Pride in Patent Ownership Act

by Dennis Crouch

A bipartisan pair of Senators have proposed the “Pride in Patent Ownership Act.”  The premise is that if you own a patent, you should be proud to own the patent — and actually record your ownership interest.  The bill pushes this pride by requiring patent owners to record their ownership with the kicker that those who fail to record lose their right to punitive damages for any infringement that occurs prior to recordation.

If a patentee fails to comply … no party may recover, for infringement of the applicable patent in any action, increased monetary damages under section 284 during the period beginning on the date that is 91 days after the effective date of the issuance, assignment, grant, or conveyance with respect to the patent, as applicable, and ending on the date on which that issuance, assignment, grant, or conveyance is properly requested to be recorded.

[Read the proposed legislation here].

The proposal also adds requirement anytime patent preparation, prosecution, or maintenance fees (including attorney fees) are paid by a “governmental entity, including a foreign governmental entity.”   The applicant needs to provide a statement “describing the amount and source of funding” provided by the governmental entity.  The provision would also retain the rule that an unrecorded interest is “void as against any subsequent purchaser or mortgagee” who purchases without notice of the prior conveyance.

The bill is co-sponsored by Senators Leahy (D) and Tillis (R) who are the chair and ranking member of the Senate Judiciary Committee’s Subcommittee on Intellectual Property.

Senator Tillis: “The public has a right to know who is a patent’s true owner. Patents provide a limited term monopoly against the public, and it’s in the public’s interest and benefit to know who owns that monopoly. I’m a strong supporter of patent rights, but those rights have to be balanced against the public’s interest. This commonsense bill will achieve that goal and I look forward to working towards its passage this Congress.”

Senator Leahy: “One of the fundamental underpinnings of the patent system is transparency. In exchange for the exclusive rights over an invention granted by a patent, the public has a right to know who owns the rights to particular inventions. We are working to ensure a fair innovation system for small businesses, non-profits, and independent entrepreneurs who have a right to know, without expensive litigation, who has the exclusive patent rights over a particular invention.”

The pair also proposed a second proposal that they call “Unleashing American Innovators Act.” The proposal focuses primarily on outreach mechanisms for new entrants into the patent space and would also require a new Southeast Regional Office — perhaps in Sen Tillis’s home city of Charlotte.

For those who don’t know. Sen. Tillis was a computer systems specialist who worked for Wang Labs., PWC, and IBM (although mostly in management).

58 thoughts on “Pride in Patent Ownership Act

  1. 15

    OT, but maybe not, here is something I think is interesting. Whenever I have to deal with an application that is put in the h*llhole known as 36xx, the Office Actions are always so bad. They have these vague correspondences between the elements of the claims and the prior art. The examiners don’t care about the purpose of the claim or anything really. Their argument always seems to be the same. If you drink a bottle of vodka, then you can see these are the same if you want to feel it.

    I’d be interested if that could be quantified. I think it could. What I’ve noticed is that 36xx AU examiners cite more paragraphs for a claim and more references. So an average OA from 36xx will cite like 5 paragraphs of a patent per element of the claim and they will be all over the place and the patents will be regarding different subject matter. But I’d bet that the 36xx cite more paragraphs than other AUs, which I think is a good indication of how vague they are.

    1. 15.1

      Basically, I have respect for examiners about 80-90 percent of the time outside of the 36xx AUs. I have respect for the examiner about 5 percent of the time in the 36xx.

    2. 15.2

      It’s an interesting idea, but I’m not sure if it’s meaningful on the level you describe. For example, if multiplexer rejections cite more paragraphs than fastener rejections, does that mean multiplexer examination is worse, or could it mean the subject itself more complicated? Claims to any device that performs [sequence of desirable economic functions] are themselves more vague (not meant in our 112b sense) than claims to particular structures or claims to specific technological implementations. This is a long-winded way of saying that your experiment needs to measure the differences in examiners and not the differences technology.

      But I suspect it could be done! Some of the cases which might more normally fall into 36XX sometimes end up in 2XXX. You’d want to identify those cases of the 2XXX examiners, and then compare them to similar cases done by 36XX examiners. That way you’d be comparing two separate sets of examiners on relatively similar technologies.

      1. 15.2.1

        Yes 6 exactly cases I have often go into 2xxx or 36xx. The ones from 2xxx cite about 1/4 the paragraphs and are precise rejections. The one from 36xx are vague, often ridiculous, rejections where the examiners keep a model of the invention in their head and then argue that this is something like what happens in these elements of the invention.

