What Would Eliminating Chevron Deference mean for Patent Law

Patent

PenguinMemeBy Dennis Crouch

In the landmark case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. the US Supreme Court laid-out the process for determining whether to grant deference to a federal agency’s interpretation of ‘its’ statute.[1] ‘Chevron deference’ as it is often termed provides agencies with power to interpret the statutory law – and that interpretation will be given deference if ever appealed to a court of law.  In some areas, the agencies are in full control. However, patent law is different. The patent courts (i.e., the Federal Circuit) has repeatedly held that the USPTO was never granted substantive rulemaking authority by Congress and, as a consequence, the agency’s interpretations of the substantive patent law are not subject to deference. Instead, USPTO interpretations of substantive patent law are reviewed de novo on appeal.  The AIA substantially increased the USPTO’s procedural authority with creation of the AIA Trials division and fee setting authority.  Those interpretations of PTO procedural statutes are given deference by the Federal Circuit.

Some academics have argued that deference should apply to substantive patent law rulemaking, such as interpretation of the “on sale” doctrine.[2]  However, the law may soon head the opposite direction.

Now pending before the Senate is the “Separation of Powers Restoration Act of 2016” sponsored by Senators Hatch, Grassley, and Lee.[3] The House version passed in July 2016 on party lines with 100+ Republican co-sponsors. In January, party lines will have shifted to allow a renewed version of the Bill to be passed in both the House and the Senate and signed into law by President Trump.

The proposal is about as simple as can be. The one-page bill simply adds the words “de novo” into the Administrative Procedure Act Section 706 – the section that provides for the scope of review of an agency action.  Under the new law, any APA appeal will require de novo review of “all relevant questions of law, including the interpretation of constitutional and statutory provisions and rules.”

This change would breathe new life into Challenges of the AIA Trial system, USITC decisions, as well as a large host of USPTO procedural examination rules and fees.

 

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[1] 467 U.S. 837 (1984).

[2] See, Stuart Minor Benjamin & Arti K. Rai, Administrative Power in the Era of Patent Stare Decisis, 65 Duke L.J. 1563 (2016) building on their prior work at Stuart Minor Benjamin & Arti K. Rai, Who’s Afraid of the APA? What the Patent System Can Learn from Administrative Law, 95 Geo. L.J. 269 (2007); Christopher J. Walker, Chevron Deference and Patent Exceptionalism, 65 Duke L.J. 2016; and Melissa F. Wasserman, The Changing Guard of Patent Law: Chevron Deference for the PTO, 54 William & Mary L.Rev. 1959 (2013).

[3] H.R.4768.

Federal Circuit’s Internal Debate of Eligibility Continues

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Amdocs v. Openet (Fed. Cir. 2016)

In the end, I don’t know how important Amdocs will be, but it offers an interesting split decision on the eligibility of software patent claims.  Senior Judge Plager and Judge Newman were in the majority — finding the claims eligible — with Judge Reyna in dissent.  One takeaway is that the Federal Circuit continues to be divided on the issues.  By luck-of-the-panel in this case, the minority on the court as a whole were the majority on the panel (pushing against Alice & Mayo).  Going forward, the split can be reconciled by another Supreme Court opinion, a forceful Federal Circuit en banc decision, or perhaps by future judicial appointments by President Trump.  I expect 2-3 vacancies on the court during Trump’s first term.

In a 2014 post I described the Amdocs district court decision invalidating the claims.  The four patents at issue all stem from the same original application relating to a software and network structure for computing the bill for network communications usage.   One benefit imparted by the invention is associated with its physically distributed architecture that “minimizes the impact on network and system resources” by allowing “data to reside close to the information sources.” According to the majority opinion, “each patent explains that this is an advantage over prior art systems that stored information in one location, which made it difficult to keep up with massive record flows from the network devices and which required huge databases.”  The nexus with the tated benefit is difficult to find in many of the claims themselve.  See Claim 1 below, which was taken as representative of the asserted claims of Amdocs ‘065 patent:

1. A computer program product embodied on a computer readable storage medium for processing network accounting information comprising:

computer code for receiving from a first source a first network accounting record;

computer code for correlating the first network accounting record with accounting information available from a second source; and

computer code for using the accounting information with which the first network accounting record is correlated to enhance the first network accounting record.

You’ll note that the claim is an almost pure software claim — requiring “computer code” “embodied on a computer readable storage medium.”  The code has three functions: (1) receiving a network accounting record; (2) correlating the record with additional accounting information; and (3) using the accounting information to “enhance” the original network accounting record.  The claim term “enhance” is construed narrowly than you might imagine as the addition of one or more fields to the record.  An example of an added field would be a user’s name that might be added to the accounting record that previously used a numeric identifier.   The court also found that the term “enhance” should be interpreted as requiring that – and doing so in a “a distributed fashion … close to their sources” rather than at a centralized location.  This narrow interpretation of the term “enhance” do not flow naturally from the claim language, but do turn out to be crucial to the outcome.

In reviewing the claim, the court noted that “somewhat facially-similar claims” have been alternatively invalidated as abstract ideas and found eligible.  Compare, for example, Digitech with Enfish and DDR.   Here, the court wrote that the claims are “much closer” to the ones found eligible.  I might rewrite their opinion to say that the judges in the majority prefer the decisions finding eligibility over those invalidating software patent claims.

The two recent Supreme Court cases of Alice and Mayo spell out the court’s two-step framework for determining whether a patent is improperly directed to one of the excluded categories of abstract ideas, natural phenomena, and laws of nature.  Briefly, the court first determines whether “the claims at issue are directed to one of those patent-ineligible concepts.”  If so, the decision-maker must then determine whether any particular elements in the claim “transform the nature of the claim into a patent-eligible application.”  This second step requires consideration of additional elements both individually and in combination in search for an “inventive concept . . . sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.” [Quoting Mayo and Alice throughout].

In making its eligibility conclusion in Amdocs, the appellate majority focused on the claim requirement (as construed) that processing be done in a distributed fashion.  According to the court, “enhancing data in a distributed fashion” is “an unconventional technological solution . . . to a technological problem (massive record flows which previously required massive databases).”  Remember here though that we are not talking about patenting a distributed system, but rather patenting a “computer program product embodied on a computer readable storage medium” used to implement the features.

Rather than taking Alice/Mayo steps in turn, the majority accepted “for argument’s sake” that the claims were directed to abstract ideas. However, the claim adds “something more” beyond an abstract idea.  Here, the court notes that the claims require “distributed architecture—an architecture providing a technological solution to a technological problem. This provides the requisite ‘something more’ than the performance of “well-understood, routine, [and] conventional activities previously known to the industry.”

Despite being the stated “unconventional” idea of using a distributed architecture, the court noted that the patent may still fail on anticipation or obviousnesss grounds.

