakumar: Good morning and welcome to CSIS. My name is Sujai Shivakumar. I’m a senior fellow at CSIS and the director of the Renewing American Innovation Project. The Renewing American Innovation Project was founded about three years here at CSIS, the recognition being that the innovation system of the United States itself is a national security asset, one that has to be cared for with the appropriate policy and funding. Today we’ll be talking about patents. And patents, of course, are critical for innovation. Essentially, they turn ideas into secure property. And this then enables cooperation needed to turn these ideas into products and services that renew our economy and provide new products for the market. It’s so fundamental, in fact, that it’s enshrined in the U.S. Constitution. Today, the United States economic and national security rests on its strengths on technology and innovation. And this means that we need an updated system of intellectual property rights for this modern age.
To explore this, we are joined by Representative Deborah Ross to examine the role of IP in innovation and geopolitical competition. Following remarks by Representative Ross, Andrei Iancu, senior adviser to the CSIS Renewing American Innovation Project and a cofounder of this project as well as well as a former director of the USPTO, will chair a discussion with her and a panel that includes Henry Hadad, senior vice president and deputy general counsel at Bristol Myers Squibb, Tom Brown, senior legal director at Dell, and Doug Collins, former House representative from Georgia and a former ranking member of the House Judiciary Committee.
Now let me introduce to you Representative Ross, who represents the North Carolina Second Congressional District that covers Raleigh and the Research Triangle Innovation Hub. She was first elected to Congress in 2021 and is now serving her second term. She serves on the House Judiciary Committee, the House Ethics Committee, and the House Committee on Space Science and Technology. She is also a member of the House Democratic leadership team, serving as chief deputy whip on the steering – and on the Steering and Policy Committee. So please welcome Deborah Ross. Thank you. (Applause.)
Representative Deborah Ross (D-NC): Well, good morning. It is wonderful to be with you this morning. And thank you so much for inviting me to speak with you.
I’m excited to join this discussion on intellectual property, U.S. global leadership, and national security. As you’ve heard, I serve on the Judiciary Committee. In particular, I serve on the Courts and Intellectual Property Subcommittee of the House Judiciary Committee, one of the few subcommittees this Congress that’s been doing bipartisan work. Before we get to questions, I want to highlight just a few issues I’ve been working on and talk briefly about how they pertain to national security and innovation.
First, I want to mention a few reforms that I believe would be appropriate at PTAB to ensure we’re properly incentivizing innovation. As you all know, PTAB was created through the American Invents Act to provide a more efficient, less costly alternative to district court litigation. However, PTAB is often a difficult venue for small inventors because of the relatively low burden of proof required for patent challengers, the repeated challenges that inventors can face, and the threat of dual challenges in district court.
For this reason, small inventors often find themselves subject to an onslaught of litigation from big companies, to the point where it might be more cost-effective to settle than to continue defending a patent. This is not good for innovation.
I have a bill with others called the PREVAIL Act, which I introduced with Congressman Buck and Senators Tillis and Coons. It will make various reforms to PTAB to address these issues. It will harmonize the burden of proof at PTAB and district court, requiring clear and convincing evidence to invalidate a patent. It would require challengers to choose between making a challenge in district court or at PTAB to avoid dual litigation. And it would limit serial petitions by requiring challengers to raise all arguments in a single challenge. These reforms, if enacted, would protect legitimate innovators from well-funded patent trolls and ultimately strengthen our patent system to support our country’s innovation economy.
The second issue I want to discuss briefly, because it’s a big issue, is AI. The Judiciary Committee has held multiple events on AI and IP, as has the Science, Space and Technology Committee. Of course, AI is a new powerful technology, but we need to quickly develop strong policies for how AI and IP relate if we want to maintain our competitive edge on the world stage. Otherwise, we risk confusing our IP system and not giving due and compensation to creators, because they deserve understandable rules and standards to protect the underlying IP.
Topics of question regarding AI and IP include whether AI developers should need to license materials used for training, what AI products can be protected with IP, and more. Artificial intelligence is a particularly interesting issue when we consider global competition and national security. We are, of course, in competition with China in the development of AI, and we have huge national-security concerns.
While American AI developers typically train AI through data available on the internet. China, which has a vast domestic surveillance capability, has significant personal data from its own population that it can use in the development of new technologies. We should not sacrifice our standards to outcompete China when it comes to AI, but we do need to figure out how to make sure we stay on the cutting edge for national-security purposes.
