Remarks By Director Michelle K. Lee at the George Washington University School of Law

The following is an excerpt from PTO Director Michelle Lee’s keynote address today, at George Washington University Law School. Read the full remarks here.- DC

How do we continue to incentivize … incredible innovations? First, we must ensure that the USPTO issues the highest quality patents as quickly and efficiently as possible. This means, at a minimum, continuing to bring down our backlog and pendency so that good ideas can be patented quickly. Which is why I am proud to report that we’ve reduced our backlog of unexamined patent applications by almost 30 percent from its peak in January 2009, despite a 32 percent increase in applications over this time period. Our so-called first action pendencies – that measure the time from filing an application to the time of obtaining an initial decision from the examiner— are down by 43 percent—from 28 months in 2011 to 16 months today. Our total pendencies – the time from filing an application to the time of obtaining a final office action, such as an allowance—are down by 26 percent—from 35 months in 2010 to 26 months today. Our backlog of Ex Parte Appeals – that’s not AIA proceedings, but our internal appeal process to the Board after the examiner issues her decision – has also gone down. We have reduced our inventory of ex parte appeals by 45 percent from a high of about 26,000 in 2012 to about 15,000 today. And, we have reduced the average pendency for appeals by 30 percent from 28 months in 2016 to 19 months today. In short, our backlog and pendencies are now lower than they’ve been in more than a decade, and they will continue to go down. Simply stated, this means more inventors are obtaining more patents more quickly. . . .

We constantly welcome—in fact, we solicit—feedback and input. And we have shown that we are willing to refine and improve as many times as needed. For example, we’ve provided applicants with more access to examiner interviews more than doubling the number of interview hours in just eight years. We’ve had more RFC’s, Proposed Rules, and public roundtables than ever before – including on such topics as our Enhanced Patent Quality Initiative, our 101 guidance, and our Patent Trial and Appeal Board proceedings. 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 through over a dozen IP attaches across the globe. For those of you who may not know, our attaches in China, the EU, India, Brazil, and other locations help U.S. innovators obtain and enforce IP rights outside the US, and also help advocate for improved IP laws outside the U.S. . . .

Examining patents quickly and efficiently is only part of the job. The public relies on us to issue quality patents. Today, we have about a dozen programs underway that we believe will meaningfully improve patent quality. These include programs for making sure we’re getting the most relevant prior art before our examiners as early as possible by making prior art cited in our PTAB proceedings available to examiners handling related applications, and transitioning all our examiners from the decades old, antiquated U.S. Patent Classification System to the updated, increasingly global Cooperative Patent Classification System. Developing best practices such as for enhancing the clarity of the record. And developing new and better ways to measure our progress. For example, with our Master Review Form, we are now processing twice as many reviews, and capturing data not only about the correctness of our actions, but also about the clarity of our actions. This helps us identify trends, and helps us pinpoint very specific areas for training. Finally, and, importantly, for the first time in 40 years, we are doing a comprehensive review of the amount of time our examiners need to do their work in light of the many recent changes within the patent system. We are already seeing measurable and statistically significant results in our patent quality efforts even in the short amount of time since we began the Enhanced Patent Quality Initiative. And you can look forward to more improvements in the future. In sum, the USPTO is operating well, and is issuing more, higher quality patents than ever. …

What work lies ahead? Our top priority today is to make sure the Patent Trial and Appeal Board’s AIA proceedings are as effective and as fair as possible–within our Congressional mandate. Now is the right time to examine and make any needed reforms to these proceedings, because we have five years of data and experience to guide us. …

Let’s take a look at where we are with the AIA trials today. We have shared regular updates on the number of cases and the results of those cases, but we want to break down the numbers even further so that everyone has the facts, as there have been many numbers cited – some of which are accurate, some of which are not.