Writing in dissent, Judge Reyna offered several different arguments. First, Reyna argue that the court’s skipping of Alice/Mayo Step 1 helped lead to an incorrect result. If you do not define the abstract idea at issue, how do you know whether the claim includes something more?  Reyna also argued that the “distribution architecture … is insufficient to satisfy Alice step two” because the limitation is not actually found in the claims and, even as interpreted provide only a functional result.  Reyna does note that the specification provides sufficient description of a distributed architecture, but that the claims themselves lack the requisite detail.

The specifications disclose a distributed system architecture comprising special-purpose components configured to cooperate with one another according to defined protocols in a user-configurable manner for the purpose of deriving useful accounting records in a more scalable and efficient manner than previously possible. The disclosed system improves upon prior art systems by creating a specific “distributed filtering and aggregation system . . . [that] eliminates capacity bottlenecks” through distributed processing. ’ The disclosed system is patent eligible. But the inquiry is not whether the specifications disclose a patent-eligible system, but whether the claims are directed to a patent ineligible concept.

[Read the opinion here]

Citing to Supreme Court’s Eligibility Cases

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The chart below shows Shepard’s citation results for recent Supreme Court eligibility cases.  I chart the number of federal court decisions citing to each of these seven major Supreme Court decisions.  2016 numbers do not include November-December 2016.

Citing101DecisionChart

* I apologize that the chart won’t be easy to read for those who are colorblind. Truthfully, it is hard for anyone to tease out information regarding any particular decision.

President Trump and the Patent Office

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The question on everyone’s mind is how the patent office and patent system will be restructured once Donald Trump becomes president.   Trump has substantial personal experience protecting and enforcing his own trademarks, including attempts to protect more controversial marks such as ‘you’re fired.’   However his businesses have few if any patent rights and have relied on the perception of luxury rather than innovation for their successes.  An element of Trumps campaign was the recognition that he personally understands how to find an exploit loopholes in government regulation and that his experience make him uniquely qualified to fix the holes.  Question for the patent system is whether president Trump will see patent trolls, pharmaceutical pricing, and the Eastern  District  of Texas as exploitations needing to be fixed. It is unclear at this point who will manage the transition team but hope for a smooth transition from Outgoing Director Michelle Lee to the next USPTO leader. Democracy!

 

 

Results of the Clarity of the Record Pilot

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The following is reprinted from USPTO Director Michelle K. Lee’s “Director’s Blog.”  On December 13, 2016, the USPTO is hosting its next patent quality conference.

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by Michelle Lee

I’m pleased to report that we have completed the Clarity of the Record Pilot launched earlier this year as part of our Enhanced Patent Quality Initiative. We’ve achieved our goal of identifying some best practices for enhancing the clarity of various aspects of the prosecution record. These include best practices for documenting the USPTO’s positions with respect to claim interpretation, reasons for allowance, and interview summaries as well as encouraging examiners to initiate pre-search interviews when needed to gain a better understanding of the claimed invention. I would like to fill you in on some of our findings, and also encourage you to attend our day-long patent quality conference on December 13, where we will report in detail on the progress of the dozen or so programs in the Enhanced Patent Quality Initiative.

Through this pilot, we identified the following best practices as key drivers for clarity and trained our examiners on these practices:

For interview summaries, providing:

  • the substance of the examiner’s position
  • details of any agreement reached
  • a description of the next steps that will follow the interview

For reasons for allowance:

  • addressing each independent claim separately
  • particularly identifying the applicant’s persuasive arguments (wherever they may be in the record)
  • identifying allowable subject matter of the claim rather than merely reciting the entire claim as the basis for allowance

For claim interpretation:

  • putting all 35 USC 112(f) presumptions on the record
  • explaining how the presumptions were overcome
  • identifying on the record the structure in the specification that performs the function
  • when a prior reference is used to reject multiple claims, clearly addressing specific limitations in each claim that is anticipated by the art

As a result of this pilot, we found there is progress to be made in the treatment of 35 USC 112(f) limitations, interview summaries, and reasons for allowance, while our highest clarity was in the area of 35 USC 102 and 103 rejections. Going forward, we plan to continue increasing clarity in all aspects of our practice.

Overall, we measured 68 unique data points, each data point representing a different best practice for achieving clarity. We found that on average, pilot examiners used 14% more of these best practices in pilot cases as compared to control cases, and this increased use of best practices contributed to an increase in overall clarity in pilot cases. Notably, we found that in pilot cases examiners employed:

  • 38% more best practices as compared to control cases for 35 USC 102 rejections and
  • 140% more best practices as compared to control cases for assessments of 35 USC 112(f) limitations.

Also, we found that pilot participants carried on using the best practices they learned in the pilot, even to applications not in the pilot program.  This is a strong indication that the examiners embraced the training.  We also had anecdotal evidence that pilot participants encouraged fellow, non-pilot examiners to use the best practices during the prosecution of their own cases.  Clearly the pilot participants saw a value to using these best practices when examining applications.

The Clarity of the Record Pilot ran from March 6 to August 20 of this year. To ensure a diverse pool of examiners, we invited randomly selected utility patent examiners with at least two years of patent examining experience to participate. All told, 125 examiners representing all utility technology centers participated, and roughly two-thirds of these participants were primary examiners.

The pilot kicked off with initial training in the form of four different modules – an initial module to provide participants with an overview of the pilot and three modules to provide identified best practices to enhance clarity with respect to the pilot’s three focus areas – claim interpretation, reasons for allowance and interview summaries. All of the modules started with a discussion about the goals of the pilot and the importance of clarity of the record.

Pilot participants were expected to use identified best practices when drafting office actions for a select number of cases.  In addition, throughout the pilot, participants attended meetings (called “quality enhancement meetings”) to discuss interesting takeaways with fellow pilot participants. The quality enhancement meetings were typically held with examiners working within similar technologies; however, there were also pilot-wide meetings involving invited speakers, including a judge from the Patent Trial and Appeal Board and the Commissioner for Patents, who shared their perspective on the importance of clarifying the prosecution record. Participants also met biweekly with a pilot manager to receive one-on-one training and to consult on lessons learned.

To evaluate the pilot, the Office of Patent Quality Assurance reviewed the clarity of approximately 2,600 cases for a statistical assessment of whether the best practices of the pilot improved the clarity of office actions.  In addition, we analyzed feedback from the quality enhancement meetings and training sessions, including a list of best practices developed by the pilot participants. Using this information, we identified the best practices that were key drivers of overall clarity. Based on the results from the pilot program, we are analyzing the data to provide recommendations on implementation of the pilot’s best practices across the patent examining corps.

 

A BETR Journal: The Business, Entrepreneurship & Tax Law Review

Patent

We have a new journal here at Mizzou Law with the bold acronym of BETR – the Business, Entrepreneurship & Tax Law Review (“BETR”). (An early idea had it as BEST, but I helped to lower expectations).  Startup is always a bit dicey and so I wanted to help get out the word.  In addition to traditional academic articles, the the journal is also publishing white papers (5-15 pages) with a more practical bent and much more quickly published.

