Proposed Rules: Identify the True Owner on Pain of Abandonment

By Dennis Crouch

In one of her first acts as de facto USPTO Director, Michelle Lee has proposed a new set of rules associated with patent assignment recordation. The proposal is quite complicated (occupying 18,000 words in the Federal Register) but the general idea is (1) that information regarding who owns which patents should be available to the public; (2) some rights-holders have been taking steps to hide their identity; and therefore (3) the USPTO proposes to require greater transparency. Although the proposal is signed by Deputy Director Lee, it was a White House initiative well before she took office.

The Office is proposing … to require that the attributable owner, including the ultimate parent entity, be identified … on filing of an application (or shortly thereafter), when there is a change in the attributable owner during the pendency of an application, at the time of issue fee and maintenance fee payments, and when a patent is involved in supplemental examination, ex parte reexamination, or a trial proceeding before the Patent Trial and Appeal Board (PTAB). The Office is also seeking comments on whether the Office should enable patent applicants and owners to voluntarily report licensing offers and related information to the Office, which the Office will then make available to the public in an accessible online format.

The recordation requirement would be retroactive and apply to all live patents and patent applications. However, the USPTO suggests that “most additional reporting will need to be done by companies that have complicated corporate structures and licenses, which often include the complex structures used by certain patent assertion entities (“PAEs”) to hide their true identities from the public.” The proposed penalty for failure to comply would have some teeth: abandonment.

Comments on the proposed rules are due by March 25, 2014 and can be emailed directly to: AC90.comments@uspto.gov. The review is being spearheaded by James Engel and Erin Harriman who are attorney advisors in the Office of Patent Legal Administration (OPLA).

Why: Before getting into the details of the proposal, we might pause to consider why the USPTO is proposing this new requirement. The USPTO identifies several potential benefits of a more complete ownership record. According to the USPTO, enhanced assignment information will:

  • “[A]llow [competitors] to better understand the competitive environment in which they operate.”
  • “[E]nhance technology transfer and reduce the costs of transactions for patent rights since patent ownership information will be more readily and easily accessible.”
  • “[R]educe risk of abusive patent litigation by helping the public defend itself against such abusive assertions by providing more information about all the parties that have an interest in patents or patent applications.”

In addition to these public benefits, the USPTO argues that the assignment information will help the office in several ways, such as avoiding conflicts of interest and better identifying double-patenting problems.

The key issues regarding the rules are (1) which rights-holders must be named? (2) Under what circumstances must a parent-entity be named? (3) What is the timeline for providing information to the USPTO? And (4) what would be the consequences for failure to fully comply with the regulations.

Who is an Attributable Owner?: In my 1L property law class, we discuss all sorts of way that property rights can be divided amongst present and future interest holders; lienholders; easement holders; those with equitable rather than legal title; etc. The proposed requirement here identifies three particular class of rights-holders who will be required to record their interest: (1) titleholders (someone who has been assigned title); (2) those with rights-of-enforcement (such as exclusive licensees or others that would be a necessary party to an enforcement action); and (3) entities created in order to temporarily divest (or prevent vesting) of title or enforcement rights (such as a trust, proxy, etc.). One difficulty here is that patent ownership interests are defined by a mixture of local law (state and/or foreign) and federal law. It is quite difficult to create a simple rule that fits to each of the hundreds of potential local jurisdictional mechanisms of operation.

Parent Entities: In addition to the attributable owner, the law would also require the recordation of any “ultimate parent entity” of any of the attributable owners. As a term of art, ultimate parent entity is already defined by 16 CFR 801.1(a)(3) and the USPTO is intending to follow that approach. Chapter 16 of the CFR generally relates to commercial practices and is promulgated by the Federal Trade Commission (FTC). The definition is as follows: “The term ultimate parent entity means an entity which is not controlled by any other entity.” The CFR provides the following three examples:

1. If corporation A holds 100 percent of the stock of subsidiary B, and B holds 75 percent of the stock of its subsidiary C, corporation A is the ultimate parent entity, since it controls subsidiary B directly and subsidiary C indirectly, and since it is the entity within the person which is not controlled by any other entity.

2. If corporation A is controlled by natural person D, natural person D is the ultimate parent entity.

3. P and Q are the ultimate parent entities within persons “P” and “Q.” If P and Q each own 50 percent of the voting securities of R, then P and Q are both ultimate parents of R, and R is part of both persons “P” and “Q.”

Although not clear from the definition, there is an idea that a parent entity must exhibit some amount of control over the subsidiary. One purpose here is to identify “hidden beneficial owners.”

Penalty for Failure to Comply: Abandonment.

Read the Rules and Comment: 79 FR 4105 (2014).

277 thoughts on “Proposed Rules: Identify the True Owner on Pain of Abandonment

  1. Curtis discusses the recording statute in Section 182 of his treatise. There he cites Justice Story for the following:

    In 1843, Mr. Justice Story held that” the recording
    within three mouths is merely directory, and that, excepting
    as to intermediate bond fide purchasers, without notice, any subsequent
    recording of an assignment will be sufficient to pass the title
    to the assignee.” 1 What he intended to say, it is presumed, was,
    that an assignment, if not recorded within three months from the
    date of its execution, vests in the assignee a good title as against his
    grantor, and a title as against third persons, which he can make effectual
    by recording at any time. This mell,ning he made more distinct
    in a subsequent case, adjudicated in the same year, in which he
    made a more elaborate examination of the subject, and gave to the
    statute the construction which has since been generally acted upon.2

    1. Brooks v. Byam, 2 Story 525 (1843)
    2. Pitts v. Whitman, 2 Story, 609, 614 (1843)

    The Pitts case is extensively quoted. Among the things Story had to say was this:
    “Suppose the patentee has assigned his whole right to the assignee for a full and adequate consideration, and the assignment is not recorded within the three months, and the assignee should make and use the patented machine afterwards, could the patentee maintain a suit against the assignee for such making or use as a breach of the patent, as if he bad never parted with his right? This would seem to be most inequitable and unjust; and yet if the assignment became a nullity and utterly void by the non-recording within the three months, it would seem to follow as a legitimate consequence that such suit would be maintainable. So strong is the objection to such a conclusion, that the learned counsel· for the defendant admitted at the argument, that, as between the patentee and the assignee, the assignment would be good, notwithstanding the omission to record it. If so, then it would seem difficult to sec why the assignment ought not to be held equally valid against a mere wrong-doer, piratically invading the patent right.”

    “Could the patentee maintain a suit against a mere
    wrong-doer, after the assignment was made, and he had thereby parted with all
    his interest, if. the assignment was not duly recorded? Certainly it must be con·
    ceded that he could not, if the assignment did not thereby become a mere nullity,
    hut was valid as between himself and the’ assignee ; for then there could accrue
    no damage to the patentee, and no infringement of his rights under the patent.
    Then could the assignee, in such a case, maintain a suit for the infringement of
    his rights under the assignment? If he could not, then he would have rights
    without any remedy. Nay, as upon this supposition, neither the patentee nor the
    assignee could maintain any suit for an infringement of the patent; the patent
    right itself would be utterly extinguished, in point of law, for all transferable
    purposes. Again, could the assignee, in such a case, maintain a suit for a subse·
    quent infringement against the patentee? If he could, then the patentee would
    be in a worse predicament than a mere wrong-doer. If he could not, then the
    assignment would become, in his hands, in a practical sense, worthless, as it would be open to depredations on all sides.”

    “Why should an assignment be required to be recorded at all?
    Certainly not for the benefit of the parties, or their privies; but solely for the protection of purchasers, who should become such, bona fide, for a valuable consideration, without notice of any prior assignment. By requiring the recording
    00 be within three months, the act, in effect, allows that full period for the benefit of the assignee, without any imputation or impeachment of his title for laches in the intermediate time. If he fails to record the assignment within the three months, then every subsequent bona fide purchaser has a right 00 presume that no assignment has been made within that period. If the assignment has not been recorded until after the three months, a prior purchaser ought, upon the ground of laches, to be preferred to the assignee. If he purchases after the assignment has been recorded, although not within the three months, the purchaser may justly be postponed, upon the ground of mala fides, or constructive notice of the assignment. In this way, as it seems 00 me, the true object of the provision is obtained, and no injustice is done 00 any party. In respect to mere wrong-doers, who have no pretense of right or title, h is difficult to see what ground of policy or principle there can be in giving them the benefit of the objection of the nonrecording of the assignment. They violate the patent-right with their eyes open; and as they choose to act ill fraudem legis, it ought to be no defence that they meant to defraud or injure the patentee, and not the assignee. Indeed, if the defence were maintainable, it would seem to be wholly immaterial whether they knew of the assignment or not.
    “In furtherance, then, of right and justice, and that apparent policy of the act,
    ut res magis valeat, quam pereat, and in the absence of all language importing that the assignment, if unrecorded, shall be deemed void, I construe the provision as to recording to be merely directory, for the protection of bona fide purchasers without notice. And assuming that the recording within the three months is not a prerequisite to the validity of the assignment, it seems 00 me immaterial (even admitting that a recording at some time is necessary) that it is not made until after the suit is brought. It is like the common case of a deed required by law to be registered, on which the plaintiff founds his title, where it is sufficient, if it be registered before the trial, although after the suit is brought, for it is still admissible in evidence as a deed duly registered.”

    1. The Story quotes raise an interesting issue. If an assignment is not recorded, it the patent void to the assignee but not void to the assignor? Who has the obligation to record?

    2. Let’s throw another log into the bonfire: statutory intent.

      Justice Story: “Then it would seem difficult to see why the assignment ought not to be held equally valid against a mere wrong-doer, piratically invading the patent right.

      My, how ‘we’ have moved away from the basics in this era of Infringers’ Rights.

      Justice Story: “ I construe the provision as to recording to be merely directory, for the protection of bona fide purchasers without notice.

      and

      Why should an assignment be required to be recorded at all?
      Certainly not for the benefit of the parties, or their privies; but solely for the protection of purchasers, who should become such, bona fide, for a valuable consideration, without notice of any prior assignment.

      .

      Funny that, the ‘public’ (especially competitors) is nowhere in sight as an intended beneficiary, much less academics who would find such information convenient.

      (thanks Ned)

      1. You are welcome, anon.

        It seems to me that an easy fix is to make assignments effective on recording. If the assignee never records, the patentee still owns the rights against the world. Just as Story said, if the pirate intends to infringe against the patentee, why protect him if he suddenly has to deal with an assignee who records?

        Cannot choses in action be assigned without changing title?

        Cannot a patent be assigned after filing suit?

        This whole project seems not only ill conceived, but amateurish at best. The people behind it need to be ridiculed, even while we derail it.

        But we mark who they are for future reference.

  2. “You offend Borg drones with such a comment.”

    LOL, anon (and I do mean that in a positive way!) As that great Vulcan philosopher once said, Live Long and Prosper, anon.

  3. I’m curious how many self-identifying “professionals” out there have had experience with the following situation, or if this seems like something that might just possibly be going out there in the “real world.”

    Some fatcats set up a entity A (e.g., a corporation or some other limited liability entity). They spawn off a corporation “a1″ as a “start-up” and lay out the essentials of the business in couple of patent applications. Shortly afterward a similar but non-identical concept is hatched by corporation A under a third corporate identity, “a2″. The essentials of a2 are set forth in a second set of patent applications (listing different inventors from a2).

    The overall purpose of this incorporation and patent filing strategy is to allow A to hedge its bets. The separate in-house counsel for the two (or three … or four … or five … or six …) offspring companies will inevitably be making (or will wish to make) conflicting arguments during prosecution (as some of the applications of one offspring will likely be prior art against the other offsprings’ applications). Presumably any genuine conflicts (such as might lead to litigation or some other costly destruction of an offsprings’ patent portfolio) will be avoided by a licence between the offspring companies or by destruction of one of the companies (at the option of A, who shares board members with one or more of the offspring companies).

