In this second installment of my interview with current AIPLA Executive Director and former USPTO Director, Q. Todd Dickinson, we start out discussing pendency at the Patent Office. Dickinson tells me about the incentives he used to keep patent examiners as they matured into the level of experience where they are ready to really roll up their sleeves and become the work-horses the Office needs. We talk about the AIPLA position on the proposed Three Track Proposal now pending at the USPTO. We then moved into a very interesting discussion of patent reform, and a bombshell is dropped, at least in my opinion. I was surprised to hear Dickinson say that he does not think patent reform is dead for THIS legislative cycle. He says: “The clock’s running and, the plays have to be run a little faster,” but that he “can see a path forward once the Congress returns.” He goes on to point out that the American Inventors Protection Act was attached to an appropriations bill. Looking at what Congress has on its plate upon returning it looks like there are a lot of appropriations bills. Curious indeed!
In any event, my entire discussion with Dickinson was fascinating, but this portion should be required reading for those in the patent industry. For part 1 of my interview see: Exclusive Interview: Former USPTO Director Todd Dickinson.
— START PART 2 —
QUINN: Yes, I would agree with that. And I want to get into that sort of stuff. But I have one more chart for you to look at. This is actually a question that I have been dying to ask you for some time now. And anybody who knows me that I talk to knows that I’ve wanted to ask you this question for a while. And what we’re looking at right now is a pendency chart, the average pendency chart. [ see below] And this is something I put together on an Excel spreadsheet just using the available data. And I can’t help but notice that the time that you’re in the office, in the director’s chair, and then it also appears as the time that Nick Godici was the acting, right?
QUINN: Is the only time on this chart that shows a leveling off and then decline of average pendency. And the chart goes from ’89 all the way up to 2008.
DICKINSON: Yes. I wish you’d gone back a little further because Gerry Mossinghoff was the last one before us to do it to.
QUINN: Oh, right, no, no. I know, and I started there specifically because –
DICKINSON: Yes, no, I understand.
QUINN: They got down to the 18 months, and then it just —
DICKINSON: The simple answer, candidly, is hard work; understanding what needed to be done. We did a number of things at that time. For example, we got most of the examiners an out of cycle pay raise to try to stop attrition. Attrition was running at 14% because of the dot-com boom. We got it down to about 4% and we had a big hiring program of for three years proceeding that we had a hiring program of 1,000 examiners a year. So it’s often said you can’t buy your way or hire your way out of the problem. But you can move forward an awful lot with a strategic application of resources. And so that’s a key factor there. I think, candidly, I think Nick and I both understood the examiner psyche and we worked well with the unions. And there was a sense that we were all pulling in the same direction. And so I think that had an impact in terms of people feeling good about their work and good about getting it out the door. I think we made pendency reduction a priority and communicated that.
QUINN: Now, I didn’t know about the incentive that you mentioned to try and retain folks. Because a lot of the people that I’ve talked to noticed that it’s difficult to really dig into this backlog if you’re just hiring and hiring and hiring. And then when people get to the point where they’re experienced enough to be on their own and really contribute to the brining down of the backlog they leave.
DICKINSON: Right. Oh, we did a number of other things, too. For example, and I’m very proud of this, I reinstated the law school tuition reimbursement program so people could stay in the Office and go to law school at night. And as you point out, once you get into a certain time, for a certain time, usually four, five, six years, then they tend to be longer term employees. Particularly if they see that you’re offering a career enhancement. In fact, you could literally enter the Office as a high school graduate, back then. We would pay for college and law school while you were working, absolutely.
QUINN: Now, I think the law school reimbursement has gone away.
DICKINSON: Has it gone away again? It’s a shame because it comes in, it goes out. It often gets cut in the budget, and it’s a shame because people are in the middle of their night school process, it’s like a four year process. Some of them have to drop out, which is terrible.
QUINN: And has the Office done away with the four year wave in, too? Where if you’ve been in an examiner for four years, then you can wave in.
DICKINSON: I don’t know if it’s done away with. It was there when I was there, yes, you don’t have to take the patent office bar exam.
QUINN: Yes, ‘cause I recently talked to — well, recently, not, it should be within the last year recent talked to an examiner who didn’t know anything about that, which made me wonder whether that had been done away with as well.
DICKINSON: I don’t know, that’s a good question. I mean, that’s something else we did at the time, one of the other things I’m also very proud of is that I finalized the planning for the move to the new offices. And so I think any time you have the excitement of moving into a brand new space, I think you have people who are saying, well, I’m going hang around and see how that turns out, too.
