Some will question me writing about tax policy, but the undeniable truth is that tax policy is enormously important to businesses of all sizes, including small businesses. Tax policy also affects job creation, because anytime businesses have to pay more and retain less that increases operating costs, which necessarily leaves less to reinvest in the business. This affects all sorts of things, including but not limited to lay-offs, a failure to create jobs and the investment in the creation of innovation. History shows us that when business is bad and revenues decrease businesses of all sizes typically cut back on activities necessary to innovate. When you look for less you find less, so this can and does negatively impact innovation. Innovation, job creation and a variety of matters important to small businesses are common topics here on IPWatchdog.com.  With this backdrop I leap to take on the un-reported story relating to the fact that expiration of the Bush tax cuts will impact virtually all small businesses, not just the 3% of small businesses continually, and inaccurately, stated by the Democrats.

Arlington, VA (September 16, 2010) – Biotechnology industry leaders announced today a major new program to improve the quality of U.S. life science education. The Biotechnology Institute’s new “Scientists in the Classroom” initiative is the life science industry’s response to President Obama’s “Educate to Innovate” campaign to improve the performance of America’s students in science, technology, engineering, and mathematics (STEM) education. The announcement came as life science industry executives participated in a White House event announcing the creation of the new broad education coalition called “Change the Equation” comprised of CEOs from across a broad spectrum of industries.

Chief Judge Lamberth

On Monday, August 23, 2010, Chief Judge Royce C. Lambreth of the United States District Court for the District of Columbia issued his injunction ruling in Sherley v. Sebelius, which deals with whether federal funding of embryonic stem cell research is legal. Judge Lambreth determined that Congress has prevented such funding and the lifting of the Bush ban by President Obama is immaterial. Judge Lambreth has since been either heralded or lambasted, not on the legal merit of his decision, but rather based on ideology, morality and religious conviction, which seems grossly unfair.  It also oversimplifies a complex issue and the fact that Judge Lamberth’s legal analysis seems sound.

Washington – On Tuesday, August 10, President Barack Obama signed into law P.L. 111-224 that gives the United States Patent and Trademark Office (USPTO) the authority to spend an additional $129 million of the fees the agency will collect in Fiscal Year (FY) 2010. Due to an improving economy and increased patent examination productivity, the agency projects it will collect nearly $200 million more than its FY 2010 appropriation of $1.887 billion.

Nick Godici

Nick Godici, currently with Birch, Stewart, Kolasch & Birch LLP, is a former patent examiner, Commissioner for Patents and Acting Director of the United States Patent and Trademark Office. During the Summer of 2009 he was personally asked by Secretary of Commerce Gary Locke to return to the Patent Office as a special adviser to the Obama Administration and to pave the way for David Kappos to take over as Director. On Tuesday, June 29, 2010, I sat down with Godici in his Falls Church office for an in depth interview. This is part 2 of a 3 part series.  For part 1 see On the Record with Former PTO Director Nick Godici – Part 1.

In this interview we talk about how two Presidents that are extremely different on so many fronts, Presidents Reagan and Obama, are pursuing quite similar strategies regarding the Patent Office.  We also talk about the importance of good working relations between patent examiners and the patent bar, the enormous backlog of applications at the Patent Office, the Patent Office process for handling decisions and issuing guidance in situations such as the recent Supreme Court decision in Bilski v. Kappos and what it is like to be Commissioner for Patents and the Director of the Patent and Trademark Office.

United States Supreme Court

I am just about out of ways to creatively announce that the United States Supreme Court has once again had a decision issue day come and go without issuing a decision in Bilski v. Kappos.  So lets get the obvious out of the way quickly.  The Supreme Court issued four decisions today, Monday, June 14, 2010, and none of them were the highly anticipated Bilski decision.

I know Supreme Court watching is so much fun that that it should almost be illegal, right?  Wrong!  Supreme Court watching seems akin to that Bill Murray movie – Groundhogs Day – where he kept waking up every morning in the small town to relive another day — the same day.  Unlike in the movie where Murray received chance after chance to get it right, the Supreme Court has but once chance to get this massively important decision correct, so I say let them take their time.  Even if that means they hold over the Bilski decision until next term.

And that is where the speculating begins!

