The United States Chamber of Commerce's Global Intellectual Property Center (GIPC) recently released a set of recommendations for President-elect Barack Obama in dealing with the U.S. Patent and Trademark Office (USPTO).

The paper, written by former USPTO chiefs and patent experts and released last month, warns that the incoming Congress might assign even more responsibilities to the 9,000-employee agency. Among proposed fixes for the backlog, the report recommends revising U.S. law so the agency can keep the money it generates from application fees instead of having it diverted to unrelated projects.

Today, the USPTO is "an agency in crisis" that will face significant challenges in the upcoming Obama administration due to a 750,600-application backlog and other internal efficiencies, according to the Chamber of Commerce report.

"Despite the best efforts of the USPTO's patent examination and support staffs, prevailing perceptions within the patent community are that the quality of patents issued is declining at a precipitous rate," according to the report. "Rigorous patentability standards must be met if confidence in the validity of U.S. patents is to be restored."

To that end, the GIPC offers a set of recommendations for the soon-to-be-sworn-in president in dealing with the USPTO. Highlights include these:

Objective: Improve the quality of U.S. patents.
Possible Solutions: 1) Create incentives for applicants to aid the examiner in the examination process; 2) use "fee and order of examination incentives" to encourage applicants to provide higher quality applications and information disclosures; 3) expand and enhance training programs for patent examining personnel; 4) improve the quality of the search tools provided for patent examiners; and 5) ensure that claims are adequately supported by their corresponding specification.

Objective: Reform the patent examiner production system.
Possible Solutions: 1) Review the current production goal system and more equitably adjust the goals by relative complexity of technology; 2) consider revising the count system to change the credit given for certain tasks or applications; 3) provide time after final rejection to consider amendments and affidavit information, and include incentives for examiners and applicants to encourage allowance of a case without the need for filing a request for continued examination (RCE); and 4) consider a flat goal awards program.

Objective: Enhance efficiency of the examination process by reforming examiner and applicant incentives.
Possible Solutions: "Consider altering the current examiner incentives to seek additional production credits by extending prosecution through RCE filings and encourage early resolution of patentability issues, including credit for prosecution after final rejection," the GIPC recommends. "Externally, the PTO should consider addressing current applicant practices that lead to extended prosecution and increased filings."

Objective: Permit applicants to defer patent examination.
Possible Solutions: "If the PTO cannot reduce its backlog through other means and the number of patent filings continues to increase, consideration should be given to allowing patent applicants to defer examination of their applications for perhaps up to three years," the report says.

"Depending on the model followed, a deferred examination system may require a separation of the search and examination functions and give competitors of the patent applicant the right to demand earlier examination by paying a fee," the GIPC continues. "Applicants with applications already on file and awaiting examination could be given an incentive, through partial refund of fees, to opt to defer examination for three years so the PTO could concentrate its resources on those who wish immediate examination."

Moreover, last month's recommendations call for the USPTO to be re-established as a government corporation — an idea supported by groups like the American Intellectual Property Law Association, the American Bar Association and the National Association of Manufacturers, as well as other tech trade groups.

The House passed legislation in the late 1990s to make the change, but the bill ran into opposition from USPTO labor unions who argued that corporatizing the agency would weaken employee rights. Other stakeholders criticized the idea as being good for multinationals but not for universities, independent inventors or small businesses.

Finally, according to the GIPC report's authors, the next PTO director should have experience in patent and/or trademark prosecution and litigation; working knowledge of copyright issues; demonstrable capabilities in strategic planning, budgeting and financial management; and a proven track record of successfully managing and leading an enterprise of several thousand employees.

The U.S.'s intellectual property-intensive industries employ nearly 18 million workers, account for more than $5 trillion of the U.S. gross domestic product and represent 40 percent of U.S. economic growth. In 2006, U.S. patents accounted for a quarter of all patents granted worldwide.

"America's innovators are continuously discovering new technologies and processes that create jobs, offer cures for deadly diseases, generate solutions for improving our energy security, provide us answers for addressing climate change, and develop novel ways to expand the information superhighway," the report notes. "Given the time, energy and investment they put into their research, these entrepreneurs should expect to obtain patent rights for their discoveries promptly, efficiently and reliably."

Resources

Recommendations for Consideration by the Incoming Administration Regarding the U.S. Patent and Trademark Office
by Dana Robert Colarulli, Q. Todd Dickinson, Nicholas P. Godici, Brad Huther, Esther Kepplinger, Michael K. Kirk, Stephen G. Kunin, Gerald J. Mossinghoff, Charles E. Van Horn and Herbert C. Wamsley
The U.S. Chamber of Commerce Global Intellectual Property Center, Dec. 19, 2008

U.S. Chamber Releases Recommendations for U.S. Patent and Trademark Office Reform
The U.S. Chamber of Commerce Global Intellectual Property Center, Dec. 19, 2008