From:
[email protected] (Gregory Aharonian)
Subject: Patent Office Reform Panel Final Report OVERVIEW
Message-ID: <
[email protected]>
Organization: The World Public Access UNIX, Brookline, MA
Date: Thu, 4 Feb 1993 14:29:23 GMT
Lines: 1699
Last year, the Patent Office sponsored a committee to review current
patent practices in the United States. Last fall they issued their final
report, which contains many interesting suggestions, including first to
file, software patents, excessive secrecy orders, international harmonization,
challenging patents, reexamination, excessive legal costs and other issues.
In particular, I know that a few Congressmen are introducing legislation
this spring to switch the U.S. from first-to-invent to first-to-file.
Also, it seems that the Patent Office library does not have any IEEE or
ACM publications, as incredible as that might seem (nor have they deemed to
buy a copy of my directory of much of the government's software, a great
prior art source).
What follows is the text to their final report, split into five files.
A paper version of this text can be obtained from the Patent Office. I
would like to thank Noah Friedman, Toni Emerson, Keith Berrier, Glenn Tenney,
Rahul Dhesi and Jude Wilkinson for all contributing ten dollars to help me
defray the cost of acquiring a $1.50 diskette from the Patent Office with
these files.
Gregory Aharonian
Source Translation & Optimization
==============================================================================
The Advisory Commission on Patent Law Reform
A Report to the Secretary of Commerce
August 1992
Honorable Barbara Hackman Franklin
Secretary of Commerce
Washington, D.C. 20230
Dear Madam Secretary:
We have the great honor to present the report of the Advisory Commission
on Patent Law Reform. The Advisory Commission was established in 1990 by the
former Secretary of Commerce, Robert Mosbacher, to advise him on the state of
and the need for any reform of the patent system of the United States. Over
the past two years the Advisory Commission has diligently studied a myriad of
patent-related issues ranging from key patent harmonization questions to
methods for reducing the cost and complexity associated with modern patent
litigation.
The recommendations conveyed in this report represent the combined
experience, judgment, and expertise of the Commission members while seeking
extensive public input through the use of open meetings, invitations for
public comment, and discussions with bar and industry groups and private
individuals. During its tenure, the Advisory Commission held four public
meetings, published requests for input on proposed topics, and evaluated over
fourteen hundred suggestions on patent-reform-related issues.
Faced with increased foreign competition and the growing importance of
technology in today's economy, the United States must ensure that its patent
system continues to promote the technological and economic growth of the
Nation. Although the current patent system has generally worked well in the
building of this great economic and innovative country, several important
patent areas need to be changed and improved to maximize the benefits provided
by the U.S. patent system to enhance America's competitiveness.
It is our sincere belief that the recommendations proposed in this report
will strengthen the patent system and assist in the attainment of the Nation's
domestic and international goals.
We deeply support your efforts to promote America's competitiveness, and
submit these recommendations for your consideration.
Sincerely,
Chairman Immediate Past Chairman
Douglas B. Comer Harry F. Manbeck, Esq.
Acting Assistant Secretary and Former Assistant Secretary and
Acting Commissioner of Former Commissioner of Patents
Patents and Trademarks and Trademarks
Members of the Advisory Commission
Edward H. Baxter, Esq.
Graham & James
Juan A. Benitez
Life-Stream Diagnostics
Donald R. Dunner, Esq.
Finnegan, Henderson, Farabow, Garrett & Dunner
Howard G.Figueroa
Vice President
Commercial and Industry Relations
International Business Machines Corp.
Ardon B. Judd
Vice President
Dresser Industries, Inc.
William Keefauver, Esq.
Edward L. MacCordy
President
Association of University Technology Managers
Washington University of St. Louis
Keith R. McKennon
Chief Executive Officer
The Dow Chemical Company
Dr. Ronald A. Mitsch
Senior Vice President
3M Research and Development
John E. Pepper
President
Procter and Gamble
Edmund T. Pratt
Chairman of the Board
Pfizer,Inc.
Vincent J. Rauner
Senior Vice President
Motorola, Inc.
Dr. Roland Schmitt
President
Rensselaer Polytechnic Institute
Robert P. Taylor, Esq.
Pillsbury, Madison & Sutro
Douglas W. Wyatt, Esq.
Wyatt, Gerber, Burke & Badie
Commission Alternates
Howard W. Bremer, Esq.
Patent Counsel
Wisconsin Alumni Research Foundation
C. L. Clemente, Esq.
Vice President, General Counsel and Secretary
Pfizer, Inc.
James C. Davis, Jr., Esq.
Edward G. Fiorito, Esq.
Director
Patents and Licensing
Dresser Industries, Inc.
Gary L. Griswold, Esq.
Chief, Intellectual Property Counsel
3M Corporation
Patrick O'Reilly, Esq.
Finnegan, Henderson, Farabow, Garrett & Dunner
Michael J. Pantuliano
Senior Corporate Patent Counsel
Pfizer, Inc.
Roger S. Smith, Esq.
Assistant General Counsel
IBM Corporation
Dr. Richard G. Waterman
General Patent Counsel
The Dow Chemical Company
Patent Department
Richard C. Witte, Esq.
Chief Patent Counsel
Procter & Gamble Company
Executive Secretary for the Commission
Edward R. Kazenske
Executive Assistant to the Commissioner
United States Patent and Trademark Representatives
Liasons to the Advisory Commission
Fred E. McKelvey
Solicitor
James E. Denny
Former Assistant Commissioner of Patents
Edward R. Kubasiewicz
Counselor to the Commissioner
Stephen G. Kunin
Deputy Assistant Commissioner for Patents
Commission Staff
Jeffrey P. Kushan
Paul E. Salmon
Office of Legislation and International Affairs
Additional USPTO Representatives
Michael K. Kirk
Assistant Commissioner for External Affairs
Thomas P. Giammo
Assistant Commissioner for Information Systems
Saul I. Serota
Chairman
Board of Patent Appeals and Interferences
Ian A. Calvert
Vice Chairman
Board of Patent Appeals and Interferences
Margaret Rehder
Director, Congressional Affairs
Charles Van Horn
Patent Policy and Programs Director
Manuel Antonakas
Director
Office of Special Program Examination
Magdelen Greenleif
Special Program Examiner
Robert Garrett
Director, Group 2200 (Special Laws, Administration and Design)
Gerald Goldberg
Director, Group 2300 (Information Processing, Storage and Retrieval)
Gary V. Harkcom
Supervisory Primary Examiner
Art Unit 2301
Special Acknowledgements
Professor Thomas Field
Franklin Pierce Law Center
PATENT SYSTEM OVERVIEW AND BACKGROUND OF COMMISSION
Since Congress enacted the Nation's first patent statute in 1790, the U.S.
patent system has promoted the technological and economic development of the
United States by stimulating innovation and investment in technology. For
over two hundred years, the patent system has functioned to reward inventors
and stimulate technological advances pursuant to its Constitutional grant of
authority "to promote the progress of science and useful arts, by securing for
limited times to authors and inventors the exclusive right to their respective
writings and discoveries".
The basic incentive of the patent system remains as valid today as it did
to the framers of the Constitution. As new technologies emerge, the lure of a
patent not only fosters research and development, but also permits inventors
to attract the necessary capital and resources to bring the fruits of
ingenuity to the marketplace for society's use. As the inventor Abraham
Lincoln once so aptly said: "The patent system added the fuel of interest
to the fire of genius."
