UNITED STATES OF AMERICA

PATENT AND TRADEMARK OFFICE

PUBLIC HEARING ON

ISSUES RELATED TO THE IDENTIFICATION

OF PRIOR ART DURING THE EXAMINATION

OF A PATENT APPLICATION

Patent Theater

2121 Crystal Drive, 2nd Floor

Arlington, Virginia 22202

Wednesday, July 14, 1999

The meeting convened, pursuant to notice,

at 9:10 a.m.

PANEL MEMBERS:

Q. TODD DICKINSON, Acting Assistant Secretary of Commerce and Acting
Commissioner of Patents and Trademarks

NICHOLAS GODICI, Acting Commissioner for

Patents

ALBIN DROST, Acting Solicitor

STEPHEN KUNIN, Deputy Assistant Commissioner for Patent Policy

[TABLE OF CONTENTS]{.underline}

[Scheduled Speaker]{.underline} [Page]{.underline}

1\. Opening Remarks, Q. Todd

Dickinson\...\...\...\...\...\...\...\...\.... 3

2\. Gerald J. Mossinghoff, Oblon, Spivak,

McClelland, Maier & Neustadt, PC\..... 7

3\. Tipton D. Jennings, FICPI, U.S\...\.... 32

4\. Mary Helen Sears, Principal, The

M.H. Sears Law Firm, Chartered\...\.... 44

5\. James B. Gambrell, Akin, Gump, Strauss,

Hauer & Feld\...\...\...\...\...\...\...\.... 56

6\. James F. Cottone, Registered Patent

Agent\...\...\...\...\...\...\...\...\...\..... 75

7\. Joseph Laughon, Rogers & Wells,

Securities Industry Association\...\... 99

8\. Gregory J. Maier, American Bar

Association, Section of Intellectual

Property Law\...\...\...\...\...\...\...\.... 116

9\. Charles E. Van Horn, Intellectual

Property Owners (IPO)\...\...\...\...\.... 131

10\. John R. Orange, FICPI\...\...\...\...\.... 146

11\. J. Michael Thesz, American Intellectual

Property Law Association\...\...\...\.... 162

12\. Glenn E. Wise, Registered Patent

Agent\...\...\...\...\...\...\...\...\...\..... 174

[P]{.underline} [R]{.underline} [O]{.underline} [C]{.underline}
[E]{.underline} [E]{.underline} [D]{.underline} [I]{.underline}
[N]{.underline} [G]{.underline} [S]{.underline}

[1. Q. TODD DICKINSON]{.underline}

COMMISSIONER DICKINSON: Welcome. My name is Todd Dickinson. I\'m the
Acting Assistant Secretary of Commerce and Acting Commissioner of
Patents and Trademarks, and on behalf of the PTO, I want to welcome you
all here today and thank you for coming and taking time out of what I
know are busy schedules to participate on this first\--I\'m
sorry\--second public hearing on the identification of prior art.

The Clinton-Gore Administration is committed to increasing the quality
and efficiency of the patent examination process, and these hearings are
part of that process. Identifying relevant and current prior art is key
to making high quality patentability determinations on patent
applications at the examination stage. At the PTO we are constantly
expanding the resources available to examiners for searching and for
locating prior art, however rapid progress in certain emerging
technologies challenges the PTO\'s ability to access current information
that may show that state of the art.

In some well established arts, the PTO\'s U.S. and foreign data bases
may provide sufficient relevant information to show what experts in the
field are already aware of. Currently, examiners have the ability to
search, from their own desk top workstations, approximately 900 data
bases. That includes text searches for over two million U.S. patents,
over four million Japanese patent abstracts, over three million European
patent office abstracts and over nine million foreign patent documents
in the data base. They also have an image search system that includes
all U.S. patents, all the Japanese-published applications and over seven
million EPO documents.

In addition, there are hundreds of specialized data bases that contain
technical and scientific literature, the so-called non-patent literature
or NPL. They provide patent examiners with the needed abstracting
services to cover the journals used by technical workers and scientists
in many arts. They still need more data. The PTO provides professional
information specialists to assist examiners with specialized search
problems.

Let me give a few statistics relative to today\'s hearing. About
one-third of all patent applications cite non-patent literature, however
the citations vary by technology according to how those in the art
publish their work. For example, applications examined in technology
centers 1600 and 1700, which deal with biotechnology and chemical arts,
in those technology centers, NPL is cited in about 68 and 41 percent of
applications respectively. However, in technology center 2700, which
deals with the computer arts and computer software, NPL is cited in only
about 25 percent of the pending applications.

In 1998, about 36 percent of all issued patents cited non-patent
literature. In the computer and software art, again that\'s technology
center 2700, about 44 percent cited NPL. In the biotech field where
researchers and inventors typically publish their work in journals,
almost 80 percent of the patents issuing from technology center 1600
cited NPL. These statistics and this information, I think highlight the
challenge for us in certain emerging technologies.

For some, we suspect that the data bases and resources that the PTO
relies on may not be necessarily enough to enable patent examiners to
have access to the most relevant and current prior art, though obviously
we\'re continuing to improve that daily. While an inventor may be aware
of sources for these kinds of materials, it is sometimes extremely
difficult for the PTO to discover and access them with their present
resources. So we are asking for your assistance in addressing this
challenge.

I\'m assuming and hope that most everyone who is here today saw our
Federal Register notice where we outlined in some detail the nature of
the challenge that we want to discuss. Our notice and request for
comments listed a number of particular items that we believe are
pertinent to this issue. We are asking for your insights on these and
other aspects of the issue which you may consider important.

I would like to remind everyone that written comments will be accepted
until August 2nd of 1999, and I encourage all interested parties to
submit their comments for suggestion and thank those that have already
done so. Again, I want to thank you all for coming here today and taking
again time out of very busy schedules and want to briefly go through the
list, the schedule of speakers that I have and see if there are any
additions to it.

The first speaker is someone who is certainly well known to this office,
one of the great friends of our office, former assistant secretary of
commerce and commissioner of patents and trademarks in his own right,
Gerald J. Mossinghoff from the firm of Oblon, Spivak, McClelland, Maier
& Neustadt. I also have Mr. Jennings from FICPI, Mary Helen Sears. Is
Ms. Sears here? Yes. James F. Cottone, is Mr. Cottone here? James B.
Gambrell, Jim Gambrell, is he here? Not yet. Joseph Laughon, Greg Maier,
Charles Van Horn, John Orange, Mike Thesz, Glenn Wise. Some may come
later as they\'re aware of the schedule today. If there additions to
that schedule that we have not been made aware of, would you
please\--who is managing that process? Elizabeth over in the corner.
Thank you very much.

[2. GERALD J. MOSSINGHOFF]{.underline}

COMMISSIONER DICKINSON: Having said that, we will start with Former
Commissioner Mossinghoff if that\'s all right, and we welcome you,
Commissioner.

MR. MOSSINGHOFF: Thank you, Mr. Chairman. I do have a prepared statement
which I have provided to you. We at the firm of Oblon, Spivak commend
the United States Patent Office for conducting public hearings on the
subject of search and sufficiency since the quality and reliability of
patents issued by the patent office are directly dependant upon whether
or not the most pertinent prior art was considered by the examiner in
the course of his or her examination.

Before addressing the specific questions proposed by the PTO in its
announcement of these hearings, it would be useful to reflect, in my
view, on the meaning of the term search and the assumptions underlying
in the PTO\'s questions at that meeting of this term and the assumption
that this is well understood or has a single meaning. While searching
down by patent examiners within the patent office is fairly well
circumscribed by production goals, appropriate production goals, in my
view, imposed on examiners.

No such limitations exist in the commercial world. In the commercial
world, the duration or scope of a search is limited only by the economic
value of the intellectual property involved. In the case of filing a
patent application of unknown value, the budget available for searching
may range from a few hundred dollars to as much as \$1,000 or more. At
the other extreme, in major litigations where rights of great value are
involved, the search encompasses both conventional data base searching,
both paper and electronic, and the litigation discovery process itself
in which experts and other individuals with relevant knowledge are
personally questioned for the purpose of locating prior art or other
material information that would have an impact on the validity of the
patents in suit.

This process can literally absorb millions of dollars and take years.
When patents are invalidated in a court on the basis of prior art not,
quote, considered, unquote, by the examiner, there is seldom any mention
in the court opinions of the amount of time or money invested in
locating the prior art that was not before the examiner. Was it located
after a simple search of patent files and simply missed by the examiner,
or was it located after weeks of searching through obscure publications
located in major libraries such as the Library of Congress and
elsewhere? Was it located after years of searching data bases and
deposing parties and other witnesses in the litigation? Was the prior
art undocumented prior use or sale by others that an application\--by
others than the application that was by definition not available to the
examiner?

The point is that if enough money is invested, a party can almost always
locate some prior art that was not available to the patent office and
therefore not considered by the examiner. Given this background, the
term search in the PTO questionnaire should be given a definition of
some limited scope such as, quote, reasonable patentability search of
some reasonable fixed duration. A search of this duration, for example
of eight hours or less, is about what we understand a patent examiner
can carry out and still meet appropriate patent office production goals.
A search of this duration, no matter how skilled the searcher who
carries it out, cannot be depended upon to locate all relevant prior art
in every instance, although it should locate the most relevant prior art
easily located in obvious searching locations, particularly in the U.S.
patent files. More importantly, a search of this limited nature
certainly will not prevent patents from being invalidated in litigation
due to the discovery of material prior art that was not considered by
the patent examiner.

Another factor that must be considered is the problem posed by the
patent office in the development of new technology. Within the patent
office are many examiners who are truly experts in their respective
field of technology. These examiners become experts by spending years
examining the same technology, thereby learning in detail all of the
relevant prior art. Based on their experience, these examiners can
locate the most relevant prior art even in the limited time available to
them. Furthermore, these examiners often accumulate private collections
of the most relevant prior art to facilitate the examination of related
patent applications as they arrive for examination.

Unfortunately, when new technologies develop, the examiners are at a
disadvantage somewhat in that they are not yet able to learn\--to have
had the time to learn the relevant prior art or developing searching
short cuts, thus the advantage of experience in the art that the
examiner has developed\--in developed technologies does not apply as
well to these new technologies. The patent office should take these
circumstances into account and devote more time and effort to training
examiners in new technologies and to seek out data bases or other
collections of information within these new technologies so that the
examiners can overcome this disadvantage.

And I am very impressed by what the patent office has done in the area
of biotechnology. They have really moved out, I think, ahead of what
everyone expected to provide really first class searches in an area
which 10 years ago was a mystery to almost everyone. Therefore, all
questions asked in the patent office notice must be interpreted with the
caveat that the search mentioned in the question is limited to a search
of the type that a typical examiner can conduct and still meet his or
her production goals, rather than a search of extended duration within a
generous or virtually unlimited budget.

Taking into account these comments, let me now address the questions
raised in the hearing announcement. Is the most pertinent prior art
being considered by patent examiners during examination of a patent
application? In my view, given the limited time patent examiners have
for conducting a search, our experience, the experience of our law firm,
is that examiners are doing a reasonably good job of locating relevant
prior art.

Secondly, do applicants submit the most pertinent prior art that
they\'re aware of in connection with the filed patent application?
Applicants normally submit the most pertinent prior art of which
they\'re aware when the patent application is filed or during its
pendency. It is clear from Rule 56, which I think is a very clear rule
now. It\'s been amended several times, but I think in its current form
it is very specific, as well as the case law, that the single most
important action that an applicant can take to enhance the quality of
his or our patent application is to disclose all known prior art that is
material to patentability. We always advise applicants of this, and we
believe they fully understand it, thus we believe that applicants
understand as clearly it\'s in their best interest to disclose all known
relevant prior art.

Are the current rules and procedures for obtaining prior art during
examination of a patent application adequate and effective? We believe
that Rule 56 is clear and normally results in appropriate disclosure of
prior art to the patent office.

Are prior art searches typically conducted before filing a patent
application with the Patent and Trademark Office? Whether or not a
search is conducted in any given case in our view is determined, A, by
the availability of a budget for filing the application, and, B, the
degree to which the applicant is already aware of the current state of
the art. In many cases corporations are very active in selective fields,
thus they are well aware of the state of the prior art in their field,
much of which may be their own material. In these situations, there is
little or no economic value in conducting a search, and applications may
be filed without a formal search. Also, if there are imminent statutory
bars involved, there may be insufficient time to conduct the novelty
search in any given case.

Are information disclosure statements frequently submitted? In our
experience, again, information disclosure statements are normally
submitted disclosing U.S. patent, foreign patent documents, PCT
publications, and non-patent literature.

Should applicants be required to conduct a prior art search and submit
corresponding search results including where they search to the PTO when
filing a patent application? The Court of Appeals for the Federal
Circuit has made it very clear that there is no duty to conduct a prior
art search, thus we believe that an applicant should not be required to
conduct a prior art search. As far as disclosing whether a search has
been conducted, such disclosure would appear not to be in the interest
of applicants in view of the presumed need to define exactly what is
meant by the term \"search\", how much time was invested, and whether
any guarantees are provided as to whether all prior art in the relevant
area was searched. Rather, we believe the burden of carrying out a
conventional patentability search should remain on the examiner.

Should applicants be required to submit all prior art relied on during
the drafting of claims of a relevant application? As I indicated, Rule
56, in my view, is very clear about what is covered. If prior art was
relied on during the drafting of an applicant\'s claims, it is difficult
for me to see how that prior art was not material to the patentability
of those claims.

