Feds, Industry Support Proposed Patent Ownership Disclosure Rules; IP Companies, Groups Register Concerns

The PTO’s proposed changes “will increase efficiency in the patent marketplace, thereby benefiting competition and innovation,” the two agencies said. “In fact, the Antitrust Division and the FTC would support changes to [PTO’s] rules of practice requiring RPI information to be recorded with the Office within a reasonable time after each transfer of ownership throughout the life of a patent.” Requiring submission of RPI information after each ownership transfer “would ensure accuracy of RPI records between and after collection of maintenance fees,” Justice and the FTC said. Improved RPI rules would improve transparency “by ensuring that potential licensees can more easily identify who owns and controls the patented technologies to which they want access,” the agencies said. The new rules would also improve antitrust agencies’ ability “to monitor the competitive impact of patent acquisitions, especially serial acquisitions in the same market by the same purchaser."

Renata Hesse, acting head of Justice’s Antitrust Division, noted the agency’s support of the PTO’s proposed rules Friday in a speech at the Antitrust Law Leaders Forum in Miami. “One serious question -- but by no means the only one -- that technology companies confront is: Who owns the patents that I would like to use?” she asked, according to a copy of her prepared remarks. “The answer is often unclear because there is no requirement to use the PTO’s system of recording patent assignments and transfers, and no requirement that the true, controlling, entity be disclosed. Faced with uncertainty, companies designing new products may find it difficult to weigh the relative merits, likelihood of licensing, and licensing costs of competing technologies. Uncertainty increases the costs of deciding whether to license the patented technology. Given this uncertainty, companies also may not be able to assess adequately the need to develop non-infringing alternative technologies or whether they should even include the covered feature. Requiring the disclosure of the [RPI] will help improve the efficiency of the IP licensing marketplace. Recordation will help reduce risk, increase transparency, and facilitate bilateral licensing. Advocacy in support of more efficient IP licensing furthers the division’s mission to promote competition in the high-tech industry” (http://xrl.us/bofpaz).

Hewlett-Packard repeated its support for improved RPI rules, which “would help maintain the balance between these competing interests by ensuring that the marketplace remains as ‘free and open’ as possible.” PTO should implement the “limited” RPI definition “so that the ownership of an application or patent is as transparent as possible in a wide variety of ownership scenarios,” HP said. “Utilizing a well-established definition ... would increase predictability in the administration of the rules.” HP said it believes RPI information should be submitted at four “key” stages -- at the application filing, at the payment of the issue fee, at the payment of maintenance fees and when a patent’s ownership changes. RPI information should be submitted within six months after a patent’s ownership changes, HP said (http://xrl.us/bofon4).

Article One Partners, which crowdsources patent research, said it supports “the immediate execution of clear standards to ensure the most expeditious recordation of ownership, with full responsibility being placed on the new owner and penalties applied for an intentional and unintentional delay in providing the data to the [PTO]. We also support an update to any processing systems ... which enable the fastest dissemination of this data to the public” (http://xrl.us/boforb).

Novartis and Intellectual Ventures said in separate filings that the benefits PTO seeks through the revised rules are already achieved by current PTO requirements on patent recordation and the requirements of the America Invents Act. Novartis said it was also concerned the PTO proposal “may have unexpected consequences and create unreasonable burdens on patent applicants, patentees, and patent practitioners, ultimately causing more harm than good.” If PTO does adopt new RPI rules, it should “carefully balance any anticipated benefits against the burdens such new rules will create -- for instance, by adopting a narrow and practical definition of ‘RPI’ that is objective, predictable, and easily applied by patent professionals handling cases for entities large and small” (http://xrl.us/bofop6). PTO’s current rules have been “quite sufficient,” and the proposed RPI rules “would apply only to a small fraction of issued patents, and therefore would be of limited utility,” Intellectual Ventures said. “From Intellectual Ventures’ perspective, the USPTO already has sufficient mechanisms for obtaining information, including real-party-in-interest information, in the narrow slice of patents and patent applications where it is necessary for the USPTO to conduct its business.” The proposed rules would also cause market distortion and would “likely reduce investment in intellectual property -- precisely the opposite result that [PTO] desires,” Intellectual Ventures said (http://xrl.us/bofoqt).

Three industry groups -- the Coalition for Patent Fairness (CPF), the Internet Association and the Software & Information Industry Association (SIIA) -- said they support the PTO’s proposed rules. The rules would be a “promising first step” in addressing “the growing practice of many entities to conceal information about the true owner and/or real party in interest of patents, thereby hindering the fairness and efficiency” of the PTO, said CPF and the Internet Association in a joint filing (http://xrl.us/bofors). SIIA said its members “rely upon patent protection to protect their inventions, but also depend upon the ability to manufacture, develop, and sell their products free from improper assertions of patent rights. We are grateful to the USPTO for recognizing the need to address the very important issue of identification of [RPI].” SIIA said it supports the more limited definition of RPI “because it addresses some of the concerns with requiring RPI that have been raised while also requiring enough information on patent ownership for product developers and other innovators to better assess the patent landscape. We also support a requirement that RPI information be kept current by requiring that RPI information be recorded with [PTO] whenever it changes” (http://xrl.us/bofos9).

The American Intellectual Property Law Association (AIPLA) said it believes the proposed rules would create “significant” burdens on patent owners. The requirements may not even result in providing the “intended information,” while the “objective of making RPI information available to the public in the few applications and patents where it is needed may be achieved using much less burdensome procedures,” AIPLA said. PTO has not provided adequate support to justify changing the RPI rules, and the reasons it has put forward don’t require instituting the proposed revisions, AIPLA said. The group suggested an alternate proposal -- “to require disclosure of the ultimate parent entity when an application is filed. This would satisfy the examiner’s needs under [U.S. law]. In addition, to the extent that [PTO] is authorized to request broad RPI information, this may be done when the Notice of Allowance is mailed. Furthermore, the Office could initiate a procedure by which a member of the public could anonymously request broad RPI information at any time during prosecution of a patent application or after its issuance. The Office could then require the patent owner to submit the information and publish it in the electronic file wrapper” (http://xrl.us/bofoyr).

The Intellectual Property Owners Association (IPO) also said it believes RPI identification “might be appropriate at certain points during prosecution or after grant. Identification of the RPI only at selected stages, for example immediately before assertion, may not be overly burdensome to applicants and patent owner.” PTO should define RPI “as the highest level ‘parent’ of a corporate patent owner,” IPO said. “This more limited definition would reduce the burdens that would accompany a broader definition, such as [a] definition requiring disclosure of every party with standing to bring an infringement action.” Still, IPO noted that PTO must weigh the burdens its proposed rules would create, and that some justifications for the proposed rules are flawed. IPO also questioned whether PTO has the authority to impose its proposed rules, noting that “Congress appears to have determined that providing patent assignment information to [PTO] is optional, and has set forth consequences for failing to record assignments” (http://xrl.us/bofoz8).