1. A View from Both Worlds: USPTO and the Federal Labs Mojdeh Bahar, J.D.,M.A. Technology Licensing Specialist Office of Technology Transfer National Institutes of Health U.S. Department of Health & Human Services FLC MAR Annual Meeting October 2007

2. Road Map  USPTO and its mandate  Federal Labs and their mandates  Federal Labs as USPTO customers  What do USPTO’s customers/applicants want?  Internal Workings of the USPTO  Conclusions

3. USPTO’s Authority  Right to exclude others from practicing the patentee’s invention.  Quid pro quo  Article I section 8 of the Constitution “Congress shall have power... to promote the progress of science & the useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.  Governed by Article 35 United States Code

4. USPTO’s Function and Mandate  To issue patents of high quality in a timely and efficient manner.  To insure that the invention sought to be patented is useful, novel and non-obvious as set forth in 35 U.S.C. 101, 102 and 103.  To ascertain that the scope of the issued patent is clearly defined and is commensurate with the extent of disclosure to the public as set forth in 35 USC 112.

5. USPTO’s Function and Mandate …cont’d  To promote the progress of science.  USPTO hopes to achieve major goals by the new rules: Reduce pendency Reduce pendency Increase efficiency Increase efficiency Improve the quality of patents issued Improve the quality of patents issued

6. Federal Labs and Their Mandates  Federal labs conduct “mission oriented” research.  Although the programmatic goals of the labs may vary, the statutory requirements with which all labs must comply remain essentially uniform.  Reporting inventions and using intellectual property rights, e.g., patents, as an incentive for commercializing the technologies born in labs are essential.  Every lab is subject to reporting requirements, to their own agencies and the DoC.

7. Legal Authority 35 USC 200 Patent policy and objectives for federal government’s inventions 35 USC 207 Domestic and foreign protection of federally owned inventions-patenting and licensing authority of agencies 35 USC 206 Uniform clauses and regulations (DoC) 37 CFR 404.4 Authority to grant licenses to federally- owned inventions 37 CFR 404.5 Restrictions (on) and conditions for granting licenses 37 CFR 404.10 Modification and Termination of Licenses

8. Patent Trends  A 2003 study shows that from 1976 to 2002, the number of patents issued each year to all federal agencies and laboratories remains essentially unchanged.  The total number of patents in all sectors grew about 140 percent over this period.  For U.S. Universities issued patents increased 1,164 percent over this period.

9. Federal Labs as USPTO Customers  U.S. private sector patents consistently averaged 95 percent of the total issued patents to all U.S. based institutions.  The number of patents issued each year to the Federal agencies and laboratories remained essentially unchanged.  The number of Federal Labs’ inventions disclosed grew from 2,662 in 1987 to 3,909 in 2001.

11. Some Caveats  Per the study, it is not clear whether university filings have increased. Is the increase in the number of issued patents a result of an increase in filings?  Per the study, it is not clear whether the industry filings were on the rise or not.

12. Federal Labs as Applicants  Federal labs have different ways of dealing with the USPTO, i.e., different levels of involvement in patent prosecution: In-house patent application preparation In-house patent application preparation Contract law firms Contract law firms Hybrid Hybrid  The types of technology coming out of the Federal Labs are very diverse, e.g., mechanical, electrical, chemical, biotechnological.  The core missions of the Federal labs are different.

13. 1600170021002600280036003700Total*Design New Applications 1 9/30/2004 55,40263,92371,77897,38077,65156,73865,005508,87818,451 New Applications 1 9/30/2005 62,64472,69776,529 115,58 5 94,42570,35483,225586,58024,534 TC Application Inventory* 1 “ New Application inventory” is the number of new applications designated or assigned to a technology center awaiting a first action. *Total inventory includes applications not assigned to a particular TC, awaiting processing either pre- or post-examination. TC = Technology Center *This and the next two slides are from Bob Spar’s presentation at PLCW, April 2006

14. Patent Pendency (as of 1/1/2006) Patent Pendency (as of 1/1/2006) Technology Center Average 1 st Action Pendency (months) 1 Average Total Pendency (months) 2 1600 - Biotechnology and Organic Chemistry 23.333.5 1700 - Chemical and Materials Engineering 20.629.8 2100 - Computer Architecture Software and Information Security 33.144.8 2600 – Communications 31.243.9 2800 - Semiconductor, Electrical, Optical Systems 15.025.0 3600 - Transportation, Construction, Electronic Commerce 19.827.5 3700 - Mechanical Engineering, Manufacturing and Products 18.626.6 UPR Total (as of 10/1/2005) 21.830.6 1 “Average 1 st action pendency” is the average age from filing to first action for a newly filed application, completed during October-December 2005. 2 “Average total pendency” is the average age from filing to issue or abandonment of a newly filed application, completed during October-December 2005.

15. First Action Pendency by Art Areas High Pendency Art Areas Pendency 1 (months) Low Pendency Art Areas Pendenc y 1 (months) 1640 – Immunology, Receptor/ Ligands, Cytokines, Recombinant Hormones, and Molecular Biology 27.7 1620 – Heterocyclic Compounds and Uses 16.9 1743 – Analytic Chemistry & Wave Energy 30.8 1752 – Radiation Imagery 12.1 2123 – Simulation and Modeling, Emulation of Computer Components 39.7 2125 – Manufacturing Control Systems and Chemical/ Mechanical/Electrical Control 20.0 2617 – Interactive Video Distribution 50.4 2651 – Dynamic Information Storage & Retrieval 16.1 2836 – Control Circuits 24.3 2833 – Electrical Connectors 8.8 3628 – Finance & Banking, Accounting 52.1 3612 – Land Vehicles 12.0 3731 – Surgery: Cutting, Clamping, Suturing 30.9 3723 – Tools & Metal Working 10.9 1 “Average 1 st action pendency” is the average age from filing to first action for a newly filed application, completed during October-December 2005.

16. Internal Workings of the USPTO  Too little time, too few examiners, too many applications!  An Examiner has between 8-15 hours to do one count, i.e., issue one first office action on the merits (note that this includes the searching of the claims).  Examiners do not get counts for issuing restriction requirements or second action on the merits (non-final or final) actions.  Allowances and abandonments serve as counts.

17. Internal Workings…cont’d  In some arts searches can be very involved and time consuming, e.g., chemical structures, biotech sequences.  Compact prosecution is emphasized, but does not always happen.  Any action on the applicants’ part that would save time for the examiner is always welcome, e.g., telephonic elections, proposed amendments, agenda for examiner interviews.  There is an emphasis on customer service and cooperative (rather than adversarial) relationships with the applicants/applicants’ representatives.

18. Communication and Cooperation Communication Communication Interviews with Examiner- can be a win-win situationInterviews with Examiner- can be a win-win situation Focus on Invention with your client and the USPTOFocus on Invention with your client and the USPTO Cooperation Cooperation Open, frank discussionsOpen, frank discussions Use of USPTO Internal Resources: Practice Specialist/QASUse of USPTO Internal Resources: Practice Specialist/QAS Prosecution Prosecution Agree on the inventionAgree on the invention Identify the issuesIdentify the issues Work out the claimsWork out the claims

19. 19 Questions

20. OTT/NIH Contacts NIHhttp://www.nih.gov http://www.nih.gov OTThttp://www.ott.nih.gov http://www.ott.nih.gov Science. Ideas. Breakthroughs.