Remarks by Director Michelle K. Lee at New York Intellectual Property Law Assoc. (NYIPLA) Judges Roundtable

USPTO Director Michelle K. Lee

Friday, April 1, 2016, 12:25-12:45 p.m.

 New York Intellectual Property Law Assoc. (NYIPLA) Judges Roundtable

“Day of the Dinner” Luncheon CLE, Waldorf Astoria Hotel, New York

Remarks as Prepared for Delivery

Thank you for your kind introduction, Anthony, and good afternoon, everyone! It’s a pleasure to be back with you here today for the NYIPLA luncheon. The topic for today is the “Changing the Rules of the Road and the Impact on Intellectual Property.” Indeed, the rules of the road are changing, and I look forward to the panel’s discussion on the recent amendments promulgated by the Judicial Conference of the United States to the Federal Rules of Civil Procedure, and patent law reform.

These changes are in addition to changes (and likely ongoing changes) from the courts on such basic issues as: What is patent eligible subject matter for software related innovations in cases such as Alice and Mayo, Key aspects of patent litigation, including the standard for fee shifting in Octane and Highmark, and divided infringement in Akamai v. Limelight willful infringement in Halo v. Stryker, venue in TC Heartland, and claim construction before the USPTO’s Patent Trial and Appeal Board in Cuozzo.

So the rules of the road in patent litigation are indeed changing. What I’d like to focus my brief remarks on today are some of the changes we are implementing at the USPTO, particularly on the patent quality front, which has been a priority of mine. The USPTO is focused in an unprecedented manner on quality from two angles. First, we launched our Enhanced Patent Quality Initiative to ensure that we are issuing the very best quality patents possible through our examination process. And, second, through the AIA PTAB trials, we are working to ensure that the patents in our system are ones that should have issued. About the time I spoke to you here last year, I had just launched our Enhanced Patent Quality Initiative—the first time our agency has taken a comprehensive review of anything and everything we can do to enhance the quality of patents we issue. Since the time we spoke, we held our first-ever Patent Quality Summit. The Summit was extremely well-attended with over 1500 participants including litigators, prosecutors, former jurists, academics, in-house attorneys, economists, USG colleagues providing thoughts on how the USPTO could enhance the quality of the patents it issues. 

Based upon this extensive input, the USPTO has focused on about a dozen initiatives representing a multifaceted approach to enhancing quality. Although I won’t have enough time to discuss them all, I’d like to highlight a few of them, to give you a flavor of what we’re doing. 

First, in February, we launched a Clarity of the Record Pilot. 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 notice possible of what the patent claims. To do this, in our pilot, we’re focusing on more thorough documentation in four areas that we think will have the most impact of enhancing notice, including, claim interpretation: Reasons for allowance in a notice of allowability, Interview summaries, Pre-search interviews (at the examiner’s option). From this pilot, we hope to identify best practices to enhance the clarity of the record, develop advanced guidance and assistance for examiners on best practices, and provide recommendations for corps-wide implementation of the Pilot’s best practices.

Another part of our efforts is ongoing examiner training.  Just like you’re all here today for continuing legal education—we are making ongoing legal training an integral part of the patent examiner’s experience.  Our training currently focuses on clarity of the patent record—emphasizing both why it’s so important to have a developed record for when a patent leaves the office, and the requirements of 112 with a focus on enablement, indefiniteness, and functional claim language.

Our multi-faceted approach also includes learning from our rich data to best identify trends in examination, areas for improvements, and next steps. This is why we’re working to centralize all of our quality review efforts and data in a single, uniform system. Through an online standardized form, reviewers—whether supervisors or Quality Assurance Specialists—will assess and capture their review of all aspects of examination, including: Whether rejections were made under each of the statutory requirements ((101, 102, 103, 112(f), (a) and (b)), and an assessment of the clarity and correctness of each rejection made. 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—three to five times more data. As a result, we will have more targeted and relevant training to our examiners, increased consistency in work product across the entire examination corps, and greater transparency for the public and within the Agency on standards for review. This “master review form” is now posted on our website so you too can see how we’re reviewing examiners.