Should applicants be required to submit all non-patent literature
directed to the same field of invention attributable, authored by, or
co-authored by applicants? The term \"field of invention\", in my view,
is overly broad and if used in a PTO regulation or directive would, in
my view, create undesirable confusion with the current standard which
has been adopted by the Federal Circuit, namely material to the
patentability of one or more claims. If the inventor or inventors were
prolific writers, as many scientists and scientific people are, to
identify and presumably submit copies of all of their writings could be
counterproductive to a thorough examination.

It says: \"Please examine the types of patent\--non-patent documents
applicants should be required to submit.\" In my view, they should
submit any type of non-patent literature of which they\'re aware is
material to the patentability of the claims in their applications.

\"If you believe that the most relevant prior art is not being
identified, please identify any suggestions to obviate the problem.\" We
believe, given the searching limitations imposed by the PTO, the most
relevant art is identified by the patent examiner, however we strongly
recommend that the PTO seek out industries involved in areas of rapidly
advancing technology to obtain assistance in identifying the most
relevant data bases or other locations in which examiners should look
for relevant prior art. We think this is probably particularly true\--I
think you\'ve done that in the biotechnology area. I think it\'s
particularly true now in the software area. I believe you\'re going to
be deluged with applications on software and particularly business
methods carried out of software, and I think there must be a host of
industries and organizations who would be delighted to help you get to
the best searches possible.

Eleven: \"Please discuss any related matters not specifically identified
in the above questions.\" The U.S. has a patent system, as we all know,
that was founded on the Constitutional mandate to promote the progress
of the useful arts. This mission has been delegated to the PTO and
obviously is its reason for being. The obligation to issue valid
patents. This obligation has never been interpreted to include a
guarantee that patents will be valid for all time and under all
circumstances. In fact, the reissue and re-examination provisions of the
law presuppose that imperfect patents may be issued from time to time
because of some material prior art that was considered during the
original examination, thus the PTO mission to issue valid patents must
take into account the fact that other a limited search can reasonably be
conducted in each case.

Mark Lemley published an article not too long ago in the quarterly
journal of the AIPLA, and the statistics are rather interesting, I
think. You may actually want to include that article in the record of
these hearings because it\'s, I think, the most recent thorough work on
statistical analysis of what happens to patents after they\'re granted
by the office. There, the article said that roughly 55 percent of all
patents were held valid, 45 percent held invalid, and this is going to
final judgment only.

That was the universe. Of the 45 percent that were held invalid, 102
prior art entered into play only 26 percent of the time, and so if you
have 45 percent held invalid and only 26 percent of those involved
documented prior art, 102 prior art\--and he did not break out whether
it was considered or not considered by the patent examiner\--you\'re
down into the teens. You\'re down into the 12 or 13 percent of the
patents were held invalid because of prior art, and we still don\'t now
how much of that was considered by the examiner and how much was not.

So I think the\--there seems to be articles written, editorials written
about the problems, but I think if you analyze in the cold light of
statistics, the problem isn\'t that great. It is not a major problem
waiting for some dramatic solution.

We believe that the PTO should strive to conduct the best search
possible within the restricted times allocated to examiners. To be most
effective, this search should utilize modern computer data base
searching, and you\'ve indicated, Mr. Chairman, that that is your goal,
and it is your success. Further, the PTO should communicate with
industries or associations involving the latest technology such as
biotechnology or software to make sure it has accessed the most relevant
data bases. Imposing further burdens on the applicant in this regard
would not be appropriate in our view.

The applicant already carries an extremely onerous burden with the duty
of disclosure rules in place at present. Pressing this duty further with
the requirement to search and disclose specific searching results would
almost likely result in a myriad of legal problems that would surely
work against applicants and against the relatively high percentage of
patents held valid at the present time.

In conclusion, we believe the PTO is doing a fine job in carrying on its
mission of issuing valid patents, taking into account the limitations of
the real world. The PTO, no matter how much money it spends, how many
examiners it hires, or how hard it tries will never be 100 percent
successful in issuing patents that cannot be invalidated in court by
prior art not considered during examination. This fact should be
realized by the PTO and accepted by the public.

The main problem of the PTO in dealing with newly developing
technologies in this area should focus on communicating with industry
and industry groups and technical experts familiar with these
technologies, one, to identify the most relevant data bases and sources
of relevant prior art; two, to collect non-patent literature or other
materials particularly pertinent to new technologies to facilitate
examiner searches; and three, to train and hire examiners in the area of
new technology. Such training in my view should include field trips by
examiners to corporations or educational institutions involved in the
development of new technologies. There is no substitute in my view for
getting out and kicking the tires every once in a while.

We applaud the PTO for holding these important hearings, and we\'d be
pleased to assist in all appropriate ways in the PTO carrying out its
important mission.

COMMISSIONER DICKINSON: Thank you, Commissioner.

I failed to introduce my fellow panelists. If you don\'t mind, I\'ll
introduce them, and we\'ll see if there are any questions. To my right
is Acting Assistant Commissioner for Patents, Nick Godici. To my left,
far left, is the Deputy Assistant Commissioner for Patent Policy, Steve
Kunin, and to my immediate left is our Acting Solicitor Albin Drost.

Are there any questions from the panelists? Mr. Kunin.

MR. KUNIN: Thank you, Mr. Mossinghoff, for your testimony. I think that
it was quite useful. I do have a question with respect to the part of
your testimony that relates to the subject matter that appears basically
on pages 6 and 7 of your written commission. Your testimony goes to the
question of disclosing all known prior art that is material to
patentability.

You state that many times corporations are very active in selective
fields, they\'re well aware of the state of the prior art, and much of
this may be their own material. The question that I have is what
obligation do you believe is imposed upon applicants of this type in
conducting essentially an internal search of the kind of material that
you state exists in your testimony separate from an independent search
of external data bases? So essentially what I\'m asking is you indicate
that many of these applicants are aware of and perhaps have their own
material, maybe their own collection. Do you believe there ought to be
some kind of an obligation to do essentially an internal review and to
provide that kind of information?

MR. MOSSINGHOFF: Mr. Kunin, I think I would break that into two areas.
If it\'s a small organization, as many of the patentees are, the small
start-up organizations, I think they have a total obligation now to
disclose the prior art as they see it, and many do a very good job, as
you know, in the introductory part of the patent itself.

In the cases I\'ve personally been involved in, the best patents are the
ones where the applicants and their attorneys really levelled with the
patent office about what was done before. In a very large organization,
hundreds of thousands of people, I don\'t really believe there ought to
be an obligation search through a multinational corporation. I think
that would be inappropriate, but clearly those kinds of materials are
discoverable in litigation. It\'s the first questions that the opposing
counsel asks, and all of the information in the entire corporation is
available to opposing counsel under discovery, and hiding any
information such as that is worse than illegal. It\'s stupid because
your patent will be declared unenforceable.

MR. KUNIN: Thank you. Can I follow up?

COMMISSIONER DICKINSON: Absolutely.

MR. KUNIN: Okay. If I any understand you correctly, we would
characterize actually knowledge versus constructive knowledge, and
therefore in your testimony you\'re talking about knowledge, the
knowledge would not go to constructive knowledge. Basically, the mere
fact that the company might have something in its records someplace, but
it may not have been actively in front of the people preparing or
prosecuting the application that there would be no obligation to seek
out that information because of some constructive knowledge requirement;
is that correct?

MR. MOSSINGHOFF: That is correct. I think that the courts, the Federal
Circuit has done a good job in defining what actual knowledge is. It\'s
a broad-ranging definition. It includes not just the inventor but anyone
involved with the prosecution of the case, the attorneys involved and
all the rest. Again, if it\'s a small company, a Silicon Valley start-up
company, they know everything that\'s going on in the entire company. If
it\'s a huge multinational corporation, they obviously don\'t, and I
don\'t believe that there ought to be a requirement that they do an
intra-corporate search throughout the world to find that out. I think
the courts have done a good job in defining what actual knowledge is.

COMMISSIONER DICKINSON: Other questions? Mr. Drost.

MR. DROST: Mr. Mossinghoff, I have a question about point eight about
requiring inventors to submit all articles attributed or authors by the
article. You said this would create undesirable confusion with the
current standard. Can you tell me how that would create confusion?

MR. MOSSINGHOFF: Well, I\'ve seen\--one of the things that never ceases
to surprise me, having coming out of the research-based pharmaceutical
industry for a number of years, is whenever someone sends you their
C.V., you wish you would have asked them to do it by express mail and
not by fax because they have tied up your fax machine for a good period
of time. Many of these scientists take that as an example. Many
scientists publish a hundred or so articles. You see that attached to
their C.V.

Generally, I have two objections to it, one the same field is different
than material to patentability, and I think one of the things we don\'t
need is different standards, a new standard. Let\'s stick with the one
the courts have interpreted; and two, many of these scientists,
particularly in prior technology area, are extremely prolific in writing
and publishing and providing copies of that could be two, three inches
thick. I don\'t see how that condition helps an examiner. All of a
sudden the examiner now has to spend a lot of time going through all of
that.

I think the test is if it\'s material to patentability. That\'s the one
the court has explained, and if there\'s information known to the
applicant that\'s material among his writings, obviously among his
writings or her writings, material to patentability, I think that must
be disclosed under Rule 56. To require all articles, I think without
that judgment could just swamp the patent examiner with a lot of
unnecessary paper.

MR. DROST: Even if it was limited to their field?

MR. MOSSINGHOFF: Well, I don\'t know what that means. I don\'t like the
phrase \"same field of technology\". That would introduce a new\--now
we\'ve got a new parameter. What does that mean, and how is that
different from material for patentability? My goal has been for a long
time let\'s keep it simple. Let\'s let the patent system serve simply
industry, and the more phrases like that you put in the regulations, the
less simple the issue becomes.

Now if it\'s not material to patentability, but this article was, quote,
arguably in the same field of invention, therefore should have been
submitted, therefore it was not, therefore there\'s a cloud on the
patent. These things are tried before juries. Defense counsel are
looking for all kinds of sand to throw in the air as part of their job,
and that\'s just another grain of sand that you could throw in the air.

So if there is going to be a test, I think it ought to be the test that
people are really beginning to understand, that is material to
patentability. I think most patent attorneys understand that test.

COMMISSIONER GODICI: Mr. Mossinghoff, thanks for being here. Your
comments are very helpful. One of the things that suggests to us is that
we start interacting with industry, particularly in the software area,
to help us establish data bases, training, so on and so forth.

One of the things that we found\--and you complimented us for the
biotech, you know, having done that in the biotech area. One of the
things that we\'ve found is that the biotech field normally does more
publishing than in the software area, and it\'s been tougher to get at
the prior art. That\'s part of the reason we\'re here today, and I guess
the question I\'ve got is do you have any suggestion, any vehicles, any
mechanisms for doing precisely what you\'re suggesting here in terms of
interacting with the industry, because it\'s been a little bit difficult
for us to kind of grapple with that.

MR. MOSSINGHOFF: I think that\'s so, and I do, I think you\'ve done a
good job of getting your arms around the biotech area and the genomic
area, but again, going back five to ten years, everyone was kind of
throwing up their hands saying what are we going to do about searching
the genome. It\'s billions of things. It\'s got codes. Nobody quite
knows how you\'re going to get patents on these things, and I think the
patent office has in very innovative ways seen that.

I would seek out the I, Triple E and other organizations and task them,
maybe have them set up working groups to tell you how they can search. I
was at a meeting of a machine on what they call the Washington Summit,
and I was a speaker, and I went to the reception at lunch, and I was
standing there talking to some colleagues and overheard two people
behind me, and the one said to the other, Do you know how bad it is in
the patent office, and the other said, No, how is it. He says, Do you
know who they have searching software, and the other said, No, who do
they have searching software, and he said, Electrical engineers, and the
other guy said, Oh, my god.

So, I mean, you\'ve got that problem. It\'s the computers and electrical
engineers are very well connected with each other. Software writers are
different people, and it seems to me that it would be very appropriate
for the assistant secretary to decide who to task in the I, Triple E or
other-where and say we\'ve got a problem, and you guys are smart. Help
us out of this problem. Tell us how to do this. Tell us what we ought to
be doing because I don\'t think it\'s insolvable.

I think probably every new field of technology presents the office with
those same kinds of issues.

COMMISSIONER DICKINSON: I have a question. I know your firm very well,
and its reputation is certainly a stellar one. It\'s come to our
attention through witnesses and other means though that there are
actually attorneys out there who counsel clients not to do searching.
They don\'t want to try to find the art that is out there. Leave it to
the patent office and hope that that\'s going to be sufficient. What
they don\'t know, won\'t hurt them, I guess being their motto. Are you
aware of attorneys who do that, and should we be concerned about that,
and if so, how should we manifest that concern?

MR. MOSSINGHOFF: No, I am not aware of attorneys that do that. I don\'t
think that\'s good advice. I think that, if possible, the best patent
applications are written with the prior art clearly in mind starting
from the beginning, not just as you amend your claims but right from the
very beginning. If you know the best prior art and you\'re a good
attorney, you\'ll write a very sustainable patent. So I think that\'s
the case.

I just think there\'s so many reasons why a search would not be
conducted, starting off with the fact that you may not simply have time.
Clients can walk in the door and say I sold this thing, you know, 360
days ago, and I\'d like you to file a patent application on it at this
point. So there\'s so many reasons why a search would not be performed
that I think any obligation to perform a search could add to the
complexity.

I\'m involved in several cases now, and obviously defense attorneys are
very skilled and very ethical, and they look for every possible reason
to avoid infringement and damages under the opponents patents. We
should, I think as a matter of policy, give them less reasons rather
than more reasons, and every time the office writes a rule, that\'s
another reason why a defendant can escape liability, and I don\'t think
that\'s appropriate.

