Partner, American Continental Group
Wish #1: Congress acts to clarify Section 101 Patent Subject Matter Eligibility Standards
Congress should consider legislation to address recent Supreme Court decisions that have unfortunately narrowed the scope of patent protection for life sciences and software technology by expanding judicially created exceptions to patent eligible subject matter. A few companies are pleased with the new law on subject matter eligibility and therefore are vocally opposed to any legislation. However, the PTO Director has highlighted the new uncertainty and unpredictability of this area of the law resulting from the recent Supreme Court decisions, and a large and growing number of associations from the IP community are asking for a legislative solution. As Justice Stevens said in his dissent in Diamond v. Diehr, these Supreme Court decisions regarding the patentability of program-related invention “do not establish rules that enable a conscientious patent lawyer to determine with a fair degree of accuracy which, if any, program-related inventions will be patentable.” To rectify the situation, Congress should promulgate legislation to restore the scope of subject matter eligibility in a clear and technologically-neutral manner as it intended when it passed the Patent Act of 1952.
Wish #2: The PTO hires a new CIO to oversee an overhaul of the agency’s IT systems.
The position of PTO CIO has been vacant since Nov. 3rd 2017, when former CIO John Owens left the agency. During recent public PTO events, leadership has stated that they’ve received a substantial amount of applications for the position, and the expectation is that a new CIO will be selected in 2019. The selection of a permanent CIO is essential to the future stability of the PTO IT systems. Over the past year, PTO users have suffered from a number of IT failures, including the eight-day Patent Application Locating and Monitoring (PALM) database outage in August 2018. It is my hope that a new CIO will bring a focused, detailed vision of how to modernize and maintain the PTO’s IT systems. The near-term focus of the CIO should be on acquiring examiner tools that aggressively incorporate the latest artificial intelligence (AI) and machine learning capabilities being developed in the commercial world. Hopefully, any new modernization efforts will also include a balanced use of both PTO employees and outside contractors so that the agency is not left in a sub-optimal situation if/when key personnel depart.
Wish #3: The PTO continues to improve its ability to support the Public Dissemination of Data (PDD) systems which update and share millions of patent and trademark documents daily.
The PTO currently provides the following patent and trademark bulk data available to anyone free of charge: Patents (grants, published applications, assignments, classification information, and maintenance fee events) and Trademarks (registrations, applications, assignments, and TTAB proceedings). Hopefully this service, whereby patent and trademark bulk data is made easily accessible and at no cost to the public, will continue in the New Year, and will be improved by the use of newly-developed technology.
Wish #4: U.S. and China will finalize an agreement to curb Chinese IP theft and avoid a long and costly trade war between the two countries.
In August 2017, President Trump signed an executive memorandum ordering an investigation into China’s alleged theft of U.S. intellectual property through forced technology transfers and cyber theft. The USTR investigation concluded in March 2018, and resulted in $34 billion in trade action against China, followed by an additional $16 billion in June. China retaliated with its own tariffs against the U.S. President Trump later directed USTR Director Lighthizer to impose another $200 billion in tariffs on imports from China beginning 24 September. These additional tariffs related to the USTR’s determination under section 301 that “the acts, policies, and practices of the Government of China related to technology transfer, intellectual property, and innovation covered in the [section 301] investigation are unreasonable or discriminatory and burden or restrict U.S. commerce.” These tariffs were set at 10% initially and were scheduled to increase to 25% on 1 January 2019. One of my New Year’s wishes is for a de-escalation of the current trade antagonism between the U.S. and China. There are some signs of hope: in late November, President Trump and China’s President Xi Jingping agreed to suspend new trade tariffs and start a 90-day negotiation period. Wu Handong, an adviser to China’s Supreme People’s Court, has indicated that China is accelerating the approval of a revised patent law in part to address U.S. concerns. Mr. Wu said the draft was submitted to China’s legislature earlier this month and is expected to be approved next year. Revisions, he said, would subject violators to greater administrative penalties and fines. Whether any such changes that emerge are sufficient to meet U. S. concerns remains to be seen. However, China has motivation to address its intellectual property policies in a manner that reduces current trade tensions. China’s growth rate is declining, and the country is more dependent on trade than the United States. Although its authoritarian government can more readily mobilize public support and force its citizens to absorb short-term costs in the name of long-term development, its ability or willingness to do so is not unlimited because of various other internal pressures on the Chinese government. Moreover, now that China is developing its own innovative and creative industries it has greater long-term interests in providing adequate protection to intellectual property in both a domestic and international context. The United States, of course, is not immune to the costs of a trade war with China as attested by the recent volatility of U.S. markets. Earlier this month, the USTR issued a Federal Register notice postponing the tariff increase 25 percent rate until 2 March 2019. Hopefully the New Year will bring a deal that adequately addresses alleged theft of U.S. intellectual property while keeping Chinese markets open to U.S. owners of intellectual property.
Marla Grossman is a partner at American Continental Group, where she helps her clients with strategic public policy planning and representation before the White House, US federal agencies, and Congress. Grossman’s particular areas of expertise include intellectual property, technology, competition and trade policy. With decades of experience inside the beltway, including as counsel to the Senate Judiciary Committee, Marla is a true powerhouse on the intellectual property scene.