Smith Says Patent Reform 'Almost There' At Administration's World IP Day Celebration

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Rep. Lamar S. Smith (R-Texas), joining members of the administration and others May 5 for a late celebration of the 11th anniversary of World Intellectual Property Day, said that “we're almost there” in moving a patent reform bill through Congress, anticipating that the U.S. House of Representatives would schedule floor debate on H.R. 1249 “probably in June” and that little time, if any, would be needed to reconcile that bill with S. 23, passed by a 95-5 Senate vote March 8 (81 PTCJ 593, 3/11/11).

The event, held at the Rayburn House Office Building, was jointly sponsored by the Patent and Trademark Office, the American Intellectual Property Law Association, and the World Intellectual Property Organization. A panel with a representative from each organization discussed the theme of this year's World IP Day, to “celebrate the role of design in the marketplace, in society, and in shaping the innovations of the future.”

However, patent reform sneaked into their panel discussion throughout, and other invited speakers--Commerce Secretary Gary F. Locke and U.S. Trade Representative Ronald Kirk--spoke exclusively on patent reform and on efforts of enforcement against counterfeiting and piracy.

Smith: Patent Reform's 'Would-Be Champion.'

World Intellectual Property Day is a concept created by WIPO to celebrate the date, April 26, on which the convention establishing the organization originally entered into force in 1970.

Official recognition of the day was delayed somewhat in this country, however, presumably because Congress was on recess on that day. A year ago, the event featured a patent reform discussion by Rep. John Conyers Jr. (D-Mich.), then chairman of the House Judiciary Committee (79 PTCJ 817, 4/30/10), and the organizers of this year's event recreated that scenario with Smith, Conyers's successor as committee chairman.

The House Judiciary Committee voted 32-3 to approve H.R. 1249 April 14, just before the legislators headed home for a spring break (81 PTCJ 821, 4/22/11). However, with debate over the debt ceiling and the fiscal year 2012 budget dominating the current House floor agenda, it was expected--and Smith confirmed--that the patent reform bill will have to wait.

Smith called the committee vote “a surprise, … better than I expected,” and especially thanked Locke and PTO Director David J. Kappos for “helping to sell the final product” to the other members of his committee.

Still, Smith was somewhat cautious in his optimism. Kappos had introduced Smith as a “true leader and champion of patent reform,” noting that Smith was chief sponsor of the first patent reform bill in June 2005 (70 PTCJ 142, 6/10/05).

However, Smith would take credit only as a “would-be champion,” adding, “We'll find out more in the coming weeks or couple of months.”

Potential Snag in PTO Improvements.

In his remarks, Locke first congratulated Kappos and the PTO for strides in improving operations at the agency, particularly noting that the patent application backlog has finally dipped below 700,000, despite an increase in the number of applications filed. “But the work won't be done until we get patent reform,” he said.

Locke praised provisions in the pending patent reform bills that allow the PTO to set fees and retain all the fees it collects from patent applicants and owners. He particularly pointed out that the agency could then fully implement its “Track I” program allowing accelerated examination of a patent application for an additional $4,000 fee. Kappos was forced to postpone the May 4 start to Track I when Congress passed the fiscal year 2011 budget and kept $85-100 million of the PTO's collected fees to be used for non-patent purposes (81 PTCJ 853, 4/29/11).

“The program is ready to go,” Locke said, “We just need to get this legislation passed.”

Later in the conference, though, Kappos noted a problem in the way the bills are currently written that will, unless fixed, further delay Track I introduction.

The provision that bans the diversion of fees collected by the PTO, he explained, requires establishment of a “revolving fund” that begins with zero dollars on Oct. 1, assuming patent reform is enacted this summer. With the PTO having to give up as much as $100 million of this year's receipts, it will be operating on a meager budget, therefore, until FY 2012 collections ramp up after that date. That will make it impossible to increase the examiner corps, as required to implement Track I, until enough FY 2012 fees are collected, Kappos said, adding his hope that a “technical adjustment” could be made to the bill.

