This morning, my fellow leaders of the Chicago Intellectual Property Law Association (IPLAC) and I met with Michelle K. Lee, Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office (USPTO), and several of her fellow USPTO executives, including the impressive Dr. Christal Sheppard, Director of the Detroit Office.
Director Lee has excellent qualifications. Unfortunately, as discussed below, she is striving to make it harder for inventors to obtain and enforce patents.
The Director is well qualified to lead the USPTO
Director Lee speaks warmly of the 13,000 employees of the USPTO, including 8,500 patent examiners. She cites the ratings that place the USPTO at or near the top of best places to work in the federal government. She is acutely aware of the USPTO’s need for full, stable funding, which can be paid entirely from user fees for services, so long as those funds are not diverted by Congress for other uses.
Ms. Lee holds degrees in computer science and electrical engineering from MIT and in law from Stanford. She worked as a computer scientist at MIT and HP and clerked for federal judges, including Paul Michel of the Federal Circuit. She also worked as a lawyer in a prominent law firm, and she worked for Google before becoming Director of the USPTO Silicon Valley Office and then Acting Director of the USPTO. On March 13, 2015, Ms. Lee was sworn in as Director.
Two firsts for Ms. Lee: She is the first woman to serve as Director of the USPTO in the 225 year history of the Office. She also seems to be, as far as anyone can determine from records and memories, the first sitting Director to visit and speak to the Chicago patent bar. Both of these accomplishments are long overdue, and it is a credit to Ms. Lee that she is blazing these trails.
Ms. Lee is the first Director to fully integrate the USPTO’s new satellite offices in Silicon Valley, Detroit, Denver, and Dallas, connecting them to headquarters in Alexandria, VA. She sees the new offices as expanding the USPTO’s reach and service to all of America and adding to the pool of qualified candidates for employment by the Office.
This morning, Ms. Lee spoke of her four main areas of current focus:
- Patent Legislation;
- Post-Grant Review, including Inter Partes Review (IPR);
- Patent Quality; and
There was little time this morning for talk of international issues, and IPRs were discussed only briefly, leaving legislation and quality as the main topics of discussion.
The Director wants to make it harder to enforce patents
Regarding proposed patent legislation, Director Lee spoke this morning primarily of the so-called “Innovation Act,” H.R. 9, which she supported in her testimony on April 14, 2015. That bill would:
- Presumptively shift fees in many cases, such that the loser would pay the winner’s legal fees and costs;
- Heighten pleading requirements for patent owners, requiring them to detail their contentions on claim construction and alleged infringement;
- Stay, that is delay and defer, discovery on issues other than claim construction, until district courts rule on claim construction; and
- Permit customers of alleged infringers to obtain stays of cases filed against them.
All of these measures would make it harder for patent owners, especially individuals, small companies, universities, and non-practicing entities (NPEs), to enforce their patents in court. Director Lee supports the proposed changes. Many decry that prospect, saying that it will devalue the very same patents that are issued by the USPTO.
As for inter partes review (IPR), Ms. Lee recognizes that these proceedings are now common responses to patent infringement complaints. For more on IPR proceedings and strategy, see my recent blog on Inter Partes Review (IPR) of Patents.
What to do now: Contact your Congressman, Senators, and the White House—tell them that you oppose H.R. 9, because you want the patent system to be preserved and strengthened, not gutted.
The Director’s push for quality will make it harder to obtain patents
Concerning initiatives for increasing quality of patents, Director Lee spoke this morning of the March 2015 Quality Summit held at the Office. The Summit is described in her April 10, 2015 Director’s Blog.
There certainly is room for improvement in quality of patents, but demands for “quality” often translate into repeated rejections of patent applications. That’s too bad, because inventors shouldn’t have to suffer through endless delays and rejections.
Quality of examination should mean faster allowance of good patents, not just rejection of bad ones. Inventors should be encouraged and rewarded.
It is all too easy for examiners to issue first action rejections, as discussed in my recent blog, Build Your Patent Portfolio: Preparation, Prosecution, Appeals. The blows of rejection are better absorbed by large companies than by independent inventors, small companies, and foreign applicants.
In this morning’s roundtable discussion with the Director, I asked if the new quality initiatives will make it even more likely that patent applications will be rejected repeatedly. In response, the Director stated that quality is to be measured at all stages of prosecution, not just upon allowance. Indeed, this goal of quality throughout prosecution is stated in the March 25-26, 2015 Patent Quality Summit Slideshow.
But none of the quality initiatives seem to contemplate even the possibility of first Office action allowance. And unless productivity metrics are changed, examiners will continue to be rewarded for making rejections.
Routine first action rejections are unfortunate for many reasons. Early allowance would facilitate the goal of “compact” prosecution, whereas rejections lead to delays, refilings, increased fees and costs for applicants, and a bigger backlog of applications in prosecution and appeals. (“Compact” means “get it over with,” but in practice, this leads to Requests for Continued Examination (RCEs) and appeals, analogous to treadmills and ladders, respectively.)
What to do now: Submit written comments on “quality” to the Patent Office—tell them you want good patents to be allowed faster, not slower.
The U.S. patent system is under attack
In my blog on the History and Future of the U.S. Patent System, I wrote of the importance of the U.S. patent system in the historical development of this nation and of the need for its continued vitality if the U.S. is to remain a world leader in innovation, technology and commerce. The U.S. is not the only player in the world. China, Japan, Korea, and Europe, among other nations and regions, have rapidly developing industries and patent systems that rival our own.
If Congress and the USPTO crush patents and their enforcement for the benefit of the large corporations demanding “reform,” they will, at the same time, crush innovation and intellectual property. The flames of the “fire of genius” will flicker and die if the “fuel of interest” is withdrawn, in the words of Abraham Lincoln. This would be short-sighted, especially as foreign competitors strive to overtake U.S. leadership in industry and technology.
Even as storm clouds gather, Americans can rest assured that the patent system, embedded in the Constitution and 225 years of history, will endure. The questions are how best to preserve and strengthen the system, and how best to work within the system even as it changes.
The patent system is under attack. At a system level, what is needed is for Americans to call on the Administration, Congress, and the USPTO, to preserve, defend and advance the patent system. On a case by case basis, what is needed is diligence and persistence in preparing, prosecuting and enforcing patents.
Under any scenario, patents will still issue for meritorious inventions, especially when drafted and prosecuted skillfully. Patent owners will still be able to fight for justice by enforcing their patents in court.