NEW YORK – The United States Patent and Trademark Office is operating at a “higher level” these days, trying to look beyond patent numbers to patent quality and value, USPTO Director David Kappos told a group of licensing executives yesterday.

“We’re trying hard to learn from, search out, spend time with the people who create value in IP,” such as those who do licensing, he said.

Kappos gave the keynote remarks at a 4-6 May meeting of the Licensing Executives Society, being held in New York. He made several references to the ongoing budget limitations in government that are affecting efforts to support innovation and competitiveness, and acknowledged that the private sector is having to lead the way in many cases.

Kappos said the office is aware that navigating the patent system involves “layers of complexity” and is focussed on making it simpler to use, targeting the end results, such as putting innovative and affordable drugs in the hands of families.

The United States’ global leadership in innovation is “not a birthright,” he said, as other countries have discovered they can compete in these areas as well, the US must continue to work hard to attract resources, including capital, to spur new research.

Intellectual property has a strong future, he insisted. “While our landscape is shifting,” he said, “the importance of IP, I promise you, is not.” Instead, it is becoming “monotonic.”

“While our landscape is shifting,” said Kappos, “the importance of IP, I promise you, is not.”

The USPTO is working to help “optimise” the ability of businesses to grow by reducing barriers, he said, describing various ways in which it is “re-engineering” its systems such as allowing acceleration or slowdown of patent processing.

But while the patent office is implementing as many improvements as it can, “budget realities” have hampered its ability to roll them out, he said.

Peer to Patent

The office is focussed on patent examination quality and on better use of the internet and information technology, Kappos said.

He described the Peer to Patent pilot project being operated with New York University, which allows the public to offer comments and prior art to pending patent applications, thereby improving the venerability of granted patents and speeding processing. The first round of the programme had some 150 applications (a statistically significant sample, he said) and drew thousands of hits and tens of thousands of submissions. There were cases of prior art that would not have been available to examiners. It was so useful that several other countries, such as Japan and Australia, as well as the World Intellectual Property Organization, launched their own versions.

Now the USPTO is undertaking its second round of the Peer to Patent project, including the healthcare sector and with more nuances, this time aiming for 1,000 applications, and now allowing patent examiners to interact directly with commentators who agree. Kappos said he expects the programme will eventually be expanded to include all applications at the USPTO.

Third US IP Attaché in China

Asked about China, Kappos said he “strongly” believes China will increase its “respect” for intellectual property its involvement in technology development increases, and said USPTO is adding a third IP attaché in China. The new one will be in Shanghai, joining the attachés in Beijing and Guangzhou.

He said China and India have become competitive, but that the emphasis of the USPTO has moved from counting simple numbers of patent applications to the quality of the patents. And he credited the USPTO for its initiative on green technologies and a pilot initiative rewarding humanitarian patents. The aim is to show that the US “will not only be the world’s chief global competitor, [but] will also be the world’s chief global citizen.”

He also cited a World Bank study that showed that in 2009, the United States had $89 billion on revenues from licensing, far more than any other nation.

Influencing Congress, the Judiciary

Kappos said he and his office is “absolutely” involved in setting rules and influencing the law. He regularly meets with judges and his office is strengthening its cooperation with the courts. He said his office will “push the law forward,” and does not mind being corrected by the courts along the way, as “that is the democratic process.”

“We won’t sit back and wait for cases to come up through the courts,” he said. New USPTO official James Smith is being brought in to do that, Kappos said, with a mandate to reshape the USPTO Patent Board and “move aggressively” to advance cases, to “tee them up” for the courts.

Smith was announced last week as the next Chief Administrative Patent Judge of the Board of Patent Appeals and Interferences (BPAI) at the USPTO, and will take office on 8 May. As BPAI chief judge, Smith “will lead the board that hears and adjudicates patent appeals from decisions of patent examiners,” USPTO said in a release.

Kappos made a strong pitch for the US House of Representatives to pass the current patent reform legislation recently passed by the Senate and by the House Judiciary Committee.

Reform would help with the enormous backlog of patent applications at the USPTO, he said. The target number of applications to be pending at any time is about 350,000, a reasonable amount for 7,500 patent examiners taking into account variations between types of applications, he said. Right now, the backlog is still about 700,000, down slightly from the 765,000 it was when he took office about two years ago. The office also is working to reduce average time of first action on applications to 10 months and time to decision to 20 months.

The backlog is of high importance as it represents hundreds or thousands of ideas that could boost the economy and create jobs, he said.

Separately, a number of speakers at the event including Kappos referenced the increasing cross-sectoral nature of innovations, such as across neuroscience and nanotechnology.

The office is addressing this cross-cutting nature and the backlog through advances in technology. For instance, a greater number of petitions will be fully automated, for instance, no longer requiring “platoons” of USPTO staff to process them, he said.

Kappos summarised the need for patent reform as: “You cannot expect tomorrow’s economy to take place in yesterday’s infrastructure.”