We enjoyed a delicious 2007 Pinot Noir from Joseph Carr Wines over the holiday. The beautifully simple instructions on the back label – share – have a Creative Commons feel to them, don’t you think?
We complied, sharing with friends. And after a couple few glasses, I found myself wishing for an easy way to make perfect copies of the creation. No luck.
Despite its massive size, budget and complex regulatory framework, the Patent and Trademark Office has only two statutorily defined duties. According to 35 U.S.C. §2, the Office:
“(1) shall be responsible for the granting and issuing of patents and the registration of trademarks; and
(2) shall be responsible for disseminating to the public information with respect to patents and trademarks.”
That’s it. Grant, issue, register; disseminate information. Simple and straightforward.
While some may argue that the “issuing” aspect has been forgotten in recent years, its difficult to argue that the Office doesn’t pay sufficient attention to the first responsibility. The granting and issuing of patents and the registration of trademarks is the business of the Office, and the Office treats these responsibilities with the appropriate attention.
The same cannot be said, however, for the second responsibility. The duty to disseminate information to the public seems to be forgotten and, at times, flat ignored.
Yesterday was one of those times.
A storm had dumped a mountain of snow on the D.C. area over the weekend, causing the Office of Personnel Management to advise on its website that all federal agencies in the Washington, D.C. area would be closed the next day, December 21.
Many patent practitioners immediately wondered whether the Office was officially closed…thereby triggering “the rollover rule” that would effectively extend Monday due dates to Tuesday.
Unfortunately, the Office never told the patent community whether it was “officially closed,” leaving more than a few of us with less than a clear picture of whether the rollover rule was in play. Morning came and went without any word…as did the afternoon. Nothing. I’m writing this post at 11:38 PM and the Office website still doesn’t say anything about the closure (or the non-closure).
A simple message on the website would have eliminated all confusion. “The Patent and Trademark Office is open (or closed) for purposes of filing papers and paying fees….”
If you think this is trivial, roll back the clock to Halloween, 2007. As many practitioners were preparing last minute continuation applications in an effort to beat the November 1 effective date of the controversial continuation rules, the United States District Court for the Eastern District of Virginia issued a preliminary injunction that temporarily blocked the implementation of the rules. With the stroke of a pen, the urgency associated with those last minute continuation applications disappeared.
While word of the injunction circulated quickly through the blogosphere, the Office remained silent. In fact, at the close of business that day, the Office still had not directly notified the patent community about the injunction that negated the need to file last minute continuations.
Fail.
Sure the Office has successes in the dissemination arena – the ability to search patents and published applications on the website comes to mind. But there are other glaring failures as well – you still cannot, for example, download a .pdf of an issued patent from the uspto.gov website. Seriously….how amazing is that?
With these failures in the “information dissemination” systems, policies and procedures of the Office, can it be said that the Office is satisfying its duty to disseminate information to the public?
Clearly I think not. The Office can, and must, do better. The uspto.gov website should be viewed as the authoritative source of such information, not the butt of jokes and snarky blog posts. This won’t happen, though, until the Office stops ignoring its responsibility to disseminate information.
Director Kappos is bringing welcome change to many areas of the Office. I’m hopeful that a refresh of the duty to disseminate is somewhere on the punch list.
The Office of Personnel Management is reporting that all federal agencies in the Washington, D.C. area will be closed tomorrow, December 21. There is no reason to expect that this won’t apply to the Patent and Trademark Office.
Adjust your Christmas week work schedule accordingly.
We’re all familiar with the so-called cash crunch that the Patent and Trademark Office faced during fiscal 2009. Patent-based revenue was hit from several angles during the year, resulting in a dramatic reduction in the fees that support operations. A drop in the number of new applications meant applicants were paying fewer filing fees, and the historically low allowance rate translated to fewer issue fees being paid.
Acting Director John Doll reported the lower filing rate in March…and indicated that the Office had stopped hiring Patent Examiners as a result.
The impact of the shortfall didn’t stop at a hiring freeze, though. The Office warned of furloughs and lowered bonuses, reportedly eliminating some. A source has even indicated that the Office adjusted air conditioning schedules in an attempt to save money.
