USPTO Director Michelle K. Lee
Monday, April 11, 2016, 2:35 p.m.
Federal Circuit Judicial Conference
The Grand Hyatt Washington, 1000 H. St., NW, Washington, D.C.
Remarks as Prepared for Delivery
Thank you, Judge Moore, and good afternoon! It’s a real pleasure to be here with you today. Conferences such as this are a perfect time for all of us to take a step back from our hectic, day-to-day tasks and reflect on the broader system that we are all a part of. And this is important because our intellectual property system, and in particular patent system—doesn’t stand still for long. There have been significant changes recently in our patent ecosystem including through, as discussed earlier today, numerous judicial rulings including on some very fundamental issues such as, “What is patent eligible subject matter?” and new rules on pleading standards and discovery set for by the Federal Judicial Conference.
What was considered a “niche” field when I entered it now makes front page headlines with jury verdicts and Supreme Court cases. No sooner did one round of major legislation finish with the passage of the America Invents Act of 2011 than did another round of legislative discussions begin. Certainly it makes sense to have ongoing conversations to ensure that our laws are keeping up with rapidly evolving technologies, to make sure our patent system continues to incentivize technological innovations so critical to our nation’s continued economic success. As we move forward in this important moment in our history, it is incumbent that all of us -- Courts, Congress, agencies and advocates – to work together as responsible stewards of our IP system, to ensure that the greatest innovations are yet to come.
What does it mean to be a responsible steward? Well, for those whose role it is to draft our nation's IP laws, they must do so sensibly, with input from experts, and with a focus on balanced laws that promote innovation across industries now and in the long run. For those whose job it is to interpret our nation's IP laws and render legal decisions resulting from that interpretation, they must do so accurately, clearly and consistently. For those whose role it is to advocate before lawmakers and argue before judges, they must do so with an eye toward not just what is good for one's client in a particular case, but also what is right for our system in the long run. And, finally, for those of us whose role it is to implement and administer both new laws and new judicial interpretations of those laws, we must do so with care, precision, and transparency.
So what are we, at the USPTO, doing to meeting our obligation as good stewards of our IP system? As you would expect, we are certainly reducing our patent backlog and pendencies, educating innovators about IP, and working with our international colleagues to ensure that they share our IP values so American companies can ship their products overseas, knowing that their IP rights are respected and, if infringed, that there are appropriate enforcement procedures and remedies. But in my remarks with you today, I’d like to share with you some specifics about the USPTO’s unprecedented focus on enhancing the quality of patents in our system generally. We are doing so in two key ways: First, through the AIA PTAB trials, we are working to ensure that the patents in our system are ones that should have issued. Second, through our Enhanced Patent Quality Initiative, we are working to improve our examination processes to ensure that patents entering our system are the highest quality possible. These are steps that are squarely within our statutory mandate steps that are important to take, now, especially as a number of bigger and broader changes are being discussed legislatively, and it’s what we know we need to do, and are uniquely suited to do, in order to play our role as responsible stewards of our IP system.
Turning first to our efforts on the PTAB trials, as you know, they were created in 2011 pursuant to the AIA, with the goal of providing a check on the quality of patents already in the system in a manner that was faster and lower-cost than district court. Following this Congressional mandate, the USPTO stood up three different post-grant review proceedings. Since then, we have received more than 4,600 petitions –more than three times the number we expected. Despite this number, we still have not yet missed a single statutory deadline. With a total of 261 judges now onboard, the PTAB is working efficiently and effectively – and meeting our Congressional mandate to provide a faster, lower cost alternative to district court litigation on the issue of patent validity. But as hard as we worked on our initial roll-out of the Board’s proceedings, we never assumed that our rules or guidance would be perfect. So we took it upon ourselves to solicit extensive public input and make improvements through a rule making process, not because of any statutory requirement, but because we felt it was the right thing to do, after we had about two years of experience with these relatively new proceedings. And, just 10 days ago, we released newly revised, final rules for the PTAB. Some of you in the audience provided feedback on the rules, so thank you for your input.
I’ll just briefly highlight the main changes, including: Allowing patent owners to include, with their opposition to a petition to institute, any testimonial evidence, such as an expert declaration, a new certification requirement for practitioners before the PTAB, akin to the Rule 11 requirements in federal courts, and clarifying that the PTAB will use the claim construction standard used by district courts for patents that will expire during a proceeding. In addition, we had proposed considering a Single Judge Pilot program. As you know, we currently rely on a panel of three administrative patent judges to decide whether to conduct a trial – and then that same three-judge panel typically conducts the trial itself. We requested comment on whether we should, for efficiency purposes, conduct a pilot program where a single judge would determine whether to institute the trial, and if the decision was yes, that judge would be joined by two other judges to conduct the trial. This was a proposal that was included in a pending piece of legislation. In response we received 18 written submissions. While a few suggested a modified pilot program, the majority of commenters opposed the pilot program altogether, and after careful consideration, we decided not to go ahead with it. To me, the process we followed here is an excellent example of how we are never satisfied with the status quo, we are always looking for ways to improve, and we listen carefully to public input. We are open to making whatever changes are necessary to ensure the PTAB trials are as effective and as fair as possible, provided those changes fall within our congressional mandate. So, as good stewards of our IP system, the USPTO is doing everything it can through the PTAB proceedings, to ensure quality patents in our system.
