Patent Law

By Mark Nowotarski and Tom Bakos

35 USC 122(c) needs to be repealed and replaced with a law that will allow a more efficient and effective examination process. The current legal requirement to prevent third parties from participating in the patent examination process is no longer in the best public interest. Peer to Patent has shown us that public participation works, but the next step is impossible until 122(c) is at least amended. An examination process that utilizes the expertise of the industries in which applications lie has now become essential in the very difficult to examine fields of software, pharmaceuticals, and business methods.

35 USC 122(c) was added to the American Inventors Protection Act of 1999 to protect the interests of applicants, particularly small entities, once their patent applications were published. The concern at the time was preventing major corporations from harassing independent inventors by inundating the patent office with submissions and commentary intended merely to delay and ultimately prevent otherwise well deserved patents from issuing.

Times, however, have changed.

The USPTO can't keep up with demand in part because it lacks technical expertise in many fields. A growing public perception is that patents inhibit innovation. The Supreme Court is openly questioning the presumptive validity of business method patents and political forces are aligning themselves to legislatively restrict the scope of patent protection in some of the most promising areas of growth in our economy, such as the financial services sector.

Recent trials of the Peer to Patent program have shown that well regulated systems for third party submissions and commentary can be set up to effectively assist examiners and dramatically improve the efficiency and thoroughness of patent examination. The system demonstrated its ability to harness the efforts of third party reviewers, including those in the employ of large corporations, to not only uncover important prior art, but to provide useful commentary as well. And, it did this without the feared negative consequences of large corporations unfairly dominating the examination process. But Peer to Patent is of limited use as long as 35 USC 122(c) restricts it to applicants who volunteer to have their applications reviewed and stops the review once the application is in the hands of an examiner.

Our experience in working together on several business method cases is that the combined efforts of a practitioner (like Mark) and third party technical expert (like Tom) yields dramatically higher quality applications and faster prosecution. We see no reason why the same principles can't be applied by the USPTO so that examiners, with the proper safeguards, can work with third party technical experts to get higher quality patents to issue in substantially less time.

Recent advances in the art of public participation in patent examination can be applied to assure that large corporations do not unfairly monopolize third party submissions thus rendering 35 USC 122(c) in its current form no longer necessary. Rather than requiring the Director to block third party submissions, the law should allow the Director to harness the efforts of outside experts in order that inventors can receive the timely and thorough patent examination they deserve.

• 122(c) reads as follows: "PROTEST AND PRE-ISSUANCE OPPOSITION.- The Director shall establish appropriate procedures to ensure that no protest or other form of pre-issuance opposition to the grant of a patent on an application may be initiated after publication of the application without the express written consent of the applicant."

[NOTE: Mark Nowotarski is the president of Markets, Patents & Alliances and is a registered patent agent specializing in business methods. His background is in mechanical engineering and he has 17 patents in this field. Tom Bakos FSA MAAA is an independent actuary specializing in helping clients patent their insurance innovations. He is an inventor on one issued and several pending business method patents. Mark and Tom are also coeditors of the Insurance IP Bulletin. The Insurance IP Bulletin is a bimonthly publication dedicated to helping the insurance industry use patents to promote innovation.]