        1. 15.2.1.1

          You should come to work at the office. In 4ish years you’ll be reviewing actions of junior examiners, and in doing so teaching them how to do it right. Sure it’ll be a pay cut, but be the change you want to see, right?

          1. 15.2.1.1.1

            Yes the solution is a one-man Rambo type of operation to change the USPTO. That’ll work. 🙂 Just as Rambo could have single-handedly taken down N. Vietnam.

            1. 15.2.1.1.1.1

              I was thinking of changing 36BM, which seems a bit more plausible as it’s only 600 or so people.

              Anyways, it’s probably for the best. You would be fighting an uphill battle because it isn’t just a bunch of examiners independently coming to this style of examination, it’s a culture that is instilled and reinforced by management. So even if you somehow managed to make it past the probationary year, you’d never be allowed to be a SPE.

            2. 15.2.1.1.1.2

              “Yes the solution is a one-man Rambo type of operation to change the USPTO. ”

              I’ll support ya for director if you want to do it bruh lol.

      2. 15.2.2

        You know 6, it is not just a little bit. The OAs in 36xx are just ridiculous. They are so much worse than the ones in 21xx that I feel like I am in a third-world country. I do prosecution all over the world and have interviews with examiners from all over the world. And work with people all over the world.

        The 36xx AU examiners are like dealing with people that do not understand patents or examination. I think it is because they have 101 to hold over your head. They know that they are just going to reject you under 101 and have no intention of ever lifting the 101 and don’t care about anything else.

        The OAs are just so vague. And they don’t say —“X discloses Y at paragraph XX where A is B and C is D.” Boom! That is how a 21xx Office Action looks. A 36xx Office Action looks like “X discloses Y at paragraph xxx-yyy, with 3-20 paragraphs being cited, because X ‘may’ or ‘could’ do what is done in the claims.”

        It is just outrageous how bad 36xx AU OAs are.

        1. 15.2.2.1

          I have a case in front of 36XX. 60+ pages of bulk. If the app has a 101 rejection then the rest is there to pad the file history and nothing more.

          1. 15.2.2.1.1

            Yup. I see those and the conversations with the examiners are surreal.

            It is clear when you are dealing with a 36xx AU examiner that they put the elements of the invention in their head and then map it to other disclosures in this vague absurd way. And then they play this game where as you pin them down that you do all the work. The whole process in the 36xx AU is about as bad as it is anywhere in the world. An absolute disgrace.

            That is why the big problem now in writing applications is to be sure to stay out of the 36xx AUs and why some applications go there and others don’t is a mystery that people are trying to unravel.

            1. 15.2.2.1.1.1

              I literally recommend not filing if it is likely to go to the 36xx AU.

            2. 15.2.2.1.1.2

              “It is clear when you are dealing with a 36xx AU examiner that they put the elements of the invention in their head and then map it to other disclosures in this vague absurd way. And then they play this game where as you pin them down that you do all the work. ”

              Yeah that’s overcoming the bureaucracy.

        2. 15.2.2.2

          Bro I’m not ben.

    3. 15.3

      I hope everyone realizes that Lee was attempting to propagate the practices of the 36xx AU to all the AUs.

      I would probably recommend to clients that they shut down their patent operations if all the AUs behaved like the 36xx AUs.

      1. 15.3.1

        I hope you guys realize that under the recent docketing “reforms”, the office has crafted a system that’ll automatically place non-3600 applications with 3600 examiners once the 3600 applications dry up.

        This’ll effect the fields “adjacent” to 3600 more than others, but those examiners could pop up anywhere!

        But don’t worry. They’ll be given up to an extra 6 hours of time to examiner your application. So they’ll be perfectly capable of examining whatever they’re assigned.

        Thank Iancu!

    4. 15.4

      Are you complaining about AU 3643 (fishing, trapping, vermin destroying, plant and animal husbandry)? Or perhaps about one of the surface transportation art units 361X (railways, shipping, cars and trucks)? Or the 365X (material and article handling) art units? Or maybe the 362X/368X/369X AUs dealing with electronic commerce and business methods (which doesn’t really seem to belong in TC3600)?

      Technology Center 3600 has a very diverse group of (mostly) mechanical technologies, from construction to earth moving and agricultural equipment, and is possibly in need of some reorganizing, but I find it hard to believe that the examining corps is somehow uniformly bad or poorly managed throughout this TC.

      We have a client with a firearms ammunition invention (AU 3641 – weaponry), so I guess we’ll find out soon enough.

      1. 15.4.1

        He’s definitely talking about the latter. They should probably be called something like “36BM.”

