By Donald Zuhn --
Last week, we reported on a letter that David Boundy, the Vice President of Intellectual Property for Cantor Fitzgerald L.P., sent to the Office of Management and Budget (OMB) on behalf of twenty-five companies and organizations, criticizing the IDS rules proposed by the U.S. Patent and Trademark Office on July 10, 2006 (see "Changes to Information Disclosure Statement Requirements and Other Related Matters," 71 Fed. Reg. 38,808). Yesterday, Mr. Boundy alerted Patent Docs to a second letter that has been sent to the OMB challenging the proposed IDS Rule.
The second letter was prepared by Dr. Richard Belzer on behalf of clients he declined to identify. In explaining the need for confidentiality, Dr. Belzer writes that "[my clients] have persuaded me that there is a reasonable expectation that revealing their identities could result in financially devastating retaliation with respect to patent applications now in process or which they would submit to USPTO in the future."
Accompanying Dr. Belzer's 11-page letter is a 21-page Declaration from a registered patent attorney having over 20 years of experience in the field of intellectual property and the unedited comments of "four experienced patent attorneys with skills across multiple practice areas" who reviewed the Declaration. Although the affiant was willing to be identified, Dr. Belzer states that "to ensure that the affiant has the same protection from retaliation that my clients reasonably fear, I have redacted all personally identifiable information from the declaration."
Based on the affiant's estimate that the cost of complying with the proposed IDS Rule will be between $7.3 and $7.9 billion per year, Dr. Belzer concludes that the IDS rule would have an "economically significant" effect. [Patent Docs readers are reminded that Mr. Boundy's letter included an estimate from San Luis Obispo, CA patent attorney Philip Steiner that the cost of complying with the proposed IDS Rule would be $1.9 billion.]
With respect to the impact of the proposed IDS rule, Dr. Belzer begins by stating that:
[b]ased on my expertise in regulatory analysis, and more than 20 years' experience reviewing such analyses (including 10 while employed as an economist at OMB), I am virtually certain that the proposed IDS Rule is economically significant and thus warranted the preparation of an RIA [Regulatory Impact Analysis] in accordance with the guidelines set forth in OMB Circular A-4.
Dr. Belzer then adds that "based on my governmental experience it is inconceivable that USPTO could be unaware of the approximate magnitude of these costs, or that it employed any reasonable economic method or logic to determine that the proposed rule was 'not significant,'" and that "[o]ne can infer with reasonable certainty that USPTO deliberately evaded the requirements of Executive Order 12,866 [which mandated that the Patent Office perform an RIA]" (emphasis added). Dr. Belzer continues his harsh criticism of the Patent Office's efforts to gain OMB approval for the proposed IDS rule by noting that the:
USPTO is required, pursuant to OMB's and is own information quality guidelines, to adhere to the principles of substantive and presentational objectivity in the dissemination of influential information. The proposed IDS Rule was covered by these guidelines, but USPTO did not disclose any credible information about its cost. This is per se a violation of both substantive and presentational objectivity. The agency could not reasonably have believed that the costs of the proposed IDS Rule were trivial and thus not worth mentioning, and its failure to disclose an unbiased cost estimate was knowingly misleading.
Determining that the Patent Office has failed to credibly estimate the costs of complying with the proposed IDS Rule, Dr. Belzer concludes his letter by offering to assist the Patent Office and the OMB in the development of credible burden estimates for the proposed IDS rule.
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