[Ecommerce] [Fwd: [Broadcast-discuss] USPTO Official Speech to AIPLA]

[Manon Ress]

Thanks to S.J. for pointer.  For Jonathan Dudas (USPTO) a recent
proposal is an "amorphous charter of "balancing intellectual property"
but "the US will fight this"...

-------- Original Message --------
Subject: [Broadcast-discuss] USPTO Official Speech to AIPLA
Date: Wed, 20 Oct 2004 06:32:11 -0400
From: Seth Johnson <seth.johnson@RealMeasures.dyndns.org>
Organization: Real Measures
To: broadcast-discuss@lists.essential.org


Relevant snippet:

The U.S. and a handful of nations are net givers at the World
Intellectual Property Organization, and that's fine. We shoulder
that responsibility. But the rest of the 174 nations are net
receivers; that is, they are the beneficiaries of the fees that
you pay for PCT that does not go to PCT operations.

Even worse, there were proposals on the table to fundamentally
change the WIPO charter and philosophy from one that promotes
intellectual property and its protection to a more amorphous
charter of "balancing" intellectual property. We have no quarrels
with balance. In fact, we believe our current system and
international norms are properly balanced. But simply put, this
new balancing act is a strategy to water down intellectual
property protection, and the U.S. will fight this as well, and I
am certain that we will do so.


> http://www.uspto.gov/web/offices/com/speeches/2004oct15.htm


REMARKS OF
JONATHAN DUDAS,
UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL
PROPERTY AND DIRECTOR OF THE PATENT
AND TRADEMARK OFFICE

2004 AIPLA ANNUAL MEETING

Friday, October 15, 2004


MR. DUDAS: What I want to talk to you about today are the
challenges that face our intellectual property system, the
challenges that face the USPTO. And as we gather, in part, to
honor USPTO and copyright officials for outstanding service, I
also want to talk to you about some of the successes we've
recently had at the USPTO. I want to tell you about the many
challenges that still face our system and our agency and why you
can, and why you should, be confident that the USPTO will meet
these challenges.

I gave a great deal of thought to whether or not I could sum up
all of the challenges facing our intellectual property system in
one simple statement, but of course nothing is that simple.
However, I believe if you take several steps back and you take a
bird's eye view, you begin to realize that the source of the many
different challenges is the need to resolve the vastly different
perceptions that people have about intellectual property.

I'd like to give you a specific example of differing perceptions
that I think may come close to home. It's something I deal with
on a daily basis and it's something that USPTO deals with on a
daily basis, especially as I'm translating and working between
the intellectual property community, lawyers, participants,
private sector and working with the government.

Many of you, as intellectual property lawyers, have questioned
how do we view the world, how do we view intellectual property.
And many of us at the USPTO, and many of you at AIPLA, as
intellectual property lawyers, are comfortable perceiving our
intellectual property system through analysis of volumes of
statutes, judicial interpretations and law review articles, and
thank God you are.

Many of us are quite comfortable perceiving our intellectual
property system through passages like I hope shows up on the
screen, but I will read for you. "The critical period for
diligence for a first conceiver, but second reducer, begins not
at the time of conception of the first conceiver, but just prior
to the entry in the field of the party who is first reduced to
practice and continues until the first conceiver reduces to
practice," citing Hull v. Davenport, from Chapter 700 of our
NPEP.

That is an appropriate and a learned way to view our intellectual
property system. However, I want to take just a moment to
contrast that with the many, many people, perhaps the vast
majority of people who are not intellectual property owners and
how they view our system of intellectual property. So, for that
view, I'm going to turn to the sage words of J.J. Jamison, Peter
Parker's boss in the movie, "Spiderman," as he had his eureka
moment.

[Movie clip played.]

[Applause.]

MR. DUDAS: I laugh every time I see that with my children, and my
wife calls me a patent geek.

[Laughter.]

MR. DUDAS: I'm honored to be called that.

Now, I know where I am. I'm standing before hundreds of the top
intellectual property lawyers in the world. So those of you who
perceive the intellectual property world as an excellent venue
for litigation, before you consider the best jurisdiction to sue
me for copyright infringement, please note that I do have the
consent of Columbia TriStar to show you that clip.

[Laughter.]

