Bernard Knight Jr., former general counsel to the U.S. Patent and Trademark Office, played a significant role in the creation of the America Invents Act — the 2011 law that has been touted as the most significant change to the U.S. patent system in more than 60 years.
But while the AIA has transformed patent law in major ways, Congress is already writing legislation that could further reform the system.
All this is happening at a time when the PTO is without a director. The agency has not yet replaced former director David Kappos, who stepped down in February to join Cravath, Swaine & Moore. And the PTO’s acting director, Teresa Stanek Rea, announced in September that she, too, plans to resign. The White House is believed to be reviewing candidates, but so far a new PTO director has not been named.
Against that background of an IP agency in flux, we talked to Knight, now a partner at McDermott Will & Emery, about several related issues. An edited version of that interview follows.
Corporate Counsel: What do you think of the proposed legislation pending in Congress that is designed to thwart so-called patent trolls?
Knight: Some of the components of the bills could actually hurt more than help. The concept of fee shifting could end up hurting small businesses, for example, because they could end up being responsible for paying legal fees. This might deter them from suing to protect their patent. Trolls are not the only ones filing lawsuits for patent infringement.
CC: One of the more controversial parts of the legislation appears to be a proposal to expand the new proceeding being used to challenge covered business method (CBM) patents, which mostly cover inventions that perform a financial service. Under some proposals, an expansion would allow the CBM challenge to be used for other types of patents as well — codifying the Patent Trial and Appeal Board’s (PTAB) decision in SAP America Inc. v. Versata Dev. Group Inc., so that CBMs would include software patents incidental to a financial service. What do you make of this?
Knight: This concerns me. Postgrant proceedings at the PTO have been a lot more popular than we anticipated when we were drafting the rules. The PTO’s chief economist predicted we’d see 400 cases in the first year, but we’ve already seen more than 600. The PTO is now the third busiest patent docket in the country, after the Eastern District of Texas and the District of Delaware. The law says the proceedings have to conclude within a year, with the possibility of an extra six months if necessary. But we don’t even know whether the judges doing the reviews will be able to get through the existing cases in time.
If you open up the CBM review proceedings to many other types of patents, there’s a real question as to whether the PTO will have the people and resources to get the job done in the required time. I also wonder about the wisdom of targeting a specific industry. The proposal to expand the CBM proceeding is really a way of targeting the software industry — an industry that contributes a great deal to the U.S. economy.
CC: You recently wrote an article in The Hill saying the new PTO director is in for a bumpy ride. Can you elaborate on this?
Knight: The new director will have to make sure the PTAB has sufficient resources and personnel to be able to conduct its postgrant reviews within the allotted time. The new director will have to be very knowledgeable about these new postgrant proceedings, which have become so important to the patent system.
CC: David Kappos, the previous PTO director, played a key role in the patent reform debate that resulted in the AIA. What role should a new director play in the debates surrounding patent reform?
Knight: David Kappos is a tough act to follow. Maybe that’s why it’s taking so long to name his successor.
The new director will have to have extensive management experience to manage the PTO’s 10,000 employees in offices all over the country. The director will also have to work with the White House and Congress to help steer efforts to get rid of patent system abusers. The White House has announced steps to improve patent quality — it’s requiring the PTO to look more closely at software patents and provide more training to examiners. And as we discussed, Congress is considering several bills that aim to deal with the patent-troll issue. This has become a hot political issue and one that will have a major impact on innovation and economic growth.
Lisa Shuchman is a reporter for NLJ affiliate Corporate Counsel.