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New Rules on Denying Patent Reviews Up First on Vidal’s Agenda

Jan. 3, 2023, 10:20 AM

Rulemaking on when an administrative tribunal will decline to review a patent validity challenge is the first item on the US Patent and Trademark Office’s 2023 to-do list, Director Kathi Vidal told Bloomberg Law in an interview.

“That’s at the very top and then once we roll that out, we’re going to start focusing on some of the other rulemaking,” Vidal said about the office’s goals for the new year.

The agency’s Patent Trial and Appeal Board has the discretion to deny a request to launch an “inter partes review” of a patent. It may do so based on several factors, such as those under Apple v. Fintiv when parallel litigation over the same patent is proceeding in a federal court or the International Trade Commission.

Fintiv sparked opposition from companies like Intel Corp. and General Motors Co. that argued it preempts legitimate patent validity challenges. A bipartisan group of US senators introduced legislation last year to nix it.

In one of her first acts as director, Vidal in June issued interim guidance on Fintiv—a move that some patent lawyers praised as a “big step” toward clarity, consistency, and transparency in PTAB proceedings.

Vidal said the office is “nearing its final stages” toward launching its first formal rulemaking on discretionary denials.

“All of the things that we’ve been working on this year, we want to make formal,” said Vidal. This also includes formal rulemaking on the director review process and the creation of a potential design patent bar.

Vidal said the office also plans to address concerns about trademark registration delays and fraud, and is exploring the possibility of a small claims patent court.

Patent Eligibility

The agency is aiming to update guidance on several areas of confusion, such as what inventions are eligible for patents, she said.

Following the US Supreme Court’s continued refusal to take up a patent eligibility case, Sen. Thom Tillis (R-N.C.) introduced a bill that would, for the first time, list specific types of processes and discoveries that aren’t eligible for patent protection.

The patent office has been providing technical assistance to Congress on the bill.

Vidal said the office is eager to make change when it comes to patent eligibility, “whether that comes from the Senate, from the Supreme Court, wherever that comes,” she said.

Additionally, the office will update guidance on when a patent is invalid because the invention was “obvious,” and how patent specifications should be drafted, she said.

Director Reviews

Vidal also laid out plans to reshape director reviews of PTAB decisions— a power the Supreme Court granted in its 2021 US v. Arthrex decision.

She floated the possibility of replacing the agency’s precedential opinion panel with an error corrections panel that would address instances where the board reaches a wrong decision.

Currently, POP operates on the director’s discretion and its primary members also usually include the commissioner for patents and the PTAB’s chief judge.

Once a proposal is finalized, formal rulemaking will be launched.

Diversity, Inclusion

The Patent Office will ramp up its diversity efforts in the upcoming year, Vidal said.

Through the recently launched Women’s Entrepreneurship Initiative, Vidal said her goal is to “close the capital divide,” where women are currently the fastest growing category of entrepreneurs but underfunded compared to organizations created by men.

Vidal said the agency will continue its work with summer invention camps that taught almost 250,000 children in 2022.

The office also will boost its pro-bono program, and encourage more law firm participation in the office’s Legal Experience and Advancement Program, which creates a pipeline for more diverse attorneys to argue before the PTAB.

“I’m hoping by the end of 2023, we will have reshaped the USPTO to be best in class when it comes to diversity, equity, inclusion, belonging and accessibility,” Vidal said.

Agency Collaboration

Patent office collaboration with other government agencies will be another focus in 2023.

Vidal said the office is working with the Minority Business Development Agency to figure out how the PTO can ensure they are “meeting people of color where they are,” as well as veterans and Native Americans.

It will be working with the National Oceanic and Atmospheric Administration to ensure that inventors’ intellectual property is protected when they reach out to venture capitalists for funding on climate-related inventions, she said.

The patent office has also been working with the Food and Drug Administration to examine high drug prices and anti-competitive business practices by pharmaceutical companies, an issue that was recently highlighted by lawmakers who urged the office to increase its efforts.

Trademark Delays

On the trademark front, Vidal said the office plans to tackle concerns over delays in trademark registration.

She said she’ll work with a union representing agency workers to find solutions to the registration backlog.

“They are going to take me through a lot of the details soon so that we can then kind of reconsider everything we do and whether there’s a way we can do things better or more efficiently so people get their trademarks more quickly,” Vidal said.

Fraudulent trademark applications and scammers also continue to be a problem.

“We need to collaborate with businesses more that are seeing issues, so that is definitely a topic for next year that we’re going to focus on,” Vidal said.

Earlier this year, the office registered their own logo for a trademark, with the aim of giving the PTO “another lever to pull” against scammers who imitate the agency. However, they have not enforced the mark and it’s unclear what such enforcement would look like.

Back on the patent side, the office will be shaping a research and development unit to test out more effective methods of patent examination.

Vidal said the agency is also gathering information on the creation of a small claims patent court that may be housed within the office or elsewhere. It’s closely examining the US Copyright Office’s new small claims tribunal, and Vidal will ultimately receive a report on the findings.

“We’ve laid the groundwork to some meaningful change that I’m looking forward to pushing across the finish line in 2023,” Vidal said.

To contact the reporter on this story: Riddhi Setty in Washington at rsetty@bloombergindustry.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Keith Perine at kperine@bloomberglaw.com