The reasons that are there are good. Rule 56, I think has been amended
at least three times. It\'s a very solid understandable rule. Let\'s
keep it the way it is for a why so the courts can interpret it and so
attorneys can give the best possible advice, but I think to begin to add
other requirements, that\'s got to be pleaded in the defendant\'s
answer. They didn\'t do a search, and they were supposed to, and there
are three reasons why they couldn\'t do it, and none of those apply. All
of a sudden you\'ve got \$100,000 of litigation just on that single
issue. We should avoid those, I think.

COMMISSIONER DICKINSON: Let me ask you a question that\'s related to
these questions in our Register notice but wasn\'t directly asked. You
referenced\--you mentioned disclosure statements in your comments. I
should have indicated we have some statistics on that. Roughly 58
percent of applications submit an IDS, and in 2700, for example,
computers and software area, 18 percent of those list some non-patent
literature. Should we\--as you know, information disclosure statements
are not required to be submitted. That\'s a voluntary practice. Should
we consider amending the rule to require information disclosure
statements to be submitted?

MR. MOSSINGHOFF: I don\'t believe I\'d favor that. I think Rule 56
doesn\'t\--I think you can say that if you tell the patent office about
prior art, you have to do it through an IDS. I think that\'s perfectly
appropriate, but to require one in each case may require when where
there is nothing, and all of a sudden you\'ve then got a defense that
can come before a jury. You send in a blank form, or you send in a form
that had something that was obviously not relevant when it turns out
there really was something that was relevant that you didn\'t know
about.

And so I think that an overall premise ought to be to keep patents
enforceable and to do that. The less requirements, burdensome
requirements you put on applicants, the better is it for the system.

COMMISSIONER DICKINSON: Any further questions from the panel?

\[No response.\]

COMMISSIONER DICKINSON: Thank you very much. We always appreciate your
comments. They were very helpful.

MR. MOSSINGHOFF: Thank you.

[3. TIPTON D. JENNINGS]{.underline}

COMMISSIONER DICKINSON: The next witness on our list is Tipton D.
Jennings who is here representing FICPI, I understand, today.

MR. JENNINGS: Good morning, Mr. Commissioner, gentlemen. I represent the
U.S. Section of FICPI. FICPI Is an acronym for \[french is spoken\].
That\'s probably the most French I ever said at one time. It\'s an
international federation of patent attorneys in private practice. It was
founded in 1906, and as I said, I am appearing for the U.S. Section of
FICPI. Its president\--Mr. John Orange who is president of the
international federation will be testifying later today, and he\'ll be
appearing on behalf of the international federation.

I apologize for not having any written comments today. I\'ve been out of
the country. I am preparing a paper, and it will be filed prior to the
end of the month, and today I just wish to comment upon some of the
matters that are raised by the 11 questions in the Federal Register.

FICPI believes that the present rules and procedures for identifying and
citing prior art documents are adequate. The practice of identifying and
collecting prior art and preparing and filing information disclosure
statements is already expensive and time consuming. I prosecute patent
applications. I know that in every case, I file information disclosure
statements. Sometimes I file two and occasionally three. So I
think\--and I think most people in my firm do the same thing.

I\'m with a firm in Washington called Finnigan, Henderson, and we have a
lot of patent attorneys in that firm who are prosecuting patent
applications, and I think it\'s\--and I know it\'s our practice that we
file information disclosure statements. FICPI doesn\'t see the need to
implement additional procedures that entail further expense with the
burden upon both applicants and upon examiners and would create risk and
costs in enforcing a patent.

The present rules, for example, Rule 56, they force applicants to cite
to the examiner the best material prior art of which they are aware.
Their duty is not only upon applicants but upon anyone who is
substantively involved in the preparation and filing and prosecution of
a patent application. Thus, based upon the examiner\'s search and the
applicant\'s disclosure of art, it is our observation that pertinent
prior art is being considered. Obviously, it can\'t be the most
pertinent in all cases. That\'s an impossibility, but is the solution to
create additional costs, burdens, and risk in the hope of ensuring\--I
think those are the words of the\--in the Federal Register\--in the
hopes of ensuring that the most pertinent prior art is uncovered in all
cases, and clearly it is not.

So is the solution elsewhere, and we submit it is in the Patent and
Trademark Office. We believe that the main reasons the most pertinent
prior art is not being cited is the lack of time to search by examiners
and the turnover of examiners. As disclosed in the Federal Register, the
patent office is doing a wonderful job in providing the capability to
search and retrieve a wide variety of documents. They spent a large
amount of money on this, but the examiner may not have the time to find
the key document, or if it is a new examiner who is not properly skilled
in the art, he may uncover this key document and not realize what he
has, not realize the significance.

So examiners must have time to search and evaluate prior art. I
interview occasionally, and I talk to examiners whenever I can, and they
have told me if they had more time, they could find the best prior art.
I understand saying that, and giving them more time that\--I run into is
problem that there are production goals that affect promotions and pay
raises, so maybe this is the chance of changing the practices is remote,
but that I think would be one major solution to the problem of not
uncovering key prior art.

The second solution is to try to get new examiners up to speed so that
they develop their expertise more quickly. Presently there\'s a large
turnover, particularly of newer examiners in certain arts, and they
leave the patent office even before they develop their expertise, and
their replacements have even less skill. Obviously, this is a continuing
problem, and I know you\'re concerned about that. I\'ve heard you and
other commissioners talk about it, but it\'s one that affects the
quality of patents being issued.

FICPI would like to touch briefly on the question of searches that were
raised by questions in the Federal Register. The concept of requiring a
prior art search and reporting the results to the patent office is
laudatory. Hopefully, better prior art will be placed in the hands of
examiners, but we have a question as to how you define a prior art
search because we don\'t know what this term encompasses.

Former prior art searches are probably not routinely conducted by
corporations. They search in former collections. They rely on a
vendor\'s knowledge and information. They scan contents of various
sources, and all these develop prior art. If this is what the PTO
contemplates as a search, it is already receiving the results of these
type searches through information disclosure statements. This is being
done now.

The question then is does the PTO want a formal search conducted. The
cost, burden, and litigation, as is raised by requiring any search, rule
that out in our minds. Any search should remain voluntary. The PTO and
applicants will continue to benefit when the results of a voluntary
search are filed in the patent office by way of information disclosure
statements.

I\'d like to touch briefly also on Questions 7, 8, and 9 in the Federal
Register. They are all related, and they all inquire into a required
submission of documents to the patent office, Patent and Trademark
Office. These are: one, prior art relied on during claim drafting; two,
non-patent literature authored by applicants; and three, certain other
types of non-patent documents.

Initially, and in keeping with the case law, applicants should be
required to submit only prior art that is material to patentability.
Anything else only increases the cost and burdens on both the PTO and
applicants. The focus should be on the quality of information and not on
the type of the information.

Now, if these three questions are implemented as rules, examiners will
be swamped with unimportant information that must be reviewed.
Applicants will not take the risk of non-submission of any document out
of concern that in subsequent litigation a defendant will allege
unethical conduct, thus applicants will cite everything that falls
within those rules. Examiners will spend their limited search time
reviewing unimportant documents, possibly resulting in an overall
reduction in the quality of issued patents.

In conclusion, I want to thank you for the opportunity to be here today,
and as I stated, I will be submitting a paper prior to the end of July,
and I welcome any questions.

COMMISSIONER DICKINSON: Thank you, Mr. Tipton\--Mr. Jennings. Sorry. I
apologize.

Mr. Kunin.

MR. KUNIN: Thank you, Mr. Jennings, for your testimony. I have two
questions, very brief, which are follow on to some of the comments and
recommendations that you\'ve made in your testimony. You indicated that
a possible solution would be to give examiners more time, and you do
recognize what the implications of that are. Two implications of that
might be that patents will take longer to issue, and, second, perhaps
the examination costs would rise.

Would you support the\--considering that we\'re in a 20-year-term
regime, do you have any problems with the fact that perhaps this might
result in patents taking longer to issue and fees having to be raised to
cover the additional time spent by examiners?

MR. JENNINGS: When you say patents will take longer to issue, do you
mean because an examiner will be examining fewer patent because they\'ll
have to spend more time examining a particular patent?

MR. KUNIN: It could occur in two ways. One would be examiners spending
more time, and consequently the examiner might be taking longer on any
particular case, and also there\'s a multiplier effect that if you were
to, for example, add even one additional hour to every examiner\'s
output expectancies, that when we\'re dealing with hundreds of thousands
of applications processed each year and the number of additional
examiners needed, we reach a point where we almost can\'t hire enough
examiners to keep up.

So, consequently, it\'s possible that there will be an adjustment period
in terms of how long it would take to restaff the office to be able to
recapture the efficiency. So those are two possible outcomes.

MR. JENNINGS: Well, you may have to do it by groups then as opposed to
doing it all at once. So you could stage this in sequentially based on
the technology involved. I don\'t see really why in the end if you have
more examiners and you phase it in sequentially why this would lengthen
the term of\--or shorten the term of the patent and the following
issuance, that it would cut into the 20-year term. I don\'t follow that.

I mean, the obligation is on the patent office to meet certain goals,
and I don\'t know why if you have sufficient examiners, and you provide
them with the tools and the time to conduct searches why they cannot do
their work in the same amount of time. It may mean that they are
examining less patents, but you will have to reflect\--you know,
supplement the examining corps by hiring more examiners.

I mean, the other extreme is to go to a registration system. You
wouldn\'t need examiners at all, but, I mean, we don\'t believe in that
in the United States. We\'ve got an examination system, and if you\'re
seeking out higher quality patents, it\'s going to require more
comprehensive searches and more time to search by examiners.

MR. KUNIN: The other question relates to your concern with respect to
examiners being swamped with large volumes of documents submitted by
applicants that may not necessarily be material to patentability. We,
right now, are addressing the implications of the Federal Circuit\'s
decision in In re: Portolla Packaging which in essence is a form of an
encouragement of precisely that behavior. Do you think that as a result
of the Portolla Packaging decisions that we ought to make any kinds of
changes to Rules 97 and 98 dealing with information disclosure
statements to prevent the kind of abuse that you\'ve mentioned?

MR. JENNINGS: Well, I don\'t think it would be abuse. I think you would
be getting what you asked for. If you don\'t limit the rule to
materiality, then you\'re asking for anything that might have any
relationship to the patent, because I guarantee you during litigation,
the defendant will be looking at every document that isn\'t submitted
under the new rule and will challenge the patent on that basis or the
enforceability of it.

So I don\'t think there\'s an abuse involved. If there\'s abuse out of
the present rules, then it should be dealt with, but if you institute
new rules, then you may be asking not for abuse, but you may be asking
for more than you contemplated.

COMMISSIONER DICKINSON: Other questions? Mr. Drost.

MR. DROST: One of the things I believe we were interested in when we put
out the notice was that we were concerned there might be a body of
non-patent literature out there that we simply don\'t have access to,
particularly in the area of computer software. You came and said that
the solution would be to give the examiners more time and more training,
and I\'m interested in whether you\'re saying that there isn\'t a large
body of non-patent literature out there that we don\'t have access to.
In other words, we have all the prior art within the office.

MR. JENNINGS: I don\'t know if it\'s in the office, but it\'s certainly
in\--most of it is in data bases.

MR. DROST: So what you\'re saying is that we have access to all the
material we need to have access to?

MR. JENNINGS: That\'s my understanding, and I\'m sure there\'s always
information you don\'t have. I mean, it\'s not a perfect world, but I\'m
not aware, although I\'m not a\--I\'m not in daily contact with software
houses, and I don\'t know what they may have in their files, but as far
as I know, most examiners that I\'ve talked to feel that they have the
tools, if they only have time to use them, and they could find the best
prior art if they\'re given the opportunity.

Now, if it\'s a large body of prior art that an inventor is aware of,
and he knows there\'s material information in it, then he has an
obligation to come forward now and cite that. So my question, I guess is
a mixed one. I really don\'t have a full answer to that and I\'m not
sure because of my familiarity with the software field to that extent
whether there is, in fact, a large body of information out there.

COMMISSIONER DICKINSON: I just have one. You cited, again, the two keys
in your opinion to solution are, if I can summarize them, time and
turnover, more time in production and turnover of examiners. I learned
one thing in this job, I guess, that time tends to equal money by and
large. I guess turnover does too in some ways because some of the
solutions there are compensation based, quite candidly.

Would FICPI support an adjustment in our current fee schedule to
accommodate some change in our current time allowances for productivity
in order to address the question of turnover?

MR. JENNINGS: Well, I really haven\'t polled the membership on that. I
would imagine that initially there would be resistance to it, but quite
frankly, I think the patent office has the money it needs, and if we can
get the bill passed by the Senate and the House and signed by the
president, and the Patent and Trademark Office becomes a separate
corporation, a government corporation, perhaps the money that we now
turn over to the treasury at the end of each year will be kept with the
patent office and we can use that for these very things that I\'m
talking about.

COMMISSIONER DICKINSON: Other questions?

\[No response.\]

COMMISSIONER DICKINSON: Thank you, Mr. Jennings. I appreciate your
comments.

MR. JENNINGS: Thank you.

[4. MARY HELEN SEARS]{.underline}

COMMISSIONER DICKINSON: The next witness I have listed the Mary Helen
Sears.

MS. SEARS: Good morning. Thank you for the opportunity to be heard this
morning on what I think is a very important topic. I also apologize that
I don\'t have a written statement this morning. I had hoped to have one,
but other things kept me from completing it. I will have one by your
deadline and will submit it.

Turning to your question one, I certainly do believe that in all active
technologies, whatever they may be, the most pertinent prior art is
often overlooked by patent examiners, and when I say active
technologies, I\'m talking about those where active research and
development is going on, where there is a lot of writing, where there is
a lot of patent activity, and it\'s not hard for examiners to overlook
the most pertinent prior art.

