“If the American patent system was a factory, 68% of the products we put out are found defective in a later proceeding.”
Earlier today, John Squires, who is President Trump’s pick to become the next Director of the U.S. Patent and Trademark Office (USPTO), had his confirmation hearing before the Senate Judiciary Committee. For better or worse, the panel today also included nominees Stanley Woodward, Jr. for Associate Attorney General; T. Elliott Gaiser for Assistant Attorney General; and Joseph Edlow for Director of the United States Citizenship and Immigration Services, all of whom attracted more attention and questions than did Squires.
During the hearing, Squires said his focus will be on making sure patents are “born strong” in light of the fact that—according to his remarks—inter partes reviews (IPRs) at the Patent Trial and Appeal Board (PTAB) show there is a 68% error rate. In other words, nearly 7 in 10 patents issued by the Office are currently “defective” according to Squires. IPWatchdog reached out to both the USPTO and Squires for confirmation of this statistic. A spokesperson for the USPTO said they were not sure where the number came from, and Squires had not responded as of the time of publication
In response to a question from Senator Ted Cruz (R-TX) about whether the PTAB is effectively an arm of Big Tech that disproportionately favors large challengers, Squires surprised many by suggesting the problem is not with a PTAB that is aggressively invalidating issued patents that are statutorily presumed to be valid, but rather that the problem is found on the front end, which leads to poor quality patents routinely being issued by the Office.
“If you look at the data, the concerns are in plain sight,” Squires began his answer to Senator Cruz. “IPRs have a 68% defect rate; if the American patent system was a factory, 68% of the products we put out are found defective in a later proceeding.”
Squires would say that the way to “address it”—presumably the large number of defective patents issued by the Office—is to focus on the input and have patents be “born strong,” which entails improving quality by, among other things, incentivizing prior art to be disclosed during examination. What Squires meant regarding incentivizing the disclosure of prior art is not clear and would lead the casual observer to perhaps believe there is no incentive to disclose prior art during prosecution, which is not the case. Material prior art known by the applicant is already required to be disclosed by applicants pursuant to 37 CFR 1.56, and the penalty for not disclosing such prior art is functionally forfeiture of the patent through a holding of inequitable conduct. Further, patent examiners spend hours searching for prior art themselves.
“Having improved quality, I think, will alleviate many concerns,” Squires told Senator Cruz. A response that again was less clear and direct than it could have been, but which seemed to some to reinforce that Squires believes the problem is not with an overactive PTAB, but rather with low patent quality.
To be fair, the disjointed nature of the hearing, and the numerous questions of DOJ nominees relating to whether they would advise President Trump to ignore a court order—which several also asked Squires—made it at least somewhat difficult to follow. Nevertheless, when responding to Senator Cruz, Squires harkened back to his opening statement where he explained there is a need for more reliable, higher quality patents to be issued by the Office. After characterizing patents examiners as “world class”, Squires would go on to say that one way better patents can be issued is by leaning into the use of Artificial Intelligence (AI) to issue patents of “provable quality”, as well as “to learn from, reduce and remedy mistakes that manifest later”; mistakes that presumably were a reference to the fact that nearly 7 out of 10 patents issued by the Office are defective.
Also, during his opening remarks, Squires discussed the need to move U.S. systems more efficiently into the future. “We want [innovation] to be better, cheaper, faster, more sustainable, to get us to market more quickly with quality and confidence. At present, unfortunately, our system is going in the other direction,” Squires said. “But with ‘born strong patents’ and robust quality marks we can reclaim America’s primacy, revitalize industry and growth, proudly export our culture, boost national security and improve our lives.”
Patent Trolls and Litigation Financing
During the hearing, Senator Grassley asked Squires about his past involvement with the creation of the funding arm of Fortress Investment Group and whether he has represented litigation funders. Squires said he has not been involved with Fortress since 2017 and has never represented litigation funders in any capacity. He also noted that he has been critical of patent trolls in his writings and said that troll practices are exploitative of inventors.
Support for Patent Reform
Senators Tillis and Coons asked Squires about his thoughts on the currently pending patent reform bills they have been spearheading for the last few years—the Patent Eligibility Restoration Act of 2025, the Promoting and Respecting Economically Vital American Innovation Leadership Act (PREVAIL Act), and the Realizing Engineering, Science, and Technology Opportunities by Restoring Exclusive (RESTORE) Patent Rights Act of 2025. Squires said that patent eligibility uncertainty is “costing American competitiveness” and that the recent hearing held by the Senate IP Subcommittee on foreign threats to American innovation demonstrated that China’s patent system “has more expansive subject matter area” than the United States, which “should be troubling to all Americans.”
Senator Coons also asked Squires about PREVAIL, and he agreed the PTAB is in need of reform. “We have 15 years of data since the America Invents Act and it seems to be skewed in favor of one versus the other; reform may help flatten out that curve,” Squires said.
Squires was equally supportive of RESTORE.
Chinese IP Theft
Senator Schmitt asked Squires about Chinese IP theft and how the United States can better combat it, particularly in light of emerging AI models like DeepSeek and recent statements from top government officials about abandoning IP altogether. Senator Tillis interrupted Squires’ answer, however, and ask that he provide a detailed answer in writing for the record instead, which Squires agreed he would do.
What Next?
While consistent with the theme of needing a system that produces better quality patents, Squires saying that 68% of the product of the Patent Office is defective is hard to reconcile. It is hard to reconcile with statements supportive of PREVAIL and acknowledgement that the PTAB needs reform, and even more difficult to reconcile with recent actions by the USPTO under Acting Director Coke Stewart, which are being carried out at the direction of Commerce Secretary Howard Lutnick.
So, what next? After a confirmation hearing, the nominees can be expected to receive numerous questions in writing from Senators, which we know will be the case at least with respect to questions relating to theft of intellectual property by China. As Senators, staffers and stakeholders pore over this hearing we suspect that there will be many follow up questions asked of Squires that will give him the opportunity to clarify his testimony in a more complete manner.
It is not inconsistent to hold the opinion that the Office can and should endeavor to constantly do a better job, while at the same time believing the PTAB has gone too far. Striving to be better does not preclude the possibility that the PTAB is incorrect when it finds so many patents to be defective. However, it will be interesting to see how Squires elaborates upon his views and navigates the nuances in response to the written questions he will receive. Particularly the critical question he will no doubt receive in some form, which is whether he personally believes that nearly 7 out of 10 U.S. patents that are currently in force are defective.
