Posts Tagged: "patent quality"

If Gene (the “genie”) were to grant me patent and IP wishes for 2016, I would ask for (in no particular order) the passage of trade secrets legislation, resolution of the current 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.

This year our panel of industry insiders is quite diverse, with commentary from Bob Stoll (Drinker Biddle), Ashley Keller (Gerchen Keller), Paul Morinville (US Inventor), Alden Abbot (Heritage Foundation), Marla Grossman (American Continental Group) and Steve Kunin (Oblon). Unlike last year where there was near unanimous agreement that the Supreme Court’s decision in Alice v. CLS Bank was the biggest moment of the year, this year our panel of industry experts focused on a variety of different matters. There was one recurring theme, however. The inability of patent reform to advance on Capitol Hill was undoubtedly one of the biggest stories of the year.

The end goal of any patent application is to obtain a patent, which is true whether an applicant find themselves assigned to a patent examiner in an Art Unit that issues over 95% of applications received, or whether they find themselves assigned to a patent examiner in an Art Unit that issues less than 5% of applications received. Unless and until the Patent Office can address obstinate patent examiners and patent examiners who continually fail to meet quality expectations how can the Office truly address the problem? Frankly, talking about improving patent quality seems to be much ado about nothing, or perhaps akin to rearranging deck chairs on a sinking ship.

Drew HIRSHFELD: ”One thing that really can move the ball toward a higher quality patent is again the clarity of the record, and the amount of information that’s in there so that third parties can really tell what the patent was about. So quality has, as you’ve identified before, many ways to look at it. But when I leave this position, whenever that time is, certainly if I can have a more clear record, more full explanations on the record, I think the system would be in a better place and that is one of my goals.”

HIRSHFELD: “[Y]ou caught my attention with quality means we issue a few patents. So let me address that first. We’ve always focused on quality as far as I’ve been here. What we have been asked to do in recent years is ask how can we take a more “out of the box” approach to quality, right? Is there anything that we could be doing with the goal of continuous improvement? And so to me that’s an absolutely wonderful position to be in for anybody asking how can you do your job better. And so I don’t look at quality as saying we want to issue more patents or less patents, we want to do a better job, a good job in the process as we’re moving forward. Things like clarity of the record. That does not mean we’re going to issue more or less, it means that we’re going to take extra steps to make sure we’re on the same page as the applicant. Or make sure we’re creating a good record so that a third party down the road can evaluate the application history, the prosecution history and tell exactly what took place. Certainly there is not a sentiment to try to reject more or less. Our goal is to do what the courts are asking us to do but we want to make sure that we’re thinking about all the ways we can do that in the most effective, efficient and clear way.”

To a large extent the meaning of the term depends on your viewpoint, but for a patent owner patent quality is all about value. Indeed, from the patent owner’s perspective it is virtually impossible to divorce patent quality from patent value. This should hardly be surprising. A patent that is guaranteed to have only valid patent claims but which is extraordinarily narrow may be a quality patent in the eyes of some, but commercially useful it will not be. Thus, from the standpoint of a patent owner patent quality must necessarily be a function of value.

Typically in our experience only about 3% to 5% of a patent portfolio consists of “star patents.” These are the patents that are demonstrably valuable because they claim technology that is commercially useful today or in a very near future market. Finding this small percentage of good patents is the name of the game. That’s why until very recently the prevailing strategy for many companies was “the more the merrier” with a strategy that focused more on quantity. Companies filed as many applications as they could, fueled by the belief that they would ultimately hit pay dirt with a percentage of the resulting patents generating value.

In the patent arena it is not hypocrisy that is fueling the misguided strategies of tech companies. Instead it is the self-interest of tech CEOs who are increasingly only concerned about the short term. This is tragic because corporations are supposed to exist in perpetuity, not just until the current CEO can cash out with his or her golden parachute. Short term thinking of tech CEOs is destroying the patent system and wasting shareholder assets. What are these companies going to do when foreign corporations push their way into the U.S. marketplace? How will CEOs explain away the existential threat they face when foreign manufacturers flood the market with goods and services without regard to long since crippled patent portfolios of the former tech elite?

A fair treatment of the issue of patent quality would have necessarily considered those applicants that were wrongfully denied, as well as the extraordinary wait one must endure on appeal to the Patent Trial and Appeal Board to rectify examiner mistakes. Anything short of a fair and even-handed inquiry is not only inappropriate, but seems intended to lead to a conclusion that supports a preordained narrative. Sadly, this preordained narrative fits perfectly into the view of one side of the patent reform debate. With Congress considering patent reform in both the House and Senate the timing on the release of this one-sided report seems hardly coincidental.

Patent Quality. Two words that individually we all know what they mean, but you put them together and they cause lots of confusion. So let me clarify. Patent Quality is not invention quality and it is not patent value. Invention quality, patent quality and patent value are all different. They relate to each other. They may impact each other. But patent quality is its own unique thing. Patent quality is about validity, and more, including all of the pillars and items laid out by the USPTO.

The last time patent quality was being discussed the leadership of the Office had not come from the private sector, but rather came from within government ranks. Running the USPTO today are two people with substantial private sector experience and knowledge about how patents are used. This bodes well for the future, and is no doubt why so much of the focus on patent quality today was on issuing patents that deserve to be issued.

According to Martin-Wallace, the goal of the Patent Quality Summit is to establish a dialogue between the USPTO and stakeholders so that both sides can obtain a better understanding of where everyone is coming from when we talk about patent quality, and to set expectations going both directions. “Quality is two-fold – both internal and external,” Martin-Wallace explained. “We want to make sure we are delivering quality to stakeholders… patents that can stand up in the courts.”

There has been tremendous growth in the post-grant review system. But that growth is perhaps disproportionately driven by top filers. In both 2013 and 2014 almost a quarter of all IPRs were filed by the top ten petitioners that year. Among those top petitioners are many names you would expect to see including Apple, Samsung, Google, and Microsoft. However, having the system driven by a few major players is not necessarily beneficial, as it can leave behind smaller but still important actors.

The USPTO has put SAWS to rest, literally. The USPTO has posted a message on the agency’s website explaining that after conducting an internal review of the SAWS program the agency has ”decided to retire this program.” Furthermore, the USPTO explained that ”[a]ny applications currently in this program will now proceed through prosecution absent any additional SAWS-related processing.”

I will be criss-crossing the country again in March 2015, with stops in Washington, DC, Chicago, Michigan, and San Fransisco. What follows is my schedule for the month. If you are in the area come out to say hello.