By Kevin E. Noonan --
A change of administration always gives stakeholders a chance to make their policy views known, in an effort to influence the new people and policies taking power in Washington. This is particularly true in this season of (welcome) change, and even more important for U.S. patent law, in view of the proposed (legislative), actual (judicial), and thwarted (administrative) changes in patent law and practice over the past few years.
James Greenwood (at right), President and Chief Executive Office of the Biotechnology Industry Organization (BIO), took this opportunity to share BIO's views on patent reform in a letter recently sent to President-elect Obama. In his letter, Mr. Greenwood reminds the President-elect of the importance of patents to the members of his organization, comprising "more than 1,250 biotechnology companies, academic institutions, state biotechnology centers and related enterprises across the United States and in more than 30 other countries." These companies are on the cutting edge not only in the traditional fields of pharmaceuticals and medicine, but also in agriculture, energy, and environmental sciences. According to Mr. Greenwood, "[s]trong patent protection is essential to the success and, in some instances, survival of biotechnology in this country. Patents allow biotechnology companies and their life science partners to transfer technology, attract capital, and make business decisions that lead to the development of medicines and diagnostics for intractable diseases, and agricultural, energy, and environmental products to meet growing global needs."
In view of the importance of strong patent protection for biotechnology, BIO and its members have a unique interest in making U.S. patent law more effective in promoting innovation. However, one of the most important players in U.S. patenting, the Patent and Trademark Office, is an "agency in crisis," according to Mr. Greenwood. The problem: the more than 1.2 million patent applications currently pending in an examiner corps of 6,000. Despite large increases in the number of examiners (four-fold) and the PTO's budget (10-fold) over the past 10 years, Mr. Greenwood asserts that the Office has not been able to cope with the "ever-growing influx" of new applications, resulting in a backlog of unexamined applications and a 50% increase in pendency. And it can be expected to get worse, according to Mr. Greenwood, in view of Patent Office statistics showing a 6% increase in patent application filings expected to continue for several years.
Mr. Greenwood does not believe that current Patent Office efforts have been effective in addressing these problems. He cites "aggressive" production goals for examiners that have increased examiner attrition, and the inconsistencies in the amount of time allotted for examination of applications that have become "more and more complex." The inappropriate production goals are also having the expected bureaucratic effect of increasing the rate of rejection to "historically-high levels." Even in the face of these trends, which might under other circumstances increase confidence in those patents that are granted, Mr. Greenwood rightly stated that there is an "erosion of confidence in the quality of U.S. patents." (He neglects to mention the political motivations of groups like the Coalition for Patent Fairness that tout the lack of patent quality because it fits with their anti-patent agenda.)
Mr. Greenwood also thinks that the efforts in the last two Congresses to "reform" U.S. patent law were ill-advised for focusing on "patent litigation and other divisive back-end changes to the patent system" rather than PTO problems. He also notes that many of the policy drivers for legislative reform have been addressed by the courts, in cases such as KSR Int'l Co. v. Teleflex Inc., eBay Inc. v. MercExchange L.L.C., and In re Seagate. In view of these changes in the law that have already effectuated much of what the proponents of patent reform legislation asserted as the bases for legislation, Mr. Greenwood posits that the proper place for patent reform is in the Patent Office using administrative remedies.
And Mr. Greenwood has a number of such remedies that he proposes in his letter. These include the following:
• PTO branch offices and other measures to facilitate hiring and access to talent: BIO and Mr. Greenwood recognize that the complex applications examined by the Office today require individuals with the appropriate science and engineering backgrounds, and that the Office should have all the tools available to recruit and retain these people. Thus, he proposes that the Office establish (or at least consider establishing) branch offices outside the Washington, D.C. area, using technology (PAIR, teleconferencing) in combination with branch offices to ensure consistency and adequate examiner supervision.
• Pre-first action interviews and issuance of "short form" search reports: BIO and Mr. Greenwood propose expansion of certain features now used during "accelerated examination" that provide opportunities for applicants and examiners to have "informal" pre-examination conferences. The advantages of such conferences would be that "applicants and examiners could meet for an informal pre-examination conference to discuss the application, explain the underlying technology, and agree on ways the application could be improved for more efficient substantive examination." The goal would be to streamline the examination process by identifying art and amendments to overcome such art early in examination. (An unspoken corollary of such a system would be that the examiner or applicant make expressly of record the substance of such pre-examination activities.)
