Anticipate This!™ | Patent and Trademark Law Blog

Suggestions for Patent Reform in the 111th US Congress.

Posted in Statute Commentary by Jake Ward on January 10, 2009

Most practitioners are well aware that the ill-conceived Patent Reform Act of 2007 died in Congress last year.  Indeed, the bill was widely opposed, and many of us found it surprising that the bill actually passed the House before going down in flames in the Senate. 

Despite, or because of, the full attention that Congress will necessarily be giving to our economic situation this year, some believe that patent law reform will again be addressed by Congress.  Related to this potential reform legislation, some excellent suggestions were posted this week at the IP Watchdog, and are reproduced below for the convenience of our readers:

1. Codify the Duty of Candor

Congress should codify 37 CFR 1.56 because the Federal Circuit refuses to acknowledge the Patent Office defined duty owed by applicants and representatives. This has caused tremendous difficulty with respect to getting the industry on board with Patent Office reforms, and has lead to hostility and resentment coming from the Patent Office and directed at the Patent Bar and industry. The Patent Office wants the best art disclosed only and the Federal Circuit requires everything, so Rule 56 has been mooted by the Federal Circuit because attorneys and applicants know that if a patent issues and becomes a valuable asset the Federal Circuit will have the final word on enforceability and inequitable conduct. Understandably, attorneys and applicants follow the Federal Circuit ruling, regardless of how insane it may be, which seemingly infuriates the PTO hierarchy. This has lead to the Director of the Office of Enrollment and Discipline, Harry Moatz, to threaten in speeches that he will pursue attorneys for ethical violations when they submit to much prior art, and has lead to extreme backlash against Accelerated Examination and the proposed Examination Support Document. Even Judge Rader explained during oral arguments in the PTO claims and continuations appeal that it would be insanity to file an ESD given recent Federal Circuit rulings on inequitable conduct.  For more see Patent Reform Proposal: Codify USPTO Rule 56.

2. Amend 35 USC 103 to Moot KSR v. Teleflex

Congress should modify 35 USC 103 to moot the United States Supreme Court decision in KSR v. Teleflex. In KSR the Supreme Court created a rule that allows for inventions to be patented only when the solution is counter-intuitive. If there was any reason to pursue a particular inventive path that would make the invention obvious and unpatentable, which is nonsensical. If the KSR test is faithfully applied only those that accidentally invent or stumble upon an innovation can get patents, which means that we are now back to the “flash of creative genius” standard that Congress specifically legislated out of the Patent Laws with the 1952 Patent Act re-codification. Luckily, so far, KSR does not seem to be widely used, at least to the full extent that it could be given the language used by the Supreme Court. Nevertheless, the Board of Patent Appeals has said that their reading of KSR is that “obvious to try” is now a valid rejection. It is hard to argue with the Board’s interpretation, although previously “obvious to try” was time and time again said to be a standard that was not the law and a standard that made no sense. With the Patent Office facing extreme backlogs and more than 1.2 million pending patent applications at the end of fiscal year 2008 it can be anticipated that there will be a push to increasingly rely on KSR rejections as the new PTO administration attempts to wrestle with the current patent crisis.

Amending 103 to fix this problem would really be quite simple in reality. The last sentence of 103(a), which the Supreme Court obviously did not read during its consideration of the KSR matter, already says: “Patentability shall not be negatived by the manner in which the invention was made.” One way to modify Section 103 to affect this purpose would be to simply underline that sentence, and perhaps add the parenthetical expression “(we really mean it!)” thereafter. Seriously though, the proper way to amend Section 103 would be to simply add to this last sentence of 103 as follows: “Patentability shall not be negatived by the manner in which the invention was made, and an invention shall be deemed to be obvious only where there is a teaching, suggestion or motivation within the prior art to combine references.” By doing this the Federal Circuit law would be embraced, KSR would be mooted and we would once again have an objective standard rather than a standard based on “common sense.”

3. Codify What Constitutes Unauthorized Practice of Law

Shockingly the Patent & Trademark Office refuses to enforce 37 CFR 11.5(b), which defines prohibited representation practices before the USPTO. The Office refuses to enforce Rule 11.5(b) because they do not feel they have the authority to prevent non-attorneys from representing applications in patent and/or trademark matters. It is ridiculous to have a Rule that the Office will not enforce, particularly when the Office requires those who they recognize as patent attorneys and patent agents to take a Patent Bar Examination. The Patent Office turning the other way is why the invention submission scam has cost independent inventors $300 million annually due to invention scams and fraud. This is an issue that should be easy to reform in Congress given it is unthinkable that any member of Congress or any lobby would have a problem really putting the invention submission industry out of business.

Additionally, unauthorized practice of law is even more widespread on the Trademark Office side of the building. It is impossible to do any search on any search engine for trademarks or trademark applications without finding one of the many large corporations proclaiming that they can file trademark applications for less than law firms and attorneys. even proudly proclaims that they file more trademark applications on an annual basis than the top 5 law firms combined. These entities are engaging in the unauthorized practice of law under Rule 11.5(b) and the USPTO is doing nothing to stop them. Either Rule 11.5(b) needs to be removed, the Patent Office needs to drop the requirement that only patent attorneys can represent inventors, the Trademark Office needs to drop the requirement that only attorneys can represent business owners in trademark matters, or Congress needs to force this agency to police itself.

