Pressure on the American Patent System

More of this Feature • Japan's Influence on the USPTO • The Real Cause • USPTO Upper Management's Attitude • Privatizing the USPTO More Expert Advice • Patenting, Marketing, and Inventing advice and instruction articles on patenting, marketing, and inventing written by experts in their fields.  • How I Learned to Become a Successful Inventor - History was the Key • Acquiring and Defending Patents.

by Ronald J. Riley

One example of foreign interference is how they managed to get the USPTO's backing for changes that will undermine the patent system. Proponents who support weakening our patent system argue that inventors are abusing it. They usually cite "submarine patents" as an example of misuse. The term submarine patent first appeared in a Japanese publication. It is used to describe a patent that is issued after a long delay in the USPTO. When this happens, it catches everyone in industry by surprise. Some persons claim that inventors intentionally delay. There are no proven cases of intentional delay being used to create a submarine patent.

There is considerable evidence that delays are the fault of inefficient bureaucrats at the USPTO office. When powerful interests confronted them over the problems created by patents that were issued after lengthy delays of up to forty years they picked individual inventors to be the scapegoat.

The office is specifically mandated to aid individuals who are filing for patents. The office's claim that submarine patents are caused by individual inventors is proof that they are not adequately aiding inventors as mandated by law.

There is a great deal of evidence that the USPTO is in fact the cause of excessive patent delays. When an examiner receives an unusually complex or in some cases a poorly drafted patent (as can happen with pro se applications), they tend to work on it after they have processed other patents to keep their productivity evaluations favorable. The patent may go one or more years between office actions and I have heard of four and five years in extreme cases.

The examiner leaving the USPTO, causing the file to be passed to another examiner, can cause an even greater delay. The new examiner is faced with even more work to become familiar with the patent and sticks the file on the bottom of their pile.

The application languishes and soon ten or twenty years, or in the worst-case forty years have elapsed. This is not the inventor's fault. The solution is to enforce the mandate that the USPTO prosecute all patents, especially pro se patents in a timely manner.

Many persons who have a vested interest in a weaker patent system have claimed that inventors have a motive to delay patents until a technology is well established. It is illogical to believe that an inventor would intentionally delay his patent for forty years. Compounded interest on money earned earlier far exceeds the potential for a bigger market, which is cited as a motive to delay patents. And the fact is that an inventor would have to be clairvoyant to see twenty, thirty, or forty years ahead. There is a fair probability that an invention would be rendered obsolete during a very long pendency by a new discovery that would make the delayed patent worthless.

Prolific inventors would be foolish to defer income when a lack cash flow stops them from filing additional patents, whose financial return is likely to far exceed the value of compounded interest on invested funds. It follows that prolific inventors want income as soon as possible on existing patents, to fund developing their most current ideas.

THE PRACTICAL IMPLICATIONS OF THE CHANGES

   I suggest the following issues must be examined as a group while carefully considering what the practical implications are.

• 1) 20 year from filing.
• 2) World wide proof of inventorship, section 104.
• 3) Early publication.
• 4) Prior user rights.
• 5) Third party participation in the patent process.
• 6) Privatizing the patent office.

The 20-year term also shifts the financial consequences of unreasonable delays from large corporate interests to the inventor. It is clear that the USPTO would rather have one or two angry inventors verses having many large corporate interests (and the organizations that represent them such as NAM, AIPLA and IPO), demanding an explanation for unreasonable delays. In other words the 20-year change removes a serious political problem for the PTO.

Administrative solutions such as the five or ten year extensions (that are included in H.R. 400/ S.507) are not acceptable. An inventor would be at the mercy of the USPTO admitting that the USPTO had caused an unreasonable delay in the patent's execution. USPTO upper management is not willing to accept any responsibility for so called "submarine patents". And I think it unlikely that they would take responsibility for the delays they cause if H.R. 400 / S. 507 were passed. In any event giving the USPTO more power over inventors is poor policy since they are already abusing their authority.

Another aspect of this problem is allowance of the invention's claims. Currently the inventor or their representative and the examiner interact to determine appropriate claim language. The examiner has an incentive to complete the patent because they look bad if the case drags on. Inventors have an incentive to receive their patent as soon as possible because they rarely derive income from a patent before it issues. I am sure it is not an accident that the 20-year change gives the USPTO much more power over the inventor.