Benefits for individual inventors, however, are not the sole function of
the patent system. In exchange for the valuable rights conferred by a patent,
the patent system demands from the inventor a complete disclosure of the
invention. This disclosure promotes additional development and discourages
the unnecessary duplication of research. Thus, the rights of individual
inventors are balanced against the rights of the public. Internationally,
there has been an increased awareness of the importance of adequate and
effective intellectual property protection to the development of domestic
industries, in stimulating foreign investment, and to the enhancement of free
and fair trade. The United States laws have been active, both on a bilateral
and multilateral basis, in pursuing higher levels of patent protection
worldwide. Currently, U.S. negotiators are seeking a conclusion to
international agreements to harmonize the patent laws of different nations
and to establish minimum standards for the acquisition and enforcement of
patent laws worldwide.
This growing awareness has also prompted a series of domestic initiatives
to strengthen the U.S. patent system. Perhaps the most significant legislation
reform has been the creation of the Court of Appeals for the Federal Circuit
in 1982. The Federal Circuit, through its interpretation of the patent laws,
has provided a much-needed clarification of standards for interpreting patent
rights and increasing predictability in the application of the patent laws.
This added certainty, together with several other improvements to the patent
laws, has ushered in an era of increased respect for the rights of inventors
and the patent system as a whole.
BACKGROUND AND MANDATE OF THE ADVISORY COMMISSION ON PATENT LAW REFORM
Because technology is becoming increasingly important in the competitive
global economy, the United States must ensure that its patent system continues
to maximize the incentives for innovation and development. The past success
of the patent system in providing this stimulus is a direct result of its
ability to evolve and adapt to changing times and to new technologies as they
arise. Yet, to evolve, the U.S. patent system must periodically be studied
and refined. Direction and guidance from the public, industry, and the patent
user community serve an important, if not essential, role in shaping the
patent system to ensure that it does continue to meet the Nation's competitive
needs. To this end, advisory groups representing a cross-section of the
corporate and public patent user community have periodically been called
upon to analyze, discuss and devise ways to improve the patent system.
The 1966 Presidential Commission on the Patent System (1966 Commission),
was established by Executive Order No. 11215 on April 8, 1965, to address a
range of issues comparable to the present Commission. The 1966 Commission
extensively studied the U.S. patent system and made a series of
recommendations for significant changes. In its Report, the Commission
emphasized that it was not presenting "a catalogue of discrete remedies", but
instead was offering a comprehensive and coordinated series of suggestions(1).
The Report itself presented thirty-five specific recommendations, classified
in general areas such as patentability of inventions, procedures for amending
and canceling patents, and issues relating to liability and enforcement.
Several features of our current patent system, such as the reexamination
process, internal quality review program, and certain automation efforts,
were an outgrowth of the 1966 Commission recommendations. A number of other
recommendations, however, were not adopted. For example, the Commission made
specific recommendations to adopt a first-to-file system, provide a patent
term of 20 years from filing date, automatically publish patent applications
after a fixed period, and allow either the inventor or the assignee to file
patent applications. It is somewhat ironic that many of these reforms were
later introduced in both Europe and Japan, but not in the United States.
Former Secretary of Commerce, Robert Mosbacher, following the bicentennial
celebrations of the United States patent and copyright laws, established the
Advisory Commission on Patent Law Reform to advise him on the state of and the
need for any reform of the U.S. patent system. In order to evaluate the impact
of suggested changes on different segments of the public, a diverse membership
for the Commission was purposely selected. The Advisory Commission thus
includes representatives from U.S. businesses, both large and small,
universities, the patent bar, the antitrust bar, and the public.
The issues studied by the Advisory Commission range from key harmonization
questions to methods for reducing the cost and complexity associated with
modern patent litigation. For each issue, the Commission sought and received
extensive public input, through the use of open meetings, invitations for
public comment, and informal discussions with bar and industry groups and
private individuals. Thus, the Advisory Commission, during its tenure, held
four public meetings, sought public input on proposed topics(2), and sought to
tincorporate suggestions from the public into its recommendations for reform.
The public input has been essential in not only identifying what problem areas
exist, but in deciding which course of action will be most appropriate for
the United States as a whole to pursue. This public input, along with the
expertise and experience of the members of the Commission, has enabled the
Commission to consider, assess and endorse a series of recommendations for
reform that will ensure that the U.S. patent system continues to promote
technological and economic growth.
OVERVIEW OF RECOMMENDATIONS
SUMMARY
This report identifies improvements that will help to ensure that the
patent system (as it applies to utility patents only) continues to evolve and
serve its role as an incentive for innovation and development in the United
States. The areas addressed by the Commission can be grouped into three
general areas.
The first series of recommendations would conform the U.S. patent system
to a rapidly emerging global model. These changes would further, but remain
contingent upon, the goal of harmonization of the patent systems of the United
States and other countries.
The second series of recommendations is designed to streamline the process
of defining patent rights, and to reduce the cost of this process for all
parties involved. The recommendations in part two of the report thus aim to
decrease transactional costs associated with patent enforcement, reduce
uncertainty in rights of the patent holder and the public, and to provide an
easier route to resolve challenges to the validity of improperly issued
patents.
Finally, the third series of recommendations addresses a number of discrete
issues facing inventors using the patent system. These issues are the subject
of concern in different sectors of the patent user community.
Some of the recommendations of the Commission, if adopted, will effect
fundamental changes to the United States patent system. These reforms are
intended to make the patent system more accessible to all inventors, to
provide certainty in defining and enforcing patent rights, and to facilitate
acquisition and enforcement of patent rights, domestically and abroad, by U.S.
inventors. The Commission's full report should be consulted for a full
discussion and the specific details of each recommendation.
HARMONIZATION-RELATED ISSUES
Although the focus of this Commission is the U.S. patent system, suggestions
advanced by the Commission are intended to influence U.S. policy in the
foreign arena as well as domestically. The Commission agreed to study many
of the issues related to the worldwide harmonization of patent laws as part
of its broader study.
International patent law harmonization efforts began in 1984 under the
auspices of the World Intellectual Property Organization (WIPO), the
specialized United Nations agency responsible for intellectual property
matters. Since that time, WIPO has convened numerous meetings of a
"Committee of Experts on the Harmonization of Certain Provisions in Laws
for the Protection of Inventions" to draft a treaty for a harmonized patent
law. U.S. Government and private sector representatives have actively
participated throughout these discussions. The dominant issue in the domestic
debate is whether the United States should implement a system of awarding
priority of inventions to the first party to file a patent application, rather
than the current U.S. system which awards the patent to the first inventor.
In the development of the draft treaty, work proceeded on the assumption that
the United States could embrace a first-to-file patent system, provided that
the package of provisions found in the treaty was, on balance, of benefit to
the United States. However, without consensus in the United States on the
pivotal first-to-file issue, there is little prospect of patent law
harmonization, because other countries appear unwilling to change their
systems absent acceptance of first-to-file by the United States.
The Commission's recommendations on these harmonization-related issues
outline a carefully balanced approach that should make a first-to-file system
acceptable for the United States. The Commission's approach reflects a
consensus among the various affected groups that should enable the United
States to successfully conclude a meaningful patent harmonization treaty.
Such a treaty would require improvements in the patent systems of other
countries, as well as in the United States, and would benefit U.S. inventors
who rely on patent protection in foreign markets.
Issue -- First-to-File
The Commission recommends adoption of a first-to-file system in the United
States. This recommendation is contingent upon reaching a global patent law
harmonization treaty which, on balance, provides an overall benefit to U.S.
interests. Adoption of the proposed first-to-file system is also contingent
upon inclusion of three specific elements.
First, inventors should be able to file low cost, informal "provisional
applications" to secure their rights to obtain patent protection both
domestically and abroad in a first-to-file system. Under the Commission's
model, inventors would be given up to a full year after filing a provisional
application to satisfy the formal application requirements for a complete
patent application. Provisional applications would increase access to the
patent system for all inventors, particularly those of limited means, by
providing a simple and inexpensive method of preserving priority rights and
by giving the inventor time to explore the commercial opportunities for the
invention.