I think that non-patent literature, at least in my experience, is what
is most overlooked, foreign patent documents come next in order of
what\'s overlooked, and U.S. patents are probably last, but there are
still significant oversights at times; and I might say that I have
experience in looking at a lot of different technologies because when I
prosecute patent applications myself, it\'s in the chemical or
biological arts or the very simple mechanical ones, but when I do
validity and infringement opinions for clients and when I participate in
litigation, I work in all different kinds of art, and I see this all
over.

Now, it\'s true that patent examiners have a very limited time to do
what is a very big and significant job in many cases, and I appreciate
very much the fact that have a problem of balancing these time
constraints against doing a really good job and coming out in the best
possible way. I believe, and I will get to it in more detail in a few
minutes here, that one thing that can be done to assist in this
balancing task is to put a greater reliance upon the practitioner\'s
duty of disclosure to the patent office, and I will explain how, because
I have some specific ideas, in a minute.

But before I get to that, I also want to note that in my experience, and
I\'ve been practicing before the office and litigating and all the rest
of it since 1960. So I\'ve had a lot of experience. In my experience,
when I am following prosecution of a patent application, both in the
United States and in other countries, particularly in the European
patent office and the Japanese patent office, I find that in general
better searches are done in both Japan and the European patent office
than are done here.

I don\'t really know exactly how they go about searching in Japan, so I
can\'t comment much further, but in Europe I think we\'re all familiar
with the fact that examiners don\'t do their own searching. There is a
particular branch of the European patent office actually off site from
where it is that has the obligation to do the searching. It\'s done by
professionals, and they present the examiner with the search report
which also has little categories on it that indicate just how pertinent
the reference is, which is often very helpful both to the attorney and
to the examiner in going at the examination job.

Now, whether such a thing would be feasible here, I have no idea, and
I\'m not necessarily recommending it, but what I would suggest is that
the U.S. Patent Office use a little of its resources to confer with both
the European and the Japanese patent offices about how they search and
look into it a little bit more and see what they can suggest that might
be really helpful here, and they may suggest things that aren\'t
helpful, and they can be discarded, but it never hurts to ask in
situations like this.

I also want to suggest that while the U.S. patent classification system
has been very much lauded by people who like to see more and more and
more details, it does have a draw back, and its draw back is that if the
examiner who is classifying particular claims in connection with
allowing the application happens to make a mistake or two, it makes it
very easy to miss U.S. patent references if you\'re relying on the
classification system to search only a particular class and subclass,
and today I do believe the computer word searches that are carefully
carried out even in U.S. patents can help to alleviate that problem.
They may also be a good cross-check sometimes on the question on whether
some patents ought to be in a subclass is missing.

I can\'t help but comment that in the last couple of weeks I\'ve seen
some news stories that indicated that even when you\'re searching the
internet, the best remember browsers only locate 30 to 40 percent of the
available material on any given topic. Now, these articles did not cover
whether this may partly be due to the fact that the browser eliminates
duplications which occur on a variety of web sites, but it\'s something
to be thought about in this whole situation.

Turning to another one of the questions, today I do believe that
applicants in general submit the most pertinent prior art of which they
are aware, but at least U.S. applicants do. They\'ve been very
sensitized to the need to do this. Practitioners are very sensitized to
the need to do it, and I think there is an earnest effort made. I can\'t
speak entirely for situations where the applications come in from
abroad, and the correspondence between the attorney and the applicant
may or may not always unearth everything that ought to be brought to the
attention of the patent office, but I think there are many modifications
to the present system which could be made to improve the effectiveness
of the examiner\'s search in identifying the best prior art.

And, first of all, what I would very much suggest, and I might comment
first of all, I don\'t favor requiring everyone to do a search. In the
first place, not everyone will do a good search, and it may not make any
difference for some people to do what they think is a search. Secondly,
there may be clients who really cannot afford the search who will say
just prepare my patent application and let them tell me whether I have
something or not, and lawyers lots of times can\'t resist that sort of
an appeal because those people have a right to be represented too, but I
do favor very much requiring of the practitioner as a part of his duty
of disclosure to tell the patent office whether a search was made and
what the extent of the search was.

For example, if it\'s been searching in some class and subclass of U.S.
patents, that can be indicated. If it\'s been searching an online data
base, the data base can be identified. If the search was cursory rather
than detailed, this can be stated too, and the office could actually
devise a form to elicit some information of that kind and simply require
everyone to file it whether they filed an IDS with it or not.

Sometimes people search by names of companies that they know are active
in a particular field or names of inventors and researchers who are very
active in the field. There are all kinds of ways that searches can be
made, and there should be some way for people to identify just what they
looked for. Also, I think that practitioners can be asked as a part of
their duty of disclosure to identify sources that have not been searched
but are reasonably anticipated to be likely to yield up something that
is pertinent to a given patent application.

For example, when you\'re dealing directly with inventors, they may tell
you something like my colleague who came from Russia told me that for 10
years in the lab he worked in over there they were investigating this
topic. We haven\'t been able to really access the art because we don\'t
speak Russian, but this is known to the office that this might be a
fertile place, perhaps, ways can be devised to look into that particular
area of subject matter.

COMMISSIONER DICKINSON: Ms. Sears, I don\'t mean to interrupt you. It\'s
very valuable testimony. You have about five minutes.

MS. SEARS: Okay. I do believe the references utilized in drafting the
claims of a patent application, unless they are used simply to see a
strategy of claim and are not at all pertinent to the subject matter of
the application, should be required to be identified and should be
submitted. I believe that pre-published non-patent literature
attributable to the applicant in any way should, in fact, be at least
identified, and in particular I note that many applicants who are
prolific writers in their field sometimes have articles that they have
submitted for publication that aren\'t submitted yet that are very
pertinent not only to the application in terms of prior art but also in
terms of identifying things like best mode and so on, and I think there
some real thought could be given in that area.

Also, I think there should be some way of discouraging people who submit
carloads of references without identifying what\'s pertinent, and what I
would suggest is that some thought be given to developing a form. Let\'s
say people just put a check mark by each thing that is just there for
background and causes them to have to identify what they have submitted
that has a real meaning to the claim subject matter. In those cases, I
think your form should require them to tell what pages or what line and
column or whatever is the place where the examiner ought to be looking.
It can save the examiner a lot of time in reading stuff that isn\'t
getting him anywhere.

Let me see. I note that the idea of putting all of the search
responsibility on the applicant is not very feasible. There have been a
lot of comments in the past when such things came up about how this was
really not something that even the examiners felt comfortable with.
Also, this is the only patent office in the world that actually tries to
encourage the applicant to make a search. Everywhere else they rely
exclusively on the patent office. I do think there should be more
cooperation, as I have said, but I don\'t think I would put it all
there.

The last thing I want to mention before I conclude is that I think that
the second prong of effective examination is for the examiners to be
capable of recognizing highly pertinent prior art and applying it
against the claims, and while it\'s a long time ago now, the Supreme
Court in Graham emphasized that the patent office has the primary
responsibility of rooting out unpatentable subject matter. I don\'t
think that should be overlooked or forgotten in some of the other
concerns that are so important today.

I do think that some attention should be given to this problem in terms
of two or three things that I\'ll suggest very quickly. One is
encouraging examiners to take technology courses if they don\'t really
feel confident, in particular to acknowledge to which they\'ve been
assigned. Perhaps if there are subjects where a lot of examiners don\'t
feel very confident, the office could think about offering some courses
on site. The other possibility is to pay all or part of their tuition to
take certain kinds of courses that they can justify.

I also think some careful thought should be given to the supervision of
examiners in their first couple of years, especially to make sure that
they don\'t take unwarranted short cuts just to meet their production
goals. Those goals are important, but it\'s also important to do your
job right, and the office has a bit of a responsibility to be sure this
does happen.

That really concludes what I wanted to say.

COMMISSIONER DICKINSON: Thank you, Ms. Sears. I appreciate your
testimony.

Are there any questions? Mr. Kunin.

MR. KUNIN: Thank you, Ms. Sears for your very thorough and specific
recommendations. We certainly appreciate your taking the time to look
into the questions and give us some very thoughtful comments.

I do have a question that relates to something that you said. We
published an advance notice of proposed rule making which notice
indicated that we had some similar concerns that you did with respect to
how our information disclosure practice should work or could work in a
better way. In particular, some of the ideas that you threw out with
respect to having the applicant segregate the more pertinent from the
less pertinent information and to provide more explanation of relevancy
met with a substantial amount of criticism by the commentators in
advance notice. In particular, there was a substantial concern about the
way in which in litigation inequitable conduct charges are made and
investigations through depositions and the like.

You indicated that you have an extraordinary amount of experience in all
aspects of the patent field, in particular in litigation. Could you
perhaps briefly address whether you feel this issue of inequitable
conduct charges is real or kind of a\--

MS. SEARS: I think it is a real issue, but I really think that the
practitioner who is most candid with the patent office about where he or
she sees the problem is the least vulnerable to inequitable conduct
charges, and so I really do not understand the degree of concern that is
expressed.

COMMISSIONER DICKINSON: Questions?

\[No response.\]

COMMISSIONER DICKINSON: Thank you, Ms. Sears. We appreciate it.

MS. SEARS: Thank you. Thank you for the opportunity.

COMMISSIONER DICKINSON: The next witness I have is James F. Cottone. If
I could step out for just a minute. I\'ll turn it over to Commissioner
Godici.

MR. COTTONE: I have five view graphs, but I don\'t see an overhead
projector here or any kind of projector. Is there something we could
work out and delay my presentation for a few minutes for me to do so? I
don\'t see Elizabeth here.

COMMISSIONER GODICI: It\'s going to take us\--it will probably take us a
little bit of time. Do want to\--

MR. COTTONE: Leap frog me.

COMMISSIONER GODICI: Leapfrog, and we\'ll try to get a projector. Do you
want to start and they\'ll bring in the view graph, or should we go to
the next one? We\'ll going to the next person.

MR. COTTONE: Sure. That\'s fine with me.

[5. MR. GAMBRELL]{.underline}

COMMISSIONER GODICI: Mr. Gambrell, could we impose upon you to go next?

MR. GAMBRELL: Sure.

COMMISSIONER GODICI: Thank you.

MR. GAMBRELL: Good morning. My name is James Gambrell. I\'m a partner in
the Akin, Gump, Strauss, Hauer & Feld law firm, but I speak for myself,
obviously, and not for some hundred patent lawyers that are in our firm.
I\'m sure most of them have somewhat different opinions.

I think it goes without saying the fact that I\'ve practiced 45 years in
this firm or in this area, and I\'ve thought, I\'ve written, I\'ve tried
cases, I\'ve taken appeals and the like, and I don\'t mention that to
indicate how qualified I am but to give you an idea that I don\'t come
here and speak about recommendations lightly or without some background.
Indeed, I started as a first director of the Office of Legislative
Planning and some of the comments I may make relate to some of the
experiences I had when I was in the patent office as a special assistant
to the commissioner.

I\'d like to break my comments into largely two parts. I would like to
first comment on some of the questions that were posed in the request
for this hearing, and then I\'d like to deal with some of the solutions,
at least as I see them, to solve or at least ameliorate the problem of
poor examiner based largely of the best prior art being before the
office.

With respect to the first question that you raised in your proposed
areas, it seems to me that the question is not\--or obvious what the
answer is. Examiners sometimes have the best art. Sometimes they don\'t.
Indeed, when I was teaching at NYU years ago, one of my graduate
students did a whole book on the question of whether Judge/Justice
Clark\'s comment on whether the standard of invention being in the
patent office was distinctly different than that one in the court, and
when you separate out all of the cases which had nothing to do with the
prior art but looked at where the prior art was involved and whether the
patent office and the courts did different things, you found out there
was no significant difference.

The fact is Justice Clark thought that there was a difference, but he
was incorrect, and the only way you find that out is to do a study and
to examine the various cases and find out whether the best art was in
front of the examiner; and if he had it, did he do well, and did he do
it similar to the courts, and if he didn\'t, was that the reason why he
hadn\'t. So the question is I don\'t think you can guess about whether
they have the best art.

I suggest that the patent office ought to conduct a study to find out.
You have a raw materials to do it. You have the prior experiences of 10
years or so. Do a study and find out exactly what happens for the most
part when District Courts handle cases involving prior art. Did they
have the best art? Didn\'t they have the best art? Why didn\'t they have
it and so forth.

Indeed, we did that when I was in the office. We did one of interference
practice because everybody knew what was wrong with interference
practice, but the fact of the matter is nobody had ever studied it to
find out at what stage things happened and where the critical blocking
points were, and I don\'t suggest that we solved the problem with that
study, but we certainly knew where the pain was and where you could do
the most good in changing things.

On your second question, you want to know whether the applicant submits
the best art. Again, I think a random sample study by the patent office
will help identify whether that\'s true or not. I can sit here and give
you my personal experience or Tip Jennings can or Mary Helen Sears can,
but our personal experiences are poor substitutes for what happens in
the universe, and therefore all we\'re doing is giving you war stories
about our own personal experiences which may be relevant, may not, and
may be quite off the ball of what\'s happening.

So, again, I suggest that rather than personal experience, you do a
study. It\'s not that hard to do. It\'s time consuming, but it will be,
frankly, very informative, and I suspect will surprise a lot of us about
a lot of different sources of deficiencies.

The third question you ask are the current rules adequate. Clearly,
they\'re not. Clearly, we are moving towards an examination system with
the proliferation of prior art that no one can keep up with, least of
all examiners who have over five million patents to examine in the U.S.
alone, not counting foreign patents, all sorts of other activities,
e-mails which is one of the most immediate sources of great information
now, as Bill Gates of Microsoft can tell you. There\'s all sorts of
things on those e-mails that would be informative to examiners on the
state of the art where somebody is trying to get a patent.

