Latest Actions by U.S. Patent and Trademark Office Director Squires Weaken the Certainty in the U.S. IP System that Small Businesses Need

WASHINGTON – ACT | The App Association expresses serious concern regarding the U.S. Patent and Trademark Office’s (USPTO) recently released Notice of Proposed Rulemaking (NPRM) on the Patent Trial and Appeal Board (PTAB) inter partes review (IPR) procedures and related policy changes, and USPTO Director John Squires announcement today that he will make all decisions regarding institution of proceedings. The NPRM and Director’s announcement, would impose restrictions that undermine a vital mechanism created by Congress to safeguard patent quality in the United States.

“The purpose of the PRAB was to give a lower cost opportunity to small businesses to contest bad patents,” said Morgan Reed, president of ACT | The App Association. “This makes it harder for small businesses to participate. Even if every decision the Director made regarding institution would be the right one, there is not enough time in the day to do the appropriate review and meet all the other duties of the office. This is a step backward for small businesses in America.”

High-quality patents are foundational to the U.S. innovation ecosystem. The PTAB is a critical tool for American innovators to efficiently defend themselves against weak, overbroad patents. Preserving access to the PTAB, as intended by Congress, ensures that granted patents are meritorious, reduces inefficient litigation, and levels the playing field for American small business innovators.

“Additionally troubling is the timing of this announcement within the same week that the USPTO withdrew a consensus driven proposed rules to strengthen the PTAB, and announced a new NPRM with significant deficiencies,” said Reed. “And they announced a dramatic reduction in the patent application backlog. Two major events is a coincidence, but three is a trend, and that trend looks like sacrificing the quality assurance of issued patents.”

For our community of small business and startups competing and innovating across consumer and enterprise markets, the PTAB is essential in both delivering a cost-effective, expert forum to challenge weak or overly broad patents and in fostering confidence in the U.S. patent system as a whole. The NPRM’s proposals to limit IPR eligibility and restrict the ability to raise invalidity claims in other forums would obstruct this critical avenue, leaving small businesses more vulnerable to dubious patent assertions from larger, better-resourced entities.

The App Association urges the USPTO to reconsider the NPRM and the Director’s decision. To keep America first in innovation, we must protect the PTAB and ensure our small business heroes can fight back against patent abuse. We also urge Congress to initiate an inquiry.

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