4th of July Predictions

Here are my predictions:

  1. Although committee meetings will continue, substantive legislative patent reform is dead for 2007. There is simply too much opposition and too many varied viewpoints.
  2. Despite strong opposition, the proposed continuation rule changes will be implemented.

Happy Independence Day!

35 thoughts on “4th of July Predictions

  1. 35

    Whoops – I think you forgot that the Republicans and their allies in Big PhARMA aren’t running the show any longer.

  2. 34

    I just checked the reginfo.gov website, and the rules have been moved from the ‘under review’ section to the ‘completed’ section. The status indicates that the rules are “consistent with change”.

    Does anyone know exactly what that means?

    I found the following on the “OMB Watch” website:

    “All rules changed and then approved by OIRA are labeled “consistent with change.” A change for clarity, such as the insertion of a comma, is reported in the same manner as a change in substance that affects the very nature of the regulation. This label needs more specificity to distinguish the various types of changes OIRA makes.

    Under Executive Order 12866, issued by President Clinton and still observed by the Bush administration, agencies are to document changes made to their rules while under review at OIRA. Yet this documentation is inconsistent and frequently inadequate. In a 1998 report, the General Accounting Office found complete documentation of OIRA changes for only 26 percent of the 122 regulatory actions it reviewed, covering EPA, the Dept. of Transportation (DOT), Housing & Urban Development (HUD), and DOL.”

    Any ideas as to when we might actually see these final rules published?

  3. 33

    I actually thought that yesterday was the deadline for OMB to act, although I’m not sure. So does anyone know whether OMB would actually make an announcement about their decision (or that they were at least taking a 30-day extension to continue their consideration)? Or if the rules are sent back to the PTO or struck down (or whatever the appropriate administrative step would be) will we just never hear any more about it?

  4. 31

    DWAP – I’ve seen your name pop up on a series of posts and not a single time have you offered anything of merit. If your ambition is to be the sand in everyones KY, you are well on your way to raging success. Seriously, all you accomplish with this consistent vomitus is to knock discussions off course – if this is all you have to offer, do us all a favor and become a professional organ donor.

  5. 30

    Alan, Gravis Mushnik is a fictional character.

    Located on skid row is a little flower shop by the name of Mushnik’s. Now Mushnik’s is family run by Gravis Mushnik and his daughter Audrey, also working at …

    link to google.com

    link to imdb.com

  6. 29

    The USPTO patent records identify no patents with an inventor “Mushnik”.

  7. 28

    For his comment on doubling the patent costs to the independent inventor, I am sending Alan Mcdonald one of my beautiful patented hybrids as a gift. Put it on your nightstand near your head when you go to sleep, Mr. McDonald- you’ll have a change of attitude in the morning.

  8. 26

    Here is the true story of Charles Goodyear – one of the saddest stories about American inventors (It is hard to imagine more sad story, maybe just a story of Edwin Armstrong link to en.wikipedia.org )

    link to goodyear.com

    Apparently these fellas were not worthy cause they apparently lacked “the leadership qualities and entreprenurial spirit”…

  9. 25

    Small inventor, I missed that part in Art. I, sect. 8 cls. 8 of the Consitution about the need to make artists wealthy. I though patents had something to do with the advancement of the useful arts, not aggrandizing the wealth of individuals. By the way, Mr. Goodyear did not die penniless from as far as I can tell. In fact the Goodyear company would not exist but for him. Secondly, it was the French who used the invention extensively during his lifetime.

    In the year 1852 Goodyear went to Europe, a trip that he had long planned, and saw Hancock, then in the employ of Charles Macintosh & Co. Hancock admitted in evidence that the first piece of vulcanized rubber he ever saw came from America, but claimed to have reinvented vulcanization and secured patents in Great Britain, but it is a remarkable fact that Charles Goodyear’s French patent was the first publication in Europe of this discovery.

    In 1852 a French company (Aigle) was licensed by Mr. Goodyear to make shoes, and a great deal of interest was felt in the new business. In 1855 the French emperor gave to Charles Goodyear the Grand Medal of Honor and decorated him with the Cross of the Legion of Honor in recognition of his services as a public benefactor. Later, the French courts subsequently set aside his French patents on the ground of the importation of vulcanized goods from America by licenses under the United States patents.

    In 1898, almost four decades after his death, the Goodyear Tire and Rubber Company was founded and named after Goodyear by Frank Seiberling.

    On February 8, 1976, he was among 6 selected for induction into the National Inventors Hall of Fame.

    In his hometown of Woburn, Massachusetts, there is an elementary school named after him

  10. 24

    We didn’t lose the cold war. It still rages. All the russians did was as they always do: retreat back to the home country and let their adversary over extend themselve. It worked with Napoleon and with Hitler. Now it looks like it worked with Bush or shall I say that sorry excuse for a man yellow belly coward DICK Cheney.