Again, I think that it\'s clear that they don\'t have enough time, the
examiners. We all know that. We also know\--at least my view is that the
reason why we don\'t have as good of an examination system as we should
is because the consequences are not severe enough with respect to the
patent lawyers, the inventors, and the assignees as to providing good
information to the patent office. I\'ll talk a little bit more about
that in terms of solution.

With respect to your question four, again do a study to find out whether
or not there is a problem here and what kind of problem it is. Are prior
art searches typically conducted before filing? I can tell you my
experience. I nearly always do, but can I tell you that that\'s a
general rule or a majority position? I have no idea whether it is, and I
don\'t think my experience would tell me or give me an accurate
response. Again, do a study. You can find out. You have the files. You
have the results of the searches, and you can find out what they do and
what they don\'t do by looking at the litigation that occurs with
respect to some patent.

Again, it\'s difficult to know what is a reasonable search, and indeed
if you require a search, as everybody knows, the arguments are going to
be is it adequate, it is reasonable, did you look in the right spots;
and as a trial attorney, I can tell you that all those questions will be
raised if I\'m on the defense, and indeed they will have to be defended
by a player and a patentee, but I don\'t know exactly what\'s
reasonable. I would think that what\'s reasonable, of course, from an
end-result standpoint is that it turns up the best prior art, but
that\'s an after-the-fact decision.

On question five, again, I think that you can do a study to find out
what really happens with respect to IDSs. They are frequently submitted.
Whether they\'re very effective or not is another question. Mary Helen
Sears, who just testified, I have to tell you provides very substantial
IDSs. I was an expert witness in a case in which she had procured the
patent, and she provided the patent office with some 60 or 70 references
in which she, in some detail, discussed each one and related it to the
claimed invention, and of course the defendants argued, Oh, my goodness,
she missed here and there; but I will tell you that by and large, I
found that what she did was extremely helpful. It was the thorough, and
it undoubtedly helped the examiner in his quest. I have never seen
anybody that has done one quite as thoroughly as Mary Helen Sears did,
but it took her a lot of time, and it was a very responsible act, and it
was done long before IDSs were a conventional kind of thing to do.

Again, though, you could find out what is involved and what people are
doing and how they\'re doing it by doing a study and analyzing it based
on your own record. With respect to Questions 6, 7, 8, and 9, I think
they\'re all interrelated in a way, and it seems to me that the question
of whether a prior art search ought to be required, what should it
include, whether it should be relied on for claim drafting ,or whether
you should also give an insight on non-patent literature, these all
depend on reasonableness, questions of expense, and the arguments have
been complete as to what should inevitably come.

What I think is a problem with all of these ideas about the question of
searches and submissions to the patent office is they look at the wrong
end of the gun. It seems to me the question ought not to be do I have to
submit a prior art search or have one made, but the question is what are
the consequences of attending the lack of good art before the patent
office; and therefore let me address briefly what I think is a solution
to the problem, and the question of searches and disclosures to the
patent office will take care of themselves with this kind of solution.

First, the question is will the submission of searches solve the
problem. I don\'t think it will solve the problem. It will help the
problem, but it\'s not going to solve it. My second question, of course,
is is there a better way, and I think there is, and it requires two
simple proposals but which are undoubtedly highly controversial. First,
I would eliminate the presumption of validity that a patent enjoys as to
all claims in the patent unless the best art is available to the
examiner regardless of why the best art was not before the examiner.
It\'s not a question of wrong doing or anything. It\'s just saying that
if we\'re going to give 20-year exclusive rights to a patent owner, they
should be obligated to require that the best art is before the office.

Now, obviously to have the best art before the office requires an
examination of the prior art and a submission if you want to have a
strong patent. I\'m not suggesting the patent is invalid if the best art
isn\'t in front of the office, but merely that the presumption is
eliminated, and you look at it as a de novo situation as to whether or
not in view of that art and the rest of the art a patent with those
claims should or should not have issued, and anybody who has tried a
lawsuit knows that the presumption with clear and convincing evidence is
a big hurdle to overcome with an injury and even indeed with many
judges.

So therefore it seems to me this puts the pain and the burden where it
ought to be, and that\'s on the patentee, the applicant, and the owner
to be sure that the examiner has the best art since the consequences are
severe if they don\'t, and the presumption of validity is an easy and
simple way to eliminate the added value of the view that the examiner
has done a good job. There is no question in my mind that an examiner
can\'t possibly do a good job if he doesn\'t know the best art. I don\'t
care how well he does his job, he\'s sitting there with one hand tied
behind his back.

The second proposal I would suggest, again a controversial one I\'m
sure, is to make the issuing patent, the issued patent invalid or
unenforceable if material art known to the applicant or his assignee is
not given to the PTO and the examiner. You make the patent invalid or
unenforceable if material misrepresentations or arguments are made that
the applicant or his assignee knew could not be made if the examiner had
the information that the assignee or the applicant or his attorney had.

The comment on this is simple enough. I\'m not suggesting there be an
intent to deceive. I\'m merely saying that once it is established that
the best art was known to the applicant or the assignee and not
disclosed to the patent office, or they make a material
misrepresentation, much as we measure that right now with respect to
arguments they make and the like, that we don\'t play games. We merely
say the patent is going to be forfeited. We\'re not going to get into
the question whether they intended to deceive the office or anything.
We\'re merely saying that the benefit is to have to demonstrate that the
inventor and his attorney and other people involved are not felons.

We\'re not interested in whether they\'re felons right now. We\'re
interested in whether the patent is going to be granted for 20 years to
give somebody an exclusive right to hold over other enterprises\' heads,
and it seems to me that the standard, and the patent owner has to meet
this standard, is the way to do it, and it will naturally bring out
searches. I have not doubt that there will be an increase in searches,
and I think they will be materially better.

In conclusion, I would say that the proposals certainly seem harsh, and
we can and should justify them, it seems to me, by remembering that a is
a patent privilege. It\'s an exclusive grant for upwards of 20 years. It
requires the applicant and those associated with it to discharge their
duty of candor, and if these two policies were implemented, in my view,
the question of should there be a search, how thorough should it be,
what should the applicant search, etc., will blend into a simple
solution. If he wants a strong patent with a strong presumption, he\'s
going to make a thorough and careful search and do his level best to see
that examiner has the best art.

The adequacy of the search won\'t be at issue either because we\'re not
talking about whether he looked everywhere but what he found, and again
I think we have to get back to basics, but outlining the consequences
attendant to failure to help the PTO and leave the avoidance strategy to
the beneficiaries of the patent grant, the patent owner. He\'s the one
who gets it, and he\'s the one who should take steps to see that it\'s
carefully done.

In conclusion, I would suggest that the reason I suggest and recommend
such draconian proposals is because I think our examination system is in
serious, serious difficulty, and I don\'t think any Band Aid approach to
it is going to help it. We\'re either going to have to substantially
improve it by relying on the owners of these patents to help us, or
we\'re going to lose an examination system and go to a de facto
registration system. Now, maybe that\'s the way to go in the long run,
and maybe it\'s inevitable, but I suggest at the very at least if we
tried these types of proposals, we would come out with a system that
puts the burden where the benefit is, and if I\'m going to get the
benefit of the patent for 20 years, I see no reason why I shouldn\'t
assume the burdens and the patent office needs help. The examiners can
be the most principled and experienced in the world, but if they ain\'t
got the material to work with, they\'re not going to make a good job.

And that\'s basically where I come out. I thank you for your time and
your consideration. I\'ll be happy to respond to questions. I don\'t
want to say that I\'ll answer them because I\'m not sure that there are
any simple solutions to a lot of this, but indeed I think the patent
system is in a time of crisis and that we need to not look for Band Aids
but look for some real antibiotics that may cure it.

COMMISSIONER GODICI: Thank you, very much, Mr. Gambrell.

Questions? Steve?

MR. KUNIN: Thank you, Mr. Gambrell, for your testimony, and at least in
my opinion maybe you would agree with it that in order for your two
recommendations to be realized that it would more likely than not
require a legislative solution, that it would probably be beyond our
regulatory authority, and if that were the case, considering the current
status of H.R. 1907, would you favor these types of provisions being
included in that, and if so, you know, do you think that it would affect
the passage of that legislation, or would you favor a stand-alone
provision in separate legislation if that would be necessary?

MR. GAMBRELL: I have no preference. I certainly agree with you that in
large part at least your proposals would require legislative action, but
it seems to me that the patent office and hopefully the patent bar,
which I doubt, but I think the patent bar and the patent office ought to
endorse such a system. I would like to sit here and tell you, Mr. Kunin,
that all patent lawyers are honest and they don\'t misrepresent, but I
have been a trial lawyer and an expert in 40 years or more, and I\'ll
tell you the number of times when lawyers have skirted the truth,
disguised the facts, and misrepresented the art is very common, and I
don\'t think that they are going to automatically police themselves to
do the right thing.

Unfortunately, courts very frequently don\'t come down on them as they
should for these kinds of omissions. They said, oh, you know, it\'s
rhetoric, and we won\'t bother with it, but the fact is that there is a
lot of sliding away. I\'m struck\--this is pretty much the way one
lawyer once expressed to me when I was looking at his proposed jury
instructions in a case I was involved in, and there was one jury
instruction that the other side had proposed that was helpful to the
plaintiff, but it did not represent the law. It was clearly contrary to
existing law, and I said, Well, you ought to tell the court that it\'s
wrong and correct it even though it to some extent may impact on your
case, and his comment was, Well, I\'m not going to worry about this now.
I want to win at the District Court level. I\'ll worry about the appeal
later, and I think a lot of lawyers who prosecute patents have the same
thought in mind, if in doubt, I will try to stretch it a little bit. I
get the patent, and then I\'ll worry about whether I can rationalize or
explain what it is and why it was proper what I did.

I would like to have a higher opinion of all lawyers in our profession,
but I think the competition, the increase in number, and the general
lowering of ethical responsibilities of lawyers in general and people
throughout society has made it necessary for us to develop techniques
that will encourage, indeed require, lawyers to tow a very careful
ethical line, and I don\'t feel offended by doing it.

Now, my experience has been, Mr. Kunin, that I always make searches,
virtually always, and I produce every bit of the information I find
because I figure if I can\'t get it through the patent office, I
certainly am going to have as much or more difficulty in the courts. So
it\'s a very simple objective, practical kind of thing, leaving aside
the ethical consideration.

I think it\'s time that we recognize that it\'s important that patents
are effective with the public interest and that we as lawyers and
applicants have an absolute duty of candor to be straight up with the
patent office and with the courts, and I\'m not offended by the
requirement, and I think that people who get burned by it are people who
next time will be more careful. I do think we need to get away from
talking about whether somebody intended to deceive because what you\'re
asking a court or the office to do is decide whether you\'re a felon,
and I don\'t think it\'s necessary to do decide whether somebody
intended it or not.

The question is what is the consequence of it and let\'s deal with that.
If that\'s dealt with adequately, I think we can leave the other
question to other areas like inequitable conduct and a whole range of
things, but we will protect the patent system which I care a great deal
about.

COMMISSIONER GODICI: Any other questions?

MR. DROST: Your response to the first set of questions was to recommend
that we do studies to try to determine these facts, not just go by
individual experiences. How would you conduct some of these studies,
other than I guess we could look at a small number of District Court
cases, but how would you look\--how would you find whether patent
attorneys are conducting searches, prior art searches?

MR. GAMBRELL: Well, I think one thing you could do is you could ask
them. In 1980, when the Federal Circuit was created, I did a study for a
commission on form shopping, and one of the things that Don Dunner and I
did\--we jointly did it\--is we sent questionnaires to a large number of
lawyers throughout the country and asked them to tell us what they did
anonymously. We didn\'t ask them to identify who they were, but we did a
statistical sample. We randomly selected them, and we got heavy numbers
of responses, and I think we learned a great deal and a lot of it was
surprising too.

Some of them were things that I would have been sure would go one way
but didn\'t go that way, and I think that\'s one way you could do it, I
think you could look at your files and make a random sample of your
files. On this interference study we did, we randomly selected a 15
percent sample of interferences over a 10-year period and then went back
and looked at all the files and found out what happened and when they
were terminated and the like, and we found out all sorts of information
that I think\--I remember Dean Lawrence who was one of the most premier
interference lawyers of all time was surprised at some of the results,
and he probably handled 10 percent of the interferences in the patent
office at the time.

I think what we think happens and what may actually happen is frequently
quite different, and at least we would know where the critical points
were and how frequently things are done. I think IDSs are good ideas. I
think searches are useful, and I think it\'s beneficial to the patentee
because he will get a stronger patent, but to require searches is going
to create real problems on reasonableness, expenses.

Now, you could eliminate those small inventors who only file one or two
applications perhaps and say we\'re not going to talk about their
requirement. We\'re going to talk about the others, but 40 percent of
the good inventions a few years ago proved to be creations of very small
groups and not large, large companies, and so you get into a real
dilemma here as to whether or not you can solve the problem and protect
the small guy who doesn\'t have many resources at the beginning.

It\'s a touch choice, and I don\'t have the answer to that one.

COMMISSIONER GODICI: Thank you very much.

MR. GAMBRELL: You\'re welcome.

COMMISSIONER GODICI: Are we ready, Mr. Cottone? I tell you what. This
might be a good time to take about a five-minute break if anybody needs
one, and we\'ll get set up here. So feel free.

\[Recess.\]

[6. JAMES F. COTTONE]{.underline}

COMMISSIONER GODICI: Why don\'t we go ahead and get started? We\'re
attempting to get a microphone to the speaker\'s table. We\'re going to
get started with Mr. Cottone, and I do believe we now have a microphone
at the front table that will help.

