Nick Godici Part 3: Funding Crisis ’09, Furloughs & Fun Stuff

Nick Godici

Nick Godici, the former Acting Director of the United States Patent and Trademark Office, sat down with me on Tuesday, June 29, 2010, for an extended interview. Nick is one of a select few who have seen the Patent Office on every level, from patent examiner, to SPE, to Group Director, Commissioner for Patents and ultimately Acting Director. In Part 1 of the interview we discussed his philosophy on examining patent application, the historic allowance rate vs. the depressed allowance rate of the pre-Kappos PTO and a variety of other topics. In Part 2 we discussed how President Obama’s approach to revitalizing the USPTO under Director Kappos’ direction parallels President Reagan’s attempts under Gerry Mossinghoff. We also discussed building relationships between patent examiners and the patent bar, what the PTO is likely doing to announce 101 guidelines in the wake of Bilski v. Kappos, and what it is like to be Director of the USPTO.

In this final installment of my interview with Nick Godici we learn just how close the Patent Office was to sending out 9,000 furlough notices (to all those on the patent side of the building) during the Summer of 2009 as a result of lack of funds. We also discuss the historic patent allowance rate versus the 42% rate the Patent Office got down to during the Q1 of 2009.  Godici also humors me by answering the fun questions and we learn that he was the primary examiner on a somewhat famous (or infamous) patent relating to a bird trap and a cat feeder, and he goes off the board with an interesting selection for most famous fictional inventor.

Start Part 3 —

QUINN: I have two more questions before we will hopefully have some time to get into the fun stuff.

GODICI: OK

QUINN: Would it be fair to say you were a special adviser to the Patent Office on behalf of the Commerce Department? How do you characterize your roll when you went back?

GODICI: Yes, that is what I was asked to do. They put the even something on the door and I think it said Expert Advisor or something along those lines. But the I was asked to go over to the PTO and my main contacts were general counsel at the Department of Commerce and the deputy chief of staff for the Secretary. And they just wanted me to go in and try and figure out what was going on and to talk to them on a daily basis in terms of the issues that they saw were problems.

QUINN: So was this to assess what is going on to give the administration and the commerce department a better sense of what’s going on at the Patent and Trademark Office?

GODICI: Yes in one sense and in another sense there was a particular crisis.

QUINN: Is that the funding?

GODICI: Yes, that was the funding. Last summer the Patent Office was very close to printing 9,000 letters that would have notified everyone but trademark examiners that they were going to be furloughed because they literally spent more than the incoming collections. The way the appropriations bills are normally structured it says that the PTO is authorized to spend up to X amount of money provided they collect that amount of money. If you collect more X you can only spend that lesser amount. But what happened through fiscal year 2009 was a step wise drop of the income from month to month. It started out in October, November, December at one level and then come January, February and March it dropped down again. And then in April it took another swing down. So by July, they had hired 600 patent examiners in the beginning of the fiscal year and they had gone on a spending routine based on one set of assumptions of what the income would be. But over the late spring and summer they saw income drop dramatically to the point where it was possible to be in a deficit situation at the end of the year. You can’t do that. So the one possibility last year was that Patent examiners and other people at the PTO would have been furloughed for a biweek or two to save X million dollars and to balance the checkbook at the end of the year.

QUINN: So lights would have been shut off.

GODICI: Yes.

QUINN: Wow.

GODICI: So that was the immediate crisis while I was there. Things worked out. Congress passed the trademark bail out act.

QUINN: To raid the trademark budget.

GODICI: Exactly. Which’ by the way, never actually happened.

QUINN: Oh it didn’t?

GODICI: No money was transferred from the trademark fund to the patent fund. There was a bit of a recovery in the August/September time frame. We did some more cutting at the end of the year, especially in contract areas and we were able to just barely make it through at the end of year without having to go to the furlough option or dipping into the trademark funds.

QUINN: Wow I did not realize it had gotten quite so dicey. It was in the news that there were problems, but I did know to what extent.

GODICI: The thing about running a furlough is that you have to give employees advanced notice and they have to have the opportunity to voice their concerns. So in order to furlough someone in the last two weeks of September you pretty much have to tell them in July that this is going to happen to go through this entire process and that was the time frame we were dealing with. Luckily we were able to find a way to avoid that whole process.