    Now let us take a good look at Goodyear . . . hmm he is instaneously known for the vulcanization of rubber. And you, what exactly are you known for? Why don’t you identify one of your patents.

    By the way it appears I really hit a nerve with that 60s generation thing. Hey man the truth hurts.

  11. 23

    Hey, D.W.A.P. you really annoyed me a LOT
    Here is a small piece of info for you, patently-ignorant fella:

    Charles Spencer Goodyear died in 1860 almost pennyless..

    The Goodyear Tire and Rubber Company was founded in 1898..

    Like I said, just shut up

  12. 22

    Hey, D.W.A.P., whoever you are…

    lack of “leadership qualities and entreprenurial spirit” does not equate to being FOOL
    Got it ? Want a good example ? Here it is: Albert Einstein.

    Now, dude, you are absolutely clueless about the realities of modern tech.
    You simply cannot build a high-tech company around just one patent, no matter how important it is (Actually, as a small company, you are MUCH better off relying on trade secrets and staying off the radar of the big guys)

    But you are unfortunately correct about a waste of generation, pal
    Only we didn’t lose Vietnam or Iraq – we lost the Cold War,
    Now you can comfort youself with the thought that some of us without “the leadership qualities and entreprenurial spirit” live a pitiful life of corporate slaves or patent trolls here, instead of, e.g working on strategic nuclear missiles somewhere else…
    Those with “the leadership qualities and entreprenurial spirit” have turned into Robber Barons.
    So just shut up dude, because things could really be a lot worse for you than just loosing Vietnam or Iraq.

  13. 21

    Now this small inventor FOOL has just convinced me that the e-bay decision was not only just but needed. Listen to me you goof ball Good Year is a company founded upon the patent for vulcanizing rubber. Birds Eye is a company founded upon the patent for freeze-dried food. The hits go on and on. You simply lack the leadership qualities and entreprenurial spirit required to truly benefit from a patent. You must be a product of the 60s generation. The same sad group who lost Vietnam and now leads the country to is resounding defeat in IRAQ. What a waste of a generation.

  14. 20

    Alan McDonald,
    You are obviously a patentless guy…

    To tell you the truth, I don’t really care if they keep the small entity status or completely eliminate it. Having spent about 12 grand on patent attorney I just couldn;’t care less about PTO saving me 500-1000 bucks
    Maybe some poor guys working in McDonald’s will disagree but I think that the majority of independent inventors can well afford PTO fees (not patent attorney fees)
    What really worries me is the skyroketyhing cost of patent assertion litigation…
    Unless they do something about it there will be no incentive for smaller entities to file patents. After all, patent is just a license to sue. There isn’t any other use of it

  15. 19

    PTO management’s poor record on hiring and retaining examiners is old news. The Commerce Department Inspector General reported on it a couple of years ago. Very little progress, if any, has been made, yet the same people remain in charge.

    There are no consequences for PTO management. The December 8, 2004 fee increases were supposed to revert to their original levels if no progress was made on the backlog by September 30, 2006. Despite no progress on the backlog, the increased fee levels have remained. PTO management remains. It’s no wonder they think they can get away with the proposed rule changes.

    The current “training” environment at the PTO exacerbates the retention problem. The clear message to those in the training academy is that their job is “don’t allow anything.”

  16. 18

    Alan McDonald, on second thought, how about not? How about we lower the small entity fee to further motivate independent innovation, and also adopt an incrementally progressive system wherein the filing fee increases as a function of the number of patents filed by any one entity in a given period?

  17. 17

    Can an examiner be sued purusuant to 42 USC 1983 for deliberately failing to follow a Congressional Statute. Afterall they are agents of the governemtn actuing under color of authority and depriving a citizen of their statutory rights. I believe these are call Bivens actions. Any comments on this?

  18. 16

    An Examiner, I have a better issue for ya. 35 USC seciton 133 makes clear that an applicant cannot be afforded less than one month time to respond to an advisory action. Yet time and again the PTO manages to obtain extension fees in violation of this statute. I am just waiting for some hungry tort attorney to nail the PTO for this financial indiscretion.

  19. 15

    Instead of 50% fees for individual inventors and small entities, how about double fees, since the PTO has to spend more time hand holding and cleaning up the poorly written applications?

  20. 14

    A question. Full disclosure – I am not an attorney but an examiner. My understanding is that the regulations (such as 37 CFR) must be consistent with and may not contradict the statutes (such as 35 USC). Please correct me if I’m wrong on this one.

    35 USC 132(b) states:
    “(b) The Director shall prescribe regulations to provide for the continued examination of applications for patent at the request of the applicant. The Director may establish appropriate fees for such continued examination and shall provide a 50 percent reduction in such fees for small entities that qualify for reduced fees under section 41(h)(1) of this title.”

