IP Law in the USA and Beyond – May 2010

We present several recent intellectual property related reports of interest for your review.   Hyperlinks are provided for your convenience. 

Patent Law Hits Primetime Drama with Kathy Bates on Harry’s Law

American economic security is being threatened by an outflow of jobs, talent, technology and production.  We must boost invention and make new products Americans and the rest of the world will need, want and buy.  The answer is to provide faster, sounder and clearer patents, plus faster, stronger enforcement.  Such improvements can be made if we improve the USPTO and the Federal Courts.  Patents have been the main engine of economic growth and technological progress since 1790 when the First Congress passed the first Patent Act.

Among the problems identified are:

• Delay: in some technologies it is taking 4-6 years to get a patent and the product life-cycle may be shorter than that.  The gears of the USPTO seem to almost be seized up.
• Antiquated technology:  It is ironic that the government entity that examines state of the art technology is using 30 year old computer technology.
• Backlogs:  There are over 700,000 patent applications that sit unread in a warehouse in Alexandria, Virginia, often for years.  Almost 400,000 new applications are being filed each year, which adds to the backlog.
• Employee turnover: Most examiners leave after only 3 years for better pay and working conditions in the private industry.  The average experience level of the 6,000 examiners has fallen to only about 3 years, but it takes that long to become experienced and competent.  Inexperienced examiners harm the system by rejecting claims that should be allowed and allowing claims that should be rejected.
• Fee diversion:  Since 1982 Congress has diverted over $900 Million from the USPTO.  Even this fiscal year, Congress will not allow the USPTO to keep the fees that it collects from inventors and patent owners.  An estimated $150-250 million will be diverted from the USPTO to other government programs.

The solution proposed is to:

• Provide a one-time capital investment of $1 billion.  In view of what has already been diverted, such an investment by congress would be a repayment of money already taken from fees that have been collected by the USPTO.
• Guarantee that Congress will stop diverting fees away from the USPTO.
• Hire thousands of additional patent examiners.
• Provide salary increases to retain experienced examiners.
• Modernize the 30 year old computer system.
• Increase space to house the additional patent examiners.
• Open satellite offices in major cities such as Houston and Detroit.
• Hire unemployed engineers who are already experienced in patent matters.
• Exclude scientists and engineers from the restrictive General Pay Schedule so that the pay can be increased for examiners to be more competitive with private industry.
• The Director should be given greater authority to give earlier examination to patent applications in promising new technologies and individual applications for pioneering inventions.

Judge Michel closes by saying that it is time for Congress to “prime the pump” — only then can private investment take over.  This is perhaps the best and perhaps only way to increase innovation and reverse competitive decline in America.  It could restore us as the technology leader of the world, increase private and public revenues and stock value and create millions of new jobs.Back to top

US Patent Application Pendency by Technical Area

The following table shows the average First Office Action Pendency and Total Average Pendency for pending patent applications to date for Fiscal year 2009, broken down by technology center.

According to data published by the USPTO in the Performance and Accountability Report Fiscal Year 2009 Management’s Discussion and Analysis the 2009 pendency goals at the US Patent and Trademark Office (“USPTO”) are:

First Official Action:  27.5 months.
Overall Disposal (Issued or abandoned): 37.9 months.

Steps that are being taken to reduce the patent pendency include:
Hiring additional examiners, which is largely dependent upon the passage of a Congressional Bill into law that would give the USPTO the authority to set fees, but not allow Congress to “siphon off” fees collected by the USPTO.

First action interview program to provide interviews early in the prosecution to identify patentable subject matter early to result in an early disposition of the application.

Changing the patent examiner count system to discourage Continued Prosecution Applications.

With over 800,000 patent applications pending, and another 70,000 filed each year, it is time to get the gears of the USPTO up to speed again, for the benefit of Inventors, Entrepreneurs, Businesses of all sizes and the American Public.Back to top

Proposed House Legislation Allows USPTO to Set Fees but Does Not Prevent Congressional Diversion  

This week the House is expected to take up a bill that would allow the US Patent and Trademark Office (“USPTO”) to set its own fees for its operations, but would not bar Congress from diverting some of the fees for other purposes.

Both the American Intellectual Property Law Association (“AIPLA”) and The Coalition for 21st Century Patent Reform (“CCPR”) oppose the proposed legislation.  The CCPR includes major companies such as DuPont, General Electric, Motorola, Merc and 3M.

The USPTO is in drastic need of reformation.  The AIPLA and the CCPR are in favor of legislation that would allow the USPTO to set its own fees for operations, but the legislation needs to prohibit Congress from diverting fees collected by the USPTO to other government programs.  Since 1982, Congress has diverted over $900 milliion from the USPTO.  Those fees were paid by inventors, patent owners and trademark applicants.  The fees should be used to pay examiners, increase the number of examiners and upgrade the antiquated Information Technology infrastructure of the USPTO.

Unless Congress is prohibited from diverting funds from the USPTO, the bill would simply turn the USPTO into a cash cow to be used as desired by Congress for programs that are unrelated to innovation and entrepreneurship in American.

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Media News:

Patent Law Hits Primetime Drama with Kathy Bates on Harry’s Law

Kathy Bates will play a former patent attorney in the upcoming prime time TV show, Harry’s Law.  She will play a cranky former patent attorney who changes direction to practice criminal defense.