The Patent and Trademark Office faced a cash crunch in fiscal year 2009. Fee collections were significantly lower than expected, and several drastic cost-cutting measures had to be implemented toward the end of the year. The annual report seems to suggest, though, that the Office left $118M on the table, presumably exposed to Congress for diversion.

As the 110th readies itself for the show, I’m sure patent reform is the top priority for all incoming Members. Fee diversion, post-grant review, and first to file, oh my! Boy, I sure hope they’re able to put their minds at rest over the holidays…

In all seriousness, we have seen a few hints about the direction in which patent reform will move once the 110th Congress signs its name to the growing log of the issue. Senator Leahy, the incoming chair of the Judiciary Committee, recently gave indications that the patent reform agenda will include efforts “to increase access to essential medicines throughout the world.”

According to Leahy:

“We can help struggling families in developing nations, while improving US relations with large segments of the world’s population…The current global health crisis is one of the great callings of our time. Whether it is the Avian Flu, AIDS, SARS, West Nile Virus, or the approaching menace of multi-drug resistant bacteria, we need to recognize that the health of those half-way around the world now influences our security and affects our lives here in the United States….I want the work of the Judiciary Committee to be a catalyst to help make life-saving medicines more readily available around the world.”

He leaves no doubt that he views patent reform as part of his agenda on “access to essential medicines,” stating that he intends “to redouble efforts to re-examine our patent laws in the hope that by making thoughtful and practical changes we can greatly increase access to essential medicines throughout the world.”

Certainly, that’s a whole new direction for patent reform in the United States. It sounds a lot like the debates that occurred in India as that country struggled to become fully TRIPs-compliant.

Read the full article on Leahy’s comments at Intellectual Property Watch.

Figueroa v. United States – the fee diversion case – revealed Judge Newman’s sympathetic ear for the current patent application backlog, its potential effects on innovation, and the need for increased funding levels. She focused on these issues during oral argument as she pressed the government to show the extreme nature of its position that the preamble of the Patent Clause does not limit congressional authority to establish patent fees:

Judge Newman: “Is the government’s position that…Congress could appropriate the entire income [of the Patent and Trademark Office]…and allow the backlog to continue to increase in the…Office if, in fact, [that's] what Congress decided to do?”

Government counsel: “Yes, your Honor. It’s our position that Congress’ legislation is not limited by the preamble’s promotion language on which the Appellant relies.”

What if you could see what an issued United States patent looks like after the Court of Appeals for the Federal Circuit reviews it?  Guess what…..now you can.

Late last week, the Court of Appeals for the Federal Circuit made it clear that, under current law and judicial interpretation, a patent holder has no Fifth Amendment remedy against the United States government for unauthorized use of a patented invention.  By denying a petition for rehearing en banc in Zoltek v. United States [.pdf], the Court quietly let everyone know that it believes the Fifth Amendment has no place in patent law.  A dissent by Judge Newman and a concurrence by Judges Dyk and Gajarsa helpfully document the issue and, as Crouch points out, possibly help frame it for consideration by the Supreme Court.

With Zoltek as backdrop, these tough questions seem like great food for thought on a Friday morning:

If there is no Fifth Amendment property interest in an issued patent, can there be one in an application for patent?

Can the Patent and Trademark Office commit a Fifth Amendment regulatory taking by finalizing the proposed rule on continuation and RCE limits that essentially eliminates the ability to claim, through continuation practice, properly disclosed inventions in currently pending applications?

While patent holders still have 28 U.S.C. s.1498 as a remedy against the government for unauthorized use of a patented invention, what remedy, other than the Fifth Amendment, does a patent applicant have against the government for arbitrarily limiting his ability to seek protection on his properly disclosed invention?

Is the Patent and Trademark Office celebrating in the wake of Zoltek?

Should we clarify the property interest issue before we finalize the proposed rule?

Remember when ‘patent reform’ was about moving to a first-inventor-to-file system? About adopting a post-grant review procedure and making it easier for third parties to submit art for examiner consideration? Heck, remember when it was about changing the injunctive relief standard?

