Will the Latest Patent Bills Increase Diversity and Transparency in the Patent System?

The goal of these offices would be to partner with local organisations to educate and promote innovation and the patent system, particularly among underrepresented groups.

The UAIA also requires a study of the patent pro bono programmes to determine whether they serve underrepresented groups and have sufficient funding to do so.

The study will evaluate deterrents of participation in pro bono programmes, including the requirement of demonstrated knowledge of the patent system before participation and prosecution length times.

The UAIA aims to reduce financial barriers to entry. For example, the UAIA seeks to expand eligibility of pro bono programmes to individuals living in households with gross incomes of no more than 400% of the US federal poverty guidelines.

The UAIA would also reduce application fees for small and micro-entities to 75% and 90%, respectively, of stated fees (from the rates of 50% and 75% of fees).

For first-time inventors, the UAIA would establish a pilot programme that would initially assess patentability and provide a referral to a patent practitioner through the pro bono programme.

Laudable goals, but …

Improving diversity in and access to the US patent system is a laudable goal, but some measures in this bill seem tied only loosely to the stated purposes. For example, will opening another regional office appreciably increase access in the new post-pandemic world where more transactions (including patent examination) are handled remotely?

In fact, the requirements for choosing the location for the southeastern regional office (closeness to “patent and research-intensive institutions”) would seem to reinforce the status quo by putting a regional office near those already using the patent system.

The community outreach and education programmes are more likely to improve diversity and access, if such programmes work with industry and local programmes to address other factors leading to lack of diversity in innovation, such as discrimination, cultural influences, institutional structures, and/or lack of mentoring that may hinder innovation and advancement of underrepresented groups.

This bill would help with the financial barriers by enhancing the pro bono programmes and lowering fees for small and micro entities. In short, the bill would likely benefit the underrepresented groups it aims to serve. The trick will be to get the bill signed: since 2011, the senate has introduced 15 bills with amendments seeking to improve the AIA, but none has made it into law.

US falling behind in global innovation

The other bill, the Pride in Patent Ownership Act (PPOA), would purportedly provide the public with more visibility into who owns and/or is financing ownership of each US patent. The PPOA would require that all assignments or interests in a patent be recorded within 90 days.

Failure to do so would prevent parties receiving “increased damages” under 35 USC 284 until the interest was recorded. The PPOA would also require any government funding patent applications or maintenance fees to disclose the source of the funding in statements that would also be recorded.

According to press releases issued by the senators, the bill would help small businesses that may want to contact patent owners to obtain a licence. Second, the bill would provide Americans with a better understanding of how many patents are held by foreign entities, so it can better be determined how the US is competing globally in innovation.

While recording of assignments in the USPTO has legal benefits and has historically been considered good practice, recording is not mandatory and many entities delay recording conveyances to hide patent sales and true ownership or interests until an infringement action is filed.

It is also difficult to determine who is benefiting from invalidity challenges in the USPTO Patent Trial and Appeal Board. An accurate up-to-date database of patent ownership would be useful, but this bill is unlikely to result in one.

The only penalty for non-recordation is forfeiture of treble damages for the period after the 90^th day until registration, which is not weighty enough to force change.

The press releases acknowledge that it is already known that more than half of US patents are issued to foreign inventors, which indicates on its own that the US is falling behind in global innovation. Will knowing how many of the other half are acquired by foreign companies after the fact make a difference? Probably not.

What would benefit all businesses is paying more attention to why US patents are attractive to foreign investors, and more focus on efforts to encourage innovation and level the playing field for US companies.