Michelle Lee: End of Sequestration Allows PTO to Focus on IT Systems, Satellite Offices

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By Tamlin H. Bason  

Feb. 3 --“The USPTO has never been better poised to effect positive changes as it further fuels our nation's innovation economy,” Deputy Director of the Patent and Trademark Office Michelle K. Lee said Jan. 30 at American Intellectual Property Law Association's Mid-Winter meeting in Phoenix.

In her first public address since being sworn in as deputy director on Jan. 13, Lee touted a number of developments that she said were cause for optimism within the patent community. Notably, the end of sequestration means that the agency can finally afford to make much needed improvements to its IT infrastructure and it can continue to work on developing its satellite offices, Lee said.

Additionally, “every level of the administration shares in the excitement and recognizes the importance of patents and intellectual property,” Lee said, noting that President Obama's mention of patents in his State of the Union Address on Jan. 28 was only the second time that a president has ever mentioned patents in his annual address, the first coming in 2013. The PTO, the Department of Commerce and the White House “are absolutely aligned and are working together on these important issues,” Lee said. She noted that the PTO has taken ownership over some of the executive actions that Obama announced in June with respect to curbing abusive patent-troll activity, and she urged stakeholders to familiarize themselves with the legislative proposals that were outlined in the same memo. “Stay tuned because soon there will be some pretty exciting announcements on all of those things,” she said.

After Looking Back, Lee Vows to Move PTO Forward

Lee noted that she was born and raised in Silicon Valley, the daughter of an engineer and “a beneficiary of the economic opportunity created by the innovation economy.”

Prior to being appointed deputy director, Lee served as the director of the PTO's Silicon Valley satellite office. Before that, she was deputy general counsel at Google Inc.

Lee holds a B.S. and an M.S. in electrical engineering and computer science from the Massachusetts Institute of Technology. She worked as a computer scientist at Hewlett-Packard Research Laboratories and at the MIT Artificial Intelligence Laboratory. After receiving her J.D. from Stanford Law School, Lee served as a law clerk for Judge Vaughn R. Walker of the U.S. District Court for the Northern District of California and Judge Paul R. Michel of the U.S. Court of Appeals for the Federal Circuit. Lee was at Fenwick & West before joining Google in 2003.

She was deputy general counsel for Google and was the company's first head of patents and patent strategy. While there, she served two terms on the PTO's Patent Public Advisory Committee, which advises the agency on its policies, goals, performance, budget and user fees.

“I have focused my professional life on creating innovative technologies and/or enabling those who do,” Lee said. “I view my current role as an opportunity to do more of the same.”

'Employee Morale at an All-Time High.'

In addition to the end of sequestration, another positive development was the PTO grabbing the top spot in the annual rankings of best places to work in the federal government. Released in December, the rankings are based on a survey that asked employees to rate their satisfaction with and commitment to their employer. The PTO was ranked the fifth best place to work in 2012 and has steadily risen in the rankings since coming in as the 105th best agency to work for in 2009.

“To go from 105th place to first place in five years is truly remarkable,” Lee said. “From my observations, and as reflected in the performance of the agency, employee morale is at an all-time high,” she said.

'We Remained Open.'

A significant portion of Lee's remarks concerned the PTO's financial situation. Lee noted that Congress in early January passed an omnibus appropriations bill. “This legislation means that the federal government, including the USPTO, will not be subject to sequestration in 2014 as we were this past year,” she said.

The bill not only “provides the USPTO with our requested $3.024 billion in spending authority for fiscal year 2014,” but it also “enables the USPTO to place any funds that we collect above our $3.024 billion appropriations amount into our fee reserve fund,” Lee said.

Lee said that the reserve fund was essential last fall when it allowed the PTO to stay open during the government shut down.

“During those difficult times when the rest of the federal government shut down, we remained open due to some funds in reserve and continued processing the patent and trademark applications that help drive our country's innovative economy and doing the best that we could--as we did all year--to thrive and excel in an austere fiscal environment,” she said.

Money Will Go to IT, Satellite Offices

AIPLA's Executive Director, Q. Todd Dickinson, asked Lee a few questions after her remarks, including a question on how the PTO planned on utilizing its new revenues now that sequestration has ended.

“Our priority is to look at the areas that were neglected or put on hold during sequestration.” Lee said. The agency's aging IT infrastructure “is a top priority that for far too many years has been neglected,” Lee said. Indeed, IT improvements are “the easiest thing to cut funding to” and as a result IT spending “bore the brunt of cuts during sequestration,” she said.

Among the IT investments will be “a massive overhaul of our website,” she said. “We have a wealth of info on our website, but I must confess sometimes it is hard for even me to find it,” Lee said.

Developing the satellite offices is another thing that “quite frankly is going to take funds,” Lee said. She said that the PTO expects to open its permanent offices in Denver and San Jose in 2014, and the permanent Dallas office should open in 2015.

'Board Has No Agenda.'

Lee concluded her remarks by focusing on the Patent Trial and Appeal Board's handling of covered business method challenges and inter partes review proceedings, both of which were created by the America Invents Act.

She noted that in 2014 “we have already seen more CBM petitions than we had in all of fiscal year 2013.” There has also been a noticeable increase in IPR petitions this fiscal year, Lee said.

“The ever-increasing number of petitions is proof positive that the public appreciates the board's ability to resolve disputes about patent rights earlier and more efficiently than in the past using these alternative proceedings,” Lee said.

Lee, however, cautioned practitioners against trying to read the tea leaves based on a small sample size of board decisions. She said:

I wouldn't read too much into any apparent trends in rulings. The one and only one job of the Patent Trial and Appeal Board is to call the shots neutrally and accurately based on the facts and the case law. The board has no agenda, and the rulings fall where they may.  


To contact the reporter on this story: Tamlin Bason in Washington at tbason@bna.com

To contact the editor responsible for this story: Naresh Sritharan at nsritharan@bna.com

Text of speech available at http://www.uspto.gov/news/speeches/2014/lee_aipla.jsp