• Reassessment of current restriction practice in light of the European unity-of-invention concept: One of the unacknowledged (by the Office) inconsistencies of the now-enjoined new continuation rules was that divisional applications constituted a major portion of the applications vilified as "rework" in the Office's philosophical justification for the rules. Mr. Greenwood and BIO propose that the Office consider using international standards for restriction practice, to reduce the incentive or capacity for examiners to "restrict . . . an invention down to every patentably distinct embodiment" and producing divisional applications in the process that increase the backlog of unexamined applications.
• Incentives for applicants to abandon obsolete applications: BIO and Mr. Greenwood recognize that there are instances where the importance of patent applications diminishes over time, whether because the underlying technology is never commercially viable, the technology becomes obsolete, or the applicant simply runs out of time due to the patent term limit of twenty years from the earliest priority date. Mr. Greenwood cites Patent Office statistics that over 10% of applications are abandoned for failure to respond to a first office action, and posits that this represents a waste of Office resources. However, Mr. Greenwood also wants to ensure that there is no disincentive for an applicant to wait until receiving a first office action to make the decision to abandon an application. One way to address this situation, according to Mr. Greenwood, would be to require an applicant to affirmatively request examination, noting that "up to 30% of all patent applicants decide that they no longer want to seek a patent on their application" in foreign jurisdictions imposing this requirement. BIO's letter also suggests that the Office offer incentives for abandoning applications on obsolete technology, such as "offering a partial refund of search and/or examination fees for withdrawn applications" or advancing examination of "other, commonly-owned applications in the examination queue for every obsolete application that is withdrawn before substantive examination." An additional proposal is to provide accelerated or deferred examination at an applicant's option, citing the use of such practices in the EU, Japan, China, Canada, Germany, and Korea.
• International work sharing: This proposal is in line with current efforts by the Office to "workshare" patent search and examination with patent offices in Australia, Japan, Korea, and elsewhere. The advantage is that almost half (45%) of all patent applications pending in the Office were filed from abroad, and that international patent filing strategies are "routinely" used by U.S. businesses as well. In these efforts the Office has recognized the inefficiencies in having essentially the same application subjected to patent searching by multiple patent offices worldwide. Technology, such as electronic file sharing, could be used to promote consistency and efficiency in these efforts. Mr. Greenwood also suggests adopting strategies employed in countries like Australia and Israel where an applicant can elect to accept a patent having "identical scope" as a granted foreign counterpart patent.
• Transparency and public assistance in patent examination process: Public PAIR and the decision to open patent prosecution records to the public for published applications are the types of "transparency" reforms supported by Mr. Greenwood and BIO, and this type of transparency in the patenting process should be expanded, including permitting third parties to submit prior art to the Office to "improve the patent examination process."
• USPTO fees: Finally, BIO and Mr. Greenwood propose that the fee structure of the Office be modified to permit examination fees to be "more directly proportional" to the amount of effort required for adequate examination work required. As part of these reforms, Mr. Greenwood proposes that the Office be allowed to "retain and reinvest its revenues" and that fee diversion be permanently prohibited.
Who is appointed as Patent Office Director, and the direction the Office takes under the Obama administration has been the subject of wide speculation since the election. The recent withdrawal by Governor Richardson from consideration as Commerce Secretary has made these questions even less clear. BIO and Mr. Greenwood attests that the organization is "eager to engage constructively in the continuing debate on improving the timeliness, quality, transparency, and efficiency of the patent system." It will be refreshing if the new administration proves to be more willing to listen to the ideas proposed by BIO and others, rather than to seek justification and support for policies produced by Patent Office bureaucrats without the benefit of input from the companies and other stakeholders most invested in solving the real problems facing the Office, patent applicants and the public.
"Mr. Greenwood proposes that production goals and time per application should be adjusted for complexity of the subject matter, and that the Office should not treat all applications equivalently, recognizing that examiners should receive more "credit" for examining applications of greater complexity that require more time and effort for proper examination."
I am reading this while I am taking a short break after spending 3 working days writing one hopefully adequate office action for no count. Would somebody please listen to this man?
Posted by: Biotech Examiner | January 07, 2009 at 12:12 PM