Andrei Iancu, director, U.S. Patent and Trademark Office (Photo: Diego M. Radzinschi/ALM)

The Senate Judiciary Committee has reconstituted its Subcommittee on Intellectual Property, and on Wednesday it hosted U.S. Patent and Trademark Office Director Andrei Iancu for his first oversight hearing of 2019.

Last year, the new director came armed with promises about reforming post-grant review proceedings at the Patent Trial and Appeal Board and new guidance for patent examiners on Section 101 patent eligibility. On Wednesday, Iancu told the committee he'd delivered on those promises.

But subcommittee chairman Thom Tillis, R-North Carolina, and ranking member Chris Coons, D-Connecticut, have bigger ambitions this year: a legislative amendment to Section 101 that would overrule a series of controversial U.S. Supreme Court decisions. Here are five takeaways from Wednesday's hearing:

1) All hail the king. When Iancu took over leadership of the Patent Office last year, he was widely seen as possessing substantive intellectual property chops and managerial experience from his work at Irell & Manella. The question some asked was whether the longtime Los Angeleno could adapt to the D.C. political environment. Mission accomplished so far. Tillis and Coons lavished praise on Iancu for delivering new Section 101 guidance earlier this year and recalibrating claim construction at the PTAB, among other things. “You've had an extraordinary impact in a short period of time,” Tillis said, dubbing the changes the Iancu Effect. “If you will forgive me,” Coons added a minute later, “I'm going to compliment you for many of the same initiatives.”

2) Watch your language, senator. Like Supreme Court justices, Senate Judiciary members have freely thrown around the phrase “patent troll” in recent years. It's a practice Iancu has publicly discouraged. “Let me ask you about patent trolls,” Sen. John Cornyn, R-Texas, said Wednesday. He noted that Apple Inc. recently closed two stores in the Eastern District of Texas to avoid patent litigation and said the problem “has become a fight not just between technology firms, but literally one that affects Main Street.”

You can cheer or boo Iancu's campaign against the “T-word,” but credit him for standing his ground. “I want to make sure that we do everything we can to avoid all sorts of abuse from all sides,” he told Cornyn, naming “blunderbuss” demand letters as one example. “But I think it is important to avoid pejorative terms because I think it has a counterproductive effect. It makes us in fact look away from the real problems that we really need to address.”

3) Section 101 legislation could be here before you know it … Tillis and Coons confirmed what's been semi-public for a few months: They're working on legislation to overrule the Supreme Court's interpretation of Section 101 of the Patent Act, which technology companies and many others have used to short-circuit expensive and prolonged litigation. Tillis declared the Supreme Court's patent eligibility case law “a mess” and promised a bill by this summer that he expects to produce a “bi-cameral, bipartisan outcome.” Coons was only slightly less bullish, calling Section 101 a “frankly very thorny issue” and saying he expects to get legislation passed “in this Congress.” Sen. Mazie Hirono, D-Hawaii, even suggested Iancu's guidance for patent examiners didn't go far enough, because it still excludes patents on “methods of organizing human activity.” Iancu said that language was taken directly from the Supreme Court and that the new guidance includes specific examples.

4) … or it could get derailed by the war on big pharma. The framing of the resistance to Section 101 legislation seemed pretty clear Wednesday: higher drug prices. “I do want to express my deep concern that the present policies may make medicines less affordable than they should be,” Sen. Richard Blumenthal, D-Connecticut, said. Cornyn said that, while he appreciates people “work hard to create and promote life-saving drugs,” he didn't understand how a single drug could be covered by more than 100 patents. Iancu patiently explained that there could be separate patents on the molecule, the method of manufacturing, the coating and the delivery mechanism, among other things. Politically, it didn't sound like a winning argument. Coons tried to play defense, saying that he's “concerned, as many of my colleagues are about the high price of pharmaceuticals.” But, he asked Iancu, “Does weakening the overall patent system strike you as a meritorious way to address the pricing of a particular sector that also benefits from patents?”

5) It might be time for a pause on PTAB reform. Coons praised Iancu for the changes under his watch at the PTAB. “What additional measures would be required to assure post-grant proceeding fairness?” he asked. It seemed like a great setup for Iancu to plug Coons' STRONGER patents act, which would codify some of Iancu's changes and add more. But Iancu wasn't biting, at least for now. “By and large, we do want to be sure that things we have done in the past 12 months are working well” before taking on further reform, he told Coons. When Hirono complained about abusive serial petitions by the likes of Apple, Google, LG, Microsoft and Samsung, Iancu assured her the PTAB has already taken steps to address that problem. “There should be some kind of remedy to stop them. Fines or something,” Hirono said. “We are looking at this and options in that area,” Iancu said.