    So wouldn’t regulations which limit the number of continuations be contradictory to this statute? Consideration of CON/RCE seems to be *required* for the PTO upon request by an applicant.

    Was this point brought up in the submissions to the PTO or OMB?

  21. 13

    Too many people at the USPTO sound like the guy in the recent commercial who, after seeing that sales have doubled, worries that such growth will continue to which another guy responds, “Isn’t that the point?” These people see growth as a problem and would rather turn business away by limiting continuations than demonstrate true leadership and creativity by adapting in ways that solve the backlog while protecting inventors.

    It’s true that the USPTO cannot fix the backlog solely by hiring. But they can fix much of the backlog by hiring *and* retaining. Like a person bailing water out of a sinking boat, they need to take time to plug the leak. Yet too many people at the USPTO say “We can’t hire our way out of the problem (of having too much demand)” and leave it at that. Can you imagine those words coming from Jack Welch or even the manager of your local fast food restaurant?

    Attention USPTO management: stop fretting about having too much work and start focusing on retaining the talent you are developing. Create satellite offices, pay more, provide better benefits, allow for increased telecommuting and create a better working environment. In sum, provide employment that competes with patent agent jobs in the private sector. Next, increase the filing and claims fees, which will pay for these added benefits and will also deter knee-jerk continuation filing. This won’t solve the backlog problem, but it would stop the leak.

  22. 11

    An agency that instead of taking care of its real patent examination job, attempts to make new patent laws through regulations that conflict with statutes and federal courts’ decisions, will fail.

    USPTO’s management apparently has very little understanding of the economic reasons for the exponential growth of continuations over the last quarter of a century. Based on anecdotal isolated abuse cases, they naively think that the 850,000 continuations filed in the last 25 years are a manifestation of applicants’ abuse. They have had the statistics all along, showing them that continuation filing rate doubles every 6.5 years just as trademark applications do. Is there any connection? Are trademark applicants abusing the system by filing excessively? I doubt it. Had any economist at USPTO (are there any?) attempted to ask simple questions, they would have been able to see that this rate is essentially the growth rate of new product introductions. Demand for patent protection (continuation claims) grows at a rate of new product introductions and NOT at the rate of original disclosures. Original disclosures arrive at an exponential rate doubling only every 14 years, the growth rate of science. Not surprising, is it?

    The USPTO appears ignorant of the economics of historical product cycle contraction, requiring more frequent claim “mid-course corrections”. Thus, USPTO management recklessly believes it can stop a basic economic phenomenon that it fundamentally misunderstands. The USPTO apparently also lacks expertise to analyze and study the economic trends associated with patent application filings and should leave policies for changing these trends to Congress. Instead of setting policy, it should focus on its job of quality examination of claims sought by applicants.

    For the last 20 years, the USPTO has failed to achieve its basic job. It consistently managed to dispose of fewer applications than it receives in any given year. The growing backlog and the runaway pendency increases caused the USPTO’s management to panic. They thrashed around rule structures and came up with a package without any regulatory impact analysis and without any release of information enabling the public to evaluate the impact.. My submission to OMB (at link to whitehouse.gov.) discusses the above topics in more detail and shows why USPTO’s ill-conceived rulemaking fails to meet basic legal requirements and therefore will have to be rejected by OMB.

  23. 10

    Joe – Neither the reform legislation or the rules package will do anything significant to curtail the backlog. In fact, the rules package will likely cause an increase in the backlog, at least in the short term. PTO management has already admitted as much (see previous posts).
    With rumors of attrition rates at the patent academy hovering around 50% the PTO is doing nothing substantial to reduce the backlog by hiring.
    It is abundantly clear that the current PTO management is unqualified and poorly equipt to handle the situation.

    The idea of a registration/delayed examination system – at the inventor’s election – is looking better all the time. It seems to be the only thing that would realistically reduce the backlog in both the long and short term because it is essentially a parking lot for technologies that may not yet be commercially viable. A registation/delayed examination system with mandatory publication at 18 months would reduce some of the backlog without the complete overhaul of the system proposed by both the current reform bill and the rules package.

    Unfortunately, I think both the rules and the reform bill will pass with this *we are above the law* administration and a do-nothing-but-talk Congress. By the time the doo hits the fan, it’ll be up to the next set of political hacks to attempt a fix. We are all in for a ride.

  24. 9

    If the rule package and the patent reform legislation don’t go through, nothing about pendency will change until the system gets hopelessly backed up forcing Congress to pass something like the proposed rule package into the statute. The PTO as I see it cannot hire their way out of the pendency situation.

