Extended Excerpts from the Address by Todd Dickinson (Director of the USPTO). Event: American Intellectual Property Law Association annual meeting. Date: October 20, 2000. Editor's Notes:  • Tech Law Journal attended, recorded, and transcribed Dickinson's address and answers to questions.  • Dickinson read from a prepared text. Tech Law Journal asked the USPTO press office for a copy, but was refused.  • The audio recording was of poor quality. Several words or phrases were inaudible; and, there may be other errors in this transcription.  • Copyright Tech Law Journal. All rights reserved.

Dickinson reviewed recent developments at the USPTO including:

• new resources.
• customer service and satisfaction.
• changes in fees.
• reductions in backlogs and delays.
• creation of the USPTO university.

Status of Negotiations with the Patent Examiners Union

"I feel confident, that since we both USPTO employees satisfaction as a top priority, I am confident that we will be able to reach agreement, meet both of hopes and expectations, and hopefully, do that quickly."

Electronic Filing of Patent Applications

"We are going to launch, next week, the electronic filing of patent applications. Next week, you will be able to download the software, as long as you have a digital signature, which you all should have, by this point, I hope. And you will be able to download the software from our web site, which will allow you to file your patent applications electronically, over the Internet. Now, this is a step we have long been preparing for. And a step, that while, seemingly, may seem obvious to some folks, given our computer capabilities, it is so much more for the future of intellectual property. This brings us finally, I hope, to a time when our office will be a model of e-government."

American Inventors Protection Act

"I also want to mention the American Inventors Protection Act, that tidal wave patent legislation that was difficult to pass, but in many ways, has turned out to be open boom to our community, and changes, in many ways, large and small, strategic and tactical, how you all will do your clients' work.

As we start shaping our plans for the future, two provisions to the AIPLA are, I think, are foundations for that change. One is the publication of patent applications at 18 months. Of all the bill's substantive provisions, I think this will have the greatest impact on our operations, and it may have the greatest impact overall in the strategy, and the future of patent prosecutions.

We expect to publish about 80% of all applications, and the publication format will be electronic, and full text searchable. Content will be based on the application as filed, unless the applicant submits a publication ready document via our new electronic filing system. The publication fee is to be paid with the issue fee ___ (inaudible phase).

Now, although there will be no access to the actual filed wrapper, copy of the file wrapper will also be available for a fee.

We will also have provided for in the rules -- Rule 99 -- the possibility that prior art will, at the ___, find its way to the examiners. Particularly in the Internet age, the opportunities that present themselves, in terms of bringing to the examiners a wealth of range of prior art, by taking ___. But we are very mindful, very mindful, of the prohibition in the statute against the pre-grant opposition or protest. The opportunity, as I said, without formal process, without formal third party involvement, other than art itself, finding its way to the examiners, has now been provided for in the rules.

Finally, it is important to note, that, published U.S. applications are, in essence, a new form of prior art, under 102e, as of their filing dates. Therefore, in many ways, published applications will become the predominant for of prior art used by the, by them. And they may be likely even to become the gold standard of forementioned  prior art.

Now, another important aspect are the reexamination provisions of the bill. ___ provides for Optional Inter Partes Reexamination for review of patent validity, as I think you all know. I want to -- Great opportunities in the draft statute, which was only partially realized in the final version, was the possibility of lowering litigation costs, and increasing the ultimate quality of our product with this process. Now, some felt, feel, felt that is is not as complete as it could be. And in many ways, I think, driven by the concern, in the area of business patents, there has been renewed public debate, which I think should be very carefully observed. This is not to say that ___ third party reexamination practice, however, there are opportunities for positive change. I am a very strong believer in the reexamination process, and the potential it brings for quality in our work.

Now, some have worried that this may mean that we did not do our job right in the first place. I think, on the contrary, we do the best we can with the resources at hand. But if there is prior art out there, we want to know about it, because we are eager to patents the strongest in the world, and reexam is key to that. So, in addition to the final rule making package on Inter Partes Reexamination, we deployed (?) the change in our current policy for initiating and examining ex parte reexaminations.

And I want to tell you about a few of those steps. First of all, I think we have resolved what I think is one of the most widely held concerns, and now all duly filed ex parte reexams will be reassigned to a different examiner, than the examiner of record on the application.

