2014 AIPLA Opening Plenary Remarks

Deputy Director of the USPTO Michelle K. Lee

October 23, 2014

2014 AIPLA Opening Plenary

"Our Shared Stewardship of a Gold-Standard IP System"

Remarks as Prepared for Delivery

Thank you, Wayne, and good morning everyone. Before I begin, I just wanted to say, it's been a busy week, and that I am beginning to lose my voice, but it means a lot to me to be here today and to speak to you all of you, so I hope you will bear with me and hopefully my voice will hold through the speech.

With that, I'd like to congratulate Q. Todd Dickinson for his successful leadership of AIPLA, and for his past service as Director of the United States Patent and Trademark Office. We at the USPTO appreciate his support of our agency over the years, and I personally want to thank Todd for his warm welcome of me when I took the helm of the agency in January. I know we all wish him the very best in his future endeavors.

I also want to commend Vince Garlock for his recent stewardship of the Association, and congratulate Wayne for his successful tenure as the 106th president of AIPLA. And congratulations, Sharon Israel! I look forward to working with you in the months ahead on many of the big issues I'll be talking about here today. As always, I see a number of familiar faces out there in the audience-friends and colleagues who've made a difference in the world of IP through their dedication and professionalism. And that's why it's a pleasure to speak to AIPLA, which has played such a critical role in shaping our nation's intellectual property system for one hundred and seventeen years.

On a more personal note, it was truly an honor when President Obama announced his intention to nominate me for the helm of the USPTO-America's innovation agency-as it navigates a sea of transformative change. As some of you know, I've spent my entire career engaged in innovation. I grew up a tinkerer, always looking to learn how things worked and how things could be improved. That passion led me to become an engineer, which then later led me to become an intellectual property attorney and advisor to high-tech companies. I've prosecuted patents; asserted patents; defended against infringement; and licensed, bought, and sold patents, sometimes for very large sums of money. So I share your conviction, gained through years of firsthand experience, that IP has tremendous value and is a driver of innovation.

I believe we also share an understanding that we are living in a pivotal moment in the history of intellectual property. IP is on the minds of many, from the most powerful policymakers to the youngest of innovators. It's the subject of articles in Vanity Fair and episodes of This American Life. And through a special partnership with the IPO Education Foundation, today even Girl Scouts can get badges for demonstrating a working knowledge of IP.

Of course, an ever-expanding ecosystem of interested parties leads to an ever-expanding range of viewpoints on the appropriate contours of IP protection. As we move forward in this critical moment in our history, it can be helpful to compare our efforts to sailing. To reach our destination, we must sail into the wind. And we must do so with all hands on deck. In other words, it's incumbent that we all work together as responsible stewards of our IP system. We must ensure its continued role in promoting the innovation that defines our society, and our economy.

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 for the long run. For those whose role it is to interpret our nation's IP laws and render legal decisions resulting from that review, they must do so in a clear and consistent manner. 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 both new laws and new judicial interpretations of those laws, we must do so with care, precision, and transparency. So are we all meeting our respective obligations? That's a question I ask myself every day.

Let me share four priorities the USPTO is undertaking as a responsible steward of our IP system. First, the USPTO is now even more focused on quality. Quality yields certainty in the marketplace, reduces needless litigation and fuels innovation. Second, in the increasingly online commerce-driven world in which we live, it's incumbent upon the USPTO to advance cost-effective and strong global IP protections. Third, the USPTO must remain a leader in operational excellence. We owe our customers nothing less. And finally, all three of these priorities must be accomplished transparently, with active public engagement.

So let's start with the agency's first priority: quality. As you know, a high-quality patent clearly sets out the boundaries of a claimed invention, and encourages other innovators to come up with something transformative and new. I'm hardly the first USPTO leader to stand before you emphasizing that quality is a priority. And I certainly won't be the last. But for too long, due to uncertain budgetary conditions and limited resources, the USPTO has had to make do with less. No longer.

