Patent Validity Review Changes on Hold for Next PTO Director

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By Malathi Nayak

Plans to change patent validity review proceedings at the Patent and Trademark Office’s Patent Trial and Appeal Board are on hold, the office’s interim director said Aug. 3.

“What direction we take with broad changes to PTAB would have to await the appointment of a permanent director,” Joseph Matal said at the quarterly meeting of the agency’s Patent Public Advisory Committee.

President Donald Trump hasn’t nominated a replacement for former Director Michelle K. Lee, who resigned in June.

The PTO launched an initiative in April to review PTAB proceedings, such as inter partes review, which let parties challenge the validity of patents. The efforts were aimed at examining abusive serial petitions, PTAB rules on owners’ motions to amend patent claims during proceedings, and the board’s decisions to grant petitions and thereby institute trials.

The PTO is continuing to study the claims amendment process, which Matal called a “continuing source of controversy,” and patent application pendency goals, he told the the Patent Public Advisory Committee.

The committee reviews how the PTO functions, including its policies, budget, and user fees for patent services, gathers public comment and advises the director.

Lee had announced that the office will use stakeholder suggestions to guide its review of the data on more than 6,500 Patent Trial and Appeal proceedings conducted since the board was launched in September 2012.

In 2016, the PTO made some changes to PTAB procedures, such as submission of new evidence with a patent owner’s preliminary response. But patent owners complained that the agency failed to address two areas —motions to amend claims and use of the “broadest reasonable interpretation” in claim construction—that they contended help patent challengers win favorable rulings.

Shared Administrative Services

Matal said that the Department of Commerce’s “shared services initiative” if implemented, would hinder the PTO’s information technology and human resource operations.

The initiative, which the department announced in 2015, is aimed at making its agencies, including the PTO, more cost-efficient by sharing administrative services, such as financial management, information technology and human resources, where they have similar needs.

“This year some of the bills for starting up this program have come due and they are bit larger than what we currently expected,” Matal said.

“The PTO has very, very acute, very specific hiring and IT needs,” he said adding that the agency must ensure it hires technically qualified examiners and that its “24X7" information technology system “stays up and running.”

The PTO has contributed $3 million to support the Commerce Department’s shared services center, and will spend another $8 million on the center in 2017, Anthony P. Scardino, the PTO’s chief financial officer, said.

Large corporations with extensive patent portfolios and small businesses looking to raise funds will be hurt by the initiative’s impact on the PTO, according to Michael Walker, committee member and former Chief Intellectual Property Counsel at chemical company DuPont.

“Everyday businesses are making decisions on investment based upon their patent rights and to have a delay in examination because an IT system goes down or the lack of quality hiring of examiners, that has a real life impact on people,” Walker said.

Matal offered no projection on how the initiative, which is being reviewed by the administration, will be implemented. But he said he was “confident we can find a solution.”

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bna.com

To contact the editor responsible for this story: Mike Wilczek at mwilczek@bna.com

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