Second, inventors must be provided with a grace period of one year during
which they will be able to publish without fear of loss of patent rights. This
right is a key element of the patent law harmonization effort, and its
retention in the patent system is considered crucial.
Finally, a limited prior user right should be provided in a U.S.
first-to-file system. This right should be cast as a limited equitable
defense to a claim of infringement that would be available only to those who
had used or made substantial preparation for use of a patented invention prior
to the filing date of a subsequently issued patent. The prior user right
proposed by the Commission seeks to protect the legitimate interests of U.S.
industry without unduly detracting from the exclusivity and marketability of
the patent grant.
The proposed first-to-file system thus would provide a simple and
inexpensive means for establishing priority of invention, while at the same
time making it easier for all inventors to gain access to the patent system.
The new system would reduce the time and expense of obtaining patents by
providing a readily determinable date of priority, and would afford greater
certainty in rights for U.S. inventors.
Issue II -- Patent Term
Under current United States law, patents remain in force for 17 years from
the date of the patent grant. Delays in the grant and expiration of patent
rights are not consistent with the objectives of early disclosure and
dissemination of technical information, and can lead to problems when the
delays in grant are excessive.
In contrast, a patent term of 20 years measured from the filing date of
the first application is rapidly emerging as an international standard. Many
countries have adopted or intend to adopt this term. This term is also
under consideration in the Negotiating Group on Trade Related Aspects of
Intellectual Property of the Uruguay Round of General Agreement on Tariffs
and Trade (GATT) multilateral trade negotiations.
Consistent with the objectives of patent law harmonization, the Commission
recommends that the U.S. patent term be changed to one that will run 20 years
from the date of filing of the patent application. The Commission is confident
that this change will benefit the interests of both the individual U.S.
inventor and the public.
In addition to the recommendation for a 20-year patent term, the Commission
recommends maintaining existing provisions for patent term restoration
for delays due to required Federal regulatory approvals. In view of the
Commission's proposed reform of the patent secrecy order program, patent term
extension for a period of up to five years due to delays incurred by the
imposition of a secrecy order should be authorized.
Issue III -- Publication of Patent Applications
The Commission recommends that patent applications be published at a fixed
time after their filing date. Early publication fairly balances the rights of
patent applicants and of the public, by specifying conditions to accompany
early publication. In addition, provisional protection should be provided to
compensate inventors for unauthorized use of published inventions in the
interval between publication and patent grant.
Automatic publication of applications is common to nearly every other
country in the world. In contrast, the current U.S. system mandates that
patent applications remain confidential until the date of patent grant, at
which time, the application is printed and disseminated to the public.
Automatic publication affords significant benefits to the public, primarily
through early dissemination of the technical information in patent documents.
This enables others to use the information and further the technological
process, and to keep abreast of developments by competitors.
Issue IV -- In re Hilmer
A topic that has gained prominence through the context of patent law
harmonization discussions is the effect on later filed patent applications
of foreign-originated U.S. patents. Under the current "Hilmer" rule, such
patents are effective as prior art only as of their U.S. filing date, and
not their foreign priority dates.
The Commission recommends that, if a successful harmonization treaty is
concluded, the U.S. patents and published U.S. applications be applicable as
prior art references for novelty as of their earlier effective filing date
(foreign priority date), and for both novelty and obviousness as of their U.S.
filing date.
Second, in the event that the U.S. retains the present first-to-invent
system, the Commission recommends preservation of the Hilmer rule as it exists
in the current U.S. patent law.
Finally, in the event that the U.S. implements automatic publication of
patent applications with or without harmonization, the Commission recommends
that the date of publication serve as the equivalent to the date of issuance
for purposes of availability of the published application as prior art. Thus,
the changes proposed by the Commission regarding the Hilmer rule are made
contingent on U.S. implementing a successfully concluded harmonization treaty.
PATENT ENFORCEMENT-RELATED ISSUES
The value of patent rights stems ultimately from the grant of exclusive
rights to make, sell or use the patented invention. Realization of that value,
therefore, is contingent upon the ability of a patent holder to enforce those
exclusive rights. Exercising these rights requires participation by the
Federal Government, through the forum of the judiciary.
Under the existing system of civil justice in the United States, enforcement
of patent rights has become expensive and time consuming. The problems of
modern civil litigation, while not being unique to patent litigation, do pose
unique problems for both patent rights holders and the public. If there is no
cost-effective means for enforcing the right, there is a direct reduction, if
not elimination, of the value of the patent.
Likewise, the public's right to utilize technology not subject to patent
rights must not be impeded. The well-balanced right of a patent grant must
not be disturbed so as to provide patent owners with excessive rights made
possible through an inefficient process of enforcement.
In view of these concerns, the Commission has studied the process of
defining patent rights in the United States, and proposes reform at several
levels to make this process easier, less complicated, and less expensive. The
recommendations offered address the direct question of cost and complexity
involved in patent enforcement, with the objective of reducing transactional
costs of defining patent rights. Similarly, ensuring that an inexpensive,
rapid process for challenging the validity of patents where one has possession
of evidence to the contrary has led the Commission to recommend reform of the
reexamination system. Thus, the theme for this set of issues is to ensure
that transactional costs do not prejudice the rights of patentees or the
rights of the public through the process of patent enforcement.
Issue V -- Reduction of the Cost and Complexity of Patent Enforcement
The Commission proposes implementation of measures to reduce transactional
costs in modern patent litigation. The primary theme for these recommendations
is greater control over patent litigation without creation of additional
burdens for the judiciary.
Specific proposals pertain to expanded use of differential case management,
and include such elements as
- the early setting of a firm trial date,
- discovery case management,
- reform of discovery practice including mandatory disclosure of
core information, and
- mandatory mediation to encourage early settlement and simplification
of patent-related disputes.
Greater civility between parties and attorneys during litigation will go
a long way toward simplifying the process and reducing its costs. Furthermore,
in conducting patent trials, the Commission recommends greater control over
the use of experts to restrict their role to factual experts, rather than
advocates, and urges careful study of the use of jury trials in patent
litigation.
To avoid creating additional burdens on the judiciary, the Commission
recommends broader use of magistrates or special masters to assist in pretrial
activities, as well as filling existing judicial vacancies more promptly
throughout the Federal district court system. Finally, any realistic solution
to the problems in scheduling and the conduct of modern civil litigation must
include a means for lessening the adverse impact of criminal trials due to the
requirements of the Speedy Trial Act on conduct of civil litigation.
The Commission also recommends consideration and use of other means of
resolving patent disputes. For example, the Commission urges greater awareness
and use of alternate dispute resolution to resolve patent disputes, as well
as consideration of special procedures to conduct patent litigation. The
Commission urges that three proposals be studied further, specifically,
- designating specialized patent courts,
- circuit sharing of judges with experience in patent litigation, and
- adoption of a "small claims" procedure for patent cases in Federal
courts.
The Commission also encourages further study of the nature of patent cases
to identify specific features which differ from other forms of complex civil
litigation.
Finally, to eliminate excessive transactional costs, the Commission
recommends removing bases for challenging patent validity that do not provide
a corresponding public benefit. In particular, the Commission recommends that
the best mode requirement of 35 U.S.C. 112 be eliminated, and that the "on
sale" bar of 35 U.S.C. 102(b) be restricted to actual completed sales,
measured in terms of completed sale plus delivery, rather than mere offers
to sell.
