Remarks as Delivered Kathi Vidal
Under Secretary of Commerce for Intellectual Property and
Director of the USPTO
2022 Bench & Bar Conference Fireside Chat
Jun 16, 2022
Azra Hadzimehmedovic: I have the distinct pleasure of welcoming Director Vidal with us today in person. It has been two months and three days since you were confirmed but you have been hard at work in those two months and actually in the months leading up to your confirmation because there was a period there… And you've been hard at work in getting your policies and priorities put into action right away. We have a lot to cover. So we'll just dive in. I'll start with Fintiv.
I think it's fair to say that many stakeholders have called for more certainty in the application of the different factors. And some say it's been hard to predict how each judge would come out on the application of any single factor. What can we expect from your office in terms of the discretionary denial policies?
Kathi Vidal: So first of all, it's so great to be here and to be here with all of you and see everybody in person. I've been coming to this and was on the planning committee for years and just appreciate everything everybody did to make this come together. And thank you Azra. In terms of Fintiv, you are going to see more certainty. As with everything we're doing, we're going to do interim and then final. And the thinking around that is where we can make change swiftly, we're going to do so. You saw that with Director view, where we provided additional guidance. You saw that with the role of the Director vis-à-vis the PTAB. And you're going to see that, I hope in the next week. I can't promise when, because there are processes. On Fintiv, we're going to provide more clarification on a few of the factors and how they will be applied. Now that is interim, just like what you've seen with the other three. We are then going to be moving things to final through rulemaking. So we will see that on Fintiv as well. We already did a request for comment on discretionary denials, received 822 comments so thank you all for participating in that. That's going to go through rulemaking where it's other aspects may go like the Director review is going to go for request for comment before we go through rulemaking.
Azra Hadzimehmedovic: We can next turn to Director review and there you have been making a splash. There have been as far as I know three Director reviews and all three have been sua sponte, which is new. The most recent ones that I've seen are the two VLSI cases that are very interesting and sure the audience is aware of the very large $2.1 billion damages verdict in the case. Intel's petitions were first denied. And now different entities have filed petitions on the same patent and those were being instituted. The Director intervened and will be requesting briefing. I do understand you cannot tell us the details of what is going to happen in that case, but I think it would be interesting for our audience to find out from you. How do we get your attention for Director review on any particular case?
Kathi Vidal: So I tried to put forth the criteria, I did put forth the criteria on the Director review page. So there is a section that tells you the types of things I would take up on Director review. It's a little bit broader than for POP review, I'm sure everybody's familiar with the POP process. So if you're unhappy with a decision on institution, or a final written decision, you can raise it with POP.
Part of what I do is I'm on the POP panel and I look at all of those. So there is a mechanism, this by the way, despite what you may have seen in the news today, there is a mechanism to get the attention of the Director when it comes to institution decisions because I review all those and I decide whether I'm going to take any on Director review, which as you saw I've taken up to you on Director review.
In terms of getting attention, it's really about does it raise an issue that I should be addressing whether it's a policy issue, an issue of first impression, etc.? Or is there a case to be made that the decision that there was error? And so I not only want to take the ones where I feel like there's something that I want to say on it, but if there's any error where I feel like it needs to be rectified, I'm going to take them and deal with that.
Azra Hadzimehmedovic: Turning next to a completely uncontroversial topic, the 101 section, what is your in your office's current thinking on 101?
Kathi Vidal: So, it needs to be fixed. You know, we are going back to first principles that we need a system that incentivizes innovation instead of ices investment of innovation and you cannot have that if the law is not clear. It just it doesn't work the way it's supposed to work. So I did find out this morning that you hopefully will see the results of the 101 survey that we did, that Congress asks us to do in terms of determining whether current 101 jurisprudence actually encourages and incentivizes innovation in some of the new and emerging technologies.
You will not be surprised about the results of that survey, but it is important information for Congress so that they can think about legislation in the area. Certainly the you saw our brief, also the solicitor's brief, it was a joint brief in American Axle on that. What I've been telling people is there is not going to be an ideal vehicle for raising 101 before the Supreme Court. I think everybody's been waiting for that ideal vehicle. There won't be one. You're not going to resolve all 101 issues across the pharmaceutical space, across the computer space, in one vehicle. So we just have to make vehicles be perfect. And that means people will just need to chime into the process to invite the Supreme Court to clarify 101 law across all fields.