We also required the holding of a senior level conference, similar to our current appeals conferences, before they issue a no final rejection, and will require the notice of intent to issue a reexam specific in each and every reexam case. For inter partes reexam, we will have a reexam performed by a specially assigned senior staff person, which will be a pilot for the possibility of using this expert panel to handle all ex parte reexams as well.

Finally, it works better to utilize the direct ___ reexam process. And any prior art, which will be submitted, under, 35 60 301, section 501, of the rules, will be reviewed at the group director level, with an eye towards as a possible ___, always by the group director, with an eye towards serving as a possible basis for a director ___.

Now, all of these aspects I think are going to shape the future in many ways of an agency, and hopefully improve the quality of what we do.

Possible Legislation Regarding Reexamination and Post Grant Oppositions

"As I said, I think there also may be an opening in the next Congress to visit the term, or the question rather, of expanding reexamination, or even moving forward aggressively towards post grant PTO style oppositions. This, as I said, may be the most important followup to the current legislative discussions regarding business method patents."

Dickinson then praised the work of the patent advisory committees.

Globalization / IP Treaties

"Now, look forward a little bit into the future, particularly global, as to where we might be going. I think it is important to say, and remember, in so many ways, IP is global, by definition and by nature. And it is recognition of this, that will bring us to a future where we are operating in much more of a position of (strength ?). After all, it is true that global aspects of IP that may actually at first be able to (expose its flaws ?) Flaws of many types tend to show up in sharp relief against contrasting policies. And if you are able to understand the scope and the power of creations that are coming out of this area, we must first and foremost, understand its weaknesses.

There is no question that as we enter a new century, a new millennium, and a new administration, we have the opportunity to shape the future in a very significant way. But, what should we do? Have we gone far enough? ___ that the answer to that question is no. We have been lucky in the present administration, has proven a very strong supporter of the PTO and the IP community in general. But, there is always work to be done. And, it is my hope that the next administration, whoever that administration is led by, will be as equally as supportive, because, now, more than ever, we need to concentrate on IP policy.

Now, globally, in the past, just the past four years, we have seen, a boom in treaties and international agreements generally. Most deal with procedural aspects. We have seen trademark law treaty, the patent law treaty, the two WIPO copyright treaties, and the Hague agreement on industrial designs. That is four treaties in five years. And these agreements have led to -- we will negotiate one final treaty, the audio visual performers' rights treaty, at a diplomatic conference ____. These agreements have really laid the groundwork for the new -- into the next century."

International Harmonization of Patent Laws / Global Patent System

"What we'll hopefully, eventually do, the realization, of international harmonization. Now this is something that simply must happen, if we are going to realize the full potential of intellectual property, and the gifts that it brings to every population in the world. A substantive patent law treaty by 2010 is and should be top priority. Now that the harmonization of patent formalities will be addressed under PTL, WTO's standing committee on the law of patents is considering this next step in harmonization of national and regional patent laws. I believe that substantive harmonization discussions, hopefully leading to an effective treaty, will come to see all aspects of patent application and post grant procedures are necessary, if we are to remain competitive. Harmonization along these lines would simplify the process of obtaining patents, of reduced redundancy and costs, and get us hopefully one day to the adoption of the global patent system."

Database Protection

To address another issue, sooner or later, we also have to get to the question of sui generis protection for databases, and its global applications, or whatever mechanism might be derived to protect the databases themselves. Now, back in 1986 the European Union promulgated the database directive, as I think you know, requiring EU members to state -- requiring the EU member states to provide substantial sui generis protection to the investment in databases, in addition to the copyright protection of the creative elements of such databases.

Such extra copyright protection for databases was on the agenda for the 1996 WIPO diplomatic conference which produced the copyright treaties, but the amount of time devoted to these treaties, and the swell of opposition, stopped them from making ___. Now, domestically, we have also seen this controversy. While the IP community, the administration, and the scientific community, all agree that we need some kind of domestic protection legislation, specifically as a means to establish statutory fair uses, we have not, however, to this point, obviously, been able to reach a consensus.

