Patent

By Marla Grossman, Partner, American Continental Group

The U.S. patent and trademark system depends on the dissemination of value-added information.  Such dissemination can best be achieved by a public-private partnership that takes advantage of the core strengths of private sector publishers and government. Specifically, a competitive private sector patent and trademark information industry complemented by the U.S. Patent and Trademark Office (USPTO) provides the optimal approach for meeting the broad range of user needs -- from specialists to the general public. The following principles are critical to ensuring the highest quality and integrity of the U.S. patent and trademark system.

Policies Should Encourage a Diversity of Sources for Patent Information

It is common sense that one should not rely on a single source of information, and that the most accurate information addressing the broadest variety of needs is best derived from a marketplace of ideas with a multiplicity of sources. U.S. law embraces such thinking, and federal statute provides that federal government agencies shall ensure public access to an agency's public information by "encouraging a diversity of public and private sources for information based on government public information." (44 USC 3506(d)(1)(A)) The statute's enforcement vehicle, OMB Circular A-130, provides that in determining how and whether to disseminate information, agencies will: "[t]ake advantage of all dissemination channels, Federal and nonfederal, including State governments, libraries, and private sector entities, in discharging agency information dissemination responsibilities." President Obama reinforced this message in the recent “Memorandum for the Heads of Executive Departments and Agencies on the subject of Transparency and Open Government”: “Executive departments and agencies should … cooperate among themselves, across all levels of Government, and with nonprofit organizations, businesses, and individuals in the private sector.”

The concept of “a diversity of sources” has special applicability to patent information. Each area of technology benefits from different types of search tools to achieve optimal results. There are many types of uses of patent information, and there are many types of users in addition to those who conduct searches for patentability, infringement, validity, etc.  Such users include researchers, business intelligence analysts, financial analysts and technology specialists.   If there is only one source -- the USPTO -- all of this diversity is lost, and consumers will suffer. And yet, this is what can happen if the USPTO does not consciously take into account this principle when they are making decisions about what patent services it is going to provide and at what cost.

In the midst of new objections from some Republican members of Congress to a patent reform bill recently approved by the House Judiciary Committee, ACS has released a new Issue Brief on the measure at issue in the bill, “Short Term Pain for Long Term Gain: Why Congress Should Stop Diverting U.S. Patent and Trademark Office User Fees.”

In the Issue Brief, American Continental Group, Inc. Partner Marla Page Grossman explains the importance of ending fee diversion, a practice in which funds paid by patent and trademark applicants are diverted to other programs and agencies “entirely unrelated to the [U.S. Patent and Trademark Office],” significantly slowing down the approval process and thwarting innovation.

A provision to end fee diversion is contained in the America Invents Act, which was passed by the Senate and approved by the House Judiciary Committee with broad bipartisan support. But the provision encountered new opposition just last week, when House Appropriations Chairman Harold Rogers and House Budget Chairman Paul Ryan sent a letter to House Judiciary Chairman Lamar Smith opposing the fee diversion provision because it would hand “the Congressional power of the purse” to the Obama administration.

In the days that followed, “[i]t was Republican leaders who fired back,” Grossman explains, with Rep. Lamar Smith responding that “contrary to putting the USPTO on auto-pilot, H.R. 1249 would actually promote accountability and transparency, creating more channels for oversight than currently exist,” and Sen. Tom Coburn asserting, “[w]e cannot have true patent reform without ending fee diversion and providing the PTO with a permanent, consistent source of funding” and that the “power of the purse does not provide Congress authority of non-taxpayer funds.”

The Chamber of Commerce also expressed public support for the fee diversion provision this week, and more than 150 companies, schools and groups, including GE and Apple, submitted a letter reiterating the necessity of this provision.

In her Issue Brief, Grossman explains the importance of encouraging innovation through the patent system to spur needed economic growth, demonstrates the inefficiency and unfairness that comes from diverting patent fees paid by users, and presents a number of ways in which the USPTO could maintain control of their own fees, the best of which “is incorporated in this Congress‘s patent reform bills.”

She concludes:

USPTO fee diversion must stop, and must be stopped now, to ensure that the USPTO can engage in the stable, long-term planning necessary for the issuance of timely, high-quality patents. The best legislative solutions will necessitate congressional appropriators prioritizing U.S. innovation, jobs and the economy over “inside the Beltway” politics. But good policies often come with painful politics. If Congress can handle a little pain in the short term, the nation will likely be rewarded with a more efficient USPTO and national prosperity over the long term.

Read Grossman’s Issue Brief here and read a previous guest post by Grossman on this issue here.