Another question came up during the break of whether or not transcripts
would be available, and to answer to that question is yes, via e-mail.
If you would give an e-mail address to Mary or Elizabeth or a card, we
can make arrangements once we have the transcripts to give them to you
by e-mail.

COMMISSIONER DICKINSON: We\'ve made the transcripts from other hearings
available on our web site.

COMMISSIONER GODICI: Mr. Cottone.

MR. COTTONE: Okay. Thank you, Nick. I would like to begin my
presentation this morning by introducing some basic ideas about how best
to search for prior art and especially how to find the best prior art in
the shortest possible time, and then take those basic ideas which we\'ve
fairly well quantified over the years and address the two main questions
which are the subject of today\'s hearing, namely is the most pertinent
prior art being considered by patent examiners during examination of
patent applications, and the second question, are the current procedures
for obtaining prior art during examination of a patent application
adequate and effective.

The basic ideas I\'ll being discussing are a little unusual and grew out
of an investigation I conducted about five years ago when it became
clear to me that online searching had finally come of age and would
possibly be the dominant form of patent searching by examiners and other
searchers. The single event that triggered off my investigation was the
public availability of the PTO\'s image search cape ability on the CSIR
dual screen workstations. These workstations that finally allowed
side-by-side screens with both text and image searching was so powerful
that the first question that came to mind was how good was this online
text and image, followed shortly by other related questions such as is
it worth its heavy costs.

Just as an I side, the automation people spend hundreds of millions of
dollars a year now automating our processes. That\'s projected for the
next five years, and the public pays \$50 an hour to use the image
workstations. So cost is of course a factor, and the next question was
does the availability to the public, now a per charge usage of image and
text stations, compete with or supplement or threaten to replace the
existing search media such as the paper files that have served us all
and the patent system so well for many years.

Well, as it turned out, the answers to all these questions were already
at hand in the form of hundreds of patentability search reports sitting
in my storage files. In looking at my old search reports, especially the
search sheet notes, it was clear to me that we would not only identify
when a 102 reference was found but also where it was found. That\'s a
critical piece of information, that is did the 102 come from a manual
search of a particular class and subclass or from an online text search
or from an image search.

By going back through our files for just about seven years, a
retrospective study somewhat similar to the study just previously
proposed and other matters, we were able to find several hundred
patentability searches for which we developed at least one 102
reference. We then narrowed our investigation down to 421 cases where
there was absolutely no ambiguity as to the quality to of the 102
reference and no ambiguity as to where the 102 reference came from. The
results of this investigation are tabulated in figure one which is now
up on the screen, and, as you can see by the bar graphs, are absolutely
clear in their results.

I will now discuss figure one informally. These four bar graphs show on
the left axis number of 102 developed and on the four horizontal axes
where the source of the 102 was. The N, sub C, slash S-C is the number
of 102s developed by searching class and subclass. That is paper file
manual search and sub APS, and you\'ll notice of the 421 cases, we
developed 358 102s by manual search.

Next, N, sub APS, and APS here is kind of a hybrid term because for many
years the public only had access to the text search terminals. Later, we
got access to the image search terminals and then finally the combined
text and image. So that N, sub, APS means all online search facilities
provided by the PTO, U.S. patent data base. That produced 294 102s out
of 421 cases.

And then you see a great big gap between the two leaders, that is the
manual search followed very shortly by the online search, and the next
gap is N, sub F and P which is foreign publications. That produced 84
hits, 84 102s, and finally N, sub, exam is 51 102s produced, again out
of the 421 sample, which were essentially gifts from an examiner.
Generally, the examiner will say go find the Brown patent or the Smith
patent, or the examiner will say during an interview, gee, you better
hit this alpha subclass or look particularly at the last five years of
this sub. In that case, we call that 102 a gift from an examiner.

Now, you add up all of these hits, 358, 294, 84, and 51. You notice
clearly manual leads the game, followed very shortly by APS and then
foreign pub and exam. This produced an average of\--they don\'t add up
to 421. They add up to 730-something which implies an average of 1.9
102s per search done.

Now, here\'s where things get interesting. If we presume that the number
of 102 references developed for each of the four search types, and
hereinafter I\'ll be referring to these four search types as you see on
figure one. That is manual text, foreign pub, and exam, and a little
later I quantify that in mathematical terms. We call it N equals four.
So when you hear me saying N equals four, it\'s these four search types,
and you can surely do N equals five or six by going to commercial data
bases and elsewhere.

If we presume that the number of 102 references developed for each of
the four search types tabulated in a sample can be roughly equated to
some standard statistical measure such as a probability of detection,
then some very interesting observations can be made, based wholly on the
numbers shown on figure one, can be offered.

Based on the standard concept of probability of detection that flows
from straightforward search theory, the next graph shows an equation
that allows us to make this presumption and put it into quantitative
form. While Elizabeth is getting that right, let me back just one moment
and say that in the statistical field we\'ll be covering\--and this will
be short. I won\'t take the full 20 minutes. I\'ll get to the point
shortly.

We start with a presumption that there exists a 102 someplace in the
system, and as we get up in the morning, we said there is a 102, and now
we\'ve got to go find it someplace in these four or five buildings. So
all of this is predicated on the existence of a 102. Our job is to find
it in some optimum way, and we\'ll get to the point where we can show
that this is done in one, two, three, ten, or thirty hours and quantify
that.

Looking now at figure two, we note that the equation at the top, P, sub
C, which is up on the railing on the ceiling, P, sub C is the cumulative
probability of detection of an event given that N statistically
independent search trials for that event can be made. You\'ll probably
recognize this from your statistics that\'s the way you do radar
detection, multiple pulse radar detections or multiple trials and get a
cumulative probability detection. It\'s fairly well known and standard.

The P, sub I is the probability of detection of any one statistically
independent search trial, that is a manual search will produce results
that are totally independent from the results of a text search and the
text search results are statistically and totally independent from a
manual search of the foreign art and publications. Now, that is also a
presumption and the degree to which that mathematical precision holds is
to which these numbers that we\'re going to show here are valid, and
that remains to be seen. We\'ll need some Nobel laureate to work up the
correlation between number of 102 hits and statistical independence
which we are presuming.

Now let\'s look at the table in figure two where I\'ve taken the numbers
from figure one and put them in a particular sequence where the
cumulative probability of detection, which is the bottom row, P, sub C,
accumulated as N goes from one through four. The key item to note is if
we do four statistically independent searches of a particular topic, the
cumulative probability of detection is 0.97, and that\'s on the bottom
row, P sub C under the column four which is the fourth statistically
independent search effort. That is if we can somehow linearly scale the
number of 102s with a probability of detection, and that\'s a big if,
then the cumulative probability of detections go from .85 if we do only
the manual search in column one to .88 if we use a manual search and
include the foreign art and publications, up to 0.9 if we also consult
with an examiner who may or may not give us a good steer; and finally if
you go to the next image search, we get the 0.97 probability of
detection.

I think you\'ll agree that these probability of detections are pretty
darn good, and they tell us that if we do a number of statistically
independently distinct types of searches, eventually we can be fairly
sure that the examiner has seen all the best prior art or has considered
all the best prior art completely independent of IDSs and other things.
This is just search mechanics.

For those of you who are interested in this type of analysis,
quantifying the results of large numbers of prior art searches, you can
find a detailed presentation of this approach in the April 1997 JPOS
issue on pages 233 to 240. A few copies of that paper which I authored
are provided on the front table here, and if they run out, you can look
up the article in your copy of the JPOS.

Now, with these ideas in mind, let\'s extrapolate to our problem for
today, namely how to find the best prior art in the shortest possible
time. Our experience shows that figure three offers search\--some
insights into search strategies which were found to be very useful.
Consider first manual searching of the paper files. Manual searching of
the paper files as represented by the N equals one line, this is a
straight line that eventually develops the 102 reference given, of
course, that one existed at about the 30-hour mark.

You\'ll notice that the probability of detection from zero to one is on
left axis, P, sub C, the same P, sub C that was in the equation at the
30 hour mark. At about the three hour point in a search, the P, sub C is
just over the 50 percent mark, and at about 10 hours, this increases to
the 70 percent mark; and recall this is for a manual search, three
hours, ten hours, and thirty hours, not bad but also not very time
efficient.

This depicts what often happens when an examiner engages in a not
particularly well-focused manual search effort, and if the search
situation appears familiar to any of you researchers, you\'ll probably
recognize the pain inflicted as you approach that N equals 10, N equals
30. Next compare the N equals one line with the N equals four curve.
You\'ll notice that the N equals four curve approaches a probability of
detection of one, that it initially rises fairly steep and then
eventually starts to taper off.

Recall that N equals four is from four independent search efforts, that
is a manual search effort, an online search effort, and so on. Note that
at three hours, the N equals one gives about a 50/50 chance of finding
the 102, while the N equals four gives about a .94 probability of
detection. That\'s a really significant improvement. For the
intermediate N equals two curve, the results are somewhat between but
still much better than the N equals one line.

I\'m going to depart from my prepared text just to briefly mention that
when I first produced this chart from our own 421 cases in massaging the
statistics and discussed it with some of the all-time searches, they
looked at me and says, Jim, are you trying to tell me that the more I
search, the better the result are? I say, Yeah, that\'s about right. The
more you search, the better your results are, and I was flabbergasted
because I had done all this hard work, and I knew I was onto something
but I didn\'t know quite what, and that was because we were thinking in
terms of N equals one.

The more you search, you start from the beginning of building two and go
to building four, and eventually you\'re going to find a 102. It may
take 30 hours. It may take 300. You\'ll find it if it\'s there. The
question was how to do this smarter. So when you start doing N equals
two, for example, the manual search plus the foreign art and pubs, the
manual search plus an APS search, again N equals two, look at the
significantly better results you get in shorter times.

Now, I think it\'s fairly well\--pretty much intuitive, and I\'ll get to
the shapes of these lines a little later.

Elizabeth, can we go to number four please?

Now, let\'s look at figure four for an eye-opening variation of figure
three. Figure four has the same axes and curves of figure three but with
the addition of an N equals one star line at a much steeper slope. There
are many situations that produce this steep slope. The most
straightforward one is the existence of a motherlode subclass or a
digest. Now, note that a motherlode subclass of course is where some
examiner has done a lot of hard work and collected four or five, ten
shoes, and every piece of pertinent art for a particular subject is in
that\--

COMMISSIONER DICKINSON: You have about five minutes, Mr. Cottone.

MR. COTTONE: I\'ll have to move faster.

Note what the N equals one star does for you just over the one and a
half hour mark. There is a 95 percent probability of detection and that
this is almost exactly equal to an N equals four search. Just think of
that. If you had a motherlode subclass or a well-maintained alpha
subclass or digest, you can reasonably expect to find all the best art
in well under three hours of search. Actually, someplace between one and
three hours is where a typical search will probably wrap up.

I can see some of the people shaking their heads saying, huh, motherlode
subclass, you must be dreaming. My answer is, well, they do exist thanks
to the hard work of some conscientious examiner, for example, Examiner
Weistock who made a motherlode subclass in the solar art. He saved
countless, thousands of searching hours. When they do exist, they are
powerful tools.

The second part of my answer is that the dollar cost for making good
motherlode sub classes and digests is a minute fraction of the costs for
bigger, faster, and more finicky online search systems. I think the
ratio could be as high as 100 to 1. That is for every one dollar spent
on making up and maintaining a good small subclass, the automation
people would probably send \$100, coming up with an equally effective
search medium. This goes also for putting paper copies of the foreign
art in publications in the shoes. I think it\'s extremely cost
effective.

Finally let\'s look at figure five. For a quick-look summary of the main
factors that go into a searcher\'s decision on how to approach a
particular search for the purpose of finding the best prior art in the
shortest time, all serious searchers are already familiar with most of
these factors and the relative ways shown are those that reflect my
personal experience, but it is really clear that the existence of a few
good clear and unambiguous key words will bias a decision in favor of
doing an online search first and then using the other searching tools as
a back up.

So we want to continue to do N equals four or at least N equals two or
three, but let\'s get to the meat first and use the other remaining time
as back up and insurance. Equally clear is the existence of a motherlode
subclass wherever one exists or an examiner suggests one. That would be
the manual search area to cover first. This is as suggested in the N
equals one star line on figure four.

The more or less secondary factors also play a role for each art unit
and distinct technology. These secondary factors are greater weights
than those suggested here. For example, in biotech, you certainly don\'t
want to look for a motherlode subclass or a short well-defined field.
You want to get to the key words, especially for sequences and so forth.
So there are some art units where you almost have to do certain types of
searches.

In view of these ideas on how to do a time optimum search, some general
observations and conclusions are now reasonable to make. First, it is
reasonable to conclude that there is a silent shootout going on in the
PTO patent searching. This shootout is just as serious as those that
went on in the frontier towns of the wild west and are just as
potentially fatal to the U.S. patent system as they are to those poor
little gunslingers. Even as we talk here this morning, hundreds of
patent examiners are voting with their fingers and their key boards on
the subject of what type of search to do first and how long to spend on
each type of search before going on to the N equals four approach.

PTO policies appear to have weighed in on the side of online searching,
which is good, but they have also weighed in on the side of the demise
of the paper file which is not good. Despite PTO policy, the silent
shootout goes on and yet it remains to be seen exactly what the outcome
will be.

A second conclusion, presuming that online searching will assume a
significantly larger role in prior art searching as time goes on, it is
critically important that the theoretical benefits of online searching,
of which there are many actually realized. At the very minimum, much
more training time must be provided to the examining corps to make sure
that online potential is obtained in a professional and useful manner
for patent applicants being examined right now.

