Business & Practice

Iancu Aims to Tackle U.S. Patent Quality Issues

April 12, 2018, 12:33 PM

• Patent Office looking into patent eligibility, review procedures, Iancu says • U.S. intellectual property leadership status “within reach,” director says

Patent and Trademark Office Director Andrei Iancu is focusing on improving patent quality and adopting pro-innovation polices in a bid boost his agency’s global standing.

“For more than just a few years, our system has been pushed and pulled, poked and prodded,” Iancu said in a speech in Washington at an event hosted by the U.S. Chamber of Commerce. “The cumulative result is a system in which the patent grant is less reliable today than it should be.”

Lawmakers, patent owners, and practitioners have argued that U.S. patents have become difficult to enforce in recent years, and that the U.S. position among patent systems worldwide has slipped.

“The good news is that reclaiming our patent leadership status is within reach,” Iancu said.

Recent Supreme Court rulings have inserted standards into the patent office’s interpretation of federal law that are difficult to follow, Iancu said. Lower courts are handing down inconsistent opinions as they interpret the high court decisions, making the patent system less predictable, he said.

Critics say PTO patent validity proceedings under a 2011 law are unfair to some patent owners—and potentially unconstitutional. The Supreme Court is weighing the constitutionality of the office’s patent validity review process in Oil States Energy Servs., LLC v. Greene’s Energy Grp., LLC. The high court is expected to issue a ruling in that case by the end of June.

U.S. case law has had a negative impact on what technologies can be patented, and the ability to cancel issued patents by contesting them at the PTO makes it harder for patent holders to enforce patents, according to the Chamber of Commerce’s 2018 International IP Index, a study of intellectual property protections in 50 countries released in February.

The U.S. patent system, which placed first two years ago in the index, has since slipped to 12th in the 2018 rankings. Simplify, Simplify

The PTO is exploring ways to simplify how its examiners determine what technologies can be patented, Iancu said.

“Through our administration of the patent laws, which we are charged to execute, the USPTO can lead, not just react to every new case the courts issue,” he said.

The America Invents Act of 2011 created administrative patent reviews conducted by the PTO’s Patent Trial and Appeal Board as alternatives to more costly district court litigation to challenge the validity of patents.

U.S. patent owners complain that PTO patent validity reviews, which require a lower burden of proof to prove invalidity and have different patent claim interpretation standards than federal courts, have made it too easy for alleged infringers to kill issued patents. Technology companies and other businesses support the review procedures, arguing they have helped fend off abusive infringement litigation.

“Both arguments have legitimate elements.” Iancu said. “But I encourage people to reduce the hyperbole and look at the process with fresh eyes, in order to understand its true benefits and true challenges.”

Iancu is scheduled to testify before the Senate Judiciary Committee April 18 at a PTO oversight hearing.

(Updated with additional reporting throughout)

To contact the reporter on this story: Malathi Nayak in Washington at mnayak@bloomberglaw.com

To contact the editor responsible for this story: Keith Perine at kperine@bloomberglaw.com

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