As my term as IPO President draws to a close, I would like to take this opportunity to review the organization’s recent activities and accomplishments and reflect upon the past two years. It has been my privilege to serve as your president during this busy and tumultuous period. I’d like to acknowledge and thank the IPO members who have volunteered their time, energy, suggestions and critical observations. Without your efforts IPO would not have been able to accomplish all it has. Most of all, I’d like to personally thank the IPO staff for making everything run smoothly on a daily basis.
IP Takes Center Stage
The past two years have been a time of increased recognition and growth for IPO, as well as generally increased attention to IP issues in the courts, Congress and patent offices worldwide. The tension between IP owners’ needs for high quality, enforceable, timely and cost-effective IP rights and general public skepticism of corporations and their use of IP rights had shaped a broader public debate and influences the politics surrounding patent reform legislation. Some people think IP rights are too strong, cause higher consumer prices, and create unnecessary impediments to the free flow of ideas, but there has been a growing recognition by business leaders of the importance of strong IP rights to the creation of jobs in the global, knowledge-based economy. Business leaders are speaking out about the importance of innovation and strong IP rights to economic growth. They ask for increased predictability, speed and lower cost to enable them to manage risk and make sound investment decisions for stakeholders. They desire improved clarity from the courts, reduction in abusive litigation practices, and better efficiency and quality from IP offices around the world. IP rights are also becoming central to international diplomatic and economic development policies as a means to combat counterfeiting and product contamination, to increase free trade, and to improve human rights and end slave labor practices. Increasing rates of new patent and trademark applications worldwide are a testament to a collective view that IP rights are essential to commercial development.
Patent Reform: Almost There
Increased litigation by certain patentees referred to by some as “trolls,” particularly in jurisdictions perceived to be “pro-patent” such as the Eastern District of Texas, has highlighted the limitations and deficiencies of the existing venue statute and raised questions about damage calculations, the standard of non obviousness, the availability of injunctive relief, standards for proving inequitable conduct and the federal courts’ ability to keep up with the increased demand for timely inter-party resolution while maintaining quality and fairness.
The need for innovation is the trumpet call in many industries. Recently created patent-based auctions and licensing marketplaces and mainstream journal publication of quarterly corporate patent ratings are challenging conventional models for how patents are viewed. They have emerged simultaneously with an unprecedented growth in the number of newly-filed patent applications that has created a “crisis” in the patent offices’ ability to keep pace. The USPTO’s increased hiring and training program for new examiners has not yet resulted in reducing application pendency to the 18-month goal. In fact, pendency will continue to increase, at least in the short term. IP owners and their customers suffer when patent offices around the world are unable to efficiently and effectively examine applications and work collaboratively with each other and applicants to reach final disposition of an application or an appeal less than 18 months after filing.
The National Academies, Federal Trade Commission, Congress and the courts reached high level consensus on the need for statutory reform of patent law and identified a number of areas where reforms were needed. The IPO Board of Directors and its Advocacy Policy and Amicus Brief committees have responded to these challenges, researching and proposing solutions to improve the law and the operation of patent offices and the courts. They have debated, revised, published, advocated and engaged with others to seek principled changes and specific improvements to patent law. This legislative advocacy is central to IPO’s mission.
At the time of this note, Congress continues working on patent reform legislation. IPO will to work with Congress on each proposal on which the Board has developed a position. Some of the most complicated issues such as venue, apportionment of damages, inequitable conduct reform, and post grant oppositions will be difficult to resolve. Hopefully Congress will continue to listen to IPO’s concerns and make the changes we advocate. Regardless of the outcome of the patent reform legislation, IPO will push to improve quality and predictability, lower costs, and reduce patent application pendency.
Last year the USPTO proposed limiting the number of continuations and claims for all patent applications. This proposal represented an attempt to help examiners get a handle on the volume of new applications awaiting examination, despite the fact that the number of applications taking up examiner time because of continuations and claims represents a small percentage of the total number of newly filed applications and such applications are primarily concentrated in a few art areas. IPO commented on the proposed rules, pointing out difficulties with their retroactive impact and with increased and/or required prior art characterizations by applicants in the absence of statutory reform to the inequitable conduct doctrine. We also encouraged the USPTO to utilize approaches other than imposing burdensome requirements on applicants. The USPTO’s rule package proposed for adoption accepted a few of our proposals but added significant additional burdens on applicants, which were problematic from both a legal and practical perspective. IPO will maintain a dialogue with the USPTO to seek better solutions for improving the examination of patent applications without imposing additional burdens on applicants that could result in additional uncertainty and litigation.
