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Blog Category: Patent Reform

Encouraging Innovation, Not Litigation

Secretary Pritzker at the White House promoting the Administration's Patent Action

Importance of Patent Reform

America’s entrepreneurs, businesses, and workers are the primary source of new ideas that drive innovation. Patents, trademarks and copyrights–the main protections in our intellectual property (IP) system–are critical tools that help commercialize innovative, game-changing ideas, from advances in healthcare technology to improved consumer products. By creating a better environment for America’s private sector to capitalize on those ideas, IP protections help foster the innovation and creativity that leads to a stronger economy and more jobs.

In 2012, economists at the U.S. Department of Commerce studied industries that use patent, copyright or trademark protections most extensively, and found that these “IP-intensive industries” account for over one-third of our nation’s GDP, more than 60 percent of our exports, and nearly 28 percent of jobs. Clearly, IP protection is a pillar of the United States economy.

Department of Commerce’s Commitment

The Commerce Department is playing a major role in ensuring that the United States remains the world’s strongest ideas-driven economy with a 21st century patent system. A core part of the Commerce Department’s mission is to help American businesses build things here and sell them everywhere around the globe. That is why U.S. Commerce Secretary Penny Pritzker made innovation a main pillar of the “Open for Business Agenda” that she launched in November to continue to serve entrepreneurs and businesses that drive innovation. 

Commerce's U.S. Patent and Trademark Office Implements Most Provisions of the America Invents Act

Vice Chief Judge Jay Moore of the Patent Trial and Appeal Board explains provisions of the AIA (file photo)

The most significant reform to the U.S. patent system in more than a century is a major step forward as numerous provisions of the Leahy-Smith America Invents Act of 2011 are now in effect. The new rules will spur innovation and economic growth by streamlining the patent application process and introducing new procedures to ensure patent quality. Seven reforms to U.S. patent law went into effect one year after the signing of the bipartisan patent reform legislation by President Barack Obama on September 16, 2011. 

Some of the new rules include three new administrative trial provisions—inter partes review, post-grant review, and the transitional program for covered business method patents—will offer third parties timely, cost-effective alternatives to district court litigation to challenge the patentability of an issued patent; a supplemental examination provision that allows applicants to submit additional information relevant to the patentability of an issued patent to the Office in a new procedure that may protect the patent from an inequitable conduct charge; an inventors oath and declaration provision that for the first time allows assignee filing of a patent application; and a citation of prior art and written statements provision will enable the Office to treat the claims in a patent consistent with how a patent owner represents its claims to the courts or in other Office proceedings.

USPTO: Leading the Way on International Patent Harmonization

Nearly 80 percent of all patent applications filed worldwide are processed through five patent offices: Commerce's United States Patent and Trademark Office (USPTO), the European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), and the State Intellectual Property Office of China (SIPO). In 2007, the five agencies formed a group called the IP5, to work on increased cooperation and collaboration. Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos and Deputy Under Secretary Teresa Stanek Rea attended the 5th Meeting of IP5 Heads of Offices in Porticcio, France on June 6th.  

As the USPTO implements the America Invents Act (AIA), signed into law on September 16, 2011, by President Obama, America is poised to implement an optimal 21st Century harmonized patent system. This administration is leading the process of reshaping an IP world into one in which national and regional patent systems are coordinated to create an optimal environment for technological innovation.

At this high-level meeting, the Heads of Offices focused on receiving and analyzing input from IP owners regarding how to make the patent process more user-friendly. As part of that vision, they discussed the concept of a “Global Dossier,” aimed at simplifying procedures for patent applicants and improving the efficiency of the offices when dealing with the same patent application.

The IP5 also reaffirmed their commitment to improve the Patent Cooperation Treaty (PCT), which already enables patent applicants to seek simultaneous patent protection with a single international application for up to 145 countries.

This was the first-ever IP5 meeting featuring the Heads of Offices. The next meeting of all Heads of Offices will be held in the United States, hosted by the USPTO, in 2013.

2011: A Great Year for American Inventors and Innovation

Photo of USPTO Headquarters

Guest blog post by David Kappos, Under Secretary of Commerce for Intellectual Property and Director of the USPTO

As December draws to a close , it’s difficult to imagine a more historic year for the United States Patent and Trademark Office (USPTO) than 2011. The dedication and hard work of our talented public servants has enabled the Agency to make significant strides in the quality, efficiency, and certainty of patents and trademarks granted to technological enterprises. And our collaboration with the small business community has allowed us to level the competitive playing field by offering new tools and resources for independent inventors to acquire intellectual property rights with more ease. As this year comes to an end, I want to take a moment to recount what our extended USPTO family has helped accomplish for American inventors and American innovation, through the lens of a few numbers and key dates that were important this year.