QUINN: OK The last substantive question, concerns one of our mutual friends

GODICI: [Laugh]

QUINN: who was generous with his time talking with me about you, and he has nothing but admiration for you. I asked him, if he could ask you one question, what would he ask? And he said he would ask you what about getting the back log down and getting the allowance rate to where it belongs at about 2/3 of applications allowed. Now those are his words. So first, would you agree that 2/3 allowance rate, which I’m told is a the historic allowance rate, is generally appropriate. The second, aside from what Kappos is already doing, what would you recommend?

GODICI: History tells you that if there was 30 years of 60-65% allowance rate then that’s generally where it should be. I hesitate to say that you ought to shoot for a certain allowance rate, or you try to manipulate the system to get to a certain allowance rate. You ought to make fair decisions in each individual application that comes along. And where it comes out, it comes out. The converse is also not true. A lower allowance rate doesn’t equal better quality in my mind either.

QUINN: Well let me stop you there. Do you think that when we got down to 42% and we’re talking pre RCE, do you think that that was too low? I know you have to look at every case and it’s not necessarily fair but what I’ll say is it seemed to the practicing patent bar that we had, for a very long period of time, an historical 60-65% allowance rate and then all of a sudden over a span of only a few years we’re at 40-42%.

GODICI: Right.

QUINN: So it was perceived that there was certain Jerry-rigging to push it down. I know that’s open ended, but do you have any thoughts on that?

GODICI: Yes, I think that there was a reluctance to allow an application for fear of making a mistake. You get what you measure and there was a tremendous emphasis on measuring quality by measuring the error rate from the quality review process. And the administration was all about reducing that error rate. Well one way to not make an error while allowing a case is not allowing a case. It created a lot of churn. RCEs skyrocketed and it became a very inefficient ways to run the system and timeline. I think we’ve seen Dave Kappos and Bob Stoll come in and reverse the curve or attempt to reverse the curve.

QUINN: Right, and I don’t want to ask you a question on that but as you were just talking about the time line and recovery I can’t help but notice, and I’ll make this observation, that is at the same time that you returned to the Patent Office, which I know was very well received by a lot of people that I talked to, and then there was the Kappos appointment, which was again, very well received. So I am hopeful that we’ve bounced. Do you get the feeling that we have bounced and are maybe headed back toward a natural trajectory, whatever that is?

GODICI: Yes, absolutely. I see it and not only do I see it, every one that I work with here at the law form and that I talk to at other law firms are seeing a shift in attitude. Examiners are more open to discussions and having interviews and like we talked about earlier, trying to arrive at what would be allowable and how to make a case allowable on how to work on language and suggest language and so on and so forth. It’s not happening overnight, and there are certain areas where it may not be happening as quickly as in other areas but I think from day one when Dave Kappos came in and I think from when he was sworn in he said that rejection doesn’t equal quality. I absolutely 100% agree with that. As I said before, it’s easy to reject. It’s harder to put your name on a patent and allow it. But that’s the job and I think that that’s the harder part of the job. And that’s what, I think, Bob Stoll and Dave Kappos are trying to accomplish. It’s got to be fair but it’s got to be efficient also; the examination process.
QUINN: And the last thought there would be do you have any ideas. Because it seems to me, observing from the outside in, that Kappos is trying to do whatever he possibly can, within the confines of statute.

GODICI: Right.

QUINN: Realizing that at this point it doesn’t seem like we’re going to get congressional assistance. I don’t know what else he can do. I mean, he’s getting very creative.

GODICI: Right. If there was a silver bullet, if there was a magic formula to reduce pendency, I think it would have been arrived at by now. I think the answer is that you must roll up your sleeves, have good, highly trained patent examiners that you can rely on. Give them the tools. Try to do things that make the examination process more efficient, that reduces the rework and the churn. One of the things that I’ve often thought about is the requirement for some kind of an interview, meeting of the minds, interaction between the prosecuting attorney and the examiners. I mean a requirement.

QUINN: I’ve thought about that too.