Issue VI -- Grounds for Holding Patents Unenforceable
The Commission reaffirms the necessity of the defense of unenforceability
to ensure open and fair dealing between the U.S. Patent and Trademark Office
(USPTO) and patent applicants, but recommends that certain specific concerns
be addressed.
With respect to inequitable conduct, the Commission recommends retention
of the defense of unenforceability to remedy findings of inequitable conduct,
but encourages courts to adopt a more objective standard to measure conduct of
patent applicants. In particular, the Commission urges courts to take note of
the recently changed standards for measuring conduct as embodied in 37CFR1.56.
In this regard, the Commission encourages courts to employ a more objective
standard for measuring materiality of information withheld during prosecution,
and to permit the presumption that obligations for disclosure are satisfied if
the required information is actually considered by the examiner in a timely
manner, regardless of how the information came to the attention of the
examiner before issuance of the patent.
The Commission also recommends that courts provide flexibility in
implementation of the new definition of materiality to ensure that rights
of parties established prior to the new definition are not adversely impacted
during litigation by the mere fact of a changed standard of conduct before the
USPTO.
Finally, the Commission proposes a legislative clarification of the
significance of possession of intellectual property rights in the context
of antitrust proceedings. Specifically, such rights should not give rise
to a per se presumption of market power.
Issue VII -- Reexamination
The Commission recommends that the basis for and scope of reexamination be
expanded to include compliance with all aspects of 35 U.S.C. 112, except best
mode. This will ensure that all significant issues related to patent validity
that are commonly raised and considered during the original prosecution may be
addressed in a subsequent reexamination of the patent.
The Commission also recommends providing third parties with more
opportunities for substantive participation during the reexamination
proceeding. The objective of the Commission in this regard is to build
confidence in the reexamination process so that third parties will be inclined
to raise patent challenges in this forum rather than through litigation.
The primary benefits of this will be reduced costs of resolution of patent
validity issues, and a more rapid determination of rights. However, the
Commission recommends that the increased third party participation be
implemented through a balanced approach to ensure that the reexamination
process fulfills its intended role.
Issue VIII -- Licensee Challenges to Patent Validity
The Commission proposes that legislation be enacted to improve the balance
between the rights of a licensee to challenge the validity of a licensed
patent and the right of the patent owner to enforce the licensed patent. Such
legislation should permit the parties to agree to contract provisions which do
not conflict with the basic policy objectives articulated in "Lear v. Adkins"
that permits licensees to challenge patent validity.
Issue IX -- Reissue
The Commission recommends elimination of the concept of error as a
condition for reissue, and proposes eliminating the prohibition in reissue
practice against recapturing subject matter surrendered during original
prosecution. In addition, the Commission proposes a one-year limit on
broadening of claims through a reissue proceeding.
Issue X -- Federal Protection for Trade Secrets
The Commission does not recommend enactment of a Federal statutory
protection for trade secrets. The Commission endorses trade secret protection
under State laws with the adoption by all States of the Uniform Trade Secrets
Act.
UNIQUE ISSUES FACING THE PATENT SYSTEM
A number of issues were brought to the attention of the Advisory Commission
independent of the questions of harmonization or efficiency of defining patent
rights. These issues represent areas of significant public interest, or areas
which have served to generate interest in the past. The Commission studied
these issues, and has reached a general consensus on the recommendations
proposed.
Issue XI -- Protection of Computer-Related Inventions
The public expressed significant interest on the issue of protection of
computer program-related inventions. A number of divergent perspectives were
offered by the public, and considered by the Commission, as to how best to
protect this key area of U.S. competitiveness .
After thoroughly considering the public comment, analyzing the options
offered, and evaluating the potential impact of such options, the Commission
concludes that the current framework of laws available to protect computer
program-related inventions should be maintained.
On the procedural level, however, the Commission believes that refinements
can be made to the patent examination process for this class of inventions
to ensure high quality examination. The specific recommendations of the
Commission include improvements to building and maintaining searchable prior
art collections, classification of patents in this field, and hiring and
training of patent examiners for this technology. To address concerns
expressed by many public respondents, the Commission also recommends that
procedures for citation of prior art to the USPTO by the public be publicized
and expanded, and that a trial program be established to assess the merits
of such an expanded procedure.
Finally, the Commission endorses and supports efforts to promote protection
for such inventions from other countries that do not already provide it.
Issue XII -- Secrecy Order Program
The Commission is cognizant of the changing world order, changes in how
information and new technologies are disseminated, and the subsequent
commercialization of new technologies in markets previously inaccessible to
U.S. inventors. As part of its survey of the current U.S. patent system, the
Commission assessed how the existing secrecy order program functions in the
modern international commercial market, and concludes that there are several
aspects of this system that require reform.
Secrecy orders bar the grant of a United States patent if they are imposed
on a pending patent application. This has the effect not only of depriving
the inventor of exclusive rights within the United States, but also of such
rights abroad, as an inventor who has received a secrecy order on an
application cannot obtain patent rights abroad. The USPTO does not determine
if the subject matter of the patent application is of a nature that would
warrant imposition of a secrecy order; this is the duty of various
governmental entities charged with administration of the National Security.
The Commission has determined that the administration of the secrecy order
program has become inefficient, particularly with respect to the process of
determining that a secrecy order should be imposed, and the conditions under
which orders should be rescinded. Furthermore, while recognizing the
constraints of possible reform of the system, the Commission was alarmed at
the volume of secrecy orders issuing to bar patenting of privately owned
technology.
Accordingly, the Commission recommends reform of the secrecy order program
to streamline the process of review and rescission of secrecy orders, and to
implement measures to ensure greater consistency in application of standards
for imposing secrecy orders. To accomplish these goals, the Commission
recommends placing the authority for review of patent applications for secrecy
orders into a single body, which will ensure that standards remain consistent
between the export control laws and the secrecy order program. Finally, the
Commission favors certain procedural changes to assist patent applicants in
seeking review of secrecy orders, and to prevent unnecessary secrecy orders
from continuing in force.
Issue XIII -- Assignee Filing
In many other countries, the owner of an invention has the direct authority
to file for and obtain patent protection. This flexibility often avoids
unnecessary delays in filing patent applications, which thereby avoids
unnecessary loss of priority rights to inventions. Safeguards are common in
such systems to avoid abuse of inventor rights, and to date, these safeguards
have proved sufficient.
The Commission therefore recommends increasing the flexibility of owners
of new technology to obtain patent protection by permitting assignees of
inventions to file on their own behalf. This recommendation is contingent
upon the inclusion of the appropriate safeguards to prevent abuse of inventor
rights. The recommendations offered would make filing of patent applications
easier - something which is desirable in either a first-to-file system or a
first-to-invent system. As such, the Commission endorses adoption of assignee
filing independent of successful conclusion of a patent law harmonization
treaty.
Issue XIV -- Deferred Examination
Deferred examination systems are used in some countries to allow applicants
the discretion to defer the examination process of a filed patent application.
This is not consistent with the current examination system in place in the
United States, which ensures a rapid determination of rights to technology.
The Commission views this rapid determination of rights to be a significant
benefit, both to inventors and to the public, and for this reason, urges that
it continue.
The Commission therefore recommends retention of the current system of
automatic examination of patent applications as they are filed. The Commission
unanimously opposes a system which would give the patent applicant discretion
to defer examination of patent applications. Furthermore, in the event
that automatic publication of applications is implemented, the Commission
recommends that an accelerated examination procedure be provided to those
applicants or third parties desiring it.
Issue XV -- U.S. Patent and Trademark Office Funding
The Commission proposes a fair and equitable allocation of the funding
burden of the USPTO by recommending public funding for those USPTO activities
that particularly benefit the public, and a guarantee that user funds be used
solely in support of the examination and issuance of patents and trademark
registrations. The Commission further recommends that an advisory board be
established to assure efficient operation of the USPTO.