Slide 1 Revised

This waterfall slide is our attempt to present even more data in a more accessible and transparent format. According to waterfall slide data, which shows the status of every petition filed since beginning of AIA, of those petitions that have reached some sort of final disposition (i.e., are not pending), about one third of all petitions are denied institution and do not go to trial; about one third of all petitions settle either before or after the decision to institute; and only about one third of all petitions ever reach final written decision. It is only at that point of reaching final written decision is it relevant to talk about the patentability or unpatentability of the claims of a patent. And, at that point, it is true that 66 percent of petitions will find all instituted claims of the patent unpatentable, 17 percent of petitions will find all instituted claims of the patent patentable, and an additional 17 percent will have mixed results (some instituted claims will be found to be patentable and some will be found to be unpatentable). So statements that “all” or 95 percent or even 80 percent of patents are found unpatentable are not supported by the data and do not account for prior disposition by settlement or by denial of institution.

Slide 2 Revised

Drilling down further on the institution rate, here is some helpful data from the years the AIA trials have been in effect. As you can see, the institution rate in our proceedings has been steadily declining from a high of 87 percent in the beginning, to about two thirds today. These are the numbers, and these are the facts. Now, our stakeholders have understandably asked how the rates of unpatentability in AIA proceedings, reflect on the quality of all of the other patents we’ve issued. . . . [T]here are almost 2.8 million patents in force. Incredible. Of those 2.8 million about 4,000 patents have been challenged in AIA trials. This represents less than 0.2 percent of the patents currently in force. …

As I have said many times in the past, the USPTO is constantly looking for ways to make the AIA trials as effective and as fair as possible within our Congressional mandate.  And we welcome your suggestions and ideas, the more specific, the better. To this end, we’ve set up a mailbox where you can submit your ideas at PTABProceduralReformInitiative@uspto.gov. This is an early opportunity to provide input. Your feedback here will help form the basis for our recommendations to the administration on next steps.

In fact, we have already heard from a number of you regarding a number of issues. As discussed:

  1. Multiple petitions, and how best to curb abusive practices.
  2. Whether to provide other opportunities to amend claims later in the proceedings when patent owners may have a better sense of where their claims stand,
  3. Whether to reevaluate our claim construction standards in view of new data and experiences, and
  4. How to best incorporate the findings and legal conclusions of prior proceedings at the USPTO, including examination and other post-grant proceedings, as well as, importantly, proceedings conducted in the federal courts.
  5. What considerations should go into a decision to institute, for example, how can we better take into account considerations such as the interests of justice, economic factors, and hardship.
  6. As to decisions to institute, whether there should be additional review of institution and termination decisions—and by whom.
  7.  When and how to permit parties to join proceedings.
  8. When and under what circumstances might it be appropriate to extend the length of the proceedings beyond 12 months and what impact would extensions have on litigations before, not only the Board, but district courts. . . .

[W]e are [also] streamlining the way the Board identifies and designates opinions as precedential, with the goal of designating more opinions precedential. Why? Because doing so 1). Improves the consistency across panels of the Board, and 2). Provides greater notice to the public to help you make better informed decisions on how to manage your Board proceedings. . . .

Fees: Finally, we are also proposing increases to our AIA trial fees. . . . We believe, as many of you do, that these proceedings should be self-funded. I commend our team for making thoughtful initial cost projections and for recommending revisions to ensure that these proceedings are fully self-funded. There is much to do on AIA proceedings, patent quality, and in many other areas, and I promise you that we are working diligently, with a sense of purpose, every day.

In closing, we all want what’s best for this country’s inventors, innovators and entrepreneurs. Because it is through their efforts that our country remains at the forefront – economically and globally. Simply stated—and I think President Trump and Secretary Ross would agree—we want the United States to out-innovate and out-perform our global competitors, producing new jobs and new technologies and new industries that benefit all Americans, including individual inventors and those in our small businesses and startups. Let’s not forget that the modest businesses and unknown inventors of today may become the largest and most well-known drivers of our economy tomorrow. To make that happen, Congress, the courts, the administration (especially the USPTO), and even all of you here today, must all work together to make sure the system envisioned by our Founding Fathers lives up to its purpose to promote innovation. You have the commitment of the entire USPTO team that we will play our part to ensure that we continue to incentivize the kind of innovations that make our lives better and safer And that put men and women—like Mr. Iver Anderson with his lead-free solder—in the National Inventors Hall of Fame. Our future depends upon it. Thank you.

Dennis Crouch

About Dennis Crouch

Law Professor at the University of Missouri School of Law. Co-director of the Center for Intellectual Property and Entrepreneurship.

