New USPTO director in for a bumpy ride

The U.S. intellectual property system is in a state of flux.   Director Dave Kappos resigned his position in early February and Deputy Director Teresa Rea announced that she is leaving the agency. Both Kappos and Rea are respected leaders in the intellectual property community.  The America Invents Act (AIA) was largely the brainchild of Kappos, and both he and Rea together implemented the greatest change to the patent system in the last half a century. It is, indeed, a loss to American innovation that both of these outstanding leaders in IP have left the USPTO at a critical time.

The new director of the USPTO will have his or her challenges. Significant members of the management team that developed and implemented the landmark AIA have now left or will soon leave  the agency, Kappos, Rea, the solicitor, now Judge Ray Chen and the General Counsel.  The new director will have to get up to speed fast with little experience dealing with this new complicated change in the law.  Although the career staff still at the USPTO is excellent, knowledgeable, and first-rate, there is no substitute for first-hand knowledge of why the regulations were drafted the way that they were.  Such knowledge is critical at this early stage in the law’s implementation.

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One of the cornerstones of the AIA was the creation of new administrative trial procedures to challenge patents before the USPTO.  These new proceedings have been much more successful than originally thought. The agency originally predicted about 400 filings and the filings in 2013 have exceeded 500. This is more than a 25 percent increase in workload. The USPTO now is the third busiest patent docket in the country after the Eastern District of Texas and the District of Delaware.  It must have sufficient resources and personnel to get the work done or it will fail in its new mission. Judges need to be hired, It systems must be upgraded and courtrooms need to be built.  All of this requires resources and a Director with intimate knowledge of the proceedings. The viability of these proceedings is important to the US patent system.   Sequestration is making this difficult for the USPTO.

The new director also will have to steer the White House’s new initiative regarding software patents and abusive patent litigation. Both are political hot buttons with a huge impact on innovation and economic growth. In June, the White House announced major steps to improve the quality of software patents. Among the steps, the White House is requiring the USPTO to look more closely at software patents and provide more training to examiners. These initiatives could be seen as a measure to limit the number of software patents or at least make such patents more difficult to obtain. These initiatives have caused great concern for many in the software industry, which contributes about $400 billion annually to the US economy.  The new director will be walking a tightrope to appease the White House and not cause a backlash from the software industry.

Finally, there are several legislative initiatives to be dealt with.   Possible amendments to the AIA dealing with the new proceedings to challenge a patent are being discussed on the Hill. There also is legislation to deal with the patent troll issue.   One of the difficulties with such legislation is that it’s difficult to define a patent troll (many companies own patents that they don’t use for manufacturing, etc.).  The USPTO needs to be a key player on these legislative issues.

All of these need to be dealt with effectively by the new director.  It will take a special leader to address all of these challenges while charting the course for the future. 

Knight is the former general counsel for the U.S. Patent and Trademark Office where he served from 2010-2013.  Now a partner in the Washington office of McDermott Will & Emery, he counsels clients on complex patent litigation.