By Tony Dutra
PTO Director Kappos is praised for guiding America Invents Act implementation
and decreasing pendency.
Technical amendment unlikely; Congress urged to initiate enabling legislation
for Patent Law Treaty and Hague Agreement on designs.
The major provisions of the America Invents Act are yet to be implemented,
but a June 20 hearing by the U.S. Senate Judiciary Committee marked the third
session already featuring Patent and Trademark Office Director David J. Kappos's
report on implementation of the nine-month-old patent reform legislation.
While previous hearings in the House of Representatives touched on the
possibility of a “technical amendment” that would actually make substantive
changes to the AIA, senators appeared inclined to reject such a measure.
The committee members repeatedly took the opportunity instead to praise
Kappos and his management team at the PTO for a job well done to date.
“I hope you consider staying on [as PTO director] no matter who the president
is after this next election,” Thomas A. Coburn (R-Okla.) said.
testimony, meanwhile, was largely focused on international harmonization
efforts, asking the legislators to start the process of enacting implementing
legislation for two international treaties--the Patent Law Treaty and the
Hague System for the International
Registration of Industrial Designs.
The AIA was enacted Sept. 16, and Kappos was called to testify first at a
Feb. 1 hearing held by the House of Representatives' Judiciary Committee's
Subcommittee on Intellectual Property, Competition and the Internet (27 PTD,
2/10/12). The subcommittee focused on prior user rights.
Section 5 of the AIA is
titled “Defense to infringement based on prior commercial use.” Before enactment
of the AIA, prior user rights were available, under 35 U.S.C. §273, only for
prior commercializations of business method patents. The AIA expanded prior user
rights to all patents, available to those who commercially used the technology
more than one year before the invention is publicly disclosed or the patent is
During the February House hearing, certain members of the subcommittee,
believing the one-year period and a university exemption did not sync with other
countries' approaches, suggested a technical amendment to the AIA that would
come closer to international harmonization.
Kappos summarized a report on the topic required under the AIA, which
recommended: “The USPTO should reevaluate the economic impacts of prior user
rights as part of its 2015 report to Congress on the implementation of the AIA,
when better evidence as to these impacts might be available.” By the end of the
hearing, it appeared that the subcommittee was resigned to waiting.
Then, Kappos provided testimony at a May 16
full House Judiciary Committee hearing (97 PTD, 5/21/12). He addressed the AIA
provisions that the agency has implemented to date, most notably “Track One”
prioritized examination. He also gave details about the feedback to notices of
proposed rule making by the PTO since the bill was enacted, citing “hundreds of
comments” received from the patent community and that are currently being
reviewed by the office.
Some committee members and other witnesses at that hearing, though, were more
concerned about the AIA's program allowing challenges to “covered business
method” patents. Critics and proponents continued to disagree over which patents
qualify as CBMs, and which are exempted as “technological inventions”--a
category that the PTO is charged with defining.
The possibility of a further technical amendment to the patent reform
legislation preoccupied several members of the House panel.
The Senate Judiciary Committee included a review of “International
Harmonization Efforts” in the title of the June 20 hearing. It seemed then that
a technical amendment would be again on the table, but the prior user rights
issue was mentioned only in passing.
The international focus now was on Kappos's progress in convincing other
countries to follow the AIA, rather than to consider any amendment to align the
United States with other regimes. In his opening remarks,
Committee Chairman Patrick J. Leahy (D-Vt.) said, “We need to encourage other
nations to adopt a similar grace period, without which some American inventors
may be unable to seek patent protection abroad.”
The likelihood of a technical amendment was further lowered in remarks by
Coburn and Sen. Charles E. Grassley (R-Iowa).
Grassley questioned the necessity of an amendment and added, “Hopefully no
one will try to get something done [by amendment] that they couldn't get done
during the six years [of patent reform debate].”
Coburn asked Kappos if he had been in discussion with others, presumably in
the House, about specific topics up for amendment. Kappos said the agency has
indeed given advice on such topics as the estoppel provisions in post-grant
opposition proceedings, prior user rights, and the basic definition of prior art
in the new 35 U.S.C. §102.
