Patent and IP Wishes from K Street for 2017

By Marla Grossman
January 2, 2017

Editorial Note: Each year we publish our annual IP Wishes column. I invite a panel of industry insiders to tell us what they wish for in the new year. We solicit wishes that are several paragraphs, but also let everyone know we are more than happy to publish full length contributions as well. Marla Grossman took us up on that offer and drafted the following full length article, which is a part of our Industry Insiders series

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Genie lampLast year at this time, I wished for the passage of trade secrets legislation, resolution of the patent reform legislation stalemate in Congress, that the USPTO consider evidence of non-preemption during its initial determination of patent eligibility; and that the USPTO prioritize accuracy, completeness and accessibility of the public record as part of its Patent Quality Review. Trade secret legislation did pass, but my other wishes were a bit of a mixed bag. The USPTO does continue to work on the patent quality initiative and is focusing on completeness of the record, the Federal Circuit has in at least one case raised the lack of pre-emption as validating a finding that claims are patent eligible. As for patent reform, it stalled, and the future is uncertain as the Supreme Court now considers patent venue.

If a genie were to appear to grant me wishes for 2017, I would ask for two things in particular: First, that the USPTO not change the information printed on the front page of issued patents. Second, that the Commerce Department cease attempts to make the USPTO pay for the shared services initiative.

1. The USPTO Does Not Reduce the Information Provided on the Front Page of Patent

The USPTO is proposing that, as part of an effort to streamline patent issuance, the amount of information provided on the front page might be reduced. The stated rationale for doing so, beyond potential “efficiencies” in the issuance process, is that “complete information concerning US patents and US patent application publications is accessible to the public via the PAIR system.” While in principle this appears to be a reasonable position, in practice it would be highly problematic for several reasons.

First, and most importantly, the USPTO’s proposal will likely lead to a significant degradation in the quality of the public record. Today’s publication processes include robust quality checks on allowed patent applications, including the bibliographic information published on the front page. This process exposes literally hundreds of thousands of errors each year in the information that is available in PAIR.

Each year applicants make literally millions of errors in the documents they submit to the USPTO. While patent examiners often do yeoman’s work in exposing problems in applicants’ submissions, still nearly half of all allowed applications contain errors or omissions that must be identified and corrected prior to issuance – with many of these errors and omissions occurring in the front page content.

The USPTO’s proposal implies (1) that in a streamlined process these quality checks would no longer be performed on front page content during the publication process, (2) that the uncorrected and flawed PAIR content would now represent the public record, and (3) that users of the USPTO’s PAIR content would have to discover and correct for flaws in the PAIR content on their own. This would represent a massive abdication of a key responsibility of the agency, namely assurance of the accuracy of the public record. Further, it would run entirely counter to the Office’s stated commitment to improving quality processes and outcomes, including the quality of the public record.

Former Director Kappos made the following commitment to Congress in 2012. When asked “what are PTO’s plans for ensuring that this new system will help maintain PTO’s current high standard of content accuracy for PTO’s databases and published U.S. patent content,” the former Director answered, in part, “Any PE2E projects that would impact the current patent publication process would meet or exceed the current standards.”

Current Director Lee has said, “I am excited to say that we are taking a big step forward by modifying (1) our process for reviewing patent quality, and (2) the volume of data we’ll be gathering.   In essence we are transforming our (1) patent review process and (2) data capture process, with the net benefit being greater transparency and consistency across the entire patent corps.”    Moreover, improving patent quality has been a consistent theme throughout her tenure. As recently as this fall, she stated, ““Improving patent quality both in terms of ensuring that every patent issued comports with all statutory requirements and has a clear record, is a top priority for the USPTO. Through issuing high-quality patents, we enable certainty and clarity of rights which fuels investment in innovation and reduces needless litigation.” The USPTO’s proposal regarding front page content runs entirely counter to these commitments from the past and current Director.

In addition to essentially ensuring degradation in the accuracy of the public record, a change such as the one proposed would serve to make patent information more opaque rather than more transparent. The current publication process for front page content involves not only robust quality checks, but also a range of content normalization steps that make search systems far more effective and make the results they provide more useful and transparent. The USPTO’s description of the proposed streamlining implies that these content normalization steps will no longer occur, and that users (and search systems) will have to deal with bibliographic content in more “raw” form (i.e., in the less normalized state in which it exists in PAIR) – simply because current data normalization steps will no longer occur. Taken together, the quality and data normalization issues will represent a massive and growing problem for users of patent information, including patent examiners.