Second, I mentioned our efforts to enhance the quality of the patents before they issue from our office. To this end, one of the first things I did, even before being sworn in as Director of the USPTO, was launch a major new agency-wide campaign called the Enhanced Patent Quality Initiative. Now, I know I'm not the only director, nor will I be the last director, of the USPTO to say quality is important. But why now and what’s different?
Four main reasons:
- (1) our funding situation has become more steady and predictable thanks to the AIA which gave us the ability to set the fees for the services we provide;
- (2) we decreased our backlog of newly filed patent applications from its all-time high in January 2009 and continue to do so;
- (3) with all of the discussion about abusive litigation, it is even more incumbent upon the USPTO to issue the very best quality patents possible; and
- (4) finally, ensuring as much accuracy and clarity of patent rights as possible is important to patent owners themselves given the role PTAB proceedings now play in providing lower-cost and faster avenues for those who might challenge the legitimacy of patent claims.
What do I mean by patent quality and what has the Agency done under the Enhanced Patent Quality Initiative? By quality patent, I mean a patent that is both (1) accurately issued (according to the statute and case law), and (2) clear (providing public notice). I think the USPTO has done a reasonably good job, especially recently, on accuracy, but could do more on clarity. More on that in a bit. What has the agency done under the Enhanced Patent Quality Initiative? First, I created an entire department focused only on patent quality. So it's not just one person or a group of people doing it part time. There is literally a department now focused on this issue. I wanted the agency be permanently structured and resourced to focus on patent quality, now and in the long-run, since any entity that produces a quality product needs to focus on quality for years if not decades. Second, my team and I held at two-day, first-ever, Patent Quality Summit in March of 2015, attended by over 1,500 patent prosecutors, litigators, in-house counsel, former jurists, academics and examiners. We discussed anything and everything the agency could do to enhance patent quality – from small to big, from changes to examination procedures to IT improvements, from how we measure patent quality to how we conduct prior art searches.
A year later, we have about a dozen programs currently underway —before examination, during it, and afterwards, through new ways of measuring patent quality. I won’t have enough time today to go into all dozen initiatives, but I’d light to highlight for you a few. And, for more details on all, you’ll see a card on your table/chair with information on our website with full information.
First—before examination—we’re taking a number of steps to make sure that we are getting the best, most relevant prior art before our examiners as early as possible. On important way that we are doing this is by leveraging the foreign language skills and work of our foreign office counterparts. Under our laws, patentability hinges upon the prior art, not just in the United States and not just written in English, but prior art across the globe. Worldwide patent quality increases when: the public and examiners get access to the most relevant prior art, not only in their native language, but in other languages as well. After all, we all know, that when a patent is litigated, litigation counsel will search the corners of the earth for prior art references not considered by the examining patent office to invalidate. Hence, by working with and sharing work product with foreign IP offices, our examiner’s gain access to hard-to-locate foreign prior art, searched by native language (other than English) speakers and tapping into foreign language data bases.
For example, we worked with the top four patent offices in the world (European, Chinese, Japanese and Korean), and now have an convenient, online portal called Global Dossier that allows our examiners and the public to access file histories (including prior art references) in all of these countries. This online portal should prove useful to any of you who may be looking for hard-to-find foreign references. We further helped our examiner identify more quickly and efficiently relevant prior art by classifying all our patents according to the Cooperative Patent Classification System. Currently, over two dozen offices and growing across the globe are participating in the CPC System, comprising over 25,000 examiners. The more patent offices who classify prior art using CPC, the more quickly examiners can identify the most relevant prior art, regardless of their native language, leading to better quality and more certain patent rights across the globe.
We are also looking at ways to make the examination process itself even better through (1) a clarity of the patent record pilot program and; (2) ongoing legal and technical training for examiners. In our clarity of the record pilot program, we’re focusing on more thorough documentation in the file history in three areas that we think will have the most impact to enhance notice, including claim interpretation, more detailed reasons for allowance in a notice of allowability – e.g., explaining how the applicant overcame the prior art cited or argument made, and more detail in interview summaries. Our overarching goal is to make sure we capture the exchange between applicants and examiners with the right level of detail, finding that delicate balance between too much and too little, so that the public has the clearest possible notice of what the patent claim covers and what it does not. As a result of this pilot, we hope to identify best practices that we can introduce training to our entire patent examination corps.
