Congressman Berman Is on the Case
By Kevin E. Noonan --
One of the frustrations of those opposed to actions taken by the Administration over the past eight years has been the lack of Congressional oversight, in view of the congruency of the party in power of the legislative and executive branches. Although in theory this left the judicial branch to supply a check (or a balance) on public policy, the courts are a blunt and slow tool (and are not above their own type of partisan bias; see Bush v. Gore ). However, this trend began to turn with the election of the members of the 110th Congress, where the opposition party came to power and, although lacking a sufficient majority to impose its will, maintains the power to police.
One part of the Administration that has suffered mightily as a result of this lack of oversight is the Patent Office, where the current Director and his minions have presided over one of the great adventures in mismanagement in U.S. history. But it appears that at least some of the Members of Congress are beginning to notice: at the end of April, Howard Berman (D-CA), Chairman of the Subcommittee on Courts, the Internet, and Intellectual Property of the House Judiciary Committee sent Jon Dudas, Director of the U.S. Patent and Trademark Office, a letter requesting information to supplement Director Dudas' February 27, 2008 testimony before the subcommittee at an oversight hearing (see "House Subcommittee Holds USPTO Oversight Hearing"). Although on its face the letter was a cordial request for additional information, even the most casual perusal of the contents of the letter indicates that Congressman Berman (at right) has something on his mind.
The letter contains eighteen numbered paragraphs covering a wide range of topics. And the questions are specific, asking Director Dudas (at left) to reconcile or justify his testimony with either Patent Office behavior, statements, or actions. These topics include:
• Projections as to the number of applications expected to be filed over the next five years. The Congressman wants to know what methods (including computer programs) the Office uses to make these projections and what considerations are included in its calculations. The letter specifically references the enjoined continuation and claims rules, and asks to what extent the projections were based on anticipation that the new rules would be implemented. It also points out that the FY2008 budget projected an 8% per year increase, while the FY2009 budget projects a 5% per year increase.
• In view of the status of the enjoined new rules, the Congressman asks what actions the Office and/or Congress could take to address the pendency backlog, either at a 5% per year or 8% per year patent application increase level. The letter also cites the GAO Report that claimed the Office could hire 2,000 new examiners per year for the next five years and still not decrease the backlog (the GAO report estimates the backlog would continue to grow, under this scenario, from 260,000 in FY2007 to 953,643 at the end of FY2011). The letter notes that the source of the GAO's estimates was the PTO, and thus requests Director Dudas to provide all information supporting these estimates.
• Turning to the corps of patent examiners, the letter cites statements in the GAO report alluding to internal Office review of production goals for examiners. The letter then cites Director Dudas' testimony before the subcommittee that the Office was beginning to review production goals. Congressman Berman asks Director Dudas to provide a description of the methods being used to perform this review, the personnel involved in the review, and a timetable for its completion. In this regard, the letter also asks for an accounting of the discrepancy between the GAO report's statements, that most examiners who leave the Office do so in response to management (including the production goals), and Patent Office statements that most examiners leave the Office for "personal reasons." The letter specifically asks questions regarding putative exit interviews given to departing examiners that Director Dudas used to support his testimony, including the percentage of departing examiners who had participated in said interviews.
• Patent allowance statistics, specifically the decline in allowance rate from 70% in 2000 to 44% in 2007. The letter asks whether the Office included Requests for Continued Examination in its statistics, and if so how.
• The letter requests further information on the progress of plans for regional patent offices, and asks what resources have been used, particularly in view of the failure of the program to be included in the FY2009 budget.
The letter turns more frank with regard to two issues: the statutory requirements for making changes in the Office's internal management structure, and the behavior of "senior PTO officials" in the RIM v. NTP reexamination.
• The letter also asks for information regarding whether the Office violated Acts of Congress as well as Commerce Department rules when implementing the creation of the Office of Enforcement. Specifically, the letter reminds Director Dudas that the 2006 Science, Justice, Commerce Appropriations Act requires that, before the Office can "reprogram" funds it must notify Congress fifteen days prior to reprogramming, and that Departmental Administrative Order (DAO) 203-13 defines reorganization ("establishment, consolidation, abolition or 'other significant change'") as "generally considered a reprogramming that triggers the disclosure requirement." Director Dudas had testified to the subcommittee that elimination of the Office of Enrollment was a "realignment," and the letter requests the Director to inform the subcommittee of the criteria used to distinguish between the two. In this regard, Congressman Berman asks the Director for an accounting of all other actions taken by the Office that were deemed a "realignment" (and putatively outside the rule requiring Congressional notification) and a "detailed description" of the basis for so doing in each instance.
