PTO Seeks to Incentivize Release of Humanitarian Technologies

On Monday, September 22, 2010, the United States Patent and Trademark Office announced via Federal Register Notice that the Office is considering pro-business strategies for incentivizing the development and widespread distribution of technologies that address humanitarian needs. One proposal being considered is a fast-track ex parte reexamination voucher pilot program to create incentives for technologies and licensing behavior that address humanitarian needs. Under the proposed pilot program, patent holders who make their technology available for humanitarian purposes would be eligible for a voucher entitling them to an accelerated re-examination of a patent.  Given that patents under reexamination are often the most commercially significant patents, it is believed that a fast-track reexamination, which would allow patent owners to more readily and less expensively affirm the validity of their patents, could provide a valuable incentive for entities to pursue humanitarian technologies or licensing.

Under the proposed pilot program, patent holders who disseminate their patented technologies for humanitarian purposes would qualify for a fast-track ex parte re-examination voucher, which could then be used on any patent owned by the patent holder or transferred on the open market.  The Federal Register Notice goes out of its way to point out that the concept of a government agency offer fast-track vouchers is not unique.  In fact, the U.S. Food and Drug Administration (FDA) currently has a similar voucher program for fast-track review in place. Under the FDA program priority review vouchers are provided to entities that develop drugs to treat neglected tropical diseases.


Among the technologies which address humanitarian needs that would be eligible for the program are treatments for tropical diseases, diagnostic medical tools, crops with higher yields or better nutritional value, and treatments for sanitation or clean water. Participants could qualify for the proposed pilot in two ways: by making their patented technologies available to impoverished populations for humanitarian use, or by making their patented technologies available to researchers who are developing technologies that address humanitarian needs.

While the devil is always in the details, as a general rule I am predisposed to be highly supportive of incentive based maneuvers to encourage desired behavior.  For example, the Orphan Drug Act can be viewed as nothing other than an enormous success, and for those who choose to remain intellectually honest it is clear that a strong patent system has created both enormous economic opportunity for the United States and the creation of extraordinary live saving treatments and cures.  While reasonable minds might disagree with the famous (or infamous) statement of Gordon Gekko about greed being good, we can all agree that greed is a human condition.  Ignoring the nature of some, if not most or even all, to be greedy is naive.  So there is something quite natural about government recognizing the obvious and attempting to tickle what I refer to as “the greed gene” to incentivize a desired outcome.

Now, having sung the praises of using the dangling carrot approach to achieve a desired outcome, I am conflicted regarding this particular pilot program.  First, I wonder whether a fast-track re-examination voucher is going to be much of an incentive.  In any given year there are only several hundred ex part reexaminations anyway.  Perhaps the prospect of having a particularly valuable patent reexamined quickly in an ex parte process and then made stronger as a result will be enticing, but I wonder.  I also wonder whether it is appropriate to use a “move to the front of the line” to incentivize outside the Patent Office social policy at a time when the Patent Office is so horribly bogged down that it can only legitimately be characterized as barely keeping its head above water.

On Monday, Director Kappos wrote on his blog that this time last year there were 750,000 patent applications in the queue that had not been touched and were awaiting first action.  Presently there are 725,000 patent applications awaiting first action, which is the first time in a decade there has been a dent in the backlog.  This is particularly good news because during fiscal year 2010 filings were up 4% and the number of patent examiners continues to be in decline.  So even with more applications and fewer patent examiners Kappos has been able to squeeze out a dent in the backlog.  With 10 days remaining in the fiscal year he wrote that he hopes to get close to the 700,000 backlog target.  Indeed all good news, but with this type of backlog and reexamination pendency that can easily be 3 to 4 years, should the Patent Office be encouraging humanitarian activities in exchange for a place in line?