The Strength and Struggles of Diversity of Opinion
IPO’s Board is intentionally diverse. IPO’s strength is a direct result of the diversity of its membership. While everyone shares a fundamental desire to improve IP laws and rules, specific progress on statutory reform comes primarily from the dialogue, debate and consensus building of those most knowledgeable on the issues. As a Board we have attempted to find compromises where other groups have taken industry- or company-specific stances. We may not yet have a final patent reform bill we all like, but we are stronger as an organization for working together. I am proud we have maintained IPO as a place to share, disagree, and reach useful compromises. Despite our efforts to bridge industry divides on all issues, we have not reached consensus on every issue in the patent reform debate, and although on occasion our majority consensus has been fairly slight, I believe we have done quite well in adopting guiding principles and specific statutory proposals on most reform issues without sacrificing the rights of owners, our shared fundamental belief in the need for strong IP rights, or the desire to work together in a respectful and constructive manner. I feel we have found a middle ground in an otherwise politically alienating environment.
Defining and Measuring Patent Quality
The Quality Task Force is a key initiative we recently undertook. Since what can be measured can be improved, we are in the process of identifying and developing measurable indicators of patent quality, which when tracked will help improve the quality of patents and the patenting process. The Task Force will present its findings to the IPO Board soon, and when we are satisfied that they represent a good start from a patent owner perspective, will share the work with patent offices and other interested stakeholders to encourage a common understanding of what defines a quality patent, how we can objectively measure quality, and how we can track data to provide constructive feedback to applicants and examiners.
It’s a Small World
During the past two years we have made substantial strides in our international activities, especially with international IP education. As IP owners increasingly participate in a global marketplace and conduct global research and development, IPO members realize that IP rights, harmonization and effective enforcement must be viewed in a global context. During the past few years research and development activities have become increasingly multiparty and multi-national. Research is increasingly being conducted by collaborative teams located in various countries, within the same and different organizations. IP owners in rapidly developing economies are also increasing their research and development activities, filing more patents, and expressing an interest to better understand how to manage their IP assets and enforce their rights against infringers.
IPO’s international activities have included working with the Federal Circuit on the International Judges Conference in Washington, DC and conducting annual fact-finding conferences in China and India. IPO has been actively working as a leader in the industry trilateral non-governmental group with AIPLA, BusinessEurope and the Japan Intellectual Property Association to develop a single global patent application that can be filed in any of these three major offices without requiring revision for filing in another of the offices, and which will be searched and examined just once. This effort will reduce unnecessary duplication of work, improve quality and uniformity, and save applicants hundreds of millions of dollars. We have made significant progress with our NGO groups and encourage the USPTO, EPO and JPO to implement pilot programs so this effort can be adopted and used quickly.
Early next year we will co-host an IP-focused conference in Mexico City. We are in the process of developing an international strategy to better coordinate previously unconnected activities, maximize their effectiveness, and be prepared for a discussion of how we should expand this activity.
Many Opportunities for Members to Participate, and Membership Grows
We had a very busy two years in IPO-sponsored conferences, with more conferences, seminars, fact-finding trips and collaborative activities than ever before. IPO committee members have been active in all aspects of IP law. We have significantly increased our attention to trademark law as a direct result of the efforts of our trademark committees. Our law firm members have been extremely helpful in providing necessary expertise on many legal issues. Their hard work and scholarship was important to the quality of our amicus briefs. They contributed to committee proposals for statutory reform, and acted as presenters at our meetings.
We have improved our internal conflict of interest guidelines and governance practices with the help of our general counsel and have endeavored to improve the effectiveness of our communications and meetings. We set new attendance records for our annual meeting, increased our membership, achieved our recruiting goals, and end 2007 in sound financial condition.
I am pleased to have had this opportunity to serve you. While we may not have achieved all we set out to achieve, I believe we have done quite well. I’d like to extend my congratulations to the new IPO officers Steve Miller, Dave Kappos and Doug Norman, and to the new executive committee members. I wish them all good luck in continuing the mission. The organization remains energized, and engaged to carry on with the battles ahead. I believe we are in a strong position to meet the needs of our members and increase our role around the world as THE BEST IP ORGANIZATION.
Thank you all for your support.