U.S. PATENT REFORM FOR FAST-MOVING TECHNOLOGY

Washington Internships for Students of Engineering

August 4, 2011

Sponsored by IEEE-USA

Jolene L. WangYale University

OUTLINE

Introduction

Background Information

Key Concerns & Issues

Suggested Proposals

Current Legislation

Policy Recommendations

Questions

Acknowledgements

INTRODUCTION

Technological innovation – 75% of U.S. growth rate

Intellectual property – 40% of economic growth

Role of patents

innovation

economic growth

international competitiveness

BACKGROUND

Intellectual Property Matters

Type of IP Rights Covered

Copyrightoriginal works of authorship fixed in a tangible medium

of expression

Patentthe exclusion of others from making, using, offering for sale, or selling as invention

Trademark

the use of a word, phrase, symbol or design that identifies a particular

product, brand or service

Trade Secretprivacy of any form of

information that is to be maintained as confidential

PATENT HISTORY

“The Congress shall have Power… 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.”

U.S. Constitution Article 1, Section 8,

Clause 8

“Whoever invents or discovers any new and useful process, machines, manufacture, or composition of matter, or any new and useful improvements thereof, may obtain a patent…”

United States Code, Title 35, Section 101

FAST-MOVING TECHNOLOGY

Product life cycles of less than 36 months

High-tech companies: IBM, Microsoft, Intel

Most common types of fast-moving

technologies: Hardware Software

Diamond v. Diehr (1981) Business Methods

State Street v. Signature Financial Group (1998) “automated financial or management data processing

methods”

KEY CONCERNS

Rise in fast-moving technology patents Increase in lawsuits and litigation costs

http://snapvoip.blogspot.com/2011/06/software-patents-and-associated-legal.html

http://en.wikipedia.org/wiki/File:Growth_in_Business_Method_Patents.jpg

KEY ISSUES

U.S. Patent & Trademark Office

Funding and diversion of user fees

more than $875 million in redirected fees

Shortage of experienced patent examiners

1/3 with less than 3 years experience

Length of pendency

average 36 months

Growing backlog

KEY ISSUES

IT Industry & Market Defensive patenting and patent thickets High litigation costs and market entry barriers

SUGGESTED PROPOSALS

Software Copyrights

Deferred Examination

Multi-tiered Patent System

Multi-track Examination

DEFERRED EXAMINATION

• administrative inefficiencies

• insufficient prior art

• patent standards

MULTI-TIERED PATENT SYSTEM

• administrative costs

• excessive filings

• increase backlog

CURRENT LEGISLATION

USPTO “Three-Track” Patent Program

Track One – prioritized examination within

12 months for $4000 fee

America Invents Act 2011

S. 23 & H.R. 1249

4th attempt at sweeping patent reform

POLICY RECOMMENDATIONS

Internal Reforms

Prior Art Reconstruction

Institutional Modifications

External Reforms

End Diversion of Fees

Open Post-Grant Review

IMPROVE PRIOR ART DATABASES

Establishing a supplemental repository of non-patent prior art

more complete prior art collection

IMPROVE CLEARANCE SEARCH

Implementing external task force and search specialist groups

Encouraging greater uniformity in language and claim terminology

enhanced search capabilities

CREATE OPEN POST-GRANT REVIEW

Congress should advise the USPTO to establish a post-grant review that allows challenges

based on any grounds of patentability

within a certain number of months of patent issuance

S. 23 (9 months)

H.R. 1249 (12 months)

END DIVERSION OF FEES

Congress should increase the appropriations of funds to the USPTO through the discontinuation of fee diversion Increase examiner retention rate

Decrease growing backlog

Improve quality of patents

Promote innovation

Stimulate economy

QUESTIONS

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ACKNOWLEDGEMENTS