Senate's Hearing on AIA Implementation By PTO Shows Technical Amendment Unlikely

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By Tony Dutra  


• Summary: PTO Director Kappos is praised for guiding America Invents Act implementation and decreasing pendency.  

• Takeaway: 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.

Kappos's written 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.

Two Prior Hearings in the House.

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 filed.

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.

Technical Amendment Unlikely.

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.

Urge for Implementation Legislation on Two Treaties.

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 support.

Wide Range of Topics.

Other committee members covered a variety of topics:

• Leahy , 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.

• Grassley 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 owners.

• Sen. 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.”

• Sen. 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.

• Sen. 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.

• Klobuchar 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.

• Sen. 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].”


By Tony Dutra  

Kappos testimony at

Leahy opening remarks at

Patent Law Treaty information at

Hague Agreement on designs at


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