MR. DUDAS: Certainly, you all need to question anybody, myself
included, who tries to give you a dose of reality by showing you
a clip of a fictional character from a fictional movie. And while
this is intended to be a humorous contrast, it is very real in
many respects. I believe that Challenge No. 1 for all of us and
for all of you is conveying what you know and what we know at the
USPTO about our system of intellectual property to policymakers,
to government leaders and the general public who do not have the
same background that you have, that the folks at the USPTO have.

You don't know too much, and many of those folks don't know too
little, but the answer certainly is not to send more people to
law school. I'm a lawyer too. I think that's much too much
competition. But we, all of you at AIPLA and the USPTO, have a
responsibility to solve this challenge. We need to communicate
and we need to educate. This challenge of differing perspective
goes well beyond the example I showed right there. We have a
perception gap between developed nations and developing nations
on the role of intellectual property and the development of our
economy. We need to communicate, and we need to educate.

We have a perception gap between how our high school and
college-age kids view theft of tangible property and how they
view the theft of intellectual property. And, again, we need to
communicate, and we need to educate. We have other perception
gaps as well. And when I say we need to communicate and educate,
I don't mean we need to do that out of the kindness of our heart.
I say we need to do that because there is truly an attack on the
intellectual property system in the United States and
internationally, not just pendency and quality issues or the
administration of the Patent and Trademark Office, but
fundamentally what our intellectual property system is and has
become.

And for anyone who travels the world on an intellectual property
mission, you'll find time and time again that this attack is
valid, it's there, and we need to address it.

One thing I can pledge to all of you unequivocally is that in
every instance I have mentioned, my charge is very clear, the
charge of the USPTO is very clear. We are resolved to protect
your intellectual property rights. Internationally, we are
resolved to protect your rights in the treaties we debate, the
enforcement measures that we promote, and the Free Trade
Agreements that we negotiate. Domestically, we are resolved to
protect your intellectual property rights through administration
policy and, perhaps most importantly, by ensuring that you have
the highest-quality patents and trademarks in the shortest time
possible, in short, to give you the certainty and the quality
that you need and deserve.

I want to focus a little bit on the perception gap that was
facing our agency about three years ago. I'm certain most of you
are aware of the tremendous scrutiny of the office and the
tremendous doubts there were about the office in 2001--some of it
potentially warranted, some of it reflecting a need for us to
communicate and educate better.

In 2001, the Congress had given statements. They'd voted on
reports that said they lacked confidence in the management of
PTO. They lacked confidence in what was happening at the PTO. The
administration that came in at the time, the Bush administration,
certainly was very clear that we want to make certain that the
USPTO is on the right track. And certainly AIPLA was a leader,
and AIPLA recognized that there were problems and raised it in
testimony in Congress.

But President Bush came into office determined to improve
government not particularly focused on the USPTO, but improving
government across the board. And he issued the President's
Management Agenda, which served as the basis of our 21st Century
Strategic Plan and served as the USPTO's guidance for how we
would manage.

Secretary Evans entered office with his eye on improving
specifically the USPTO and our entire intellectual property
system. He made it clear to me, when he appointed me as deputy
almost three years ago, that putting together a comprehensive
strategic plan and managing the office was to be our number one
priority. Under Secretary Rogan got to work, I got to work and,
importantly, all of you at AIPLA got to work at well.

AIPLA has played a critical role in shaping the ideas that were
to govern our office, that now govern our office. Your current
president was critically important in that process. Your board of
directors was critically important-- Mike Kirk, Vince Garlock,
all important in this process. That plan is much more than a
collection of good ideas that had the benefit of your input. That
plan was a set of commitments. And if you read books on
management or listen to gurus and speeches on management, one
thing I've heard consistently is you need to make promises and
you need to keep promises, and at the USPTO, we've done that.

We said that we would make quality our number one priority, and
we have done that. We said that we would make our patent
processing fully electronic by 2004, and we have done that. We
promised that we would protect the U.S. IP system and your
interests internationally, and we have. We said that we would
reaffirm the agency's credibility in Washington, in Congress, and
in the Executive Branch, and we have done that. And we said that
we would work to end the practice of diversion in the President's
budget. We have; first, by cutting the proposed diversion in half
and then by completely eliminating it for the first time since
that practice began.

I would like to talk a little bit about what these promises have
meant and what they'll mean for the future. Our first promise is
quality. The USPTO pledged to make quality our primary
consideration, our number one consideration at every avenue and
to use the resources of the fee modernization bill to implement
new quality initiatives.