We especially want to ensure that any database protection does not add adversely affect the level or quality of scientific research in this country. And we have a profound belief that government generated information should remain in the public domain. To be honest with you, I think that is one of the principle problem's with the EU's approach.

Regardless, we must reach some kind of agreement. If the U.S. does not formulate legislation, over the long haul, the international community will likely will likely move ahead with a standard closer to EU's directive. So, consensus is absolutely necessary in this country if we are to ensure the widespread development and dissemination of databases on the Internet.

International IPR Enforcement

In the final analysis, none of this, means anything at all, without effective enforcement. And, we have done a lot already in that area. We have have sponsored trainings, exchanges, conferences, in countries from Kenya to Senegal over the last year. Bangkok to Wagadudu (?) in order to teach and learn from foreign governments who want to bring their IP systems up to speed. We have met with top leaders of IP offices throughout Asia -- spent a large part of this summer and fall going throughout Asia -- I have been to China, Thailand, Viet Nam, Korea, in order to stress how important the protection of our intellectual property is to ___.

We still have a lot more to do. We have to promise to all developing nations that we will support them in their efforts to create strong intellectual property rights systems. We must recognize that only through cooperation will strong economies be able to help their neighbors join the coming prosperity of the information age. We especially have to ___ that we assist developing countries to create effective TRIPS compliant enforcement regimes. Now, this is a daunting challenge, because the sheer number of countries obligated to comply with TRIPS, and the major infrastructure changes that many of us make.

On January first of this year, 2000, over seventy countries had to demonstrate that domestic laws and enforcement regimes were TRIPS compliant. By 2006, the least developed countries will be obligated to do the same. Assisting developing countries to meet their obligation first of all require a great deal of technical assistance and training by developed countries like ours, assisted by private industry, and regional organizations, international organizations. It requires the strong public and private sector cooperation. And, it also requires an ongoing dialogue between developed and developing countries on enforcement issues.

Domestic IP Law Enforcement

Domestically, we can continue to work with the newly established National Intellectual Property Law Enforcement Coordination Council. It is a new body that has been established by Congress last year. I am one of the co-chairs. The Assistant Attorney General for the Criminal Division is the other co-chair. And, we have representatives from the State Department, USTR, Customs, the Department of Commerce, and the Copyright Office. With a mandate to coordinate domestic and intellectual property law enforcement coordination among federal and foreign entities, we genuinely look forward to the time when the council will serve as a vehicle through which federal agencies can partner with industry to develop effective strategies for addressing, among other issues, say, Internet piracy.

Now, counsel has already began a dialogue with industry, to identify the ways that we can work together to do this. And, coming in November, this November, we will be holding a public meeting to welcome all important opinion regarding this issue. And, I hope that the AIPLA and others, will take that opportunity to come to us, at the NIPLECC (?), and tell us, in many ways, what you would like us to be doing, because it is critical in the NIPLECC's (?) work as it goes forward.

Recommendation for a Presidential Commission

"Now, the international framework that we want to implement in the coming years is part of the larger macro approach that is elemental to intellectual property protection in the coming century, as I said. We need to continue to work together and determine jointly the best approaches towards a global harmonization ___.

___ we can have opportunity to continue this great work over the last eight years. Our current implementation of electronic filing is but one step, as is the other initiatives I mentioned. I always -- you know, we have kept pace with this new economy, and I think the key to provide the best intellectual property protection, we have to keep up changes that are seeming to be a daily occurrence in our field. That is why I think there will be even -- that our next step is even more important, to work even harder in the area of IP policy.

And one of the things that we are considering is recommending to the next administration the possibility of appointing a presidential commission to study the intellectual property system, the future role of intellectual property policy, its relationship with the U.S. economy, and the importance of strong IP protection to global and domestic prosperity. And, as while I mentioned, we made great strides in one particular area, that is, interferences, I see another chance to improve.

Depending on the support we receive from the new administration, I think we have the unique opportunity to implement an initiative that maybe leads into an entirely new approach. I would like to see the creation of a group comprised of our partners in the private sector, as well as representatives of the USPTO, who will carefully examine the practice of interference, and the role of our agency in it. By fostering this type of discussion it is my belief that we will be able to solve the special and complex problems that we are trying to deal with as we continue again to try to issue quality patents."