QUINN: Well, let me ask you this. And I know this is gonna be fanciful. But let’s say funds weren’t an issue for the Patent Office.
DICKINSON: That is fanciful.
QUINN: Yes, We can talk about that in a moment. What would be the things that you would suggest could be done in order to continue to hold onto those folks that the office needs to hold onto most?
DICKINSON: Wow. My good friend former acting Under Secretary Nick Godici sometimes disagree on this particular issue but I think examiners need more time. So I’d use some of the resources to give them more time to do the job. As many people point out, technology has become more complex, certainly the requirements for the file itself and the need to keep a much more complete record. Whether that’s court demand or whether that’s driven by the office, has gone up very significantly. And that takes more time to keep that file in that kind of order. So I think giving examiners more time is important. The key piece that I think is high on Director Kappos’ agenda is reform of the IT systems there. It’s been a long time goal which has proceeded in fits and starts. In fact, I would wonder if the user community now does not have more sophisticated systems than the Office has, which I think is different than in the past. And so the office really needs to play catch up there. And there are significant productivity gains I think as well as quality gains that could be achieved with reform of the IT systems.
QUINN: And you think that that sort of drags down the examiner core and maybe demoralizes them a little bit?
DICKINSON: Well, that’s part of it. But I think it makes them less productive than they could be. And they’re less able to get the art that they need. One thing we talk a lot about, for example, is having an opportunity where an application is filed in the major offices of the world, having some mechanism by which the examiners can communicate. Whether it’s cloud computing or whether it’s the dashboard Dave talks about, the common citation documents we talk about at sort of a basic level. The opportunity to avoid redundancies. The opportunity to have examiners collectively review these I think is extraordinary. But it requires the systems to be in place.
QUINN: Well, that gets us into some other area I wanted to talk about.
DICKINSON: Plus hiring and pay, by the way. Hiring and pay I think as I mentioned.
QUINN: All right. About what Kappos is doing now and about the three track proposals and so forth. And when you bring up the cooperation with other offices, that would seem to be, and I know you were there in presented at the three track public hearing?
QUINN: I don’t know whether it was actually considered a hearing. It was a meeting or —
DICKINSON: Round table.
QUINN: — round table what it actually was.
DICKINSON: Lot of round tables.
QUINN: I don’t to get anybody in trouble calling it an official hearing because I don’t know that that was exactly true.But one of the things that most people seem to have the problems with was with respect to track three where the Patent Office was gonna basically stall or wait or hold up until another action somewhere else had gotten the first office action — the first filing in another office. What is your thought on that? I can understand why you would want to do that, and I also understand why everybody’s upset about it.
DICKINSON: Let me say first off that it just happens to be this week that we are finalizing our written comments for three-track, our board is. And so they’re not completely finalized yet so what I’m saying is pretty much the AIPLA position. But it’s not completely locked down. AIPLA major concern is something that goes by the acronym, SHARE, by which a foreign applicant’s application will be held in the United States until there’s a first office action which is then supplied to the U.S. office with a response. This is probably the most criticized piece of the three-track. Now, it’s sort of ancillary to three-track. Three-track doesn’t require it, really. But it’s being included within the proposal. First of all, foreign applicants, particularly Japanese applicants, I’ve never seen them so riled up. Japanese are usually very deferential to our system, they don’t want to make a lot of waves, they don’t lobby, certainly but they are hot under the collar. I believe it’s, for the record, the Commissioner of the Japanese patent office has actually weighed in on that issue and set a critique to Director Kappos, which seems to me very significant. There are several worries, but one is that there will be retaliation. A second is that we have in our profession here in the United States a lot of our attorneys, a lot of our members do work for foreign companies. And they don’t like their clients being potentially discriminated against either. So that’s a key issue. A third, I think, we’ve been promised kind of a comparison chart. It’s been said that this is just what the EPO does, and just what the JPO does, therefore it should be okay because that makes it more towards harmonization. It seems counter harmonious to me a little bit at the moment, but if that’s true, then we might revisit the question a little bit. What I haven’t seen yet is that comparison chart, so I don’t know whether it’s actually true or not. Still waiting on it.
QUINN: Okay. Do you expect that you’ll get that before it goes final?
DICKINSON: Before it’s final, that’s a good question. I’m not sure exactly the finalized timing yet. I hope so. While on three-track itself, we are generally supportive. And that’s a shift because we traditionally would oppose the deferred examination of the third track. And if a couple questions get answered in a certain way we could be supportive.