• The letter cites an article in Time magazine from 2006 and an e-mail from James Toupin that "senior Administration officials" met with RIM's CEO Jim Balsillie during the pendency of the NTP reexamination. Calling it "ex parte activity," the letter asks Director Dudas to identify all senior Patent Office personnel involved in such meetings, and for the Office's policy regarding these contacts.
The answers to these questions should be interesting indeed. Also included in the letter are even more pointed questions posed by Congressman Darrell Issa (R-CA), a subcommitee member:
• Congressman Issa (at right) wants to know the policy basis for the Office to eschew implementing a "request for examination" requirement, as a way to reduce the backlog based on the experience in other countries that "10% to 40%" of all applications are allowed to lapse for failure to request examination.
The letter gives Director Dudas until May 19, 2008 to provide answers to these questions, pointedly including the subcommitee's address (B-352 Rayburn House Office Building, Washington, D.C. 20515).
While these actions are to be applauded, they carry with them the feeling of being too little, too late. The same "senior Patent Office officials" responsible for the ineffectiveness of the Office to address its problems will be leaving in less than twelve months, and those who willingly and enthusiastically fell into step behind their misguided proposals may be expected to leave as well. The legacy of these officials, like so much of the rest of the current administration, will be of opportunities lost, squandered by an appeal to authoritarian rulemaking rather than consensus building with Patent Office stakeholders. In view of the current parlous state of the USPTO, Inauguration Day 2009 (fittingly, a PTO holiday) can't get here soon enough.
ADDENDUM: For a chilling set of allegations of misconduct in the NTP patent reexaminations (the subject of one of Congressman Berman's inquiries to Director Dudas), we direct our readers to the last twenty pages or so of NTP's response, filed April 24, 2006 in Re-examination Control No. 90/007,731, 90/006,675, and 90/006,533 (consolidated) (see Patently-O link). NTP alleges multiple acts of misconduct against senior administration officials (including Director Dudas and Commissioner Doll), based on e-mail correspondence and other documents obtained under a Freedom of Information Act request. (Thanks for Peter Zura's 271 Patent Blog for alerting us to these allegations.)
Earlier this week, we
In a May 7th
The newly filed cases do not mark the first time that the two companies have squared off in court. In 2006, StemCells filed suit against Neuralstem, asserting infringement of four other neural stem cell patents. Neuralstem responded to that suit by filing requests for ex parte reexamination of all four of the asserted patents. Last month, the U.S. Patent and Trademark Office issued a Notice of Intent to Issue an Ex Parte Reexamination Certificate for two of the four StemCells patents. The two companies quickly issued competing press releases asserting that the USPTO had upheld the patents with only minor changes (according to StemCells) or with "numerous substantial changes" (according to Neuralstem).
The Commissioner touted a number of programs and policies in the Office intended to address the twin goals of reducing the backlog of unexamined applications and improving the quality of granted patents. The first initiative Commissioner Doll mentioned was the accelerated examination (AE) program, which he considers an unqualified success. The statistics he cited bear him out: 110 patents have been granted under the program, and the goal of filing to final disposition (abandonment, grant, or exit from the program for appeal or further prosecution) within a year has "never" been missed. One unnamed patent was particularly speedy: allowed within 17 days of filing and granted 58 days thereafter (75 days filing to grant). Use of the program is accelerating, with 200 applications filed requesting AE in the past month. Commissioner Doll confessed that his intuition about what would be the most important component of the program - the Examination Support Document, in which the results and detailed analysis of an applicant-performed search are submitted to the Office - was wrong; both applicants/practitioners and Examiners report that it is the interview that makes the greatest difference.
