Why It Matters

Congress granted the U.S. Patent and Trademark Office (USPTO) a short-term extension of its fee-setting power through December, but the real fight is just beginning. The House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence, and the Internet held a hearing on September 2 to examine whether to renew that authority with conditions attached, specifically reforms to how the agency denies patent challenges.

Chairman Darrell Issa (R-CA-50) framed December's decision as a choice about "terms," not whether renewal happens at all. Ranking Member Hank Johnson Jr. (D-GA-4) argued that adding PTAB reforms to fee authority renewal would make a traditionally bipartisan program unnecessarily controversial.

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The Background

Congress passed the America Invents Act in 2011 on a broadly bipartisan, bicameral basis to modernize the patent system and ensure only high-quality patents were protected. That law granted the USPTO limited and temporary authority to set its own fees, freeing the agency from annual budget battles and letting it operate sustainably.

According to Patently-O's pre-hearing analysis, Congress will almost certainly extend the authority because it has been a major success. The Patent Trial and Appeal Board (PTAB) was intended to have discretion to deny petitions based on material insufficiency or prior rejection.

But in recent months, the agency has tightened that discretion without notice and comment procedures, a shift that has alarmed some members and witnesses alike.

The original fee authority was set to expire on September 16. The House passed a continuing resolution one day before the September 2 hearing that extends USPTO fee setting authority through December 11, 2026.

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What They're Saying

Rep. Issa opened by sketching a troubling picture. He cited data showing some companies have seen as many as 80 PTAB requests denied consecutively. He noted that ex parte re-examinations are being reduced, limiting the ability to challenge patents outside of costly Article III litigation. Nuisance-level patent demands ranging from $50,000 to several hundred thousand dollars are growing against dozens or hundreds of companies.

Rep. Johnson, the ranking member, fired back. He characterized Issa's concerns as "partisan" and based on "political ideology over merit." Johnson argued that adding PTAB reforms to fee authority renewal would make a traditionally bipartisan program unnecessarily controversial. Congress should eventually consider proposals such as the PREVAIL Act.

Teresa Stanek Rea, former Acting Director of the USPTO, proposed a two-year reauthorization cycle with new statutory guardrails including a requirement that the USPTO issue written reasons for PTAB institution decisions.

Melissa Wasserman from the University of Texas School of Law backed renewal with a sunset clause and called for a fully functioning Patent Public Advisory Committee. She also advocated for collecting more examination costs before allowance while retaining discounts for small and micro entities.

David Kappos, former USPTO Director and now representing the Council for Innovation Promotion, made the case for long-term renewal not conditioned on policy changes. He explained that the entirely fee-funded USPTO needs flexibility to maintain reserves, modernize technology, and sustain examiner hiring through downturns and funding lapses.

Morgan Reed, representing the Association for Competitive Technology, asked for a real sunset provision on fee authority, a functioning Patent Public Advisory Committee, and limits on discretionary denial at the PTAB. Her organization issued a press release on September 3, 2026, urging Congress to reclaim oversight of the USPTO's PTAB authority as its fee-setting authority neared expiration.

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Political Stakes

Trump's Secretary of Commerce, Howard Lutnick, fired every member of the patent public advisory committee and the trademark public advisory committee two months after Trump's inauguration. New members were not sworn in until half a year after their predecessors were fired.

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The Other Side

Patent reform advocates argued that the December deadline is precisely when Congress should demand accountability. They pointed to data on rising PTAB denials and questioned whether the agency's recent policy shifts reflected congressional intent or administrative overreach. Rea's proposal for a two-year reauthorization cycle with statutory guardrails attempted to renew the authority but with oversight built in. Wasserman called for a fully functioning Patent Public Advisory Committee.

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What's Next

The options are to extend the authority cleanly for seven or eight years, condition it on reforms, or let it lapse and force the USPTO into the annual appropriations process.

Issa has signaled he will push for conditions. Johnson is likely to resist. Given that Republicans control the White House, House, and Senate, they have the votes to impose their preference, but only if they can agree on what that preference is.

The Bottom Line

The USPTO relies entirely on fees to operate, and any disruption could ripple through the patent system that underpins innovation by slowing patent examination, disrupting trademark processing, and creating uncertainty for the innovation economy.

The hearing was a preview of that December fight. It showed where the lines are drawn and how much daylight exists between those who see the fee authority as a policy lever and those who see it as essential infrastructure for innovation.

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