Subject matter: intellectual property, taxation, banking and finance, and regulatory issues.

Contact: Editor-in-Chief mulawbetr@missouri.edu (Currently Alex Langley).

MU School of Law

Partial-Institution Decisions Blessed by En Banc Federal Circuit

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SAS v ComplementSoft (Fed. Cir. 2016)

Today, the Federal Circuit denied SAS’s en banc request challenging the USPTO’s approach to partial-institution of inter partes review petitions.  In a substantial number of cases, the PTO only partially agrees with the IPR petition and thus grants a trial on only some of the challenged claims.  In the present case, for instance, SAS’s IPR Petition challenged all of the claims (1-16) found in ComplementSoft’s Patent No. 7,110,936, but the Director (via the Board) instituted review only on claims 1 and 3-10.

The statute seems to side with SAS: The Board “shall issue a final written decision with respect to the patentability of any patent claim challenged by the petitioner” 35 U.S.C. § 318(a).  However, the appellate panel in this case (following prior precedent) held that “Section 318(a) only requires the Board to address claims as to which review was granted.”

In its petition, SAS wrotes:

Because § 318(a) is clear and unambiguous in requiring a final written decision as to “any patent claim challenged by the petitioner,” the PTO had no authority to adopt a contrary rule authorizing IPRs “to proceed on all or some of the challenged claims,” 37 C.F.R. § 42.108(a). Regardless of efficiency or workload concerns, the PTO’s rulemaking authority “does not include a power to revise clear statutory terms.” Utility Air Regulatory Grp. v. Environmental Protection Agency, 134 S. Ct. 2427, 2446 (2014).

In what appears to be a 10-1 decision, the Federal Circuit has denied SAS’s petition for en banc review.  Although the majority offered no opinion, Judge Newman did offer her dissent (as she did in the original panel decision).

 

 

 

Vote 2016

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For American readers – As you plan for your business day on November 8, 2016 – Please remember to Vote.

I originally posted the photo below on Patently-O back in 2004 with the following caption:

Here is a picture of my neighbor and Senate hopeful Barack Obama and his daughter casting his vote.

Pendency of US Patent Applications

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This next chart is helpful for those considering patent application pendency.  As the title suggests, the chart shows the pendency of U.S. Utility Patent Applications grouped by quarterly disposal date.  Here, the pendency begins with an application’s filing date and ends with either a patent being issued or the application being abandoned.

PendencyCombo

The chart itself actually includes five separate data series: Three displaying average pendency and two displaying median pendency.  Although the average is useful for someone considering a portfolio of applications, the median may offer a more ‘typical’ application.  The series are labelled either “Crouch Data”, “USPTO CE Data”, or USPTO Dashboard.  The USPTO CE Data includes pendency for utility applications filed 1981+ and disposed-of 1985-2014 and the raw data on disposals comes from the USPTO Chief Economist.  Because I wanted to include some post-2014 data, I also obtained a sample of about 30,000 applications published 2001+ and looked at the disposal pendency of those applications.  This is the Crouch Data.  Finally, I also included the past two years of data from the USPTO Dashboard. The averages and medians are reported these data sets except for the Dashboard.  Looking at differences between the data – the primary difference is that the Crouch Data shows a higher pendency.  I believe that this is primarily driven by the fact that a non-trivial number of patents issue prior to an application’s would-be publication date and thus are excluded from my data set.

In general, you’ll note that the average/medians have shifted fairly dramatically over the past three decades — more than doubling from 1996 to 2010 and now falling again in recent years. The USPTO reports the most recent average pendency at 33 months from filing.

 

What is the Steady-State Patent Allowance Rate?

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PatentGrantRate

by Dennis Crouch

This post continues from two prior data-posts:

Adding-in data from the USPTO Chief Economist (Alan Marco), I have updated my chart of the USPTO utility patent grant rate. The chart shows my verson of patent grant rate calculated as the number of patents issued (allowed) divided by the number of disposed-of-applications where the disposed-of-applications includes serialized utility applications either (1) abandoned or (2) issued as patents (allowed) during the given period and does not give any consideration to RCE filing.

In the chart above, you’ll find in allowance rate that I calculated using the USPTO Chief Economist disposal data that stretches back to 1985.  Overlaid in blue is my data previously presented.  You’ll notice substantial similarity between the data sets during the period of overlap, but some differences.  You’ll note that – on average – the rate calculated from my data is greater than that calculated from USPTO data.  Although I cannot entirely exclude a counting error, I expect that the differences can be explained primarily by the fact that the USPTO data includes all utility applications while my figures are limited to published applications.  Others have shown that non-published applications tend to have a lower allowance rate (these are, for the most part, applicants that have chosen not to file globally and tend to include a higher proportion of software and business method inventions).   In addition, I believe that the USPTO counts the patenting as of the allowance date rather than the issue date, which is why I put “allowed” in parenthesis above.  A further explanation for the differences that my data relies upon only a sample of around 30,000 published applications rather than the entire population.

In my estimation, the chart fails to reveal any ‘natural’ or steady-state allowance rate. It is also difficult to correlate the allowance rate with particular changes in the law or court decisions.  Rather, best guess is that the primary impact on the overall allowance rate stems from USPTO Policy as set by its Director.

There’s No Such Thing as a Content Based Unconstitutional Condition

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I asked my former student Zachary Kasnetz to write this post on his forthcoming article explaining the Federal Circuit’s errors in its en banc Tam decision. A draft version of his article is available online: ssrn.com/abstract=2864016. – DC

By Zachary Kasnetz

I would like to thank Professor Crouch for this opportunity to share my views on the Federal Circuit’s decision in In re Tam, 808 F.3d 1321 (Fed. Cir. 2015) (en banc), in advance of the Missouri Law Review’s publication of my article.  This post discusses some of the arguments I make as to why the court erred in holding Section 2(a) of the Lanham Act facially unconstitutional.

Section 2(a) of the Lanham Act prohibits registration of any mark that “may disparage . . . persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute.”  15 U.S.C. 1052(a).  It has long been controversial and commentators have largely  agreed that it is unconstitutional.  See In re Tam, 808 F.3d at 1334 n.4 (citing commentary).  Tam held: (1) Section 2(a) was a content-based and view-point based restriction on speech; (2) it regulated the expressive, not commercial aspects of Tam’s mark; (3) it actually regulated speech; (4) registration was not a subsidy or government speech; and (4) could not pass strict or intermediate scrutiny.  The holding and reasoning are flawed regarding the numbers 1, 2, and 4.[1]

First, the Court reasoned backwards.  First, the court should have decided whether Section 2(a) actually regulated speech at all and then whether it was a government speech or a subsidy.  If the answer to that question was no, then whether Section 2(a) was content and viewpoint-based and whether it impacted the commercial or expressive aspects of Tam’s mark would have been irrelevant.  Government speech and subsidies are not “exempt” from First Amendment scrutiny as the majority claims: they don’t implicate the First Amendment at all because they do not abridge any speech.  See Rust v. Sullivan, 500 U.S. 173, 193 (1991); Pleasant Grove v. Summum, 555 U.S. 460, 467 (2008).