    Does this seem like an especially unlikely scenario?

      1. You’ve seen this

        I think I’ve pretty much seen it all. I’ve seen CEO’s of companies I prosecuted applications for end up in prison (where they belong). Nothing surprises me anymore.

        So is it the “recipe for disaster” aspect of that situation that leads you to believe that it is unlikely? Are there ways to maximize the “bet hedging” benefits f0r Company A while minimizing the likelihood of disaster?

        1. I think I’ve pretty much seen it all.

          Have you seen agenda-driven posters who supposedly are involved in the procurement of patent rights for others who proudly boast that they start their own businesses without performing due diligence of any kind on patents that they might be violating with their new business?

          How about supposed lawyers engaged in massive intellectual dishonesty because “blogs are not courtrooms” and engage in the very behavior that cause them to have tremendous umbrage when others display the same characteristics?

    1. That is a very interesting idea. I think it might work, especially given the (reputed) reluctance of the PTO to declare interferences (assuming that the subject matter of the applications was similar).

  4. The new deputy director is making quite a splash, proposing the most radical rules package in the history of the PTO. I wonder if she has the gumption to take on information patents with the same verve? What if she were to propose a rule or guidance that would object to any claim language that included new information as a limitation unless the applicant demonstrate a functional relationship of the information to the underlying subject matter?

    1. Impressive Ned – you actually appear almost ready to discuss the controlling law of the exceptions to the printed matter doctrine.

      You do realize of course that functional relationship must exist with software or software could not be used to change the machine and make the machine ‘configured to,’ right? That is, after all, the only reason for the manufacture of software to exist in the first place.

    2. proposing the most radical rules package in the history of the PTO.

      Seriously? More radical than the continuation and claim count limits?

    3. the most radical rules package in the history of the PTO

      So “radical” that it will massively impact the patent prosecution strategies of … nobody.

  5. “The USPTO identifies several potential benefits of a more complete ownership record. According to the USPTO, enhanced assignment information will:

    “[A]llow [competitors] to better understand the competitive environment in which they operate.””

    Why is that a benefit? Doesn’t that benefit come at the detriment to the patent Owner? Why is the PTO looking at this from the side of competitors? Why do competitors need to know who owns an invention? Seems to me, all they need to know is that THEY DON’T own it.

    “[E]nhance technology transfer and reduce the costs of transactions for patent rights since patent ownership information will be more readily and easily accessible.”

    B.S. – If a patent owner was interested in transferring its technology, it would make its ownership and interest public on its own. There is no need for a requirement with a draconian penalty.

    “[R]educe risk of abusive patent litigation by helping the public defend itself against such abusive assertions by providing more information about all the parties that have an interest in patents or patent applications.”

    B.S. How does this particular information prevent abuse?

    1. and another:

      Propaganda is not a matter for average minds, but rather a matter for practitioners. It is not supposed to be lovely or theoretically correct.

      That ‘not supposed to be theoretically correct’ sounds an awful lot like Malcolm’s refusal to be intellectually honest because this is merely a blog and not a court of law.

      1. and from the same speech: “It is not the task of propaganda to discover intellectual truths. Those are found in other circumstances

      2. and another:

        One should not as a rule reveal one’s secrets, since one does not know if and when one may need them again. The essential English leadership secret does not depend on particular intelligence. Rather, it depends on a remarkably stup1d thick-headedness. The English follow the principle that when one lies, one should lie big, and stick to it. They keep up their lies, even at the risk of looking ridiculous.

        Malcolm to a remarkably stup1d thick-headed T.

      3. Interesting to see that historical quotes are removed wholesale.

        Exactly what in the quote was more offensive than, oh say, “GFY with a rusty chainsaw”?

        It surely is telling that the behavior that the quote pinpoints is allowed free reign, but the accurate description suffers censorship.

    2. Les, I agree. IIRC, much of this kind of thinking is straight out of Silicon Valley, certain professors and certain large companies. That the new deputy director used to work for one of these, this looks a lot like private legislation to benefit the few being advanced by former employees…. The stink of corruption is profound.

    3. Say what now? The Executive Office agrees with me? No, I was not aware of that. If the Executive Office agrees with me, why did the Executive Office hire Ms. Lee?

    4. Funny Malcolm, you don’t seem to care to comment about the accuracy of those quote fitting your blogging ‘style.’

      Shockers.

      1. Who benefits the most? Google.Who benefits the most? Google. Who has Google stock options? Hmmm…

        Spit it out, Ned. You seem to trying to establish some “causal relation” (to coin a phrase).

        Does everyone see how it works with the patent txxbaggers? Either the rule they don’t like favors “BigCorp”, in which case the proponents of the rule are surely in the pocket of BigCorp or stand to benefit via the increase in stock value that will inevitable (LOL!) accompany the proposed rule change; or the rule they don’t like is a totalitarian-socialist effort to undermine freedum luvving “principles” and take away everyone’s private property.

        The txxbaggers are so deeply invested in their own horsesht and so drunk on their own self-importance that it’s impossible for them to keep their b.s. straight.

        “Keep the government out of Medicare!” “Socialists want Google, Apple and IBM to run the world.”

        It’s pathetic and sad.

        1. Nice dissembling Malcolm.

          You do know that a system can be attacked from multiple angles at the same time, right?

          That such attacks are in no way indicative of not “it’s impossible for them to keep their b.s. straight.”

          But of course, you already knew that, right?

    5. … competition … Why is that a benefit? Doesn’t that benefit come at the detriment to the patent Owner?

      Uh, Les, improved competition is a benefit to the public. You know, those people that the USPTO acts on behalf of. And yes, improved competition does come at the detriment of those who have market power.

      1. Now then, how exactly does knowing who owns a patent improve competition?

        Do you mean, If a competitor knows that the patent is owned by a small company, then they can run a D&B on them and determine that they could not afford to enforce the patent so the competitor can go ahead and infringe it with impunity. Could it be that that is what is meant by improved competition?

        If not, then please do explain how this ownership knowledge would “improve competition”.

      2. Leopold, I say thee whoa: “ improved competition is a benefit to the public

        Not so fast. It is pertinent to remind everyone exactly who coined the term “Troll” and exactly why: there was no benefit to the public involved.

        Leopold, I thought that you were going to abstain from commenting on things you did not know about?

        1. It is pertinent to remind everyone exactly who coined the term “Troll”

          It’s not “pertinent” at all unless you want to change the subject.

          You’re a well-known defender of patent trolls, a notorious blogtroll, a pathological liar, and a goofy nutcase who believes and proudly proclaims, when he’s not comparing his “enemies” to Nazis, that “more patents” is “good” per se.

          Those facts are far more pertinent to any discussion wherein you choose evacuate your vile mouthpoop in front of everyone.

          1. Understanding the source of the denigration is not – and cannot be – considered changing the subject.

            But you already knew that, didn’t you?

  6. At comment 17.1.1.2.1 above I asked a question, and got an excellent informative reply from LB, why the provisions of the EPC won’t “cut it” in the USA.

    It is not as if Europe has no experience of lavishly funded NPE’s quite prepared to take their issues to supreme courts all over Europe. But Europe seems not to have a problem with who actually “owns” DSS or IPCom. My perception is that in Europe it matters less who stands behind the Plaintiff than whether the P has an arguable case and whether it is good for the costs, should it lose the action.

    Politics is the art of the possible. I guess the USPTO’s proposed Rules solution is possible, whereas other solutions to the USA’s NPE problem are simply not possible to implement.

    LB you write:

    “Max, I’m aware that it’s hard for you to believe that we do anything right here in the colonies.”

    My position is that no single jurisdiction does everything right, but that they can each get incrementally better, by watching what the others do, and then themselves doing it better.

    1. Max: Politics is the art of the possible.
      This slogan does not actually apply here when it comes to recently proposed patent policies. For these, the following quote is more apt:

      “Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies.” –Groucho Marx

    2. MaxDrei has an interesting point: “My position is that no single jurisdiction does everything right, but that they can each get incrementally better, by watching what the others do, and then themselves doing it better.

      Of course, this only goes so far.

      National sovereignty does come into play. As does the fact that each jurisdiction does not have the same foundational principles.

      And in contrast to Malcolm’s knee-jerk reaction about my providing the insight of Hal Wegner, my personal view is that there is no one-world-wide patent because of the differences in the foundational principles of the individual sovereign nations.

      Malcolm leaps too quickly (and of course, leaps incorrectly).

      My pal Hal is well known for his desire to coalesce patents systems into a global system. We are not there yet. Further, I doubt that even Malcolm would get it wrong with the observation that the AIA was an attempt (an imperfect attempt to be sure) to take a step closer to a single world norm. My own personal view is not the same as Hal’s – but my own personal view was not involved in my sharing of Hal’s insights. Malcolm’s incorrect judgement not withstanding.

      Hal’s point was that this (illegal – and probably so on more than one level) agency fiat, put forth with zero consultation with other patent powers is more a divergent step than a step towards any semblance of unified patent law.

      1. Hal’s point was that this (illegal – and probably so on more than one level) agency fiat, put forth with zero consultation with other patent powers

        And my point is that, shameless hypocrite that you are, if a rule limiting patent rights in away way was proposed after “consultation with other patent powers”, it’d make no difference to you whatsoever. You’d be spewing the exact same whining self-serving b.s. here, except you’d be complaining about socialists trying to establish a one-world government or some other mouthbreather tripe.

        1. And your point was simply off.

          As stated, my post was a pure reflection of what insights Hal Wegner offered.

          You attempted to smear (and do so again) merely because I am the one presenting Hal’s insights (you kind of missed the fact that I note that I do not share Hal’s aim for a global system).

          There is no hypocrisy involved – at all.

          .

          Stop reeling for a moment. Gather your breath (and what little wits you can muster), and try again.

  7. MM: “‘deny damages to anyone who is not the record owner…’ This is not just about ‘litigation abuse.’”

    MM, no, it is not. But that does not mean that the simple solution will not effectively force the patent owner to keep the record updated if he is intending to enforce the patent.

    Trying to keep the record straight regarding real parties in interest and privies serves no real purpose. Why does the public need to know the beneficiaries of a trust if one knows the trustee?

    Re: double patenting, the office simply has to reject the claims. Let the applicant claim the benefit of the exclusion accorded common owners if he wants to.

    Regarding estoppels and the like in IPRs etc. the rules currently provide that the parties identify real parties in interest and privies. Why is this not sufficient?

    It strikes one that the proposed rules are not only excessive, but excessively excessive, and, to boot, unwise, burdensome and unnecessary; and they serve no good purpose and might do significant damage to the patent system if left unchecked.

    1. Trying to keep the record straight regarding real parties in interest and privies serves no real purpose. Why does the public need to know the beneficiaries of a trust if one knows the trustee?

      You’re comparing an entitlement granted by the government and enforceable against the public to a “private trust”? That’s a ridiculous comparison.

      Many purposes for making this information readily available to the public have already been identified. Simply because those purposes are not of interest to you, Ned, does not mean that they have no purpose. Moreover, the public who is allegedly being served by this runaway train of a patent system has a right to know who the entities are who are abusing or exploiting the system. Why does the public have a right to know that? Because it’s a public agency. It operates at the whim of the public, in a manner chosen by the public, for purposes determined by the public. To take one simple and easy-to-understand example, the patent system is not just a #$@ toy for some rich axxhole patent attorneys to get richer with at everyone else’s expense.

      they serve no good purpose and might do significant damage to the patent system if left unchecked

      What’s the “significant damage”, Ned?

      the proposed rules are not only excessive, but excessively excessive,

      It’s funny. All the people I’ve spoken to about this — including many “innovators” far brighter than the bottom-feeders who tend to yack up their patent luvvin’ furballs here — see nothing at all “excessive” about the proposed rules. But a certain class of deeply invested parties is seems very frightened indeed of having the lights turned on. I wonder why.