Finally, I want to highlight a bill that was signed into law last Congress, the Unleashing American Innovators Act. This bill aims to support our innovation economy at the ground level by creating new patent offices with a mission to conduct outreach to underserved populations. All people from all communities deserve the opportunity to see their innovations patented and to profit from their ingenuity.
I’m hopeful that as the Unleashing American Innovators Act is implemented, we will see an uptick in patent applications in underserved communities. If we’re not fully supporting American innovators, if we leave out entire populations that have not historically had the resources to compete, we risk losing out on their creativity and their contributions to our nation.
This is the message that I want to end with. We can best support our national security through strong IP rights and by bringing those rights back to the American people through greater access to the U.S. Patent and Trademark Office’s support and services.
Thank you, and I look forward to our conversation this morning. (Applause.)
Andrei Iancu: Well, great. Thank you so much for those wonderful remarks. Good to be with you, Congresswoman.
I was incredibly encouraged by what you just said, primarily in your overall message that we want to encourage national security, innovation, economic growth through stronger intellectual property rights.
Can you explain a little bit that link? Because I don’t think a lot of people, both in Congress as well as in the general public, understand this linkage between those things.
A lot of people think that innovation just happens because people are brilliant. They’re engineers, scientists. They want to create. And then clever ones after the fact might get some IP rights, without seeing that one is necessary for the other. Can you explain a little bit what that linkage is and what you see in it that maybe others don’t?
Rep. Ross: Well, our Founders saw it and that’s why it’s enshrined in our Constitution, that we would give for a limited time exclusive rights to intellectual properties so scientific discoveries, also artistic creativity.
And the reason for that is to encourage people to devote their lives to do the very best in terms of research and the arts, and people have to feed their families. They have to make a living, and in our country we will reward you for that incredible creativity, for investing your intellect and your innovation in doing something extraordinary and sharing it with the public.
And I want to emphasize we don’t give these rights forever and ever. They’re for short periods of time, and after that time has expired this intellectual property belongs to everyone, can be used to either produce something more cheaply, produce something else. But for that short period of time, you have the exclusive right to decide how your – the fruits of your labor will be used.
Mr. Iancu: Just to push back a little bit on that. First of all, I agree with everything but just to be on the devil’s advocate side, some would say, look, you can incentivize creators, allow them to feed their families by compensating them, right, by giving them either prize money or just their regular income from selling the products, et cetera. Why do you need to prevent others from doing it?
Rep. Ross: Well, I represent the Research Triangle area and what I’ve seen is some people are just innovators. They come up with the wonderful idea. They do something that’s extraordinary but they’re not necessarily the person who’s going to implement that idea. They’re not CEOs or manufacturers or supply chain people. They are creators, and the value of that idea if they don’t get to reap the rewards of it might be somebody else reaping those rewards, and so we need to make sure that they are able to do that.
The other thing is that our country does not invest in creativity in the way that it should. We just passed the CHIPS and Science Act, which is the greatest investment that we’ve really had in a generation. Yet, it has not been fully funded. And I represent a number of entities that get grants from NSF but we’re not a country that rewards innovation from the ground up.
We’re a country that expects you to do it on your own. There’s private investment, and the only way that you can reap the reward of that is to be able, again, for a limited period of time have that exclusive right and then share that innovation with everyone else.
Mr. Iancu: Now, the country used to in the past do a bit more in encouraging and investing in innovation, right? I’m reminded of President Kennedy’s speech – speeches, really, but the one famous one at Rice University in the early ’60s committing the nation to land a human being on the moon by the end of that decade, which resulted in a broad-based, all-industry, all-government commitment to at least space innovation and related technologies during that decade. Because, frankly, we were spooked a little bit by the Sputnik launch by – from the Soviets.
I feel that we’re somewhat missing that ethos in today’s world, even though we have equal or greater challenges from another competitor now in China and maybe others, on AI, as you’ve mentioned, all sorts of other advanced technologies. What can we do? What needs to be done to return to that ethos of the ’60s to commit the nation?
Rep. Ross: Well, I believe we took a big – a giant leap – how’s that, we’ll do it – use the space analogy – with the CHIPS and Science Act. So I don’t know if you recall from the last session of Congress, the Senate really approached this as competing with China. But the House approached it in investing in the future. And in the end, we both compete with China – the chips aspect of it is being implemented, we’re making sure that we can produce the goods and products that we want to do, that we’re not being held hostage to a supply chain issue or a single source of chips, microchips.
