A pair of patent bills are aiming to boost D&I and accountability in the IP system, but certain aspects of the proposals run the risk of reinforcing the status quo, argues Linda Thayer of Finnegan.
On September 21, 2021, two bipartisan bills were introduced in the US senate by senators Patrick Leahy and Thom Tillis, the chair and ranking member of the senate Intellectual Property Subcommittee.
Released just days after the tenth anniversary of the Leahy-Smith American Invents Act (AIA), which became law on September 16, 2011, the Unleashing American Innovators Act 2021 (UAIA) seeks to amend the AIA.
The proposed act is designed to increase access to and participation in the patent system by demographic, geographic, or economic groups determined by the director to be underrepresented in patent activities before the US Patent and Trademark Office (USPTO).
The underrepresentation by women, individual innovators, racial minorities, small businesses, veterans, and rural communities was specifically mentioned.
If enacted, the UAIA would require the USPTO to establish a southeast regional satellite office within three years in one of the following: Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Tennessee, North Carolina (NC), South Carolina or Virginia.
In choosing the location, the director shall consider the number of “patent-intensive industries”, “research-intensive institutions”, and state and local government frameworks supporting IP near the proposed site.
According to USPTO statistics, of the top 50 regions for producing patents, only one lies within the southeastern US—the 14th-ranked research triangle park in Senator Tillis’ home state of NC. The state is home to Duke University, NC State University, the University of North Carolina at Chapel Hill, and more than 200 research, technology and ag-bio companies employing more than 40,000 people. Under the proposals, a study would need to determine whether additional satellite offices would be necessary to satisfy diversity goals.
The UAIA requires the director to establish two community outreach offices in each region with a USPTO office, with an additional requirement for a Northern New England outreach office serving Maine, New Hampshire, and Senator Leahy’s home state of Vermont.
The community outreach offices shall be located in communities with at least one public and one private university and more than 15 registered patent attorneys, and where less than 45% of firms are owned by women, minorities, or veterans.
“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 purpose.”
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.
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.
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 90th 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.
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