Remarks delivered at Silicon Valley IP Forum 2019
Deputy Director of the U.S. Patent and Trademark Office Laura Peter
April 10, 2019
Palo Alto, California
As prepared for delivery
Good afternoon everyone, and thank you, John Cabeca for your kind introduction. It’s a pleasure to be here with all of you today to discuss intellectual property in a global environment.
Just think: 150 years ago, before the invention of the car or the airplane, it would have taken weeks to get across the country, let alone around the world. Now I can hop on a plane and be in London for breakfast. Just 50 years ago, before the invention of the cell phone or the internet, I would have had to mail a written letter or use a landline to call someone across the world. Now I can send a tweet to millions of people worldwide in just seconds. The evolution of technology has led to an increasingly global environment.
Chieko Asakawa’s inventions are helping to connect even more people. In 1997, she invented the Home Page Reader, the first practical voice browser to provide effective internet access for the blind and visually impaired computer users. Recently named as a 2019 inductee into the National Inventors Hall of Fame (NIHF), Dr. Asakawa holds over 20 patents, is an IBM Distinguished Service Professor in the Robotics Institute at Carnegie Mellon University, and is an IBM Fellow at IBM Research.
Although visually impaired herself at the age of 14, she did not let this hinder her innovative mind. Rather, she used this to her advantage to help her understand the needs of a unique audience. In just five short years, her Home Page Reader was widely used globally to help people “hear” the internet, what she calls “a revolutionary moment for the blind.” Although initially developed in her native language of Japanese, its use was later expanded to include 11 additional languages.
Currently, she is working on developing an artificial intelligence-powered navigation system, called NavCog. This smartphone app will assist the blind and other disabled populations in navigating the physical world. Dr. Asakawa believes the future of AI is that “cognitive assistance will augment…our five senses.” With the rise of the internet, and the help of inventions such as that of Dr. Asakawa, the world has become infinitely more connected.
In today’s global world, we must view intellectual property though a different lens. As you know, IP protection differs around the world based on each country’s national laws. According to a recent report by the U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC), the U.S. remains the strongest intellectual property system in the world. Notably, the U.S. moved up this year to tie for second place in the patent rights rankings, a move up of 10 spots from the prior year. The 2019 Chamber report cited our USPTO PTAB reforms as a primary basis for the improved rankings this year.
But in order for us to remain worldwide leaders in the economy and innovation, we must continue to improve our IP system. We must continue to stimulate and incentivize innovation. IP intensive industries employ over 45 million Americans and hundreds of millions of people worldwide. Intellectual property is essential to the US economy, accounting for $6.6 trillion in the U.S., more than the nominal GDP of any other country in the world.
Indeed, from the beginning of our nation, intellectual property has been the engine behind America’s economic and cultural development. Recognizing its importance, our Founders included IP rights in the Constitution itself. In fact, in the body of the Constitution, notwithstanding the Amendments, the word “right” is mentioned only once: It is in Article 1, Section 8, Clause 8, granting the Congress power “to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
Our Founders were ahead of their time to foresee how important protecting intellectual property rights and stimulating innovation is to the growth and success of our nation. For this nation’s greatest inventors, backed by our patent system, went on to change the world. In order to ensure that our nation remains at the forefront of technology, the USPTO must at a minimum provide a reliable and predictable legal framework to incentivize and protect innovation, inspire people to innovate, and broaden the opportunities for innovation.
To increase the reliability and predictability of U.S. patents, we have initiated a number of changes at the USPTO in the past year. Specifically, we have made changes with respect to patent subject matter eligibility under Section 101 and proceedings at the Patent Trial and Appeals Board (PTAB).
Although the statutory language regarding patentable subject matter has remained virtually unchanged since the 1790s, we all know that recent judicial decisions have introduced a degree of uncertainty to the application of the law. This has led to confusion for applicants, attorneys, and our examiners who wrestle with these issues every single day.
The USPTO has been working hard to clarify patentable subject matter under Section 101—of course, within our statutory authority and judicial precedent. As many of you know, over the last year, we have issued guidance to examiners regarding: the “conventionality” analysis in the second step of the Mayo/Alice framework, “method of treatment” claims, and most recently a revised framework for 101 subject matter eligibility analysis that synthesizes the law and streamlines the 101 analysis at the USPTO.
