David Kappos

The Patent Office Chief Details the New Law

October / November 2011 By: Tom Michael Volume 9 Number 5

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President Obama signed the sweeping new AmericaInvents Act into law this past summer, ushering in a new era for the U.S. Patent and Trademark Office and prompting entrepreneurs, scientists and others with a stake in the innovation game to wonder, “what’s in it for us?”

USPTO Director David Kappos, an Obama appointee who came to the job in 2009, aimed to answer some of those questions recently at a Brookings Institution forum that focused
on the new law.

Kappos—officially the undersecretary of commerce for intellectual property and director of the United States Patent and Trademark Office—is a lawyer who directed IBM’s intellectual
property division before coming to Washington in 2009. During a 30-minute speech and a lengthy question-and-answer session at Brookings, he displayed a deep reservoir of knowledge about the new law and a willingness to listen to the concerns of a highly engaged audience.

Kappos sought to explain that the new law is a continuation of a “grand bargain” the Founding Fathers envisioned to protect intellectual property—or inventions—especially as intellectual property law is more directly connected to the tools and technology Americans use in their daily lives.

“The grand bargain embodied in this patent system is a bargain between thinkers, researchers, technologists, visionaries, scientists—and the rest of society,” Kappos said. “It’s a bargain providing incentives to innovate, in exchange for dedicating those innovations to the corpus of human knowledge, and to the benefit of all mankind in perpetuity.”

The realm of intellectual property has expanded exponentially, he said.

“No longer is intellectual property a topic reserved for highly technical or specialized scientific and legal circles,” Kappos said at the outset of his speech. “IP now permeates all fields of interest, all layers of society and all parts of our daily lives.” He said the new law offers great promise for
inventors because it cuts patent costs, aims to issue more ironclad patents that can stave off expensive court challenges and provide tools to reach patent decisions three times faster
than in the past.

“The law establishes a new in-house review process for challenging granted patents—a process that is much faster and cheaper than litigation,” Kappos said. “By resolving disputes about patent rights earlier, more efficiently and at lower cost, we will add greater certainty to—and cultivate
greater confidence in—the American patent system.”

The new law should also help eradicate some existing impediments to business and technological growth, he said. “By allowing early stage startups, independent inventors and even larger companies to effectively acquire that capital, our newly reformed patent system is in turn enabling innovators to develop their technologies faster, hire employees sooner, grow their businesses to be stronger, and sell their products more widely,” Kappos said. Perhaps the most significant part of the new law is the switch to a “first-to-file,” patent system, also called a “first inventor to file” system. It says that the right to a patent for a given invention lies with the first
inventors to file a patent application for protection of that invention, regardless of the date of actual invention.

“In the past, inventors have been lulled into a false sense of security that they could prove themselves the first to invent,” Kappos said, explaining the switch from first to invent. “But when the inevitable challenge comes, small businesses have found themselves outgunned in complex and costly legal procedures, struggling to assemble the arcane evidence, spending half-a-million dollars or more trying to prove they were the rightful inventor—and still losing in the vast majority of cases. By instead pegging our patent system to a clear, objective, transparent and simple timeline, these inventors are better equipped to protect their technologies
and businesses.”

The patent chief said the America Invents Act ensures that “entrepreneurs, innovators and businesses of all sizes have the best tools available to protect their market participation in a hypercompetitive and often ruthless global economy.”

“Provisions in the new law that promote such sound IP policy are governed by three principal pillars: speed, quality and clarity,” he said.

“Speed in the patent application review process is paramount for inventors to get their businesses off the ground; but the USPTO also places a premium on ensuring that only high quality patents are granted,” he said.

The average wait time for the granting of a patent is currently three years. Kappos said the new law should dramatically reduce that time. Under the Obama Administration, the patent backlog has been reduced from over 750,000 patent applications to less than 680,000, despite a 4 percent increase in filings, he said. But there is still room for improvement.

“To alleviate an average wait time of almost three years for patent protection, we have already begun offering inventors an opportunity to have important patents reviewed in one-third the time—with a new fast track option that guarantees a 12-month turnaround,” he said. “This allows the USPTO to move with urgency when needed and bring the sort of patented American ingenuity—that will define the next era of our nation’s growth—to the marketplace even
faster.”

The fast track program allows an applicant to pay an extra fee of $4,000 (in addition to the required filing fees) to allow its application to be fast-tracked with an examination within one year from the date of filing. The agency will take just 10,000 requests in the first year, with the potential for more in subsequent years.

Kappos said the “sheer tonnage of these provisions” will be challenging to implement.

“But as we stand at the forefront of a new era in American innovation, the office is up to the challenge,” Kappos said. “In its totality, the America Invents Act fosters a nimble and strong intellectual property infrastructure for our country, allowing businesses to grow and technologies to flourish, by leveraging inventive efforts with the fulcrum of a U.S. patent—the primary currency of innovation in this 21st century.”

Tom Michael is Innovation’s Washington bureau chief