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Patent Eligibility Needs Congressional Action, PTO Director Says

Sept. 19, 2022, 10:37 PM

Patent practitioners hoping for clarity on patent subject matter eligibility in the wake of the Supreme Court’s refusal to take up the issue may have to keep waiting, US Patent and Trademark Office Director Kathi Vidal told Bloomberg Law in a wide-ranging interview on Monday addressing her role and plans at the PTO.

While guidance on subject matter eligibility under US patent law is essential, Vidal said, the question requires congressional action.

Recent precedent has narrowed the eligibility of pharmaceutical and software patents, in particular. And the high court in June bucked the recommendation of the US solicitor general, declining to hear an appeal of an opinion from a bitterly divided Federal Circuit that found a method of manufacturing driveshafts to reduce vibrations was patent-ineligible because it was based on a principle of physics.

Vidal announced during a fireside chat at the Intellectual Property Owners Association annual meeting that the office is considering issuing guidance on computer-implemented inventions and the conditions for patentability and non-obvious subject matter more broadly. The PTO also is accepting public comment through Oct. 15 on its own patent subject matter eligibility guidance.

Nevertheless, she told Bloomberg Law, a “lot of what needs to happen is really something that needs to happen in Congress.”

Vidal pointed to the efforts of Sen. Thom Tillis (R-N.C.), which led to the introduction of the Patent Eligibility Restoration Act in the Senate on Aug. 2.

“We are certainly standing by and supporting in any way we can,” she said.

The director declined to answer when asked whether the PTO had been consulted during the bill’s development.

Director Review, Small Claims

Vidal also addressed the process of director review of Patent Trial and Appeal Board decisions, saying that she has been looking at the specific issues parties have raised, with an eye on opportunities that would improve clarity and consistency at the PTAB.

She cautioned, however, against reading too much into her review decisions.

“I will say that I wouldn’t let the cases that I’m taking signal any propensity one way or the other on how I look at various issues,” Vidal said. “Right now I’m just taking cases as they come to me.”

When asked, the director agreed that one option in her efforts to make the adjudication of patent matters more efficient could be establishing a small claims patent court—a decades-old idea that the PTO recently revived. But she pointed to the constitutional requirement for a jury trial as a potential complication.

The PTO is monitoring events at the Copyright Office’s Copyright Claims Board, whichlaunched in June. The CCB has an opt-out policy that permits those being sued to choose to continue with the case before the board—which caps the damages available in each case—or risk potential district court litigation.

Since the CCB’s doors opened so recently, “we haven’t really figured out if they’ve struck the right balance with those who are requesting the Copyright Office’s help to adjudicate their matter and those who will agree to have that done,” said Vidal. “I think we’re investigating and learning as we go.”

Trademark Registry

Vidal said that the office is focusing on tackling the issue of trademark delays and fraud on the register, which she said were in large part an outcome of a glut of new filings during the Covid-19 pandemic.

While she sees in increase in filings as a positive, “it means we do have to adapt,” she said, noting that part of this effort to adapt is the introduction of a new group of trademark examiners that will be starting work at the PTO on Oct. 24.

The PTO is also using investigative services to track fraudulent activity and speaking with stakeholders to obtain additional information. Vidal declined to comment on potential action to be taken regarding fraudulently obtained trademarks, saying only that the PTO is looking into the issue.

Emerging Technologies

Vidal said that one of the hot-button issues raised during her recent trip to several countries in Asia—including Laos, Thailand, Singapore, Malaysia and Vietnam—was the evolving landscape of the metaverse and use of artifical intelligence in inventions.

“That’s a conversation that we engage in everywhere that we are,” she said.

Vidal’s office is currently conducting a study with the US Copyright Office regarding nonfungible tokens, the results of which will inform the PTO’s approach to NFTs, she said.

The PTO’s AI-Emerging Technology partnership, along with public engagement, wwill shape the office’s use of artificial intelligence as well as help it determine how to structure policies and procedures in a way that accounts for new technologies, she said.

A recent Federal Circuit case determined that inventors must be human, leaving open further questions about the place of AI-related innovations in the world of intellectual property protections.

The PTO’s biggest challenge regarding AI’s increasing—and increasingly pivotal—role in innovation, Vidal said, is striking the right balance in protecting IP to incentivize innovation without locking it up, “regardless of whose name is on the patent.”

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

To contact the editors responsible for this story: Adam M. Taylor at ataylor@bloombergindustry.com; Tonia Moore at tmoore@bloombergindustry.com; Jay-Anne B. Casuga at jcasuga@bloomberglaw.com