But even without the passage of the modernization bill, we have
put in place a number of tremendous quality initiatives. Getting
the right people is very important. It's one of the things we're
most focused on. This is easier today at the USPTO because we
have such a highly qualified applicant pool. We have over 2,500
qualified applicants. What we need is the fee modernization bill
to be able to bring those folks in. And if we get that, we will
hire 900 examiners next year.

We are also committed to a better process of training and
updating our employee skills throughout their careers, not just
at the beginning, not just at the time of becoming a primary
examiner and getting signatory authority, but throughout their
careers. We've improved the training, the testing, and the review
of our patent examiners to ensure that they're able to provide
the best quality possible.

We now review more work, but more importantly we review it in a
smarter way. In some cases, we've tripled the number of reviews,
but especially we're working more on in-process reviews. So we
don't just look at an error rate--how many patents have issued
that maybe perhaps should not have, but we're able to dissect
issues and look throughout the process. We're able to identify if
it is at particular tech centers where we need additional work.

We are developing specialized training for examiners based on the
results we get from these in-process reviews.

Lastly, as an enhanced quality measure, we established an
expansion of a second pair of eyes review in certain technology
areas. We know that quality means more certainty, and we know
that this is one of the most important elements in our system for
many of you. Three years ago, these were concepts that were not
even on paper. Two years ago, they were proposals that we hoped
to initiate, but today they are part of the USPTO. I don't mean
to suggest in any way that's the end, that this is an
accomplishment and it's done beyond that. I mean to suggest that
we need to do more for the future. But what we can do in the
future is better identify and solve quality concerns and better
evaluate our processes. So the next step, is using this
information, analyzing it better and showing you the improvement
in quality.

When we promised that we'd make the office fully electronic in
just over two years, many people scoffed. Some people inside the
office scoffed, some people outside the office scoffed. Many
suggested that to make a promise like this was simply ridiculous.
After all, it was a pledge the office had been making since the
1970s, probably at a time when it wasn't even possible to do. But
we have done that, and we did it in the two years that we said we
would. We now have over 130 million pages in our system. If you
take this paper and put it end-to-end around the world, it would
go around the equator. It will, in time, go around the equator
twice.

We have trained more than 6,000 people on IFW--all of our
examiners, all of the technical support staff. In savings of
storage costs alone, we will save $15 million a year.

But as a further measure to increase public confidence in our
office, the office dedicated itself to provide transparency of
USPTO operations. So, while implementing electronic tools to
assist employees of the USPTO in doing their jobs, as we
implemented IFW, the office also implemented PAIR, the Patent
Application Information Retrieval, system to assist and benefit
the public, to assist and benefit all of you.

There are two sides to PAIR--private and public. Private PAIR
allows applicants access to their entire file history of
applications in the IFW database. PAIR was expanded at the end of
July, when we released the new public PAIR system. This allows
anyone access to the entire file history of an application,
including access to images of every paper, of every record for
every published application in our IFW database. These systems
are truly milestones of achievement for the agency.

And what does this mean for the future? In September of this
year, the office held a one-day patent electronic filing forum at
the new Alexandria headquarters for the USPTO to listen to your
e-filing concerns. Electronic filing is going to be critical to
the success of our office and our intellectual property system in
the future.

In attendance, were 39 external customers representing major
corporations, major law firms and intellectual property
organizations from throughout the country. The purpose of the
forum was to allow our stakeholders to give input and help
formulate a strategic plan to increase electronic filing by our
customers. We heard you tell us three things: make it simple,
make it safe, and make it happen.

You told us to make it simple by developing a fast and secure
web-based portal system for e-filing that requires no client
software, allows for PDF file formats and e-filing of document
types, other than just applications. You told us to make it safe
by providing a certificate of e-filing rule change similar to the
current certificate of mailing practice, and you told us to make
it happen by partnering with our patent and trademark
stakeholders to develop an e-filing strategic plan and to
maintain the relationship after a new system is in place so
future modifications can be made to meet your changing needs.

The USPTO is working to make it happen right now by scheduling,
this month, initial discussion towards the development of a
common USPTO web-based portal for patent e-filing with a number
of important and potential contractors.

With your thoughts, suggestions and ideas, the USPTO will gain
the insight we need to make e-filing safe, efficient, widely used
and make it a system that you want that you will use.

I mentioned earlier the guidance that the President gave us, and
the map he laid out with the President's management agenda, but
President Bush got much more specific than that with respect to
the USPTO by proposing a budget for the current fiscal year that
ends diversion and fully funds the USPTO.