Second, Section 2(a) only impacts the commercial aspects of Tam’s speech because a trademark is “a form of commercial speech and nothing more.”  In re Tam, 808 F.3d at 1376 (Reyna, J., dissenting) (quoting Friedman v. Rogers, 440 U.S. 1 (1979)).  All benefits of registration are commercial in nature, i.e., they make it easier to enforce the mark.  Registration has no impact on Tam’s ability to express any ideas or messages.  Cf. Author’s League of Am. v. Oman, 790 F.2d 220, 223 (2d Cir. 1986).  As Judge Reyna dryly pointed, the majority held that “Mr. Tam’s speech, which disparages those of Asian descent, is valuable political speech that the government may not regulate except to ban its use in commerce by everyone but Mr. Tam.”  Id. at 1378.  There is no First Amendment right to government assistance in preventing others from expressing ideas or views.  Cf. Davenport v. Wash. Educ. Ass’n, 551 U.S. 177, 188-90 (2008).

Therefore, the only basis for the majority’s opinion is the unconstitutional conditions doctrine, under which the government may not condition an important benefit on the surrender of an important constitutional right, even if it could withhold the benefit entirely.  The doctrine is notoriously incoherent and inconsistent in its application.  Tam’s basic holding is that Section 2(a) is an unconstitutional condition because it is a content and viewpoint based regulation/restriction/burden on speech.  But there’s no such thing as a content-based unconstitutional condition.

A condition’s constitutional permissibility turns on the relationship between the condition and the government program at issue.  See, e.g., USAID v. Alliance for Open Soc’y Int’l, Inc., 133 S. Ct. 2321, 2329 (2013).  The more “germane”, i.e., reasonably related to the goals of program, a condition is, the more likely it is to be constitutional.  See Sullivan, Unconstitutional Conditions, 102 Harv. L. Rev. 1413, 1420-21 (1989).  Any condition on a government benefit or participation in a government program implicating the First Amendment necessarily draws content-based distinctions: the question is whether that distinction is reasonably related to the program’s goals.  According to the majority, the goals of federal trademark law are (1) protecting the rights of mark holders and (2) preventing consumer deception and confusion.  If we accept that this is correct, the constitutionality of Section 2(a) turns on its relation to those goals.  The majority believes it is “completely untethered” those purposes.  In re Tam, 808 F.3d at 1354.  I disagree.

Trademarks allow consumers to quickly identify the source and quality of goods or services.  Therefore, trademark law conditions registration on a mark meeting certain requirements, including that it not be disparaging.  Certain kinds of marks are better at this than others, lying across the spectrum of distinctiveness from arbitrary or fanciful to generic.  Given the massive amount of information bombarding consumers, I argue that marks communicating other information or messages are less effective.  The government has an interest in ensuring that “the stream of commercial information flows cleanly as well as freely.”  Va. Bd. of Pharmacy v. Va. Citizen’s Consumer Council, Inc., 425 U.S. 758, 771–72 (1976)).  Disparaging marks, by definition, communicate more than the source and quality the good or service they attach to.  By denying the benefits of federal registration, Section 2(a) mildly incentivizes the selection of more effective marks.  Thus, it is reasonably related to trademark law’s goals.  Moreover, it only likely affects the choice of marks: it is not trying to “leverage [a government benefit] to regulate speech outside of the program itself.”  USAID v. Alliance for Open Soc’y Int’l, Inc., 133 S. Ct. at 2329 (2013).

Trademark law draws many distinctions between different marks based on their content.  As a far as I know, the constitutionality of the ban on registering trademarks containing “the flag or coat of arms of the United States, or of any State or municipality, or of any foreign nation,” 15 U.S.C. § 1052(b), has never been questioned.  Nor has the ban on those containing “a name, portrait, or signature identifying a particular living individual . . , or the name, signature, or portrait of a deceased President of the United States during the life of his widow, . .”  Id. at § 1052(c).  The government has never been required to show that such marks would actually be confusing or insufficiently distinctive despite the fact that this provision obviously singles out a category of potential trademarks based solely on their content.

Does Section 2(a) Actually Impact Speech?

I am also extremely skeptical that denying registration to disparaging marks actually has a chilling effect on speech.  The majority fears that Section 2(a) chills potential selection of disparaging marks, but the real issue isn’t whether trademark choice is being affected, but whether “ideas or viewpoints” will be suppressed.  Simon & Schuster v. Members of N.Y. State Crime Victims Bd., 502 U.S. 105, 116 (1991).  But trademarks are “commercial speech and nothing more.”  Friedman v. Rogers, 447 U.S. at 562.  Consider Tam.  If he had known that there was a real possibility that he would have been unable to register THE SLANTS because it was disparaging he would have chosen not to create his music or would not have made music intended to express pride in his Asian heritage?  I doubt it and I have not seen any evidence to support such a claim.  Perhaps he would have chosen a different name for his band, but again I’m skeptical.  Thus, Section 2(a) is “exceedingly unlikely” to suppress or chill expression of any ideas and viewpoints.  See Lyng v. Int’l Union, UAW, 485 U.S. 360, 365 (1988).

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The author is an Associate at Growe Eisen Karlen Eilerts in St. Louis.  He earned his J.D. from the University of Missouri in May 2016 and his B.A. from the University of Maryland in 2012.

[1] Assuming arguendo, that I am wrong about numbers 1, 2, and 4, I agree that Section 2(a) could not pass strict or intermediate scrutiny.  I also agree that placement on the register does not turn Tam’s purportedly disparaging message into government speech.

USPTO Allowance Rate

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For the chart below, I collected a randomized sample of outcomes from 30,000 utility patent applications published 2001-2016.  For each application, I identified the ‘disposal date’ – with the disposal date being either (1) the date that the resulting patent issued or (2) the date that the patent application was deemed abandoned.  Still pending applications (even those subject to an RCE) were not given a disposal date.

For the chart below, I grouped disposals by quarter and then calculated the percent issued as patents compared with the percent abandoned.  You’ll note the drop in allowance rate in 2008-2009 under Jon Dudas with the rapid rise in allowance rate once David Kappos took-over as director.  Although less dramatic, allowance rate continued to rise under Michelle Lee.  Of course, the allowance rate depends upon both the USPTO approach to prosecution as well as that of the applicant.

DisposalsPerQuarter

There are many different ways to calculate USPTO “allowance rate” and this is only one.  The PTO typically considers the filing of an RCE to be a disposal. That approach makes the allowance rate appear substantially lower.  Others look at an entire patent family — making the allowance rate appear substantially higher.

 

SCA Hygiene Laches Oral Arguments: How Do we Interpret Congressional Silence?