      1. ON the damage:

        It raises costs enormously at the risk of abandonment per numerous posts here. Who benefits?

        Moreover, the benefits have to outweigh the costs else the new requirements damage the system and can and will lead to wholesale abandonments of whole portfolios for no really good reason.

        A patent is not an entitlement program. It is property, by precedent and by statute. The government’s role is to assure the grant is measured, measured by the novel contribution. Once granted, the government needs to butt out except to the extent that a patentee is abusing his patent or his patent is an abuse.

        Finally, if the government (read the PTO) is going to deprive the patent owner of his patent, the PTO must do so only in accordance law and due process.

        What the Government proposes here is not law even if you think there is due process.

        1. It raises costs enormously at the risk of abandonment per numerous posts here

          There is zero evidence of an “enormous cost raise.” The hyperventilations of deeply invested patent luvvers to the contrary are devoid of meaning.

          wholesale abandonments of whole portfolios for no really good reason

          Again, there are good reasons. You may not like them but they are perfectly good reasons.

          Wholesale abandonments of whole portfolios? Even if that ever happens, if it was a good faith mistake I don’t see why it wouldn’t be a fixable error.

          A patent is not an entitlement program. It is property

          Food stamps are property, too. There is no contradiction between a government entitlement program and the (relentless abused) concept that patents are “just like any other property”.

          Once granted, the government needs to butt out

          The government, last time I checked is “we the people.” I’m quite confident that the vast majority of people welcome increased transparency with respect to the patent system which is a public agency, working on behalf of the public, at the whim of the public, in the manner in which the public decides.

          The fact that you guys protest this much just gives your game away. Keeping track of who owns a patent isn’t so hard. What’s hard for you to accept is any changes to the “hide the ball” game that is being played with respect to the public who is at the mercy of an increasingly zealous and greedy group of patent collectors.

          1. Food stamps are property, too

            LOL – tell me again of the Quid Pro Quo for foodstamps.

            working on behalf of the public, at the whim of the public, in the manner in which the public decides.

            You see Malcolm, you are missing the point being stressed here – “law” like this rule should be contemplated by Congress, not written by fiat.

            The fact that you guys protest this much just gives your game away.

            LOL – more of that ‘darling’ you must of something to hide logic.

            Your mantra is wearing mighty thin.

            1. “You see Malcolm, you are missing the point being stressed here – “law” like this rule should be contemplated by Congress, not written by fiat.”

              Perhaps but with the congress all but useless nowadays it seems that the president has “discovered he has a pen and a phone” (if you read the news these last few weeks).

          2. MM, on this issue, I think you are being a little unreasonable. There is a simple and elegant solution that is in use in Europe. We should not think we can do things better unless there are known problems with the European system.

            While I still disagree with First-to-File, we adopted it primarily because the Europeans standardized on it. Had Europe standardized on First-to-Invent, we would have not moved to First-to-File.

            I support the European approach — but by a change in the statute.

        2. “A patent is not an entitlement program. It is property, by precedent and by statute. ”

          Well of course not Ned, one single patent isn’t an entire program. But the patent system itself is an entitlement program. By statute.

          If you don’t like it, because, oh, I don’t know, your political leanings are against entitlement programs, then you should lobby congress.

        3. “Once granted, the government needs to butt out”

          Really? So you don’t want the ability to go to court to enforce your patent?

          You’re like that old man with the sign stating “keep government out of my medicare!”

          1. You’re like that old man with the sign stating “keep government out of my medicare!”

            Why do you think we call them “patent txxbaggers”?

  8. This is stunningly poor rule making from an ivory tower with no real-world perspective at all.

    Transparency hardly accomplishes anything meaningful and has a drastic penalty.

    To all you patent prosecutors out there, your malpractice insurance premiums will sky rocket if this gets passed.

    1. To all you patent prosecutors out there, your malpractice insurance premiums will sky rocket if this gets passed.

      LOL. Any prosecutor practicing for more than two years has probably heard this same whine from the patent teabagger crowd twenty times.

      It’s bullsht.

      This is stunningly poor rule making from an ivory tower with no real-world perspective at all.

      Right, because in “Patent Prophet’s” “real world” you’re not allowed to look behind the curtain until the patent troll says so.

      1. It’s obvious that you are a very frustrated person.

        You seem to know just enough to rant about patents (and insult posters at random), but are not talented or smart enough to actually be successful at whatever it is you do.

        Hence, your bitter attitude.

        In addition, any one successful enough would simply not have enough time to litter this blog with the volume of junk that you do.

        I’m not a hater. Just know that every time you post, my pity for you grows.

        Lastly, this will be the last time I reply to you. You really don’t matter.

  9. The most relevant paragraph in the statute regarding the proposed rule is

    Ҥ 261. Ownership; assignment
    Subject to the provisions of this title, patents shall have the attributes of personal property. The Patent and Trademark Office shall maintain a register of interests in patents and applications for patents and shall record any document related thereto upon request, and may require a fee therefor.” (My emphasis).

    “Upon request” is upon request of the applicant – not of the PTO. The proposed rule, however, makes submission of documents for recording mandatory. It likely overreaches the statutory authority by ignoring the statutory directive that “patents shall have the attributes of personal property” and by imposing a mandatory collection of information in violation of the Paperwork Reduction Act. By this proposed executive action, patents would effectively cease to be treated as personal property, ostensibly for the interest of “transparency” and “streamlining.” Next we perhaps should make public a complete list of every entity’s property holdings so that everything is “transparent.” Only those who have something to hide would disagree, right?

    The mandatory disclosure requirements will have very serious chilling effects on patent filings – if Congress wanted to force such disclosure under the Patent Act, there would not have been the most recent efforts to legislate “the real party of interest” provisions now proposed in the Congress. This is an agency action that would likely fail APA scrutiny.

    The logic and questionable justification behind these proposed rules, if accepted at face value, would also be applicable to agency changes in corporations law to remove the ability to have ANY hidden assets. After all, patents are not the only objects that prevents complete knowledge on a competitive basis, and streamlining public disclosure of personal property and corporate structure would have additional benefits of streamlining tax and SEC enforcement as well – right?

    An example of this breathtaking and extreme overreach is on Federal Register page 4110 “Hidden Beneficial Owners:”

    “Information required to be reported would also include identification of entities that are trying to avoid the need for their disclosure by temporarily divesting themselves of ownership rights through contractual or other arrangements. The Office deems the beneficiaries of these temporarily divested rights to be attributable owners.” (my emphasis). The PTO is rewriting Corporations law all on its own.

    Need I say more?

    1. Actually, that’s a pretty nice collection of the various points that I have made along the way.

      Thanks Ron.

      (Umbrellas open for the Malcolm CRPfest to follow)

      1. Actually, that’s a pretty nice collection of the various points that I have made along the way.

        Hey, Ron, you’re cheerleader is here to remind you that he thought of everything first. Just in case you forgot, you know.

        1. Now that (Malcolm’s post at 21.1.1) is a sign of petty jealousy.

          Which substantive point is it that you think that I have not already provided?

          Um, you do know what a substantive point is, right?

        2. Hey Malcolm,

          As you don’t seem to like what Ron Katznelson had to say about this proposed rule, why don’t you try reading the article I wrote on Granville T. Woods (“The Black Edison”): link to ipwatchdog.com and link to ipwatchdog.com Some soothing reading might calm your jangled nerves.

    2. Ron Katznelson: Next we perhaps should make public a complete list of every entity’s property holdings so that everything is “transparent.”

      Oooooooh!!!! So scary!!!! Sure, Ron. It’s a really slippery slope from (a) requiring a relatively microscopic number of entities to disclose their controlling interest in a government granted entitlement that can be used as a basis to sue any member of the public, to (b) requiring everybody in the country to list their personal property.

      Its this sort of predictably inane and hysterical shrieking, Ron, that gives your game away. Not that there was any question about where you were coming from in the first place.

      1. Its this sort of predictably inane and hysterical shrieking, Ron, that gives your game away.

        LOL – because one type is personal property and the other type is personal property…

        Um, wait.

        It’s because Malcolms says so, oh how very Carroll of him.

  10. Lessee now…an 18,000 word opaque government regulation to invent a problem and then solve it in part by instituting the draconian penalty of loss of property rights that will surely penalize far more innocent mistakes than root out the imagined evil.

    Governance by misdirected sledgehammer is how we do things now in America.

  11. Prof. Crouch: “In my 1L property law class, we discuss all sorts of way that property rights can be divided amongst present and future interest holders; lienholders; easement holders; those with equitable rather than legal title; etc.

    Do you cover the history of alienability of property? Or how US jurisprudence has always promoted such alienability?

    Perhaps a crossover with the notion of freedom to contract under US jurisprudence might provide an interesting starting point for some of the regulars who seem to have forgotten many of the basics of legal understanding in their crusades.

  12. I’m all for more transparency in registering the owner of patent rights.

    But I doubt that forcing applicants to disclose who their “ultimate parent entity” will come to pass. This question can be hard to answer, even for honest applicants within a strict US context, and I expect a lot of resistance from certain circles.

    Is your real parent entity really the People’s Liberation Army ? (Or the IDF if you prefer).

    Your nominally Irish/Bahamian/etc. company is really a 100% subsidiary of BigCorp in Delaware?

    I believe that this kind of information would also be of acute interest to the IRS…

    I did see before the EPO cases where the US applicant himself appeared to be unsure whether he really owned the rights to the patent. The titles had changed hands over and over from one investment fund to the other, a bit like those CDOs where homeowners averted foreclosure by simply asking to see proof of title.

    Good thing the EPO is prevented by Art. 60(3) from looking too deeply into this question.

    1. Good thing the EPO is prevented by Art. 60(3) from looking too deeply into this question.

      Why is that a good thing? Because the way that corporations and individuals play endless shell games would embarass the grifting classes?

      But I doubt that forcing applicants to disclose who their “ultimate parent entity” will come to pass. This question can be hard to answer, even for honest applicants

      People keep saying this. It’s false for the vast majority of applicants. Some garbage super-shell entitity loses it’s patent because it’s “too hard” to figure out who’s in control? Who cares?

      Serious question: who cares if that happens? Why should anyone care when that happens? Why should the average person, who’s only experience with patents is likely going to be having to deal with a patent troll, give a rats behind about such an entity losing its patent rights?

      1. Serious question: do you care at all about law? You seem to be on a bender that WHATEVER fits your desired ends is perfectly acceptable.

        1. Serious question: do you care at all about law?

          Serious question: do you care that you sound like a whining entitled crybaby who couldn’t argue his way out of a paper bag?

          1. Malcolm adds another lovely AOOTWMDs to his massive collection with “do you care that you sound like a whining entitled crybaby who couldn’t argue his way out of a paper bag?

        2. “You seem to be on a bender that WHATEVER fits your desired ends is perfectly acceptable.”

          That’s what the law is there for in case you don’t know. To implement people’s (specifically the people’s) desired ends. You probably missed that in law 101.

          1. You rather missed (and badly) the point of the comment 6 – the ends do not justify the means.

            Several of your posts in this session are simply too banal and wrong to bother with.

            You appear to be in full lemming mode.

            1. the ends do not justify the means.

              You’d be whining your baby behind off regardless of how this rule is implemented.

              It’s amazing that folks like anon believe that they can hide their beliefs behind some b.s. about “principles.”

              We’re supposed to believe anon has principles? The guy who trolled this blog for years using hundreds of aliases and lied about it until he was outed by Dennis? The guy who goes around accusing people of being racist but refuses to provide his evidence for the accusation?

              Give us a break, anon. You’re just a patent-fellating goon who never saw a piece of junk you couldn’t rush to defend fast enough, and who sees every attempt to rein in the patent madness as an assault on your beloved junk-monetizing freedums.

      2. “garbage super-shell entitity loses it’s patent because it’s “too hard” to figure out who’s in control?”