Last year, was the first year that a President proposed a budget
that provides the USPTO with access to all fees that it collected
since the practice of presidential budget diversion began more
than a decade ago. These are real numbers. Every year, the
President presents a budget nearly a year before the final bills
pass, and the President shows his cards and the President's
budget must add up, regardless of the administration.

What does this all mean? It means that we're making promises, and
we're keeping the promises. It means that you can have the
confidence in the USPTO as it faces the challenges we have ahead,
and there are many challenges that we face in the next few weeks.
There are many challenges that we face in the next few months,
and there are certainly several challenges that we face over the
next several years. Remember our strategic plan is a five-year
plan.

The single most important challenge currently facing the office,
I believe, is to get the appropriate resources for our agency.
AIPLA has been a partner. AIPLA has been a leader in that. This
is an issue for the next several weeks because it's essential, in
my opinion, to pass the modernization bill this year, this
Congress.

One area that is absent from any list of accomplishments that
you'll hear me talk about or any list of accomplishments about
the USPTO because we simply cannot improve without appropriate
funding is pendency. Whether hiring, competitive sourcing or
accommodation is the answer, better funding is essential.
Fortunately, our applicants agree. From small businesses to
AIPLA, we hear applicants say they want a fee increase without
diversion if it means higher quality and quicker processing and
if those funds are used at the USPTO.

Most all of you are aware of the pendency crisis facing the
office. However, I'm not certain if you all know how critical it
is to get the fee modernization bill this year. I want to show
you a chart that maps out the difference between a world with a
fee bill and without the fee bill.

What you see in that chart right there, this is historic
pendency, and what you see is a chart that will show you on the
dotted line where our pendency will go without a fee bill, if we
hire attritions, if we don't hire any additional patent
examiners, but if we stay at the number of examiners we have
right now--roughly, 3,600--and if we allow for overtime. That's
the world we live in, and have lived in, for the last three
years. What you see, the chart where it's curving downward, is
with the fee bill.

So, as you can see, we're very up front about what will happen.
What's most important is we need to turn the pendency chart
around, and that's the critical difference, what you see in that
chart, is the difference between an office that's going up and is
destabilized versus an office that's turned it around and is
stable.

Some people believe that we will pick up where we left off if
there is no bill this year. My opinion is that's simply not the
case. That theory completely ignores the process of the U.S.
Congress and the progress that has occurred this year, the
progress that AIPLA has helped bring about.

We've been through many steps with this Congress. We've been
through subcommittee hearings, subcommittee markup, full
committee markup, a deal with House authorizers, appropriators
and leadership on the House, a vote on the House floor that
literally came down to the last 10 minutes before the vote came
up or before the bill came up, but a strong vote for the USPTO, a
strong vote for the intellectual property system of 379 to 28.
It's gone through the Senate Judiciary Committee. It's gone
through an appropriations process, and a version has been
included in an appropriations bill, and it's been discussed by
the Senate leadership and across the aisle.

The reason I give you that long litany is to let you know we are
95-percent of the way through a tremendously complex 2-year
procedure. Next year, we start over, and we start over with
potentially a whole new cast of characters.

AIPLA has a critical role to play and has been a responsible
participant. AIPLA has very clearly been a part of the solution,
a critical part of the solution, but there is much more to play
out in Washington this year, and many believe the process will
not even truly begin until after the election in November. There
are even discussions underway now about a continuing resolution,
and this issue could be put off until January.

But as you participate in the process, stick to your principles,
of course. Always, always stick to your principles, but please
keep your minds open. Do not let the perfect be the enemy of the
good. Remember that as recently as two years go, and going back
more than a decade before that, every political body, from the
presidential budgets that were produced to both Houses of
Congress, everyone believed that diversion was a good idea and
openly embraced it. There was no shame.

Then, the President opposed it in his two budgets and now
everyone has a solution, which is good. Everyone is talking about
it. At the USPTO, our goal is to get the curve on the graph I
showed you to reverse course. We need the office to stabilize
rather than continue on an upward pendency path. This creates a
sense of urgency for me as the Director of the Patent and
Trademark Office. And I note again maybe a particular solution
does not go far enough or maybe a solution goes farther than
you'd like to see at AIPLA. Where the AIPLA ends up is a decision
for all of you, but please consider the cost to our intellectual
property system.