Well, those days are gone. Looong gone.

With the release of the Patent and Trademark Office’s draft Strategic Plan for 2007-2012, we now know that ‘patent reform’ is, now, a much broader concept. If you haven’t read the draft yet, I encourage you to do so. If you’re pressed for time, just read the press release regarding the release of the draft, the Introduction (3 pages), and the ‘Goal 1: Optimize Patent Quality and Timeliness’ section (9 pages).

Really pressed for time? Read the last paragraph on page 14 and the first paragraph on page 15.

With the release of the draft plan, the Patent and Trademark Office has single-handedly changed the scope of ‘patent reform.’ It’s now clear that some believe the term should refer to a deconstruction of our unitary patent system. The draft plan, while short on details, talks of “early determination of rights,” “accept[ance] of more limited property rights in exchange for lower costs and faster processing times,” and “some combination of examination processes and patent products that will better allow applicants to choose what determinations and results they need.”

the draft PTO strategic plan represents the beginning of a new chapter in the patent reform movementThe draft plan, with it’s focus on these new fundamental changes, represents the beginning of a new chapter in the patent reform movement. Seems to me we’re now talking about requests for examination, alternative ‘registration’-type systems, and other enormous changes.

How’s that for a ’strategic plan’?

Remember the good ole’ days when we liked to debate the pros and cons of post-grant review? Ah, man, to have those back again…..

I think he’d tell the Office to focus on its core business…patentability.

Everyone knows that the Patent and Trademark Office is readying its proposed continuation rule for final.  It appears that, soon, we’ll be living in a world that is very different than the one we know today.

At first glance, the rule seems like an aggressive attempt by the PTO to address its suffocating backlog.  Remember, though, that John Whealan, Solicitor and USPTO General Counsel for Intellectual Property, has indicated that the rule is not specifically designed to deal with the backlog.  Rather, it’s designed to address the problem of ‘continuation abuse.’

While we don’t know exactly what constitutes ‘continuation abuse’ yet, I think most people would agree that it relates to repeated use of continuation filings to obtain relatively broad claims long-after the filing date. The practice allows patentees to wait for a technology to be developed by others and then draft claims that cover the commercial embodiments. In essence, the patentee gets the benefit of seeing the commercially developed embodiments and ensuring that his later-filed claims cover the technology.

If it is determined that ‘continuation abuse’ is a problem that must be dealt with, is the Patent and Trademark Office the proper body to deal with the issue?

In this light, the following dicta from the CCPA’s opinion in In re Hogan 559 F.2d 595 (CCPA 1977) is quite interesting. When rejecting a PTO argument asserting that an Examiner should be able to employ evidence of a later state of the art to determine compliance with the enablement requirement, Chief Judge Markey stated:

“The PTO position…reflects a concern that allowance of Claim 13 [a later-added, relatively broad claim] might lead to enforcement efforts against the later developers. Any such conjecture, if it exists, is both irrelevant and unwarranted. The business of the PTO is patentability, not infringement.” (emphasis added)

Placing the proposed limits on continuation practice is a drastic move that has significant consequences, both for patent system stakeholders and society at large. Independent of the authority question, it seems to be a sufficiently significant issue that warrants both an investigation to assess the reality of the perceived problem and, if the existence of the problem is confirmed, a political debate on the issue of how best to deal with it.

The Patent and Trademark Office should focus on its business and leave patent reform to Congress.

Now let’s see who’s really paying attention….did you catch this one? This morning, the Patent and Trademark Office released the list of new appointees to the Patent Public Advisory Committee. Among the new advisors is Mr. David Westergard, a patent attorney with Micron Technology in Boise, ID.

If the name sounds familiar, it should…Mr. Westergard, I think, is becoming the poster boy for the software patent reform agenda. He’s been in the public spotlight on a few occassions. Most notably, he recently presented the “need for reform” underlying the proposed rule that would place limits on RCE and continuation practice, stating, in essence, that ‘continuation abuse’ must be stopped.