        If it’s really too hard to figure out who’s in control, then what’s the good of collecting licensing fees, anyway? Unless you can figure out who owns the company, you won’t be able to figure out to whom the profits go. Licensing fees that just get passed around the aether until banking fees eat them up don’t do anyone any good.

        Also, if the IRS can do a better and more fair job of collecting taxes as a side effect of beneficial Patent Office documentation, isn’t that a positive side effect that argues in favor of regulations?

    2. Your nominally Irish/Bahamian/etc. company is really a 100% subsidiary of BigCorp in Delaware? I believe that this kind of information would also be of acute interest to the IRS…

      No doubt. That’s particularly true where we see individuals and corporations starting to use their patent holdings to play tax games.

      1. That’s particularly true where we see individuals and corporations starting to use their patent holdings to play tax games.

        So then, the agency rule does not go far enough to capture the big picture and needs to include changes in the tax code…

        /eyeroll

  13. Well, LB, I do know that, going Forwards under the AIA, one expects to see more and more patents issuing to corporate owners rather than to individual humans.

    But for the time being I expect still a heavy proportion to issue to individuals, and I suppose that others will also have that expectation.

    Why? First, it takes a long time for old expectations to change. Second, I imagine a continuing expectation (special to the USA) that entrepreneurial activity by individuals is the key input to the patent process.

    But if my expectations are wrong, pray tell me why.

    And BTW, I’m still waiting for somebody to tell me why the EPC carrots and sticks aren’t good enough.

    1. But for the time being I expect still a heavy proportion to issue to individuals, and I suppose that others will also have that expectation.

      I don’t. Prior to the change, 100% of the applications I filed were filed with the inventors as applicants, since that was the only option. Since the change, 99% of the applications I have filed are with corporate applicants. I don’t know what the numbers are overall, but I have little doubt that the vast majority of applications today are corporate-owned and are filed with the corporation as applicant.

      Second, I imagine a continuing expectation (special to the USA) that entrepreneurial activity by individuals is the key input to the patent process.

      That’s a fantasy that may be special to the USA, but it’s not reality.

      In any case, none of this has anything to do with the topic under discussion, since individual owners of patents generally will be unaffected by these changes, and since all of those corporate owners were filing assignment documents both before and after the AIA was implemented.

      And BTW, I’m still waiting for somebody to tell me why the EPC carrots and sticks aren’t good enough.

      You might need to elaborate on what those EPC carrots and sticks are. Does the EPC require that parent entities identify themselves?

      1. Hi LB and thanks for those thoughts. I thought I had identified some relevant EPC provisions (carrots and sticks). I will copy here what I wrote earlier (at Comment #10 below):

        “Article 60 of the EPC sets out who can be granted a patent and Art 138 provides that if the patent was granted to a party other than the one entitled, well then the patent is liable to be revoked. In the event that a European patent is asserted, there would be restrictions on recovery of damages by parties other than the registered proprietor. I had thought that was enough simple carrots and sticks to get the job done. Am I labouring under a misapprehension?”

        The point is that these EPC provisions cost very little time and money for all of Applicants, Patent Owners, and Patent Offices. Why are they not good enough for the USA?

        1. In the event that a European patent is asserted,

          As I pointed out already, MD, patent litigation is just a small part of the bigger picture.

          The identity of the controlling interest is equally important for understanding how patents are being procured and licensed in this “Golden Age.”

        2. Why are they not good enough for the USA?

          Read the notice of proposed rulemaking for the PTO’s perspective, Max. The issues addressed by these proposed rules simply aren’t addressed by the EPC provisions you discuss, and the U.S. already has laws/rules that are more or less to the same effect as those provisions.

          As to why the purported problems identified by the PTO aren’t problems in jurisdictions subject to the EPC, I can’t say. Perhaps because there are fewer lawyers over there?

          1. Gee thanks again MM and LB. I took one look at the Notice of Proposed Rulemaking and baulked at the length of it. I thought I might get further, faster, by asking you guys.

            I’m thinking that what is needed is self-policing, setting things up so that the cost of denying the public knowledge who owns the patent is too high to contemplate.

            The EPC renders the patent invalid if it is granted to a party other than the true owner. Presumably then, in the run-up to grant, owners take care to see that, on the EPO Register there they are, named as grantee? This consideration binds on all patents, not just those very few that one day later get asserted.

            You know, it is like at the end of the Paris year, when you file outside the USA in the Name of the corporate owner, declaring the US priority of an earlier application filed at the USPTO by the Inventor. Unless the assignment of priotity rights was done Prior to the end of the Paris year, the benefit of Paris is illusory, and this alone is sometimes enough to render the patent incurably invalid.

            Then there are the various risks of leaving the former owner as Registered Proprietor, indefinitely, after a post-issue assignment of ownership has occurred. Only the Registered Proprietor can sue for infringement and recover damages.

            You say that all this is already in place in the USA. Good to know, because it was a surprise to me. I must say, I remain sceptical.

            1. Max, I’m aware that it’s hard for you to believe that we do anything right here in the colonies.

              However, the vast majority of U.S. patent applications are and always have been assigned to corporate owners, and those assignments are almost always duly registered. Most of us are also aware of the need to have the right to claim priority when making such a claim. It is also already the case in the U.S. that a litigant must prove his ownership before he can enforce the patent and collect damages. The potential downsides for not promptly registering an assignment are sufficient to encourage anyone who is paying attention to do so.

              None of that is what this current kerfuffle is about. The current issues arise from the fondness that some have for opaque, non-public, legal entities that are expressly designed to hide the “ultimate” owners.

              Under current law, Company A may hold legal title to a patent, and may duly register the assignment with the PTO, and may enter into licensing agreements. Until Company A goes to court to enforce the patent, it does not have to identify any of its owners. In fact, Company A may be owned by Company B, which is owned by Company C, which may be owned by the very patent attorneys that “represent” Company A. Until the lawsuit is filed, however, the public can’t tell who is hiding behind the title owner.

              EPC Articles 60 and 138 address only the title owner – they don’t do a thing to provoke disclosure of who owns or otherwise controls the title owner.

            2. Leopold points out “The current issues arise from the fondness that some have for opaque, non-public, legal entities that are expressly designed to hide the “ultimate” owners.

              Sounds like a question of law far more extensive than just patents…

            3. anon: Sounds like a question of law far more extensive than just patents…

              It probably is. But government granted patent entitlements have some unique features and (surprise!) they are a subject of great interest to the people who read this blog. That’s why we’re focusing on patents here.

              We know that you like to pretend that a patent is just like a rug or a pad of paper in your drawer (when it suits you). So when you try to play that game, expect to be called out on it.

            4. Another whiff by Malcolm with “That’s why we’re focusing on patents here.

              Actually, the focus here is how the Agency is overstepping its authority.

              You really should pay closer attention.

            5. Tell me 6, do you think Tafas was a re re?

              You seem to have a hard time with any lesson that conflicts with your belief system.

              For all of your posturing, you display the critical analytical ability of a lemming.

            6. “Tell me 6, do you think Tafas was a re re?”

              Why on earth would you bring Tafas into this? We’re talking about what the focus of the thread is on. Tafas is not even posting in the thread.

  14. A few questions:

    Who bears the responsibility of the recordation in the case of an exclusive license or non-exclusive license, is it the title holder or the licensee? Does everyone bear this burden?

    Also, aren’t many of these agreements protected by confidentiality, ie they cannot name this entity? I know there is usually an exception, for as required by law in most NDAs. But, I am not sure if this is required by law (meets this exception), I assumed that clause meant for things like a subpoena or court order not a request by the USPTO to record.

    Finally wouldn’t compliance be very difficult if it is retroactive, some companies books are not so great, if one party forgets to record who is at fault? I think many companies don’t even know what has been licensed or what is licensed to them, shocking I know.

      1. Lots of luck.

        (1) I must maintain the patent.
        (2) I must maintain the confidentiality of the owner, per our settlement agreement.
        (3) I cannot accomplish both, given the new rule.

        See: Congressional Research Service Report:

        link to fas.org

        For private contracts, the main legal theory is the Fifth Amendment Takings Clause. Plaintiffs argue that since contract rights generally are deemed “property” under the Takings Clause, a congressional enactment that thwarts performance under a contract in essence takes property, requiring compensation. The government’s defense is often the Omnia rule, a Supreme Court holding under which government actions that only incidentally interfere with performance of
        private contracts are deemed to constitute but a frustration, not a taking, of contract rights. Per this definition, the Omnia rule does not apply when the congressional action expressly “targets”
        an existing contract right, though even here the taking claim usually is rejected.

        Omnia Limits
        At least three limits to the Omnia rule exist.

        First, and as the statement of the rule implies, Omnia does not apply when congressional legislation expressly “targets” an existing contract right—rather than affecting contract rights only incidentally. In targeting cases, the impact on the contract is assessed for a taking instead under the ubiquitous “Penn Central test,” a multifactor balancing framework applied to regulatory interferences with property rights. Penn Central requires a court to evaluate (1) the
        economic impact of the government action on the property owner; (2) the degree of interference with the property owner’s investment-backed expectations; and (3) the “character” of the government action. The precise meaning of these ill-defined factors is only now, 34 years after their debut, beginning to become clear, with the benefit of hundreds of lower court decisions construing them. Suffice it to say here that the Penn Central test is not an easy test to satisfy. Thus, even when the United States is divested of its Omnia liability shield, plaintiffs asserting takings claims based on targeted legislation almost invariably lose under Penn Central—though to be sure, the existing cases do not involve extreme facts.

        **************
        In your comments, DEFINE the FACTS that BUST the OMNIA SHIELD.

        1. REFERENCED REPORT:

          When Congressional Legislation Interferes
          with Existing Contracts: Legal Issues
          Robert Meltz
          Legislative Attorney
          August 20, 2012
          CONGRESSIONAL RESEARCH SERVICE

  15. What may be going on here is that the Obama administration might be setting up a test case to see just how far it can go with executive administration action without engaging Congress. We know that the patent office did not give up in the Tafas case, and continued to believe that it had the power to enact the rules package. It knows that the patent community will fight this in court and that is exactly what they may want – a rematch.

  16. 2. If corporation A is controlled by natural person D, natural person D is the
    >ultimate parent entity.

    Does this mean that the name(s) of a majority shareholder with >50% shares in a company acting as an applicant-assignee must also be reported to the USPTO along with the assignment of rights to the company? Regular employees of the company may not even be privy to this information so I could see this being a difficult/awkward topic for a patent agent to discuss with a corporate client.

    1. Regular employees of the company may not even be privy to this information

      Hmm.

      link to lib.umn.edu

      link to journalistsresource.org

      The Form 4 is a document required by the SEC and the appropriate stock exchange to announce changes in the holdings of directors, officers and shareholders owning 10% or more of the company’s outstanding stock.

      To find a company’s SEC filings, go to sec.gov, and click on “search for company filings” near the middle of the page. Then click on the first button that says “company or fund name.” Type in the name of the company you’re interested in and hit enter. It’s not necessary to type in the full name of the company.

      To reiterate, there is nothing “onerous” whatsoever about the type of information being requested of companies. That’s equally true of information being requested of individuals aka “small inventors.”

      Lest we forget this plain and simple fact: the people who will strenuously and loudly object to this proposed rule are invariably those people who exploit and rely on the secrecy provided by the status quo. Also, the unifying principle of the patent teabaggers, who never saw a junky patent they could not embrace (or who never seem to have the two seconds it takes to point out why the patent is junk) is that anything the USPTO does to make patents harder to obtain and enforce must be opposed by any means available. Anything that allows the PTO (or the public) to curtail patent rights in any way will be derided by the patent teabaggers. Anything that hurts the PTO or makes it more difficult for the PTO to reject their patents will be cheered by the patent teabaggers. That’s all they care about. Promoting innovation? Creating jobs? The public interest in a functioning, transparent patent system? They don’t give a crp about any of that stuff.

