Today's Date: October 21, 2014 Search | Home | Contact | Services | Patent Attorney | Patent Search | Provisional Patent Application | Patent Application | Software Patent | Confidentiality Agreements

White House Announces Patent Related Executive Action


Written by Gene Quinn
President & Founder of IPWatchdog, Inc.
Patent Attorney, Reg. No. 44,294
Zies, Widerman & Malek
Blog | Twitter | Facebook | LinkedIn
Posted: February 20, 2014 @ 5:52 pm
Tell A Friend!




Meet Gene in Chicago
Join Gene Quinn for a Happy Hour mixer on Tues, Oct. 14, 2014, 5pm to 7pm at The Deck
CLICK HERE to RSVP.
Meet Gene in NJ
Join Gene Quinn for a Happy Hour mixer on Tuesday, Oct. 21, 2014, 5pm to 7pm at The Hyatt Morristown
CLICK HERE to RSVP. Sponsored by Innography.


During the State of the Union address to Congress in January 2014, President Obama called for passage of a patent reform bill that would allow businesses to stay focused on innovation, not litigation. Today, in what was billed as part of the “Year of Action: Making Progress Through Executive Action,” the Obama Administration highlighted progress made on previously announced executive actions, and also announced three new actions to further respond to the President’s desire to increase patent quality.

Currently the President is under fire for Executive Actions, which is something that he railed against when he was Presidential Candidate Obama in 2008, but increasingly embraces. The criticism of the President with respect to Executive Action has heretofore been related to the fact that through executive fiat the President has single handedly re-written laws passed by Congress. Of course, there is no Constitutional authority for the President to re-write laws, but that hasn’t stopped him, at least with respect to the health care law.

No such re-writing of law seems to be implicated in the Executive Actions announced today relative to the patent system. In fact, the Executive Actions on the patent front are largely much ado about nothing and seem most intended to grab headlines. Still, there are a few items that make perfect sense, such as the USPTO working with industry to train patent examiners on cutting edge scientific developments and an expansion of the pro bono program. Still, other initiatives claim to address patent quality but I can’t for the life of me understand how that could be possible. How accurate ownership records kept after the issuance of a patent will help patent quality is a mystery to me, and unexplained by the White House.

Beginning first with the update on previously announced Executive Actions —

Promoting Transparency

The Obama Administration today explained that the United States Patent and Trademark Office (USPTO) recently published a draft rule to ensure patent owners accurately record and regularly update ownership information when they are involved in proceedings before the USPTO. The White House says that this action item will improving the quality of patents issued, which is simply not true.  There is, however, a wide disparity and lack of uniformity in the examination process that does lead to unnecessarily low patent prosecution quality, but any fair observer would notice that this means that there many situations where real innovations are denied patents. Of course, the politically correct thing in the climate fostered by the President and leaders in Congress is to vilify patent owners and patents generally. So “patent quality” is code for “we need to issue fewer patents.” But still, it is an unexplained mystery how accurate information about ownership will lead to patents being of a high quality or the examination process leading to better decision making.

Greater transparency should provide key insights into and perhaps minimize abusive litigation tactics of shell companies. But shell companies are not only used by so-called patent trolls. Shell companies are used to harass competitors by large Silicon Valley technology companies, essentially employing the logic that what is bad for my competitor is good for me.

Of course, greater transparency comes with a price. It will cost more to investigate portfolios and pay attorneys to file documentation. This sounds easy enough but given all the patent sales, company acquisitions and mergers that go on in the technology sector it is not always easy for a company to know what they own. Thus, greater transparency sounds great in theory but may well be impossible in practice, or at least quite expensive in practice. It is also a double edge sword for practicing companies who have enormous patent portfolios.

Making Patents Clear

The President previously announced an initiative to make patent clear. Patents are not easy to read, but that has far more to do with the development of case law and evolving statutory requirements over the past several generations. Therefore, before we even consider the philosophical question about what it would mean to be “more clear,” there is no magic wand for the President to waveto make patents more clear.

