Staying off President Trump’s Twitter feed and other priorities for the new USPTO director 01 Sep 17
As even a casual observer of the US patent system would be aware, the to-do list for the next permanent Director of the USPTO is particularly lengthy and daunting.
Assuming that President Trump’s proposed nominee Andrei Iancu is confirmed at some point between now and the end of year, the Irell & Manella managing partner will face a possible crisis at the Patent Trial and Appeal Board (PTAB), depending on how the Supreme Court rules in Oil States, along with the constant gripes that parts of the patent community have around the inequities of the inter partes review (IPR) process.
But that’s not all he will face. He will also be tasked with leading an examiner corps which could be forgiven for having spinning heads caused by multiple SCOTUS decisions on patent eligible subject matter and the resulting guidelines they have had to absorb - and that’s before you factor in potential issues around some working practices at the office. Plus, Iancu will be looked to by some to continue to commit to the Michelle Lee-initiated PTO initiatives around improving patent quality. And he will have to decide which changes should take priority to ensure that the US system doesn’t continue to cede ground to rivals in Europe and Asia. It is, in short, a daunting prospect.
One topic that doesn’t generate the same headlines as PTAB reform but should provide an early test of Iancu’s mettle is the Enterprise Services initiative (formerly known as Shared Services). That is the programme whereby back office functions such as IT and HR are shared across the many constituent parts of the Department of Commerce. Of course, the USPTO is the one part of the US government that raises its own revenues and patent stakeholders have long been wary of the agency’s fees being diverted to fund other departments. The initiative is in its relative infancy so it’s still not clear just how far-reaching its effects will be, but it has caused some to raise concerns.
Many in the patent community view Enterprise Services as fee diversion by another name and opposition to it is one of the few areas where it is easy to find consensus. The Intellectual Property Owners Association (IPO), which often has to delicately couch its views to represent the interests of its broad range of members, has been particularly forthright in its criticism of the proposals.
In a letter to Commerce Secretary Wilbur Ross in July, Senators Grassley and Coons expressed the concerns of the IP stakeholder community around the programme, explaining why the USPTO should maintain its own services and asking for responses to a series of questions concerning how Enterprise Services would work in practice.
The proposed initiative means that Iancu, if confirmed, has to find a way of keeping his bosses at the Department of Commerce on side while also representing the concerns of the IP community. Budgetary issues are an ever-present for most agency heads and are particularly heightened in the current administration given President Trump’s inclination to make swingeing cuts to most parts of the government, including Commerce.
The battle over Enterprise Services could test Iancu’s chops like few other issues. After all, as a seasoned litigator he has plenty of experience of the minutiae of patent law, which will help him engage with a big chunk of the community. And having built a practice with a very impressive book of business he will earn the respect of the patent world’s masters of the universe. But the wheeling and dealing of Washington will be new to him, as it was for Michelle Lee. Plus, if he is very much Secretary Ross’s pick, as one source suggested, while others in the administration preferred Phil Johnson, then Iancu may be less inclined to rock the boat with his superiors. How he plays his hand on this could provide an early, stern test of tenure.
I asked a number of senior patent academics what they think should be at the top of Iancu’s to-do list. Reforms at the PTAB featured prominently, which is perhaps not surprising given oral arguments are looming in Oil States; though one keen observer of DC took a different tack suggesting wryly that task number one should be “keeping his name out of President Trump’s twitter feed”. Anyway, here are some of the responses I got:
Professor Robin Feldman, UC Hastings College of the Law
In the patent policy battles that have dominated recent headlines—patent trolling and PTAB challenges of pharma patents—Iancu is an unknown quantity. Having represented successful plaintiffs and successful defendants, patent holders and lawsuit targets, he brings the perspective of both sides of the table.
In addition, Iancu’s written works show a respect for software, along with scepticism of some of the judicial tests that allow patenting of software. In other words, at this point, he seems able to walk down the middle of the aisle.
For an incoming USPTO director, I would expect patent quality to be job #1. The USPTO has taken a beating over that topic, from the Government Accountability Office (GAO) report several years ago, from commentators and from policy makers. His background suggests a disciplined pragmatist, and I would expect that discipline to focus on quality of the product.