Coburn dismissed the thought that those issues were “technical” and said he
would fight for “full consideration” by the committee if any of the issues were
included in an amendment.
The bulk of Kappos's written
testimony addressed international harmonization efforts. He cited top-level
meetings among the heads of patent offices in Asia and Europe, with progress on
unified classification systems, patent document translations, and work
sharing--the Patent Prosecution Highway and the Patent Cooperation Treaty.
Kappos also credited the Patent Law Treaty and the Hague agreement as having
the potential to benefit American innovators. The two pacts were ratified by the
Senate in 2007, but still require “implementing legislation for the U.S. to
become a member,” he noted.
“The PLT simplifies the formal requirements and reduces associated costs of
obtaining and preserving patent rights in multiple countries of the world,”
according to the testimony. “The Hague Agreement facilitates international
design protection in member countries by streamlining the application process
for multinational patent protection.”
Both Leahy and Grassley--the top Republican on the committee--expressed
Other committee members covered a variety of topics:
, joined by Sen. Michael S. Lee (R-Utah), expressed concern that the
International Trade Commission can grant injunctions when the patent at issue is
a “standard essential patent”--one that covers part of a standard required of
all companies who participate in a particular industry. Kappos acknowledged “a
tremendous lock-in effect that creates extremely high value to patent owner” of
a patent essential to a standard. But he said that it must be balanced with the
disincentive to infringe that is lost if the patentee's only option is licensing
on fair, reasonable, and non-discriminatory terms.
was concerned with the travel expenses the PTO was incurring in its visits to
foreign offices. Kappos described meetings in China and Japan that included
himself and only two other PTO employees, and he argued that the enforcement
focus of the trip to China, especially, was of considerable value to U.S. patent
Dianne G. Feinstein (D-Calif.) expressed concerns from biotechnology and
software firms in her district. Kappos explained the training programs in place
for biotech examiners to keep them current on advances in the area. And he said
that ability to challenge covered business methods--through Section 18 of the AIA--will
“allow us to take a second look” at a lot of business methods that are “claimed
as being implemented in software.”
Orrin G. Hatch (R-Utah) relayed concerns of some of his constituents about the
price tag on the new “supplemental examination” procedure--a form of
reexamination initiated by the patent owner to limit exposure to inequitable
conduct charges in future litigation (17 PTD, 1/27/12). Kappos said the agency
is planning a two-stage fee payment, with a modest initial payment to submit the
petition and a higher second payment necessary only if the PTO determines the
new information raises a substantial new question of patentability.
Amy J. Klobuchar (D-Minn.) asked about preparations for the change to a
first-inventor-to-file system, which is not scheduled to begin until March 16,
2013. Kappos assured her that a notice of proposed rulemaking is scheduled for
release soon and that a roundtable discussion is planned.
and Sen. Al Franken (D-Minn.) made a pitch for Minneapolis-St. Paul as the site
of a new PTO satellite office. Kappos testified that the agency received more
than 600 responses to its notice on that topic. The PTO expects to announce two
more offices--in addition to Detroit--this summer.
Christopher Coons (D-Del.) asked what the agency is doing to hire, train, and
retain high quality examiners. “Our retention rate is about 3.2 percent,” Kappos
said proudly. However, he took the opportunity to make a request for statutory
authorization allowing the PTO to exceed the salary cap on the best examiners.
“The value of the work they do is extremely productive,” he said. Raising their
salaries “would be much more cost effective than hiring [new examiners].”
Kappos testimony at http://pub.bna.com/ptcj/SJConAIAKappos12Jun20.pdf
Leahy opening remarks at http://pub.bna.com/ptcj/SJConAIALeahy12Jun20.pdf
Patent Law Treaty information at http://www.wipo.int/patent-law/en/plt.htm
Hague Agreement on designs at http://www.wipo.int/hague/en/