The Commission also recommends that the small entity subsidy be continued
as a matter of public policy, but urges that it be publicly funded, rather
than through use of revenues from large entity fees, and that it should not
be extended to maintenance fees. Furthermore, the small entity definition
should be periodically reviewed to ensure that benefits are provided to only
those users needing the subsidy.
RECOMMENDATIONS
I. FIRST-TO-FILE
Recommendation I-A
Change the U.S. patent system to award patents to the first party to file
a patent application, as opposed to the first party to invent, as a necessary
part of a global harmonization package which provides, on the whole,
advantages to U.S. inventors, subject to the following conditions:
(i) adoption of a provisional patent application procedure to facilitate
early filing at reduced cost, allowing the inventor to claim a right of
priority for a later-filed complete application;
(ii) provision of a grace period during which public disclosure of an
invention by an inventor would not affect the patentability of that invention
if claimed in an application filed by that inventor within 12 months of the
disclosure; and
(iii) establishment of a personal right for a third party who uses or makes
substantial preparation for use of an invention in good faith, before the
filing date of an application on which a patent is granted to another, to
continue that use under certain conditions ("prior user right").
II. PATENT TERM
Recommendation II-A
Change the term of patents from 17 years from the date of grant to a term
of 20 years from the date of filing of the complete patent application as part
of a first-to-file system.
Recommendation II-B
Where a patent is granted on an application which invokes the benefit of
one or more earlier domestic complete applications, the term of the patent
shall be counted from the filing date of the earliest-filed complete
application invoked in the subsequent application.
Recommendation II-C
Address exceptional circumstances affecting the patent term in the
following manner:
(i) provide no extensions for administrative delays, such as appeals;
however, such proceedings should be handled expeditiously;
(ii) maintain existing provisions for patent term restoration under
35 U.S.C. 156 for delays due to the Federal regulatory approval process; and
(iii) permit extension of the term of any patent whose grant has been delayed
by the imposition of a secrecy order for a period equal to the period of the
delay, up to a maximum of five years, and amend 35 U.S.C. 183 to provide
compensation for the period of delay, if any, which exceeds five years.
III. PUBLICATION OF PATENT APPLICATIONS
Recommendation III-A
(i) Publish patent applications within 24 months from the earliest priority
date claimed by the applicant, including the date of filing a provisional
application.
(ii) Publication should take the form of laying open to public inspection of
the specification and claims of the patent application, as well as the search
report when available, and should be accompanied by publication of an
abbreviated format of the application.
(iii) Give patent applicants a claim for compensation from an infringer of
published claims which later issue in a patent where the infringer has been
given written notice during the period after publication; the claim will
entitle the patent owner to compensation for the period from the date of
actual notice until issuance of the patent.
(iv) Permit applicants, through the payment of a special fee, to request an
accelerated examination by the USPTO and/or publication of the application
prior to the 24th month.
(v) Urge the USPTO to issue first actions on the merits on patent
applications in time to permit applicants to decide, with that knowledge,
whether to abandon their applications without publication or to proceed
with prosecution of their applications.
IV. IN RE HILMER
Recommendation IV-A
(i) If the U.S. retains the present first-to-invent system, the "Hilmer
rule" should be maintained "as is". The U.S. should only change the "Hilmer
rule" in the context of a global harmonization package.
(ii) If first-to-file is adopted as part of harmonization, U.S. patents and
published U.S. applications should be applicable as prior art references for
novelty as of their earliest effective filing date (foreign priority date),
and for both novelty and obviousness as of their U.S. filing date (including
filing date of provisional application).
(iii) Whether or not the U.S. adopts a first-to-file system, if publication
of applications is adopted, the applicability of a prior-filed U.S.
application as prior art should occur when the U.S. application either issues
as a U.S. patent, or is published, whichever occurs first. The earliest U.S.
filing date should be the effective date for prior art purposes.
V. REDUCTION OF THE COST AND COMPLEXITY OF PATENT ENFORCEMENT
Recommendation V)A
(i) Encourage implementation by the district courts of differentiated case
management plans for cases raising issues of patent validity or infringement,
where that plan includes:
(a) the early setting of a firm trial date;
(b) use of a discovery-case management system that requires the court,
either through direct intervention of the trial judge, use of a
magistrate, or through appointment of a "special master" pursuant
to Rule 52 of the Federal Rules of Civil Procedure, to exhibit
careful and deliberate monitoring over discovery so as to encourage
the limiting of issues by the parties, the range of issues
discoverable, and the number and extent of discovery requests;
(c) strict deadlines for filing, hearing and deciding
discovery-related motions;
(d) use of a mandatory disclosure procedure for core information
having the following elements:
(1) an automatic protective order that will cover any information
provided under the core disclosure requirements which the
parties designate, and which the court shall issue prior to
the disclosure of such designated core information;
(2) a short time frame to comply with the mandated disclosure
requirement;
(3) the use of Rule 11 sanctions for non-compliance with the
mandated disclosure provisions; and
(4) a pre-trial conference to define the remaining scope of
discovery, to finalize the pleadings, and to limit issues
pending in the action to take place shortly after the
mandated disclosure has been completed;
where the information to be disclosed by each party is established
by the Court according to preestablished guidelines, and shall not be subject
to change through actions of the parties or the court;
(e) use of a mandatory mediation conference to resolve some or all
issues pending in the action, conducted not by the trial judge but
by a person trained in the conduct of mediation, to be held at a
time before the final pre-trial conference;
(ii) Provide formal recommendations to the advisory groups of each district
on key provisions for inclusion in the district's civil justice expense and
delay reduction plan.
(iii) Implement changes to practice in a uniform and consistent manner among
the Federal district courts.
Recommendation V-B
Make broad use of magistrates or Special Masters pursuant to Rule 52 in
pretrial matters such as discovery and motion practice, provided that such use
does not detract or displace the proper role of the trial judge in the
litigation.
Recommendation V-C
Find a solution to address problems created by accommodation of the need
for speedy criminal trials which does not disrupt the conduct of complex cases
such as patent cases.
Recommendation V-D
(i) Reduce the use of "experts" to the giving of testimony in areas where
expertise is required and diminish their role as advocates.
(ii) Prohibit contingent fees for expert witnesses, and require the
disclosure of all fees paid to experts.
Recommendation V-E
(i) Promote greater awareness and use of alternative dispute resolution
(ADR) through mandatory law school programs and through continuing education
programs.
(ii) Require courts in each case to identify issues suitable for resolution
through voluntary ADR and to assist the parties in designing an appropriate
ADR process for those issues.
Recommendation V-F
Promote study and consideration of special procedures or systems for
conducting patent litigation and enforcing patent rights, including:
(i) restriction of patent jurisdiction to one designated court per circuit;
(ii) designation of judges having special expertise in conducting patent
litigation in each judicial district and provision of flexible authority over
judicial assignments to permit such judges to hear patent cases throughout
each district where necessary; and
(iii) implementation of a "small claims" procedure for resolving patent
disputes in existing Federal district courts.
Recommendation V-G
Remove challenges to patent validity which create a disproportionate
effect on costs and delays during patent litigation without providing a
corresponding public benefit, specifically:
(i) eliminate the "best mode" requirement of 35 U.S.C. 112, first paragraph;
and
(ii) restrict the application of the "on sale" bar to patentability of
35 U.S.C. 102(b) to completed sales, where a completed sale is defined as sale
plus actual delivery, rather than extending to merely an offer to sell.
Recommendation V-H
Encourage opposing trial counsel to respect appropriate standards for
civility during litigation, including respect of the role of the attorney as
an officer of the court, and through cooperation not inconsistent with the
role of the attorney as an advocate of his or her client.