For us at the USPTO, the form is already proving its value with another one of our programs—our Topic Submissions for Case Studies. The goal of the Case Studies program is to thoroughly review and analyze specific areas of patent examination to determine whether and how they can be improved. Back in December, we asked the public for suggestions on topics.  We received a number of good suggestions, several of which overlapped with areas we were already investigating. Several of our first Case Studies consider section 101—a challenging area of developing law as you all know.  Based on stakeholder input, we’re investigating (1) the clarity of the written 101 rejections,  (2) consistency of practice across art units, and (3) whether Office Actions with 101 rejections are practicing compact prosecution.

Our new Master Review Form will help us analyze these issues in a thorough and systematic way.  It’s designed to get at issues just like these. And we’d also like your feedback as we continue to improve on our first cut at this form.  We’ve published a Federal Register Notice explaining our new review process and I encourage you to provide feedback, including feedback on the form itself.

We think you will like what you see, but either way, we benefit from everyone’s input, including and especially patent litigators who work with the results of our work product.  We need you to tell us:  What else do you wish we would include in the file history?

I’ll briefly mention a few more initiatives in our Enhanced Patent Quality Initiative including—Integrating feedback/lessons learned from PTAB proceedings into examination and developing an automated pre-examination search. I am excited about these efforts.  They represent the USPTO’s commitment to continuing to ask hard questions and to making an investment in producing the best possible work product.

Turning now to our efforts on the AIA PTAB trials, the USPTO is “changing the rules of the road” with the release of new, revised, final rules for the PTAB. This is the result of the culmination of a process that began over two years ago and involved getting stakeholder input every step of the way. As you know, the PTAB was created by the Leahy-Smith America Invents Act of 2011. Since then, we have received over 4,600 petitions—three times the amount we expected. Despite this number, we still have not yet missed a single statutory deadline. But as hard as we worked on our initial roll-out of these proceedings, we never assumed that our rules or guidance would be perfect at the outset, but instead anticipated making refinements along the way.

One of the first actions I took as head of the agency was to kick off a series of listening tours on the PTAB, after the proceedings had been running for approximately two years.  The goal was to check-in with stakeholders and communities and get feedback. Judges from the PTAB visited eight cities around the country to meet directly with practitioners. A year later, I announced a series of “quick fixes” that the PTAB was able to make immediately in response to what we learned. These were simple, but important changes, such as allowing a claims appendix to be filed with a motion to amend and expansion of page limits for certain filings.

We came out several months after that with proposals for more substantive changes via a notice of proposed rulemaking. This week we’ve published our final rules, representing the completion of this process.  To the many of you in the audience who participated—thank you. I’ll just briefly highlight the main changes: Allowing patent owners to include, with their opposition to a petition to institute a proceeding, any testimonial evidence such as an expert declaration, including a new certification requirement for practitioners before the PTAB, akin to the Rule 11 requirements in federal courts; and clarifying that 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 2 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 from IP organizations, associations, businesses, law firms, patent practitioners, and others. 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, how we are always looking for ways to improve, and how we listen carefully to our stakeholders for input. Know that the USPTO is open to making whatever changes are necessary to ensure that the PTAB trials are as effective and as fair as possible, provided it is within our Congressional mandate.

The NYIPLA crowd has historically been active and diligent participants in these processes, and for that, I thank you.  To be the best agency, we need a real 360-degree perspective on how we’re doing. That means hearing from patent litigators, prosecutors, in-house counsel, academics, innovators (big and small), jurists and everyone with a stake in our patent system, which is really all of us, if you think about it.

Thank you for your attention today, and I look forward to hearing the next panel speak on the many other rules of the road that have been changing!

#  #  #