First to Invent v. First to File

"We must begin the dialogue, I guess, for interferences, and that is, the potential question of transforming from a first to invent system to a first to file system. I am very mindful, very very mindful, of the domestic and legislative challenges, political challenges in particular, which that represents, and I am not, I don't think, naive about the hurdles that have to be gotten over. But I think that that discussion has to start at some time, particularly as we move towards question of substantive harmonization to our law."

USPTO Funding / Diversion of Fees

"None of this, none of this, will be achievable if we don't get to one final ultimate goal, which in many ways is number one priority of our office, the number one priority of your organization, and many of those in the intellectual property community. And that is funding.

Funding is probably the most important issue that we need to address. We can only be of limited help to the IP community if appropriators and those folks who put together the budget continue to limit the access to the fees which and your clients pay. The federal appropriations strategy to remain below established budget caps must put both the administration and Congress under increasing pressure to find sources of revenue to fund a lot of government programs.

Understandably, given our success perhaps, our fee collections have become a fairly inviting target for diversion to these programs. But, as I have said many time over, and many all of you have, we need those fees in order to run our business. We don't make a profit. We don't have a surplus. Ever dime we get is costed out, and is applied to the work that we need to do, and the services we need to grant to you all.

Now, we are not in the administration sitting on our hands on this issue. We have have continued to work with the Secretary of Commerce and the OMB to craft a proposal that would enable us to have access to them. There is some hope that that will still also, in that crafting, allow us to remain subject to the appropriations process, which has its own political implications. But, we are open to a variety of options. And, that approach is not necessarily unique, but it is a hopeful sign.

I think that protecting U.S. prosperity is at least as important as many other things that the U.S. government does, and our piece of protecting that prosperity, is, in many ways, the most important. So, I am doing everything I can to get the word out, to make sure that our fees, hopefully, one day will be put to the purpose for which they were intended, I think, issuing patents and registration of trademarks.

Dickinson then addressed consolidation of USPTO offices and telecommuting of examiners.

Intellectual Property and the American Dream

I want to conclude this overview by stepping back for a moment, and reviewing the larger issue of what the USPTO is striving towards. We implement our policies, work with our offices, modernize our offices, and implement automation. All of these elements are designed to create and maintain a very, in some ways, delicate system, that works in harmony to preserve one of the most fundamental rights of this nation -- to succeed.

I am using right now, not necessarily in the legal sense, let me make sure I am clear about that, in a room of lawyers, and that is the right, the right as a citizen to be able to succeed. Now, I know that this is never a guarantee, in any country. But, I would like to think, in the United States, that we have special respect for the pioneer spirit, for the innovator, for the worker who takes that innovation, and makes something of it.

We are a democracy. We rejoice in the level playing field. We celebrate in gifts of equality. And as we work to protect, and encourage, and grow the intellectual property community, the USPTO is attempting to honor these ideals, and pay homage to a promise that has come to symbolize the United States, and that is the American Dream.

Now, this concept, I don't think is tired refrain -- it is a reality, for our citizens, or even those who hope to become citizens. And it is my belief, that in this new era, the intellectual property system has become one of the key vehicles for their hopes, a representation of the American Dream, whatever it might mean to an individual.

Our lives have been redefined, and we are working to make these changes meaningful for our nation, for our future, and for the future of our peoples.

Thank you very much.

Answers to Questions

An inaudible question was asked about the chances of getting Section 135 amended. Dickinson responded:

"I think the opportunity for any meaningful statutory amendment at this point is probably fairly slim, with the possible exception, as I said, of the discussions that have been had, around the question of reexaminations. I would not think that that is likely a high priority of Congress. It may wait for the next -- whatever the next package of patent legislation comes along. That is not to say it is not a possibility. But, I think. I think Congress is not probably in the mood now for much in the way of additional patent legislation, after the battles of the recent past, with the possible exception of reexams. I would not expect it to be very high."

A question was asked about electronic signatures with electronically filed patent applications. Dickinson responsed that electronic applications can be filed with electronic signatures.