  25. 8

    “I think the only way that these rules have a chance to pass constitutional muster is to allow small entities to avoid the contiuation and claim limitations propsosed by the new rules.”

    …exactly my friend. On the mark.

    You shouldn’t take too seriously the analysis of a junior level member of the profession who can’t even convince BU his contract is worth renewing.

  26. 7

    With respect to the continuation rules, I thought that the SCOTUS decide all this stuff beginning about 100 years ago with Muncie case. Can someone tell me how this differs from the late claiming doctrine. I mean clients have a right to file continuations. It is independent of Title 35. Let’s state what is happening here in salient terms. The PTO is limiting the number of claims that can be filed in a patent application. The requirment of best mode is still maintained. Now the continuations are limited. The net effect is that in satsifying best mode, one may be required to claims every aspect of one’s invention in multiple patent applications so as not to leave anything patentable on the table. This means that one cannot attempt to enjoy the statutory right to a patent, unless the showing in 102 and/or 103 is made, unless one has a great deal of money.
    This is simply an intolerable situation. These rules will fail Constitutional muster on several grounds.

    Firstly they appears to contradict the line of cases decided in the first part of the 20th Century by SCOTUS concerning the late claiming doctrine.

    Secondly, they impede the progress of the usefull arts by making a great incentive to not file patents.

    Thirdly, they are the against the entire rationale for independent inventors to seek a 50% reduction in fees.

    I think the only way that these rules have a chance to pass constitutional muster is to allow small entities to avoid the contiuation and claim limitations propsosed by the new rules.

  27. 4

    My guess, after working clsely with two former OMB folks (one a former deputy director), is that the rules are on the less-likely-to-survive-OMB-review end of the spectrum. Part of OMB review is a consultation with the Department of Justice. If DoJ tells OMB that they don’t want to defend the case, OMB won’t let the rules out.

    PTO’s failure to disclose its data, both at the time of the Notices of Proposed Rulemaking and in response to FOIA requests, and DoJ’s perception that the PTO broke the law by that failure to disclose, is the single issue most likely to sink them.

    The discovery rules for an agency are reasonably analogous to those for a civil litigant. The agency, as proponent of a rule, bears the burden of coming forward with substantial evidence, and must make its record during the rulemaking procedure. The record closes at the end of Notice and Comment – they can’t supplement the record later, in response to litigation. The agency has to show that the rules are reaosnably related to a specific underlying cause for an identified problem. They have to produce documents they intend to rely on at the time of the Notice of Proposed Rulemaking (in this case, January 3, 2006). With no evidence to support the issues on which an agency must show evidence, the agency loses. If the agency can be shown to have affirmatively hid and selectively disclosed documents, the agency gets sanctioned with attorney fees. This all arises under various administrtive statutes instead of Rule 26 discovery sanctions, but the analogy is reasonbly accurate.

    Our papers discuss PTO’s *public admission* that PTO made *no attempt whatsoever* to identify any underlying cause. They failed to produce documents with the NPRM, and affirmately refused to produce them in response to FOIA requests. Imagine what happens to a civil litigant who has no documents in the record after close of discovery, and says they had them but didn’t produce them out of sheer sloppiness and laziness…

    PTO admitted publicly that they had documents, but refused to produce them with the NPRM, and refused to produce them in response to FOIA requests. They made no privilege claims. However, Commissioner Doll did offer a selective disclosure – further aggravating the non-disclosure.

    From this point forward, there’s very little transparency into OMB deliberations. But think – we hope – we put together a compelling story of agency disregard for procedure, that the agency’s problems arise out of that refusal to observe procedure and the internally-generated havoc that creates, that applicants cannot possibly be the problem when they’re paying for continuations and claims by user fees set by the PTO, that disregard for the rule of law pervades the agency and that’s why they’re in trouble, and management common sense is in very short supply at PTO.

    We hope that OMB will agree with us. One of my former-OMB contacts suggested that “privately disembowel” was a likely outcome. An agency that lives by telling the procedural law to go jump in the lake should die by the procedural law. But we’ll have to wait to see like everyone else.

  28. 2

    Of –I saw that even Phyllis Schlafly got into the act!–, Cauley should have read his copy of “Innovation and Its Discontents” more closely; she was already “into the act” and demonized by Jaffe and Lerner in 2004.

  29. 1

    I don’t necessarily agree that patent reform is dead for 2007 [or this session], although the anti-reform forces are certainly making quite a racket — I saw that even Phyllis Schlafly got into the act! However, if reform can’t pass in this Congress — with bipartisan support and a Democratic majority — it never will. Too bad.

    However, on the bogus controversy about damages allocation — nothing will [or should change] since, Chief Judge Michel notwithstanding, nothing in the statute changed the existing law on patent damages in the slightest –when it is applied corrrectly.

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