Third, and related to the two issues above, the USPTO’s proposal would increase the cost burden on users of patent information and would create a disparity of outcomes among those users. If the USPTO no longer ensures the quality of the public record at the level of today’s standards or better, users of USPTO content would have to do it on their own. Some users have more and better resources to do so than others, which would create inequity of outcomes. But all users would have to expend more cost, time, and/or effort to arrive at the level of quality and information transparency that the USPTO provides today. In other words, while the USPTO’s costs may go down, users’ costs (and frustration) would go up.

Far from eliminating the quality checks that exist in the current publication process for bibliographic (front page) content, the USPTO should instead be utilizing technology and existing value added content to make those checks more robust.

The USPTO should keep existing post-allowance filters for front page content in place, but in addition to those filters should also implement analytics that are already available in the private sector to catch errors and anomalies that persist to the point of allowance or beyond.

Finally, regarding the proposal, the USPTO says “… the USPTO is seeking to reduce the issuance time of a patent by eliminating potentially unnecessary information from the front page of the patent.” It goes on to say that, since some of the front page information is available in PAIR, it may be duplicative and no longer necessary to appear on the front page. However, a patent’s front page is integral to the end users’ analysis of the document. Thus, while I appreciate the USPTO looking for efficiencies in the issuance process, reducing the amount of information provided on the front page would be highly problematic, and one of my wishes IP wishes for 2017 is that the USPTO not advance this problematic proposal.

2. The Department of Commerce Does not Make the USPTO Pay for Shared Services that the Agency does Not Need

Like a horror movie where the killer, assumed dead, springs back to life when you least expect it, such is the case with diversion of USPTO user fees to unrelated agencies within the US federal government. The latest chapter in this narrative is the USPTO’s forced participation in a Department of Commerce shared services initiative for human resources, information technology, and procurement functions.

The USPTO is, of course, fully funded by private user fees. The ability of the USPTO to keep all of its user fees was a cornerstone of the Leahy-Smith America Invents Act. However, it seems as if the Commerce Departments new shared services initiative distorts the intent of the AIA and is the latest form of fee diversion.

The idea behind the Commerce Department’s shared services is that federal agencies should embrace technology to increase efficiencies and improve productivity. However, the reality is that the USPTO’s needs in each of the identified shared services areas are unique. For example, its IT needs are critical to patent and trademark examination and are quite different from the needs of other Commerce Department agencies. The USPTO is in the process of modernizing its IT systems to handle new demands created by the AIA and has developed information sharing systems to enhance international harmonization. Additional demands of its IT systems at this time could slow the USPTO’s progress and potentially diminish the quality of its work product. Similar concerns apply to the USPTO’s procurement and human resources needs.

Being required to purchase services from other agencies could increase costs for the USPTO, as could the mandated provision of services to other agencies at less than USPTO’s costs to provide them. Even worse would be to require the USPTO to utilize services mismatched to its needs, regardless of their costs.

USPTO stakeholders have yet to be informed by the Commerce Department about how any requirement that the UPSTO use shared services would guard against overpayment by the USPTO for such service, how requirements of other agencies to use USPTO services would guard against underpayment by the other agencies for such services , the magnitude of the expected initial financial expenditure to develop these shared services – and perhaps most importantly – how this Commerce Department initiative is in the USPTO’s best interest.

Thus, my closing wish IP wish for 2017 is that the Commerce Department under the Trump Administration keeps in mind the intent of Congress articulated in 35 U.S.C. § 1 that the Director of the USPTO shall retain authority over the “management and administration of its operations and shall exercise independent control of its budget allocations and expenditures, personnel decisions and processes, procurements, and other administrative and management functions,” subject only to the Secretary of Commerce’s direction on IP policy. Because this matter seems clearly within the authority of the USPTO Director to independently control operations, my wish is that the next USPTO Director is free to determine whether the agency should participate in sharing services with other Commerce agencies only if he or she believes that they will improve the quality or increase the efficiency of the USPTO’s current service offerings.

