With money in the bank, Patent and Trademark Office sets long-term agenda

Freed from the uncertainty of the congressional budget process, the Patent and Trademark Office is plotting long-term strategy for the first time, said Deputy Director Michelle Lee. Issuing better patents is at the top of her list.

“I’m certainly not the first head of the Patent and Trademark Office to say that quality is a priority, nor will I be the last,” she said Thursday during an event at The Brookings Institution.

The difference, she said, was that “for too long, due to uncertain and limited financial resources, the USPTO has had to make do with less. But that’s no longer the case.”

Lee credited the America Invents Act, a 2011 law that lets the agency charge fees to those who use its services. The agency collected $3.2 billion in user fees during fiscal 2014. The money has let the agency build up an operating reserve, currently at $651 million, to carry it through emergencies such as a government shutdown.

Michelle Lee, deputy director of the Patent and Trademark Office

“That permits us to think strategically and for the long run about, perhaps, more expensive initiatives that truly help our agency,” she said.

PTO also has gained breathing space as it made headway on a backlog of patent applications that peaked at 750,000 in January 2009. The agency has reduced the backlog by 20 percent, despite a 4-percent year-over-year increase in new patent filings, she said.

Those two developments let the agency “do more than just sort of make do,” Lee said. “We can focus on the building the workforce and the tools we need to support what I’ll call a world-class patent system.”

A new patent-quality chief

Improving patent quality means balancing speed with precision, Lee said, citing her own experiences, first as a computer scientist and, later, as an intellectual property lawyer for some of Silicon Valley’s giants, including Google.

“For the USPTO to issue those patents promptly and accurately is critically important so people can invest in these developments. But also on the other side, I’ve seen patents that should not have been issued or the scope was too broad,” she said. “If there is abusive litigation or a patent that shouldn’t have been issued, there’s also a cost to our businesses.”

A forthcoming initiative, of which Lee said she is “super excited,” will focus on improving customer service, prosecution services and the measurement of patent quality. Valencia Martin-Wallace, now assistant deputy commissioner for patent operations and a 22-year agency veteran, will lead the effort. As the first deputy commissioner for patent quality, Martin-Wallace will oversee both long- and short-term improvements, Lee said.

“I wanted one person whose one and only job it was, day in and day out, to improve patent quality at the PTO,” she said. “She will help us keep our eye on the ball on improvements to patent quality now and in the long run.”

Already, the agency has asked employees in various roles, from patent examiners to IT specialists, to brainstorm ways to improve patent quality. In a few weeks, the agency will publish a Federal Register notice to engage the public in the effort. It will be followed by a two-day summit, with “straw man” proposals to focus the discussion, according to an agency spokesman.

It will be the first of many conversations this year and in the coming years, Lee said.

“We need to better understand what quality means to our customers and stakeholders,” she said.

PTO also will apply “big-data techniques” to pinpoint and evaluate trouble spots in the patent application process, as part of the quality initiative, Lee said.

Satellite offices get more responsibilities

PTO is banking on its four, young satellite offices to help it understand customers’ needs and improve satisfaction.

“We view them as hubs of education and outreach,” she said. “When I say education, I don’t just mean PTO to the public about our filing procedures and the importance of [intellectual property] and things of that nature, although it certainly includes that. I mean the public’s educating the PTO on how we can have better programs, procedures and policies to best meet their innovation needs. It’s two- way communication.”

The offices, in Detroit, Silicon Valley, Dallas and Denver are still in their infancy. Patent applications still are funneled through agency headquarters in Alexandria before reaching the satellite offices, Lee said. But once the offices are fully operational, they will have both patent examiners and judges to hear disputes closer to where stakeholders live.

The Detroit office, the first to open in 2012, has just gotten a permanent director. Until now, executives from headquarters have been rotating through the top position, according to an agency spokesman. The Silicon Valley office, still housed in temporary digs, will move this summer into a permanent space in the San Jose city hall this summer.

Changes coming to PTO telework program

Lee briefly mentioned changes to the agency’s telework policies in her speech at Brookings. Once regarded as a model for other agencies, PTO’s widely used program hit a road bump after the Commerce Department inspector general said some patent examiners were fudging the number of hours they worked.

The agency has commissioned a review by the National Academy of Public Administration, expected in May. But Lee says she is not waiting to make some changes.

“We have a number of initiatives underway. I’ve shared them with the members of Congress,” she said. “We’re implementing a bunch of policies and procedures to improve and curtail time-and-attendance abuse and to review the employee conduct process.”

Leadership in limbo

Even as the agency embarks on long-term initiatives, Congress has put Lee’s career in limbo. President Barack Obama has tapped her to be the agency’s permanent director, but she has yet to be confirmed by the Senate. Her first confirmation hearing before the Senate Judiciary Committee was in December, too late, according to Sen. Chuck Grassley (R-Iowa), to put her nomination to a vote before the end of the session. Grassley, now the committee’s chairman, Wednesday held a second confirmation hearing. PTO has been without a permanent director since February 2013, when David Kappos left to practice intellectual property law.

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