But the more important thing is, again, investing in the next generation. And the United States has been a leader in innovation. But we have not been intentional about keeping our cutting edge. And we absolutely have got to do that. And the thing that I think is just inspiring, is going to labs, going to places where people are coming up with new, creative technologies, new creative health systems, biotechnology. There have been generations, but there’s a new generation that wants to use their talent, their intellect for the good of this country and this world. And we absolutely have got to invest in them. And I believe at least the science part of the CHIPS and Science Act, is a step forward.
Mr. Iancu: Yeah. It’s a good example of what can be accomplished. And we have to look at more industries, I think, and figure out what needs to be done in those to incentivize. Speaking of which, let’s talk a little bit about the green energy industry. You’ve done a lot of work developing that for the United States, especially given the district you represent. Can you talk a little bit about what type of innovation and IP protections are needed to further incentivize investment, frankly, from the private sector but also the public sector, into those industries?
Rep. Ross: Mmm hmm. So the main thing that’s going on with dealing with climate change and finding alternative carbon-free ways of producing electricity is bringing down the cost. So we’ve had hydro power. It is really the oldest form of renewable energy that we’ve had. But we’ve had some problems with droughts and different ways of regulating that hydropower. Solar came on the scene, but because initially it was more expensive it wasn’t adopted as readily. Now we’re seeing utility-scale solar. So most of these innovations are ways of reducing the cost of you harnessing the wind, hydro, making small modular nuclear reactors.
But there has to be an economic incentive to do it. And there has to be an economic incentive to do it not just to say, yes, we can produce this energy, but to show that it’s cost-effective, that it is reliable. And in the case of things like battery storage, that it’s dispatchable. Which means that we can use it 24/7. And rewarding that innovation is not only going to expand this industry, but it’s going to lead us to cleaner air, cleaner water, and a better environment for the future.
Mr. Iancu: Yeah. One of the remarkable things about IP – and I think it’s a bit counterintuitive to a lot of people – is that IP protection, given the incentives it provides, actually works to lower costs, right, because it incentivizes more competition, more private industry getting in if there are the rewards out there. And on top of that, it incentivizes collaboration, which is really important. If you’re secure in your IP rights and the rule of law, you’re more secure collaborating with your colleagues.
And that’s really important for universities in your district. You know, if they don’t have protection, why would they collaborate?
Rep. Ross: Well, I think they might – they might collaborate just because of the intellectual stimulation of it. But having that protection makes it so that there are rules of the road when you collaborate: What are you licensing? Who is the underlying creator? So what it create – it just gives people an understanding of what the rules are, how best to secure their rights; but also how, when they share information, you know, the right person gets the credit for what they – what they do, and whatever they do together they each can be compensated for.
Mr. Iancu: So let’s turn a little bit to the PREVAIL Act, which you talked about in your remarks and introduced with Representative Buck in the House. First of all, at a higher level, how does a bill like that – that relates to a specific function of the U.S. Patent and Trademark Office, the post-grant proceedings or the PTAB – how does a bill like that actually work to incentivize innovation or to help with national security and other technologies?
Rep. Ross: So just to be clear about the PREVAIL Act – and I want to give most of the credit to the senators because they were the ones who initially put it together and they’ve already been having hearings on it – is it is taking PTAB, which was a good idea and does good things, and now that we’ve had the experience with PTAB making changes once we’ve seen that small innovators have not benefited as much from PTAB. So it’s a good idea to make it quicker and easier to resolve patent disputes. It’s a good idea to have it be less expensive. But because the way PTAB is functioning right now and you might end up in two different venues, district court or before the PTAB, you might have two different standards of proof for defending your patent. That creates just a quagmire for the small inventor. For big people who have plenty of money and plenty of lawyers, it’s – you can have kind of strategic advantages as opposed to innovative advantages.
So the changes that we’re recommending are ones that provide more certainty, more protection for true patentholders so that they don’t have to constantly defend their patent. Remember, as we’ve been talking about, this is – this is a right that’s limited in time. It’s not like you have your patent forever. Well, if you get your patent and then you spend 15 years defending it, then you really don’t have the protection that you need in order to reap the rewards of your innovation. So really what the PREVAIL Act does is look at what the unintended consequences were when PTAB was created, try to fix those, and try to rebalance in favor of innovation.
Mr. Iancu: Now, some who like the PTAB quite a bit – and by the way, approximately 80 percent of the patents that are undergoing PTAB review in IPR or PGR – more than 80 percent of those are also in parallel district court litigation, which is the dual system that you just referenced. And the petitioners who like the PTAB will say, well, why would you make it more difficult to access the PTAB? Because, you know, if you have invalid patents, the Patent Office should have the ability to take them out, to invalidate them, so why create a higher burden of proof, which the PREVAIL Act does? Why should you make it more difficult to invalidate invalid patents?
