GEORGE COLE, ESQ.

MR. COLE:  Good afternoon.  The first problem area I would like to address
is the paucity of adequately_educated patent examiners.  I realize, and I
presume that we are familiar enough with the problem, I don't have to detail
it.  A hundred and sixty examiners are simply not enough to examine
thousands of patents every year, to keep up with the literature and
expanding number of technical fields to remain abreast of continually
changing and adapting common law, and in addition, to eat, sleep, get lunch
and a few things like that.

The problem is particularly acute in the area of software_related invention,
which is why we're here today.  It's so bad there's a serious possibility
that the current approach will be abandoned perhaps in favor of alternatives
such as privatizing the process.  We could try giving it to all the people
in Ann Arbor where their database is to give them a trade secrets database
of computer inventions, which would then serve as the basis for seeing
whether or not a right to sue existed.

Frankly, I'm in favor of improving the review process not weakening or
abandoning it.  It costs society far less to have a determination made
during an impartial review process than through adversarial patent
litigation.  What the PTO needs, what we need the PTO to have is more people
with the knowledge needed in the patent review process.  We need the process
to continue to keep the current legal and technical standards, to improve on
them, particularly the technical standard, particularly in fast_advancing
fields such as computer software.

Yet, we face an inherent problem in the current system that will keep us
from solving it by just adding more examiners. That's because to become a
patent examiner you need a scientific degree, a Bachelor's degree, and the
legal education.  Virtually all who have such dual qualifications pick them
up in that order __ science first, then the law.  Very few do it in the
opposite order which is what I did, law first and then a science. In my case
a Master's in computer science at Stanford in '87, six years after I had a
law degree from Michigan.  The order most prospective examiners gain their
dual backgrounds matter, and I'll get back to it in a moment.

The old approach would have been simply adding more examiners, this is
necessary, and I would suggest that with some creativity on the part of
government and business, we can find the money to do it.  I mean, suppose
every patent issues gave the government a four percent royalty.  But this is
not going to be an effective solution overall.  It doesn't use the advances
in communications that we have, it doesn't react to societal trends.

For one thing, there are often far more rewarding opportunities available to
people who have dual training.  For example, if you want to practice in
Washington, D.C., you're giving up the weather that you've got outside today
in favor of an East Coast Winter.

COMMISSIONER LEHMAN:  I should note; you know, we don't require them to be a
lawyer to be a patent examiner.  Maybe we should, but we don't.  All you
have to have is the technical background, so you don't really have to have
the dual training.

MR. COLE:  Don't need the dual training.  And then when the review process
comes in and the examination goes through.

The other problem is __ I'm sorry, let me continue with this line for a
moment.  Another approach would have been to abandon, as people suggest,
giving patents in computer software. If the U.S. was the only country where
that was going to have an effect, it would be something that makes sense. 
But since it is not the only country where software patents can issue, and
only larger companies can realistically and consistently press for patents
abroad, and then by international treaty enforce them in the United States,
this is going to put us at a severe disadvantage.

Our most valuable resource in software is in intellectual creativity, and
it's going to end up possibly completely stifled by this.  As the companies
go outside, enforce the patents there, get them there and then come in and
squelch it here.

One prior speaker announced how that happened in a slightly different field,
where they came away from the area where they do not afford protection to
the U.S.  I would rather not see that happen the other way around.

Another approach would be, we get rid of the legal and technical evaluation
that goes on.  Now, patent examiners may not have to have a legal
background, but you're going to have to pay some attention to what the
courts are doing along the way, or in a challenge there is going to some
review of what the current state of the law regarding software algorithms
is.  The courts aren't going to come up with a solution in the near future,
I suspect.

A real problem in a way is that the background that the patent examiners
have is a Bachelor's and this just isn't enough nowadays.  It used to be
enough, it used to be just like a basic college degree was enough to be on
the leading edge of our society, but by the time the science makes its way
from the lab to the educators into the curriculum and into the students,
it's dated.  It's going to be maybe five years behind the times, and the
undergraduates aren't going to be able to keep up with the leading edge
because they're still too busy picking up the fundamental basis so they can
understand the leading edge.

So we have that delay built in, and it's just going to get worse if you sit
there and ask the patent examiners to pick up a graduate degree.  They're
going to add more years to the time, but that's also going to add the
pressure for them to go elsewhere.  So how do we provide the benefits of
this process that gives both the evaluation, but copes also with an inherent
limitation on the number of people that you've got?

What I'd like to suggest; the Patent Office consider finding means to
leverage its personnel, just as the federal judiciary can call on special
masters, or judges pro tem to extend the effectiveness of the cadre of
full_time judges.  The Patent Office should look for ways to use the
thousands of individuals who have technical advanced education in our
society, not as full_time patent examiners working solely for the
government, but additional personnel called in and paid for as needed.  When
you need more computer science people, you get more computer science people. 
When you need more biomechanical people, you get more biomechanical people. 
But you don't have to commit to a full_time government career service job. 
And perhaps you could get the specialist fees paid for by the people who are
applying, or as one person suggested, if they're going for a special
process, if they want the technical specialty, if they want speed, let them
pay for it, but call it in from outside.