At the end of the summer, the situation appeared so grim that the Office went to Congress and asked permission to move a$60-70M surplus from the trademark side over to the patent side (yes, an act of Congress is needed). Congress acted swiftly, and President Obama signed the transfer into law on August 7, 2009.
The urgency of the situation seemed to pass, and operations continued at new ‘adjusted’ levels.
Then, shortly after closing the books on fiscal year 2009, the Office issued its 2009 Performance and Accountability Report. In it, the Office notes that actual fee collections for 2009 totaled $1.874B. As a result, the Office was left with a final appropriation level of $1.874B despite having an approved budget of $2.010B.
So there’s the shortfall. The crunch.
In these circumstances, I would have expected the Office to have spent every penny available to it, making difficult choices along the way. I’m not entirely sure that this happened, though. The following table, reproduced from page 45 of the Report, seems to indicate that $118M was left on the table.
I don’t see that management specifically addressed these monies in the Report, and do not know the status of these funds. I suspect they may be lost to fee diversion – a very odd result considering the overall budget shortfall – since they were not spent during the year in which they were collected. The status indicator “Unobligated Balance, Available” might suggest that the Office will have access to these funds in 2010…but it’s not entirely clear.
FY2009 was certainly full of challenges and I think it’s a bit much to expect the Office to have incurred expenses that neatly matched fee collections, particularly considering the drastic cost-cutting measures that had to be implemented in the final months of the year. That said, missing it “by that much” would be acceptable. Missing the mark by $118M, though, isn’t.
The Federal Trade Commission sued Intel today, accusing the company of using its dominant market position to stifle competition. The agency’s complaint alleges that Intel used a variety of anticompetitive tactics “to put the brakes on superior competitive products that threatened its monopoly….”
Specifically, the Commission claims that Intel used threats to coerce computer manufacturers into buying Intel chips instead of those of rival manufacturers, and to block the marketing of machines that contained non-Intel chips.
What has been the impact of Intel’s behavior? According to the Commission, the company’s actions over the last decade have damaged “competition, innovation, and, ultimately, the American consumer.”
Intel, of course, has been a vocal leader in the patent reform debate over recent years. The company is a member of the computer/software industry’s Coalition for Patent Fairness and has publicly called for changes that would curb litigation it views as “abusive.” A Promote the Progress reader has even speculated that Intel was the invisible hand behind several letters offering support for the failed rules package that would have placed arbitrary limits on an applicant’s ability to file continuation applications.
The company’s policy blog assures us that its efforts to change the patent laws are aimed at encouraging innovation and helping consumers:
…we believe that good faith manufacturers should be able to innovate and develop new products for consumers without having to worry whether they are going to lose the “patent lottery”, where speculative companies that do not produce or sell anything are able to reap large rewards in court for small sums invested in buying up patents and suing on them.
Today’s lawsuit reveals an interesting dichotomy. On one hand, the company appears willing to use its own monopoly power to block competition and protect its position. On the other hand, as its patent reform efforts show us, the company objects when others assert against it the monopoly power provided by patents.
The first half of that dichotomy is illegal, which explains the Commission’s lawsuit against the company. The second half, however, is not. A patent owner, whether she be the original inventor, a speculator, or even the fabled patent troll, has an exclusive right to practice the claimed invention. And, yes, she can sue a company, even a “good faith manufacturer,” that she believes is infringing her patent. Perhaps this explains the company’s efforts to change the patent laws.
That dichotomy also leaves Intel in a difficult position. The company must now reconcile its assurances that it seeks patent reform in order to foster innovation and to protect consumers with its alleged anti-competitive tactics, which the FTC claims has had precisely the opposite effect.
Color me skeptical.
It goes without saying that the constant training of the Examining corps on the latest developments in patent law is a near impossible task.
Consider the following from a 1995 USPTO press release:
The U.S. Patent and Trademark Office is developing new guidelines that will govern the examination of patent applications on computer software inventions, the agency announced.
The guidelines are being developed in response to recent judicial decisions that suggest a trend toward increasing the eligibility of computer software-based innovations for protection under U.S. patent laws, while decreasing the availability of protection for certain aspects of computer programs under the copyright process, the PTO said. At the same time, the Office announced that it is reconsidering its position in a number of pending appeals concerning software-related cases, including In re Beauregard, which involves a computer program stored on a computer readable medium such as a floppy disk.
