Recommendations for US Patent Reform*
by the Federal Trade Commission (FTC) and the National Academies of Science (NAS)
II. Patent Office Operation
The Patent Office is responsible for implementing the patentability standards when reviewing patent applications. Many of the policy recommendations concerned Patent Office operation.
Post-grant Opposition Proceeding
The patent examiner has the burden of proof for demonstrating that inventions are unpatentable, either because they are not novel, e.g., they were previously patented or described in a printed publication (prior art), or because they are obvious in view of the prior art. The CAFC has reaffirmed that the USPTO must grant a patent if the examiner does not provide evidence that the invention was previously known or was obvious or otherwise doesn't comply with the statute.
However, patent examiners have limited access to prior art other than prior patents. Other firms in the patent applicant’s industry may have better information than the evidence available to the patent examiner. These firms may also be motivated to make sure that an invalid patent does not get granted.
For this reason, both reports (and the USPTO itself) propose that the U.S. institute an administrative proceeding after a patent has been granted so that other parties can bring forward invalidating evidence. The claim is that this proceeding would be cheaper and faster than a full trial and more effective than the current “re-examination” procedure. As discussed in an earlier issue of TIIP (Post-Issue Patent “Quality Control”: A Comparative Study of US Patent Re-examinations and European Patent Oppositions), such a procedure exists in Europe.
Both the FTC and the NAS reports call for legislation to create a new administrative procedure providing for post-grant review of and opposition to patents. We refer the reader to the details of the proposals in the reports (FTC, Chapter 5, pp. 23-4, NAS, Chapter 4, pp. 78-82).
Continuations
One controversial aspect of US Patent Office procedure is the use of “continuations,” (including “divisionals” and “continuations in part”). Once a patent application is initially rejected (or even before it is rejected), the applicant can file a “continuing” application that preserves the priority date of the original application. This allows the applicant to reiterate arguments (or present new arguments or evidence) to the patent examiner, or to modify patent claims, either to correct drafting errors or for other reasons. Many (perhaps most) of such continuing applications eventually become patents (see Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office).
This means that the patent system can be gamed. Patent applicants who do not file their applications abroad are not required to publish their applications. Also, patent claims can be amended even after applications are published. This allows patentholders to keep continuing applications pending for many years, sometimes broadening claims, without alerting the industry, while other firms make large investments in commercializing the technology. Then, when the patent is finally granted, all investments made by others after the early priority date are liable for infringement, even though the other firm may have had no knowledge of the pending application or the amended claims.
Both the FTC and the NAS recommend mandatory publication of patent applications 18 months after filing
In addition, the FTC recommends a limited prior user right: if a firm is found to infringe only because a patent claim was amended and before the amended claim is published, the firm should be sheltered from penalties.
Funding
Both reports recommend increased funding for the US Patent and Trademark Office to enable it to ensure quality patent review.
Other
On the broadest level, the FTC advocates that “economic learning and competition policy considerations should be integrated into patent law decisions.”
The NAS report also recommends that the Patent Office implement a robust electronic processing capability and a strong “multidisciplinary analytical” capability to assess and implement management practices, new technologies, patent quality and individual examiner performance.
I., II., III.
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*The analysis provided here (in black) does not necessarily represent the analysis provided by the FTC or NAS. The recommendations (in red) are brief summaries of recommendations in the reports.
