House Subcommittee Holds USPTO Oversight Hearing

    By Donald Zuhn --

On Wednesday, the House Subcommittee on Courts, the Internet, and Intellectual Property held an oversight hearing on the U.S. Patent and Trademark Office.  The Subcommittee heard statements from Jon Dudas, the Undersecretary of Commerce for Intellectual Property and Director of U.S. Patent and Trademark Office; Robin Nazzaro, the Director of National Resources and Environment for the U.S. General Accountability Office; Robert Budens, the President of the Patent Office Professional Association (POPA); and Alan Kasper, the First Vice President of the American Intellectual Property Law Association (AIPLA) and a partner with Sughrue, Mion, PLLC.  Copies of each witness' statement can be found at the following links: Mr. Dudas' statement, Ms. Nazzaro's statement, Mr. Budens' statement, and Mr. Kasper's statement.  Over the next week, Patent Docs will be reporting on the testimony that was provided to the Subcommittee by each of the above witnesses; today, we begin with Director Dudas' statement.

With respect to patent initiatives, Director Dudas (at left) divided his discussion into three parts:  human capital initiatives (i.e., those affecting the examining corps), administrative and regulatory initiatives, and legislative initiatives.  The Director's testimony also touched on trademark initiatives and the Patent Office's attempts to strengthen IP rights protection and enforcement worldwide.  Before addressing the patent initiatives, the Director noted that the Office had examined more than 362,000 patent applications in 2007, its largest number ever, and had maintained an examination compliance rate of 96.5% for the second year in a row (the examination compliance rate is the percentage of allowed applications that the Office determined had been allowed without examination error).  The Director also noted that the patent allowance rate for 2007 was 44%, which constituted a drop of more than 26 points from the allowance rate eight years earlier.

On the topic of human capital initiatives, Director Dudas discussed the Office's efforts to hire more examiners (the PTO hired 1,215 new examiners in FY 2007 and plans to hire 1,200 more in FY 2008); the Office's telework programs (the PTO plans to add 500 more examiners to the hoteling program in FY 2008); examiner pay; examiner attrition (the PTO's 8.5% attrition rate is lower than the 11.2% rate for all federal workers, and interestingly, the attrition rate for examiners with less than three years of experience is almost four times higher than that for examiners with over three years of experience, i.e., 15.5% versus 3.95%); examiner training, certification, and recertification; and the Office's review of the examination process (applicant and practitioner input in FY 2007 indicated that final rejection practice, Request for Continued Examination (RCE) practice, search quality, and restriction practice are in need of review).

Addressing the subject of administrative and regulatory initiatives, Director Dudas stated that the Office "believes that improvements in patent quality are dependent, to a significant degree, on providing examiners access to more and better-focused information relevant to their decision making," and thus had "promulgated and proposed, and will develop and propose, regulations and administrative changes governing submission and examination of patent applications that will enable our examiners to make more efficient and informed patentability determinations."  The Director then discussed a number of these regulations and administrative changes, including accelerated examination, the peer review pilot program, the new Markush rules package, the new Information Disclosure Statement (IDS) rules package, electronic filing and processing improvements (electronic filing of patent applications rose from 2% in FY 2006 to 49.3% in FY 2007), pre-appeal conferences, pre-first Office action and first action examiner interviews, and work-sharing programs with foreign patent offices.

Noting that "'multi-invention alternative' claims are especially prevalent in the pharmaceutical, chemical, and biotechnology fields," Director Dudas contended that the new Markush rules package "would permit the examiner to focus examination to a single invention [and] encourage applicants to identify, with more specificity, the claimed invention to be examined, thus promoting examination quality."  In defending the new IDS rules package, the Director was quick to indict the practices of applicants and practitioners, stating that:

The USPTO has observed that applicants sometimes provide information in a way that hinders, rather than helps, timely and accurate examination.  For example, some applicants send a very large number of documents to the examiner, without identifying why they have been submitted, thus tending to obscure the most relevant information.  Additionally, some applicants send very long documents without pointing out what part of the document makes it relevant to the claimed invention.  Sometimes applicants delay sending key information to the examiner.  These practices make it extremely difficult for the patent examiner to find and properly consider the most relevant information in the limited time available for examination of an application.

To those who might criticize the new IDS rules package, the Director explained that under the proposed rules, applicants could still submit as many documents as they choose or very long documents, provided that they satisfied "more stringent requirements" for doing so.  The Director concluded his discussion of the Office's administrative initiatives by noting that the PTO was "looking at a wide variety of alternative examination procedures including those that can be implemented under existing authorities as well as those requiring statutory changes."

With respect to legislative initiatives, Director Dudas discussed patent reform provisions concerning Applicant Quality Submissions (AQS), public quality submissions, and post-grant review.  The Director reiterated that the Office "fully endorses the proposed AQS legislative language in the Senate bill, which is consistent with language originally recommended by the Office," explaining that patent applicants have "the most knowledge, the most opportunity, and the most to gain by providing the USPTO with the best possible information" about their inventions.  Offsetting (somewhat) his earlier criticism of applicant and practitioner practices with respect to the submission of references, the Director conceded that "[p]olicymakers would also need to consider how the current doctrine of inequitable conduct may discourage applicants from fully and fairly sharing relevant information with the USPTO," and noted that the Office was working with Congress on language that "would encourage applicants to share more information with the Office."  On the topic of post-grant review, the Director stated that the PTO supported a first window of 12 months within which any person could seek to cancel as unpatentable any claim of a patent, and a second window of 6 months after a petitioner receives notice from a patent holder alleging infringement and is able to show substantial economic impact.

Comments

[NIPRA anonymous]

"The patent applicant has the most knowledge, the most opportunity, and the most to gain by providing the USPTO with the best possible information about his or her invention."

Unfortunately, this statement is grammatically incorrect. It also simplistically and incorrectly assumes (as a person without patent experience might) that patent applicants have "the most knowledge" of the prior art. In reality, inventors more often than not have no idea what research is being conducted on the other side of the globe (and may as of yet be unpublished), and they have *much* less knowledge of patented prior art than USPTO examiners should. Director Dudas would have inventors become researchers and examiners (rather than inventors), while at the same time dis-"incentivising" the public dissemination of their own inventions through rules expressly designed to deter and obstruct (e.g. through fictitious presumptions) patent application filings. This is no way to promote the progress of the useful arts - though it will reduce the agency's own discomfort with its backlog.

USPTO examiners should have "the most knowledge" of the prior art, and to the extent they don't, this should be considered a failing of the USPTO. To place the burden of assessing the prior art and examining the claims on the applicant only further reinforces the ever-intensifying questions: What do we need the USPTO for? What useful function does the USPTO perform? (In both instances, I am beginning to think, "Nothing!")

[Inquiring Mind]

Thanks very much for this post. I had no idea that any such hearings were going to take place. At least there is some hope that some of the witnesses discussed some of the criticisms of the Patent Office brought out in the comments on the rules and the briefs in GSK/Tafas v. Dudas, and I look forward to hearing about them.