“The PTO must keep its practices consistent with judicial interpretations of the law. A failure to do so could jeopardize effective intellectual property protection for one of our nation’s most important industries,” said Nancy Linck, PTO’s solicitor.
Fast forward to last year and the Federal Circuit’s decision in In re Bilski…and you can appreciate the problem. In 1995, the Office had to prepare for caselaw developments that were increasing the patentability of software-based inventions. Now, just fifteen years later, the Office is preparing the corps to examine applications in the face of a sternly downward trend.
Like it or not, modern patent law is characterized by constant change. While we all struggle to stay current in this fast-paced area of law, we have to acknowledge that the Office has an additional challenge in its efforts to keep up with constant change: volume.
While we’re struggling to train ourselves and our teams, the Office is dealing with thousands of Examiners and hundreds of thousands of applications. It’s a grand scale faced by no other entity.
Why bring this up now? Simple….patent reform and patent quality.
The reform debate will be heating up again in coming months. With any luck, the patent community will pay attention to the patent quality issue and the need for reforms that support it. If we begin to acknowledge the predicament faced by the Office, maybe we can start helping it meet the challenge.
Looking at the recent decline in patent applications from US businesses, this CNNMoney article claims that innovation is the latest victim of the recession.
The article examines several peripheral issues related to the decline in filings, including the application backlog at the Patent and Trademark Office. Calling it a “vicious cycle,” the article notes that the backlog operates to “further discourage patent filers.”
Pointing to the pending patent reform legislation, USPTO Director David Kappos offers a fix:
“If we’re able to get patent reform through, we absolutely can take processing times way down and get innovations through to the marketplace.” (emphasis mine)
The article even notes the Director Kappos thinks the legislation could “help reduce the average wait time to as little as one year.”
Remember the USPTO proposal that would require patent practitioners to pay an annual fee to maintain their license? The practitioner maintenance fee surfaced in November of 2008 when the outgoing Dudas administration pulled it from the shelf – it was published in draft form nearly five years earlier – and fast-tracked it to final form. At the time, the sudden appearance of the final rule in the waning days of the administration looked like a desperate move to put a new regulation on the books as the ill-fated continuation rules remained in limbo (and in litigation).
The saga took a turn in July of this year when the post-Dudas Office attempted to clarify the status of the rule for 2009, indicating that no due date had been announced and that “[n]o decision has been made to collect the fee in FY2009.”
So the rule is officially in limbo, and practitioners don’t know if or when the fee will become due. More importantly, the position of the new Kappos administration on the annual fee and other aspects of the rule remains less than clear.
Now it looks like the Office still considers the rule alive and kicking. On Friday, the Office published a Federal Register Notice [.pdf] that references the “Annual Practitioner Registration Fee” and various other fees related to the rule (voluntary inactive status, USPTO CLE fees, etc.). The Notice is labelled a “continuing information collection” that relates to various aspects of practitioner registration. There is no mention of a due date, and the fee is mentioned alongside several other fees and forms relating to practitioner registration.
The Notice is certainly not a direct indication that the Kappos administration supports the requirement for an annual registration fee. The inclusion of the fee in this “continuing information collection” does, though, seem to indicate that the Office intends to require payment of the fee at some point in the future, perhaps in fiscal year 2010.
The Office is soliciting comments on its “continuing information collection” and will presumably accept comments that address the substance of the proposed annual fee. You can send your input by email to Susan.Fawcett@uspto.gov. Comments must be submitted on or before February 9, 2010.
I have previously offered my support for imposition of the annual fee, with a few important concerns.
Remember that the Court of Appeals for the Federal Circuit, sitting en banc, is scheduled to hear oral argument in Cardiac Pacemakers v. St. Jude Medical next Monday (June 1st). The en banc appeal is limited to the following question:
“Does 35 U.S.C. § 271(f) apply to method claims, as well as product claims?”
Once available from the court, I’ll make the oral argument file available on the casepage for the en banc appeal. (I’ll post my notes on the oral argument once prepared).