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Today the Supreme Court heard oral arguments in SCA Hygiene v. First Quality with the following question presented:

Whether and to what extent the defense of laches may bar a claim for patent infringement brought within the Patent Act’s six-year statutory limitations period, 35 U.S.C. § 286.

Sitting in the background is the Supreme Court’s parallel copyright decision in Petrella v. MGM (2014) holding that the doctrine of laches cannot bar a claim for legal damages brought within the three-year statutory limitations of copyright law. In its opinion, the Federal Circuit distinguished Petrella – finding that in this situation patents should be treated differently than copyrights.

Martin Black (Dechert) argued for petitioner-patentee SCA Hygiene and suggested that Petrella paves the way: “There is nothing in the Patent Act which compels the creation of a unique patent law rule, and if the Court were to create an exception here, that would invite litigation in the lower courts over a wide range of Federal statutes.”

According to Black, the focus should be on the statute – and the statute does not provide for laches. Further, section 286 is entitled “Time Limitation on Damages” — that is the section that should be applied when determining whether a patentee unduly delayed its enforcement.

Mr. Black: Laches has never been applied in the face of the Federal statute of limitations. The Court looked at that issue exhaustively in Petrella and could not find Respondents one single example.

Petrella was decided 6-3 and with Justice Scalia’s death the result would be 5-3.  Justice Breyer dissented then and indicated in oral argument “Just to repeat, I’m still dissenting.”

Mr. Waxman, representing the accused infringer in this case (who won on laches) began by highlighting the background of the 1952 Patent Act — “This Court has repeatedly recognized that the 1952 Patent Act sought to retain and reflect patent law as it then existed.”  And, at that time (1952), laches was thought to be an available defense.

Mr. Waxman: The question  in this case is what Congress understood the patent law doctrine was in 1952. And we think that there is a literal mountain of cases. Every single case that was decided in any court at any level from 1897 when the six-year damages cap was put into place until today, with the exception of one district court decision in Massachusetts which demonstrably misapplied the two authorities that it cited, every single case has recognized that — that laches was a defense in an appropriate case to claims for damages. And no case has ever said or suggested to the contrary.

CHIEF JUSTICE ROBERTS: That mountain of cases were in equity, right? . . .  that’s where your mountain becomes a mole hill, right? . . .

Mr. Waxman: But the point I’m trying to make — and if I make no other point, please let me not be misunderstood here — Congress in 1952 simply continued in haec verba the statute that had existed on the books since it was put in on the equity side in 1897. And there were — whether it is a mountain, a mole hill, or a mesa, all of the — okay. Never mind. I’ll just stick with mountain or mole hill. All of the — I mean, I — I don’t think — I hope I live long enough to have another case where I can come to Court and say, all of the case law that decide — that examine this question, all of which was adjudicating the applicability of laches to claims of damages alongside the six-year damages limitation provision, all of them recognize that laches existed comfortably alongside that provision. And there is nothing really anomalous about that.

 

The difference then, according to Waxman, between patents and copyright is not really found in the statutory text itself but instead emanates from the history and congressional sense at the times of enactment.  For patents, the background law allowed laches and congress intended to implement that background law in 1952.

Mr. Black disagreed with the state-of-the-law:

So it was in front of Congress in 1952 with three things. This Court’s precedent that said that  laches could not be used to bar legal relief. You had the merger of law and equity in 1938 which scrambled all the eggs. You had the 1946 Lanham Act, which also went through the committee on patents and copyrights where they specifically included the word “laches” in the statute. And you had the abolition of the remedy that parties had been seeking as the primary means of monetary relief in patent law for 60 years. There is no way that you can look at that, that fact, and get around it by pointing to a book, a treatise, which, by the way, does not have a section in it on unenforceability.

A practical problem with eliminating laches is the lying-in-wait scenario — do we allow a patentee to simply wait for years until the defendant is locked-in and then sue? Mr. Black argued that Congress offered a solution — concerned third parties can file a declaratory judgment action or else a petition for inter partes review.   Black also argued that the lying-in-wait scenerio doesn’t happen in practice because the patent term ends too soon (unlike in copyright law).  The discussion also entered into patent trolls and the FTC recent report.  Mr. Black argued that “The companies that get hurt by [Laches] are operating companies who don’t like to sue and therefore wait until they have to [while] patent trolls . . . have to sue to monetize.”

Pending Patent Applications

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PendingStatus

For this study, I collected PAIR data from a sample of about 10,000 published utility patent applications that were filed 2007-2016. (not considering priority claims). For each of those applications, I simply categorized whether the application was (1) patented; (2) abandoned; or (3) still pending.  The chart above shows the results grouped by quarterly filing date.  Looking at applications filed in 2014q4 (~ two years ago) 26% are patented, 6% abandoned, and 68% still pending. By the time applications application have been pending for four years only about 15% remain pending.

There are few abandoned applications during the first 2 1/2 years of pendency – it seems that most applicants wait at least for a final rejection before giving up.  An application pending for 4+ years is likely to involve substantial after-final practice (RCEs, appeals, etc.) that substantially slows down final resolution.

 

Patentlyo Bits and Bytes by Anthony McCain

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Copyright on a Useful Item

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Screen-Shot-2016-05-02-at-2.27.31-PM[1]Today the Supreme Court heard oral arguments in the pending copyright case of Star Athletica v. Varsity Brands.  Although not a patent case, the issue involves the boundary line (if any) between patent and copyright and the “useful article” exception. Question Presented: What is the appropriate test to determine when a feature of a useful article is protectable under section 101 of the Copyright Act.  The statutory test under Section 101 states that “the design of a useful article . . . shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.”

Clothing has traditionally been seen as useful and therefore not itself subject to copyright protection.  Here, the subject matter is the design of a cheerleader outfit (see image at right).

Petitioner (Mr. Bursch) began with a provocative statement that probably says more about copyright law than the case itself: “Mr. Bursch: Congress did not intend to grant a century-long copyright monopoly in cheerleader uniform design.”

I expect that the court’s consideration of this case will also have some impact on its views regarding the coverage of design patents in Apple v. Samsung.

 

Read the transcript

 

Construing Claims as of their Effective Filing Date

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A short aside from Dennis Crouch

In Phillips v. AWH, the en banc Federal Circuit included an oddball statement regarding PHOSITA perspective in claim construction.  The court wrote that the focus is on the meaning to PHOSITA “at the time of the invention, i.e., as of the effective filing date of the patent application.”  I call the statement odd because it incorrectly states that the time-of-the-invention is the same as the patent application’s effective-filing-date. The difference can be critical — although word-meaning changes slowly over time, recent invention is an important trigger for rapid definitional change.

Regardless of whether the Phillips statement is correct, going forward for Post-AIA patents, the court should now eliminate “the time of the invention” from its claim construction process.  Under the statute, all of the focus now is on the effective filing date with invention shifted to a mere historic element of the patenting process.

