“If individual and small business innovators can take the off-ramp when they do not want to be there…the PTAB’s bias against such inventors would fade into history.”
Inventors and innovative companies welcomed the news that the new administration immediately appointed Coke Morgan Stewart as Acting Director of the U.S. Patent and Trademark Office (USPTO). Challenges lie ahead. But for first time since the Andrei Iancu years (or before that, the David Kappos years), innovators feel confident that the leader of “America’s Innovation Agency” grasps the importance of strong and reliable patent rights.
A USPTO Director does operate under some handcuffs. She is not all-powerful. When it comes to policy, she cannot change every bad regulation or practice by fiat. But there are some areas where her power is nearly plenary – human resources and internal quality processes. To a large extent, changes in these areas do not need to comply with notice and comment rulemaking. In other areas, the draft rulemaking ink is already dry, and only needs the Acting Director’s imprimatur to get it rolling.
In the spirit of helping the new Acting Director hit the ground running, here are five (almost) instant fixes to the patent system that are within her power. And read to the end to find one bonus that could win back inventors’ trust.
Ex parte Examination
- Discourage implausible obviousness combinations. When an examiner needs to combine four or more references to reject an independent claim over prior art, something stinks. The Acting Director can discourage overaggressive rejection behavior. While not categorically contrary to law, such rejections are often implausible, since in theory each reference must be glued to each other reference by a “reason to combine” that existed at the time of the invention.
Suggestion:
Prohibit any four-or-more reference obviousness combination unless approved by a supervisory patent examiner (SPE).
- Closely supervise overly-restrictive examiners. The public domain has data on how “hard” individual examiners are. For example, one can find what an examiner’s allowance rate is, and compare that to the allowance rate of other examiners in the same group art unit.
Suggestion:
For the most restrictive percentile (let’s say, 85th percentile or worse compared to peers), require a thorough quality review by the Office of Patent Quality Assurance, SPEs, or Technology Center Directors, of all draft final rejections for a period of time (let’s say, one year) – giving such reviewers discretion to overrule rejection decisions and allow cases.
Both Ex Parte Examination and Adversarial Proceedings
- Culling anti-patent litigation behavior. Those of us who have fought for allowance to the bitter end of the court system in a patent application or post-grant proceeding have always had a serious metaphysical question about “what is going on here?” Why would the agency aggressively defend a weak (albeit, defensible under the standard of review) rejection decision? Worse, when a private company decides not to defend a Patent Trial and Appeal Board (PTAB) unpatentability decision, why would the agency step in as appellee (as it almost always does) to defend the PTAB, but leave undefended the examiners’ original allowance decisions?
Suggestion:
Dedicate one Solicitor’s Office attorney to the task of dropping challenges against inventors and patentees, with full discretion to say “no” to showing up in court (whether district court or the Federal Circuit). The Solicitor’s Office already does this to some extent, and on occasion has been lobbied to withdraw or not appear to defend the agency’s decision. In such cases, a court still makes a reasoned decision based on the facts and the law, but without the USPTO’s goading. The Acting Director can dedicate one of her counsel to becoming a super-quality-control agent, in the form of a person whose role makes sure the Solicitor’s Office only appears to defend the most defensible anti-inventor and anti-patent decisions of the agency.
Adversarial Proceedings
- Discretionary denial for individuals and small businesses. For reasons that only the prior administration can explain, the USPTO has so far actively opposed nonprofit organization US Inventor’s multi-year effort to bring balance to the PTAB. In one of those efforts, US Inventor filed a petition for rulemaking that, once enacted, would grant “veto power” over certain micro- and small-entity patentees being dragged into the PTAB. As US Inventor has explained, if individual and small business innovators can take the off-ramp when they do not want to be there (e., just as can any respondent in the Copyright Office’s new Copyright Small Claims Court), the PTAB’s bias against such inventors would fade into history. That is, if the PTAB were a low-cost alternative to deciding patent validity, and if it were truly fair, inventors in a dispute with an accused infringer would gladly opt in for that kind of post-grant quality review.
Suggestion:
Begin rulemaking to enact US Inventor’s “veto power” discretionary-denial changes to Chapter 37 of the CFR.
- Refund ill-gotten gains when cancelling issued patents. Folks above a certain age remember when the phone company offered “caller ID” as a calling feature for a fee, then offered “caller ID blocking” as another feature for another fee. The USPTO is equally amoral when it accepts issue fees and patent maintenance fees, but then takes a PTAB petitioner’s much larger payment of fees to rule that an entire issued patent’s claims should be canceled as unpatentable. If there was a mistake, wasn’t it the agency’s?
Suggestion:
Collect and escrow from a PTAB petitioner the paid-in amount of issuance and maintenance fees associated with an issued patent at rates that exist on the filing date of the petition. If the petition succeeds in canceling all claims, refund that amount to the patentee. If the petition cancels only some of the claims, use such funds to issue a pro rata refund. This may require its own rulemaking.
Bonus: People often forget, but the USPTO Director has the power to grant a patent, notwithstanding the outcome of examination. (See page 5 of the linked court filing). The Director should entertain “discretionary grant” authority for at least one exemplary ex parte patent application. This should be a rarely used power. But a true friend of innovation will recognize that sometimes the system did not work the way it should. Extraordinary inventions that encountered extraordinary bureaucracy, or encountered defensible but inane rejections, should be eligible for this very special treatment. What a message that would send, that the USPTO has finally become (as it likes to say) “America’s Innovation Agency.”
Image Source: Deposit Photos
Author: iqoncept
Image ID: 23375360