20 thoughts on “Remarks By Director Michelle K. Lee at the George Washington University School of Law

  1. Iver Anderson? He just substituted silver and zinc for lead. Obvious. Common sense. No way his patent survives more than 8 IPR petitions.

    (sarcasm…)

  2. She forgot to add that she is waiting to pick up her $100 million dollar pay check from Google when she leaves the USPTO.

  3. I developed a distrust of Michelle Lee the first time I heard her speak. Every time I’ve heard her since, or read her speeches, it’s just deepened that distrust. Today’s speech is just another part of the trend.

  4. Let me restate what I have always stated:

    Rubber stamping Accept Accept Accept is as unacceptable as rubber stamping Reject Reject Reject.

    While one may think that the reductions noted by the Director are more than the mere “moving of deck chairs on the Titanic” that has characterized past such “self-congratulatory” Office announcements, one would be wise to consider that what has really happened is that a new deck on the Titanic has been opened – the deck of “go ahead and stamp Accept and we will just obliterate the item in the Post Grant Review processes.

    THIS is what happens when the uninformed think that “inspecting quality in” AFTER the examination processs is somehow a viable contributor to “Quality” of the examination process.

    It
    Is
    Not

    1. Exactly Anon. There is every incentive now to keep churning out patents – because that is what justifies the IPR (and the Constitutional back flips required to keep it on the books). Typical government, create a problem (poor quality work product), and then create a solution (the IPR) which IMHO, makes the entire patent system many times worse than the QC issues in the first place.

      1. IWT, in the view of PTO, that “give-with-the-right-hand-take-with-the-left-hand” mentality is a feature, not a bug.

        1. The Office has a long history of nonsensical “feature” mentality that simply runs counter to the very mission of the Patent Office.

          Charles H. Duell (Commissioner of US patent office in 1899):
          “everything that can be invented has been invented.”

          Sounds an awful lot like the House fallacy that the first programmable computer is an invention that subsumes all further improvements related to different components that different software provides.

          Almost as if that very first programmable computer inherently contains ALL future programming….

          But wait – that is what Morse attempted, was it not?

          😉

  5. Lee For example, we’ve provided applicants with more access to examiner interviews more than doubling the number of interview hours in just eight years.

    That speeds things up. But it doesn’t improve patent quality.

    Interviews need to be recorded. There’s no excuse for not recording the Interviews.

    On the other hand, we know exactly why applicants would prefer the Interviews to be kept secret.

    1. Malcolm,

      This has been explained to you previously.

      It is one thing to want something different. It is quite another to pretend as you do that “There’s no excuse for not recording the Interviews.

      As I mentioned previously (and as reflected in other non-patent areas of law), communication theory clearly shows that negotiations are simply more effective – and effective for ALL parties – when there is no such “every word captured and put on the record” as you feel must be present.

      Your feelings are simply not in accord with well established communication theory.

      That said, your follow on critique of “On the other hand, we know exactly why applicants would prefer the Interviews to be kept secret.” is equally misplaced and merely shows the cognitive dissonance of you operating in an area of law with which you do not believe in the work product produced.

      Personally, I really don’t care is the interviews are captured verbatim , as my preparation for such is stellar and the side that would suffer from any “verbatim” capture would be the Office.

      I also realize that my own feelings do not override the larger communications theory in play, so it is just NOT a big deal for me.

      1. communication theory

        LOLOLOLOLOLOLOLOLOLOLOLOLOLOL

        You can’t make this stuff up.

        Remember folks: this is the same “anon” who’s been frothing at the mouth for years about “star chambers.”

        1. Clearly, things like reality and facts do not fit into your desired world view.

          That and a healthy dose of ignoring what I actually posted makes your reply, well, a typical Malcolm reply.

            1. Another Malcolm classic of nothing but ad hominem….

              Maybe (someday) try to say something on point with some substantive value.

              It would be a welcome surprise.

                1. You realize that anon, whatever else his faults, pretty much always is holding you by the nose and kinking you in the a$s, right?

                2. It’s not my theory, Malcolm.

                  Maybe venture past your script.

                  Maybe also note the rest of what I stated – and my own personal lack of care of whether the things are transcribed or not.

                  So do tell how you are going to try to try to twist this, eh pumpkin?

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