Advocacy Groups Split Over PTO Proposal to Disclose Patent's True Owner
The National Law Journal
A patent office proposal to require disclosure of a patent's true owner so the agency can publish up-to-date information has sparked debate.
Intellectual property and business groups are lining up on both sides of a U.S. Patent and Trademark Office proposal.
In a Federal Register publication on November 26, the PTO sought comments by January 25, but it accepted comments on a case-by-case basis after that date.
The PTO's proposal had the long-winded title, "Notice of Roundtable on Proposed Requirements for Recordation of Real-Party-in-Interest Information Throughout Application Pendency and Patent Term." It stated that more transparency would help the public, financial markets, inventors and manufacturers better understand who owns what inventions and the competitive environment.
In a January 29 letter, the Intellectual Property Owners Association focused mostly on the burdens of disclosure.
The association stated that ownership disclosure immediately before a patent is asserted "may not be overly burdensome to applicants and patent owners," but it noted several situations that could make disclosure burdensome. These include ownership disputes; license negotiations; corporate restructurings; and the tendency for some corporations to assign patents to multiple subsidiaries. Administrative issues would also place a burden on patent lawyers, the group noted.
That group also wants to know whether the agency wants the ultimate corporate parent of the patent owner or "disclosure of every party with standing to bring an infringement action," which it believes is cumbersome.
In addition, it wants to know what penalties the PTO has in mind for failing to comply. "IPO would strongly oppose any penalty that includes abandonment of an application or invalidation of a patent," the letter states.
"Continually updating the real party in interest over a period of years can be a really substantial cost," said executive director Herb Wamsley. He noted that outside counsel who prosecute patents may not always have ready access to ownership information. "There's a lot of record keeping here."
The American Intellectual Property Law Association made similar points in its January 25 letter.
Although the group said that the ownership information "would be beneficial both during and after prosecution," it detailed concerns about the substantial cost and time burdens on patent applicants.
The association appreciates the disclosure problems the PTO is grappling with but the proposal needs work, said executive director Q. Todd Dickinson." We provided helpful suggestions but it's not ready for prime time."
Also on January 25, the American Antitrust Institute filed a letter favoring the proposal.
The institute stated that a better patent ownership record "can help operating companies, both incumbents and potential new entrants, manage their legal risk and reduce their search costs."
The institute argued that more disclosure could help facilitate the standard-setting process and aid antitrust agencies investigating acquisitions involving patent portfolio transfers. It said more disclosure could mitigate the anti-competitive effects of patent assertion entities, commonly known as "patent trolls," which use patents chiefly to demand licenses and file lawsuits. That's because their business model relies on ownership secrecy.
The PTO did not respond to a request for comment.
This article originally appeared in The National Law Journal.