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Responding to criticism from the patent community, the U.S. Patent and Trademark Office has revised its proposed strategic plan to revamp the patent system. Under the new proposal, examiners would still lose their historic job of searching for prior art related to patent applications. As PTO Director James Rogan proposed in June, that task is to go to private outside contractors. But the PTO now plans to send applications to contractors rather than having the applicants do so themselves. The revised proposal also reduces some of the huge application fees included in the original proposal and would no longer allow applicants to defer examinations for 18 months. PTO Deputy Director Jon Dudas announced proposed revisions to the agency’s “21st Century Strategic Plan” at a meeting of the Intellectual Property Owners Association on Monday. Other officials in the Bush administration must sign off on the proposal before it is finalized. “We’re considering these changes,” said PTO press secretary Brigid Quinn. “It’s definitely not a done deal.” Quinn said the original proposal Rogan announced in June was never set in stone but intended for discussion. Members of Congress, as well as major IP organizations, have criticized the plan. In October the American Intellectual Property Law Association, the Intellectual Property Owners Association and the International Trademark Association sent a joint letter to the director of the Office of Management and Budget outlining the elements of the plan they opposed. Among other things, they objected to permitting patent applicants to defer the examination of their patents, requiring applicants to select a contractor to perform an initial prior art search, and the imposition of certain application surcharges. Under the agency’s revised plan, rather than deferring examinations, the PTO would allow applicants to abandon their applications before the examination is completed and get a partial-fee refund. As for the proposed application fees, the PTO is dropping so-called punitive fees that were intended to dissuade applicants from certain activities, such as filing applications with excessive claims or dividing a large application into smaller applications with fewer than 20 claims. The new fee structure is not yet available. As a result of the fee changes, Quinn said the agency would get about $400 million less and require more time to issue a patent. Thus, she said the agency is considering issuing an advisory opinion 18 months after an application is filed to let the applicant know the likelihood that a patent will be issued. The three major patent groups that wrote to the OMB in October have endorsed the PTO’s revised plan. However, they have tied their support to eliminating the diversion of PTO revenue to other government agencies. “We are pleased that we can now report, in light of proposed refinements to the plan recently shared with us by Undersecretary Rogan, that we wholeheartedly endorse the plan,” the three groups wrote in a Nov. 22 letter to the OMB. “Our support is based upon the assumption that the Bush administration will effectively address the issue of diversion. Our members will insist that we strongly oppose any proposed fee increase that does not include an appropriate solution to diversion.” AIPLA Executive Director Michael Kirk said these groups have not yet seen the fee proposal and expect it will be available in late January or early February as part of the president’s budget or as a separate legislative proposal. Former PTO Director Q. Todd Dickinson, a partner with Howrey Simon Arnold & White, said “the big question” is whether the rank and file members of the IP groups will support the revised plan. “The administration needs to send a strong signal about their commitment to ending diversion,” Dickinson said. While the IP groups have been appeased by the PTO, examiners are still opposed to the outsourcing of prior art searches. Ronald Stern, president of the Patent Office Professional Association, the union that represents examiners, said the tasks of a prior art search and examining an application are intertwined. Separating these duties, he said, will lead to great cost and a repetition of tasks.

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