So I would say those, those are the two and then the 101 guidance. We are looking critically at that, if anybody has any input on that whatsoever. We've just rolled out a director webpage where you can send comments directly to me through that webpage. So the more specific you are any comments you provide across anything, a red line would be great, then I’ll know exactly what you're thinking. But any thoughts you have on the 101 guidance, please send them my way. As you know, Azra, the last guidance was in 2019. I think it's done a really good job. I'm not looking to completely revamp something. It created a lot of consistency across the examining core. And I think that was really important, but it's time to take a look at it to see if it needs to be altered in any way.
Azra Hadzimehmedovic: Another uncontroversial topics F/RAND. It's been recent that public statement that PTO and NIST have withdrawn from the 2019 and you have not reinstated the previous statement and the draft statement that was in the making is not going to be at least for now, the public statement of the United States. What we've seen in the past is that the withdrawal of the statement has been sort of generally accepted and welcomed by both sides of that debate. And maybe some would have liked for the 2021 to be implemented. Where do you see this policy going from the PTO’s perspective and also sort of the government agencies perspectives?
Kathi Vidal: While I appreciate that, it's interesting to see all the speculation on what that meant and how that came about. It was the right decision. I mean, that's how it came about. It was not an impasse between Justice and me and Laurie Locascio at NIST. It was it was a deliberate move, and I'll give you a little bit of the history behind it. So no country had a statement. And then in 2013, the U.S. decided that we needed a statement. So the U.S. then put out a statement. As some of the stakeholders in this room know, that statement was misused by other countries, to say your country does not support you.
Then there was a 2019 statement, which some people believe overturn the 2013 statement. The Directors involved in both say no, it just clarified it and didn't overturn it. So there was a lot of confusion around the 2019 statement. And again, it was misused by other countries. So when we went back and thought through this, it didn't take long to figure out we shouldn't be in the business of making a statement when it comes to things like this and I've been asked questions about this. Well, what are your thoughts on injunctions? And I say, okay, you've got the Federal Circuit judges in this room, you got the Apple case that they wrote, you have eBay, that tells you what you need to know about injunctions in this space.
It doesn't mean we're getting out of the SEP policy area. We want more US companies involved in standards. That's critical. We want to work with our allies on this. We're working with WIPO on this and I'm going to Geneva in July to work on this. I'm working with DOJ on this. I'm working with NIST weekly on this. So we want to do a lot in the policy area. We want small to medium sized enterprises involved in in the standards area. So there is a lot we need to do as a country. What we don't need to do is tell you what the Federal Circuit and the Supreme Court have said in terms of their law.
Azra Hadzimehmedovic: When I first heard about you as a very famous litigator, I also heard that you were somebody who was really set on promoting inclusion in our profession. What do you see as promoting inclusion innovation at the USPTO?
Kathi Vidal: So that's a good question. And you know, when I was asked about this position, and whether I'd be willing to come to DC and serve, that besides U.S. competitiveness, besides innovation generally, which I believe very strongly, and I want to see more innovation, I also thought about the ways that we could enhance innovation everywhere in the U.S., including in underrepresented communities. That's not only underrepresented communities in terms of ethnic communities and women. It's parts of the country where people have felt left behind. We've seen that in the last few years and so this is just the perfect time for me to be here because the entire administration is aligned around that.
And so what you're going to be seeing soon and again, it's this interim, and then final is we are working on a national plan and program around this. It's part of CI2, the Council for Inclusive Innovation, which the Secretary chairs. It's a USPTO initiative, we've asked the Secretary to chair it, and I vice chair it, so you're going to see a lot around that. But while we're doing that we're already rolling out parts of it because we don't want to wait until something's final to start creating change. And so what you've may have seen recently is we launched an inclusive innovation webpage where anybody who's never innovated before can connect into that.
And it provides a lot of information on the IP ecosystem, how to get involved. It actually provides information on lawyers can get involved in pro bono, which is critical.