Thanks to the efforts of my predecessors at the USPTO-and all of you-to achieve a sustainable source of funding and a reduction in our application backlog and pendency, for the first time in a long while the USPTO doesn't just have to make do. It can focus on building the workforce and tools it needs to support a world-class patent quality system. That's why, at the most recent Patent Public Advisory Committee meeting, Commissioner for Patents Peggy Focarino outlined the contours of our new Patent Quality Initiative. We will roll out the initial results of this initiative early next year. Let me give you a brief preview today. This new initiative is built around three core elements: excellence in prosecution products and services; excellence in customer service; and excellence in measurement of quality.

I've asked that teams of employees from across the agency-from examiners to IT staff to policy experts-be put together to take a hard look at patent quality from every angle. We're considering all options-big and small-before examination, during examination, and after examination. This includes upgrading IT tools for our examiners, such as fully implementing our Patents End-to-End system and expanding international work-sharing IT capabilities. It includes increasing resources to improve patent examination quality, for example, by expanding focused reviews of examiner work products to measure the impact of training; improving the effectiveness of interviews between examiners and applicants; and providing training to all of our employees that interact with customers. It also includes comparing best practices and collaborating to improve quality with our foreign counterpart offices; more on that in a bit. And it includes using big data techniques to measure and improve every stage of the examination process. What do I mean by big data? Well, we collect a lot of data during the examination process, but we haven't had the resources to fully capitalize on its potential. Now we do.

We can not only analyze data effectively, but apply lessons learned throughout the examination process,

  • improving quality from the first touch of an application, and
  • providing more precise training to our examiners to fill any specific gaps identified.

Of course, when measuring results we need to better understand what quality means to our customers. That's why we will start that conversation with you early next year through a series of discussions across the country, explaining how we currently measure quality and seeking your input on how we can do better.

All of this is in addition to the existing quality initiatives we have underway, including

  • increased technical training for our examiners;
  • more legal training, including on Section 112(f) on functional claiming;
  • a glossary pilot program;
  • easier ways for third parties to submit prior art; and
  • enhanced use of crowdsourcing techniques.

Further, the USPTO is being a responsible steward of our IP system by ensuring that our AIA trails testing patents of questionable validity are efficient and cost-effective. This is our mandate from the AIA. Based on the number of petitions we have been receiving, our stakeholders seem to value the service we provide. But we are looking to make these proceedings even better. That's why the Patent Trial and Appeal Board held public outreach events in eight cities earlier this year, and plans to hold six more next month. We're sharing the Board's progress and experiences so far, while also seeking input on improvements. So as we engage in the admittedly challenging task of improving patent quality, I have an ask of all of you as members of the IP bar, professionals who prosecute and litigate patents every day: Work with us to create a world-class patent quality system. It is what we must do to maintain a healthy and respected IP system. It is what we must to do to be good stewards of our IP system.

The agency's second priority is a continued commitment to supporting U.S. innovators competing in the global economy. As Secretary of Commerce Penny Pritzker and I hear from businesses of all sizes looking to manufacture and export their products overseas, they frequently express their need for cost-effective access to strong IP protection abroad.

Now one thing that remains clear is that our IP system is considered by many around the world to be the "gold standard." More than ten thousand innovators and consumers in seventeen countries said so in a recent survey by Time Magazine. And that belief resonated in conversations I had in Geneva during the most recent World Intellectual Property Organization meetings. In those meetings I discussed with peers from IP offices around the world our desire to move forward on operational coordination to streamline procedures and reduce costs for our innovators who are seeking foreign IP protection.

As many of you know, we've spent the past two years implementing the Cooperative Patent Classification system, which we developed with the European Patent Office. President Battistelli will speak to us today at lunch and he may have more to say about this then. The system permits more effective prior art searches while reducing duplication of work. That should make patent examination both faster and better, supporting our focus on patent quality. While in Geneva, I signed an agreement with the Korean IP Office, or KIPO, obligating them to reclassify their entire patent collection under the CPC. This is a huge step forward for international worksharing, and I encourage other offices will follow Korea's lead.