A program that the Commissioner ascribes to Director Jon Dudas (who is "aggressively pursuing it") is a "worksharing" program, that is an offshoot of the Patent Prosecution Highway programs currently in place with the Japanese Patent Office and other offices, and soon to be established with the EPO. The Commissioner drew a distinction between the programs, however, saying that the PPH program was "applicant-initiated" while the proposed worksharing program would be Office-initiated. Under the PPH, an applicant having an examination in one office can have the results transmitted to a second PPH office, to expedite prosecution in the second office based on (successful) prosecution in the first office. The worksharing program would also permit examination results to be transmitted between offices, although it can be expected that the offices will not have the applicant's incentive to transmit only positive prosecution results. Commissioner Doll was particularly hopeful about the economies of scale that could be achieved by having available to the U.S. Office results of a Japanese Patent Office search of Japanese patents and applications (which are rarely a major part of the prior art considered during U.S. prosecution), and envisioned a "common" prior art database that could be used by
all offices. An amusing aspect of this program is the establishment of a PTO "Facebook" so examiners at the different offices can "get to know one another." The worksharing idea will be further discussed in a meeting between the "Big 5" offices (the USPTO, EPO, JPO, Korean Patent Office and Chinese Patent Office) chaired by Deputy Director of the USPTO
With regard to patent reform legislation, Commissioner Doll said Deputy Director Peterlin and USPTO General Counsel
Last month, the U.S. Patent and Trademark Office 
Last month, the U.S. Patent and Trademark Office
Ever since it was discovered by European explorers at the end of the 18th Century, the duckbill platypus (Ornithorhynchus anatinus) has been a biological anomaly. Fur-bearing and lactating like a mammal (although lactation is through the abdominal wall because the animal lacks nipples), the platypus reproduces by egg-laying like a chicken and produces a venom like a reptile. The platypus is so strange that
The sequencing experiments were performed using genomic DNA from one animal, obtained from the Glenrock Station at new South Wales, Australia (and nicknamed "Glennie"). It was known prior to sequencing that the platypus karyotype has 52 chromosomes, which is reported in Nature to comprise 2.3 billions basepairs of genomic DNA. These chromosomes are morphologically characterized as comprising a few large chromosomes and several smaller ones, "reminiscent," according to the Nature report, "of reptilian macro- and microchromosomes." Included in the chromosomal complement are multiple sex chromosomes, including five "X" and five "Y" chromosomes, which have been observed to properly segregate in sperm and egg cells. In addition, these chromosomes have a certain level of homology to the "Z" sex chromosomes found in birds.
As
On May 6th, the Intellectual Property Owners Association (IPO) joined the ranks of those understanding these Patent Office pronouncements for what they are: desperate attempts to shift the blame for the application backlog to anyone other than the managers whose incompetence is actually to blame. In a
The IPO's letter also reminds the Director what the other side of the Patent Office's mouth has been saying for several months: that the reduction in the allowance rate was not because patent quality has declined, but because patent examination quality has increased (see "
Thus, Mr. Dudas' comments are yet another Patent Office straw man raised to deflect attention from the real root of the problem: mismanagement. The management problem exacerbated the lack of funding that started the Office down this path at a time of great technological advances in several scientific and industrial fields. This was coupled with changes in what was considered within the scope of patentable subject matter, and with Patent Office rule changes (like publication) that created strong incentives for applicants to file new, continuing, and divisional applications before these rule changes went into effect in the fall of 2000. As a consequence of all these factors, the Office (as well as patent offices worldwide) experienced a large increase in the number of applications, an application "bubble," that is the true "cause" of the application backlog. Instead of pointing fingers, the more productive approach would be to accept the IPO's invitations (and others like it from other groups and organizations in the patent community) to join with the Office in an attempt to solve these problems, rather than merely assessing blame. Perhaps the next Administration will be able to field a Patent Office team capable of doing so.
May 15, 2008 -
Law Seminars International (LSI) will be holding its fourth annual conference on Current Issues in Complex IP Licensing on September 11-12, 2008 in Philadelphia, PA. The workshop will provide information on:
I. Current best practices for covering the fundamentals: Making sure there will be a match between what you want to get out of the deal and what you actually get
The registration fee is $497.50 for students and new employees, $795 for government employees, or $995 for all other attendees. Those interested in registering for the workshop can do so