Rep. Ross: Well, it’s really equalizing the burden of proof. And remember, somebody went through the patent process to begin with and got the patent.
So I talked a little bit about the American Innovators Act. So many people don’t even know how to access the patent process and lose their intellectual property along the way. So getting the patent in the first place is not an easy thing, as you well know. And so if somebody is going to try to take something away when you’ve already put – you’ve done the invention; you’ve put in the blood, sweat and tears of getting your patent – it shouldn’t be easy to take that away. And again, it’s limited in time. So once you get your patent, if you spend all of your time and effort trying to defend it, then we all lose out on that innovation.
Mr. Iancu: Right. And the argument there is, you know, if courts give deference to the original examination in the Patent Office, why shouldn’t the Patent Office itself give deference to itself, especially when, speaking as a former director of the Patent Office, rarely makes mistakes, especially between 2018 and 2021. (Laughter.) So might as well give deference.
Now, some, completely on the other side, people who really hate the PTAB – and some of those are the smallest of the small inventors, inventors in their garages and so on, and they really dislike the PTAB – those will say, well, why should you have it at all, right? And why should you give the petitioner the choice to avoid district court and be in the PTAB at all? Why not just put all the faith in our court system and the jury system, which is in the Constitution? So, you know, they would argue that your bill should be amended to effectively eliminate the PTAB, at least if the inventor doesn’t want to be there.
Rep. Ross: Well, what I would say is that those inventors, those very small inventors, are going to have to take the time and spend the resources to defend the patent. And it’s much quicker and it’s much more cost-effective to be in the PTAB. And so while I understand that they may prefer to be in district court, the PTAB is a quicker and more efficient way of dealing with it with people who have a fundamental basis in patent law. However, the bill also requires the choice between PTAB and district court rather than burdening them with having to litigate in both venues.
Mr. Iancu: Yeah. One other thing that your bill does is it has some good-governance provisions, which I think there’s broad consensus on those. One of them goes to the review by the director, the politically appointed director. And last year the Supreme Court said that all final decisions from the PTAB on IPRs and PGRs have to be reviewable by the politically appointed director under the Constitution and separation of powers and all of that. And your bill effectively codifies that and provides, you know, good-governance procedures for how the director is to review a final decision.
Now, some will say that that’s uncomfortable. It is what the Supreme Court said. But some will say that it’s uncomfortable because it’s a quasi-judicial procedure between two private parties. And now you have a political appointee that would make these decisions.
What do you think about that and how to slice that issue where you have the constitutional mandate, as the Supreme Court articulated, on the one hand; on the other hand, just the general feeling of Americans that judicial decisions should be politically independent, and that’s why we have Article 3 courts?
Rep. Ross: Well, I couldn’t agree with you more. But we have to follow what the Supreme Court has dictated. And that then makes it even more important that we have experienced, thoughtful and ethical appointees and that the process for doing that appointment is strongly vetted and that we have people who really only care about the underlying content and making sure that the law is applied correctly.
That doesn’t always work. It doesn’t always work with all of your judges. But we have to follow what the Supreme Court says and try to find absolutely the best person. I think that the bill enhances our efforts to do that.
Mr. Iancu: Right. And there’s transparency issues that the bill addresses, which also there’s broad consensus on.
OK, so now dialing back to national security issues, and something that a lot of the audience at CSIS and the CSIS organization cares about, can you talk a little bit about how all these issues – whether it’s the PREVAIL Act or just IP in general – how does that impact our national security and why the general public should care?
Rep. Ross: Well, I think we – when we think about national security, we need to think about it in terms of the things that benefit and protect our security, health, and welfare. And so, yes, national security is our armed forces and protecting our borders. But national security is also making sure that we have ample supply of COVID vaccines if we have a pandemic. And having strong intellectual property is one of the things that made our pharmaceutical industries able to ramp up and produce the vaccines that we needed during the coronavirus pandemic.
The same is true, and I alluded to this in my remarks, for AI. We have got to be sure, in terms of cybersecurity, in terms of manipulation of our elections, any of these things – they are all matters of national security – that we create the incentives for the best and the brightest to come up with innovation. And, again, this innovation is not just out of our universities. It goes back to the American Innovators Act. This innovation can come from people seeing security threats in their areas and coming up with an innovative way of dealing with it. But if we outsource intellectual property to our competitors, we don’t have access to it when we need it in times of peril.