        I saw a paper a few days ago about reversal rates as a function of technology areas. The paper lumped the non-BM 3600 AUs in with 3700, and found them to have a much higher reversal rate than 36BM in ex parte appeals (55.5% vs 30.9%). So amusingly, you applicant may have more to worry about than if they had fallen into 36BM!

        1. 15.4.1.1

          Or Ben is it because so many of those 36BM AU appeals 101?

          1. 15.4.1.1.1

            You seem to be positing a scenario where a high affirmance rate is an indicator of low quality. That is a strange suggestion.

            Come to think of it, if you could get a 36BM PTAB judge job, that really could make a difference! Naturally, the previous caveats regarding how you would likely conflict with management still apply. But as a PTAB judge, you could slap examiners on the wrist dozens, maybe hundreds, or times a year. Personally, the feedback loop I care about most at the PTAB is my appeals.

            1. 15.4.1.1.1.1

              Er, that should be:

              Personally, the feedback loop I care about most at the PTO is my appeals.

            2. 15.4.1.1.1.2

              Just nonsense from you Ben. You seem to feel that if you write with a reasonable tone that the substance of what you say is reasonable–it is not.

              Not going through the elementary logic that illustrates your nonsense as I would bet most of the adult readers already see it.

        2. 15.4.1.2

          But nice try Ben. I know your specialty is to interfere with any argument a non-anti-patent judicial activist makes.

          My guess is that you are an administrator at the USPTO or an examiner that has a second job as a paid blogger.

    5. 15.5

      “If you drink a bottle of vodka, then you can see these are the same if you want to feel it.”

      The very utmost in the best way of evaluating claims. Originally invented in Russia I hear.

    1. 14.1

      +1

      Leahy said he wants to reverse the changes that the former PTO director made and get back to the IPRs being able to get rid of weak patents.

  2. 13

    Am I correct in seeing this as a slight shift of Tillis’ away from the pro-patentee side?

  3. 12

    This is a solution in search of a problem.
    Why can’t the good senators focus their energy on clearing up the massive mess that is subject matter eligibility? If they wanted to, they could re-write Section 101 in a very clear manner. What they are doing is a sideshow.

  4. 11

    OT here, but since comments are not possible on the interesting above blog article “Missing Decisions and the Federal Circuit” September 22, 2021 by Jason Rantanen, this is just to note that the two cited therein completely unpublished and unsearchable Fed. Cir. decisions were papers only signed by the Clerk of Court, not by any judge.

    1. 11.1

      The motion by the PTO in Zhu to remand was unopposed. The request to remand in Boloro was filed by the appellant following the GVR on its cert petition in the Supreme Court. Given FCR 27(h) and the Internal Operating Procedures, it is highly likely that the motions were acted upon only by someone in the clerk’s office (or at best the Senior Staff Attorney), and no judge ever read the papers.

      I don’t think it’s very surprising (or even worth noting) that these dispositions would not be listed on the court’s opinions/orders web page.

      Just because something appears on Law360 does not mean it is really newsworthy. This is just more filler to justify paying the subscription price.

  5. 10

    I agree with most of the goals here, but the language is sloppy and may have a number of negative unintended consequences.

    For example, if I license a patent to company A in field of use #1 with rights to sublicense, and I license the same patent to company B in field of use #2 with rights to sublicense, and company B sublicenses without notifying me, this law appears to indicate that both company A and I lose rights when suing for patent infringement. This law could have major deleterious effects on licensing rights and, particularly, on startups licensing technologies from universities for example, since many startups rely on business models that are highly dependent on sublicensing and partnership agreements.

    1. 10.1

      I agree that the proposed language is vague and indefinite. The public statements of the Senators refer only to patent “ownership”, but the language of the bill as introduced also refers to “certain rights or interests in a patent… conveyed to any person” and a requirement to record assignments “and certain other interests”, which conceivably might include some or all aspects of licensing as well. The question then arises whether licenses would also need to be recorded in some (exclusive licenses?) or all cases. I do not see any definition of what is meant by “other interests” anywhere in the bill.

      1. 10.1.1

        Good points all.

        Should it pass, it’ll likely become yet another tool in infringers’ tool box.

        Further complicating patent suits.

        Just what our already overworked courts need.

      2. 10.1.2

        As such, would not the default then be “total tracking” and would not such sound in the same exact “merits” for pushing this trope in the first place?

