Next PTO Director must have management experience, patent savvy, and leadership skills

By Judge Paul Michel
June 12, 2017

Madison Building USPTOThe nation, through the elected Administration, needs to choose wisely as a new Director is selected to lead the Patent and Trademark Office.   The credibility of the American patent system is threatened.  It needs to be restored after years of decline under serial assaults from eligibility decisions of the Supreme Court and the PTO’s manner of implementation of Inter Partes Reviews mandated by the America Invents Act.  Investors and inventors are fleeing the damaged system in favor of trade secrets and overseas opportunities for Research & Development and Commercialization.   There, patenting and patent enforcement and licensing are more attractive, particularly in nations that have strengthened their systems just when America has enfeebled its own.

Patent eligibility is now far more expansive in Europe and even China, but seriously shrunken here.  Examination of applications is so much better there than here that issued patents that are challenged usually hold up there, but usually fail here.  Trials are many time faster and cheaper.  Injunctions, now rare here, are routine there.  Post-grant proceedings there are fairer than here because the procedures are balanced as between the challenger and the patent owner.  Here, the owner suffers many unnecessary disadvantages, apparently for the bureaucratic convenience of the office so it can more easily meet the Congressional deadline of one year from institution for issuance of the Final Written Decision.

Consequently, patent values are plummeting, while licensing  and capital investments in many technologies are sinking , as are the filing of patent applications and enforcement suits generally.  In short, erroneous grants  and denials of patents and excessive invalidations by the Patent Trial and Appeal Board are sapping the strength of our system.  Investment incentives are falling because of the uncertainty of eligibility and the low odds of sustaining patents in IPRs.  In foreign competitor nations, however, patent applications and enforcement suits, including by U. S. companies, are increasing, especially in Germany, the United Kingdom and China.

All these ills can be addressed effectively by the PTO’s new Director, provided they have the necessary management experience, patent savvy, and leadership skills.  Someone like me who has not run anything larger than a courthouse may lack the needed capabilities, as may someone who has run nothing larger than a litigation team or small law firm.   Same for the gifted academics who provide  such useful commentary on all matters patent.  Same with former Capitol Hill staffers(I was once one myself).  They all have their place, but it is not at the helm of America’s 13,000 person innovation agency.

Rather, we need someone from a large company who has shown leadership ability and has a proven record of successfully managing a significant part of a large organization.  Of course, the person must also have experience prosecuting, licensing and litigating patents.  And, a background in science or engineering.  But many patent lawyers have such experiences.  Few, however have the necessary management chops.

In my opinion, David Kappos embodied all these attributes to a great degree.  And, he came from a long, highly successful career at IBM, where he ran a large operation that depended on using patent skills both for protecting patented inventions and defending against patent assertions by others.  A company or law firm that primarily or only employs one or the other strategy is probably not the best talent pool from which to select a PTO Director, because achieving balance between owners and users is the key to success.

Finally, the person should have deep experience with the patent policy debates and the many agency reports and legislative proposals that have roiled the patent community for a decade.  Today, those debates continue, unabated.  The PTO Director plays a central role in all this.  Similarly, as an internal matter within the PTO, the Director, under existing statutory authorities, can by  formal regulation and informal guidance, correct confusion regarding eligibility, imbalances in IPR procedures, and misuse of repeat, harassing IPRs.  But only if the nominee has the right capabilities.

The future of America’s innovation economy hangs in the balance.  It is time for the patent community to call on the Administration to select someone with the “right stuff.”

The Author

Judge Paul Michel

Judge Paul Michel became a private citizen on June 1, 2010 for the first time since he graduated from law school at the University of Virginia in 1966. Upon graduating from law school he became an Assistant District Attorney in Philadelphia, thus embarking upon the career of a public servant from 1966 to his retirement from the United States Court of Appeals for the Federal Circuit in 2010. Michel served on the Federal Circuit, which is the main patent appeals court in the United States, from 1988 to 2010, serving as Chief Judge from 2004 to 2010.

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Discuss this

There are currently 6 Comments comments.

  1. Eli Mazour June 12, 2017 1:14 pm

    Please check out my recent video interview with Judge Michel http://www.clause8.tv/ if you are interested in learning more about these issues and his fascinating career.

  2. Night Writer June 12, 2017 3:22 pm

    Great article. I agree that Kappos had the right qualifications and we need someone like that.

    No more people that cannot read a file wrapper. Ridiculous to be put in charge of 7,000 people whose work product you have no hope of evaluating.

  3. A Former Examiner June 13, 2017 6:50 am

    I agree mostly with the article. And I have much respect for Judge Michel. But, I most troubled by the statement that “[e]xamination of applications is so much better . . . [in Europe and even China] than here that issued patents that are challenged usually hold up there, but usually fail here.” First, are the number of challenged patents there even remotely close to the number in the USA? Second, do the parties challenging the patents in either Europe or China have the same incentives as the parties here – e.g., the same amount of monetary damages to motivate them? Third, how are the courts interpreting the claims, and the law for patentability there verse here – e.g., what is the bar for obviousness or how are the claim terms interpreted?

    Moreover, based on my own experience at the PTO in TC2600, I have never thought “wow” those EPO or Chinese Office actions are “so much better” than the office actions here. Actually, I thought the contrary. Why? Mostly, it seems that an EPO examiner has so much power over the application – so who needs facts. What do I mean? First, in the EPO office actions, I have often seen the dependent claims cursory rejected without any finding of fact-finding. Nor, any instruction why or how one would modify the prior art under some obviousness framework. Second, they have different standards for claim terms. Most of the office actions rejected the claims as essentially overly broad. In response, an applicant would greatly amend and argue to even have a fighting chance at an allowance. Can you imagine the amount of estoppel? The resulting allowed claims tend to be more narrowly recited then here – not because of a stellar office action and search, rather likely based on the EPO-examiner’s power.

    Finally, in my opinion, there is no post-grant system like here to challenge patents in EPO – e.g., we have a 1st and 2nd window of review (PGR, IPR). And our IPR is widely used. In comparison, the EPO’s post-grant proceedings, aka the never ending story once initiated, is a 1st window review that is less used then here – maybe because their first window is so short or the cost of challenging a patent is too exhausting – go look at the amendment practice. Or, because they are less litigious. Or the expectation of the return of a litigation is much less. I, honestly, don’t have much experience on this part. I just find an issue where we blame the examiners and the PTO. Remember, the PTO is responding to both Congress and the Courts in their handling of the AIA, 101, and 103 – they don’t have the authority to ignore any undesirable holdings from the CAFC or SCOTUS. If you want a system more like the EPO or China, we need to go to Congress, not to the PTO.

  4. John White June 13, 2017 8:30 am

    Great article! Hopefully decision makers for this selection are prepared to weigh in on the side of a strong patent system, as opposed to a progressively weakened one.

  5. Drain the Swamp Man June 18, 2017 11:04 am

    After working at the USPTO for 22 years, I agree that Kappos understood somewhat the needs of the organization. However he along with the rest misunderstand the importance of IT. The old school mentality of growing government is fully engrained. They have let the agency misuse their outlay of hundreds of millions of dollars in information technology. After 22 years they have nothing but legacy systems. Trademarks after 200M outlay for IT has nothing to show. The same for Patents. It’s time to drain the swamp at USPTO.

  6. Examiner of ordinary skill June 22, 2017 7:27 pm

    Say it with me: “Judge. Rader.”