This is a difficult question indeed.  Who can blame the Obama Administration for trying to find ways to put humanitarian technologies into the hands of those who need those technologies sooner rather than later?  I am happy to blame the Obama Administration for a lot, but humanitarian efforts are objectively good, moral, ethical and necessary.  I just wish that humanitarian incentives wouldn’t cost a place in an already crowded and lengthy line.

I guess my problem, if in fact I really do have a problem with this pilot program, is the fact that it is quite different from the other fast-track or efficiency improving proposals of the Kappos Administration.  I think it is fair to say the other programs that would allow acceleration or advancement related to either reducing the backlog (i.e., abandon one to move one up) or spurring the US economy (i.e., advancement of Green Technologies).  The previous alterations of the first-in-first-out queue related to USPTO efficiency or economic development seems completely legitimate for the USPTO, a division of the Department of Commerce.  I am less convinced that a purely humanitarian effort that offers advanced placement in line at the USPTO is appropriate given the monumental challenges facing the Patent Office and the fact that an advancement of one necessarily associates with the slowing of others.

I suspect that what I am writing will be taken by some to be cruel and immoral; such an incorrect characterization is to be expected.  But my position is neither cruel or immoral.  The patent system already provides enormous benefit to those most in need by granting to greedy individuals and companies exclusive rights for an exceptionally limited time, after which the technologies fall into the public domain for all to benefit from for practically free.  So the patent system is by definition and through application an extraordinarily successful and driving humanitarian force.  The question is whether some innovations should be slowed in process at the USPTO to encourage quicker humanitarian benefit, and I guess I just don’t think that is the appropriate trade-off.

What I would be in favor of, however, are incentives that would result in humanitarian technologies being donated that do not cause other innovators to suffer from line-cutters.  Patents are property rights because Congress says they are, and the length of time a patent stays in effect is what it is because Congress declared it to be that way.  So Congress can define the patent term however it chooses.  So what would be wrong with Congress granting an additional 30, 60 or 90 days of patent term in exchange for the donation of humanitarian technologies?  That could be a powerful incentive for many companies, particularly biotech and pharma companies, to donate certain technologies.  Can you imagine how many pharma companies would line up to do that if they could extend the term of a blockbuster drug by even 30 days?

I know that the likelihood that Congress will do anything patent related, let alone something productive, asymptotically approaches zero.  Thus, if any kind of patent reform or policy is to be implemented it will need to come from the Patent Office or the Courts.  So I am mindful of the limitations on what solutions are available given the Patent Office’s interest in humanitarian efforts, and I do applaud the Patent Office and Department of Commerce for thinking outside the box.  After all, the goal of the patent system is to spur the dissemination of technologies and information for the benefit of society.

In any event, what is your opinion?  In addition to sharing your thoughts below, which I hope you will do, the Patent Office would like to hear your thoughts as well.  To be ensured of consideration, written comments must be received by the Patent Office on or before November 19, 2010. No public hearing will be held.  Written comments to the Patent Office should be sent by electronic mail message over the Internet addressed to  Comments may also be submitted by mail addressed to: Mail Stop Comments—Patents, Commissioner for Patents, P.O. Box 1450, Alexandria, VA 22313–1450, marked to the attention of Joni Y. Chang. Although comments may be submitted by mail, the USPTO prefers to receive comments via the Internet.


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Join the Discussion

5 comments so far.