Stepping Back: One problem with any time-of-the-invention analysis is that the traditional legal definition of invention involves a potentially wide temporal expansion.  Remember, invention begins with conception but is not completed until the invention is reduced to practice.  The patent courts added further to this by finding the filing of a patent application to be a constructive reduction to practice that completes the invention process. Because most patent applications are filed prior to a complete reduction to practice, for most patented inventions the time of invention completion is the same as the effective filing date of the patent at issue.

 

In re Aqua: Ambiguity in the Statute Means Deference to the PTO

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In re Aqua (Fed. Cir. 2016)

In its newly filed brief in this pending en banc case, the USPTO sets forth the three statutory provisions of 35 U.S.C. § 316 that are related to amendment practice in an Inter Partes Review (IPR) proceedings: §§ 316(a)(9); (d)(1); and (e). [Aqua Products–PTO brief.] Taking them out of order: Section (d) allows for one motion to amend; Section (a)(9) gives the PTO broad regulatory authority to set the standards and procedures associated with the motion to amend; and finally Section (e) indicates that petitioner has the burden of proving unpatentability. The friction between these sections may not be inherent to the statute, but arose when the PTO created the rule that the patentee must prove patentability of any amended claim before the motion will be allowed. The patentee argues in Aqua that the PTO approach is contrary to § 316(e) while the PTO argues that its approach is allowed by the broad rule-making-authority granted by § 316(a)(9).

316(a) Regulations. —The Director shall prescribe regulations— (9) setting forth standards and procedures for allowing the patent owner to move to amend the patent under subsection (d).

316(d) Amendment of the Patent.— (1) In general.—During an [IPR], the patent owner may file 1 motion to amend the patent in 1 or more of the following ways:(A) Cancel any challenged patent claim; (B) For each challenged claim, propose a reasonable number of substitute claims.

316(e) Evidentiary Standards.— In an inter partes review instituted under this chapter, the petitioner shall have the burden of proving a proposition of unpatentability by a preponderance of the evidence.

In its brief, the PTO explains that assigning burdens associated with the motion to amend is a “standard” expressly falling within its rulemaking authority and thus must be granted deference by the Federal Circuit on appeal. That portion of the argument appears clearly correct. The difficulty for the PTO comes into play in distinguishing Section 316(e) — its best and first argument is that the provision does not expressly discuss amendments: “For one thing, § 316(e) never mentions amended claims.” The PTO goes on to argue that 316(e)’s implicit focus is on burden’s associated with claims-at-issue and not proposed claims. “§ 316(e) speaks only to the petitioner’s burden of proving the unpatentability of existing claims; it does not specify who has the burden of proving the patentability of new, never-before-examined substitute claims.”

The brief also takes the interesting tack of walking through the amici filings and pointing out that none of them fully agree on the meaning of the supposedly unambiguous Section 316(e).  If the section is seen as ambiguous, then the PTO’s deference level kicks-in once again.

Any amicus brief supporting the USPTO petition will be due by November 2, 2016 with oral arguments set before the entire court on December 9, 2016.

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Remarks by Director Michelle K. Lee at the 2016 AIPLA Luncheon

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USPTO Director Michelle Lee offered a set of Remarks at the October 28, 2016 AIPLA Luncheon.  As a presidential appointee, Director Lee is likely nearing the end of her term as USPTO Director.  Although the likely election of fellow Democrat Hillary Clinton suggests a smooth transition that could extend her term beyond January 2017, I expect that she will step-down prior to that point and that Deputy Director Russ Slifer will step-up as Acting Director.

The following are a few snippets from her speech:

Thank you, Denise, for the introduction.  And, good afternoon, everyone.  It’s a real pleasure to be here with you today. I always look forward to the AIPLA annual meeting. In fact, it is the third time I’ve had the honor to speak at this conference. I’m reminded of the first time I spoke at AIPLA, the mid-winter conference in Phoenix, AZ in January 2014. It was literally just a few weeks after I had moved from California to Washington and became acting head of the USPTO. At that conference you all welcomed me to my new role and we began our work together to strengthen and protect the intellectual property system that we know is so critical to our country’s continued economic success.

Almost three years have passed since that meeting, and I find myself honored and humbled every single day to serve in this role and to be a part of an amazing team at the USPTO. I feel it every time I’m at an international conference, seated behind a flag of the United States on the table in front of me, reflecting on how I’m a child of immigrant parents representing the United States of America.  And I feel it today, standing before you, reflecting on just how far the USPTO has come during this Administration.

Today, I’d like to share with you my views of the state of the United States Patent and Trademark Office and how this situates us to meet our future challenges. Back in January 2009, when our President was first sworn into office, the USPTO’s patent application backlog and pendency numbers were at all-time highs. Today, both our backlog and pendencies are now lower than they’ve been in more than a decade, and they continue to go down. That is hardly the only success story. But it’s emblematic of how much the USPTO has charged forward the last eight years, and how strongly it is positioned to face future challenges. This has been a team effort, with incredible work done by my predecessors, Congressional cooperation, the incredibly dedicated and talented staff at the USPTO, and all of you.

Together, we have put the Agency in a spot where we are ready to build on our successes. Today, we are financially more secure thanks to the America Invents Act, a milestone of this Administration, which gave us, among other things, fee setting authority. Additionally, we are more customer-service oriented and more responsive to stakeholder input than ever before. We’ve constantly welcomed—in fact solicited—feedback and input, and are willing to refine and improve where needed. We’ve had more RFC’s, Proposed Rules, and roundtables than ever before–and thank you for your input and patience responding to each. Whether you gave feedback on our EPQI, our 101 guidance, our PTAB implementation and refinements, and/or our transparency of patent ownership proposal, your input has been valuable.

We’ve also brought a broader range of services to support American innovators where and when needed, including: Through four regional offices across the country and over a dozen IP attaches across the globe. And, we’ve worked to provide you with more access to examiner interviews by training and promoting their benefits internally at the USPTO and externally, leading to an increase of 232% more interviewing hours in just eight years.

Finally, and importantly, the USPTO’s relationships with all of its partners is healthier and stronger than ever before–that’s with our users, our employees, our unions, Congress, and within the Administration. I want to take a brief moment on this topic, because I really do believe it is key to the Agency’s success – past and future. Thinking back to even just 10 years ago [under Jon Dudas], the relationship with our users was nowhere near as collaborative, transparent, or productive as it is today. The Agency often didn’t seek much public input on examiner guidance or implementation rules, and interviews weren’t encouraged as they are today. Together, we have changed that dynamic.

Second, we’ve strengthened our working relationship with our employees. All told, we have enjoyed some of the highest rankings in the Partnership for Public Service’s list of Best Places to Work in the Federal Government. And we all know, an engaged workforce produces better work product and services for all of you. Over the last eight years, our attrition rate has reduced significantly to the point where we compete favorably with some top companies in the private sector. Also, we’ve developed a productive relationship with our unions, allowing us to make better and faster improvements in important areas such as our production count system, patent quality, and our telework program.

