Wednesday, April 27, 2011

On Fast Track, Patent Office Run Over By Budget Deal

As LEXVIVO previously reported, the United States Patent and Trademark Office ("USPTO") entered 2011 by proposing several significant reforms designed to improve the efficiency and quality of the patent application process.  Included in these proposed changes were a new fast-track patent pathway and new satellite Patent Offices.  The Federal budget compromise recently agreed between Congress and President Obama, the Full-Year Continuing Appropriations Act, 2011 (Pub. Law 112-10), brings this brief patent office perestroika to a halt.  Here is an email USPTO Director David Kappos sent to his employees last week:
As you may know, the FY 2011 budget was signed by the president on April 15, 2011 and contains the USPTO’s appropriation through the end of this fiscal year, September 30, 2011. With the enactment of the Full-Year Continuing Appropriations Act, 2011 (Pub. Law 112-10), USPTO spending authority for FY 2011 has been limited to $2.09 billion. In view of the funding cuts reflected in the final budget and affecting the U.S. government as a whole, we will be unable to expend the additional $85-100 million in fees that we will be collecting during this fiscal year—funds that we had anticipated being able to use to fund operations this year.
In short, the Continuing Appropriations Act for FY 2011 does not allow us to maintain spending at the levels planned for this year. Further, I am mindful of the fact that we may very well be operating at the FY 2011 level for the foreseeable future. As a result, we have had to make some difficult decisions in order to ensure the responsible stewardship of the agency. It is against that backdrop that I must reluctantly announce, effective immediately, that:
• All overtime is suspended until further notice;
• Hiring—both for new positions and for backfills—is frozen for the rest of the year unless an exemption is given by the Office of the Under Secretary;

• Funding for employee training will be limited to mandatory training for the remainder of the year;
• Funding for contracting of Patent Cooperation Treaty (PCT) search is significantly reduced;
• The opening of the planned Nationwide Workforce satellite office in Detroit and any consideration of other satellite locations are postponed until further notice;

• Only limited funding will be available for mission-critical IT capital investments;

• The Track One expedited patent examination program, scheduled to go into effect on May 4, 2011, is postponed until further notice.
In addition, all business units will be required to reduce all other non-compensation-related expenses, including travel, conferences and contracts.
Trademark activities are unaffected and will maintain normal operations.
I want each of you to know that we have not come by these decisions easily. I recognize that these measures will place additional burdens on your offices, your staff, and your ability to carry out the agency’s mission. However, I believe that they are absolutely necessary to ensuring that the agency can continue to operate through the remainder of this fiscal year and into FY 2012.
I thank you for continuing cooperation and patience, and I appreciate your dedication and service during this challenging time.
David Kappos
Under Secretary of Commerce for Intellectual Property and Director of the USPTO
Ironically, the USPTO does not contribute materially to the Federal deficit.  Instead, it is financially self-supporting, covering its operations through the collection of fees from patent and trademark applicants.  However, Congress has traditionally appropriated these fees for other governmental purposes, leaving the USPTO continually short of money to pay for improvements, such as skilled new patent examiners to help alleviate the huge backlog of patent applications.  In an age of austerity, the USPTO might be celebrated as a governmental exemplar of financial self-sufficiency.  Instead, it continues to act as a piggy bank continually filled by inventors, only to be raided by Congress.  It is difficult to see how this strategy benefits technological innovation.

Friday, April 22, 2011

Opening The Closed While Closing The Open

The Public Patent Foundation describes its mission as "Representing the Public's Interests in the Patent System."  As its website explains,
Undeserved Patents and Unsound Patent Policy Harm the Public
... by making things more expensive, if not impossible to afford;
... by preventing scientists from advancing technology;
... by unfairly prejudicing small businesses; and
... by restraining civil liberties and individual freedoms.
PUBPAT Represents the Public's Interests Against Undeserved Patents and Unsound Patent Policy
Patent Attorney David Garrod, who has served as Senior Litigation Counsel for the Public Patent Foundation, assisted the Public Patent Foundation in its campaign against false patent marking, and authored several free claim construction dictionaries.  Meanwhile, his company, Bedrock Computer Technologies, LLC, asserted its own patent (United States Patent No. 5,893,120, entitled  "Methods and Apparatus for Information Storage and Retrieval Using a Hashing Technique with External Chaining and On-The-Fly Removal of Expired Data") against software giants such as Google, Amazon, and PayPal.  On April 21, 2011, Bedrock won a $5 million jury award against Google, whose use of open source Linux software code allegedly infringed claims of the '120 patent.

The result is a fascinating and apparently quixotic juxtaposition of opening the closed while simultaneously closing the open, and is as clear as mud.

Thursday, April 7, 2011

The Patent Conference

Early in A Connecticut Yankee In King Arthur's Court, the titular Yankee, Hank Morgan, upon becoming King Arthur's "perpectual minister and executive", explains the importance he places on patents:
the very first official thing I did, in my administration—and it was on the very first day of it, too—was to start a patent office; for I knew that a country without a patent office and good patent laws was just a crab, and couldn't travel any way but sideways or backways.
Although this sentiment appears in a work of humor, many earnestly share Morgan's views on the importance of patents.  The recent explosion of patent scholarship reflects the growing perception that patents and patent systems are crucial instruments of public policy - instruments capable of generating benefits and costs for society.  Now, the increasingly important field of patent research has its own annual home:  The Patent Conference.