USPTO: Boosting Small Business with the New Patent Law

The president signing the bill

When President Barack Obama signed the America Invents Act (AIA) into law six weeks ago, he did more than just implement the largest patent reform since 1836. The AIA aims to help small business secure patent protection for their inventions in a variety of ways. The Act offers not only favorable legal provisions, but also establishes studies and programs to further investigate how Congress may assist small businesses in the future. The provisions in the AIA help simplify the patent law, promote the disclosure of inventions, and establish procedures to remove bad patents from the intellectual property (IP) system early.

By introducing provisions that speed the patent application process and enhance the quality review of patent applications, the AIA enables applicants to secure an examination of an application in one-third the regular time from an average of 3 years to an average of 12 months. Additional provisions will provide an avenue that small businesses may use to challenge bad patents and receive a decision within 12 months. This changes the current practice where decisions on patent validity are determined through district court litigation and may take several years at significantly greater expense.

Building a 21st Century Patent and Trademark Office

Director Kappos takes questions while at the Brookings Institute

Today, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) David Kappos addressed the Brookings Institution’s Center for Technology Innovation, outlining how comprehensive patent reform, signed into law by President Obama two weeks ago today, impacts American innovation, American jobs and American leadership. Representing the most significant overhaul of the U.S. patent system in a generation, the America Invents Act (AIA) transforms how patents are obtained, challenged, and valued in acquisition, licensing, and litigation settlement discussions.

In the centuries since the first patent examiner—Thomas Jefferson—reviewed and granted the first U.S. patent, our nation has observed sweeping revolutions in the pace of innovation—but with no comprehensive legislative adjustment in patent policy.

By building out the world’s only 21st century Patent and Trademark Office, equipped to manage the demands of a globalized economy, this new law enables a better resourced USPTO to grant intellectual property rights with greater speed, greater quality, greater clarity and greater enforceability. It also advances the President’s overall strategy of deploying American innovation to build businesses and build jobs.

Acting Secretary Blank and USPTO Director Kappos Join President Obama at the America Invents Act Signing Ceremony

President Barack Obama signs the America Invents Act into law at Thomas Jefferson High School for Science and Technology in Alexandria, Virginia, Sept. 16, 2011. (Official White House Photo by Lawrence Jackson)

At a ceremony at the Thomas Jefferson High School for Science and Technology in Alexandria, Virginia, President Obama today signed the America Invents Act into law, representing historic patent reform legislation that will help American entrepreneurs and businesses bring their inventions to market sooner, creating new businesses and new jobs. Passed with the president’s consistent leadership and strong bipartisan support, the America Invents Act represents the most significant reform of the Patent Act since 1952, and will help American companies and inventors who have suffered costly delays and unnecessary litigation focus on innovation and job creation.

Innovation is the primary source of economic growth, job creation,
and U.S. competitiveness in today’s global economy. An efficiently operating intellectual property system is critical to our ability to spur innovation and bring new services and products to the marketplace faster. For investors, patents are strong indicators of market potential for new companies; and for inventors, they are often vital to attracting investment. 

"Our success in creating the conditions that spur new ideas, and our commitment to investing in the education, research and development priorities that help shape our country’s innovation infrastructure, will determine the opportunities of future generations,” Acting Commerce Secretary Rebecca Blank said. “These issues will determine whether or not America is home to the industries that will fuel economic growth–and the jobs that come with it - in the 21st century.”

Aneesh Chopra, on the White House Blog, said, "By transitioning to a simpler, more objective, and more inventor-friendly system of issuing patents, the new Act helps ensure that independent inventors and small entities have greater clarity and certainty over their property rights and will be able to navigate the patent system on a more equitable footing with large enterprises."

The Act also establishes a new in-house review process for challenging patents—a process that is faster and significantly cheaper than litigation, which too often stymies technological growth. By resolving disputes about patent rights earlier, more efficiently, and at lower cost, we can  add greater certainty to—and cultivate greater confidence it—the American patent system."

United States Patent and Trademark Office Director David Kappos and U.S. Chief Technology Officer Aneesh Chopra hosted an Open for Questions event on WhiteHouse.gov at 5:00 p.m. EDT on Friday, September 16th. If you missed it, you can watch the entire Q&A session on the White House blog.

The Leahy-Smith America Invents Act (AIA)

On September 8, the Senate passed the Leahy-Smith America Invents Act (AIA), H.R. 1249, by a vote of 89-9.  The bill now will be sent to the President for his signature.