Nevertheless, the White House explained that the USPTO has developed and implemented a training program to help its examiners rigorously examine so-called “functional claims” to ensure that at least those claims are clear and can be consistently enforced. This sounds wonderful, and new to the uninitiated, but the problem is that functional claiming has been around for decades. There is a great body of case law surrounding the topic, examiners handle these types of claims all the time, and this really wreaks of the White House blaming patent examiners for the perceived problems. While there are some patent examiners that refuse to issue patents and others that refuse to deny applicants, the overwhelming majority of patent examiners are hard working and do a good, fair job. However, and perhaps tangentially, according to some patent attorneys, the anti-patent mantra from the White House and Congress is impacting in a perceptible way the relationship between the examiner and applicant, with more and more examiners unwilling to issue patents in particular technology spaces. Sadly, addressing this issue, which deals with unequal treatment and lack of uniformity, isn’t a top priority.

According to the White House in the coming weeks, the USPTO will launch a pilot program that uses glossaries in patent specifications to promote patent clarity. IA patent glossary may not be a bad idea, but let’s not fool ourselves. This will either lead to more narrow rights granted, lead to greater cost to prepare patent applications or more likely both. Further, how the Courts will interpret patent claims in this new regime is unclear. Will the Courts do away with or modify the ordinary plain meaning law built up over generations even without a statutory change enacted by Congress? That seems doubtful, so I’m not sure what this really accomplishes except perhaps inject greater uncertainty.

Protecting Main Street from Abuse

According to the White House the USPTO today launched an online toolkit aimed at empowering consumers with answers to common questions, information about patent suits, and details about specific patents. The toolkit will include information and links to services and websites that can help consumers understand the risks and benefits of litigation or settlement, and pick their best course of action.

Information is great, but exactly how a Frequently Asked Question section of USPTO.gov will help is unclear. It seems a little like rearranging the chairs on the Titanic and acting like that will help. Instead the Obama Administration should inquire as to why things have so dramatically changed and patent owners are targeting smaller and smaller businesses.

In some situations it is being done by nefarious actors who send fraudulent and misleading demand letters claiming infringement of dubious patents, but the New York State Attorney General has shown how State AGs can put an end to that using consumer protection statutes. There is no need to engage in the clearly unconstitutional legislation passed by Vermont. As I told representatives from the Vermont government prior to passage of their legislation the way to move forward is through consumer protection, which has now been borne out.

In other situations small businesses are being targeted by patent owners because those larger companies that are infringing patents are doing so without care or consequence. Attempts are made to contact larger companies by some patent owners and those letter are simply discarded. Anyone who goes to any one of the many industry programs that discusses patent litigation problems hears attorneys from large corporations practically giddy as they gleefully announce to the audience that they merely circular file demand letters and licensing inquiries. Of course, they then have their lobbyists tell Congress that they need help because they get sued even before they are approached. So far they have had the argument both ways, and this has lead some patent owners to turn up the heat and sue smaller companies that the larger companies are in many cases legally obligated to indemnify. In short, some of this is a litigation tactic necessitated by the business processes of certain large technology companies.

Expanding Outreach & Focused Study

The White House announced today that the USPTO is expanding its Edison Scholars Program, which brings distinguished academic experts to the USPTO to develop and make available to the public more robust data and research on issues bearing on abusive litigation. While I think more data and statistics are a great thing, the independent sources show that patent litigation is not the problem it is made out to be. The only “studies” that show that there is a tremendous problem are published using proprietary data that is simply not available for inspection. On the other hand, the studies that use openly available public data come to different conclusions, namely that patent litigation is not particularly problematic or alarmingly on the rise. It is as would be predicted, and was predicted, when Congress enacted reforms in the America Invents Act (AIA). Reforms required more patent infringement lawsuits to be brought because the number of defendants per lawsuit were reduced.

Strengthening Exclusion Order Enforcement

Previously the Obama Administration promised to make the enforcement of exclusion orders issued by the International Trade Commission more transparent, effective, and efficient. No news on that action item yet, although the White House announced today that the Office of the U.S. Intellectual Property Enforcement Coordinator launched an interagency review and will, in the coming months, deliver its recommendations.

Now the three new executive actions announced today to ostensibly strengthen the quality and accessibility of the patent system —

Crowdsourcing Prior Art

To help ensure the highest patent quality, the USPTO announced a new initiative focused on expanding ways for companies, experts, and the general public to help patent examiners, holders, and applicants find relevant prior art. Essentially, the USPTO will explore a series of measures to make it easier for the public to provide information about relevant prior art by refining its third-party submission program and exploring other ways for the public to submit prior art to the agency. The USPTO will also update its guidance and training to empower examiners to more effectively use crowd-sourced prior art.