Recommendation V-I
Gather statistically valid data from a representative sample of the Federal
judicial district courts to permit determination as to whether or not the
trial of patent cases is substantially different from the trial of other
complex cases and, if different, in what ways.
Recommendation V-J
Initiate public debate on the appropriateness of the use of juries to
resolve questions of patent validity or infringement in litigation, and in
particular:
(i) the applicability of the VIIth Amendment of the U.S. Constitution to the
right to have a jury decide issues of infringement or validity; and
(ii) the extent to which a "complexity exception" can and should be applied
to deny a demand for a jury trial.
VI. GROUNDS FOR HOLDING PATENTS UNENFORCEABLE
Recommendation VI-A
Clarify the nature of conduct by a patent rights holder that justifies the
use by a defendant to a patent infringement action of the equitable defense of
unenforceability consistent with the following guidelines:
(i) continue to hold unenforceable patents in which the applicant, its
attorney or its representative during the prosecution of the application
for that patent before the Patent and Trademark Office failed to meet the
appropriate requirements for disclosure of information within their knowledge
having to do with the allowability of presented claims;
(ii) implement a more objective standard for materiality of information than
one based upon the perspective of a "reasonable examiner"; and
(iii) create a presumption that the standard of disclosure is satisfied if
required information is before the examiner in a timely manner, regardless of
how that information came to the attention of the examiner.
Recommendation VI-B
Changes to the standards for judging inequitable conduct before the United
States Patent and Trademark Office should not prejudice the rights of patent
rights holders, so that in any action to enforce a patent which was granted
prior to the effective date of such changes, the patent rights holder should
be given the choice of being judged by either the standard used before, or the
standard employed after the amendment.
Recommendation VI-C
Enact legislation which establishes that possession of intellectual
property rights should not give rise to a per se presumption of market
power, in the context of an antitrust proceeding.
VII. REEXAMINATION
Recommendation VII-A
The basis for and scope of reexamination should include compliance with
all aspects of 35 U.S.C. 112 except for best mode.
Recommendation VII-B
The order for reexamination and the first office action should be
consolidated and any third party requester should be permitted, within strict
time deadlines, to submit written comments on the patent owner's response to
the first office action. The third party's comments should be limited to
issues covered by the examiner's office action and the patent owner's
response.
Recommendation VII-C
A third party requester should have the right to participate in any
examiner interview initiated by the patent owner or by the examiner. Such
an interview should be conducted under controlled conditions before the
examiner and a senior USPTO representative. The third party should not
be permitted to initiate interviews.
Recommendation VII-D
A third party requester should have the right to submit written comments
at the close of prosecution of a patent under reexamination. Such comments,
which should be limited to issues raised during ex parte reexamination, should
be considered by the examiner before any appeal by the patent owner of an
adverse decision and before issuance of a Notice of Intent to Issue a
Reexamination Certificate. If the third party's comments cause the examiner
to change his decision, the examiner should be permitted to reopen prosecution
to the extent of issuing a supplemental final action to which the patent owner
should be entitled a single response under 37 C.F.R. 1.116. If, in the single
response, the patent owner makes any claim amendment, the third party should
be permitted to submit comments limited to the claim amendments. Thereafter
no further comments should be received from either the patent owner or a third
party. The third party comments should be a part of the record considered on
any appeal by the patent owner or the third party.
Recommendation VII-E
A third party who requested and participated in a reexamination should be
permitted to appeal any adverse decision of the Examiner to the Board of
Patent Appeals and Interferences and to the Federal Circuit. The third party
and the patent owner should be permitted to participate in any appeal by the
other. The third party's appeal to the Board and the Federal Circuit should
be limited, respectively, to issues raised in the third party's comments after
close of prosecution and to issues dealt with by the Board. A third party's
right to appeal should be conditioned upon filing of a written waiver by the
third party of any right to assert, in any forum, the invalidity of any claim
determined to be patentable on appeal on any ground which the third party
raised or could have raised during the reexamination.
Recommendation VII-F
A reexamination should not be initiated or continued on any patent claim
held valid in an entered judgment, or its equivalent, of a district court in
an action in which the requesting party or its privies raised or could have
raised the same issues.
VIII. LICENSEE CHALLENGES TO PATENT VALIDITY
Recommendation VIII-A
Enact legislation to improve the balance between the right of a licensee
to challenge the validity of a licensed patent, in accordance with the holding
in Lear v. Adkins, and the right of the patent owner to enforce the licensed
patent by:
(i) Permitting the parties to agree that either party may terminate the
agreement if the licensee has asserted in a court action that the patent is
invalid; and
(ii) Permitting the parties to agree that the licensee will be required to
continue performance in accordance with the agreement until either the
agreement is terminated or a final determination has been made that the
claims practiced by the licensee are invalid.
IX. REISSUE
Recommendation IX-A
The concept of "error" as a required condition for reissue should be
eliminated.
Recommendation IX-B
The prohibition in reissue practice against "recapturing" subject matter
surrendered during the original prosecution should be eliminated.
Recommendation IX-C
The right to seek by reissue claims broader than originally issued should
be limited to one year following grant of the original patent.
X. FEDERAL PROTECTION FOR TRADE SECRETS
Recommendation X-A
Protection of trade secrets is adequate under state laws.
XI. PROTECTION OF COMPUTER-RELATED INVENTIONS
Recommendation XI-A
The current framework of laws protecting computer program-related
inventions should be maintained.
Recommendation XI-B
(i) Patent protection should continue to be available for computer
program-related inventions.
(ii) No special test or interpretation of the law should be applied to
computer program-related patent applications.
(iii) The patent examination process should be improved as specified in
Recommendations XI-E through XI-H.
Recommendation XI-C
No change should be made in the U.S. patent laws or in U.S. patent policy
that would substantively or procedurally disadvantage U.S. inventors compared
to their international competitors.
Recommendation XI-D
The U.S. Government should continue to place emphasis in its negotiations
with other countries or multinational bodies that categorically do not grant
patents for computer program-related inventions to encourage modification of
their systems to allow the grant of such patents.
Recommendation XI-E
The USPTO should assemble a larger, more complete non-patent art collection,
and provide its examiners better access to the non*patent prior art in the
computer program-related technologies.
Recommendation XI-F
The USPTO should make further efforts to classify the patent and non-patent
computer program-related art to maximize the ability to search inventions in
this field.
Recommendation XI-G
(i) The USPTO should train patent examiners in the computer program-related
technologies to raise and maintain their level of technical expertise.
(ii) The USPTO should recruit, as examiners, individuals who are experienced
in this technology, and take special action to retain experienced
examiners.
Recommendation XI-H
(i) Encourage the public to use the citation procedure under 35 U.S.C. 301
and 37 C.F.R. 1.501 to cite to the USPTO patents or printed publications
pertinent to any issued patent. The USPTO should use non-patent
citations, where possible, to expand the collection of art available
for use in examining pending applications.
(ii) Encourage the public to use the "Protest proceeding" under 37 C.F.R.
1.291 and the "Public use proceeding" under 37 C.F.R. 1.292 for pending
applications and instruct the public how to become aware of some pending
U.S. applications through a database search of foreign applications or
through published information on reissue applications. Furthermore,
encourage the public to use the "Protest Proceeding" under 37 C.F.R.
1.291 and the "Public use proceeding" under 37 C.F.R. 1.292 if the U.S.
adopts a system that provides for publication of pending applications.