A completely inaudible question was asked. Dickinson responded:

"That is an excellent question. I think, in a very specific way, one of the things we have said we have to see first before we even begin that discussion in the United States is a discussion of international grace period. I was very pleased that the AIPLA has endorsed a resolution calling for the international grace period. I am also very pleased that Europe has taken up the discussion in some detail. And hopefully, we will move forward on it.

I think the broader sense that we get, what we gain, is the day when we will have one system worldwide, that will, likely, hopeful, reduce the redundancy, reduce the costs. Some have argued that we have a de facto first to file system anyway. One statistic -- I think it is not completely, compelling statistic -- but it is illustrative I think. We took in three hundred thousand patent applications last year. We declared 400 interferences, the process to determine who the first inventor was, ____. 25 percent of those 400, or 100 of them, 100 of those cases, was the junior party, was usually the first to invent, but the second to file. In only one hundred of those cases, out of 300,000 did the junior party prevail.

So some have argued, the question is not as difficult as it might appear. But I understand very clearly the challenges, particularly politically, in the United States. We should not be unmindful several things. First of all, the concern of the small inventor community has about the impact on them and their work. They genuinely feel they were disadvantaged, relative to large entities, in the filing process. I don't think that is a misplaced fear in some ways.

Secondly, we have to be very mindful, that, in the debate around the AIPA, they ___ themselves very politically coached. So one of the things that I have invested I think a lot of time in is working with the independent inventor community, getting to know their concerns, getting them to see that we are as much on their side as on anybody else's side, and hopefully we can begin that dialogue ____. This isn't something that is going to happen tomorrow, and I am not calling for it today. Don't mistake what I am saying. But I think the discussion has got to start at some point."

A question was asked about whether there is a constitutional problem with a first to invent system. Dickinson responded:

An inaudible question was asked about business method patents. Dickinson responded:

"Some have argued that we have done that. For example, we currently, and for a long time, have issued teaching method patents, which remain a subcategory of that. It -- I shouldn't say this, with a number of federal judges here, but (laughter) -- My reading of State Street is all they said is there is no exception for business methods in the statute, and they didn't necessarily link it to software, though the two cases that they exclusively dealt with -- State Street and AT&T ___, were software ___ business methods. Now, let me also say that, most, if not the vast majority of the applications we see now in this area are indeed software, because, as most of you know, you are not wanting -- that is probably how your clients are doing the work, and you probably don't want to push the window too far in terms of what is acceptable and what is not. I think this is a question which will probably have to await for a clarification by the courts."

A completely inaudible question was asked. Dickinson responded.

"That is an excellent point. My understanding is that when we examine business method patents, that one of the issues which the examiner is instructed to examine to, and our guidelines now say, is there has to be a technological component to it -- a technological art, as the statute, as the case law says. And so they examine to that question when they do it. Now, whether that, those applications will fit that or not, whether they will be rejected or not, I think remains to be seen.

Let me also break one of the myths that sometimes people think -- that we are allowing these. Our average allowance rate across the board, all in throughout the agency, is about 67 percent. About 67 percent applications will eventually issue. That has been the same issuance rate, allowance rate, for twenty years or more. In business methods, class 705, the allowance rate was 57 percent. And that is before we began the most recent initiative of taking a second look, which has turned a number of these patents, so I would suggest that the allowance rate there is even less."

The following question was asked about global harmonization. "In terms of the global harmonization that appears to be the goal for 2010, can you comment on where the current thinking is in terms of what would happen to enforcement proceedings, court proceeding in the United States, and what pressures there are to bring them into a sort of global alliance with the way some of the other countries ..." Dickinson responded:

"Well, I think one of the key issues that has to be dealt with, in any discussion of global harmonization, is the question of sovereignty, and the question of sovereignty as it applies to the courts. I think we try -- and actually, the court system in the United States has dealt with the issues for a long time in very mature ways. So, the question is whether we -- eventually globalization will be to one patent which is enforced in some world wide court, I think is very far away. I think the next steps are going to be looking at questions of regional cooperation, mutual recognition, and I think Congress will have to deal with the question of whether the courts would give recognition, maybe to, through a recognition in our office, or some other mechanism, to patents that may be ____. But that is a question that will require a lot of debate still.

Thank you very much."