GATT enabling legislation also altered section 104 to allow foreign interests to use non-published information as evidence of prior art. This will lead to many more interference proceedings, dramatically increasing legal costs. These costs will be incurred in the early years of the patent, often before the inventor has cash flow from the invention.

Early disclosure will be used by dishonest entities to erode the patent term, by allowing third parties to challenge pending patents, claiming prior user rights, and use of fraudulent evidence from difficult to investigate foreign sources. Adoption of 18-month publication will deny inventors a head start in the market with their invention. Loss of that head start will cost the inventor the most lucrative sales, there by denying the inventor profits that he needs to defend his patents against large entities which frequently use litigation to force the real inventor into bankruptcy.

Proponents of H.R. 400 / S. 507 will argue that it "gives patent holders important rights even before the patent is issued." Having "rights" does not help the inventor if those rights are coupled with other provisions such as early publication. The problem is that one must be able to defend their rights. Defense of the rights is only possible if the inventor has cash flow, something he will not have as a result of early publication and a host of other inventor unfriendly provisions.

Early publication will make our patent system subject to "flooding" as is common in Japan. Flooding is where hundreds of narrow and often questionable improvement patents are filed concerning a fundamental patent, limiting the ability of the original inventor to collect royalties. The Wall Street Journal published Little U.S. Firm Takes On Japanese Giant, Yamaha accused of "Patent Flooding' to Gain Advantage" on page A10, on Wednesday, June 5,1996.

This article describes how Cyberoptics technology has been appropriated through flooding by a Japanese company. This has been a common tactic used by Japanese companies against American companies who file their patents in Japan. Japanese companies are now using this tactic in many other countries that have adopted early publication of pending patents. We will be subject to the same abuses if we adopt early publication.

Early publication will allow pre issuance opposition of patents. American patent law has a provision of pre issuance opposition that is rarely used because patents are now secret. With early publication, the "Public Use Procedure" will be useable against all patents.

Early publication will lead to a massive transfer of concepts created by American inventors to other countries which inevitability will cause further loss of American jobs. America cannot afford to lose the creation of new jobs through new technology. Jobs are the economic support of our population.

Early publication will result in the transfer of technology with military significance. Publication of pending patent applications will initially result in over 100,000 patents being published. This huge volume of material will overload the staff that is responsible for screening material with military significance. Technology often has dual use, both military and civilian. Publication will cause such technology to be disseminated much quicker to the detriment of our national interests. Could USPTO upper managers position favoring publication be motivated by the fee they will charge for publication? Is it possible that some USPTO managers who have a history of working for Japanese interests have been unduly influenced?

Prior user rights undermines the purpose of our patent system. The patent system was created to encourage inventors to disclose their inventions. If the incentive of a guaranteed period of exclusive use is removed, it creates a strong incentive for inventors to treat ideas as trade secrets. If they are able to protect the idea as a trade secret, they may use it indefinitely. If they fail to keep the idea secret and someone else patents the idea, they forfeit the invention.

One of the most vocal proponents of prior user rights is William Buddinger of Rodel, Inc. Mr. Buddinger made a business decision many years ago to treat an invention as a trade secret and enjoyed its exclusive use for over twenty years. A Japanese company figured out his invention (probably through industrial espionage) and received a patent on it. Now Mr. Buddinger would like all of America to bail him out, he expects us to weaken our patent system because he made a poor business decision.

Persons who decide to use trade secrets to protect their inventions do so with full knowledge that they run the risk that someone else may patent the idea. They make a decision to use trade secret protection, knowing they may profit from the idea much longer than the normal patent term. They profit from that decision while failing to teach others as patentees do. They are adults who should accept the consequences of their actions, and not scheme to selfishly protect their personal interests at the expense of the rest of American society.

Important patents that are not stopped outright will be tied up with interference's and other delaying tactics that will eat up half or more of the 20 term. All infringers will claim to be a prior user. The very concept of prior user rights is contrary to the basic purpose of our patent system. The patent system is meant to encourage disclosure of ideas to promote the general advancement of technology.

Prior user rights will encourage greater use of trade secrets since the person using the trade secret will not lose their right to continue using the idea if it is discovered by another party. This is bad policy, persons who make a decision to use trade secrets do nothing to advance technology and should therefore not enjoy protection in the form of prior user rights.

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