Johnson, a strong proponent for patent reform, publicly questioned the need for expanding covered business method (CBM) review, which has long been a pet cause of Shumer’s. Schumer is on record as supporting CBM and wanting to expand the reach of this post grant patent challenge. It is believed Schumer is so invested in CBM because those primarily using CBM are banks and other financial institutions, which is where Schumer receives much of his considerable financial backing and political support. More recently Schumer has also been lobbied by App developers and others who would like CBM review to become available to challenge all software patents.
If the news of resistance on the Senate Judiciary Committee is true the question then turns to whether anyone qualified for the job of Director of the USPTO could be confirmed. Virtually everyone in the industry questioned the wisdom behind expanding CBM review; Phil Johnson was hardly an outlier on that subject. In fact, even Microsoft and Apple broke off from the Google/Cisco high tech collaboration to question the wisdom of expanded CBM review. It was a bad idea to expand CBM. If support for expanding CBM becomes a litmus test then it seems unlikely that a candidate will emerge that is both acceptable to those who adhere to the Google/Cisco orthodoxy and who would also be acceptable to pharma/biotech and the rest of the patent community that needs strong patents and a fully functioning patent system.
Indeed, the nominating process for the next Director of the USPTO is shaping in a way that defines the broader patent debate, between those companies for which strong patent protection is absolutely essential and those companies, far fewer in number, that would prefer that the patent system simply go away.
To put this in context, President Lincoln once said that the three greatest innovations the world had ever seen were the invention of the printing press, the creation of the United States of America, and the establishment of the U.S. patent system. Lincoln went on to say that all other innovations since have been enabled by these three monumental events. Yet, those who prefer to copy the hard work and innovations of others — the infringer lobby — would prefer the patent system to be dismantled. Utterly ridiculous, but these are the forces working non-stop behind the scenes in Washington, DC, and increasingly holding sway with powerful Senators, among others.
The reality, however, is that if the White House does not reconsider the nomination of Phil Johnson and proceed despite protests by a bitter Senator Schumer who can they nominate? While some will find this question to represent an unwarranted panic, the truth is that the calendar, politics and reality are against any other nominee, save one — Q. Todd Dickinson.
While the Obama Administration has hardly been the most transparent Administration in U.S. history, one promise they have kept is to put nominees through an extraordinary vetting process that reportedly can take between 5 to 9 months to complete even in the best case scenario. Let’s say that the White House has decided to move past Johnson and will not look back. They must first identify a willing candidate; someone who can pass through the gauntlet that is the vetting process, has the requisite experience and who is willing to take a substantial pay cut. Such an individually would likely having to unwind investments and holdings, or at least put them into some blind trust. Even if the White House can this week identify that person who accepts the invitation to take the position and who is willing to subject themselves to scrutiny that would make an IRS inquiry look like a day in the park, that means we are looking at at least January 2015 before confirmation.
Political watchers know that Congress accomplishes very little in January, particularly after an election has occurred. It would also be foolish, I think, to expect any committee hearings in the Senate on any potential nominee in a lame duck session. This means that in all likelihood it would be at least February 2015 before the Senate Judiciary Committee would take any action. That means a full vote to confirm in the Senate no earlier than March 2015, and this timetable assumes that the nominee being vetted has no red flags that surface requiring selection of an alternative candidate. It further would require no political problems or holds in the Senate.
The Obama Administration will come to a close in January 2017, and during the final two years of the Obama Administration there is a real chance that Republicans will control both the House of Representatives and the Senate, which would make any legislation difficult to move. That means whoever takes over as Director will be limited to working to improve the patent system from within the Patent Office. That is probably the best thing anyway given the fact that the Office hasn’t even really begun to implement much of the American Invents Act (AIA) because the first to file provisions, which substantially change everything from a prosecution perspective, were not effective until March 2013 and largely only apply to applications filed on or after March 16, 2013 (although it is possible to still file applications thereafter and be entitled to treatment under pre-AIA, but that is another topic for a different day). What this means is that the first wave of Office Actions that apply the AIA prior art rules have or will soon start to be sent.