GODICI: I mean literally first there’s a understanding of the technology, then there’s a search so the best prior art is on the table and then there’s a sit down to define where we draw the line in terms of patentability and whether the client is willing to take the scope of claims that the examiner has determined are allowable or whether or not an appeal is necessary. I think, in my mind, possibly becoming as efficient as possible is a way to reduce the back log, besides having the right level resources to deal with the over whelming number of applications that are being filed.

QUINN: Our friend, when I had lunch with him the other day and we were talking about this, for the first time he put it to me like this. When he was a patent examiner he said after he met face to face with an attorney then that changed all of the papers that were ever filed because you had some sort of a relationship. And where you might pick up the paper and read it and in a cold way it comes across, the examiner is wrong. After you’ve had a face to face meeting with that person you can read it and say “OK, well this is not necessarily a personal attack.”

GODICI: Right.

QUINN: So it seems to me that that relationship part of the attorney examiner interaction is critical.

GODICI: Yes and I remember as a junior examiner having interviews. And it goes both ways. I remember a much respected attorney coming in for an interview and he sat down and I was a junior examiner and there was a primary next to me and he said, “The prior art doesn’t show this feature.” And the primary looks at me and said, “Well Nick, what do you say for that?” And I said, “Well it may not but it’s not in the claim either. So it worked both ways. He said, “You know, I think you may be right.” I understood where he wanted to go and he understood where I was coming from and there was a meeting of the minds that doesn’t occur when you’re shifting papers or electrons these days [Laugh]

QUINN: Right [Laugh]

GODICI: back and forth. So I don’t know if it’s a silver bullet and I know Dave Kappos and Bob Stoll are moving in this direction anyhow. But I just think that one of the ways to move things quicker and resolve things at an earlier stage is this face to face, or a meeting of the minds. The earlier that occurs, the better off we are.

QUINN: All right, well you’ve been very generous in your time. And in my feeble attempt to imitate James Lipton of Inside the Actor’s Studio, I have a few questions for you. Now I will say, judge Rader answered this question.

GODICI: [Laughing]

QUINN: So you don’t have to if you don’t want.

GODICI: Well I took a look at the questions and I am not a star wars guy. [Laughing]

QUINN: So let’s get there [Laughing]

GODICI: Go ahead, whatever.

QUINN: Alright, favorite hobby or past time.

GODICI: As you know from our mutual friends, I like to play golf. I also own a boat. So we do a lot of boating on the Potomac River. So probably boating and golfing. And having time with grandkids. I’ve got 4 grandkids.

QUINN: Favorite Sport?

GODICI: Depends upon whether you’re talking about today at my age or back in the old days. [Laugh] No, I enjoy all sports. My father was actually a coach in the high school that I went to.

QUINN: And what did he coach?

GODICI: Well he coached football and wrestling. I was a football/wrestling/baseball guy. I enjoy going to ball games and as you can go see when I retired from the PTO they gave me a baseball bat. They engraved it with my name and “The Commish” because the guys at the office knew I was a baseball fan so I’m a sports fan [Laughing]
QUINN: Favorite movie?

GODICI: I don’t have a favorite movie.

QUINN: How about a favorite genre.

GODICI: Genre? There are two things I like. I like historical movies that deal with a particular era and teach you about what it was like. I’m also an action movie person. I like to be entertained.

QUINN: Who would you most like to meet? Benjamin Franklin, Thomas Edison the Wright Brothers or you can go off the board there. The theme being inventors, so if there’s another inventor that you’d want to meet.

GODICI: That’s like asking me “Who would you rather meet, Babe Ruth, Lou Gehrig… [Laughing] or Hank Aaron.

QUINN: I know, but I’ll tell you my answer. It would be tough, but it would be Benjamin Franklin because of the perspective that he gives, besides being a world class, hall of fame level inventor, the importance he played to history. So that’s who I would pick.

GODICI: I would go with, to be perfectly honest with you, probably Edison. Only because he was into the technologies that maybe I would have been into. But he also dealt with the patent world. And so besides the technology aspect of it I’d ask “What did you think about the patent system?” My understanding is that Franklin was Anti-patent. [Laughing]

QUINN: Right.

GODICI: So I would have just been interested to know. Edison had his patent wars and so did the Wright brothers clearly so it would have been interesting to get their perspective on how the patent system maybe motivated them at some point or caused them problems at another point or whatever the impact may have been.