  6. 9

    The proposed sanction for not properly recording present ownership of a patent is indicated to only be that “those who fail to record lose their right to punitive damages for any infringement that occurs prior to recordation.” That is, no effect at all on normal back damages. How likely is that to affect or discourage the common practices of unrecorded assignments between shell corporations of patents purchased by the many patent assertion companies, since they rarely have any basis for pre-suit punitive [up to trebled] infringement damages anyway? They rarely even notify, much less attempt licensing, of their patents until after filing law suits, to insure being in Waco TX, if that is at all possible.

    1. 9.1

      I agree. If the risk to an unrecorded patent owner already present in 35 U.S.C. 261, fourth paragraph, “An interest that constitutes an assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.” doesn’t work on some, then this proposed added sanction probably won’t work either.

      1. 9.1.1

        Mark, I have always wondered if even that existing “void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice” provision is very effective? Does that not require a rare original patent owner willing to risk criminal prosecution for secretly selling or mortgaging the same patent to two different parties?

        1. 9.1.1.1

          Yes. An unscrupulous reseller would be very uncommon, at least in the patent world. Recordation of real estate transactions is much more valuable in that respect.

  7. 7

    Senator Leahy: “One of the fundamental underpinnings of the patent system is transparency

    HAH

    Let’s start with enforcing what is already at 37 CFR 1.2 in regards to the admitted other programs in the shadows that are SAWS-like.

  8. 6

    More 1984 — dress up as “pride” what is in essence a desire of the Efficient Infringer lobby to identify those assets (personal property?) of others owned by those without the means to be enforce.

    I might consider this a possible trade-off IF the government took its role as a FranchisOR seriously (and by seriously, I mean legally compelled) to defend the item given to the Inventor/Owner/FranchisEE.

    1. 6.1

      Yes, 1984 it is.

      p.s. They might as well put the new office in the Atlantic Ocean for all the difference it’ll make.

  9. 5

    “The public has a right to know who is a patent’s true owner. Patents provide a limited term monopoly against the public, and it’s in the public’s interest and benefit to know who owns that monopoly.

    #1 Anybody saying that a patent is a ‘monopoly against the public’ is a big fat liar. And coming from the hill staff? Down right insulting.

    #2 So take this insulting lie, the straw man, and set on fire “The public has a right to know the “true” owner.” Why can’t someone just enjoy quiet title to ownership? Why subject yourself to the vexation of PTAB?

    #3 We know this is just private law directed at IV. Demonstrating once again our Congress is a parliament of wh@res.

      1. 5.2.1

        p.s. #’s 1 and 2 as well.

  10. 4

    That a failure to record title can have consequences for back damages is a very old idea. I can’t recall anybody ever raising any serious objection. But of course that’s all outwith the USA.

    Some of those acquiring title choose to record it on the Register, others not. They pay their money and make their choice. But most of the time, the Patent Office Register in Gondwanaland accurately reflects actual ownership of the Gondwanaland patent. That’s a good thing, isn’t it?

  11. 3

    I never understood why they put the assignee and the inventor on the front of patents but then just let them be sold to anonymous people. Makes no sense.

    1. 3.1

      Meh, I made a comment, but right into censorship jail.

    2. 3.2

      (s i g h)

      6, FULL alienability of the bundle of property rights is a basic foundational aspect of US patent law.

      What the government should do you is make it ultra-easy to update a hardcopy (and the physical body of that hardcopy worth being proud of) when or if that item of property changes ownership (that might be the point that you are reaching for — to give you the benefit of the doubt).

    3. 3.3

      6, an assignee printed on the front of the patent is usually the original assignee who deserves the credit for paying for the R&D and the inventors and the patent preparation and prosecution, and usually has far more useful information about the background of the invention than later remote assignees.

      1. 3.3.1

        That’s a fair point, Paul.

  12. 2

    Talk about flagrantly missing the point in terms of what sort of legislation is needed vs. what is proposed here. Well, I hope that their staffes enjoyed drafting the press release.

  13. 1

    “require a new Southeast Regional Office — perhaps in Sen Tillis’s home city of Charlotte.”

    Charlotte to Alexandria is only 6 hours. Seems like Atlanta would be a much better choice.

      1. 1.1.1

        Never too late to make charlotte the hub!

        Charlotte does have some good stuff there already. AND, most importantly, it’s like 80% minority, so that would be a real boon to the local pop. and to the office to have that diversity.

      2. 1.1.2

        I don’t know if I would agree that Atlanta is the slam dunk choice. Charlotte is not the right place (and bizarre) but somewhere in the Research Triangle is similar to putting the West Coast office in San Jose.

        1. 1.1.2.1

          Durham to Alexandria is just 4 hours.

Leave a Reply

Your email address will not be published. Required fields are marked *

You can click here to Subscribe without commenting

Add a picture