“Dave can't lobby you, but I can,” AIPLA Executive Director Q. Todd Dickinson said to the audience--which included a number of aides to House legislators--urging that the bill be fixed before it is passed. “There is a Day 1 problem with this legislation, and we can't have the office flying with only one wing” on Oct. 1, he said.

Patent Reform's Effect on Harmonization.

Another issue that came up in the panel discussion--moderated by PTO Deputy Directory Teresa Stanek Rea and featuring Kappos, Dickinson, and James Pooley, WIPO's deputy director general for innovation and technology--is the effect passing patent reform will have on the ability of the United States to be a voice in international patent law harmonization.

The harmonization issue is related to the patent reform bills' provision to change from a first-to-invent system--the United States is the only developed nation with this approach--to a first-inventor-to-file system, which exists in one form or another in the rest of the world.

“The United States has not been able to lead in the past in harmonization,” Pooley said, “because it is outside universal norms.”

“When the legislation goes through, it will perhaps be a turning point,” he predicted, “and we can get back to the business of substantive norm setting.”

Counterfeiting and Piracy Enforcement Considered.

Patent reform was not the exclusive topic of the day, though, and with World IP Day being an international event, it was somewhat of a surprise that more global aspects of intellectual property were secondary issues.

On April 26, in fact, those that did celebrate World IP Day were typically more focused on trademark counterfeiting and copyright piracy, and means of increasing enforcement of each.

For example, the Institute for Policy Innovation's Sixth Annual World Intellectual Property Day Forum in Washington, D.C., was dominated by the concern that IP theft undermines the incentive system for industrial innovation and artistic creativity (81 PTCJ 851, 4/29/11).

Locke and Kirk addressed IP rights enforcement at the May 5 event. Locke specifically called out China, contending that 80 percent of the software used in China was pirated. Locke's candor about China's IP enforcement shortcomings was significant, inasmuch as he has been named by President Obama to be the next ambassador to China, although the Senate has not yet taken up his nomination.

“Ultimately, IP laws are only as good as the effectiveness of their enforcement,” Locke said.

Kirk lauded the USTR Office's efforts at encouraging international respect for IP rights. He noted that renegotiated free-trade agreements with Panama, South Korea, and Columbia all contain provisions with the “highest IPR protections we could imagine.” Further, he said, the U.S.'s contributions to the Anti-Counterfeiting Trade Agreement (81 PTCJ 796, 4/15/11) led to “strong rules that enable best practices to spread more quickly.”

Finally, Kirk also praised the new approach taken by the USTR's Office through its “Special 301” report on countries that fail to protect intellectual property rights. In its May 2 release of this year's list, the USTR's Office said that a mutually agreed-upon action plan would be designed to lead to a country's removal from either the priority watch list or watch list (82 PTCJ 13, 5/6/11).

Kirk called the action plans “a new and thoughtful way to address our concerns.”

Design: U.S. Should Implement Geneva Act.

The panel discussion featured presentations by Kappos, Pooley, and Dickinson on the World IP Day design theme.

Kappos called design patents “an important entry point” allowing developing countries to get an appreciation of the value of intellectual property systems. On the domestic front, he pointed to the PTO's 2009 celebration of the 600,000th U.S. design patent (78 PTCJ 723, 10/16/09). The patent was issued to Goal Zero, a company that designed a battery system that works in conjunction with a solar briefcase that recharges the system using sunlight. That company created 900 jobs in the United States, Kappos said.

Pooley quoted a line from Apple's Steve Jobs, “Design is the fundamental soul of a human-made creation that ends up expressing itself in successive outer layers of the product or service,” as he demonstrated the “functional elegance” of the iPad2.

All three panelists were hopeful that, once patent reform is enacted and Congress can devote more time to other IP matters, the lawmakers will take up legislation to bring the United States into compliance with the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs, a 1999 treaty that offers a more convenient way of seeking protection worldwide for designs.

Dickinson, who was PTO director when the Hague Agreement was negotiated, said, “It's really time to get that done.”

By Tony Dutra

Dickinson is a member of this journal's advisory board.

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