      1. Lest we forget this plain and simple fact: the people who will strenuously and loudly object to this proposed rule are invariably those people who exploit and rely on the secrecy provided by the status quo

        NSA who…?

        Edward Snowden who…?

    1. My poster boy for why this won’t work probably is NV Philips. Trying to get them to reveal their ownerships on pain of losing their American patents would set off an international incident.

  17. Dennis,

    There is a huge issue as to whether the USPTO has the statutory authority to promulgate this propose rule in view of the Tafas case: is this propose rule permitted by statute and is it substantive or procedural? Unfortunately, there is also the 2006 case of Star Fruits where a divided Federal Circuit panel upheld the authority of the USPTO to enforce an analogous 37 CFR 1.105 (permitting an examiner to request information from the application on penalty of abandonment of the application). Judge Newman vociferously dissented in that case (and for good reason), arguing that 37 CFR 1.105, and how it was applied, violated the Administrative Procedures Act.

    1. EG,

      I wold posit that 37 CFR 1.105 is not strictly analogous, if but for only section (viii)(4): “Any reply to a requirement for information pursuant to this section that states either that the information required to be submitted is unknown to or is not readily available to the party or parties from which it was requested may be accepted as a complete reply.

      Not only is the proposed rule for “attributed parties” absolute and lacking any type of ‘not readily available’ reasonableness escape clause, the proposed rule has an omnibus “you can take no action to escape reporting” clause, that broadens the capture to perfectly legal means that would escape actual ownership. This goes well beyond the mere self-authorizing of an executive agency to merely gather information (as questionable that is in itself); this is a de facto rewriting of corporations law.

      1. anon,

        Understood. Why I referred to Star Fruits and 37 CFR 1.105 is it similarly puts you to the Hobson’s Choice of either complying with the requirement or face having your application go abandoned. In fact, this proposed rule creates a new basis for the Examiner making a 37 CFR 1.105 request, once again, putting the applicant to a Hobson’s Choice. The fact that Star Fruits upheld the validity of such 37 CFR 1.105 requests continues nauseates me to no end.

        1. omg you might have to provide some limited types of information to help the agency administering your entitlement grant! omg, omg, omg! Wonder if the people applying for food stamps are similarly outraged when that agency requests information relevant to the food stamps program?

            1. Why should I bother? The quid pro quo is not relevant what so ever to providing the agency responsible for administering an entitlement program with information relevant to the entitlement sought.

  18. I think in theory it is generally a good idea to require disclosure of the owner–the problem is in the details, including the time given for disclosure and the penalty. I totally agree with Blindman. Our company is not a PAE and we are not at all trying to hide ownership or interests–we have been routinely recording assignments with the PTO the whole time. The problem for us would be mainly trying to get the correct information from foreign companies from which we have licensed patents. What if they don’t give us the right information? The patent, which we (a U.S. company) licensed in good faith goes abandoned? This could potentially do a lot of damage to U.S. companies who have nothing to do with the PAE problem.

      1. Generally good advice 6.

        But as you (ironically) alluded to, even commenting won’t help if “the fix is in.”

        Just look at the blazing speed of the Goodlatte bill…

        1. >>But as you (ironically) alluded to, even commenting won’t help if “the fix is in.”<<

          NO WAY !!
          Couldn't be!!!

          Michell Lee stated to assembled masses, in response to my direct question at a local bar event, that this was "not a done deal" and that they were "open for suggestions"

          Ya, sure !!

          As in other POLITICAL “rulemaking” procedings, this scheme will only be derailed by litigation timely filed after adoption of the FINAL RULE. I hope lots of folks are laying the groundwork for that in their comments, and that they are updating their APA case briefs.

        2. I’m sure they’re not above changing the new rules around to accommodate reasonable concerns where the change will not frustrate the ultimate purpose of the rule.

          1. 6, take a step back and ask yourself what happens if the ultimate purpose of the rule is beyond the authority of an agency of the executive branch of the government?

            Did you take civics in grade school?

            1. “6, take a step back and ask yourself what happens if the ultimate purpose of the rule is beyond the authority of an agency of the executive branch of the government?”

              First it isn’t the “ultimate purpose” that the agency needs authority for ya re re. And second, even if you were talking about the “ultimate nature” of the rule proposed then nothing happens without intervention of other parties should the rule be passed.

    1. The problem for us would be mainly trying to get the correct information from foreign companies from which we have licensed patents. What if they don’t give us the right information? The patent, which we (a U.S. company) licensed in good faith goes abandoned?

      Here’s a suggestion: encourage the companies from which you license patents to give you the right information. Tell them what the consequences are for the value of their patent license if they fail to provide the right information.

      1. Here’s a suggestion: learn about law. Appreciate law. Learn about intellectual honesty. Apply to yourself and your comments intellectual honesty. Realize that the ends do not justify the means. Reach for the ends you want through valid and intellectually honest means.

        It’s a path that does not require you to change what you believe in – just how you go about proselytizing and trying to reach what you believe in.

        1. Here’s a suggestion: learn about law. Appreciate law. Learn about intellectual honesty.

          LOL. Here’s a suggestion: GFY with a rusty chainsaw.

  19. From EPC land, I read with interest, how difficult this topic is. Article 60 of the EPC sets out who can be granted a patent and Art 138 provides that if the patent was granted to a party other than the one entitled, well then the patent is liable to be revoked. In the event that a European patent is asserted, there would be restrictions on recovery of damages by parties other than the registered proprietor. I had thought that was enough simple carrots and sticks to get the job done. Am I labouring under a misapprehension?

    Are there readers out there, familiar with how the EPC provisions have been quietly and unobtrusively working hard since 1978? If so, in what respects do they fail to achieve the requirements set out by The White House?

    Tickle: could it be that the topic is uniquely difficult in the USA because the USA, uniquely, expects the registered proprietors of patents routinely to be Inventors, not corporate entities? For all the rest of the world, that is not the case.

    Somebody upthread has commented that, for corporate owners of world-wide patent families, these proposed Rules are not really any problem. That is right, isn’t it?

    1. Tickle: could it be that the topic is uniquely difficult in the USA because the USA, uniquely, expects the registered proprietors of patents routinely to be Inventors, not corporate entities? For all the rest of the world, that is not the case.

      It’s not the case in the U.S. any more, Max. You’re out of date.

      1. Perhaps.

        Perhaps not. There is an interesting back and forth on that topic between Lemley and Katznelson related to some of the AIA changes.

        But MaxDrei’s post reinforces some of my posts: other mechanisms already exist, so the quest here for more information should engender a critical eye.

            1. Civil procedures rules

              Civil procedure rules don’t address issues raised by individuals and companies who hide behind layers of corporate shells while they are procuring and licensing patents.

              You’re aware of that aren’t you?

            2. Are the corporate shells illegal?

              Your moving question (since I gave an answer to your first question) should reflect an accurate answer to my question here.

              You should then note that if you have a problem with corporations law, then the proper venue for correction is not a Federal Agency dealing with only one aspect tangentially related to the larger question – such is the domain of our Congress.

              You really don’t understand the issues here – the legal issues – do you?

            3. Are the corporate shells illegal?

              I don’t know. I haven’t seen them all.

              If you’re asking whether corporate shells are illegal per se, then I believe the answer is no. Are you going to try to argue, then, that we “have no right” to complain about about entities hiding behind corporate shells while they play patent assertion games? Because that’s an incredibly ridiculous argument.

              But it is the sort of argument that you like to make.

    2. Somebody upthread has commented that, for corporate owners of world-wide patent families, these proposed Rules are not really any problem. That is right, isn’t it?

      It’s not really a problem for anybody, MD. The usual suspects are throwing their usual tantrum because their freedums are being curtailed. There’s nothing onerous or unreasonable about it but it violates their most cherished principle: the USPTO can not be allowed to make rules that constrain their freedums in any way without a huge temper tantrum.

      If the USPTO made some rule tomorrow that made it easier for them maintain and enforce patents without adequate consideration of the non-patent owning public’s interest, there would simply be cheering up and down the block and nobody would be running around proclaiming worrying about the collapse of the Republic.

    3. I had thought that was enough simple carrots and sticks to get the job done.

      Exactly what “job” are you referring to?

      1. The “Job” MM? Flushing out who is the real owner of the patent, on the date of grant, and keeping it up to date on the PTO Register accessible by the public. All I have in mind is that the best Motivator to disclose is self-interest. Make it so that the risk of not announcing the real owner on the Register is too high to be acceptable.

        My impression in Europe is that owners typically do record their ownership on the Registers of Patent Offices in Europe. The exception is owners in the hands of US attorneys. Those attorneys seem not to know the risks of failing to keep those non-USPTO Patent Office ownership Registers up to date (and surprised when they find out).

        Tell me I’m wrong, by all means.

        1. Make it so that the risk of not announcing the real owner on the Register is too high to be acceptable.

          Seems to me that’s what’s being done here.

  20. (1) Many of the proposed provisions are totally unworkable.
    (2) The time and estimated costs associated therewith are a joke for patent practitioners dealing with small businesses. (0.1 hours ???)
    (3) Compliance efforts in private practice would be full time work based on case load ratios for a number of additional legal secretaries or paralegals. Total nightmare. Example: Proposed Section 1.275. If ownership changes, you have three months, not extendible, to file a notice with the USPTO. Hell, I don’t talk to many clients about applications for more that 6 months, and they surely will not remember to tell me if they’ve taken on some new “attributable owner” in many circumstances. This will require a constant email/letter campaign, which will likely become spam filtered……. INSANE.
    (4) How will you ever get some foreign clients to timely provide such info ??? Impossible.
    (5) What about option agreements (not an owner now, but might be in the future, perhaps with some retroactive rights ????)… Not to mention stock options, or percentage ownership changes in small businesses….. TOTAL NIGHTMARE.

    This has got to be scuppered………. and the process started over, if it has any merit at all…..

      1. Most of the noted concerns of AIPLA are still applicable:

        From: AIPLA Comments on Real-Party-in-Interest (RPI)
        January 25, 2013
        ************************
        IV. The Proposed New Recording Requirements May Provide A Substantial Imposition in Costs and Time on Applicants

        The proposed system of continuously monitoring, filing, and updating RPI information at numerous points during prosecution, and post grant, would create a tremendous burden of cost and time for
        all applicants. We estimate the cost of services for investigating the RPI of a pending application or issued patent and filing a confirmation that the information is correct, would be at least $100
        and may be several times that amount. The suggested changes require a practitioner to carry out an RPI inquiry at least three times during patent prosecution of every patent application, resulting
        in an additional cost of between $300 and $1,000 per application. Companies that undergo name changes or reorganization during this time would need to file additional updates and confirmations.
        This may be especially difficult for foreign applicants, where each communication must be to a foreign counsel, who in turn must make yet another inquiry to the geographically distant client,
        often with translation costs and time delays. The practitioner would also need to explain to foreign counsel the requirements of the broad or limited definitions of RPI which may cause confusion and error in the reported results.

        Even for domestic companies, these inquiries may be complex. For example, the broad definition of RPI requires identification of all parties having enforcement rights. A patent that is the subject of multiple licensing agreements may include several exclusive licenses that are limited geographically or by field of use. Furthermore, these licenses may be subject to confidentiality restrictions, for example, as a part of the settlement of a lawsuit.

        Even if these ethical issues are ignored, and a requirement to publicly disclose confidential information is imposed, the RPI determination for a patent of this type would require extensive analysis of multiple agreements to determine the rights conveyed. Under the limited definition of RPI, where the focus is on control, the RPI determination would require investigation of corporate structure and ownership, including intra- or inter-corporate agreements relating to each patent or application to determine which company or person ultimately has control over the patent rights.

        Start-up companies may also be subject to extra expense under the proposed procedures. These companies are typically funded by an ever-changing web of family and friends, angel investors and
        venture capitalists. Every time a new funding source is identified, the funding agreement would need to be analyzed to determine if the RPI has changed, triggering a need to update the RPI information with the Office. The RPI reporting requirements would put an additional strain on these companies, needlessly diverting money away from research and product development.

