Dear Friends  --

I was recently assured (my trusted source got this information from a Senate staff person, whom they named but I decline to reveal) that the Policy and Patent Subcommittee of the Senate Judiciary Committee is considering the following position paper. My source said that a senior Senator on the Committee has promised to support this, presumably to correct some of the flaws in last year's rewrite of the patent system via HR 1907.

This is the first good news in a long time. It may be a hopeful development, for both large firms and small, and, perhaps, even for individual inventors and PTO workers. Others whom I respect disagree, claiming this this is too good to be true. Cynics close to Washington think this "leak" is just another trick. They suspect deceit to divert attention and give the false appearance that something constructive is being done, when it's not. They could be right.

In any case -- sincere or not -- the content looked fair and reasonable to me. I suggest that you may wish to study it and draw your own conclusions as to its possible merit. If you think something like this could help fix the PTO, send a copy to your Representatives and Senators and request action. Ask them to please do this or something better. There is little to lose, and few (including some who lobbied to pass the new law) are happy with the results from last year's bill.

Regards,

John D. Trudel, September 11, 2000

The United States has had what is acknowledged to be the world’s oldest and best patent system. As a result, the last century was known as "The American Century." Unfortunately, despite warnings from several groups including a quorum of America’s Nobel laureates who requested full and open debate and warned of "lasting economic harm" Congress chose to end that system by passing legislation to rewrite the patent system as a part of the budget bill.

In today’s 21st Century economy, knowledge assets are the new strategic resource for businesses and nations, and Cold War has turned into Patent War. Where nations once fought wars over trade routes and raw materials, in the future they will fight wars over the rights to protect and market unique products. International economic and military threats have become intertwined.

Therefore, it is crucial and urgent that we take action to restore a system that allows the innovation that has been our nation’s main source of economic advantage and national defense. This white paper addresses seven key points of action that would help to accomplish this end.

1) Independence, Fairness, and Objectivity. It is essential that the patent and trademark office (the PTO) be kept free of corruption and improper influence. The PTO is the technologic equivalent of the Supreme Court. It is charged by the Constitution to "secure to inventors and authors for a limited time the exclusive rights to their discoveries and writings." Therefore, protecting the PTO’s objectivity and competence must be given the highest possible priority.

a) Patent examiners must be kept free of any economic or political pressure that could possibly compromise, or appear to compromise, their objectivity. They should regain their independence and their liability under Title 18 of the United States code for long jail terms for participating in corruption.

b) The Director of the PTO should be selected with the utmost care and held fully accountable for PTO operation. This position should not be a Presidential appointee, and the PTO and its Director should be subject to full oversight by Congress and federal law.

c) No functions of the PTO should be contracted to any commercial or foreign entities.

d) Gifts and donations of any nature (including property) to the PTO must be prohibited.

e) Removal of the PTO from the Commerce Department is recommended. As a quasi-judicial function, it might better fit into the Justice Department or the court system.

2) Confidentiality. Patent filings are the key strategic assets of inventors and their employers. Their trade secrets have been recognized as property, only to be given up in exchange for a patent. Therefore, as in the past, the PTO must hold all patent filings in strict confidence until such time as a patent is granted. If a patent is not granted, this information must be returned to the inventor.

3) Oversight and Performance. It is said, "Justice delayed is justice denied," and nowhere is time more crucial than in today’s global high technology markets. Therefore, the PTO Director should be held fully accountable to Congress for the PTO’s key deliverables. This specifically includes the timely processing of patent applications (hopefully within 18 months), and without sacrificing or compromising the quality of the work product.

a) It is clear that the courts (e.g., Zurko) would prefer not to second-guess the PTO. Therefore the PTO should ensure that boards of appeals operate as independent and objective bodies with appropriate expertise to resolve issues like alleged "junk patents" (e.g., the infamous Amazon patent on clicking a mouse to place an order) or alleged denial of proper patents. The action of these boards must be both prompt and effective.

b) Appropriate appeal processes must be embedded into the PTO to assure the timely, fair, objective, and competent processing of all patent applications.

4) Proper Role. Past PTO commissioners have stated that their role was "to regulate technology." Since such a viewpoint is both improper and potentially dangerous to our citizens’ freedom and our nation’s innovation and prosperity, this must stop. The role of the PTO should be explicitly limited to be the fair, timely, and competent processing of patents and trademarks so as to satisfy Article One Section Eight of the U.S. Constitution.

5) Audits and Fiduciary Responsibility. The PTO has been raising its fees constantly and undertaking needlessly lavish programs, such as the planned $2 Billion "patent palace." The normal government procedures and guidelines for fiscal responsibility and oversight, including GAO audits, must be restored to the PTO. Maintenance fees should be abolished.

6) Patent Term. The normal U.S. patent term should be restored and the new tangle of rules repealed. This can be easily done and international treaties accommodated simply by making patent term "the longest of 17 years after issue or 20 years after filing."

7) Simplicity and Democratic Process. Since this is the most important economic policy legislation of the Century, it is imperative that any changes to the patent system be done in the full light of day and with the open debate that the Nobel laureates requested. It is equally imperative that the regulations that govern the patent office be kept as simple as possible.

a) Since our national security and economic sovereignty is at stake, this issue should be left solely to loyal U.S. citizens. Foreign lobbyists and international organizations like WTO and WIPO should not be allowed to design or subvert our nation’s PTO. The Bruce Lehman/Ron Brown letters of agreement with Japan should be repudiated.

b) Inputs from U.S. innovators, corporate technologists, small businesses, universities, legal experts, and the U.S. investment community should receive priority over those from trade organizations and professional paid lobbyists.

c) An example of what we do not want is the present U.S. tax code. Unfortunately, S. 1948, the current law that governs the PTO, resembles this in its ambiguity and obfuscation.

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