Our examiners have welcomed this new guidance on Section 101. Since the release of the 2019 Revised Patent Subject Matter Eligibility Guidance (“the 2019 PEG”) in January, we have been diligently training our employees. By now, nearly all patent examiners and PTAB judges have received training. By initial accounts, it appears that this new guidance has resulted in more clarity for examiners. For example, from January thru December of 2018, on average 14.3% of office actions in artificial intelligence were allowances. Since the training in January, the average has increased to 35.9%. Of course, we cannot directly attribute this increased allowance rate to the revised 101 guidance, since there are many factors that go into determining allowability.
To help keep the public informed, the new guidance and related materials are available on our website. We also conducted a Patent Quality Chat in January—you can find the recording of this online as well. As we begin to use this new guidance in examination and at the PTAB, we are also reviewing public feedback.
Over the past year, we have also initiated a number of changes at the PTAB. Among other things, we updated the Trial Practice Guide, we published two new Standard Operating Procedures (SOP), we published a final rule changing the claim construction standard in AIA trials at the PTAB to match the standard used by district courts and by the ITC, and just recently, we initiated a claim amendment pilot program in AIA trials.
The first SOP outlined the procedures the Board uses for assigning (or re-assigning) judges to cases and clarified that the PTAB will expand panels only in very limited circumstances. The second SOP created a Precedential Opinion Panel (POP), which governs precedential and informative decisions of the Board. This panel will help to increase consistency on issues of exceptional importance to the agency.
In March, we issued our first decision from a POP panel hearing regarding issue joinder and same party joinder. We also recently designated five previous decisions as precedential with respect to the topics of motions to amend, live testimony, and submitting new evidence; and designated three previous decisions as informative with respect to the topics of applying the revised 101 guidance and the grounds for institution.
After reviewing the public comments, we recently published a Federal Register Notice regarding a pilot program for motion to amend practice before the PTAB. This pilot program applies to all AIA trial proceedings instituted on or after March 15, 2019 and provides patent owners with two new options. A patent owner may choose to receive preliminary guidance from the Board on its motion to amend; and a patent owner may choose to file a revised motion to amend after receiving the PTAB’s preliminary guidance (if requested). This pilot program is designed to ensure that post grant proceedings are not all-or-nothing.
For the public, we also just held a Patent Quality Chat yesterday and a Boardside Chat today on the new pilot program, the recordings of which will both be available online soon. And finally on March 14, we appointed Scott Boalick as new chief judge of PTAB and Jacqueline Bonilla as new deputy chief judge, positions in which they have both been acting since September 2018. Chief Judge Boalick and Deputy Chief Judge Bonilla have both been instrumental in helping to develop and implement these new PTAB reforms over the last year.
As I have mentioned, in this truly global environment, the USPTO cannot operate in a bubble. Rather, we must be fully engaged with the international IP community. To that end, the USPTO participates in cooperative forums, such as IP5 for patents, TM5 for trademarks, and ID5 for industrial designs. These forums allow world IP leaders to meet routinely, discuss IP policy issues, and collaborate on international initiatives.
The IP5 includes the world’s five largest patent offices: the EPO (European Patent Office), the JPO (Japan Patent Office), KIPO (the Korean Intellectual Property Office), CNIPA (the National Intellectual Property Administration of the People’s Republic of China), and the USPTO. Together, these five offices account for more than 80% of patent applications filed worldwide, as well as 95% of all PCT work. Important IP5 initiatives that will help promote international worksharing include classification harmonization, the Expanded Collaborative Search Pilot, and Global Dossier.
Classification harmonization is a partnership between the USPTO and the EPO to provide an internationally compatible system to improve patent searching. As a result of this initiative, the USPTO has now converted from the U.S. Patent Classification system (USPC) to the Cooperative Patent Classification system (CPC).
Additionally, USPTO’s Global Dossier, created in collaboration with the IP5, provides our examiners, and the public, with free streamlined access to the prosecution histories of foreign counterpart applications in real time, including English computer-automated translations of Chinese, Japanese, and Korean office actions. This enables examiners to more easily find relevant references and prior art earlier in the prosecution.
Under the Expanded Collaborative Search Pilot (CSP), the search results of examiners at the USPTO are combined with those from the Japan Patent Office (JPO) and/or the Korean Intellectual Property Office (KIPO). Examiners in this pilot program will have the best prior art in front of them from multiple foreign offices before issuing their first office action. All of these cooperative efforts help the USPTO in our mission to improve the search and examination of our applications and provide a solid, reliable patent grant.