On Tuesday, May 25, 2010, Adam Albrett, a patent attorney (Reg. No. 50514) who lives in Fairfax, Virginia, was arrested and charged with making threats on the life of the President of the United States, Barack Obama.  At that time an order of temporary detention was issued by US Magistrate Judge Thomas Rawles Jones, Jr., who ordered that Albrett be held in custody pending a detention hearing that was to be held on Thursday, May 27, 2010 at 1:30 pm.  Instead of the detention hearing being held today it was deferred until Tuesday, June 1, 2010, at 2:00 pm.  Albrett’s temporary detention was extended until that time.

Senator Patrick Leahy (D-VT), Chair of Judiciary Committee

Senate Judiciary Committee Chairman Patrick Leahy (D-VT) recently came to agreement with Committee Ranking Republican Jeff Sessions (R-AL) on changes to the Patent Reform Act of 2009 (S. 515), winning Senator Sessions’ support for passage and making it extremely likely that patent reform will happen this year, and likely very soon. An individual involved in the ongoing patent reform debate on Capitol Hill tells me that the Leahy-Sessions language would substitute for the Committee-passed language, and then be considered by the Senate as a whole. This is an important procedural step toward passing patent reform, and could mean that patent reform will be passed by the full Senate any day now. Leahy’s procedural move is called a “hot line”, in which Senate Majority Leader Harry Reid (D-NV) will ask all Senate offices for unanimous consent to proceed to the bill, substitute the new language, and consider it passed.

Robert Reich at the Progressive Governance Conference 2009

Today in the Wall Street Journal Robert Reich, a Professor of Public Policy at the University of California at Berkeley and former Secretary of Labor under President Clinton, painted a bleak picture of the future of the US economy over the next decade.  Reich explains that the latest job numbers are a positive sign relatively speaking, but that “the bleeding hasn’t stopped.”  While the economy added some 162,000 jobs in March, 40,000 were temporary jobs thanks to the ongoing census.  That means 112,000 “real new jobs,” as Reich calls them, were created, which is below the 150,000 needed on a monthly basis just to keep up with US population growth.  Reich blames outsourcing in large part, and says that even with robust job growth of 300,000 jobs per month it would take between 5 to 8 years to return to pre-recession levels of employment.

As a former Labor Secretary Reich knows a thing or two about the economy and employment in particular.  I don’t frequently agree with him on policy, but it is hard not to notice the man’s intelligence and grasp of issues, even if you oppose him philosophically or ideologically.  The reality he paints is altogether true, unfortunate and extremely unnecessary.  He concludes that “those who have lost their jobs to foreign outsourcing or labor-replacing technologies are unlikely ever to get them back. And they have little hope of finding new jobs that pay as well.”  This may be true, but I know that it doesn’t have to be that way.  The outsourcing of jobs is largely in violation of US export laws and that seems to me to demonstrate the reckless disregard for the American worker rampant in Washington, DC.  The US government is not doing anything to enforce US export laws on the books and stop outsourcing that is in violation of US law.  Sadly, this is not a Democrat problem or an Obama Administration problem, rather it is a government problem.  The same US export laws were ignored under President Bush and when Republicans controlled Congress.

EDITOR’S NOTE: President Obama’s recently submitted budget would allow the USPTO to hire 1,000 patent examiners during both FY 2011 and FY 2012.  It would also provide an interim fee increase on certain patent fees which is estimated to generate $224 million.  There is no mention of fee diversion, but reading between the lines it seems the budget would allow the USPTO to keep all, or at least more, of the fees collected.  More to come, but below is a press release issued by the USPTO on February 1, 2010.  It is worth a read.

########## PRESS RELEASE STARTS HERE ##########

Washington – February 1, 2010 – Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) David Kappos today announced President Obama’s $2.322 billion fiscal year 2011 (FY 2011) budget request for the USPTO.

The president’s budget request for FY 2011 will support a five-year plan designed to enable the USPTO to achieve the strategic objectives laid out by Under Secretary Kappos and Commerce Secretary Gary Locke – a significant reduction in patent pendency periods and the existing patent inventory backlog; improvement in patent quality; enhanced intellectual property (IP) protection and enforcement; global IP policy leadership; and investment in information technology (IT) infrastructure and tools to achieve a 21st Century system that permits end-to-end electronic processing in patents and trademark IT systems.