By the way, where are the AIPLA, the ABA, State Bar Associations and the many local Intellectual Property Bar Associations? Newsflash, your members are losing significant business and no one is doing anything about it. It is time for Bar Associations to start representing those who are members. Even if no one wants to protect the public, which really ought to be the motivation here, Bar Associations need to protect members and get involved!  For more see Sadly, Invention Submission is Alive and Well.

4. Patent Office Ombudsman

Government Officials seem to be in love with the idea of a Czar for everything. We will soon have an Auto Czar, we have a National Security Czar, and I think we ought to have a Patent Czar that takes the form of an Ombudsman. Given that the Patent Office leadership seems to so frequently lack knowledge in the area of patent practice and procedure, and given that Congress and other politicians presumably listen to these perhaps well meaning yet uninformed officials, what is really needed is an independent and knowledgeable Ombudsman-type that can comment on everything that goes on in the Patent Office. Any time that the Patent Office sends anything to Congress, anything up through the Department of Commerce or to the Office of Management and Budget a report from the Ombudsman would accompany the Patent Office information. Similarly, any time legislation is proposed that impacts innovation and/or the Patent System the Ombudsman would create an independent informational report. Of course, this Ombudsman should be required by law to be a patent attorney with a certain number of years experience. Not that this will solve the problems, but at least those who care in government could become informed of the real ramifications of their decisions should they be so inclined to listen.

5. Move to Regional Patent Offices

As only the federal government could do, they built a brand new Patent Office building that wasn’t large enough even as of the day it opened. As sad as that is it presents opportunities. The main corporate headquarters for the Patent Office stays in the Washington, DC area, and rather than the stay at home work program, which has Examiners conducting interviews with barking dogs and whining children in the background, we move to regional Patent Offices. This has enormous benefit for multiple reasons, but first and foremost is the ability to hire more people with better skills. Let’s face it, there are only so many adequately trained and educated people who are willing to live within commuting distance of Alexandria, Virginia. The price of living and the traffic alone make choosing a career as an Examiner exceedingly difficult these days even though Examiners are paid extremely well by government standards. Additionally, by locating Patent Office strategically around the country Uncle Sam could actually participate in the revitalization of certain communities, which ought to fit right in with the Obama agenda and stimulus packages that Congress will consider later this winter.

6. Legislatively Mandate that PTO Leaders be Patent Attorneys

Unfortunately, the United States Federal District Court for the District of Columbia decided in 2008 that 35 U.S.C. 3was nothing more than an aspiration when it decided that the challenge to the appointment of Margaret Peterlin was dead on arrival despite the fact that she had no relevant experience. In effect the District Court ruled that the fact that the Director and Deputy are to have “experience” is not something that can be enforced because the standard is too vague for court review. With that in mind, Congress should amend 35 U.S.C. 3 to mandate that the Director, Deputy Director and Commissioner, at a minimum, all have a certain number of years of patent experience prior to being eligible for appointment to the Office. Section 3 needs to have a definite and concrete definition with respect to the experience that is appropriate so that district courts can determine whether an appointment is appropriate. The Patent Office can no longer function with politically expedient appointments for those who are looking to stay in government employment. The Patent Office needs top level leadership that understand the patent system and innovation. If we can require that the President be born a U.S. citizen and needs to be at least 35 years old we should be able to tighten up this statute to make sure that people running the Patent Office are actually competent and knowledgeable.

7. Legislatively Create a Non-examined Patent

Congress should enact a new patent right that is based on registration, not examination. This non-examined patent should not be entitled to the presumption of validity, or perhaps is entitled to a shallow presumption of validity (i.e., preponderance of the evidence standard). Those inventions that are likely not to be commercially viable will find themselves being subject to registration rather than examination, thereby opening up examining resources to allow Examiners more time to adequately examine those “real” inventions that are seeking the presumption (or higher presumption) that attaches to the examined patent. This more than anything will help solve the crisis created by an ever increasing backlog of unexamined applications. It will also allow the Patent Office to provide more time per application for examiners to review those applications seeking a presumptively valid patent. This will cut down on the number of questionable examined patents that issue, which ought to have extremely positive effects on cutting down on the so-called patent troll problem because those patents that issue through examination will be of a higher quality across the board. Another extremely positive aspect of this is that it would be revenue neutral and have absolutely no impact on the Patent Office budget. Fewer examiners would be able to do more work, and the work done would be of a higher quality.

While we believe that each of these suggestions have merit, we believe suggestions #2, #4, #5, and #7 would go a long way in fixing the U.S. patent system.  We also heartily agree with Gene’s suggestion #7.  See a recent related AT! post here, in which we propose that Congress enact a U.S. utility model law, for example. 

Maybe it is time for patent practitioners to rise to the occasion and educate our respective Senators and Representatives about what will constitute meaningful reform to the patent system.   The lobbyists certainly are not pushing effective reform ideas.  Any thoughts or further suggestions from our readers?  Comments are welcomed.