The Author

Marla Grossman

Marla Grossman is one of the country’s preeminent intellectual property, technology and trade government relations attorneys. As a partner at the American Continental Group, she helps her clients with strategic public policy planning and representation before the White House, U.S. federal agencies and the U.S. Congress. Before joining ACG, Ms. Grossman was a partner at PCT Government Relations, a lobbying firm focused on intellectual property and technology public policy matters. Prior to that, Ms. Grossman was a partner at the law firm of DLA Piper. From 1997-1999, Ms. Grossman served as minority counsel to the U.S. Senate Judiciary Committee, where she was instrumental in the development of policy positions and legislative initiatives for current U.S. Senator Patrick Leahy (D-VT). Before working on Capitol Hill, she served as the Assistant Director of Public Liaison and Director of Law Enforcement Outreach for the Clinton-Gore 1996 presidential campaign.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 23 Comments comments.

  1. Inventor Woes January 2, 2017 8:53 pm

    Doesn’t the shared services thing violate the notion that an administrative agency can’t overstep the law that created it?

  2. Eric Berend January 3, 2017 9:46 am

    The foxes are running the henhouse. This cheerleading from a ‘K Street’ denizen, is not helpful to inventors; not in the slightest.

    To wit: “…comports with all statutory requirements…”; oh – do you mean, the obdurate refusal to allow amendments to claims in the PGR process? THAT sort of recalcitrant scofflaw bureaucratic power abuse?

    Or, how about this whopper: “…greater transparency and consistency…” – THIS, from an Agency that dug in its heels and lied to Congress about the existence of the infamous SAWS and ‘Second Sight’ anti-inventor programs at the USPTO?

    Furthermore: from an Agency that parrots infringer-friendly nonsense about so-called “patent quality”; when, a very great part of the root of whatever “problem” may exist, was the diversion of INVENTOR-PAID patent examination fees away from the USPTO?

    With all due respect, Ms. Grossman, your willful blindness to the ‘doctrine of unconscionability’ practices against inventors, that purports to view these issues in a “neutral” context: amounts to ‘fiddling’ while the “Rome” of American inventiveness becomes burned down towards nothing. All, for the sake of the new oligarchs of “Big Tech” – some of whom, you presumably work for.

    Should this criticism seems rather too strident to you – then, all to the good. Your ilk simply refuse to ‘see the forest for the trees’, here – and have, by and large, for about a decade, now. Perhaps this opprobrium may then serve to help facilitate the expansion of your thinking beyond its current myopic constraints, to see this overall situation for what it truly is.

  3. Night Writer January 3, 2017 10:25 am

    >>resolution of the patent reform legislation stalemate in Congress,

    So, who pays her bills? It sounds like Google. Thank goodness that the “patent reform” (aka, let’s burn it down) legislation was not passed.

    Yes, your 1) and 2) are good points, but the rest of your agenda is part of burning the patent system down.

    The thing that gets me about people like this is that they will never stand toe to toe with a person like me and debate the issues.

  4. Night Writer January 3, 2017 10:37 am

    Also, it is pretty clear that the trade secret act is meant as a substitute for the patent system as it continues to burn down with the next round of “reforms.”

    And, asking the PTO to consider preemption with 101 is such an anti-patent position. Preemption should not even be a consideration and is equity not law.

  5. Paul F. Morgan January 3, 2017 11:13 am

    The Author’s most valuable political expert observation was that: “As for patent reform, it stalled, and the future is uncertain as the Supreme Court now considers patent venue.”
    Venue and E.D.TX getting the majority of patent suits was certainly one of the prior proposed patent legislation hot topics. So taking cert was a good reason to delay legislation on it, But it was not the only topic. I would be interested in the Author’s views on whether or not any those other legislative topics might come up again after the Sup. Ct. decision on venue? Or, have other recent Sup, Ct. decisions on attorney fee sanctions, expanded damages, Form 18, and IPRs taken the wind out of those Congressional sails as well?

  6. Gene Quinn January 3, 2017 11:32 am

    Night Writer-

    Do you even know who Marla Grossman is and who ACG represents? Apparently not.