        Many small inventors and start-up companies are represented by patent agents. As described above, meeting the broad or limited definitions of RPI may require analysis of agreements which would be
        equivalent to a legal opinion. Patent agents who provide these opinions may unwittingly subject themselves to disciplinary proceedings in their states for the unauthorized practice of law.

        Updating or confirming RPI information for issued patents is also burdensome. Many patent owners employ service providers to pay maintenance fees. Because of this, they do not docket the due dates for the fees. In addition, they may not consider a change in their corporate name as affecting their patent rights. The proposed procedures would create additional burdens for these companies

        1. Start-up companies may also be subject to extra expense under the proposed procedures. These companies are typically funded by an ever-changing web of family and friends, angel investors and
          venture capitalists. Every time a new funding source is identified, the funding agreement would need to be analyzed to determine if the RPI has changed, triggering a need to update the RPI information with the Office. The RPI reporting requirements would put an additional strain on these companies, needlessly diverting money away from research and product development.

          Right, and absent these rules, none of these start-up companies would have any interest in knowing who has control of the company.

          I’m not buying it.

          1. This part is pretty funny:

            The RPI reporting requirements would put an additional strain on these companies, needlessly diverting money away from research and product development.

            As if these rules will make a noticeable dent in anybody’s IP budget. Companies who actually do research and develop products typically employ intelligent people who can easily handle this kind of thing. “Companies” who sit around and dream up “new functions” for old computers so they can threaten other companies who actually do research and develop products …. well, it’s easy to imagine why those “companies” would find these rules so very, very difficult to comply with.

        2. Most of the noted concerns of AIPLA are still applicable

          They also apply equally to determination of entity status (it’s so complicated!) but somehow I don’t recall all this hand-wringing. Gee, I wonder why …

          1. >>But as you (ironically) alluded to, even commenting won’t help if “the fix is in.”<<

            NO WAY !!
            Couldn't be!!!

            Michell Lee stated to assembled masses, in response to my direct question at a local bar event, that this was "not a done deal" and that they were "open for suggestions"

            Ya, sure !!

            As in other POLITICAL “rulemaking” procedings, this scheme will only be derailed by litigation timely filed after adoption of the FINAL RULE. I hope lots of folks are laying the groundwork for that in their comments, and that they are updating their APA case briefs.

          2. >>>They also apply equally to determination of entity status (it’s so complicated!) but somehow I don’t recall all this hand-wringing. Gee, I wonder why …<<

            READ THE PROPOSED RULE and you will see why….
            Small Entity ONLY needs to be reported initially and then when subsequent fees are paid. Actually, that's fairly easy, although at times you have to be a real pest to get a client to acknowledge the status in writing. OK, no big deal.

            UNDER THE PROPOSE RULE, you MUST report within THREE MONTHS of any control change, even though the PTO might take – lets say 30 months to get back to me with a FIRST OFFICE ACTION. So, I've got 10 inquiries to make during such INITIAL PROSECUTION… every three months… to remind growing small companies…. DID YOU MAKE A DEAL ? DO YOU HAVE A BIG INVESTOR? – Before I even get a first office action.

            Then, if I file an appeal brief…. during the NEXT 30 MONTH WAIT, I have to repeat the process……. Just to make sure a FAVORABLE APPEAL RESULT is not DEAD ON ARRIVAL, because something happened in the small company that has had NO OTHER REASON TO EVEN THINK ABOUT their patent status…

            SUCH A BURDEN IS TOTALLY NUTS !!!

            1. As an example of the regular letter writing campaign which will be required:
              ***********************

              Dear Client:

              The USPTO has adopted rules which provide for the forfeiture of rights in your US patents or applications if you do not FILE DOCUMENTS TO RECORD the NAME of the entity or person having the CONTROLLING INTEREST in the ULTIMATE PARENT ENTITY of EACH patent or patent application. Under the regulations, the term ULTIMATE PARENT ENTITY means an entity which is not controlled by any other entity. Currently each filing requires an OFFICIAL FEE of $40, in addition to our professional fees for handling the matter. Alternately, we can spend more than $40 in professional fees to type details into an on-line input form, and submit the record electronically to the USPTO and incur NO OFFICIAL FEE.

              IMPORTANTLY, AT LEAST EVERY THREE MONTHS while your application is pending, and EACH TIME thereafter when a CHANGE OF CONTROLLING INTEREST OCCURS, you must report such change. Kindly complete the following and return WITHIN not later than [14 days from today]:

              A. A controlling interest transfer is when CONTROL of the amount of 50% or more of the ownership in an ULTIMATE PARENT ENTITY changes hands.

              1. Has there been a transfer of stock, a contractual agreement, a merger or acquisition, or other financial interest change,or an option agreement exercised during the last three (3) months, that has resulted in a transfer of the CONTROLLING INTEREST in the ULTIMATE PARENT ENTITY ?
              ___ YES ____NO.

              2. Has an option agreement been executed in the last three (3) months allowing for the future purchase or acquisition of CONTROL of the ULTIMATE PARENT ENTITY that if exercised, would result in a transfer of the CONTROLLING INTEREST, or change in holders of a 50% interest thereof ?
              ___YES _____NO.

              3. YOU MUST file required documentation to report a CONTROLLING INTEREST TRANSFER if you answered YES to question 1 above.

              4. FAILURE TO TIMELY REPORT a CONTROLLING INTEREST TRANSFER will subject your US patent application, or issued US Patent, to FORFEITURE (i.e. the USPTO will DEEM THE PATENT OR APPLICATION ABANDONED).

              FOR MORE INFORMATION on the ULTIMATE CONTROLLING ENTITY or on any CONTROLLING INTEREST TRANSFER, contact us immediately.
              Applicable rules may be reviewed at the USPTO WEB SITE, http://www.uspto.gov.

        3. Many small inventors and start-up companies are represented by patent agents. As described above, meeting the broad or limited definitions of RPI may require analysis of agreements which would be equivalent to a legal opinion. Patent agents who provide these opinions may unwittingly subject themselves to disciplinary proceedings in their states for the unauthorized practice of law.

          Patent agents shouldn’t provide such opinions, just as they shouldn’t be drafting assignments. Those small inventors and start-ups were represented by real live attorneys when they signed those complicated agreements, weren’t they?

        4. Dennis,

          Blindman is absolutely correct. In fact, it’s going to be interesting to see how this proposed rule passes muster under the Paperwork Reduction Act, as well as the Regulatory Flexibility Act, and whether the USPTO tries to “skirt around” these Acts like it did in the Tafas case. David Boundy, Ron Katznelson, and Richard Belzer, to name a few, will have a field day with this proposed rule in that regard.

          1. David Boundy, Ron Katznelson, and Richard Belzer, to name a few, will have a field day with this proposed rule in that regard.

            Maybe you should ask them to help you with your impeachment proceedings, Eric. How is that going, by the way?

            1. EG: I guess you believe in totalitarian governments and no rule of law.

              Right, Eric. That’s what I believe. I want a totalitarian government. All of us “patent-hxters” want that.

              Thank god for the Internet so everyone can see how the patent teabxgger mind “works”.

              How are those impeachments proceedings going, by the way? Have you called your congressman about the scourge of “rogue” judges who use term “monopoly” in their patent decisions?

            2. Malcolm misses again with “Right, Eric. That’s what I believe. I want a totalitarian government. All of us “patent-hxters” want that.

              Come man, you know that the patent system is under attack from both the Left and the Right, and it is only the Left that wants that totalitarian government.

              “Patent-hxters” come in more than one variety.

            3. it is only the Left that wants that totalitarian government.

              Can we get an “amen” from any of the other patent txxbaggers?

              LOL! Stay classy, Tr0llb0y.

          2. Who twisted OMB’s arm to sign off on the economic analysis?
            That is totally skewed… …and doesn’t pass the smell test, much less realistic evaluation, for all but the largest patent holders.

    1. That sounds a little hysterical, blindman. What makes you think that option agreements will trigger the requirements? Having an option to buy stock in an entity doesn’t make you a titleholder in a patent owned by that entity, and I suspect it’s a very rare case that an exercise of options will result in a change of control of an entity. Regarding foreign clients, you already have to collect assignments from them, don’t you? I don’t see how collecting additional information as to their parent entities is so much harder. I also don’t see the typical small business presenting much of a problem here.

      1. “Difficulty” (or absence thereof) should not be the main driver.

        “Like to have” is no substitute for “should have.”

        Personal property.

        Should the “if you have nothing to hide” mantra hide the fact that this country was founded on the concept of “limited government” and that the patent system was built to have the personal property that a patent right is to be freely and fully alienable?

        Again – take the logic provided and ask yourself why stop at patents? Why not mandate complete crystal clarity and just revamp corporations law?

        1. Why not mandate complete crystal clarity and just revamp corporations law?

          I’m all for that. I would have assumed you would be, too, given that “Big Corporations” are thieves who steal everything and control Congress — something you and your buddies gripe about endlessly whenever any remotely patent-”weakening” change to the status quo is proposed.

          Golly, maybe it’s possible that you’re all worked about this rule simply because the PTO is promulgated the rule and because you and your clients rely on your ability to hide your patent ownership.

          Could that possibly be the case, anon? Let everyone know.

          the fact that this country was founded on the concept of “limited government”

          Yawn. Is that the same “limited government” that hands out hundreds of thousands of patents each year, each one of which affects my right to freely do stuff? And the trend is that the number of granted patents is going to double every few years? That “limited government”?

          You people really do crack me up. Step out of your bubble. Go to a party and talk the average person about your suffering at the hands of the USPTO and see how they react. Or better yet: get a flippin life.

          1. that hands out hundreds of thousands of patents each year

            You forgot a (not small) factor: Quid Pro Quo.

            Not that surprising, given your ceaseless and senseless anti-patent rhetoric.

            Again, Malcolm, get into a profession in which you can believe in the work product you (the royal you) produce.

          2. anti-patent rhetoric

            Like I said: it doesn’t matter what the issue is. Anything that curtails the precious freedums of the patent txxbaggers will be construed as “anti-patent,” no matter how minimal it is, not matter how reasonable it is, and no matter what level of public support exists for the rule, and no matter how the rule is enacted.

            These poor, suffering “innovators” are just being mercilessy “attacked” by the “anti-patent” forces, all of whom are too ignorant or too “socialist” to appreciate that the txxbaggers and their “innovations” are what makes the world go round.

            By the way, anon, what happened to your li’l buddy who used pop in here every day and tell us that “every patent creates a job”? You two got along really well. Like peas in a pod, really. Did he finally strike it reach it with some “Internet paradigm” patent and retire to some sweet island in the Bahamas?

            1. LOL – more Malcolm AOOTWMD: “Like I said: it doesn’t matter what the issue is.

              Much like Malcolm’s vomiting his anti-software patent agenda on each and every thread, no matter the topic.

  21. Rest assured: the people who complain loudest about this are the people who are engaging in activity that would disgust nearly everyone you talk to you about. Put another way, the only people who desperately want to keep their patent ownership hidden are people who have something to hide.

    Let’s find who those people are, shall we?

    1. “activity that would disgust nearly everyone you talk to”

      Sure, let’s find out who these people are, but what good is that going to do the public?

      Obviously they are already without shame. If they had any sense of decency or felt any responsibility to provide value in exchange for profits, IV and its various imitators would never have started their extortions.

      Patents create special privileges for the few and restrict the rights of the public. Making their ownership public will not dull the power involved.

      1. Owen lemmings the anti-patent FUD factor of Malcolm (not a surprise).

        Malcolm: “Rest assured: the people who complain loudest…are people who have something to hide.

        Talk about your stale anti-privacy notions.

        Gee, why should anyone be upset about Big Brother government? You must have something to hide. NAS what…? Edward Snowden what…?