Mr. Iancu: Yeah. Very well said. And, you know, one of the other features of intellectual property is that it encourages public disclosure. Really, patents, copyrights, you know, they are a quid pro quo. You know, we’ll give you the creator of limited time of protection and what you give the public in exchange is you’re making your invention, or your creation, public. You’re bringing it forward. The word “patent” means to lay open. And that has all sorts of benefits. Others can improve upon it, and so on.
One area within artificial intelligence that has basically no IP protection of this sort is data. So, you know, AI depends on data sets and training models. There is no patent for that. no copyright for that, and companies keep it very secret as a result. No public sharing or anything like that. Any thoughts about – is there any discussion at all, any thoughts about potentially creating a sui generis type of IP rights in that area?
Rep. Ross: We haven’t discussed it in our committees. However, Congresswoman Foushee, who represents the other part of the of the Research Triangle, and I just had an IP roundtable with tech companies and others, universities, to talk about what we might do to incentivize having data be more open, having people be able to share things in a way where they feel more comfortable. Because, again, what IP does depends on the data that it starts with. And there are a lot of concerns about civil rights, about bias, about a wide variety of things. And so –
Mr. Iancu: Privacy.
Rep. Ross: Privacy. Everything. And so to the extent that we can create incentives to have that data, that input, be as broad and diverse as possible, that’s something I think is absolutely worthy of discussion. We did have a brief – one hearing in Science, Space, and Technology addressing this issue. But we need to have a larger discussion about it.
Mr. Iancu: Yeah. There’s so many interesting things surrounding this, and IP is really critical, as you said, to AI development.
Rep. Ross: It’s also – if you don’t mind?
Mr. Iancu: Sure.
Rep. Ross: It’s also very important in the arts. So, we had a couple of hearings on this. I’ve actually introduced another bill, which we didn’t talk about, to help working musicians to make sure that in terms of AI training and then, of course, monetizing anything from AI that if a copyrighted work – and I know we’re talking about patents today – is used that there’s licensing, there’s compensation, all of those kinds of things, and that’s more on the arts side.
Mr. Iancu: Yeah, they’re very related, these issues. Conceptually they’re very similar. Obviously, in the Constitution they’re in the same clause, copyrights and patents. So the – you know, thinking about them together makes a lot of sense. In fact, I think it’s imperative because it would be weird to have a completely different approach between patents and copyrights, although there are nuances.
So just to draw to an end here, one of the very nice things that I appreciate about IP in Washington is that it’s one of the last things that it’s not partisan, I think, and hopefully that continues. Obviously, PREVAIL Act is bipartisan, bicameral.
So with that in mind, despite all the partisan – always partisan divides on Capitol Hill what’s the fate of PREVAIL now in the House? Any plans for a hearing or what are the next steps?
Rep. Ross: Well, I’m definitely an advocate and Congressman Buck is as well and so, hopefully, we will be able to get a hearing on it. I do think and I’m a big believer – I’ve been involved in politics for a while – don’t take credit for things that other people did first, that Senator Tillis and Senator Coons have been very successful at working together in the Senate and I think if they sent the bill over to the House with a very strong bipartisan vote that would be the impetus that we would need on the House side.
Of course, I will advocate for it on the House side. But I think given the current state of the House and since not that much is getting through anyway it’s better to have that jump start from the Senate side. But we’re watching the Senate very, very closely and learning from them.
So I’m hoping that it is a very strong bipartisan bill, maybe even a unanimous consent bill, dare we say. But if it is not we need to be prepared for the arguments against it and that’s something that Congressman Buck and I can learn from as it moves through the Senate.
Mr. Iancu: Excellent. I very much appreciate the optimism – that’s great – and all the work you’re doing on that front. Any last thoughts before we wrap up?
Rep. Ross: Well, I just have really enjoyed this conversation. I want you to know that I am committed to working on intellectual property issues. They’ve been an interest of mine ever since I was in law school and it’s just so exciting to not just work on these issues but see how important they are in a district like mine, which is a center of innovation.
So thank you so much for inviting me to be with you and I look forward to working with you in the future.
Mr. Iancu: Well, Congresswoman Ross, thank you so much for being here. Thank you so much for your leadership. You really are a tremendous leader when it comes to these IP issues and everything else you’re working on. I hope you keep it up and see you again soon.
Rep. Ross: Thank you.
Mr. Iancu: Thank you. (Applause.)
(END.)