    As for trade secrets being a substitute, that is not entirely correct — at least not as you mean it. Senator Coons sponsored the trade secret legislation with others who are pro-patent. At an event IPWatchdog co-sponsored in early December Senator Coons explained that with all of the uncertainty of the patent system it was important to pass federal trade secret legislation so that there was at least some federal right left for innovators. Coons continues to seek opportunities to sponsor or support legislation to strengthen the patent system.

    -Gene

  7. Night Writer January 3, 2017 11:53 am

    No I didn’t know that about Marla Grossman. I do think that tech workers should fear the trade secret act. I have first hand experience of how trade secrets can limit your career and pay options (and your options of communicating with others.) I think that trade secret laws make it easier to burn the patent system down.

    Maybe I fired too quickly, but many of the positions that I hear to “strengthen” the patent system will surely not strengthen the patent system.

    As I remember it, the “reform” bill last year would not have strengthened the patent system. But, maybe I was hasty.

  8. Paul F. Morgan January 3, 2017 12:06 pm

    Trade secrets are not a substitute for patents in most cases. As soon as a product, or even the suggestions for what a product or method could do, goes public, there is no trade secret protection for that information. Even if it becomes publicly available accidentally due to lack of secrecy protections by the inventors or owners. Nor is their any trade secret protection against anyone later re-inventing the same thing independently, which is likely if the invention was commercially successful. Unlike patent protection.

  9. Night Writer January 3, 2017 12:20 pm

    @8: Paul—what does “goes public” mean? “or even the suggestions for what a product or method could do…” That isn’t true. It takes more than a suggestion of what a product could do. There is the how. And, trade secret laws can be used to tie down tech workers in many ways that you are not even considering.

    And, Gene, I remember the AIA, and after reading the bill thinking that no intellectually honest person could think –who has half a clue–that this is pro-patent. I remember that I almost switched to business transactional law when the AIA was passed. Still there were many people that claimed to be pro-patent pushing the AIA.

    So, I tend to focus on issues and positions.

  10. angry dude January 3, 2017 12:43 pm

    Paul F. Morgan @8

    “Trade secrets are not a substitute for patents in most cases. As soon as a product, or even the suggestions for what a product or method could do, goes public, there is no trade secret protection for that information”

    That’s just not true in general
    For most “low-tech” products or even some high-tech products yes, they are reverse-engineered as soon as they hit the stores
    But for many high-tech products the essential functionality (key algorithms) is hidden deep inside the code or even better , inside custom-made silicon chips- ASICs

    I challenge you to reverse-engineer a SoC ( system-on-chip)

    it will be cheaper to buy the tech with all patents outright…

  11. Night Writer January 3, 2017 1:08 pm

    @10 angry dude: That is right. What Paul said is nonsense. And, to your point, when patents are weakened what the tech companies can do is hide the workings of the products more using encryption, servers behind firewalls, etc. Lots of ways to hide.

    Not only that but if you are worker, then what you have done may not have been made into a public product yet and you may know lots of things that are not public. Trade secret law is not a friend of patents.

  12. Night Writer January 3, 2017 1:10 pm

    What I notice —and to Gene–is people saying things like Paul has just said and then responding to the counter arguments, and then just repeating the exact same thing on another blog or on this blog.

    It is propaganda. And, when i have tried to debate professors on other blogs what they do is select what they will respond to and then end the debate when it suits them. No intellectual honesty.

  13. Night Writer January 3, 2017 1:10 pm

    I meant not responding to counter arguments.

  14. Connie Godsey-Bell January 3, 2017 3:46 pm

    Great job, Marla! Thanks!

  15. Paul F. Morgan January 3, 2017 4:37 pm

    Since I was asked for a response: First, I did not say that the parts of the information that NOT available to the public cannot be protected by trade secrets, but often the business idea itself cannot. Secondly, I appreciate that some Silicon Valley residents might view almost all new commercially valuable inventions as being protectable in embedded or private-server software expensive for others to simply replicate to get the same results. But that kind of invention is not the majority of the worlds economy or intellectual property.

  16. Night Writer January 3, 2017 6:16 pm

    @15: Paul. You don’t get it. We are talking about the effects on tech workers.