        In regards to the USPTO deciding to unilaterally take actions in relation to areas of law that are well beyond the ‘charter’ of the USPTO, a copy of what I posted on the ethics side of the blog:

        If there is a litigation abuse problem, the problem should be solved for all litigation.

        If there is a corporate structure problem, the problem should be solved for all corporate structures. Patents are not the only item that corporations use when they compete, and if ‘fair competition’ will be a rallying cry to attach property rights, then should not all such competitive business assets be treated equally and made equally clear?

        1. “then should not all such competitive business assets be treated equally and made equally clear?”

          Are all competitive business assets government entitlements?

        2. Big Brother government

          “Big Brother government” is exactly who is handing out your junky patents in historic numbers at the whim of the public.

          Of course you knew that already.

          Patents are not the only item that corporations use

          More accurately, the vast majority of corporations do not use them. Which pretty much turns your “argument” into a pointless whine. Call the the patent whambulance! The patent teabxggers are fightin’ for their freedums agin!

          1. Malcolm misses with another self-FAIL with “Which pretty much turns your “argument” into a pointless whine.

            It is actually the opposite Malcolm, to meet the stated goals then, corporations law is what needs to be even more so the main focus (and then the patent picture would simply follow suit, and not require this action).

            You really svck at this legal logic thing.

            1. corporations law is what needs to be even more so the main focus

              Go ahead and run with that “wholesale corporate reform is what is needed” angle. That sounds like a good one. Will you put something in your proposed corporate reforms about the use of corporate mail rooms to screen and discard registered letters addressed to attorneys before the attorney can review the contents? We all know that’s also something very near and dear to your heart.

      2. let’s find out who these people are, but what good is that going to do the public? Obviously they are already without shame.

        Not all of them. And I strongly suspect that some of what will be revealed will be very useful to the public.

        Making their ownership public will not dull the power involved.

        No doubt. But it will give the public sharper tools with which to follow and address undesired applications of that power.

        All we’re talking about is information about who is receiving increasingly powerful, increasingly abused and increasingly undeserved government grants — grants of rights that can be used to target and ruin the lives of most average people should they happen to fall within the net cast by the grant owner.

        1. Oh so very Holden Caulfield of you Malcolm.

          Never mind the aspect of personal property – that just gets in the way (just ask Jane).

    1. Even if Congress proposed this, it would not be found constitutional, IMHO. This is so wildly beyond the pale and to be a non starter at best.

      Michelle Lee is quickly gaining a reputation.

      1. Why do you think this to be beyond the pale?

        Is it because patents are personal property and no where else do we allow government to track personal property (without a compelling state interest like safety)? Or are you appalled for other reasons?

      2. Even if Congress proposed this, it would not be found constitutional, IMHO.

        Uh …. what’s the argument?

        read the 5th Amendment.

        You mean this: No person shall be deprived of … property, without due process of law ?

        Where’s the absence of due process here?

          1. The rule in question hasn’t been enacted yet. The due process part is your right to weigh in with your reasonable, persuasive arguments about why the rule is unfair, onerous or unconstitutional.

            In general, the PTO is charged with administering an entitlement program called “play by our reasonable rules and we’ll give you a patent that, for the moment, will be presumed valid in Federal court.”

            What is your particular interest in protecting the identities of entities who own patents? Or do you believe the identity of someone who takes advantage of a public agency for the purpose of limiting the rights of everyone else in the country should be privileged for some reason?

            What exactly is your problem with the proposed rule? Do you have a different rule in mind or do you believe that the owners/controllers of who gets sued by patents are “entitled” to secrecy (and if so — why should they be so entitled?).

            1. mm, my long reply to you was swallowed.

              I think the big issue is the executive having no legal authority to make law.

              The second is that this is a very bad idea. A simpler approach would be the Euro approach, deny damages to anyone who is not the record owner.

            2. Related to Ned’s point on “A simpler approach would be the Euro approach,” Hal Wegner opines today that another repercussion of this action was that it was taken with no apparent consultation to any of the other nations of the world and is likely to create dis harmony in an age where world patent harmonization is being attempted.

            3. another repercussion of this action was that it was taken with no apparent consultation to any of the other nations of the world,

              Oh, so now you care about harmonization all of a sudden, anon?

              What an unbelievable hypocrite you are. But it’s par for the course with the patent txxbaggers. They will say and do anything to protect their precious patent freedums.

            4. Malcolm trolls with “Oh, so now you care about harmonization all of a sudden, anon?

              What an unbelievable hypocrite you are.

              Nothing at all hypocritical Malcolm as – if you take the time to read the post – I merely relayed Hal Wegner’s newest insights.

              You really need to learn to not be so jumpy when you see a post by anon. Yes, I know it is difficult, considering the many beatdowns you receive as I highlight your duplicity and dissembling, but hey, you can control that by deciding to post in an intellectually honest manner (yes, intellectual honesty on a blog is a highly desired trait). Try it.

            5. I merely relayed Hal Wegner’s newest insights.

              Right. Because you disagree with him. That was really clear from your comment.

              Man, you’re a t 0 0 l.

            6. Learn to communicate in English, Tr0llb0y. Try using English to express you beliefs by making statements about those beliefs. It’ll help you.

              Unless, of course, you’re ashamed of those beliefs, or if those beliefs are the beliefs of a looney tunes nutcase.

              Are you going to jump on Guttag’s impeachment bandwagon along with your li’l buddy AAA JJ? Let everyone know. You remember, I’m sure: judges who use the term “monopoly” in the context of describing a patent right should be impeached. What do you think of that, anon?

              Are “rogue” judges such as that working with socialists to set up a totalitarian government? Let everyone know.

            7. LOL – looks like the forecast of the rains of the Malcolm CRPfest were accurate, as yet another AOOTWMD’s and ‘use English while Malcolm cannot read’ combined with the latest flavor of non-sequitur is posted here.

              You really really svck at this.

            1. The government cannot take property without due process of law.

              I don’t see any lack of due process and nobody’s “property” has been “taken” from them.

              The right to enforce your patent will be lost if you don’t comply with the reasonable rules. But that’s nothing new. If you can’t follow the rules, well, that’s just too bad.

              The fascinating thing, of course, is that none of these patent owners is going to go hungry because of it. But watch these entitled wealthy people scream because they have to provide some information to the PTO! Oh noes! Meanwhile, the Republicans want to inflict as much pain as possible on ordinary people who have no use for the patent system at all by taking away their “entitlements” and the loudest whiners about this proposed rule will gleefully cheer them on.

          1. Good point.

            But what about the AIA power to set fees (albeit that have to matchup in the aggregate – side point of Enronesque accounting could be followed up at another time). The Office could set the maintenance fee at $ 0.01 if it so chose to do.

  22. Hey, I have a crazy idea….. How about they get the MPEP and CFR on the uspto website updated to current before they go about changing other rules? I know, insanity, right?

    1. How about they get the MPEP and CFR on the uspto website updated to current before they go about changing other rules? I know, insanity, right?

      I had similar thoughts. Many other upgrades to the PTO infrastructure should be happening simultaneously with this.

      The best way to make that happen is to increase the PTO budget so the PTO can afford to hire the best and brightest people to develop an infrastructure that serves both the public and the “customers” of the PTO at the highest level. A bonus aspect of this proposal is that it instantly creates jobs.

      I’m glad to see everyone getting behind the idea of improving the PTO infrastructure as quickly as possible by hiring the best people to work in a dedicated fashion on that goal.

  23. Two quick questions (for now):

    How does this pass the sniff test of ‘procedural’ (as under Taffas) with a penalty of a loss of rights?

    How does someone as far down the chain as Lee intend to write such a substantive rule? (collision with the Hal Wegner running meter)

    1. “How does this pass the sniff test of ‘procedural’ (as under Taffas) with a penalty of a loss of rights?”

      Great question and I hope to see Dr. Tafas back in court over this procedural/substantive issue!

      Though generally speaking, don’t we already have many procedural things that lead to a loss of rights? Failure to submit a compliant response within the statutory time period etc?

      1. 6 asks, “ Failure to submit a compliant response within the statutory time period etc?

        You mean to advance prosecution when the Office has acted to reject an application under the rules of law? (the law part being law written and passed by Congress)

        I really do hope that you understand this ‘lawl’ thing well enough to see the difference.

        1. 6,

          As I have posted previously, here is a hint:

          The notion of alienability of property.

          Everything necessary now is available. The ‘what’ is known. The ‘who’ is immaterial to understand the “No Trespass” sign. To actually enforce, the rules already require a listing of the party of interests (think civil procedure rules that already apply to all) Quite frankly, this goes well beyond the scope of authority. That some like the rules or like the ends obtained cannot justify the means. There is a critical lack of (academic) reasoning being applied to the full impact of these rules.

        2. Yes I hear you, that is during prosecution. I had posted before someone brought up the patent/application distinction and it didn’t become immediately apparent to me beforehand. Still, maintenance fees are a thing.

          As to your “alienability” arguments, I’ve already addressed them you don’t need to bring them up everyday, it’s boring. I’m down with your arguments and all and they seem just peachy keen IF that sort of thing is already an established thing. Since I have no information establishing such, I’m afraid it seems to me like you’re just reading too much into alienability. Stuff you’d really like to be there, and which traditionally has been there simply by default. But we have reasonable restrictions on all kinds of property that indirectly affect alienability in various ways, at least some of which are implemented through non-legislative routes. Again I see no reason to be overly concerned with the tiny restriction on alienability that may hypothetically result in some tiny sub-set of instances.

          “The ‘who’ is immaterial to understand the “No Trespass” sign.”

          If patents were a no trespass sign rather than a government entitlement then I might somewhat be concerned about this. Since they aren’t I’m rather not wahmp wahhhhh.

          “Quite frankly, this goes well beyond the scope of authority”

          Well I hope to see you guys in court if someone has the balls and the money/will to challenge it! Maybe if you make a big enough stink then congress will go ahead and enact it by law! Good times!

          1. 6 quips “As to your “alienability” arguments, I’ve already addressed them you don’t need to bring them up everyday, it’s boring.

            You have not addressed them sufficiently enough for me NOT to bring them up.

            Since you insist on posting without taking such into account, do not attempt to stop posting the valid points that need to be taken into consideration (whether of not you find this ‘boring’ is immaterial).

            1. “You have not addressed them sufficiently enough for me NOT to bring them up”

              Nobody will ever sufficiently address them for you to not bring them up even after the rule is passed and 10 years have passed. This is because you are a ta rd who doesn’t understand that you don’t have to keep harping on the same thing over and over for the same old people to know your views on a matter haven’t changed. It’s a problem in your brain that I don’t have the ability to fix just now. Irl we probably wouldn’t have this problem of course since you’re probably too much of a pus sy to even pipe up and you’d be socially shunned so quickly for doing it if you did that you wouldn’t be a bother any longer.

            2. LOL – clearly you are out of your league with this law stuff 6.

              You should try to understand exactly why that your banal mouthings are insufficient, and your juvenile “irl” CRP is a fine example of posting nothing of substantive merit. You really need to do more than just your Be@vis and Bxtthead routine.

            3. Nobody will ever sufficiently address them for you to not bring them up even after the rule is passed and 10 years have passed.

              For similar reasons, anon and his weird tribe still can’t admit that his “prohibition against claim dissection” is giant crock of sh*t (and always was). He’s a True Believer. He has his script and his going to recite it, galdarn it! because that’s the only way he’s ever going to get close enough to those rich cowboys whose boots he loves to polish.

            4. Squint as hard as I can, and I cannot see a point to Malcolm’s vomit at 5:09 pm.

              You might try a different tactic of actually responding in an intellectually honest manner to the points presented.

              Give it a try.

        3. “Huh. I missed the part that said the rules would operate in a draconian, merciless fashion without regard to contingencies of any sort and with no hope for remedy.”

          What part of: “The proposed penalty for failure to comply would have some teeth: abandonment.” didn’t you understand?

          Now how about answering my questions and responding to my points.

