Earlier today President Barack Obama nominated Michelle Lee to be the next Under Secretary for Intellectual Property and Director of the U.S. Patent and Trademark Office. Lee has been serving as Deputy Director of the USPTO since January 2014. Previously, she served at USPTO as the Director of the Silicon Valley Office from 2012 to 2013, a USPTO satellite office that still has not opened and will not open until early 2015.
Immediately prior to becoming Director of the un-opened Silicon Valley Patent Office, from 2003 to 2012, Lee was the Deputy General Counsel and Head of Patents and Patent Strategy at Google Inc. Google has been a outspoken critic of the U.S. patent system and based on their public positions and lobbying it is clear that the company would like to see software patents abolished and the patent system significantly curtailed. Recently other large Silicon Valley companies have split with Google and have started to work to promote the importance of patents as a tool for American innovation.
Just as in the land of Westeros, there is turmoil and intrigue in our government as to who is to lead the United States Patent & Trademark Office (USPTO). Indeed, the top position of Under Secretary of Commerce for Intellectual Property and Director of the USPTO has been vacant since the resignation of David Kappos on February 1, 2013. His deputy, Teresa Stanek Rea, became Acting Director, but she was not elevated to his post. She resigned on November 21, 2013, which left both positions unfilled.
On January 13, 2014, Michelle Lee, former head of Patent and Patent Strategy at Google, was appointed Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the USPTO, and in the ongoing absence of a Director, she holds the fort as Deputy Director, but with her position in administrative law limbo. Despite the clear need for leadership at the USPTO, the search for the next Iron Throne holder is mired in ideology and lobbying.
Back on June 2, 2014, Senator Orrin Hatch (R-UT) wrote to President Obama expressing concern with the fact that the United States Patent and Trademark Office has been without a director for more than 16 months. A further 11 weeks has passed and we are still without a presidential nominee to run the USPTO. The letter from Senator Hatch to President Obama is reproduced below.
In the letter, Senator Hatch also questions whether USPTO Director Michelle Lee was appointed consistent with 35 U.S.C. § 3(b)(1). Dennis Crouch and Hal Wegner have covered that issue with some detail, so there is no need to rehash that here, but suffice it to say that the Director is supposed to nominate the Deputy Director for the position, but there has not been a Director of the Office since David Kappos left in January 2013. At the time Lee was nominated Peggy Focarino, the Commissioner for Patents, had been vested with the powers and duties of the Director by the Obama Administration, although not given the title.
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.
Phil Johnson at IPO Inventor of the Year award ceremony, December 10, 2013.
The Washington Post recently reported that the anticipated nomination of Phil Johnson to head the United States Patent and Trademark Office is dead. News of the death of Johnson’s nomination is both a shocking surprise and yet all too predictable in a town that increasingly makes little logical sense. Johnson is extraordinarily qualified, he is willing to take the position, he has seen the patent system from virtually all vantage points, and yet his nomination has stalled after many months of vetting and no legitimate red flags surfacing.
It seems that Johnson’s major flaw may be that he strongly supports the patent system, which is a very sad commentary. In fact, there are some starting to believe that the only candidate that may be acceptable to certain political forces is one who opposes the patent system on a fundamental level. Of course, such a candidate would be unacceptable to a great many other powerful industry interests, so this could mean that the USPTO will indefinitely be without a politically appointed and confirmed leader, at least unless the White House is willing to step up and make a nomination.
I am on record supporting the nomination of Phil Johnson, and simultaneously pointing out that the proffered rationale used by his detractors is factually false. Those suggesting Phil Johnson hasn’t been supportive of patent reform efforts are simply misinformed. In fact, you would be hard pressed to find anyone in the private sector who has been more supportive of patent reform over the last 8 to 10 years. In fact, Johnson was a strong supporter of the American Invents Act (AIA), which has been one of President Obama’s signature accomplishments. Johnson was also a strong supporter of fee-shifting legislation. Stay tuned more on Johnson’s support of patent reform efforts in the coming days and weeks.
We are far enough removed now from the Kappos Administration at the PTO (2009-2013) that we can assess it with some perspective. In this spirit, I was thinking recently about the history of PTO-academia relations. And I concluded that Dave Kappos made a major contribution in this area, which has so far been mostly overlooked.
Dave Kappos did more for PTO-academic relations than any other Commissioner or Director in the history of the Office. This is a true statement, but hardly does credit to his real contributions in this area. That’s for the simple reason that very few former leaders of the Patent Office had much if anything to do with academics. The bar was so low in fact that had Dave been merely cordial and refrained from open derision of academics and their research, he might well have set a new standard with only that.
He did much more, of course. Director Kappos actively sought out academic researchers. He brought them into formal roles in the PTO. In the process he gave them not only offices and titles, but something much more elusive, much more valuable. He gave them (us, to be honest) respect. That’s a legacy that has been overlooked by other constituents in the patent world, but it will certainly not be overlooked by academics.
Phil Johnson at IPO Inventor of the Year Ceremony, Dec. 10, 2013.