I want to talk to you a little bit about the international
environment, and I've come back just over a week ago from Geneva.
The challenges in the international arena are also incredible,
both in the immediate future and in the long term. I mentioned
earlier that there's a growing anti-IP sentiment internationally,
and we see it as well in domestic circles, especially in the
academic community, Internet bloggers and even among some
government entities.

This sentiment has poured into WIPO in some instances. Even the
simplest of harmonization efforts have been met with obstruction
and procedural tactics. In my time at the USPTO, I've always held
the belief that we should work hard to achieve a consensus at the
World Intellectual Property Organization. Ideally, we should have
every nation agree on the intellectual property reforms that we'd
like to see go forward, but we simply cannot, we must not have a
few nations obstructing the process for the rest of the world.
This is especially true when you ponder the fact that about 85
percent of the world's patents come through three offices: the
USPTO, the JPO and the European Patent Office.

It's also especially true when you consider that nearly half of
the funding for WIPO comes from only three nations: the U.S.,
Japan and Germany. Being outnumbered means only that we have to
work harder. But one area where we've been successful is
protecting your pocketbooks internationally. The U.S. staunchly
opposed a recent proposal to increase PCT fees at WIPO. In fact,
it was the U.S. that stopped a provision last year that would
have raised fees more. This saved U.S. applicants a year ago, all
of you, more than $20 million. I want to point out to all of you
that at WIPO, less than $1 out of every $3 you pay goes to the
Office of PCT.

For those of you who truly believe that diversion of fees is
absolutely unacceptable in any form, I direct your attention to
what happens when the money goes to WIPO. We had this fight on
our hands two weeks ago. We had a deal, there was a deal at the
International Bureau to propose PCT fee increases another 12.7
percent. I'm happy to report that we were successful in stopping
the proposed PCT fee increase. But I want to have everyone keep
in mind what we face.

The U.S. and a handful of nations are net givers at the World
Intellectual Property Organization, and that's fine. We shoulder
that responsibility. But the rest of the 174 nations are net
receivers; that is, they are the beneficiaries of the fees that
you pay for PCT that does not go to PCT operations.

Even worse, there were proposals on the table to fundamentally
change the WIPO charter and philosophy from one that promotes
intellectual property and its protection to a more amorphous
charter of "balancing" intellectual property. We have no quarrels
with balance. In fact, we believe our current system and
international norms are properly balanced. But simply put, this
new balancing act is a strategy to water down intellectual
property protection, and the U.S. will fight this as well, and I
am certain that we will do so.

I began at this lunch by telling you I wanted to share successes,
and I recognize that that's looking at what has been done. That's
looking at the past. And more importantly, I recognize there are
a number of challenges facing the USPTO and our intellectual
property system, but I think it's a sneak preview of what's to
come. The future holds new challenges, and it holds new
opportunities.

As you all know, post-grant review is a part of our strategic
plan, and AIPLA has been particularly interested in this and
particularly strong in this. We look forward to working with the
Hill on post-grant review during the 109th Congress.

We look forward to working with the new leadership in the Senate,
as current Senate Judiciary Committee Chairman Hatch steps down
due to term limits. And we know we'll have the same excellent
relationship with Senator Specter or Senator Leahy or whoever
else may head the committee, and have the same results, the same
commitments that we have had and the same relationship that we've
had with Senator Hatch. Certainly, both Senator Specter and
Senator Leahy have shown great leadership on matters relating to
the USPTO, in particular, and on IP issues in general.

So, when I'm asked what my vision is for the office, I can give
you a relatively clear and simple answer. I can get more complex
and tell you all that we want to do, but I want to be at the helm
of a constantly improving agency. I want to build upon the
successes that we've had. I not only want the USPTO to be the
best overall office in the world, and by all measures we are, but
to be the clear leader and the trendsetter in every aspect of
intellectual property protection. From how we address pendency
and quality issues to how we set standards for the world in
battling piracy and counterfeiting, I want the USPTO to lead.

I intend to continue this mentality in everything we do. I know
you've all heard the adage, "Lead, follow or get out of the way."
The U.S. and the USPTO have led the world on intellectual
property rights and running an intellectual property office, and
I intend for us to continue to do just that. I intend for the
USPTO to lead by example. And it's clear to me that you at AIPLA
intend to do the same.

Thank you for your attention and have an excellent afternoon.

[Applause.]

[End of Mr. Dudas' remarks.]

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Manon Anne Ress
Consumer Project on Technology
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