On April 8, 2011, the inaugural Patent Conference will be held at the University of Kansas School of Law.  The Patent Conference will be an annual event featuring the bleeding edge of patent scholarship.  This year, The Patent Conference schedule features research on patent infringement, patent damages, patent courts, empirical patent analysis, patent litigation, interdisciplinary patent studies, and Asian patent law.  Here is a press release from the inaugural host institution, the University of Kansas School of Law, describing the event:

Conference to bring world’s top patent scholars to School of Law

LAWRENCE — A critical mass of the world’s foremost patent scholars will present their latest research at the inaugural Patent Conference at the University of Kansas School of Law. 
The Patent Conference, or PatCon, will run from 8 a.m. to 6 p.m. Friday, April 8, in the Stinson Morrison Hecker Lecture Hall, 104 Green Hall. The event is free and open to the public.
The conference is a cooperative effort between the KU School of Law, the Chicago-Kent College of Law, the University of San Diego School of Law and Boston College Law School to hold an annual conference at which patent scholars in law, economics, management science and other disciplines can share their research. After this year’s inaugural conference, future gatherings will rotate among the four schools, returning to KU in 2015. 
“The scholarly study of patents has exploded in importance over the last decade,” said Andrew Torrance, a KU associate professor of law and an internationally known scholar in patent law, intellectual property law, food and drug law, and biodiversity law. “It has undergone a rapid transformation from a small niche field within intellectual property, largely overshadowed by copyright and trademark law, to an academic discipline that now attracts the enthusiastic attention of schools of law, business, public policy, engineering and medicine, as well as departments of economics, history, science and technology studies — and even science and mathematics.
“Clearly, the time has arrived for the field to have a permanent academic home, which is why we decided to found The Patent Conference.”
Torrance cofounded the conference with his colleagues David Schwartz, Chicago-Kent College of Law; Ted Sichelman, University of San Diego School of Law; and David Olson, Boston College Law School.
Nearly 40 patent scholars will make presentations in a series of panel discussions. Broad themes will include patent infringement, patent damages, patent courts, empirical patent analysis, patent litigation, interdisciplinary patent studies and Asian patent law. A complete schedule is available on the law school website.
“We are delighted that the response to the inaugural Patent Conference has been so positive,” Torrance said. “With almost 40 confirmed speakers from dozens of institutions in attendance, many of the finest patent scholars in the world will be presenting their work right here at KU School of Law. In a world that depends on technological innovation more than ever before, the cofounders and I hope this event will help spur the field of patent research to even greater success.”
The Patent Conference is sponsored by Shook, Hardy & Bacon LLP and the KU School of Law.
Patent law has attracted considerable controversy of late.  Patents are capable of inspiring both passionate support from those who believe they are necessary to spur technological innovation, on the one hand, and grave concern from those who oppose the monopoly rights to exclude others they confer upon their owners and favor more open models of innovation, on the other.  The importance of these and other issues has led to the founding of The Patent Conference, which will provide an annual venue for the free exchange of ideas and research about patents.

Friday, April 1, 2011

Thomas Eisner: Chemistry, Ecology, and Conservation

Thomas Eisner, a professor of entomology at Cornell University, died on March 25, 2011.  Eisner was both a scientific and a conservation pioneer.   He helped found the field of chemical ecology, which studies how organisms use the natural chemicals they synthesize, whether in communication, defense, or predation.  Later, he helped the National Biodiversity Institute of Costa Rica ("INBio") negotiate an agreement with pharmaceutical company Merck & Co., Inc., under which INBio received a $1,000,000 payment and $135,000 in scientific laboratory equipment in exchange for bioprospecting for, and preparing chemical extracts of, promising natural chemicals from Costa Rican rainforest organisms.  In addition, the agreement promises Costa Rica a modest royalty should any of these natural chemicals form the basis for a commercially successful drug.

Although no such drug has yet emerged from this relationship, the Merck-INBio agreement established a new paradigm in bioprospecting, in which developing countries with abundant biodiversity control access to that valuable natural resource through negotiated agreements.  Subsequent biodiversity access agreements increased both in ambition and legal sophistication.  For example, the multinational pharmaceutical company Novartis AG entered into an access agreement with the Brazilian Association for the Sustainable Use of the Biodiversity of Amazonia ("BIOAMAZONIA") under whose terms BIOAMAZONIA received an upfront payment of $4,000,000 in return for supplying Novartis with 30,000 promising biological samples over a three-year period;  furthermore, should any of these samples lead to a drug that receives both patent protection from the United States Patent and Trademark Office and regulatory approval from the United States Food and Drug Administration, Novartis will pay BIOAMAZONIA a one-percent royalty on any profits.

Professor Eisner embodied a rare dual genius that combined pure scientific study of biodiversity with creative, practical, and effective actions to conserve the sources of that biodiversity.  Many in the fields of biology and conservation mourn his death.