          1. What part of: “The proposed penalty for failure to comply would have some teeth: abandonment.” didn’t you understand?,

            The part where it says nothing to the effect that “the abandonment will be irreversible, unlike other instances of abandonment”.

            1. The part where it says nothing to the effect that “the abandonment will be irreversible, unlike other instances of abandonment”.

              Which part of the Federal Register is that in? Here on planet Earth there is no discussion that the abandonment will be unlike other instances of abandonment.

            2. anon Here on planet Earth there is no discussion that the abandonment will be unlike other instances of abandonment.

              Right, like the other instances of abandonment that are revivable. Who are you arguing with?

    2. I thought Margaret Peterlin left the PTO years ago.

      If adopted, these rules be will challenged on grounds that they constitute substantive rulemaking, and that Michelle Lee isn’t authorized to do this, because her appointment isn’t legal. But it’s not really a surprise coming from an Oval Office occupant who gave us, “You didn’t build that”.

      1. Reminds me of a (still controlling) 1908 Supreme Court case and the fact that ‘building it’ has nothing to do with US patent law (as in, there is no ‘use’ requirement).

      2. Dan F. it’s not really a surprise coming from an Oval Office occupant who gave us, “You didn’t build that”.

        You see: Dan’s really concerned about “principles.”

        LOL.

        1. What point are you trying to make at 7:09 pm Malcolm?

          (maybe you can incorporate that 1908 Supreme Court case into your ‘witty’ answer…?)

        2. What point are you trying to make at 7:09 pm Malcolm?

          That nearly all of the patent txxbagger types who whine about rules limiting their precious patent rights are rich Republican dooshbags who care about absolutely nothing except stuffing as much money into their pockets as possible.

  24. Seems like Lee is more Dudas than Kappos by issuing this pointless, burdensome regulation. The threat of abandonment is outrageous. This rule package is going to add a lot of cost to patent holders, risk to patent attorneys, and marginal benefit to the public.

    1. This rule package is going to add a lot of cost to patent holders,

      Only to a very very very small minority of patent holders.

      risk to patent attorneys

      Every rule creates risks to patent attorneys. That’s why they get away with charging way more per hour than almost everybody else in the country.

      and marginal benefit to the public.

      The public? You mean the 99.9% of people who don’t have a patent and never will and who are almost universally behind greater transparency when it comes to patent ownership?

      I’m pretty sure that a marginal benefit to those people weighs a lot more than a tiny inconvenience to a microfraction of the richest people in the country. Of course, that microfraction always seems to have a big microphone and an army of script-reciting sychopants to back them up.

      Anyway, I can hardly wait for Hal Wegner and his busload of white-collared wanna-be patent trolls to show up at the USPTO with their giant papier mache puppets and pitchforks. Fun times ahead! Promote the progress! LOL.

      1. I think most of the US fortune 500 companies, and the major pharma companies may have a different opinion on the costs. It is a bit naive to think that Dow or DuPont are single corporate entities.

        Also think of a small biotech that gets VC funding. How is the public interest served by listing the VCs of the biotech on the assignment registrar?

        1. in-house: I think most of the US fortune 500 companies, and the major pharma companies may have a different opinion on the costs.

          Excuse me? Don’t you know, “in-house”, that it’s those “Big Corps” who are “behind” this rule because it’s going to make it easier for them to steal everyone’s ideas? Haven’t you been paying attention?

        2. in house,

          Just think of corporations that follow the Illinois Tool Works model, with patent assets currently listed under literally hundreds of subsidiaries.

          (pay no attention to the apoplectic rants of rage)

    2. Anonymous, regardless of intent, the idea that Michelle Lee by regulation can declare one’s patent forfeit for non compliance with some rule she “enacts” is outrageous. Lawless. Unconstitutional.

      We were just discussing trade monopolies authorized by the monarch as being the proximate cause of one civil war and two revolutions. If the monarch can now tell you to do this or that and if you do not obey his commands he takes away your property, what is that? This is worse.

      Imagine that the president ordered you to fund the government by voluntarily contributing 100k per year, and if you do not, you lose you property.

      It is the principle of the thing that is at issue here.

      1. Anonymous, regardless of intent, the idea that Michelle Lee by regulation can declare one’s patent forfeit for non compliance with some rule she “enacts” is outrageous. Lawless. Unconstitutional.

        Jackie Chiles lives!

        If the monarch can now tell you to do this or that and if you do not obey his commands he takes away your property, what is that? This is worse.

        Just a friendly reminder to people who just tuned in: we’re talking about a rule requiring you to disclose your ownership interest in a patent unless you wish to lose your right to enforce that patent. This rule applies to approximately 0.00001% of the population, nearly all of whom are much better off than nearly everyone in the country.

        These entitled people believe that the world revolves around them and they do not like being told what to do by anybody, but especially if the person is not a “serious” stiff-suited alpha male type who smells like a leather chair.

        They will never stop complaining until they get all the patents that they want, yesterday, and any “rules” that make it even marginally more difficult to do so will be treated like an invitation to “join the Amish” or like an arbitrarily handed out death sentence.

        It is the principle of the thing that is at issue here.

        Oh, sure it is. There’s lots of people out there really worried about “principles” when it comes to the PTO. You read about them all the time in the paper, folks refusing to accept the grant of their junk patent because they’re too “principled” to benefit from the PTO’s mistakes.

      2. Imagine that the president ordered you to fund the government by voluntarily contributing 100k per year, and if you do not, you lose you property.

        Yeah, this is just like that. Take a deep breath, Ned.

        1. LB, when CJ Marshall said, “The power to tax is the power to destroy,”I am sure he did not intend to imply that the federal government intended to destroy the states. It is the slippery slope issue.

        2. Leopold’s advice of “Take a deep breath” seems much more appropriate to his cheerleading master.

          Has Leopold abandoned you Malcolm? (don’t worry too much, I’m sure any such abandonment is reversible)

  25. I am in favor of these rules, but I am not sure whether it based upon my own personal bias. In particular, I am constantly frustrated by failures in the current assignment database. More accurate assignment information would make it much easier for me to write about and analyze the law. It will be particularly beneficial for anyone wanting to use patent data as a mechanism for reflecting on economic performance of either individual companies or larger economies.

    1. Dennis, as one of Hal Wegner’s readers pointed out, the PTO itself could make everyone’s life a lot easier if it would make the assignment documents themselves publicly available.

      I understand Google’s frustration with the shell games played by some trolls, but these proposed rules are overkill. For Google, compliance with these rules is a small price to pay. But my clients don’t have that kind of moeny, and they want to spend their limited resources on getting IP protection, not paying me to investigate their corporate status and report that to the USPTO. (And if I wanted to do that kind of work, I’d have gone into corporate law instead of patents.)

      Most patent practitioners I know have a hard enough time keeping their clients’ marketing departments from destroying their IP; the last thing those clients need is another set of rules that constitute another trap for the unwary. Didn’t report that corporate name change to the USPTO within a few months of it occurring? Bummer, you just lost your patent. Yeah, that’s the definitely the ticket for spurring innovation.

      This strikes me as the continuation of what Google et al. wreaked on everyone with the AIA, namely the gaming of the system so that established players will be able to obtain and enforce their own patents but smaller players won’t be able to do the same. Or as people in the academic world might say, it’s just another step in the externalization of Google’s costs on everyone else.

        1. Anon is being persecuted by all sides! The “right” and the “left”! Oh, poor baby. What about the “center”, anon? Or is that where all the “reasonable” people are? Let everyone know.

          Ah, the endless suffering of the wealthy entitled classes. They “innovate” new methods of shoving ads in our faces and they make the world go around. And nobody appreciates them. *sniffle*

      1. namely the gaming of the system so that established players will be able to obtain and enforce their own patents but smaller players won’t be able to do the same.

        What in the heck are you talking about? I know plenty of “smaller players” who have no problems whatsoever with these rules.

        For Google, compliance with these rules is a small price to pay.

        It’s the same price for everyone. Google, in fact, will end up paying far, far, far, far more of price than most patent owners because — surprise! — they have a lot of patents.

        .the last thing those clients need is another set of rules that constitute another trap for the unwary.

        If this straightforward rule comes across to you as a “trap for the unwary” then it’s highly likely that your clients have already fallen into a lot of other “traps” out there.

        they want to spend their limited resources on getting IP protection, not paying me to investigate their corporate status and report that to the USPTO,/i>

        Why do you think that you have to investigate your clients “corporate status”? If your client is incorporated, then they should be used to following rules that are at least as complicated as this one.

        If their resources are so limited and their “innovation” is so important to you, perhaps you should consider charging them less. Or they can make a similar decision for themselves.

  26. One difficulty here is that patent ownership interests are defined by a mixture of local law (state and/or foreign) and federal law. It is quite difficult to create a simple rule that fits to each of the hundreds of potential local jurisdictional mechanisms of operation.

    I don’t think it’s difficult to create a fairly simple rule. It may be difficult for some entities in some jurisdictions to comply with that simple rule, due to the complex laws in those jurisdictions. That’s really a problem for the entities who are subject to the laws in those jurisdictions to solve. I would suggest they take the issue up with their local jurisdictions.

    I can say this much for sure: compliance with these proposed requirements isn’t going to be a problem at all for 99.9999% of so-called “small inventors”, myself included. On the contrary, it’s immeasurably helpful for the reasons given in your post (which I greatly appreciate — thanks again for the excellent and timely summary of these important issues).

    1. Compliance shouldn’t be a problem for a large proportion of big corporate filers, either. Some will have to identify a parent entity in addition to their patent holding division, but that’s not a big deal.

        1. Not really, anon. My practice (and the republic) will survive this process, regardless of how it turns out. I’ll let others worry about the legality of it – that’s outside my area of expertise. But I think the claims here that this will be a huge burden on the American way of life are overblown. This will only be complicated for those entities that have particularly complicated ownership structures – if those entities are sophisticated enough to have such structures then they’re sophisticated enough to follow rules like those being proposed.

            1. No “out of charter” concerns…?

              The only time the patnet txxbaggers raise these “out of charter” concerns is when their precious patent freedums are being curtailed, regardless of how minimal the curtailing is, regardless of how reasonable the curtailing is, and regardless of the public’s interest in seeing that curtailing achieved.

              They are surely aware of this fact about their behavior and they are also surely aware that everyone who is paying even the slightest attention is aware of this fact about their behavior.

              And so they respond in the only way they know how: recite their usual scripts (“hurts the small corporation!” “next thing you’ll be wanting to put a government camera in everybody’s toilet!” “unfairly targets patent owners but other corporations get a free pass!” “Obama!”) but with extra shrillness.

              The patent txxbaggers, who never saw a patent they couldn’t embrace or a patentee victory they couldn’t celebrate or a rule restricting patent rights they couldn’t despise, are a big part of the problem with the current patent system. It’s true they’re never going to go away but it’s important to keep the light shining on their behavior as baby steps are taken to shrink their corrosive effect on the system and its impact on the non-patent wielding public who they plainly care nothing about.

            2. patents are evi1.,

              Patents aren’t “evil” at all. The granting of carefully scrutinized and examined patents of reasonable scope can be a useful incentive for promoting the development of new products and methods in certain fields.

            3. Malcolm drones on “The granting of carefully scrutinized and examined patents of reasonable scope

              And which ones are those…?

              The ones Malcolm says so.

              Oh, how very Carroll of him.

            4. Leopold dodges “Like I said, I’ll leave the legality of it to those who know what they are talking about.

              Never stopped you before from throwing out your opinions/concerns/cheerleading chants, Leopold.

            5. Malcolm drones on “The granting of carefully scrutinized and examined patents of reasonable scope ”

              Hey anon,

              Malcolm does sound like a Borg Drone, doesn’t he?

            6. EG offers “like a Borg Drone

              You offend Borg drones with such a comment.

              The politically correct term is RQ/HD (with the oh, so very Carroll connotations).

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