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The U.S. Patent and Trademark Office’s multipronged attack on its massive backlog through proposed rule changes and a sweeping strategic plan has stirred the ire of three major industry trade groups. The patent office’s draft strategic plan for 2007 to 2012 includes measures such as offering patents with different levels of protection for a range of prices, and allowing applicants to speed up or slow down the processing of patent applications. Representing broad swaths of intellectual property attorneys, inventors and technology companies, the American Intellectual Property Law Association, the Biotechnology Industry Organization and the Intellectual Property Owners Association issued strongly worded rebuttals last month to at least some of the ideas floated in the patent office’s plan. The complaints about the strategic plan follow a deluge of 600 mostly negative comments about several proposed rules. Three proposed rules in particular have been a magnet for industry anger. They are: Limiting the number of claims about the scope of protection covered by the patent that applicants can make in a single patent filing. Reducing the number of continuations, which are revised applications. Information disclosure requirements that put the burden on the applicant to provide all relevant material to the patent office. Like the proposed rule changes, the strategic plan also includes several controversial ideas, such as: Deferred examination-filers could delay examination, and search and examination fees, for a certain time period under the theory that the need for some patent filings will disappear and the filers will withdraw the patents. Petty patents-a cheaper patent with limited enforcement rights and a shorter protection term. Collaborative or “platinum plated” examination-offering filers a decision to pay a hefty fee for a final decision in two to six weeks. The patent office would use a team of expert examiners that would work intensively with the filer during the search process. The patent office will submit its final strategic plan and its 2008 budget to Congress in February. A seismic shift The proposals in the strategic plan and the proposed rule changes-which are both viewed as a seismic shift in the patent office’s approach-are getting mixed reactions from intellectual property and patent litigators. Although the proposals are not finalized, practitioners are concerned because the patent office insists that some type of dramatic change is necessary to cut the backlog that now totals 700,000 unexamined applications. Many lawyers give the agency high marks for attempting to inject business tenets into a government bureaucracy. Those tenets include a marketing mindset that considers patents as products that can be altered to meet the needs of various types of consumers, and a competitive approach to employee retention through bonuses, awards and training. Others worry the proposals will create an uneven playing field for filers opting for low-cost patents, particularly startup companies and individual inventors. In its letter, the American Intellectual Property Law Association said many of the initiatives are “ill-conceived, burdensome, costly and counter-productive to a system that must strive to obtain the competitiveness of U.S. Industry worldwide.” The organization takes particular issue with a multi-track patent system. “Many of the proposed tracks have been demonstrated historically to be ineffective, and others raise serious problems with respect to . . . discrimination among applicants.” The Intellectual Property Owners Association’s letter said a suite of patent products “may devalue patents and create further uncertainty in the patent system” and add “unwarranted and unnecessary” complexity to the process. “Marketplace demands should not prevent or undermine the vigorous examination that must underlie the patent process,” wrote the organization’s president, Marc Adler. So far, the patent office has made no final decisions on the rule changes, but practitioners say the new rules would mesh with the strategic plan’s goals. John Doll, the commissioner for patents, said that Jon Dudas, the patent office director, would like to turn the strategic plan into a frequently revised living document. “I think you’ll see an update to the strategic plan take into account comments and advice of stakeholders and the public,” Doll said. Intellectual property groups want the patent office to continue adding staff rather than to change the rules. American Intellectual Property Law Association Executive Director Michael Kirk said his 16,000-member Arlington, Va.-based group and the patent office have a “fundamental disagreement” over the value of expanding the pool of patent examiners. “We know they were on a starvation diet, but we believe the office should devote itself to hiring and retaining staff they need to process the work,” Kirk said. “You don’t reverse the Queen Mary overnight. They are on the right track.” Backlog not going away But the patent office points to the looming backlog, and a projected 6% to 8% annual application increase over the next several years. The agency, which is pushing for regional offices in its draft strategic plan, is hiring 1,000 to 1,200 patent examiners in 2005 and 2006, and it hopes to maintain the same pace over the next five years. The patent office has run staffing models that show that hiring more examiners won’t dissolve the backlog, in the face of the current deluge of new filings, so other options are critical, Doll said. The idea is to redistribute resources to the filers who need an intensive examination. “If every application doesn’t need the same certainty, maybe we could take the 90% of patents that are never litigated and the 90% that never make money for the patentee, and they could receive a lower level of examination,” Doll said. Some lawyers support the patent office’s ideas for a range of patent products and the ability to defer examinations. It would allows filers to have a patent on record in case they need intellectual property protection, but lets them delay payment until they figure out if there’s a real business need for the patent. Since patents have different intrinsic value in the marketplace, options give companies or inventors choices about the level of resources they want to devote to a particular patent, say some practitioners. Patent attorney Stephen Becker in McDermott, Will & Emery’s Washington office joked that he “might get stoned for thinking so,” but he likes the idea of deferred examination. Becker said business-method patent applications, which are typically for computerized data processing and are a major contributor to the patent backlog, are often filed “halfheartedly.” “I think fewer people might [ultimately] opt not to examine patent applications if they think they’re not of great commercial importance because filing fees are high,” Becker said. Many companies would also be willing to pay for more protection and some individual inventors may welcome lower-cost alternatives, said Greenberg Traurig’s Barry Schindler, who splits his time between the firm’s New York and Florham Park, N.J., offices. “This is heresy to some people, but this to me is the way businesses operate,” Schindler said. But a Greenberg lawyer in Boston warned that different types of patents would create confusion and inequality, particularly for startups. “If you create a lower standard of patents, startups and individual inventors will be confused about the scope of protection they’re getting,” said David Dykeman. “This will place a much higher burden on the decisions of startups about whether to even apply for patent protection.” Trade groups say that shedding the one-size-fits-all system would increase the likelihood of litigation abuse, create a class system of patent holders in the courts and discriminate against patent applicants with limited financial resources. “The traditional system of examining every application promptly and at the same level of examination is the best way to promote legal certainty,” said Herbert Wamsley, executive director of the Washington-based Intellectual Property Owners Association. Although McDermott’s Becker favors deferred applications and calls many of the patent office’s approaches “refreshing,” he acknowledged that different classes of patents could lead to litigation tangles. “I’m not as keen on that idea unless the courts could be educated to treat any issued patent with equal dignity,” Becker said. Lawyers are also fretting about provisions in many of the proposed rule changes requiring applicants to submit more detailed reports of what’s important in the prior art. This boosts the risk that filers face inequitable conduct claims in lawsuits, said David Feigenbaum, a patent attorney in Fish & Richardson’s Boston office. “If you fail to tell them something that turns out to be important later, you’re a bad guy,” Feigenbaum said. Getting an exclusive right from any other government office requires applicants to clearly outline their reasons, and obtaining a patent should be no different, Doll said. “This is a joint process,” Doll said. “The attorney and examiner should both work together to make sure only the strongest patents go out the door.” Inequitable conduct allegations are boilerplate in more than 90% of patent cases, so the American Intellectual Property Law Association is favoring legislation that would constrain the doctrine of inequitable conduct in patent cases, Kirk said. Meanwhile, the association opposes patent office rule changes that expose its members to this risk. “It frightens the dickens out of patent applicants,” Kirk said. “Applicants are very nervous about saying anything to the office that might later be picked up by defendants in a later patent infringement case.”

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