But how much rulemaking will any new Director be able to undertake with at most 22 months in the job? It takes time to put together the vision for substantive rulemaking, and even more time to prepare a draft. Then there would be the inevitable road shows explaining the USPTO thinking and an official comment period. After the comment period there would be further internal consideration and re-working of the rules as necessary. This all takes time and as the clock continues to run it would make any rulemaking virtually impossible for the next Director, which means that the next Director, whoever it is, would have to be willing to go through an extraordinary vetting process, take a huge pay cut, and all for a job that will provide little opportunity to place their stamp on the patent system. This is not to mention that whoever is next will be the Director who follows David Kappos, which means whoever is next has enormous shoes to fill. Not the type of job that many who are qualified would want to take.
Of course, if the White House does cut and run on Johnson, if they turn their attention to someone who has previously been confirmed some of the timeline mentioned above could be short circuited given the need to merely update the vetting. Michelle Lee, the current Deputy Director who is running the USPTO has never been confirmed by the Senate, and I am told that she will not be appointed. Terry Rea did not receive the job when she was Acting Director, so there is no chance that the Obama Administration would turn to her. Kappos “resigned” shortly after giving a pro-software patent speech, so it seems impossible that the Obama Administration would turn to him. Sharon Barner, Kappos’ first Deputy Director, would make an outstanding choice to run the agency, was confirmed by the Senate and is a long time supporter of President Obama dating back to his days in the Illinois legislature, but I understand that she is not interested. We can rule out those who served during the Bush Administration as well, at least as confirmed Directors.
This takes us back to Nick Godici who served very capably as Acting Director, and was a special advisor to the Secretary of Commerce at the very beginning of the Obama Administration. Prior to becoming Acting Director Godicia was Commissioner for Patents, which is not a confirmed position, so we can eliminate him even if he were willing to accept the position, which I doubt he would. Godici is happily retired and enjoying life in San Diego, California, acting as an occasional expert witness. Godici spent his career working for the Patent Office and while he would be an excellent choice, I just don’t see it happening.
This leaves Todd Dickinson, who was confirmed as President Clinton’s last Director of the USPTO. Dickinson has stayed in the public eye, most recently as Executive Director of the American Intellectual Property Law Institute (AIPLA), where he did an outstanding job representing the divided interests of a passionate community. Dickinson has also reportedly been on several “short lists” for appointments during the Obama Administration, but how close to the top his name has come remains uncertain. Dickinson is certainly a known quantity and very capable. Even if Dickinson name hasn’t risen to the level requiring heavy vetting during the Obama Administration, the process could be condensed given that he has already been confirmed by the Senate previously during a Democrat Administration. Furthermore, Dickinson did a very good job as Director previously, and Dickinson has recently resigned from the AIPLA making him a free agent so to speak. I believe if asked to serve Dickinson would take the job, and he would be an excellent Director once again.
Thus, it seems to me that several possibilities remain. First, the White House will reconsider and nominate Johnson, which admittedly seems unlikely at the moment. Second, the White House will nominate Todd Dickinson. Third, the White House will not nominate anyone and will allow the USPTO to be indefinitely run by an unconfirmed Deputy Director. Finally, the White House will find someone with a big name who is a known quantity but who is already retired or quickly heading in that direction, which would leave us with a Director who lacks energy and desire for the job, taking it only as an exclamation point on a notable career.
Either of the first two options would be good for the patent system. Johnson and Dickinson are both extremely qualified and the patent system would be in very good hands if either are the next Director. The third option is problematic for many reasons and quite undesirable at a time when the patent system is under scrutiny; the industry needs a confirmed Director with the requisite gravitas at a time when patents have emerged from the backwater and to a place of prominence. The final option doesn’t strike me as desirable either given that the AIA rules will need tweaking as the inevitable bumps arise. You simply cannot change the substantive patent process after more than 150 years and expect everything will run smoothly. Even Director Kappos admitted that as the Office begins to fully implement first to file cracks will emerge requiring Office attention. Having someone who is a figure head who lacks the energy and desire to do the hard work could be the worst of all possible outcomes.
Unfortunately, as the White House drags out the nomination process option three and four become all the more likely. That is why if I were advising the President I would recommend moving forward with all due haste to nominate Phil Johnson or Todd Dickinson.