Equally critical is the necessity for the PTO automation developers to
slow down their rate of change so as to get better control of their work
product and to take the uncertainty and confusion out of their systems.
These three factors, poor training, uncertainty, and confusion on the
online systems operate to greatly reduce the potential of the online
systems to contribute to better prior art searching.

While most of the ideas I presented here and some of the ideas will
probably come from other folks who take this table today are directed on
how to get the best prior art in the shortest possible time\--I need a
little extension because I\'m getting to my punch line. Bear with me,
please. I mean I\'ve done all this hard work. Hang in there.

The other side of the issue that is also worthy of some serious thought,
I\'ve noticed that the types of patentability searches we are now doing
are vastly more complex and time consuming than the patentability of
searches we were doing just five or ten years ago. When I first started
searching, most of my electronic searches were for devices with only a
few system or concept searches. Now most of our electronic searches are
for large systems that have to be searched all over the office. For
example, try searching multiplex communications and area coding in a
cellular telephone system, not to mention the wild internet related
technologies.

So another reasonable conclusion on how to bring about quality searching
so as to maintain the historically good quality of U.S. patents is that
the PTO examiners must be given sufficient additional time to counter
this trend towards more complexity in their cases they handle every day.
Improved search tools by themselves are not enough. Examiners must be
given additional time how to best use their new tools efficiently and
then apply both online and paper searches to the complex cases at hand
without undue haste. This increased complexity factor also calls for
additional time per case examined by itself.

In wrapping up before taking any questions, I\'d like to say that while
I\'ve tried hard to put some real numbers on most of the ideas I put
forth, the nature of patent searching probably doesn\'t allow for such
mathematical precision. So the graphs shown, especially those on figures
three and four, are not the result of textbook-type calculations and
instead reflect our best judgment based on many years of hands-on patent
searching.

I would look forward to sharing these ideas and numbers with any PTO
folks who might like to replicate some of our search result evaluations
and statistics. And finally, I want to thank PTO officials who set up
this badly needed initiative and for giving me an opportunity to speak,
and I hope I\'ve made a sensible contribution.

I\'ll take any questions.

COMMISSIONER DICKINSON: Thank you, Mr. Cattone.

Assistant Commissioner Godici.

COMMISSIONER GODICI: Just a quick question, Mr. Cottone. One of your
charts showed the combination\--I think you called it N-4 or N equals
four combination of paper searching and APS and so on and so forth in
about three or four hours kind of reached a peak there.

MR. COTTONE: Yes, sir.

COMMISSIONER GODICI: And therefore that would suggest that if we at the
PTO use a multiplicity of tools and spent that length of time, we\'d get
to that point, but yet you mention in your conclusion that we need to
devote more time to searching, and I don\'t quite understand the
dichotomy there.

MR. COTTONE: Okay. There is a dichotomy. You\'re right. The numbers
we\'ve shown here are averages. The curves we show here are trends.
Every individual case of course has got to be treated on its own merits,
and I am not\--the graphs don\'t say that search three hours and you\'ve
got a .94 probability, you quit and go home. The graphs say on average
it\'s going to take three hours, average over several hundred 102s. It
may take\--one particular case, you may have to take six, eight, or ten
hours, and so the first item is they must have\--examiners must have
sufficient time to do a thorough search, despite the fact that they\'ve
got all the best tools and some search strategies of how to use those
tools best.

Okay. The second item is cases are truly becoming more and more complex
all the time. So the kind of productivity numbers that were\--the kind
of productivity numbers that was set for five, ten, fifteen years ago
which are still in force really apply\--make examiners engage in undue
haste. Some of these techniques, I presume a lot of examiners are
already using intuitively, and if they\'re not, I would like to ask them
to look at these graphs and see if they can\'t find a more efficient
search technique.

COMMISSIONER DICKINSON: Let me ask a follow-up question, Mr. Cattone.
There is an additional way to achieve productivity, I think in
searching, and that is through the use of automated technology. I think
that productivity in the United States generally is increasing as a
result of the increased use of automated technologies, and we are
certainly trying to make sure we exploit those same opportunities here
at the PTO. We\'ve initiated and will initiate this month some new
search technologies, automated search technologies for our examiners and
have recently introduced a system called West, and we\'ll introduce the
new system called East later this month.

Do you happen to be familiar with either of those at this point?

MR. CATTONE: Yes, I think they\'re very powerful. I\'m not happy that we
have exactly the best interface, but I think they\'re very powerful, and
they\'re moving in\--definitely moving in the right direction, but with
some reservations on that.

COMMISSIONER DICKINSON: I understand. Just also to follow up slightly on
Commissioner Godici\'s point, and it\'s actually the same question I
asked Mr. Jennings earlier, and that concerns the cost implication of
additional search time. How would you reconcile that cost implication?
Would you support a fee increase?

MR. CATTONE: I\'d have to think about that. One of the things that fell
out of our investigation of these several hundred cases out of several
thousand cases\--we\'ve picked and scrubbed the cleanest cases we can
find\--one of the implications that fell out of that was that if you
look at, for example, foreign publications, in our search we found 51
102s out of 421 cases. That comes out to be about, I think, 20 percent,
something like that.

The facts of life are that those foreign\--those 102s that came out of
foreign art and publications were not on the online systems. They were
not even in the shoes. They were not even in the paper file. This is
truly a statistically independent look. So all of the online searching
improvements in the world are going to be held hostage to the different
types of searches. Do you want to go into the assignee? Do you want to
go into is foreign art and pubs, and the fact that if, for example,
only\--out of every five cases I put on your desk, one case, the 102 is
in the foreign art and publications; and we have not yet quite
implemented F Pass, which is a disaster, and I don\'t know how well West
and East handled what used to be F Pass, every fifth patent issued
you\'re going to get blind sided.

So the fact that a particular search type has a low productivity does
not mean you shouldn\'t do it. You\'ve got to do it. It just means you
pick your sequence right so you get to the best art at the three-hour
point and not at the 30-hour point.

COMMISSIONER DICKINSON: Okay. Any other questions from the panel?

MR. CATTONE: Does that answer your question?

COMMISSIONER DICKINSON: It does. Thank you very much. Mr. Kunin.

COMMISSIONER DICKINSON: Thank you, Mr. Cattone for your testimony. We
found this to be quite interesting.

MR. KUNIN: I had a question. It appears that the information that you
provided is certainly\--it\'s not necessarily clear in terms of the
spectrum of the technologies covered. The question that I have is from
your experience in terms of technology sensitivity, if you were to look
at, for example, the growth in the internet technologies, business
software, business methods types of cases, do you have any different
views with respect to what your charts might look like?

MR. CATTONE: Absolutely, yes. That\'s a good observations, Steve. As it
turns out, aggregate numbers give you fairly good general rules. Each
case, though, has got to be handled separately, and as I\--in a given
day, as you probably remember when you were a SPE or a primary, in a
given day, I probably talk to five or ten examiners and probably in half
a dozen art units, and each one of these art units is a different patent
office sometimes. I mean they have different problems. They have
different technologies, and now the internet technologies\--so to answer
your basic question which was which technologies are represented in
these graphs, I\'d like to just put a caveat saying I don\'t do any
chemical work. So all of these graphs represent both electrical and
mechanical.

Now, the chemical work would be altogether different. As I say, when you
go into some of these chemical art units, it\'s like walking into China
for me, that is I don\'t understand even what the breakouts mean, and
therefore it is clear that the search techniques are going to be
different to reflect the realities of each different art unit, not only
how the group director wants to run his show but also how the technology
is broken out and how the technology is examined.

So I think I answered the second part of your question which is, first,
these aggregates are just mechanical and electrical, not chemical and
certainly not biotech because they are several years old; and, second,
on an art-unit-by-art-unit basis or let\'s say on a
technology-center-by-center basis, these charts will move all kinds of
different ways, and what we see here is merely an aggregate of the
several technologies that I engage in. Did I get your question, Steve?

MR. KUNIN: Yes.

COMMISSIONER DICKINSON: Thank you, sir.

MR. CATTONE: Thank you, gentlemen.

[7. JOSEPH LAUGHON]{.underline}

COMMISSIONER DICKINSON: The next speaker I have is Joseph Laughon. Mr.
Laughon is a partner in Rogers & Wells and I understand is representing
the Securities Industry Association today.

MR. LAUGHON: Good morning. As you observed, I\'m here to offer the
comments and some brief suggestions of the Securities Industry
Association, which I\'ll refer to as the SIA, concerning locating prior
art in connection with the examination of patents.

I thank you all on behalf of the SIA for the opportunity to speak here
this morning. I will tell you up front that my comments will not be as
extensive as some of my predecessors, and as an aside, I\'d like to
mention that I worked with my friend and acquaintance, Mr. Gambrell, in
patent litigations in which he served as my expert, and he assured me
during the break that his war story was not referring to any of our
experiences we\'ve had with him.

I\'d like to briefly explain the reasons for the SIA\'s interest in this
area which I can tell you is significant. The SIA was established in
1972 through the merger of two previous associations that dated back to
1912 and 1913, respectively. As the name implies, the SIA represents the
common interest of nearly 750 security firms including investment banks,
broker-dealers, and mutual fund companies. Member firms are active in
all U.S. and foreign markets and in all phases of corporate and public
finance.

The U.S. securities industry alone manages the accounts of scores of
millions of investors, both directly and indirectly. Yearly revenues
exceed \$300 billion, and it employs, the industry itself, over 600,000
people. As the panel is doubtlessly aware, there is an increasing number
of patents being issued that claim financial products and services,
business methods, electronic trading techniques.

In short, the very sort of financial engineering, if you will, involved
in the every day activities of the SIA members. Not unexpectedly and
particularly lately, litigation involving such patents is on a
significant uptick. The impact of this litigation that is really now
just getting underway in earnest on the member firms of the SIA and on
these countless millions of individual investors will be very
significant as well as have a significance on the U.S. economy as a
whole.

While the SIA and its individual members have a number of individual
issues they are considering in this whole area of patents for financial
engineering products, I believe that I can safely say that the SIA
shares a fundamental goal of the patent office, and that\'s uniformly
throughout the membership, and that is ensuring a thorough examination
of applications against the prior art so that patents that do issue are
valid and claim inventions that are truly novel and are non-obvious.

The securities industry is extraordinarily innovative in financial
engineering. Indeed, innovation and creativity are the life blood of the
member firms of the SIA. Without that, they\'re stymied. They wither and
die, and while patents in the financial area are not new and look back
to, for example, the CMA patents back in the early eighties now, the
pace of these patents I believe is vastly accelerated, thus I believe
it\'s not inappropriate to characterize patents in this area as an
emerging technology which the patent office has referred to in its
notice requesting these hearings.

Complicating the issue further is the fact that the terminology used in
some of these financial engineering products is not uniform among the
industry which exacerbates the problems of searching for prior art.
Complicating the issue further is the fact that historically many firms
in the securities field really kept their financial engineering products
proprietary and internal, and it\'s just not available to be searched by
the patent office. Even that which is published by the individual
members or by trade association magazines is not necessarily readily
available to the patent office, nor is it adequately cataloged to be of
much use in searching.

The SIA has considered this, and I\'ll be honest with you, it\'s a new
thing, and some of their views are not complete yet, but everything is
on the table, but I think there are some things that there is a
consensus on within the SIA and its individual members that I\'d like to
bring to your attention today. I understand from some comments made at
the previous hearing in June that the patent office is reviving the
practice of sending examiners out to Silicon Valley to talk with the
technical hands-on people to better understand what\'s going on and
what\'s being developed. The SIA thinks that\'s a great idea, and the
SIA is actively working to put together a similar visitation program for
the examiners, if it\'s acceptable to the office, to its members or to
joint associations, if you will, that have been put together for this
purpose.

I think the educational benefits would be tremendous for the examiners,
and I think apropos to some of the earlier comments, the education would
increase efficiencies in searches that in the long run could review
costs offsetting the cost of the visit.

Also under active consideration of the SIA is providing industry experts
in the field to come out and to educate and talk to and receive
questions from the appropriate portions of the examiner corps, the art
units, and look at these sorts of I\'ll call them financial engineering
patents for short hand.

To the extent it does not already occur, the SIA would respectfully
suggest that the more senior examiners who have had experience in this
area conduct round table discussions internally with the more junior
examiners as they come in to teach them efficiencies, to impart some
knowledge on financial instruments and products that are patented. It\'s
internal sharing of information where experience could filter down more
rapidly within the patent office itself, and the SIA considers that to
be a good idea.

For its part, the SIA, as I have alluded to, is taking steps to address
the availability and accessibility of prior art in this field. Now under
consideration is an SIA web page which would accumulate information from
its myriad members. We\'ll have to figure out of to index it and make it
accessible and more useful, which the SIA will be more than willing to
make electronically available to the patent office. We understand there
is some merging to be done and some training to be done, but given the
girth of art in this field, but for the increasing number of issued
patents, we think this would be a good idea.

This contemplated web page and data base would include technical
disclosures and publications in the pertinent fields as well as any
information that an individual member or members wish to put in the data
base that it did not want to maintain has proprietary product. It\'s a
little different way of thinking about things from last week or last
year, but given what\'s going on in the patent field, the acceleration
of change in the thinking is pretty significant within this industry.
The program, it would also consider something like technical disclosure
bulletins that IBM has long been doing, and that is a very good source
of prior art that is frequently cited by the examiners in examining
applications.

Now I\'d like to turn to a few suggestions that the SIA respectfully
requests the patent office itself to consider. In generic terms, the SIA
believes it would be a good idea to create a patent office task force to
consider different measurements of an examiner\'s performance. For
example, there would be extra recognition and advancement for pay for
thorough examinations. There could possibly be less emphasis to the
extent it exists on volume of applications handled.