While this isn’t a bad idea, if Executive Action is necessary here it is because of the failure of the public to come forward with prior art. In short it is because of the failings of the third-party submission program created by the AIA. Third party submissions authorized by the AIA became possible only on September 16, 2012, so we are less than 18 months into this experiment and tweaks are necessary? The answer is yes because very few third party submissions have been filed. In fact, during the first 15 months one could make a third party preissuance submission there were only 1,228 such submissions filed, while at the same time there were never fewer than 584,998 applications at the Patent Office awaiting first action. The number of applications third party submissions could be filed in would be much, much higher since a third-party submission can be filed prior to the earlier of: (1) The date a notice of allowance; OR (2) The later of: (i) 6 months after the date on which the application is first published by the USPTO, or (ii) The date of the first rejection of any claim by the examiner.

Crowdsourcing the Patent Office will likely make headlines and give opportunity for a lot of self congratulations. The reality, however, is that users of the patent system are simply not interested and aren’t using the tools available. Thus, the Obama Administration has a very heavy lift here.

More Robust Technical Training

The Obama Administration also announced that the USPTO is expanding its Patent Examiner Technical Training Program to help patent examiners keep up with fast-changing technological fields by making it easier for experts to provide relevant technical training and guidance to patent examiners.

I am all for this initiative. Once upon a time this type of training was commonplace. Corporations would come together to train patent examiners on the basic science of the next wave of innovation. Competitors coming together to help bring patent examiners up to speed not he latest and greatest scientific advances is a win-win situation for everyone. This is something that actually can work because it has worked in the past.

Pro Bono and Pro Se Assistance

The Obama Administration also announced today that the USPTO will dedicate educational and practical resources to assist inventors who lack legal representation, appoint a full-time Pro Bono Coordinator, and help expand the existing America Invents Act pro bono program to cover all 50 states.

I think the expansion of the pro bono program is perfect fine and makes a lot of sense. I have wanted to write about the pro bono program and profile the excellent efforts of the USPTO on this initiative for a long time, but for reasons I don’t fully understand I have not been able to get much information about the program other than it exists. Hopefully this initiative will also include an outreach component and the Obama Administration will promote a good program that helps people.

- - - - - - - - - -

For information on this and related topics please see these archives:

Tags: , , , , , , ,
Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patent Reform, Patents, USPTO

About the Author

is a Patent Attorney and the founder of the popular blog IPWatchdog.com, which has for three of the last four years (i.e., 2010, 2012 and 2103) been recognized as the top intellectual property blog by the American Bar Association. He is also a principal lecturer in the PLI Patent Bar Review Course. As an electrical engineer with a computer engineering focus his specialty is electronic and computer devices, Internet applications, software and business methods.

 

23 comments
Leave a comment »

  1. Hope and change (loose change) for inventors (if they should be so lucky)

    What’s in your wallet?
    What’s in Obama’s and who did it come from?

  2. Here is more proof that when they say “innovation”, they don’t mean the stuff that inventors do:

    http://www.zdnet.com/cn/china-leads-patent-applications-but-lacks-innovation-7000026587/

  3. “Currently the President is under fire for Executive Actions, which is something that he railed against when he was Presidential Candidate Obama in 2008, but increasingly embraces.”

    Gene,

    Our current Chief Executive has been hypocritical in this regard. And as a former Constitutional Law prof, he knows better, so I’m giving him no slack at all on this.

    “No such re-writing of law seems to be implicated in the Executive Actions announced today relative to the patent system.”

    Gene,

    Not true. Included in this package is the proposed rule to have those allegedly with “attributable ownership” disclose that fact, under penalty of abandonment of the application involved. I’ve yet to see anyone give me a plausible basis in the statutes for this rule. For example, the express letter and intent of the assignment statute (35 USC 261) provides no basis for this proposed attributable ownership” rule.

  4. I agree with Gene on the point that this is a bunch of PR with very little substance. That is what the pen and phone campaign has turned out to be.

  5. I hope you’re right in your prognostication, AC. There very fact that the current occupant of the WH believes he can do this “end run” around Congress, our Constitution and our laws irritates me to no end.

  6. step back @ 2,

    I find the ZDnet article refreshingly accurate.

    I of of course would draw the distinction between invention and innovation and give credence to the Schumpeter Principle that innovation is simply more than invention and it is in the wholesale effort to commercialize (with its attendant indirect effects that leverage the mere invention into much more) that “invention” fulfills a higher potential and reaches its highest gains.

