Frustration mounts in Silicon Valley

Courtesy of U.S. Mission Geneva

Lobbyists for the tech industry say the U.S. Patent and Trademark Office (PTO) is already understaffed and underfunded, and they question why the White House has let the director position sit vacant for more than a year.

“The headless Patent Office is now poorly positioned for several critical measures that require the gravitas of a senior executive,” Hal Wegner, a former PTO patent examiner who is now intellectual property attorney at Foley & Lardner, wrote in a blog post criticizing the Obama administration.

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Wegner said the delay in nominating a patent director “has reached an unprecedented length in the nearly 180-year history” of the agency.

Lobbyists for the tech industry say the PTO needs a confirmed leader to deal with a patent backlog that numbers in the hundreds of thousands, and they argue a confirmed director can better respond to complaints about quality control.

Former PTO Director David Kappos, who enjoyed strong support from Silicon Valley, left the agency in early 2013.

Former Deputy Director Teresa Rea took over as acting director after Kappos’s departure, but she left the agency in September. Late last year, the administration tapped former Google intellectual property lawyer Michelle Lee to serve as the PTO’s deputy director.

Lobbyists say suitable candidates for the director job were passed over, including Rea and other officials at the PTO, such as Commissioner for Patents Peggy Focarino and Chief Policy Officer Shira Perlmutter. Some questioned why the administration named a deputy director when the top spot remains open.

One patent lobbyist said there is speculation in the tech industry that Rea was not tapped to lead the agency because she was “perceived by the White House as being too responsive to traditional patent stakeholders and they wanted someone who was more responsive to Silicon Valley.”

If the administration wanted Focarino, Perlmutter or Lee to lead the agency, “it would have happened by now,” the lobbyist said. “It doesn’t look like they’re on a fast track.”

While Obama has backed the tech industry’s push for patent reform legislation, even mentioning it in last week’s State of the Union address, industry officials say the empty PTO position is giving too much power to the White House.

“The lack of a PTO director leaves us without a captain to sail a ship at a time when the U.S. is talking about the importance of innovation,” and “allows the policy direction to come from the White House,” the lobbyist said.

Bob Stoll, a former PTO commission for patents, said the agency needs a Senate-confirmed director to represent the patent community in discussions at the White House.

“If you don’t have that imprimatur of Senate confirmation, you don’t have the clout at the table that you need to put your position forward,” said Stoll, who is currently at Drinker Biddle, where he is a partner on the firm’s patents team.

Stoll said a director at the PTO would have the pull needed to argue for having the agency excluded from the automatic spending cuts under sequestration.

Although the America Invents Act — a patent reform law enacted in 2011 — temporarily protected the PTO’s user-funded fees from sequestration, the agency diverts part of the fees it collects to the federal government.

Because of that fee diversion, the PTO has had to significantly slow its efforts to open satellite offices, which officials hoped would give innovators access to the personnel and resources they need to navigate the patent process.

Lobbyists said the lack of a PTO director sends the wrong message to the international intellectual property community.

Negotiating in the international arena without a permanent director “mutes our capabilities overseas” and “hurts our effectiveness there,” Stoll said.

Despite the void at the top, the PTO is taking steps to improve the patent system, according to Jonathan Zuck, president of the Association for Competitive Technology. Zuck’s group works with more than 5,000 app developers and tech firms, including Microsoft, Apple and BlackBerry.

“There’s a lot that’s been happening since [the America Invents Act was enacted], even in the absence of a director,” Zuck said.

The office “seems to be proceeding at pace” with initiatives aimed at improving patent quality under the 2011 law, including educational reforms for patent examiners.

The PTO declined to comment for this story but pointed to a recent blog post from Lee outlining the updates to the agency, including implementing the America Invents Act and the establishment of satellite offices.

“All of this enables the agency to issue better quality patents and trademarks, not to mention increased customer satisfaction for the users of our services,” Lee wrote. 

“In short, the agency’s senior leadership has made good progress to ensure our country has a strong and robust patent and trademark system for the 21st century.”