John Whealan, Solicitor and USPTO General Counsel for Intellectual Property, spoke at the same meeting and explicitly agreed with Mr. Westergard that ‘continuation abuse’ is an issue that must be addressed. Interestingly, Whealan noted that the proposed rule has nothing to do with addressing the backlog of pending applications and everything to do with ‘continuation abuse.’

Under this new appointment, Mr. Westergard will serve a three year term as an advisor to the Office. While this new advisory role for Mr. Westergard was just announced this morning, I’m betting that he’s been advising the current administration for some time, particularly on the evils of ‘continuation abuse’ and the plague it presents to our society.

I’ve had a lot of fun over the last several years talking to patent attorneys, inventors, and business folks about the patent reform issue in the United States.  I’ve had intriguing conversations with colleagues, friends and adversaries alike.  The best discussions usually start something like this:  “Yeah…the changes would be a big deal.  Hey…I’ve got an idea…they should do this…..”

I’ve heard ideas that range from the well-thought-out, practical approach to a specific problem, to the academically-interesting-but-not-so-practical approach (think maintenance fees based on economic impact of a patent), to the downright wacky.

I thought I’d share a couple of my favorites.  One is serious, and one is wacky.  I think they’re both great ideas.

Try this on for practicality - why doesn’t the Patent and Trademark Office build regional offices in strategic locations around the country that would allow it to build the examining corps by tapping local, specialized talent for particular technology areas.  Detroit seems a logical place for an Office that specializes in mechanical and electrical engineering (and, um, I’m guessing there’s going to be a few talented automotive engineers looking for new careers over the next several years).  A computer/software shop could be established in northern California (could the PTO compete in this labor market?) and a biotech/pharma Office could be set up in Boston or New Jersey.  The whole network could be backed by a computer/software system that allows any Examiner in any location to work on any application.  I’m betting that a private company faced with the specialized labor demands and turnover rates experienced by the Office would have done this years ago….

And now the wacky…..I’m always glad to hear people thinking of new approaches, but come on!  Examiner house calls?  Yes…someone once suggested to me that the Office should “dispatch” an Examiner to the inventor’s home (or company) when examination is first initiated.  I dismissed this at first (as wacky), but grew to like it the more I thought about it.  This idea has real genius behind it – a short period of intense prosecution where both sides can focus on an application (or a family of related applications) for a brief period of time.  The current prosecution process is incredibly inefficient…taking several years to accomplish only several hours of actual work.  Using the housecall idea, the whole process could be compressed into a single span of intense work.  Think about it.  If an Examiner asked you to come to the Office (Examiners travelling just won’t work; we’ll have to make the “housecalls”) for “a couple days of intense prosecution” on a family of applications….would you do it?  You’d discuss the applications, the art, amendments (if necessary) and any other matters directly with the Examiner, and both of you would focus solely on the applications at hand.  You could break at times to talk in confidence with your client and the Examiner could leave to update searches, talk with other Examiners, etc.  At the end of a couple days, you might just walk away with a Notice of Allowance, or two, or three.  Prosecution could be wrapped up weeks after the Examiner first opened the file, instead of years later…..

Advice given to me years ago by a senior attorney seems appropriate:  “If you can’t embrace the wacky ideas, you’ll never make it as a patent attorney.”

I’ve got a few speaking engagements in the coming months that readers of Promote the Progress might be interested in. On August 25th, I’ll be speaking at Dunes CLE’s Current Issues in Patent Law in Las Vegas. I’ll be presenting an update on legislative, administrative, and judicial activities relating to patent policy in 2006 (think the Patent Act of 2005, …the Patent Reform Act of 2006, the PDQ Act, the proposed rules, eBay, and other developments). Doug is also speaking at this event (on a topic near and dear to our hearts – strategic patenting initiatives).

You can still register for the Dunes CLE here.

We’re also in the preliminary stages of putting together a conference in January specifically designed for in-house counsel. The program will be aimed at helping in-house attorneys develop effective patent strategies in these times of change, including prosecution and portfolio management strategies. I’ll be on a panel with Doug and Stephen the Barista for this conference, which will be in New York City. I’ll post additional details when they are available.