  7. Nothing good comes from that populist pos…
    protecting main street, expanding outreah… blah-blah-blah…
    patent examiners simply need to spend more time on each patent application and patent quality will improve
    as far as pro bono or pro se representation this is just laughable – most independent inventors have enough brains to deal with USPTO pro se if they don’t want to spend money on patent attorneys/agents.
    How about pro bono representation or some kind of government sponsored arbitration on the patent enforcement front ?
    I want to sue couple companies in Silicon Valley – I can do it in Delaware but alas I will need to take a few court-ordered depositions in the Valley before I can obtain quiality legal services on contingency basis
    Any help from bama ?
    The truth is: we are at the point where patents simply do not make any economical sense to independent inventors because of lack of enforcement

  8. EG, I agree that El Presidente’s preaching is alarming and sounds like it promises unconstitutional behavior. But the evidence of what he is doing with his pen is pretty small potatoes. Giving raising the minimum wage of the employees of future government contractors, most of whom are already overpaid based on Davis-Bacon rules. C’mon.

    I think his role model is Hugo Chavez.

  9. Please delete any duplicate post caught in the filter

    angry dude @ 7,

    I hear you, but do you realize that an “unintended” outcome of making enforcement more effective would be more lawsuits filed in order to enforce real rights that exist, with the ‘populist’ crying that Main Street (even though they may be infringers) are being ‘targeted’ “unfairly“?

    Look at the current hue and cry. It is as if patent infringement no longer includes “use” if that use is by an entity “small enough.”

    We have people coming on these boards with such a minimal understanding of law (but with a maximum of bravado) claiming that the law should simply be different and attuned to a seriously communistic “needs” basis (and yes, I am referring to Mr. Snyder, who does not have a voice to reply with – but who had shown no capability to reply in a reasonable and thoughtful manner anyway).

    The ‘answer’ lies in the opposite direction of where patent rights have been heading. Make them stronger. Make it clear that patent rights will be enforced fully (as in unequivocal injunctions, which are the simplest way to match what a patent is) and quickly and you will see a clarity in the market. Develop a respect for the right and you will promote invention – and innovation. There is a reason why the phrase “Necessity is the mother of invention” works.

    Make it once again a necessity to invent around and you will promote more inventing around. Make it easier to infringe patents and copy with some sort of contract equivalent of “efficient breach” (with due credit to lower case anon), and you will get more of that disrespect, copying and cherry picking on those that cannot afford the legal process.

    The first step is educating the public that a lawsuit is not automatically to be thought of as “a bad thing.”
    The second step is educating the public about what a patent right really is and why patents – in and of themselves (and regardless of the Schumpeter secondary effects that may occur) are good things. Far, far too often I see people talking as if a duly granted patent must be a bad thing because “there are so many of them.” Nothing could be further from the truth. More is in fact better. More (duly granted) patents merely indicate a system that is working as desired. When you have more Quid given, you have more Quo received and when you have more Quo received, the larger the store of knowledge – publicly accessible – and after the limited time, fully owned by all – you have.

    The third step is stop the nonsense and anti-patent rhetoric at its source. Somehow, naked propaganda needs to be more effectively blunted. This I believe would be a natural outcome (in part) to the education efforts in the first two steps, but no one should be polly-anna enough to think that education alone will suffice.

  10. Anon, you make a lot of sense, but do you have the bankroll to counter the campaign contributions of Google, Cisco, etc.?

  11. EG-

    You say: ” Included in this package is the proposed rule to have those allegedly with “attributable ownership” disclose that fact, under penalty of abandonment of the application involved.”

    Yes. I agree with you. I guess I wasn’t considering that directly an “Executive Action” as much as a proposed rule that the USPTO simply has no statutory authority to enact. I doubt that will be in the final rule package. If it is then we will have another moment in time where someone will sue the Patent Office to prevent the implementation of the rules, as done in the claims/continuation scenario.

    In some regards I suppose this is far more troubling than re-writing the health care law. Here a property right would be stripped by the Executive without any authority to do so, much like happens in your typical Banana Republic.