  • [Avatar for Moocow]
    September 30, 2010 05:56 pm

    I think there’s nothing wrong with the PTO wanting to incentivize behavior that’s of exceptional social benefit, by offering folks a little carrot. Sure, I agree that some other convceivable incentives could be much more powerful, like extra patent term – but that is not possible without legislative action. Good luck going to Congress with that! On the other hand, accelerated INITIAL examination is just not that attractive to a lot of applicants. For one, you can already get accelerated examination under existing programs. Also, many applicants in biotech and pharma are just not in a hurry to get patents because they won’t be able to launch the patented product for another 8 years anyway. But valuable patents being tied up in reexam for years – that’s another matter. It seems to me that the PTO was just thinking hard about the most valuable thing they can offer without needing new authority, and that people actually care about.
    I think it will be important to award these vouchers only rarely though, to patentees who really do something exceptional. A lot of companies, especially big ones who can afford to, already have corporate philanthropy programs that they run as part of their good business practices, and from which they already derive goodwill, tax advantages, and other benefits. Some computer makers give patented computers away to underfunded inner city schools, and every drug company has an indigent patient assistance program for free distribution of patented drugs. So we shouldn’t create some form of entitlement that everybody will expect for doing something that’s already adequately incentivized. And these vouchers should be so rare that they don’t materially impact the timing of “normal” reexams. I’m guessing that the PTO doesn’t just want to hand these out just for the asking anyway.
    In the end, I think this idea should be applauded. It could have powerful symbolic value for the PTO, and maybe it will, in some small way, benefit real people who have been forgotten by everybody else. And for the few patentees who actually get one of these vouchers there may be meaningful value too. I mean, what would you rather have – a magic turbo-reexam voucher, or a plaque and a handshake from Kappos?

  • [Avatar for patent litigation]
    patent litigation
    September 27, 2010 05:05 pm

    While ethically laudable, this new proposed incentive program sounds more like a PR ploy to improve the image of patent law than anything else. As you note, there are few ex parte reexaminations annually, so it likely wouldn’t have too much of a concrete effect on backlog issues. That being the case, I can’t imagine that this new initiative would do either much harm or much good. That said, I’m glad the USPTO and Obama administration are making an effort to bring humanitarian issues within the reach of patent law. However, I must confess that your idea — patent term extensions “in exchange for the donation of humanitarian technologies” — sounds much more intriguing. It could be a powerful incentive that would satisfy both the “greed” and “good” genes at the same time, and I think that’s what’s needed.

  • [Avatar for Dan Robinson]
    Dan Robinson
    September 24, 2010 01:25 pm

    “patent holders who disseminate their patented technologies for humanitarian purposes would qualify for a fast-track ex parte re-examination voucher, which could then be used on any patent owned by the patent holder or transferred on the open market. ”

    This seems like an area for abuse. I haven’t read the Fed Reg notice, so maybe you can provide more insight: would a company with thousands of patents be able to qualify for this voucher on all of its patents merely by making one patent available for humanitarian purposes? In other words, will we see huge corporations making token gestures that qualify them for a blanket voucher, and then moving all of their patents to the front of the line?

  • [Avatar for Courtenay Brinckerhoff]
    Courtenay Brinckerhoff
    September 22, 2010 09:33 pm

    I wrote my views about this at

    I just don’t get it. The FDA program it seems to be modeled on makes more sense – too much gets lost in the translation from a rapid drug review voucher to a rapid reexam voucher. It’s harder to see how this program will incentivize humanitarian technology. It also strikes me as a “solution” looking for a problem when there are so many more critical problems already.

  • [Avatar for patent leather]
    patent leather
    September 22, 2010 08:29 pm

    “Under the proposed pilot program, patent holders who disseminate their patented technologies for humanitarian purposes would qualify for a fast-track ex parte re-examination voucher, which could then be used on any patent owned by the patent holder or transferred on the open market. ”

    I’m not sure I understand this. Does this mean that the humanitarian patent owner can only use the voucher to reexamine one of their own patents? It is very rare to reexamine your own patent (although it does happen). Since the voucher is transferrable on the open market I would think it means it could be used to reexamine ANY patent. My recent experiences with ex parte reexamination is that they have been conducted fairly quickly. So I’m not so sure this is really much of an incentive. Perhaps the voucher might have cash value on the open market, so who knows we might see these vouchers for sale on e-bay.

    But if the goal is to help encourage humanitarian use of patents, I doubt very much that someone will say “hey let’s give rights to our patent away so we can get our reexamination voucher.” Does the USPTO even have authority to make such incentives?