Public Hearings Concerning the Evolving Intellectual Property Marketplace #540872-00005

Submission Number:
Paul Morgan
Initiative Name:
Public Hearings Concerning the Evolving Intellectual Property Marketplace

"Evolving IP Marketplace – Comment, FTC Project No. P093900" To meet the 4000 character limit, this will briefly discuss the importance (and ease of fixing) patent reexaminations, relevant to several FTC Questions [pro-bono, and not for any client or organization]. Unlike most academic inputs, this is based on 42 years of actual practice before the PTO, and professional activities, until retirement, including patent reexaminations and publications. E.g., Reexamination versus Litigation – Making Intelligent Decisions in Challenging Patent Validity, Journal of the Patent and Trademark Office Society, June 2004, Vol. 86, No. 6, and Hobson's Choice - Reexamination or Reissue?, Intellectual Property Law Review 1982, Clark Boardman Co. PTO issuance of some invalid patents is unavoidable. Congress and the public will only support the already high costs of relatively few hours of prior art searching and examination by a single non-attorney examiner for more than 500,000 patent applications filed each year. Far more costly initial examinations cannot be justified since there is normally no way to tell then which very few patents will ever be litigated against any subsequent products of others years later. The real invalidity problem is with the portion of the 1% of all patents that are ever sued on which are objectively invalid in view of much more thorough subsequent prior art searches by concerned parties. In particular, with patent trolls or others who continue suits on invalid patents, knowing that the Federal Circuit has made litigating invalidity extremely costly and difficult (with a "clear and convincing evidence" burden, rarely sustained SJ's, etc.). Thus, obtaining lucrative pay-offs from defendants avoiding costly discovery and jury trials in E.D. TX or elsewhere. This, of course, encourages maintaining more suits on invalid patents, and more trolls. The sole present legal alternative is PTO reexamination of invalid patents. This is why reexaminations are so important, and why their PTO mishandling is so serious. Many hundreds of millions of dollars in public product threat responses and litigation costs could be saved simply by the PTO conducting reexaminations as Congress intended and directed. The PTO is blatantly ignoring the Congressionally-mandated "special dispatch" of 35 USC §305. To be effective, "special dispatch" must obviously be at least much faster than normal D.C. pre-trial time deadlines. Yet even very important reexaminations (like the notorious "Blackberry" 90/007,731), which could easily be concluded in a few months, at most, pend for years, entirely from serial PTO inaction. PTO reexamination delays grow with no apparent sense of the time-urgency necessary to provide their intended alternative to multi-million-dollar litigation and invalid patent extortions. [PTO statistics are misleadingly skewed by uncontested reexaminations, etc.] Even the inter partes reexaminations Congress added in 1999 have been so badly delayed that none have had CAFC decisions and even their statutory litigation stays are being denied, e.g., ESN v. Cisco Systems, Inc., E.D. Tex., 5:08-CV-20, Nov. 20, 2008. The CAFC's Chief Judge has just publicly questioned PTO handling of reexaminations. Reexaminations are a miniscule portion of the $2 Billion PTO budget. An extremely small re-allocation of competent PTO employees from far less important matters, plus much better docket supervision, could easily solve this increasing public problem. The FTC should see that it happens. P.S. My 22 page input to the 1993 FTC study for which this is a follow-on is still relevant. Also, the strange conversions of quotation marks, deletions of paragraphs, etc. is an apparent defect in this required FTC comment form.