QUINN: The coolest invention of all times?

GODICI: Ha, ha, ha, ha I don’t know. I really don’t know. Gosh.

QUINN: Judge Rader pointed out to me that Judge Rich’s answer to this was the disposable diaper.

GODICI: Really? The coolest? [Laugh] I’ll tell you a story. I went to give a talk somewhere and the attorney picked me up to go to the reception and he had a patent in his hand. And he said “Nick, my secretary has on the wall behind her all of her most favorite patents and you were the examiner on one of those favorite patents. Would you autograph this for me? [Laughing]

QUINN: I was told this story! [Laughing]

GODICI: You have?

QUINN: Yes.

GODICI: Oh so you know what it was?

QUINN: A little bit about it, but go ahead.

GODICI: You know what it was? It was fishing and trapping and vermin destroying. And I issued a patent on a bird trap where a bird flew into the top of this tunnel like thing and came down and fed cats. [Laughing]

QUINN: Is that the Bird Trap Cat Feeder?

GODICI: Is it that famous? [Laughing]

QUINN: Yes it is. You know why that’s famous?

GODICI: Look at whose name is at the bottom of it [Laughing]

QUINN: Well of course, of course. It’s famous for a number of reasons but there are a whole slew of patent attorneys trained at Franklin Pierce Law Center that learned basic claim drafting using that patent.

GODICI: You’re kidding. I didn’t know that.

QUINN: I’m not kidding, and when I teach patent claim drafting, that’s a patent that I use.

GODICI: Well the next time you pull out a copy of that patent look at the examiner’s name.

QUINN: I will do that. And what makes it fun is that there are a lot of pieces to it.
GODICI: Right.

QUINN: A lot of parts to it. It’s a technology that everybody can understand; you can get the whole point. And it’s humorous on some level. And when I have spent time teaching, I’ve always thought, going back to what we talked about at the very beginning of the interview, about examiners moving around and applications being applications. Every application has to have the same number of pieces and parts and hit the same targets.

GODICI: Right.

QUINN: So my philosophy has always been that if I can use examples that the students are more likely to 1 read and 2 understand and 3 remember,

GODICI: And actually think about a little bit.

QUINN: Yes, so it’s better off for them. So it is kind of famous. Would that be your answer then to what’s the coolest invention?

GODICI: Well I wouldn’t say it’s the coolest invention but it’s one that I remember. I’ve had the opportunity to deal with some inventors since I’ve been here on the outside and I think the coolest invention is the one where the inventor is just so excited about it and you feel good that you help someone get patent rights and whether its commercially viable or not, a lot of times, you know, you’ve met inventors and you know the passion is there and the pride they have when they get a patent is something that’s cool.

QUINN: All right, well I’ll let you off the hook because we had a very good discussion and I do get what you’re saying. Given your experience and positions held at the Patent Office it’s probably not the fairest of questions I could have asked you. This one I think is fair. Who’s the best fictional inventor? Emmitt Brown from Back to the Future, Q from James Bond, Tony Stark from Iron man or the Professor from Gilligan’s Island? And you can go off the board if you have another.

GODICI: Gosh, I don’t know. That’s a good one. I don’t know maybe I’ll go off the board and go with MacGyver.

QUINN: I have asked a number of folks that question and it is the one people stop and think about the longest.

GODICI: I did too.

QUINN: Wow, I had not thought about MacGyver and I grew up watching MacGyver. I can’t believe he’s not on the list. He will be on the list. And the last question is, can you think of another fun question I can add to this list you ask the next person on the hot seat.

GODICI: The one that I always think of is if you had a do over. IF YOU COULD PULL SOMETHING BACK. If there was something that you could go back in time, take back and do differently, what would it be? A lot of times we look back and think “Oh I wish I had done this differently or said something differently, or done something this way instead of that way, or not said that….”

QUINN: Well I won’t make you answer that question.

GODICI: I’ve probably got too many of those.

QUINN: I suspect that by asking for a question and then asking for an answer I’ll get better questions for the next person.

Well I’ve enjoyed our time and the chance to sit down with you.

GODICI: I did too.

End of Interview