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High Hopes for PTO's Silicon Valley Branch
At a recent speaking engagement, Michelle Lee, the recently appointed head of the U.S. Patent and Trademark Office in Silicon Valley, declared the new outpost to be "open for business." Well, not quite.
Since Lee, the former head of IP strategy at Google Inc., joined in November, she's filled six judge slots. But she's yet to hire any of what could amount to hundreds of patent examiners that will eventually work out of the local outpost. Nor has she settled on a permanent location. For now, Lee and the other hires are working out of temporary offices in Menlo Park which is why Lee's speech this past week was held at SanDisk Corp.'s Milpitas headquarters.
The PTO's arrival is a big deal for patent lawyers and Valley companies who count intellectual property among their most valuable assets. Patent experts hope having a local office here will help address some of the PTO's perceived shortcomings, by letting it tap local technical expertise and making the office and the process of filing and challenging patents more accessible. And at the same time Congress authorized the creation of PTO branches in the Valley and three other cities, it created ways to challenge problematic patents early on, which could mean new work for patent lawyers here. Finally, the arrival of the PTO brings new career paths to patent lawyers in the region who've largely been limited to roles at private firms or in house.
"The distance from Alexandria has made things more difficult," Lee says, referring to the main East Coast operation. "A goal of the office is to provide easier and more convenient access to the application process for everyone."
The Silicon Valley branch, along with offices in Detroit, Denver and Dallas, were created by the America Invents Act, the broad patent reform bill passed in 2011. The Detroit office was put in place last summer, and the other three should be fully ramped up later this year.
In December Lee hired Neil Smith, a patent litigator in private practice for four decades, as the office's first administrative patent judge on the PTO's newly established Patent Trial and Appeal Board. Lee has brought on five other judges. Of those, three are new hires and two have been transferred from headquarters, said PTO spokesman Patrick Ross.
Lee declined to say how many judges and examiners the office will eventually hire. There are about 100 examiners in Detroit, and one person at the patent office said there will probably be 10 to 12 judges here.
Lee said she has narrowed the choices for a permanent office home to Sunnyvale, San Jose, Santa Clara and Mountain View.
The PTAB, created by the AIA, officially replaced the PTO's Board of Patent Appeals and Interferences in September. The new body has expanded jurisdiction to hold trials on patent validity and is meant to provide a cheaper alternative to litigation.
The PTAB will hear two main types of appeals. The first, an inter partes review, replaces the inter partes re-examination and is used to challenge patents following a nine-month window after issuance. The second, a post-grant review, is a new process to appeal a patent within the first nine months of issuance.
So far the new PTAB judges have been slogging through a backlog of inter partes review proceedings.
To date, there have not been any post-grant reviews. That process, which is similar to litigation and includes discovery and oral arguments, only applies to patents issued after March 16. While the review is supposed to be a litigation alternative, it is unclear just how much it will be used.
Edward Reines, a patent litigator with Weil, Gotshal & Manges in Redwood Shores, said post-grant reviews probably won't be sought that often until it's clear that doing so won't preclude a subsequent challenge.
"If you only have one bullet, do you want to use it in a post-grant review?" he said.
A NEW REVOLVING DOOR
Attorneys traditionally move between law firms, companies and government agencies, though the latter have significantly less presence in the Valley. The new office, Lee says, will change that. "There are a lot of benefits to be gained from going in and out of government service," she said at the SanDisk event, and is hoping for a "healthy cross-fertilization between the PTO, law firms and companies," in the area.
This may be easier said than done. Annual salaries for patent examiners, who are not necessarily attorneys, range between $55,000 and $90,000, with most starting out around $70,000, according to Ross. Salaries for APJs, who are attorneys, top out at $165,000.
In the private sector, the salary for a first-year patent attorney at a law firm can top $170,000, said Mark Kirkland, a partner with Fish & Richardson in Redwood City. "They may have difficulties hiring people because of the pay scale."
When it comes to hiring judges, the office can expect to find veteran patent lawyers, like Smith and another new hire, Thomas Smegal, looking to cap their careers with a stint on the bench. Lee's other bench hires are essentially senior patent associates at big firms who can burnish their resumes with some time as an APJ. One, Matthew Clements, graduated from Columbia Law in 2006 and has spent the past seven years at Ropes & Gray. Ross declined to make Clements available for comment, saying that no one is currently conducting interviews.
The other, Catherine Shiang, is also early on in her legal career, having spent five years as an associate at Wilson Sonsini Goodrich & Rosati. Ross declined to name the two transfers from the PTO's headquarters in Alexandria, Va.
Lee may have more trouble with the examiner jobs. Most new patent examiners are not attorneys, but instead experts in a particular technical field. But patent lawyers say many examiners do go on to law school and legal careers.
The new Valley branch won't just review patent applications from Silicon Valley. All the patent offices will evaluate patents from around the country. The hope though is that patent examination and review work will naturally be funneled to local offices that develop particular and appropriate expertise so that companies and inventors can interact with the staff on a face-to-face basis. That could mean, for example, that the Valley ends up being the place where software and semiconductor patents get routed.
But whether that leads to more interaction between applicants and evaluators isn't a sure thing. "Because of the way the facility will be set up," said Fish & Richardson's Kirkland, "there will still not be much impact on how we interact with examiners."
At her presentation, Lee said the regional office will allow applicants to have in-person interviews with their patent examiners, which will help resolve issues more quickly and keep the backlog of patent applications at bay. And those challenging the validity of a particular patent can choose to have the hearing here.
Instead of calling or visiting Alexandria, patent applicants and their lawyers can show up at the local office for an in-person meet or to talk to staff elsewhere via videoconference.
SanDisk general counsel Eric Whitaker, a friend of Lee's who arranged for her speaking event, says that much of the value of having a local office goes well beyond convenience. "There is a big cultural difference between Silicon Valley and D.C.," he says, "and the hope is the Valley office will take on the local business culture." That's another way of saying that maybe the Valley's fast, informal ways will counter the bureaucracy's gravitational pull.
Reines is another Valley fixture hoping the office here bring in a new breed of government worker, and says he thinks Lee's hiring is indicative of the type of talent the office will attract.
"Human resources have always been one of the PTO's biggest limitations," Reines says. "Having a supply of local tech-savvy examiners and judges will be very helpful."
This article originally appeared in The Recorder.