We have also maintained a healthy working relationship with Congress on both policy proposals and operational issues. From the passage of AIA, to the Defend Trade Secrets Act, to technical assistance on various legislative proposals, we have engaged with our colleagues on the Hill in impactful ways and the USPTO’s voice is a respected one.

Finally, the USPTO is effectively fulfilling its role as principal advisor to the President and Administration on IP policy. I’ve been pleased with the confidence the President and the Secretary of Commerce have shown my team and I, allowing us to pursue policies and programs in the best interest of our innovators. All of this: the greater financial security, the increased customer service orientation and responsiveness, and  the better relationships with all of our stakeholders, has enabled us to make real progress on our priorities, and positions us for even greater success going forward.

There is strong evidence of this in a number of important areas, including patent backlog and pendencies, quality and policy. During this Administration, we have: Reduced the backlog of unexamined patent applications by ~30%, despite an average ~4% year-over-year increase in filings. Reduced our first action pendency by ~38% to 16.2 months, and reduced total pendency by ~25% to 25.3 months. This is due to numerous actions taken by the USPTO leadership team and my predecessors, and the hard work of our examining corps, and we will continue to do more.

Armed with greater finances and a shrinking backlog, we embarked on an unprecedented effort to enhance the quality of patents – a core goal of the Agency. There is a cost to society when the USPTO issues a patent that we should not issue, just as there is a cost to society when we don’t issue a patent that should issue. And just as there is a cost to society when there is a patent in the system that properly issued, but that may no longer be valid due to changes in the case law. Recognizing this, we have enhanced the quality of patents in our system, both before they leave our office through our Enhanced Patent Quality Initiative (led by a new Deputy Commissioner and a newly created department within the Patents organization solely focused on this effort); and after the patents return to the office through our PTAB and other post grant review proceedings (which double check the Office’s work and allow reconsideration in light of evolving case law or newly discovered prior art).

Addressing the second prong first, the new PTAB proceedings have significantly changed the patent landscape. With over 5,000 PTAB petitions now filed, we have one of the busiest dockets in the country. These proceedings are meeting our Congressional mandate of providing a faster, more cost efficient quality check on the patents in the system. With extensive input from all of you, we have worked hard to implement and conduct these proceedings as fairly and efficiently as possible. That’s why I asked my team to engage the public in a series of listening tours that led to a set of “quick fixes” in 2015 and then more substantive revised rules last April. That’s also why we took it upon ourselves to assess the frequency of motions to amend and the reasons for their grants or denial.  We’re applying your input to identify where we can do better. These PTAB proceedings have proven themselves a valuable check on patent quality, particularly in the later part of a patent’s lifecycle.

At this point, it makes sense to bring greater resources to bear if there are questions about a patent’s validity. The economics are different at the beginning of a patent’s lifecycle. The value of a patent is often not fully known at time of filing (perhaps due to the nascency of the technology, industry and/or market), and the time and resources afforded during examination are typically limited. Innovation isn’t served if the USPTO strives to issue very expensive, “bullet-proof” patents after many years of examination. Extensive time and expense would mean that innovators would file too few patent applications, given finite budgets. The purpose of the patent system—to incentivize disclosures to advance the progress of science and the useful arts—would be defeated because too few disclosures would be made. If over time the industry and the market determine that a piece of patented technology is valuable and the public believes it is not valid under current law or newly discovered art, then there is an economic incentive to expend greater resources to test the validity of the patent. And a panel of technically trained judges steeped in patent law is well-suited to perform this double-check quickly and efficiently.  In short, to best incentivize innovation. The USPTO needs to issue IP rights that are as certain, reliable and affordable as they can reasonably be, and offer post-grant proceedings that quickly, accurately and cost-effectively test the validity of certain patents proven to be of economic importance if questions of validity arise.

With all of that said, it is essential that these post-grant proceedings are properly calibrated so that they provide a quality check but do not bar deserving patentees from enforcing their patent rights. It’s why some protections in the AIA are so important, such as restrictions on timing of challenges, thresholds petitioners must meet for institution, and strict estoppel provisions. It’s also why the Agency is committed to revising our rules as many times as needed so these proceedings are as fair and effective as possible within our Congressional mandate. It’s why it is critical, within this framework, the USPTO issue the very best quality patents possible. Patents that are issued correctly in accordance with the law, that are clear providing notice to the public of the patent’s boundaries, and that are issued consistently across the Patent Examination Corps. And, it’s why I launched the Enhanced Patent Quality Initiative in 2015, so patent owners can have greater confidence and certainty of their rights in this new environment. Today, we’ve got about a dozen initiatives underway that, we believe, will meaningfully move the needle on enhancing patent quality. This includes making sure we’re getting the most relevant prior art before our examiners as early as possible by: leveraging technology, making prior art cited in our PTAB proceedings available to the examiner handling a related pending child application, and transitioning our entire patent examination corps from the decades old, antiquated U.S. Patent Classification System to the updated, increasingly global Cooperative Patent Classification System. It also includes drilling down on best practices (such as clarity of the record) during examination coupled with targeted training. Developing new and better ways to measure our progress, like our Master Review Form and new Quality Metrics. And, providing a new after-final procedure that offers applicants the opportunity to make a presentation before a panel and receive a detailed write-up of the panel’s decision that  might resolve an issue without going to appeal, or even result in the application being allowed.

So, this is what we’re doing at a high level. But I’d like to share more specifics about one of our flagship programs—our “Clarity of the Record Initiative”–and some of the great progress we have been making on our Clarity of the Record pilot program. The goal of this program is to develop best practices on how much detail to include in certain key parts of the prosecution record, for example: Interview summaries, or reasons for allowance, or construction of 112(f) limitations. Regarding interview summaries: How many times have you reviewed a file history, noted the patent rejected and then seen the patent allowed after an examiner interview with minimal or no changes to the claims and little or no explanation for the allowance? In this pilot, we worked to provide more detailed summaries including the substance of the examiner’s position, details of any agreement reached, and a description of next steps following the interview. After the pilot concluded, we measured 22 data points focused on clarity, and found an average of 15% improvement in clarity between the pilot examiners and a control group.

On reasons for allowance: How many times have you reviewed a prosecution history, and there is nothing in the record to indicate why the claims were allowed by the examiner? Because it is at the discretion of the individual examiner to set forth reasons for allowance, those reasons have not always been included in every Notice of Allowance. As part of this pilot, participants were trained on setting forth reasons for allowance in every Notice of Allowance. At the conclusion of the pilot, we found a 25% improvement in the clarity of reasons for allowance between the pilot examiners and a control group. Through the pilot, we also found the following practices significantly improved overall clarity addressing each independent claim separately, particularly identifying the applicant’s persuasive arguments (wherever they may be in the record), and identifying the specific allowable subject matter of the claim rather than merely reciting the entire claim as the basis for allowance. This pilot also helped us review the best practices around claim interpretation.