Former Chief Judge Paul Michel, Court of Appeals for the Federal Circuit
The number one need for early, bold action is to make major adjustments to the Patent Trial and Appeal Board trials and particularly IPR reviews. These changes should allow amendments, permit live testimony and introduce the Philips standard for claim constructions. They should be made immediately otherwise confidence in the US patent system will continue to plummet. The Director is authorised by the AIA to adjust regulations and so he could act immediately and complete the changes within around three months.
Another high priority is to have institution decision made by another body other than the PTAB. Current regulations are inconsistent with the statute and the Director could and should change them to eliminate the appearance of bias. A separate unit within the PTO should make the institution decision.
Professor Adam Mossoff, Antonin Scalia School of Law George Mason University
Andrei Iancu’s appointment to the US Patent & Trademark Office offers hope that change will come, and it can’t happen soon enough. He will take lead at the USPTO in the midst of a crisis in the patent system and the innovation economy. He cannot address the decade of court decisions and antitrust actions that have undermined and weakened the stable and effective property rights historically provided by the US patent system to innovators; but he can right the ship at the Patent Office by immediately implementing much-needed reform of the PTAB, ending the years of abuse of due process rights of patent owners and the express violations of the rule of law by the previous director and her administration. This stop-gap measure is just the start, though, as another USPTO Director in the future could re-enact the same destructive policies and rules that Director Iancu repealed, and so Congress should pass the STRONGER Patents Act and thus bake into the very structure of the PTAB the checks on its power that should have been put into place in 2011.
Professor John Duffy, the University of Virginia School of Law
I would suggest that the new PTO Director should eliminate broadest reasonable interpretation (BRI) from all post-issuance proceedings. This is, far and away, my top suggested reform for three reasons.
First, the reform would do a lot to change inventors' perception of unfairness at the PTAB. It seems really, really harsh - and more than a bit unfair - for the agency, after it issues a patent, to invalidate the issued patent where there exists a reasonable alternative construction of the claims that would keep the patent valid. The shift toward ordinary principles of interpretation would likely lead to fewer patents being invalidated (and thus fewer inventors upset that all their work is for naught). Yet, importantly, the upheld patents would have reasonable - and reasonably narrow - scope (which will keep overly aggressive patent assertions in check).
As you may know, I don't always side with the pro-inventor side of debates on patent policy. I've been on the vanguard of pushing for a stronger non-obviousness requirement (both in my academic writings and in representing the petitioner in KSR v Teleflex) and for more reasonable venue rules (in representing TC Heartland). On this issue, however, the inventive community is in the right and the agency should really change course.
A second reason for me listing this as #1 is that the agency clearly has the authority to do it—and do it rapidly. In Cuozzo Speed Technologies LLC v Lee the Supreme Court has already stated that "[t]he Patent Office is legally free to accept or reject such policy arguments [favouring ordinary principles of interpretation rather than BRI] on the basis of its own reasoned analysis", and that Congress left the whole issue whether to choose BRI or ordinary principles of interpretation "to the particular expertise of the Patent Office".
Third, and finally, a switch to ordinary claim construction principles will allow the PTO to resume its traditional function of shaping the way patent rights are defined. Many familiar rules of patent claiming were developed not by the courts, but by the agency in the 19th and early 20th centuries. Now, however, the agency has lost that leadership role in defining patent rights because, in almost all instances, the agency purports to follow an approach very different from the judicial approach to construing claims. A return to ordinary principles of interpretation would immediately put the agency into a position of leadership in claim construction because, under fairly standard principles of administrative law, the courts would be required to give the agency deference in its claim constructions. (For a further legal analysis of why this is so, see my paper here.)
Professor Jorge Contreras, the University of Utah College of Law
I think he's a very good choice. He has a great background and reputation, plus a balanced set of litigation experiences and prosecution and licensing perspectives as well. I think his biggest challenge will be responding quickly and sensibly to whatever the Supreme Court decides in Oil States, which could fundamentally affect the structure of the PTAB and its powers, whichever way the court rules.
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