(iii) The Commissioner should implement a study and/or program under 35
U.S.C. 6 that expands the citation of prior art under 35 U.S.C. 301
and 37 C.F.R. 1.501 to include the citation of not only patents or
printed publications but also other material evidencing a verifiable
date of prior public use or sale which is shown to be pertinent to an
issued patent. Such a study and/or program should be limited to the
computer program-related arts, if possible, for a limited period of
time. Such a study should be used to determine a) the effectiveness
and usefulness of the citation of material evidencing a verifiable date
of a prior public use or sale, b) whether this new procedure should be
expanded to include other areas of technology, and c) whether a
statutory rule change should be made to make this a permanent procedure
for all technologies.
(iv) The USPTO should adjust its fee schedule, as it deems appropriate, for
the citation of patents or printed publications or other material
evidencing a verifiable date of prior public use or sale. Any such fee
should discourage the public from submitting non-relevant information,
but should not have the effect of discouraging the public from
submitting pertinent information which may be used by the USPTO in its
examination of patent applications. Such submissions assist the USPTO
in fulfilling its mission of issuing valid and enforceable patents.
(v) The USPTO should establish submission guidelines to help ensure the
relevancy of the material being submitted and to control the amount of
material being submitted including, but not limited to, the following:
a) the minimum prima facie standard that the material being submitted
must meet; b) the minimum requirement needed to establish a verifiable
date of prior public use or sale, e.g., the requirement of declarations,
affidavits, and/or identification of at least one party having knowledge
of the evidence; c) the requirement of a precise explanation of relevance
of the evidence to at least one claim of a patent; d) a limitation on
the number of pages submitted; and e) a minimal level of evaluation by
the USPTO of the submitted material to ensure that it meets the
submission guidelines as established by the USPTO.
(vi) The USPTO should encourage private efforts directed towards assimilating
and organizing information with respect to prior public use or sale of
technological advances. The USPTO should initiate studies with the
private sector in determining other forms and mediums of information
useful to the USPTO in expanding its collection of art for examining
pending applications.
Recommendation XI-I
Encourage implementation of a system allowing for early publication of
pending applications, which would be particularly beneficial for faster-moving
technologies, in accordance with any harmonization efforts that may be
undertaken.
Recommendation XI-J
The USPTO's development of the Patent Application Management (PAM) System
for electronic filing and processing of patent applications is strongly
supported.
XII. SECRECY ORDER PROGRAM
Recommendation XII-A
(i) Discontinue the use of secrecy orders in patent applications to implement
the export control laws, and amend 35 U.S.C. 181 to permit the imposition
of secrecy orders only in patent applications that contain either:
(a) information that is or can be classified with then-current Federal
security regulations; or
(b) previously unpublished information, the publication of which would
be reasonably expected to cause damage to the National Security.
(ii) If such use is not discontinued, amend 35 U.S.C. 181 to require that
secrecy orders may be imposed for export control purposes on inventions
in which the Federal Government does not have a property interest only
upon recommendation from the government agencies responsible for
administration of the export control laws.
Recommendation XII-B
If the secrecy order program continues to function as a means to implement
the export control laws, amend 35 U.S.C. 181:
(i) to provide that, for the purposes of Section 181, the Federal Government
has a property interest in an invention only if the invention was made
in the performance of work under a contract with the Federal Government
which establishes such interests; and
(ii) to specify that no secrecy order shall be renewed beyond the fifth year
unless the head of any agency requesting such renewal first makes a
finding that, based on his or her personal investigation, adequate
grounds exist for continuation of the order.
Recommendation XII-C
Agencies responsible for the review of patent applications for secrecy
order purposes should coordinate their reviews on a regular basis to ensure
consistent interpretation and application of the orders and regulations
defining security requirements, both for the imposition of secrecy orders and
for consideration of petitions to rescind such orders.
Recommendation XII-D
Petitions for rescission should be reviewed at a higher agency level than
that which requested the order.
XIII. ASSIGNEE FILING
Recommendation XIII-A
The owner or owners of full legal title to an invention should be permitted
to file a patent application on the invention, to prosecute the application,
and to receive any resulting patent thereon, provided:
(i) within such time after filing the application as the Commissioner
prescribes, the owner(s) submits to the USPTO a declaration which
(a) identifies the application by title and filing date;
(b) provides the name and last known address of the inventor or
inventors of the claimed invention;
(c) states that the identified inventor(s) is/are believed by the
applicant to be the original and first inventor(s) of the claimed
invention;
(d) states that the applicant(s) owns or is entitled to ownership
of full legal title to the claimed invention;
(e) acknowledges the duty of disclosure to the USPTO of information
material to examination of the application as set forth in the
USPTO rules; and
(f) certifies that copies of the application as filed and the
applicant's declaration were provided to, or sent to the last
known address of, each named inventor, and provides the date
thereof; and
(ii) prior to payment of the issue fee for any patent issuing from
the application or relying upon the application for priority,
the applicant(s) either has:
(a) filed in the USPTO an assignment by each inventor to the
applicant(s) of full legal title to the specific invention
disclosed in the application and an oath or declaration by
each inventor meeting the requirements of 37 C.F.R. 1.63 or
(b) has received a ruling from the Commissioner approving issuance
without inventor(s) participation under conditions comparable
to those set forth in 35 U.S.C. 117 or 118.
Recommendation XIII-B
The name of the inventor should be printed on the face of any patent issued
on an application filed by an owner-applicant.
Recommendation XIII-C
No examination of an application filed by an owner-applicant should be
conducted until after receipt of the owner-applicant's declaration.
XIV. DEFERRED EXAMINATION
Recommendation XIV-A
(i) Do not enact provisions to permit a patent applicant to voluntarily
defer examination of a filed patent application.
(ii) Accelerated examination should be available, with the payment of a
special fee, upon the request of the patent applicant or third parties.
XV. U.S. PATENT AND TRADEMARK OFFICE FUNDING
Recommendation XV-A
The USPTO should be funded by a combination of fees and public funds. The
fees should be adjusted annually to recover the projected, pro rata portion of
the USPTO Budget expended in direct support of the examination and issuance of
patents and trademark registrations. Other USPTO costs, funded by public
funds, would include automation, public information activities, public search
facilities, and legislative and international activities, and the like.
Recommendation XV-B
User fees should be guaranteed solely for use by the USPTO in support of
the examination and issuance of patents and trademark registrations.
Recommendation XV-C
An advisory board, comprising representatives of users and reporting
annually to Congress, should be established to advise the Administration on
fee increases and to assure responsiveness by and efficient and effective
operation of the USPTO.
Recommendation XV-D
A small entity subsidy should be continued as a matter of public policy.
Recommendation XV-E
A small entity subsidy should be funded by public funds.
Recommendation XV-F
The Commissioner should periodically reevaluate the definition of a small
entity used by the USPTO for subsidy eligibility to ensure that the program as
applied is benefiting only those intended by the policy behind the program.
Recommendation XV-G
A small entity subsidy should not apply to maintenance fees.
Recommendation XV-H
USPTO funding should be maintained at a level that supports an 18-month
pendency of applications, provided that the quality of examination is not
compromised.
Recommendation XV-I
Publication of pending patent applications should be funded by public
funds, if publication of applications is adopted.
NOTES FOR OVERVIEW
1 "To Promote the Progress of ... Useful Arts" In an Age of Exploding
Technology , Report of the President's Commission on the Patent System
(Superintendent of Documents, U.S. Government Printing Office 1966)
2 See, e.g. Request for Public Comment, Advisory Commission on Patent
Law Reform, 56 Fed.Reg. 22702 (1991).
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(note: the appendices and the main text contain a variety of graphs.
To see these graphs, write to the Patent Office for a copy of the
printed version of this report).