On claim interpretation:  How many times have you seen a prosecution record where there was clearly an issue about how a claim was interpreted, but the record was devoid of any explanation of the claim’s interpretation? In the pilot, the examiners were given training on explicitly setting forth key claim interpretations to minimize ambiguities. For example: Explaining all Section 112(f) presumptions and whether the presumptions were overcome, identifying on the record the structure in the specification that performs the function, and when a prior art reference is used to reject multiple claims, clearly addressing specific limitations in each claim that provide the basis for the rejection.

With our trainings on interview summaries, reasons for allowance and claim interpretations, we saw a statistically significant improvement in clarity when examiners used these best practices. Perhaps the most telling indicator of progress from this pilot is that when these pilot examiners were examining applications not included in the pilot program, they continued to apply the pilot’s best practices. This is a strong indication of the success of our training. Also, the clarity of the record initiative furthers the goal of compact prosecution by encouraging the applicant to rebut the examiner’s on-the-record position promptly and directly if there is disagreement. In short, we are already taking steps to clarify the record and you will see our examiners doing so increasingly over time.

Of course, patent quality also means applying the law accurately and clearly even in areas of the law that are evolving. Including, for example, the 101 jurisprudence on what is patent eligible subject matter. As many of you know, we’ve spent a fair amount of effort on this in recent years. Following major court rulings, we’ve revised our examination guidance, with input from all of you, multiple times and trained our examiners on the new guidance. Based upon input from our stakeholders, we also introduced training focused on clear drafting of 101 rejections and subsequent responses. And, we just announced in a Federal Register Notice two roundtables focused exclusively on the topic of patent eligible subject matter. At the first roundtable, we will discuss potential updates to our examination guidance, and at the second roundtable, we will discuss the impact of the current 101 jurisprudence on innovation, what changes might be considered to further support innovation, and whether such changes are best achieved legislatively, judicially or administratively. We thought it would be helpful to begin the public discussion, to create a record of where there is agreement or disagreement and what, if any, need for improvement. We welcome your participation on this important and complex issue.

As I hope you can see from this quick run-down of our initiatives, we are very excited about EPQI! It is an ambitious effort that is yielding results now and will yield many more in the long run. To learn more about our EPQI progress to date, please join us— mark your calendars—on December 13, at the USPTO, where we will spend a good part of the day sharing details of the results of each of the dozen or so EPQI.  We think you will like what you hear.

Turning now to some of our policy and other accomplishments over the course of this Administration, thanks to the AIA, we can now engage more directly with innovators—through our regional patent offices in Detroit, Denver, Silicon Valley, and Dallas. As you know, I started my tenure in public service as the Director of the Silicon Valley Regional Office. Having had the opportunity to help define the vision of these Offices, and stand up three of the four regional offices, I am very proud of this legacy to our IP system that will endure for generations to come. I’ve always said that, one day when my daughter is old enough, I can point to the Silicon Valley Regional Office in our hometown and say, “Your mom had a hand in opening that office.” And I’d feel very proud about my contribution to our community and society for that. Through these offices, we powerfully expand our ability to educate regional innovators about intellectual property and help small and large businesses and inventors directly access a wider range of services offered by the USPTO.

Additionally, one of the great privileges serving as head of the America’s Innovation Agency is that it is my job to increase opportunities and awareness about STEM, invention and intellectual property and, to me, this means across all geographic regions of this great country of ours and across all demographics. For example, when fewer than 15% of U.S. based inventors listed on a patent are women, it’s clear that we are leaving valuable inventive talent behind. This is something we cannot afford, especially as our companies cannot hire the technical talent they need, and  they are asking Congress to change our immigration laws to provide more flexibility in our visa and immigration system to ensure we can hire the best talent here in the U.S. We have the power to change this. We’ve called this our “All in STEM” campaign—and, true to the complex nature of the problem—it’s a multifaceted approach, including increasing awareness of the issue;

Getting girls interested in science, invention and IP early through efforts like our Girl Scout IP Patch and retaining and supporting women in STEM fields by mentoring, training and simply highlighting the female success stories through social media and inventors baseball trading cards for distribution to our school-aged children, so all our kids can see themselves as inventors! It’s not just a social imperative, it’s an economic imperative as we look compete in an increasingly global and competitive environment. 

And, it is no less an economic imperative to ensure that intellectual property beyond patents is properly calibrated to support creativity and entrepreneurship. We’ve advocated for significant modernizations of copyright law, beginning with our Green and White Papers on Copyright Policy, Creativity, and Innovation in the Digital Economy, where we made in the White Paper legislative recommendations on reforms to statutory damages for copyrights. We completed two historic copyright treaties and sent ratification packages to Congress—One on facilitating access to published works by the visually impaired, and another to expand copyrights for actors in audiovisual works.

On Trademarks, we’ve taken steps to improve the efficiency of our operations by adopting policies to encourage electronic filings of trademark applications which permitted fee reductions; and introducing the first major overhaul of rules at the Trademark Trial and Appeal Board since 2007, and I was pleased to recently join the President in the Oval Office when he signed the Defend Trade Secrets Act, which created a new federal civil cause of action for trade secrets This provided much needed, additional protections to innovators of today, in an environment where confidential business information can be quickly transported or emailed over state—or international—lines. While modern trade secret protection is essential, we are mindful that inventors need to be able to have the choice to instead disclose their invention in exchange for the exclusivity guaranteed by a patent—through reliable patent protection here and abroad.

As many of you know, there’s an entire department at the USPTO devoted to this very mission, complemented by IP attachés stationed in about a dozen countries across the globe. With this team, I have frequently represented the USPTO abroad, helping to ensure that a strong and equitable IP system does not stop at our nation’s borders.  One such trip—to China in 2015—stands out in my mind, both because of the importance of promoting strong IP rights in the second largest economy in the world, and because I experienced, on a personal level, the depth of opportunity offered by our country. As I articulated our positions on these critical IP policy issues with the Vice Premier in Zhongnanhai, Beijing, the central headquarters for the Chinese government, I thought for a moment of my parents back home in the Bay Area. When they bravely left their homeland in China to move to the United States to build a new life, did they ever imagine their daughter would one day be in such a meeting, in such a role? They understood America is the land for those willing to work hard and embrace its values.

I’ve had the honor and privilege of having many great opportunities over the last three years while leading the USPTO, and, I’ve capitalized on those opportunities for the benefit of innovators because, each and every day, I’ve been able to count on an amazing team of public servants at the USPTO working hard to best serve all of you. I firmly believe that the United States Patent and Trademark Office is healthy, well-functioning and poised to successfully handle whatever challenges and opportunities lie ahead.

Our issues are important, complex and nuanced. And while not everyone will always agree with all that the Agency does, we are well prepared to work together and with all of you to accomplish our top priorities and successfully address the challenges ahead. So, thank you for all your help. And thank you for all I know you will continue to do to ensure that our greatest inventions are yet to come.