QUINN: And what’s the difference and why is AIPLA maybe softening on what most would call deferred examination?
DICKINSON: Because the Office has said they will come forward with evidence that it will help with the backlog. It’s been analogized by Director Kappos to PCT, which is something that our members are very familiar with and so they say, oh, okay, it’s sort of like PCT and it’s not really deferred, though it is and it isn’t. We’re still talking with the Office about things such as, in PCT, you get a search. Will I get a search on track-three? Office seems open to that discussion. Can third parties request, through some vehicle, that the case move into the examination queue because the uncertainty of what the final result will be may weigh on them commercially? I think the Office is open to that. Will there be publication? They’ve already said there will be full 18 month publication of all third track and first track applications. So that takes away some of the uncertainty, too. Deferred examination, the usual problem is it’s uncertain. Particularly when it’s not being published you don’t know what’s out there. You make a research investment or even a manufacturing investment and then lo-and-behold some patent pops up later. The way to ameliorate that are some of these things I just mentioned.
QUINN: What do you think about, or how would you respond to the people who would say that maybe part of the backlog problem is the fact that we decided to start publishing our applications? And the thought process goes like this. Is it that if we weren’t publishing applications and there was this enormous backlog, then you would have ever big tech company and most large companies at Congress’s door pounding, knocking, demanding that you do something because you can’t have these things staying hidden for five, six, in some cases in the tech sector eight or ten years.
QUINN: It would just be a Lemelson issue.
DICKINSON: Well, and the reason we moved to publications is because of that.
QUINN: Here’s the argument, the argument, the public gets the benefit and the applicant gets the burden if the delays are allowed to exaggerate.
DICKINSON: I would hope that we will through other means get the office the resources it needs so we get down under 18 months and publication or not publication ceases to be a particular big issue.
QUINN: Do you really think we can get to under 18?
DICKINSON: We have been in the past. Can we get that back again? I think it’s a long term question. The number one issue for us classically is ending the occasional tendency towards making some of the funds that are paid in unavailable. We usually call it diversion, but the appropriation folks hate that word so we try to avoid it.
QUINN: What word do they like?
DICKINSON: They don’t — I would recommend you to go and talk to them. Now it is a bit of a looking glass situation.
QUINN: [laughing] Okay, I won’t put you in that position. You know how I characterize it –
DICKINSON: So if the resources were there I think that it could get to that point. Is it 18 months? Secretary Locke has set David a goal of 10 months to First Office Action, which is extraordinary.
QUINN: Yes. A lot would have to go right.
DICKINSON: It would. It’s a long term issue.
QUINN: Here is another thought, and I know that we’re cascading at the moment here, but I’ve always through that inequitable conduct is an enormous issue. And I don’t know how you can divorce speeding up prosecution from a discussion of inequitable conduct reform. Because it seems one of the things that during the claims and continuation debacle, that people were really, really worried about is you’re forcing so much more work on us. You’re forcing us if we want to have a patent in any kind of meaningful time frame or with a certain number of claims, we’re gonna have to give you the rope to hang ourselves with.
QUINN: So how can you force the patent bar to cooperate more and still have inequitable conduct the way it current is, because it seems to me the best way perhaps to speed things up would be to demand more cooperation. But how can you do that with inequitable conduct?
DICKINSON: Well, let me talk more broadly. First of all, let me talk to that specific issue. We could not agree with you more. The AIPLA has been urging reform of equitable conduct for years. We’ve participated in round tables going back, five, six, seven years at the Office, where that was the goal. We didn’t feel the Office understood as at the time, but that was the goal was to say, look, we would work much more closely with you. We would get much better allowances at a faster rate if we had a working relationship with the Office, but inequitable conduct gets in the way. And particularly as another factor that’s happened in this period of time [NOTE: pointing to the decline period on the allowance chart above], too, is that the CAFC has found inequitable conduct in many, many more circumstances; I think, many people would say may be of questionable finding. And so now you’re seeing the CAFC taking another look, a comprehensive look at that through Therasense, and you had Congress and Senator Hatch in particular, for whom this is a big issue, taking a look at it as well. So maybe we’ll get inequitable conduct reform that would lead to a number of positives in terms of quality, in terms of pendency.
QUINN: In talking about Senator Hatch. You’re an inside the beltway kind of guy, I think.
DICKINSON: [laughing] I’ve come to be one.
QUINN: I mean, you’re an observer.
DICKINSON: We’re only a mile inside here, so don’t —
QUINN: Well, right. And did it surprise you at all that during one of the last Judiciary Committee hearings that Senator Hatch made that very passionate speech and got up and walked out over the inequitable conduct issue?
