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Monday Jun 17, 2013

USPTO and the Obama Administration Taking Action to Improve Incentives for Future Innovation via High Tech Patents

Blog by Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the USPTO Teresa Stanek Rea

This month, President Obama offered a series of sweeping actions that, alongside Congressional steps, will immediately improve the environment for future innovation. These bold initiatives are designed to reduce abusive patent litigation tactics and to ensure the highest-quality patents in our system. The United States Patent and Trademark Office (USPTO) team is working hard, in consultation with stakeholders and the American public, to make this vision a reality.

The President set the stage for this new initiative February 14th when he said “our efforts at patent reform [via the Leahy-Smith America Invents Act] only went about halfway to where we need to go, and what we need to do is to pull together additional stakeholders and see if we can build some additional consensus on smarter patent laws.” On June 4th, the President announced five executive actions, four of which are specifically tasked to the USPTO. I’d like to take a moment to outline how the USPTO plans to begin implementing those actions.

The President’s first executive action instructed the USPTO to begin a rulemaking process to require patent applicants and owners to regularly update patent ownership information. The lack of availability of this information and the problems faced by innovators were highlighted in a study by the Council of Economic Advisers and the National Economic Council that was released with the President’s announcement. This study, entitled “Patent Assertion and U.S. Innovation,” documents the rise of litigation by so-called “patent assertion entities,” or PAEs (also described in the study as “patent trolls”). According to the study, a major challenge for companies and individuals targeted by PAEs is the difficulty in identifying the patent owner because PAEs often mask their identity by creating numerous shell entities. Better information on ownership will increase transparency, reduce abusive litigation, and enable more efficient licensing of patented technology. The rulemaking process will seek public comments on USPTO’s specific proposal on how to collect this new information and will also take into account stakeholder feedback received during earlier stages of consideration of this issue.

Turning to the second executive action announced in the President’s initiative, the USPTO will bolster training for patent examiners to improve their examination of functional claims and will also develop additional strategies to improve claim clarity. This action will build on our recent efforts to improve training programs for examiners to ensure the highest quality patent examination. Our next steps will be informed by the valuable stakeholder input received from the launch of our Software Partnership earlier this year, received both in public written comments and at two February engagement sessions in Silicon Valley and New York City.

The third executive action of the President’s initiative is focused on empowering citizens using patented technologies in consumer products. As the study “Patent Assertion and U.S. Innovation” documents, PAEs are no longer solely targeting large companies holding vast patent portfolios. Small businesses and enterprising individuals have also been on the receiving end of intimidating letters accusing them of patent infringement and threatening litigation. That is why we will create a valuable online portal that will provide answers to key questions and additional information resources for those individuals. The USPTO has long viewed public education as a core function of the agency; educational materials paired with ready access to public data on particular patents will create a powerful resource to support both users and developers of technology.

That leads me to our fourth executive action—expanding dedicated stakeholder outreach and bringing together the best of academic and government study of these issues. We will continue to actively support White House outreach efforts and help to initiate events across the country to help build a consensus on the next steps that policymakers should be taking in updating our policies and laws. We’re also excited to expand our Thomas Alva Edison Visiting Scholars program. Growing this initiative—which brings leaders in academia to the USPTO to develop empirical data and analysis on which to base agency efforts to promote innovation—will play an important role in helping policymakers, including the USPTO, Congress, and the federal courts.

In addition to our executive actions, the President’s initiative outlined a number of steps that Congress can take to reduce abusive PAE litigation while promoting a robust intellectual property system that drives innovation. We worked closely with bipartisan Congressional leaders during the development and passage of the Leahy-Smith America Invents Act (AIA), and we look forward to continue working with Congress to achieve the President’s goals.

The U.S. patent system “has spurred progress that has driven economic growth and transformed the way we live, work, communicate, and stay healthy,” National Economic Council Director Gene Sperling wrote in a White House blog June 4th. Our patent system is “enshrined in our Constitution…to encourage innovation and invention.” This Administration has done much to improve our patent system for the betterment of our economy and our society, including through the USPTO’s implementation of AIA. With your help we can—and we will—do more.


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