From: Nike, Inc.
One Bowerman Drive
Beaverton, OR 67005-6453
Contact: Thomas Horgan, Sheila Christensen
Date: December 4, 1998
Re: Patent Business Goals
Comment on Advance Notice of Proposed Rulemaking
Topic 15, 37 C.F.R. 1.155
Docket No.: 980826226-8226-01
As Vice President of Nike's Global Footwear business, I want to share thoughts regarding our company and it's relationship with the U.S. Patent and Trademark Office.
Nike is a $10 billion a year company. The Nike brand and business has been built, over the past 27 years, on a foundation of innovative product design. We firmly believe our competitive advantage and leadership position is based on our ability to create industry leading product. Our commitment to developing innovative product has led us to become one of the largest supporters of the U.S. Patent system filing up to 200 design applications annually.
As a customer of the U.S. Patent and Trademark Office, Nike, Inc., commends the PTO's efforts to adopt business goals in its operations. Nike has been an early proponent for a PTO plan in which a fee could be paid to obtain additional expediting measures. Nike welcomes this opportunity to comment on the topics announced in the Advance Notice at the inception of the rulemaking process.
This Comment is directed to Topic 15 concerning the creation of an expedited examination procedure for design applications (37 C.F.R. 1.155).
I. Expedited Examination for Design Patent Applications Fulfills a Need
An expedited procedure for the prosecution of design patent applications is a much needed avenue for patentees concerned with the design and marketing of seasonal, high- volume consumer goods with short product life expectancy. A rule enabling rapid processing of design patent applications will fulfill a critical need in many industries for patent protection to stop infringement, deter would-be infringers and achieve patent marking.
II. Athletic Footwear Design and Production Timeline and Marking Requirements
The nature of the branded athletic footwear and apparel industry is such that copyists are able to bring knockoffs of the designs to the retail marketplace at the same time or before the launch of the authentic products. In order for design patent protection to be effective and be in step with the commercial realties of the marketplace, patentees such as Nike must be able to introduce authentic products that are patented and marked with the patent number.
In our industry, the timeline from creation to retail launch of products falls in a nine- to ten-month window. For example, the design for a product scheduled for retail launch in August would be finalized about nine to ten months prior, in October and November. Production must begin as early as February or March to meet the June distribution center delivery date, and August retail launch. Nike's practice has been to file design patent applications at the time the design is finalized. To have a patent number for marking on products at the start of manufacture, those applications must issue within four to five months of the filing date.
Recent court interpretations of the marking provisions require patented products to be marked with the patent number regardless of the chosen monetary remedy the patentee pursues. For our industry, timely filed design patent applications for seasonal merchandise must issue from the PTO within four to five months so that products manufactured at the beginning of the production cycle will be marked with the patent number. Having all of the products marked with the patent number will maximize a patentee's protection by synchronizing protection with the retail market launch.
III. Timed Goal for Issuance of Expedited Design Patent Applications
Nike has been willing to pay an additional fee for expedited processing. In the language of the proposed rule itself, Nike views itself as the customer and the PTO as the provider of services. Nike views the additional fee, estimated to be $900, as payment for a service. As with any business purchase, the customer must have a tangible expectation of receiving service in a timely manner.
The additional fee would be a worthwhile business expense to Nike only if the PTO set a timed goal for the issuance of design patent applications that are filed complete and ready for expedited processing. The issuance goal would prescribe a target issue date from the filing date of any application that meets all five requirements outlined in the proposed rule (Page 53522), accompanied by a signed Declaration and all proper filing fees, and which is found allowable on the first Office Action. For our industry, an issuance goal of four months or less from filing for complete design applications filed with a Request to Expedite would maximize patent protection. Given the reduction in examination group pendency, this goal appears to be reasonable. Without setting such a goal for issuance, the PTO's additional fee for the expedited procedure is a one-way bargain, and one that customers are not likely to utilize especially given the high processing fee.
The proposed expedited procedure puts several burdens on the applicant at filing in exchange for the PTO's special treatment of expedited applications. Although this proposed rule is initiated by a need for rapid examination and issuance of applications, the missing element is a timing goal. Nike urges the PTO to consider and adopt a reasonable filing-to-issue target time period.
IV. Proposal for Advance Payment of Issue Fees
One delay that could be eliminated after allowance of the application is the time lapse between the mailing of a Notice of Allowance and the filing of the required issue fee. The proposed rule for an expedited design patent procedure presents an opportunity to accelerate the progress of an application file through this stage. Since an applicant requesting expedited treatment for an application at the time of filing is interested in obtaining rapid issuance of the design patent, a decision to pay the issue fee has already been made. In such an instance there is no reason to wait for the exchange of Notice of Allowance mailings and issue fee transmittals that take up valuable time.
We propose that the PTO consider enabling the applicant to file or authorize advance payment of the issue fee at the time of filing of a complete application along with the Request to Expedite and the additional fee. This method of lump payment of the filing and issue fees at the beginning of the process would enable the application to be handled in the same expedited "walk-through" manner throughout examination and to the Publication Division.
V. Communication with the PTO During the Expedited Process for
The proposed rule states that courtesy copies of office actions will be faxed if a fax number is provided. Nike proposes that all communication between the PTO and the applicant or counsel for an expedited application in which a response is necessary be conducted by fax or telephone. Implementation of an expedited process will encourage extensive telephone communication between the PTO and applicants/attorneys. The use of telephones and faxes whenever possible instead of mailed correspondence will speed the progress of the expedited applications through examination. Other than a required minimum of written communications that are necessary for file wrapper integrity, more immediate means of communication is urged for matters relating to expedited applications.
VI. Nike's Expected Use of the Expedited Process
Nike estimates availing itself of an expedited process for design applications for 100 to 150 design applications per calendar year as long as PTO filing-to-issuance goals are consistent with the needs of the athletic footwear and apparel industry.
The creation of new and innovative practices such as an expedited procedure for design applications would evidence the PTO's commitment to service its customers and respond to market needs.