To further improve examination, we’re also systematically providing ongoing training to examiners on legal standards and developments in technology, especially where there have been recent changes. On the legal side, we have recently focused on supplemental training and clarity on: The requirements of an enabling disclosure under 112(a), Indefiniteness under 112(b) and how our examiners should provide explanations in the record of why a claim is unclear, and functional claim language, including how to interpret it under 112(f). An additional note, as we accumulate more data from our PTAB proceedings, we have another program focused on providing feedback/lessons learned from PTAB back to our examination process. So, it’s a virtuous circle, where PTAB judgments on claims of issued patents better inform decisions on yet-to-be-issued patents. On the technical side, we have focused in recent years on inviting outside experts to come in to the agency to provide presentations to examiners on the state of the art in their fields, something our regional offices help facilitate. The better our examiners’ understanding of the state of the art, the better the quality and faster a patent issues.
As we seek to develop and implement these changes to the prosecution practice, we are also working on updating how we measure improvements to patent quality. One major development we are making is in the centralization and standardization of our review process of examiner work product. We have created an online standardized form, what we’re calling the “Master Review Form,” that all reviewers will use in their assessments. This new centralized process gives us the ability to collect and analyze a much greater volume of data from reviews that we were already doing (but sometimes not recording) – in fact, three to five times more data. As a result of the greater volume of data points, we will be able to provide more targeted and relevant training to our examiners including by art unit or technology center, increase consistency in the work product across the entire examination corps, and augment transparency to the public and within the Agency on standards for review. This “Master Review Form” is now posted on our website so you can see the criteria by which we review actions in the agency. We recently published on March 25 a Federal Register Notice (FRN) explaining this process, and I encourage you to provide your feedback, including on the master review form. We think you will like what you see, but let us know. More generally, whether on the Master Review Form, any other Enhanced Patent Quality Initiative or the PTAB proceedings, please let us know what we’re doing well and where we can do better. The USPTO benefits from the input of everyone, not just patent prosecutors, but litigators, in-house counsel, jurists, academics, innovators (small and big) and even members of the public, all of whom are affected by the results of our work product.
As you can tell, we are excited about and have much work focused these efforts to improve patent quality, both after patents have issued through our PTAB proceedings and before they issue through our Enhanced Patent Quality Initiative. Enhancing patent quality is an ambitious priority that will deliver some results in the short-run and even more in the long run, but I am convinced, and our stakeholders have told us, that this is absolutely the right thing to focus on at this point in the agency’s history, and the USPTO is committed, structured and resourced to do so now and in the future.
I hope this gives you a sense of just some of what we, at the USPTO, are doing to fulfill our obligation as a steward of our IP system. And this is what we, as a community, will need to do as our system confronts the challenges and possibilities of accommodating new technological advances into our preexisting framework. Some of these new technologies are right now on the cusp of moving from early stages of development to becoming more commercialized and widely accessible— for example, 3D-printing and personalized medicine. We can already anticipate that these developments, both of which hold so much promise for improving the quality of life not just here but worldwide, are also likely to require us to reimagine the contours of the patent landscape. With 3D-printing—we can foresee a future where individuals will have a factory at their fingertips—it will be commonplace to be able to manufacture products in your home or office, to customize a design downloaded from the internet to your particular needs. But from the perspective of patent law—what will this do to the doctrines of patent infringement? How will instances of infringement be detected? How will the doctrines of willfulness potentially adapt? Personalized medicine aims to improve medical outcomes for individuals by using the results of diagnostic techniques or genetic profiles to allow for the tailoring of medical treatments. This new era of medicine hopes to improve treatment outcomes and reduce healthcare costs. Of course, as those in this room well know, this new era also faces clear challenges with the evolving case law concerning patent eligible subject matter.
As a policy matter, our intellectual property system needs to somehow support and encourage important technological advances like personalized medicine for the benefit of our collective well-being and health, to say nothing of our future economic prosperity! We each need to do our part to make sure that this happens. As stewards of our IP system, we are all responsible for ensuring that we promote—not impede—the progress of scientific and technical development. And, I ask that each of you in this room consider what you can do, within your scope of authority as a jurist, advocate, legislator and/or stakeholder, to be a good steward of our IP system. Our IP system has been key to our country’s economic success, and will be even more necessary for our country’s future success. We need to work together to keep this remarkable system of ours strong. I thank you for this hard work, for working together, and for all that you do every day, to ensure that our greatest innovations are yet to come.