Senator-Elect Scott Brown (R-MA)

If you are unaware that Massachusetts Republican Scott Brown was victorious last night via special election to fill the remaining term of the Senate seat held by the late Senator Ted Kennedy you must be living under a rock.  Over the last month or so Brown has surged in the polls and took Massachusetts and the nation by storm, claiming a Senate seat long believed to be practically owned by Democrats.  In a matter of days, perhaps weeks, the Democrats will no longer hold a filibuster proof majority in the Senate, which likely all but assures a death to health care legislation and a dramatic slow down in the Obama agenda.  Already Senators and Representatives on the Democrat side of the aisle are talking about perhaps slowing down on health care, perhaps even starting over, and in the meantime focusing on jobs, which is after all what the overwhelming majority of Americans want Congress and the President to do.  As a policy wonk and political observer I would love to get into a discussion about what this election means, and I have over at BlatantlyTrue.com, where I wrote MA Republican Scott Brown and his Truck Head to DC, but for the pages of IPWatchdog.com, general political discussion is a bit too much off topic.  But one story that certainly is not off topic is patent reform, so allow me to ponder what this political tectonic shift may mean for the future of patent reform, which if done right could and should lead to job growth and economic prosperity.

Earlier today President Barack Obama, perhaps with the best of intentions, demonstrated that he is not all that familiar with the United States Patent and Trademark Office and how they handle patent applications. The short of it is that what President Obama said to tech executives was wrong on the facts, but at least partly correct in spirit. Essentially, President Obama said that the way the Patent Office handles electronically filed patent applications is to print them and scan them. Sadly, that is not true, or is at least extremely misleading. It is certainly true that the Patent Office used to do things that way, but since the new EFS Web system was unveiled on March 16, 2006, electronically filed patent applications are not printed and then scanned. Perhaps the President or his speech writers are readers of IPWatchdog.com and got the wrong impression when I lamented a few months ago that genius federal minds thought printing and scanning created a paperless system, or perhaps the White House has been spying on the PLI Patent Bar Review Course and listening to John White tell stories of the old days when printing and scanning of electronic filings was the rule. Whatever the case, the President was incorrect on the facts, but certainly correct to say that it is embarrassing that the Patent Office computer systems are woefully inadequate and behind the times.

A press release issued earlier today by the Pharmaceutical Care Management Association (PCMA) explained that a new article published in the New England Journal of Medicine (NEJM) urges Congress and the White House to revisit pending biogenerics legislation that would grant biotech companies an a 12-year exclusivity period for biologics. The press release explains that the experts, who are Harvard researchers and unidentified patent experts are adding “to an emerging consensus, including the Federal Trade Commission, which has concluded that 12 years of market exclusivity for biologics is unnecessary.” I suppose anyone can say anything in a press release. I am still troubled by the arrogance on display by PCMA though. Either they do not know what a “consensus” is, or they are simply intentionally misrepresenting the facts in order to further their own agenda. In either case it is appalling that the discourse relating to patents and exclusive rights has devolved to the point where the truth no longer matters and the masses are mislead by things that simply are not true.

If you have not already read the letter from Commerce Secretary Gary Locke to Senator Patrick Leahy (Chair of the Senate Judiciary Committee) and Senator Jeff Sessions (Ranking Republican Member), you absolutely need to read it to comprehend the massive changes the Obama Administration is supporting with respect to patent reform.  It would be difficult to over exaggerate the magnitude of the changes being supported by the Obama Administration.  Simply put, if the Obama Administration gets its way US patent laws would be completely re-written and substantively changed to a greater extent than at any time since 1790.  In fact, if the Obama supported patent reforms become enacted into law it would probably be much easier to simply pass legislation withdrawing all US patent laws and putting in its place the patent laws presently in existence in the European Union.  If you do not believe a European style patent system is in the best interest of the United States then you had better step up to the plate, because the stars seem to be aligning and before you know it there may not be any remaining US patent laws.  The steaks are high and it seems as if the once hopelessly derailed patent reform legislation is back with a vengeance, like a resurrected Jason a la Friday the 13th.

There has been something brewing for at least a couple weeks now on the patent reform agenda, and I have been trying to make sense of it all.  I am not sure I have my head wrapped around it yet, but the Wall Street Journal (via Dow Jones Newswire) is reporting that President Barack Obama is placing his support behind major changes to the patent laws and reopening the patent reform debate.  For some time now I have been writing that patent reform was dead and would not come back before the end of 2009, and that if it did not come back it would be difficult to do anything during 2010 due to it being an election year.  Patent reform is not susceptible to party politics, but there are major industries and large donors who are on both sides of the debate, which will make it exceptionally difficult for many Senators to cast a vote one way or another.  For that reason I do not suspect patent reform to be on the table in 2010 with what will be a very heated election cycle where every supporter and every dollar will matter.  I also did not believe patent reform would come back this fall because the health care debate was raging and splitting the country and Congress.