DICKINSON: I’ve been to a lot of hearings, and I’ve talked to people who have much more experience than I. And that was high drama and extraordinary that that occurred. I think partially what you had was the fact that the patent reform bill is a work in progress. And that it’s not always pretty, these days in particular, as to how legislation gets made. I think what probably happened was that there were a number of deals that needed to be cut, a number of compromises that had to be made, and that Chairman Leahy in particular wanted to take them in deliberate fashion. And he’d accepted the damages compromise and I think he was still then wanting to work on getting his head around a compromise in inequitable conduct, even though he and Senator Hatch had talked about it at the press conference. So that’s the kind of thing that then gets worked on. Senator Hatch went away and worked on it and they’ve now got something called supplemental examination, which is largely the product of Senator Hatch’s thinking, and it addresses to some degree, no small degree its beliefs, its hopes that inequitable conduct kind of issues. So you combine that and the fact that the courts are now doing a lot of the reform themselves, we’ll see how Therasense comes out, for example.
QUINN: It seemed to me, though, just watching because I’ve never seen anything like that where at a hearing, no less, where a Senator would say [paraphrasing], “we had an agreement, I’ve never had a Senator in all my years to go back on an agreement where there’s been a compromise reached.” To me that seemed to be the day that patent reform died.
QUINN: Is that an over statement?
DICKINSON: I don’t think patent reform is dead by any means.
QUINN: For this legislative cycle?
DICKINSON: We’re running out of time a little bit. The clock’s running and, the plays have to be run a little faster.
QUINN: All right, I gotta ask. Is this wishful thinking or do you really think that patent reform may not be dead this year?
DICKINSON: Sitting here today I think I can see a path forward once the Congress returns. And that’s partially because I know certain aspects of what’s going on behind the scenes, and I know also that my own experience, when I was Commissioner how we passed the American Inventors Protection Act, which was attached to the DC appropriations bill. What it basically says though is, if it’s gonna move, the train can move pretty quickly. And I think Senator Leahy, Chairman Leahy really would like to get this done. I think for him it’s a legacy issue. He’s proud of what he’s done. And the administration supports him.
QUINN: Yeah. But does the House? I mean, because that seems to be where patent reform has gone to die lately. What’s your sense of that?
DICKINSON: Well, don’t forget that in the last Congress the House passed a version. Now, the support for it was very different than this, for this particular bill. But they passed it out. And they said to the Senate this time, we did the heavy lifting last time, we would like you to go first. And that’s basically what the Senate’s done. Now, the House leadership has come back to them and said we’re not gonna rubber stamp what you’re doing, we like the direction it’s heading, but we’re going to want a few things before we move forward. And I would hope that they’re in active discussion around what those things are. Because I think patent reform is very much needed. I don’t see the compromise necessarily changing as a function of the Congress changing. There was a belief that this bill would be a lot different with a Democratic president and a Democratic congress, and it is, but maybe not in the way that those people that wanted it to be. So now the thought is, well, maybe if more Republicans get elected it will be more to our liking. I think the compromise is done. If anything’s going to happen, this is basically it.
QUINN: Yeah. And I personally think it’s misguided to think that patent reform is a Republican versus Democratic issue.
QUINN: It’s a geography issue, it seems to me.
DICKINSON: It’s a technology issue, it’s whose business model.
QUINN: Who’s in your district kind of issue.
DICKINSON: Yes. I think for many members, that’s the one reason why the House is a little trickier. Because again, take Senator Feinstein from California, the biggest example. And Senator Boxer. But Senator Feinstein’s worked on it in the Committee. She has every single interested represented in her state. Biotech all the way on one end. Qualcomm and the Innovation Alliance. All the heavy Silicon Valley companies at the other. The University of California a major player, and a lot of independent inventors. She is in the exquisite position of having to satisfy all those folks and strike the right compromise, which she’s very good at, has done a nice job at working towards compromise. But you get to a particular district within California, say Representative Zoe Lofgren in Northern California where one particular technology is heavily represented. And that, as you suggest, may influence that member significantly.
QUINN: Okay, well, that was a very interesting discussion. One that I didn’t necessarily thought we were gonna have, but very fun.
— END PART 2 —
Part 3 — Todd Dickinson Interview Part 3: Fee Diversion, Kappos, 3 Track. In Part 3 we discuss how fee diversion presents a huge problem to the system, how Director Kappos is doing and whether there should be any concern for him burning-out and the AIPLA position on the Three Track initiative.