APPENDICES
Appendix A -- The Patent Application Management (PAM) System
I. Introduction
A. Current systems and procedures
The manual procedures and automated systems of the U.S. Patent and
Trademark Office (USPTO) upon which patent application operations now depend
are costly and becoming obsolete. These procedures and systems were developed
in the 1970s and earlier, and are not flexible or powerful enough to provide
needed improvements. The USPTO will likely become more and more vulnerable to
disruptions in operations and related problems if these current systems and
procedures are not replaced.
B. Congressional mandate for USPTO modernization
Public Law 96-517 directed the USPTO to prepare a plan for modernizing its
patent examination, issuance, and dissemination operations. The USPTO has
successfully completed much of this modernization by developing other
Automated Patent System (APS) subsystems. The APS Examiner Search subsystem
automated the search and dissemination of electronic copies of allowed
patents. Personal computers and telecommunications networks have been
installed and are now being successfully used to satisfy many requirements
of the APS Office Automation subsystem. PAM is the next major step in the
USPTO's on-going modernization.
C. PAM is the next step in patent application modernization
Automation has permeated the entire patent community. Most patent
applications are now being prepared using computers that produce an electronic
copy of the data and could be used to process and examine the application, as
well as to photocompose and disseminate allowed patents. The USPTO and patent
applicants now use computers to generate and track the correspondence and
other application processing actions. Since applicant entry and USPTO
processing of application data are now partially automated, PAM is the logical
next step towards total automation. Electronic filing and processing offers
the USPTO and patent applicants ways to reduce redundancy, errors, and delays
in the handling of paper applications.
II. Overview of the PAM System
The objective of the PAM project is to obtain an automated information
system that will allow the USPTO to accept and process patent applications
electronically. The PAM system will supplement and eventually replace the
paper applications and manual procedures that the USPTO has used since its
inception.
A. Requirements
The following table lists and describes the ten PAM functions, and the
current operations or status of each. The functions generally correspond to
the work flow of patent applications.
B. Boundaries and Conditions
The PAM target architecture includes reliance on the USPTO infrastructure
systems such as existing mainframe computers and peripherals, networks, and
personal computers. PAM will provide interfaces to existing systems such as
the APS Examiner Search subsystem and to external modules such as the patent
application Authoring Program now being developed. PAM security and
maintenance functions will be handled by employing proven standards and
techniques. Alternative boundaries and conditions will be explored.
C. Concept of Operations
The PAM Concept of Operations is based on four PAM subsystems and
interfaces to two external modules. The Application Document Input and
Management (ADIM) subsystem will provide the interface to the PAM Authoring
Program and will handle document conversion, fee processing, and application
administration functions. The Examiner Action subsystem (EAS) will handle
the examiner processing, and the functions necessary to prepare an application
for publication. The PALM+ subsystem will handle application docketing and
status monitoring function. The P3 subsystem will handle photocomposition,
printing, and other post-processing functions. PAM will be able to accept
data from automated Authoring Program and provide electronic copies of allowed
patents to the APS Examiner Search databases.
PAM will process electronic versions of information contained in the
application file wrappers. Applications are submitted in, or converted to,
text and image electronic format, and processed in that format during
pre-examination and examination. Allowed patent applications will undergo
final editing on-line and be formatted for printing through photocomposition
software. The final product, a mixture of images and text, will be printed
and added to the APS databases. The following figure depicts the relationships
among these subsystems, interfaces, and databases.
D. Configuration
The target configuration was developed for the purpose of estimating the
costs of the PAM system. The current configuration design includes using
existing USPTO personal computers as PAM workstations, possibly supplemented
with an auxiliary keyboard with special PAM function keys; the USPTO
telecommunications network now being deployed; and existing mainframe
computers and peripherals for centralized databases and processing.
APPENDIX B -- THE UNITED STATES SECRECY ORDER PROGRAM
STATISTICS AND TRENDS
In response to a request by the Advisory Commission, the U.S. Patent and
Trademark Office conducted a detailed inventory of currently pending patent
applications subject to secrecy orders, as well as historical trends in the
imposition of secrecy orders. The applications were placed into three
different categories of ownership: Government-owned, those with a partial or
no Government interest (e.g., those which will issue to and be titled in the
name of a private U.S. entity), and privately-owned by a non-U.S. entity.
The purpose of the inventory was to study trends in the imposition of secrecy
orders, to identify which types of applications have been subjected to secrecy
orders most frequently, and to identify other related information.
The most significant findings from the study were:
- the number of secrecy orders applied to applications owned
partially or entirely by private entities rose sharply, and
- the Department of Defense issued far more recommendations for secrecy
orders than all other reviewing agencies combined.
These findings were relied upon by the Commission in formulating its
recommendations as to reform of the secrecy order program.
It is important to note that the overall volume of patent applications
filed in the United States has surged in recent years. Even so, approximately
the same proportion of applications continue to be screened and referred to
agencies for purposes of review for secrecy order.
The most striking result of the survey is the significant increase in the
number of secrecy orders imposed on applications other than those owned by the
Federal Government. While the number of orders rescinded has risen at roughly
the same rate, the overall inventory of pending patent applications under
secrecy orders has grown significantly in recent years. Furthermore, the
applications contributing to this growing inventory are predominantly those
in which the Federal Government holds a less than full ownership interest.
The following graph illustrates the significant increase in the number of
pending patent applications currently under secrecy order.
From two different perspectives, it can be seen that orders recommended by
the Department of Defense (DOD) far outnumber orders issued by other reviewing
agencies. For example, when assessed by the type of secrecy order, one can
see that the DOD initiated orders far outnumber non-DOD orders.
Similarly, when analyzed simply by the total volume of recommendations for
secrecy orders, the DOD far outpaces other agencies in the volume of orders
which stem from their recommendations. Thus, the sharp rise in volume of
orders being applied is largely attributable to the actions of the Department
of Defense reviewers.
APPENDIX C -- USPTO REEXAMINATION STATISTICS
The USPTO has maintained detailed statistics on the trends associated with
reexamination orders. These statistics reveal several interesting findings.
First, the proportion of patents which proceed through reexamination and
issue unchanged is small. Although the substantive significance of this
observation is limited, given the difficulty of ascertaining the degree or
nature of change in each patent which is reexamined, it is significant that
over 75% of all reexamined patents incur some change to the claims, and
nearly 13% have all claims canceled.
Second, the effects of reexamination remain relatively constant,
irrespective of the party requesting the reexamination and the examiner
conducting the reexamination. Thus, despite general perceptions, there is
no statistical significance which can be derived from the identity of the
party requesting the reexamination, or due to the relationship between the
original and reexamination examiner.
Since the institution of reexamination, there has been a gradual increase
in the use of the procedure. This trend is consistent with the trends in
patent application filings, which increased more dramatically during the
period of 1985-1991. The next figure illustrates this trend.
Measured in terms of all requests for reexamination filed, patent owners
requested reexamination only slightly more frequently than did third parties
(e.g., 13%).
As to the class of technology that the patent pertains, there is virtually
no discrepancy in the proportions of reexamination requests filed.
Reexamination requests, on the whole, are very likely to result in a
finding of a substantial new question of patentability, and initiation of a
reexamination proceeding. Over 85% of all requests for reexamination are
granted. Where requests are not granted, the identity of the party requesting
the reexamination does not appear to have any significance (e.g., 8% denied
where patent owner requests, while 6% denied where third party requests
reexamination). An interesting figure is that nearly 75% of the denials of
the request for reexamination were made by the original examiner (e.g., the
examiner who conducted the original prosecution), and only 25% of the denials
occurred where a different examiner was considering the request for the
reexamination.
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Greg Aharonian
Source Translation & Optimiztion
P.O. Box 404, Belmont, MA 02178