All of these provide excellent examples of how important streamlined and coordinated operations are in achieving our goals. And that's why one of the agency's priorities moving forward is operational excellence. At the USPTO I have the privilege to serve alongside of some of the hardest-working, most committed civil servants around. And I'm excited about the steps we're taking to further modernize our workforce, increase our production capacity, and ensure quality patent and trademark examination. You've seen some results of these efforts over the past several years. We reduced the backlog of unexamined patent applications from a high of over 750,000 in January 2009 to barely more than 600,000 as of September 22 of this year. That's a decrease of more than 17%, despite an average 5% increase in filings every year since 2010. And when it comes to trademarks, our performance measures are every bit as impressive, with a first action pendency of 3 months, and pendency from filing to registration or abandonment at an historic low of 9.8 months. We were able to achieve this, in part, due to increased hiring and retention of skilled examiners.

As IP becomes even more important and our filings continue to increase, we must continue to invest in our workforce to help them perform their mission to the best of their ability. Our award-winning telework program-which aligns the agency's needs with a dispersed 21st Century workforce-has been, and will continue to be, a key component of these improvements and our agency's success. It provides significant benefits in recruiting and retaining highly skilled employees while saving the agency money. It's allowed us to more than double the number of patent examiners since 2005 without increasing our real estate footprint.

But as innovators know, the cost of being a trailblazer is that you are always the first to encounter obstacles in your path. No program is perfect, and the USPTO's telework program is no exception. Recent events have helped shine a light on areas where our telework program can be improved.We've already moved forward with a number of concrete steps to bolster the management of the telework program to ensure the integrity of our operations.

These actions will help ensure this incredibly valuable program continues to provide enormous value to our agency, your clients, and the American people. But our focus is on improving all operations, including those that directly impact our customers. Many of our ongoing IT improvements will make your lives easier, from filing a patent or trademark application to managing your fees. We'll be holding a series of roundtables soon to share our work in this area and seek your input.

You are hearing a recurring theme here. Each of the agency's priorities-quality, global leadership, and operational excellence-demand real-time engagement with the public. Like my predecessor David Kappos, I come from the private sector, where customer service, input and feedback reign supreme. As a long-time user of the services of the USPTO, I watched with admiration and appreciation as the agency tacked in the direction of serving USPTO's customers through transparency and engagement. The Agency will continue to sail that path.

We've valued your participation in our various partnerships, such as the long-standing Bio-Chem-Pharma Partnership and one we created last year, the Software Partnership. I'm looking forward to seeing the fruits of our latest effort, the Cybersecurity Partnership, which we just announced on Monday. Our new satellite offices also provide opportunities to engage with more of you than ever before. And let's not forget our public roundtables held around the country, which allow us to hear directly from you on a range of important subjects. I've mentioned our PTAB roadshows and our forthcoming events on patent quality; those are but a few examples.

I also mentioned earlier the role of the federal court system as one of the stewards of our IP ecosystem. As you know, the Supreme Court has been very active on the patent front this past year. Recent changes in case law on various topics have required us to issue new guidance to our corps of more than 8,500 examiners. As responsible stewards of our IP system, we have an obligation to ensure that any change to the law is implemented faithfully and uniformly. We have valued your guidance in these areas.

Finally, we look forward to hearing from all of you on the ways we can further strengthen our system through balanced and meaningful legislative reforms. We hope to see patent reform move forward on the congressional agenda next year. All of us, as stewards of our IP system, have an obligation to engage in that process responsibly, thoughtfully, and with the goal of ensuring balance-regardless of your monetary self-interest on an issue. So we all have roles to play as responsible stewards of our IP system. Congress. Courts. Agency leaders. And advocates like you. I'm confident that, together, we can chart a path into the wind that avoids the shoals, sandbars, and storms.

We have a model to follow. You may recall that one of the biggest comebacks in sports history happened last year out in my part of the country, when the multi-day America's Cup sailing competition was held on the San Francisco Bay. A team of Silicon Valley innovators pulled off that win. In interviews after their victory, team members said that every night after a win or a loss they would analyze the data from that day's race. They then made real-time adjustments for next day, with each team member knowing exactly what they had to do to meet their shared goal.

We should remember that lesson as we find ourselves at this unique moment in the history of IP. None of us can succeed on our own. We need to work together as we-responsible stewards-tack toward our shared goal, an IP system that will continue to promote innovation across industries now and in the long run. Thank you again for having me here today, and best wishes for another great year in the exciting world of IP.

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