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Who’s in charge? Uncertainty at Patent Office a drag on innovation

By   /   March 9, 2017  /   News  /   No Comments

Uncertainty plaguing the Commerce Department and U.S. Patent and Trademark Office as the Trump administration settles in could be stymieing innovation just as the new president’s supporters are looking for stability in pursuit of economic growth.

Tony Avelar / AP Images for SanDisk Corporation

STILL THERE?  Michelle Lee is still listed as head of the U.S> Patent and Trademark Office on the agency’s website, but has disappeared from her undersecretary role at Commerce.

Michelle Lee served as the undersecretary of Commerce for intellectual property and director of the USPTO under President Barack Obama, but her position in the Trump administration remains less clear given conflicting reports, government websites and her own LinkedIn profile.

While a recent Politico story reports that Lee is still in charge of the agency for the time being — a fact consistent with her profiles on both the USPTO site and LinkedIn — her position is listed as vacant on the Commerce Department’s website.

Lee, who began her tenure as head of the USPTO in March 2015, worked her way up at the agency beginning in 2012 after leaving a 9-year career at Google as the company’s deputy general counsel focusing on patents and patent strategy.

The confusion surrounding Lee’s status, however, reflects a larger pattern at the USPTO over the past decade, as the agency has sought to tackle the growing number of pending patent applications amid a changing legislative and legal patent landscape.

The application backlog has been a constant source of criticism of the agency because of its perceived negative effect on innovation.

The Milwaukee Journal Sentinel, for example, reported as far back as 2009 on how the patent backlog slowed the economic recovery, finding that it took the agency an average of 3.5 years to issue a patent.

When Lee spoke at the American Bar Association Section of Intellectual Property Law luncheon in late October 2016, the agency reported 558,091 unexamined patent applications still awaiting action by an examiner, touting the steady — though still slow — decline in the backlog.

The USPTO’ own figures show a 27-month decrease in the patent application backlog from 609,923 in October 2014 to 546,702 in January 2017.

Going further back, the University of Richmond School of Law’s Intellectual Property Institute published a study in January 2015 showing that in 2008, there were more than 1.2 million pending applications, with 771,529 awaiting action by an examiner, the highest numbers recorded by the study that looked at the period from 1996-2014.

One reason for the slow progress: USPTO says the patent application process from start to finish can take more than two years (25.6 months).

During a speech less than two weeks before the November election, Lee defended the agency’s track record of bringing the backlog down from all-time highs nearly a decade ago.

“Today, both our backlog and pendencies are now lower than they’ve been in more than a decade, and they continue to go down,” said Lee.

Lee’s statement was technically true, but today’s backlog still far outpaces numbers from years gone by. For example, in 1997, there were 275,295 pending applications, with fewer than half that number (112,430) awaiting action by an examiner – the lowest number recorded in the Richmond study.

Affecting the workflow

In a separate speech in September 2016, Lee said that the USPTO’s authority under the Leahy-Smith America Invents Act to change patent application fees allowed the agency to raise the money necessary to hire the  examiners it needed to tackle the backlog. The agency is funded through fees, not tax dollars.

But the Government Accountability Office, in a report it published in June 2016, criticized the USPTO’s zeal, which it said resulted in a rise in patent lawsuits alleging lower quality patents issued by the agency.

In addition to Leahy-Smith’s impact on the Patent Office, two major U.S. Supreme Court cases in the past decade – Alice Corp. v. CLS Bank International, decided in June 2014, and Mayo v. Prometheus, decided in March 2012  – also affected workflow at the agency.

Both decisions involved what constituted as patentable subject matter: Alice impacted software and business methods, while Mayo involved drug delivery methods for the pharmaceutical industry.

In May 2016, the USPTO released new guidelines on how it would determine what constitutes eligible subject matter for patents in order to navigate the court’s decisions.

The bottom line, though, was it meant more work — and more rejections.

According to a 2016 study conducted by the law firm Knobbe Martens, the number of patent application rejections following Alice jumped from around 50 percent to more than 80 percent by mid-2016.

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Josh Peterson is a writer and award-winning reporter focusing on technology, politics, culture, and national security. His current areas of interest include Internet governance, intellectual property, civil liberties, space, minority issues, climate and the environment, surveillance, cybersecurity, energy, and artificial intelligence. A contributor to Watchdog.org, he is currently a Robert Novak Journalism Program Fellow and previously served as Watchdog.org's national technology reporter and the Daily Caller's tech editor.