    -Gene

  12. What would be really useful for independent inventors and other small patent holders is some kind of small claims patent court or arbitration, where you can bring your evidence and if it’s convincing enough to the specialized panel of patent judges (no jury trials) the patent owner can quickly and cheaply collect modest damages e.g. capped at some value, without spending many years and millions of dollars on endless litigation
    The current patent enforcement reality is US is beyond ridiculous

  13. Angry dude-

    You say: “What would be really useful for independent inventors and other small patent holders is some kind of small claims patent court or arbitration…”

    I agree 100%. The problem is that such a small claims patent court would be unconstitutional. The constitution guarantees a trial by a jury when more than $20 is on the line. See: http://www.law.cornell.edu/anncon/html/amdt7frag1_user.html

    If ever there were a constitutional provision in need of updating for the modern world it is the provisions regarding the right to a jury trial. I am a big believer in the jury system, but you can’t even take a date to the movies for less than $20. If the litigants waive the trial by jury then things could proceed much faster and be much cheaper.

    I do full well appreciate the irony in pointing out that an objectively good, smart and fair idea is unconstitutional when at the moment all kinds of unconstitutional activity is happening in Washington, DC.

  14. Gene, re the “attributable ownership” rulemaking as an “Executive Action”: If you read the introduction of the rules package, the PTO says they are following the directions of El Presidente in an Executive order, (or speech, or holy water dispersing) from last June.

  15. American Cowboy,

    I have an exceptionally low tolerance of the phrase “just following orders.” Clearly, the point under discussion is which branch of the government has the authority to write a law such as that being promulgated as a rule (with substantive effects).

    As Gene indicates at 11, the executive branch agency has tried this tactic before and was (embarrassingly) rebuffed.

  16. Anon, I ain’t disagreeing with you.

  17. Gene,

    I am not a lawyer, but hasn’t $20 figure been amended by more recent statutes ?

    I believe I heard the figure $75,000 as the threshold amount right now ?

    75 grand in damages to patent holder is enough to justify very quick and cheap patent enforcement action (e.g. total legal bill under 25 grand) but falls short by 2 orders of magnitude to justify full jury trial (at least 2 mil in litigation expenses, for each side…)

  18. Angry dude-

    The constitution cannot be amended by statute. It can only be amended by a long and arduous process to amend the constitution itself.

    The $75,000 figure you are talking about is a statute that relates to jurisdiction in federal court in diversity of citizenship cases. You have a right to go to federal court, not state court, if the dispute is between parties from different states and the amount in question is at least $75,000. This does not relate to patent jurisdiction though because federal courts have exclusive jurisdiction on patent matters.

  19. AC (and all)-

    I will follow up on the forfeiture of rights proposed in the attributable ownership rules next week. Please feel free to continue to raise any issues/thoughts here. I will take everything into account from the comments as I write that article sometime next week.

    Thanks!

    -Gene

  20. There needs to be criminal liability associated with patent infringement, just like copyright. Why more people are saying this is inexplicable to me.

  21. To build on ip guy’s statement at 20: Why not a double tier:

    1) Increase to the baseline a treble damage level for strict liability infringement, with a baseline that whatever is published is “known.”

    2) Then for a criminal level, introduce a mens rea standard of actual knowledge.

  22. unfortunately, criminal liability for patent infringement does not work nowadays – too many overlapping patents and a real chance of independent invention by several parties (even the groundbreaking and unobvious RSA algorithm for cryptography was apparently independently invented but not published by some British agency, not to mention the fact that famous FFT algorithm was published by Gauss himself (in latin) – this would certainly be used to invalidate patent on FFT but FFT was never patented by IBM for several reasons)

    on the opposite side, if you ask infringer if he ever read patent certain application at http://www.uspto.gov he will deny – there is simply no way to establish the truth – anyone anywhere in the world can browse uspto.gov website anonymously, using ip-address hiding services.

    go figure

  23. A couple of notes:
    Regarding making patents more clear, if the mythical PHOSITA can’t comprehend the patent specification, then the patent has failed part of its’ objective which is to disclose innovation in return for exclusivity. I have noticed that this is a significant problem in patent applications originally filed abroad and translated to English (or something which more or less passes as English) for filing in the US. I have seen office actions in which examiners ask the attorneys to clear up the mess, but in my opinion it doesn’t happen often enough.

    Regarding third party observations (crowdsourcing) – the USPTO doesn’t have to re-invent the wheel. You just need to glance at the the third party observation methods in the EU (espacenet) or, better still, the Australian patent office, to see that it can be done simply and efficiently.