  17. angry dude January 3, 2017 7:37 pm

    Paul F. Morgan @15

    Paul, with all due respect, you don’t get it

    It’s not about whether or not it’s possible to protect commercially viable high tech inventions by keeping internals a trade secret

    It’s about whether or not you want to promote the progress of humanity or bring us back to middle ages – remember those guilds keeping their secrets for generations until the secret keeper dies…

  18. Paul F. Morgan January 3, 2017 10:24 pm

    Angry Dude, that is a whole different subject from the subject of misleading comparisons of trade secrecy legal protection versus patent legal protection. It is an objection to trade secrecy protection in general.
    Since most trade secrets are traditionally* lost via departing employees working for or setting up competition, it is not surprising that they are the targets in many trade secret suits. Yes, trade secrecy can also in some cases interfere with public disclosure and its advancement of useful knowledge, unlike patents. In some states even direct non-compete-agreements are enforceable that would be unenforceable [as against public policy or statutes] in other states, like CA. Trade secrecy protection is a development of state courts and state legislatures over many years. Trade secrecy is not going away, but perhaps more employee protections, such a recoveries of attorney fees for those sued unsuccessfully, could help?

    *who knows how many more trade secrets are now being stolen by foreign government agencies via poor U.S. corporate IT systems security?

  19. Tim January 4, 2017 6:53 am

    For 2017, I’d like to see an investigation as to why 2 of 3 Appeals Court judges (Wallace and Mayer) overturned a 12-man unanamous jury in Judge Jackson’s Norfolk Court, which found Google, AOL, Gannett and others on all 14 counts (Vrngo vs IP Internet), for absolutely no reason? And then when Atty David Buies took the case to the US Supreme Court, it was snubbed? To me, this is like saying, “The Russians hacked the election”. As Julian Assange attested that none of his info came from the Russians, but from the USA. Our shareholders lost everything, and Google stock has double, in this dirty game, even after the patent was pulled, “many times”. How sad that corruption runs amuck in our court system. Vringo his now File Holdings. The stock went to pennies and after a reverse split, again dropped 50%. Today, FH is at $2.19, when it should be $60.00 a share!

  20. Night Writer January 4, 2017 7:30 am

    @18 Paul. Your view on trade secret protection are static views that assume the status quo. The fact is that we have a view of what the tech industry would be like without patents and strong trade secret protection. That is what was happening in the early to mid 1980’s. A big research area was how to encrypt software so that it could not be reverse engineered. Big corporations could develop proprietary software so that engineers would not easily leave, etc.

    The fact is that trade secret protection rather than patent protection feeds right into the monopolies of Silicon Valley. Advances would come to a crawling pace, but the monopolies would not care.

    That is one thing Gene that I have noticed that people don’t get. The monopolies like Google do not care about the pace of innovation —that is a public good–only that they remain on top. Jimmy Carter understood this and set up a strong patent system to counter act this malaise that sets in.

  21. Night Writer January 4, 2017 7:33 am

    @19: The judges feel no obligation to apply the laws. Why should they when the Scotus does not. The funny thing is that all these people don’t get that they have created Donald Trump. Mark Lemley is a strong contributor to the era of post-fact, post-ethics, post-reality, say and do anything as long as you can get away with it.

  22. Night Writer January 4, 2017 7:42 am

    @@ all of you: I would ask that you educate yourself about how things were in the 1980’s. The big companies were starting to use trade secrets in nasty ways to lock down employees and hide things. And, really develop separate technologies so that others couldn’t use their technology and tech workers would be locked into their companies.

    I worked for a state-of-the-art top notch start-up in the 1980’s and I was from a top school in computer science. They made me sign an anti-compete that I did not understand in my early 20’s. It made it very difficult to leave the company because all the skills I had developed were part of the trade secret.

    (also, if you don’t know that a big research area was developing chips so that it would be hard to reverse engineer code, then you do not know enough to comment.)

  23. Night Writer January 4, 2017 9:21 am

    The other thing too that Paul is doing is applying a change to trade secret law (note too that he talked as if there isn’t a new federal cause of action) in a static fashion.

    One must run the simulation of what will happen in 5 or 10 years with greatly reduced patent rights and greatly increased trade secret rights. It is a dystopia with large monopolies hiding everything. It would not be long before Paul’s assertion that it wouldn’t be hard to build whatever someone else built to be far from the truth.

    You know, these are complicated issues that involve changes to very complex systems.