SAN FRANCISCO — Legislative patent reform may be dead for 2014, but PTO leader Michelle Lee is still looking to rein in what she calls abusive patent litigation.

In a talk headlined “Speaking Truth to Patents” given Thursday at Stanford Law School, Lee hailed several recent U.S. Supreme Court patent decisions while touting U.S. Patent and Trademark Office efforts to improve the quality of patents.

“I reject the suggestion that any efforts to fix the problem of abusive patent litigation will break the entire system,” she said. “Our patent system has proved itself more resilient than that. It can tolerate change when needed.”

Asked afterward to define “abusive patent litigation,” Lee demurred at first, then said it would include stretching a patent beyond its original meaning and demanding settlements because “it’ll cost you a lot more to hire a lawyer.”

Speaking in a classroom where she once studied IP law with Professor Paul Goldstein, Lee assured the Silicon Valley lawyers and business people on hand that she understands the concern that reforms sought by the IT industry could cause headaches for the life sciences industry. “I clearly see the tension,” she said. “I heard all the arguments” throughout the debate over Sen. Patrick Leahy’s reform measure.

Lee emphasized that patents play a critical role in promoting innovation. She pointed out that the licensing of federally funded research in the 1980s led to an innovation boom that benefited, among others, her former employer Google.

But the extraction of cost-of-litigation settlements from unsophisticated companies and end-users “is a flaw in an otherwise great system,” Lee said, and promised to keep attacking it.

Two Supreme Court decisions that allow more fee shifting in patent cases is a good start, she suggested. The high court’s Nautilus v. Biosig decision on indefiniteness is “a win for us all, because having fewer ambiguous patents leads to less abusive litigation and more innovation.” And last week’s ruling in Alice v. CLS Bank “likely lays the groundwork for more aggressive challenges” to business method and software-related patents, she said. The PTO just this week issued guidance to patent examiners on the CLS Bank decision, she noted.

As for the PTO, it’s benefiting from more stable funding thanks to the 2011 America Invents Act. That’s allowed the office to upgrade IT tools for its patent examiners, improve their training, and encourage them to use crowdsourcing to locate prior art.

“So though legislative efforts to fix the problem of abusive patent litigation may have to wait, as you can see, the administration is not waiting,” she said.

Lee was named deputy director of the PTO six months ago. Rumors have surfaced recently that President Barack Obama may be eyeing a permanent director of the office. Lee told reporters she’s happy with her role. “I know it’s a priority for the administration to find a director,” she said. “I’m just focusing on my job. I look forward to continuing in the role.”

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