Similarly on the trademark side, the USPTO is a member of the TM5, which includes the world’s five largest trademark offices: the EUIPO (European Union Intellectual Patent Office), the JPO, KIPO, CNIPA, and the USPTO. Ongoing TM5 initiatives include efforts to minimize bad faith filings, promote awareness of fraudulent solicitations (where private parties pretend to be the USPTO and require payment of fees), and combat counterfeiting.
The USPTO has been diligently working to improve the accuracy and integrity of the trademark register. In the U.S., the number of trademark registration applications continues to rise significantly. Trademark applications increased 8% in fiscal year 2018, on top of the unprecedented 12% growth rate in fiscal year 2017. China filings accounted for 9.1% of total trademark filings last year and 8.3% of filings so far this year. However, recent trends do show that Chinese filing rates are beginning to level off.
To combat inaccurate or fraudulent claims of use and the rise in fake specimens, we are piloting software to help determine if a photograph has been digitally altered, and we are actively encouraging lawyers to report suspicious specimens in pending applications. In an effort to effectively enforce compliance with statutory and regulatory requirements for all applicants, and aid our efforts to improve the accuracy of the U.S. Trademark Register, we recently proposed a new U.S.-counsel rule.
On February 15, we published a notice of proposed rulemaking, which would require all foreign domiciled trademark applicants and registrants to be represented by a U.S.-licensed attorney in order to file trademark documents with the USPTO. The public comment period recently closed and we are currently reviewing the comments collected.
Some other specific ways in which the USPTO expands its global reach are through programs such as the China IP Roadshows and the USPTO IP attaché program. Our China IP Roadshows help U.S. right holders navigate the IP landscape in China. Since 2017, we have conducted over 20 of these free one-day programs around the country. Topics include how to file patent and trademark applications and enforce resulting IP rights in China, and how to keep counterfeit goods from China out of the U.S. market. Check out our website for more information on the upcoming roadshow in L.A. in June.
Our IP Attaché program places individuals in U.S. embassies and consulates around the world, including China, India, and Ukraine. The role of an IP attaché is to promote U.S. government IP policy positions to the benefit of U.S. stakeholders. Specifically, the attachés directly seek changes in policies, laws, and regulations related to intellectual property; educate host government officials on IP matters to help them understand the U.S. government perspective; and conduct public awareness programs to build grass roots support for U.S. policy positions on IP.
One of our main priorities at the USPTO has been, and continues to be, to change the dialogue surrounding intellectual property in an effort to stimulate innovation. In today’s highly competitive global economy, it is increasingly important to ensure that all Americans who are willing to work hard and persevere have the opportunity to innovate, start new companies, succeed in established companies, and ultimately achieve the American Dream.
We must elevate the scientists and engineers, the out-of-the-box thinkers and entrepreneurs, the inventors and visionaries. For they are the real heroes in our society. We must focus on the brilliance of our inventors, the excitement of innovation, and the amazing benefits all of us gain from these advancements.
One truly inspiring example of this innovation is Kenton Lee and his nonprofit Because International, a 2018 winner of the USPTO Patents for Humanity awards. In 2007, Idaho native Kenton Lee, traveled halfway across the world to volunteer at an orphanage in Nairobi, Kenya. One day as he was walking down a dirt path to church with the children, he noticed the shoes of the 6-year-old little girl in a white dress walking by his side. Her small feet barely fit into her shoes; the top of her shoes were cut open so her little toes could stick out. In that moment, Lee was inspired to create “The Shoe That Grows.”
Lee developed a unique patented shoe design, which can grow five sizes and last up to five years. Made of leather, compressed rubber, Velcro, and snaps, the shoes weigh less than a pound and fold for transport, so you can fit 50 pair inside a regular-sized suitcase. Lee believes, “innovation is the key to fighting poverty.” Over two billion people suffer from soil-transmitted diseases and parasites, and over 300 million children around the world don’t have any shoes. Since 2009, Because International has distributed over 180,000 shoes to kids in over 95 countries.
Their mission is “to leverage innovation to make things better.” And I think this should be our mission as well. Innovation has the potential to improve our world in so many ways. So let us continue to fulfill our constitutional mandate “to promote the progress of science and useful arts.” Let us work together to uphold the U.S. intellectual property system as the strongest in the world.
Thank you again for the opportunity to be with you today. I welcome any questions you may have.