The National Journal is reporting that President Obama is poised to name Phil Johnson as Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. Johnson is currently Senior Vice-President for Intellectual Property Policy & Strategy at Johnson & Johnson.
“I’ve worked on legislative issues with Phil over the years through AIPLA,” said Nicholas Godici, former Acting Director of the USPTO and Commissioner for Patents. “Phil is very knowledgeable, fair and willing to listen to opposing views. He is certainly a well qualified candidate and in my view an excellent choice.”
Godici wasn’t the only high ranking former USPTO official to have extremely positive things to say about Phil Johnson. “I have worked with Phil Johnson on many different patent proposals over the years and have always found him to be thoughtful in his analysis of issues and willing to look at many different solutions to a problem,” said Robert Stoll, former Commissioner for Patents and current partner at Drinker Biddle. “Phil knows the patent system very well and is always seeking to improve it. He would be a great leader for the USPTO as he would need no ramp-up time and he would be able to reach reasonable compromises when others could not.”
It’s 2014, and an angel calls me “grandpa”! What happened to that teenage kid in the mirror — and who is the old man staring back at me? Well, at least the acne is gone. Enough on the personal horrors of aging (which are way worse than any Hollywood syfy). What happens to IP law in 2014?
Near the end of 2013, the Supreme Court granted cert in CLS Bank v. Alice on issues related to software patentability, and many expect that the sagacious Justices will clarify the confusion they created about patent eligibility in earlier decisions, like Prometheus, that were amplified in the splintered en banc panel on CLS Bank at the Federal Circuit. I prophesy that the best we can hope for is a Bilski-esque vague instruction (wherein our top court opined that some business methods are patentable, citing the machine or transformation test as one viable test, without pointing to other valid tests and without enlightening the confused public.)
The Court is once again likely to limit software patentability in some arcane way that harms job creation and stifles economic growth. The bright side is that the Court’s failure to protect our largest growth industries may help spur the legislative branch into further action. A decade of intermittent patent reforms has created a permanent cadre of patent lobbyists very willing to focus their considerable efforts and talents on a new patent issue. It would be advantageous to the patent system if that attention were productively channeled to specifically include our emerging technologies in our patent statutes, and to legislate patent eligibility in a manner that treats 101 as the broad filter it was intended to be, while employing the other patent statutes, such as 112 and 103, to correctly provide the narrower filters.
On February 17, 2011, Teresa Stanek Rea was announced as the new Deputy Director at the USPTO. Yesterday Teresa Rea, who is now the Acting Director of the United States Patent and Trademark Office, announced that she will be leaving the Office, ending speculation that she may be announced as the next Director of the Patent Office.
Now the wait continues for the announcement of a new Director, which could come at any time. I have been hearing rumors about who it may be, but at this time I’m not ready to publicly speculate. There seems to be a political candidate with ties to the tech industry that has risen to the top of the Obama White House list.
Upon joining the USPTO, Rea, who is known both inside and outside the Office as “Terry,” took the mantle of U.S. government employee with the longest title; Rea’s full title prior to becoming Acting Director was Deputy Under Secretary of Commerce for Intellectual Property and Deputy Director of the United States Patent and Trademark Office.
Terry is no stranger to the intellectual property world, and she will undoubtedly be coveted by firms and corporations alike as she re-enters the private sector. She is a former President of the American Intellectual Property Law Association (AIPLA), and a long time patent practitioner who is highly regarding in the intellectual property community.
Late this afternoon Teresa Rea, the Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, sent an e-mail to those who work for the USPTO. The e-mail was simply titled: “A Message from Teresa Stanek Rea.” The message was simple, the USPTO is facing “substantial budgetary uncertainty,” which is due to sequestration.
At this point I don’t know exactly the level of financial crisis at the USPTO, but it doesn’t sound good. The USPTO is a fee generating entity that runs largely on the fees it collects and this year projections have been well above realized revenue. With there already being a deficit, looming sequestration cuts could significantly harm USPTO productivity, which will cause harm to the innovation industry in the United States.
This is particularly alarming given the recent substantial raising of patent related fees for most applicants. How can the USPTO charge more and more for less service? The industry has already been uneasy about these substantial increases in fees, but most were willing to swallow hard as long as it meant a better functioning and faster moving patent process. It certainly doesn’t sound like a better functioning, faster moving patent process is on any relevant horizon at the moment. So the industry faces the prospect of paying more while returning to painfully slow processing of applications. A true nightmare scenario.
In addition to the aforementioned e-mail from Acting Director Rea, another e-mail was recently sent to union members from Robert Budens, President of POPA, the examiner’s union. Budens hypothesizes that there is an unofficial “gag order” placed upon USPTO officials by the White House. Budens has a reputation as a straight-shooter who is liked and well respected. For him to make such an assertion there must be some identifiable rationale on which he is relying. I have always understood Budens to have a good working relationship with USPTO management. The mere fact that he can’t get answers could justifiably raise suspicions. Of course, it may be because USPTO officials themselves don’t have any answers and are scrambling to address budget deficiencies, but you would think that could have been conveyed directly.