Rep. Lamar Smith signaled he is likely to move on a bill to make technical corrections. Companies: Patent reform flawed

The patent reform law hasn’t been fully implemented, but the private sector is already complaining about it.

According to major stakeholders who testified before the House Judiciary Committee on Wednesday, the U.S. Patent and Trademark Office still has work to do on revamping its procedures. Committee Chairman Lamar Smith (R-Texas) signaled that he is likely to move on a bill to make technical corrections.


The PTO’s implementation of new review processes after a patent is granted needs more work, top patent industry executives said

“These proceedings were to form the key cornerstones of the [America Invents Act],” General Electric’s Chief Intellectual Property Counsel, Carl Horton, said in testimony on behalf of the Coalition for 21st Century Patent Reform. “They are not nearly as streamlined as they should be, and they also lack procedural safeguards that would better balance the proceeding between patent owners and patent challengers.”

Eli Lilly General Counsel Robert Armitage agreed.

“The office has not fully embraced this procedure,” he testified. “Nor has it sought to optimize its potential for increasing the reliability and quality issues.”

Kevin Rhodes, 3M’s chief intellectual property council, contended that the proposed rules allow too much latitude for challengers who get the chance to file “supplemental information” in the inter partes review and post-grant review processes.

PTO Director David Kappos defended the agency’s actions, telling lawmakers he was trying to balance calls that would make the new process mirror a federal court trial and those seeking a more restrictive process.

Kappos told the committee that the agency was developing a process that is more streamlined, faster and less expensive than in federal district court.

“We’re trying to create at the PTO a process that prevents those abuses from happening,” Kappos said. “The PTO is the least-cost alternative because it will be much more expensive in the district court.”

While the PTO’s implementation received some criticism, the process the PTO is using to write the rules received high marks.

“If there’s one word to describe the process, it would be transparency,” Armitage said. “If there were two words, it would be transparency and candor.”

But transparency and candor might not go far enough.

Richard Brandon, University of Michigan associate general counsel, said the law needs a technical correction clarifying the grace period that universities receive.

Smith — an author of the law — said there is no new legislation on the issue but that a bill might be in the offing.

“We do expect to proceed with a new bill that will make some technical corrections,” Smith said.

A key portion of the law allows the PTO to set and collect its own fees. Now that it’s doing that, patent holders are undergoing sticker shock.

Horton said the fee increases could cost his company up to $26 million to maintain its portfolio and continue to apply for new patents.

“We’re starting to feel the impact of the fee increases already,” Horton said.