The patent examiners job then changes from doing all the work on every
application, him or herself that he gets, to managing the process, to
getting the patent applications, coordinating and consulting with the
technicians, consulting with legal scholars if a complex legal issue seems
to appear and then coordinating the results.  Is there a concern over
maintaining traditional secrecy of the patent process?

I point out that researchers have lab assistants or graduate students, law
partners have associates.  I suggest, since they've already faced and solved
this type of problem in dealing with confidentiality and tracing of
information, the Patent Office could find a solution to this.

There a lot of individuals throughout this country who could be called on to
assist.  Fees could be paid to them, maybe you arrange a tax waiver instead
if they'd like that.  You've got professors at universities, you've got
legal scholars at law schools, researchers in governmental labs, graduate
students in science or law who might work on an in internship basis.

With the modern technology available facsimile transmission could allow the
PTO to coordinate such efforts throughout the country.  The Patent Office
then becomes the coordinator rather than the sole worker of the information
process and allows them to master the information and the rapid changes that
are coming through, not to be overwhelmed.

The second area that I would like to address is some of the problems in the
current regulations which attempt to provide protection against inadequately
trained individuals serving as patent attorneys.  And frankly, this is an
area that's probably worse seen in the software area than in many other
area.

Section 10.7(a)2(ii) requires an individual who seeks to be registered to
practice before the Patent and Trademark Office to establish to the director
satisfaction that he or she possesses the legal, scientific and technical
qualifications necessary to enable him or her to render applicants for
patents valuable service.  There is no requirement in the statute or
regulations that this competency be maintained.  The examination of a
would_be patent attorney is only an initial hurdle; once passed, it acts as
a lifetime assurance the attorney possesses the necessary qualifications. 
This may have been enough when science did not advance rapidly, it is not
adequate anymore.

Furthermore, the PTO presumes that a patent attorney is competent in the
field of science underlying a patent the attorney is prosecuting before the
Patent and Trademark Office. It can be left to the client to discover his
patent attorney lacked the scientific competency to adequately evaluate or
prosecute that patent.

The PTO, though it initially requires the attorney to show the scientific
field, does not maintain that information, does not retain it, and does not
check it against the application.  That protection for the public is
abandoned after the first hurdle.

Nationally, the Patent Bar is a uniform bar, you've got to have it that way. 
But you run into a problem for attorneys who want to keep up a scientific
background, who want to study in the field and have to keep up an education
for current legal standings.  Continuing legal education in most states just
does not allow, the course work simply is not there that focuses on a
technical side.  It's a rare exception to come across it.  I was lucky,
there have been some in California.

This places an additional burden on attorneys who are trying to keep up the
legal and technical background.  I am submitting, and it's in the written
comment, a proposed amendment to the regulation currently existing that
addresses these problems.  I urge your attention to it.  It tries to balance
__ I'm not saying it's a perfect solution __ but it tries to balance the
needs that I've addressed.

Do you have any questions at this time?

COMMISSIONER LEHMAN:  No.  Thank you very much.  I'll just point out that we
do have a substantial number of people with advanced degrees in our
Examining Corps.  We have at least 38 people with Master's degrees and at
least 5 Ph.D.s, maybe more.  And obviously they're there to help guide those
who don't have that.  And we're recruiting for people all the time with more
education.

My sense is that our problem __ there's been a lot of discussion, a lot of
suggestion that we need to have more attractive compensation structure et
cetera, therefore we don't want to be a part of the government.  I am not
sure that's true. I think our capacity to hire people at up to about $90,000
a year as a patent examiner.

Now, in order to do that they have to have a variety of qualifications, they
have to have an advanced degree, they have to be in an area that's been
designated hard to get, which generally I think this area is, a variety of
things.  And then even that includes I think a bonus payment that we give
them as well.  But my impression is that __ and we're never going to
compete, nor should we take from Silicon Valley the folks who can go out
there and make __ start companies that will make millions of dollars and
create thousands of jobs, we don't want them examining patents.

My sense is that to get a competent technologist who can understand the art
here, that probably we ought to be able to get people in that range that I
just described.  But that's not our most critical problem.  Though, it has
occurred to me from time to time that maybe one of the, sort of a drastic
solution about reinventing government would be that we should be moving the
Patent Office to Silicon Valley, would be that we could contract out patent
examiners.  You know, we could hire law firms to do it, or consulting firms
and in various areas.

I have a feeling that we wouldn't automatically improve our quality in doing
that, but we certainly have an open mind to all kinds of solutions whatever
they may be.  But we are steadily working on this problem, and I appreciate
the suggestions of people like you.  So thanks very much for coming here
today.

And let me say, when it comes to drastic solutions like that, you know part
of my job is I also am a policy maker, but I'm also in effect the CEO and
head of an institution with 5,000 people, and their lives and their families
are involved in this, and we're not going to take steps that are going to
disrupt these people's lives.  You know, I think we have an obligation to __
we have problems with our workforce to do that in a way that's fair to the
people who work there.

Next I'd like to call Barry Graham, who is an attorney with the
International Federation of Industrial Property Attorneys, or an attorney
who I assume is representing the International Federation of Industrial
Property Attorneys.

MR. GRAHAM:  That's correct.

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