It was critical to this program and I just want to give you a stat on this because this gives me hope that we are going to make change. So I just wanted to give you the stats on this. So right now, 13% of inventors on U.S. patents are women. Well, that's the approximation. When we get out there to pro bono counsel, the numbers are dramatically different. So the people who avail themselves of our pro bono services, 41% of them are women. So the innovators are out there, we just need to reach them.
If you look at ethnic groups, 30% of those who availed themselves of the pro bono services are African American. 14% are Hispanic. 5.6% are Asian, and 1.5% are Native American. So if you think about those stats, and you think about the representation of those who've actually been informed of our system and are availing themselves have IP protection, they're dramatically different. But looking at those stats, we know the innovators are out there, we just need to get out there and reach them. So we have a lot we're doing on that, I've been touring the country, talking to innovators and trying to figure out the ones that found their way into the process.
How did you do it? What can we do better? We have a lot of ideas on this including, even as you go through the application process, we have found out that women and certain minority groups self-select out once they get a rejection, because that's something that seems like it's a no go. So one of the thoughts is to have a cover letter on the rejections to explain, kind of a softer wording, to explain what this means and then to connect them with the video so they can think about what are your next steps. So we're looking at the system top down, and then trying to get out there to make sure that we're doing everything more inclusively because we really we need everybody involved in the system. Now, it's not just an equity issue, it's what we need to do as a country. You know, in order to have more innovation in order to do to better as a country in terms of jobs, GDP etc.
Azra Hadzimehmedovic: One of the things I love to do every time we get a new case is dig into the prosecution history, you know, beginning to and figure out how is this going to affect claim construction, where it's going to take us? I've heard that you've been thinking about how to make prosecution histories sort of even more helpful down the road for litigation.
Kathi Vidal: Yeah, so one of the things, so a couple of things that we're doing. AIPLA and IPO have agreed to team with me on doing training for examiners on prosecution histories and how they're used in litigation and ways to create more robust prosecution histories. I've also spoken to a number of judges in this room about also having the judges come in and let the examiners know what they can do to make the judges job easier when the judge is interpreting the claims. So we have that ongoing effort.
Another thing that we're doing is we're also looking carefully at, it's called patent quality. I don't like that term, but we want robust and reliable IP protection. And so I'm working with PPAC and with others to… and again, I welcome any idea anybody has, you can go to that page that we've just set up and give your feedback to make sure that at every step of the way, we're being as clear as possible in terms of what the rights are. And we have a lot of things on the board. We may or may not move forward with everything but I encourage all out of the box thinking on this but it's something that I feel very strongly about having litigated for so many years and having seen having seen how patents sometimes are stretched beyond what was originally intended. I want to make sure that we're protecting individual inventors but we're also protecting the companies that are sued to make the rights as clear as possible across the board whether it comes to investment or interpretation by the courts.
Azra Hadzimehmedovic: Almost out of time so is there anything… I think you have a message for the audience that you wanted to share on the program that you have going on at the PTO
Kathi Vidal: About pro bono?
Azra Hadzimehmedovic: About the young attorneys…
Kathi Vidal: Yes, thank you. I have lots of messages so I forget which message I wanted to communicate here. So thank you for that. And by the way, I did agree to be on the next panel. So I'm happy to be on that panel. Take questions, etc. I know we this is cut short, so I'll join the next panel on AIA, It's the LEAP program. The bottom line is please use it. The PTAB judges, and you'll hear from Scott Boalick, he'll be on the next panel as well. They want to see the more junior people there. It's important for the profession that they get that training. Nobody's going to interpret that as you didn't care about your issue. As you know, the judges read the files very closely ahead of time and they pretty much just want to sort out some of the facts. They want to hear things that most likely the more junior person knows about and you can split the time. So I would just encourage people to use the LEAP program to have junior people be part of the argument. So that's just my plea for this particular speaking session.
Azra Hadzimehmedovic: So thank you very much for being here in person with us. I wanted to share something that I've heard that I think is so inspiring. The director has been basically waking up every night at 2:30 a.m. to start her day to do the work, the agency.
It's beyond inspiring. We really thank you for everything you're doing and we're looking forward to seeing what Fintiv will bring next week and it appears that there's new every week on what you're doing. Thank you very much for that.
Kathi Vidal: Well, and thank you.