This legislation has been a major priority of the Department of Commerce and the Office of General Counsel since the beginning of this Administration.  The AIA marks the first comprehensive reform to U.S. patent law in 60 years and transforms the patent system to accommodate the needs of 21st Century inventors and businesses. 

At a time of great need for the U.S. economy, the AIA will foster American innovation, provide greater certainty to businesses and inventors, and promote job growth.  Fundamental changes to the patent system made by the legislation include:

  • Establishing a “first-inventor-to-file,” which will simplify the U.S. patent application system and harmonize it with others around the world;
  • Providing the opportunity for third parties to submit information regarding pending patent applications and creating a post-grant opposition proceeding to identify patents that should not have been granted.  Both these changes will improve patent quality, which will promote investment and job growth;
  • Improving the system to administratively challenge patents, which will speed adjudication of meritorious challenges and provide faster resolution and certainty for patent holders facing unsubstantiated challenges; and
  • Reducing fees for small and micro-entities by as much as 75%, which will foster innovation.

The AIA requires a series of rulemakings and studies, which will need to be completed expeditiously.  The Office of General Counsel will be working with the U.S. Patent and Trademark Office to complete the work as quickly as possible and to bring the benefits of the legislation to consumers and businesses alike.  Implementation Effort

Acting Secretary Blank Celebrates Patent Number 8,000,000, Calls for Congress to Act Swiftly to Pass Patent Reform

Acting Secretary Blank Celebrates Patent Number 8,000,000

Acting Secretary Rebecca Blank and Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO) David Kappos today presented patent no. 8 million to Second Sight Medical Products, Inc., for a visual prosthesis apparatus that enhances visual perception for people who have gone blind due to outer retinal degeneration. Following the signing, company President and CEO Robert Greenberg demonstrated the new product, Argus® II. 

The ceremony underscored the critical role the U.S. patent system plays in fostering American innovation and economic competitiveness and comes as Congress is acting to make the most significant reforms to the system in more than half a century. Patent reform legislation currently before Congress – the America Invents Act – will help create new jobs by simplifying the process inventors face for getting a patent, while making the system more transparent and reducing costly and time-consuming litigation. 

The bill is an essential tool to bring the patent system and the USPTO into the 21st century and to continue to unleash the innovation, ingenuity and creativity that has made America the envy of the world. Strong and clear patent rights are especially vital to small and new businesses, which create 2 out of every 3 American jobs. Successful inventors need to secure patent rights to access capital, hire employees and lift their companies off the ground. Put simply, patents are crucial to creating new jobs, new industries and new economic opportunities for Americans.

Specifically, the America Invents Act:

  • Allows the USPTO to set its own fees to recover the actual costs of the services it provides, and keep and reserve those fees exclusively for the USPTO’s use – a major part of ensuring that the agency has sufficient funding; 
  • Enables the USPTO to hire more examiners and bring its IT system into the 21st century so it can process applications more quickly and produce higher quality patents that are less likely to be subject to a court challenge;
  • Decreases the likelihood of expensive litigation because it creates a less costly, in-house administrative alternative to review patent validity claims;  and,
  • Adopts the “first-inventor-to-file” standard as opposed to the current “first-to-invent” standard. First inventor to file is used by the rest of the world, and would be good for U.S. businesses, providing a more transparent and cost-effective process that is consistent with the practices of our economic competitors.

Taken together, the reforms outlined in the America Invents Act create a better architecture for fostering American innovation and accelerating the delivery of innovative goods and services to the marketplace. It also gives the Patent Office the tools and resources it needs to serve America’s innovators by granting high-quality patents in a more timely fashion.

Secretary Locke, USPTO Director Kappos Highlight Support for Patent Reform Legislation

U.S. Commerce Secretary Gary Locke and Under Secretary of Commerce for Intellectual Property and USPTO Director David Kappos hosted a conference call with reporters today to discuss the administration’s support for pending patent reform legislation and why the administration believes patent reform is critical to promoting innovation and creating jobs.

“Passage of this legislation is essential to America's economic competitiveness and our ability to innovate,” Locke said. “As President Obama said recently, we need to out-innovate the rest of the world if we’re going to win the future. An efficiently operating patent system is critical to this goal.”

On Monday, the Senate began consideration of S.23 – now known as The America Invents Act – and the administration released a Statement of Administration Policy expressing support for the proposed legislation.

While the USPTO has made significant strides in reducing its backlog of more than 700,000 unexamined patent applications and the time it takes to process a patent, reforming the patent system is critical to speeding the transformation of an idea into a market-making product that will drive the jobs and industries of the future.