There is the possibility, given the fact that there are some senior
examiners in this field that I\'ve alluded to earlier, that there could
be, in appropriate instances, a second review process, if you will,
where the primary examiner has gone as far as he or she can, and if the
patent itself appears to claim a very broad invention, then perhaps a
more senior examiner with a little better knowledge of the prior art
could briefly review it.

The studies that Mr. Gambrell referred to earlier, District Court
decisions versus patents issued out of the patent office and the
discrepancies in the prior art uncovered, could be a good measuring
stick in assessing the thoroughness for example of an examiner\'s
evaluation of prior art if those studies were done.

Another general comment would be for the patent office to be receptive
to public feedback about issued patents, and I don\'t mean formal
feedback by way of re-exam, etc. I have in mind more of industry
feedback, and I refer, for example, to the Compton\'s New Media patent
of a few years ago which when it came out of the patent office everybody
in that field looked at each other and said wait a minute. We\'ve been
doing this for years. And the patent office did the right thing in that
instance, and I think in the area of financial engineering, there would
be a tremendous opportunity for similar situations to arise when broad
patents issue that the industry recognizes has been going on without
patent protection for years. This would avoid the need, obviously, for
an individual or a particular firm to institute a formal re-examination
with all the risks that entails for that firm as well as the expense.

Another, and near the end of my general suggestions would be the thought
of publishing all applications after 18 months, not just\--I realize
that is a controversial topic, and I realize it\'s addressed in part in
H.R. 1907, but if such a procedure\--and it would require legislation.
If such a procedure were adopted from a prior art point of view, number
one, it would make more art available to the entire examiner corps; and
number two, it would give a quick notice to the industry who could start
this public outcry procedure, if you will, to avoid a blockbuster
industry blocking patent coming out and shutting down an entire exchange
for example. It would not have a good effect on the economy.

The office may consider using\--making more use of the formal public
protest procedure in 37 CFR section 129, assuming it\'s still available
after H.R. 1907 wins its way through Congress. This would tie into the
18-month notion to let people input information and know what\'s out
there and what\'s going to issue.

Finally, I would suggest a consideration of hiring more examiners with
special expertise in the financial services field, and I know that\'s a
big order, and I know that the patent office is in competition with
private industry, but whatever ways the office saw fit to try to
institute such a program, I believe it would represent an enormous
improvement on the timely, efficient, and cost effective examination of
patents in this area, but more importantly I think it would serve a
public interest in that it would lessen the possibility of improvidently
granted patents coming out and wreaking havoc in the financial services
industry.

In conclusion, I wanted to emphasize the extraordinary interest of the
SIA in this field and to point out that we are just starting out on this
road. We will have other ideas and other views that we would love to
present in the appropriate forums. I want to also emphasize its
willingness and its eagerness to constructively cooperate with the
patent office to address some of these concerns, including expending its
own resources and time because it\'s in its interest to do so.

In sum, I believe the SIA\'s interest in the patent offices are
coextensive, and I think we both are respectful of the patent system but
very much want the patents that do come through the office to be valid
at the end of the day and to be deserving of the limited and recognized
monopoly that they confer. On behalf of the SIA, I\'d like to thank you
again for permitting us to testify this morning, and to the extent there
are any questions, I\'d be happy to try to respond even if not answer.

COMMISSIONER DICKINSON: Thank you very much, Mr. Laughon. That was very
interesting and very informative testimony. We appreciate it.

Are there questions from the panel? Mr. Kunin.

MR. KUNIN: Thank you, Mr. Laughon, for your very thorough treatment and
I think very helpful suggestions. I do have two questions. The first is
recently the Patent and Trademark Office published its final version of
its internet usage policy. In going back to your suggestion with respect
to providing access a SIA-created web base searchable data base of
financial management software, a couple of aspects with respect to our
policy I would like for you to perhaps think about or at least comment
on.

The first has to do with essentially the fact that searching over the
internet is not essentially a secure medium, and that\'s not insolvable
because we have the experience with some of the commercial data base
providers, for example the chemical abstract service, that have actually
a way by which we can do a security communication to their web site.

So that\'s one type of thing for consideration which perhaps you could
comment on, and the other has to do with ensuring the privacy of our
searches, namely, you know, should you establish such a data base, we
would require basically that there would be no way for you to be, you
know, watching what was searched and keeping records of that from a
privacy perspective and, once again, in terms of our Section 122
obligation. So that\'s the first sort of an area that I would like if,
perhaps, you could comment on.

MR. LAUGHON: I\'d be happy to. I have\--in my private representative
capacity as a patent lawyer, I have worked with a number of the
individual firms in the SIA and have first-hand knowledge of the
extraordinarily cutting edge technology that they develop on almost a
daily basis, and I can assure you that whatever the patent office would
require in terms of privacy that you\'re required to maintain and in
making your access secure to the data base, to the extent it would
encourage the patent office\'s use of that data base, it would be no
problem.

MR. KUNIN: And the second question I have is probably a more provocative
question.

MR. LAUGHON: Which I may not have the authority to answer.

MR. KUNIN: Under the current statutory regime of Section 122, there is
actually in the language of the statute a provision which essentially
empowers the commissioner to make special determinations with respect to
publication. If, for example, we were to look at those applications that
involved the technologies which SIA is very interested in, and for
example those could be identified by, let\'s say class, subclass, or
whatever mechanism that could be identified, apart from having to go
through 1907, would SIA support some kind of exercise of commissioner
authority under Section 122 to provide special publication treatment to
address this problem?

MR. LAUGHON: Well, let me answer first by saying this particular issue
has not been considered by the SIA, and I don\'t dare to speak on its
behalf, but I will comment as follows: It is\--such a procedure would be
totally consistent with the position I was authorized to take this
morning which is a universal 18-month publication. So I would suspect
that the SIA would conclude that it was in their interest to follow such
a procedure by the commissioner under 122.

COMMISSIONER DICKINSON: Other questions? Mr. Drost.

MR. DROST: You spoke about the PTO should be more receptive to public
feedback on patents, and you said that there are risks in using the
formal re-exam process. The downside of the public feedback is
oftentimes I find that it\'s very easy for people to look through the OG
and say this is obvious. It\'s another thing to come up with a piece of
prior art that says this knocks the patent out. So there\'s a benefit to
the formal re-exam process where, generally speaking, someone will sit
down and tell us exactly why a patent should be invalid. It\'s a very
positive way to go about reviewing patents that have already issued.

Can you tell me what are the risks in the present system\--you can file
it anonymously, and through law firms, but what are the risks? Why
isn\'t this being used? There\'s a lot of criticism about what we do,
but there is\--a lot of this doesn\'t translate into action.

MR. LAUGHON: I\'m happy to respond to that, and I think this may be my
personal views, but I think it would probably be reflective\--if the SIA
had considered it, it would be their views too. The risk I allude to is,
obviously, even though it\'s anonymous, you are under the current law
commencing a proceeding that once it\'s determined that a substantial
new issue of patentability has been shown, it\'s kind of out of the
requestor\'s hands, and the patentee is going to get the last word and
the last say, and once you\'ve had a patent re-examined in which the
best prior art you can come with has essentially been insulated, you\'re
in a big hole if litigation commences; and I recognize that the ex parte
essentially nature of re-exam under the current law is proposed to be
changed under 1907.

With respect to your first comment that the re-exam procedure is more
orderly, I completely agree. I think the public feedback, the
commissioner would have to exercise his or her discretion if the uproar
is loud enough, and it would be more than just saying this is obvious. I
suspect that the news media, when they interview the people who are
complaining the most, would refer to some internal documents, and I
suspect that the people who are complaining loudest would be more than
willing to submit this to the commissioner. It would only be in
extraordinary cases.

For the example that I gave too in my prepared comments, I don\'t
suggest that to be routine. I know it\'s a burden on the office, but
there are some patents that issue, and I\'m aware of a couple out there
now that are so tremendously broad in the financial services area and
that are directed to things that I know have been going on for years
that in those extraordinary situations it\'s impossible that it would be
appropriate to listen to the public feedback as I alluded to earlier.
Not routine, extraordinary situations.

COMMISSIONER DICKINSON: I have some follow up to that question. One of
the patents you cited, the Compton\'s New Media patent, was placed in
re-exam through the commission-ordered re-exam proceeding, and that was
done, I think, as a function for the outcry\--in part as a function of
the outcry that arose from the industry. Would you or the industry
support consideration of an expansion of the commissioner\'s order of
the re-exam procedure\--we issue probably three or four a year. We
request about three or four a year\--to provide for some more
opportunities consistent with your testimony today?

MR. LAUGHON: Let me say, Commissioner, that I don\'t have full authority
to give the SIA\'s answer, but, again as before, I\'ll give you what I
think their answer would be had they fully considered it. I think the
answer would be yes, and I think that an answer would be yes because I
truly believe this is an emerging technology and that it\'s new fertile
fields for the office, and they do not have yet the best prior art.

It\'s not a fault of the office. It\'s a fault of the historical
practice of the industry itself, and when they know this art, the
industry knows this art so well and can document it, has it down and can
do a field trip and can show you where it\'s been going on for ten years
before the application was filed, then yes, I believe that the SIA, when
they consider that question, would say they would support an expansion
of that by the commissioner.

COMMISSIONER DICKINSON: Thank you. Any other questions from the panel?

\[No response.\]

COMMISSIONER DICKINSON: Thank you. Fascinating testimony.

MR. LAUGHON: You\'re welcome.

COMMISSIONER DICKINSON: Our next witness is again an individual who is
no stranger to the Patent and Trademark Office, one of our great
friends, Greg Maier, also from the Oblon, Spivak firm who is the\--I
understand the section chair now.

MR. MAIER: Chair elect.

COMMISSIONER DICKINSON: Chair elect. Thank you. Of the American Bar
Association Section on Intellectual Property Law.

[8. GREGORY J. MAIER]{.underline}

MR. MAIER: We certainly want to thank you, Commissioner Dickinson and
the leadership of the patent office for conducting this hearing and
offering us the opportunity to comment. I am Greg Maier, as you\'ve
said, chair elect of the ABA Section of Intellectual Property Law. The
views that I am going to present represent the views of the Section of
Intellectual Property Law. They have not been considered or approved by
the House of Delegates or Board of Governors of the American Bar
Association and accordingly should not be construed as representing the
position of the overall American Bar Association.

The Section of Intellectual Property Law with its more than 17,000
members is the world\'s largest organization of intellectual property
practitioners and has sought to provide leadership in the intellectual
property bar since its inception in 1894. Consistent with its normal
deliberative process, the section has developed a response to the PTO\'s
requests for comments on issues relating to the identification of prior
art during the examination of a patent application.

The section\'s response was initially drafted and voted on by two of its
acting\--committees acting together, then approved by the section
council for submission to the PTO consistent with ABA policy. The
written statement containing the details of the section\'s position will
be submitted before the deadline for such submissions. My remarks today
are intended as a brief summary of the section\'s position, and any
inconsistency between my remarks and the written statement to be
submitted by the section should be resolved in favor of that statement.

The PTO\'s request for information implies that members of the public do
not feel the PTO is doing its job properly. The section does not agree
with that general assumption. The general position on the workings of
the PTO should be based on reliable data obtained by studies of court
cases, re-examination records, or other information, not on comments by
a few outspoken practitioners or even on isolated instances in which the
pertinent prior art was not properly cited or applied.

The section realizes that PTO examiners are allowed only a limited time
to search each claimed invention and that limited searching time will be
reflected to some extent in the quality of the patents issued. The
section is not aware of reliable data that indicates a general failure
on the part of examiners of the U.S. PTO to consider the most pertinent
prior art during examination of applications.

Many of the questions in the request for comment focus on the acts of
patent applicants, particularly regarding conducting patentability
searches before filing patent applications and on disclosing the results
of those searches to the PTO. In addressing these questions, the section
wishes to make two points. First, patentability searching before filing
is in our view a purely discretionary activity that varies by applicant
throughout the world based on such factors as cost, filing deadlines,
and presumed knowledge of the prior art. The section is not aware of any
comprehensive study that has been conducted on patentability searching,
but it believes that there is generally no agreed upon patentability
searching policy among applicants. Beyond that, we cannot comment with
certainty.

Second, on the issue of disclosure of known prior art to the PTO, the
section views this issue in the context of all applicable law and does
not limit its consideration solely to the prosecution of patent
applications as we assume the PTO does. In other words, we\'re looking
at the issue of patents straight through the litigation process.

The U.S. law on the duty of disclosure to the U.S. PTO is unquestionably
the harshest and most unforgiving law of its kind in the world. The U.S.
practitioner who intentionally fails to disclose information known to
him to be material to the examination of a pending application faces
both unlimited financial limit and loss of his license to practice, not
to speak of loss of his client and his reputation in the community, and
as a result, the patent practitioner has extremely strong incentives to
fully disclose any material information of which he is aware to the U.S.
PTO. The practitioner has no incentive to conceal relevant information
the PTO because every practitioner is well aware that any such action
would as a minimum render the resulting patent fully unenforceable and
thus useless to his client.

It is the position of the section that the burden placed on
practitioners to fully disclose information to the U.S. PTO has already
been maximized. It is unproductive to try to squeeze blood from a stone
or any more prior art from patent applicants either directly or through
their representatives.

Finally, it is respectfully submitted that the question in the request
for comment as to whether applicants should be required to conduct prior
art searches before filing fails to take into account a basic principle
of the larger patent law, namely that any action or assertion made by an
applicant can and will be used against him in a court of law. If an
applicant were to assert that a prior art search was conducted, and if a
pertinent reference or searching area were inadvertently overlooked, the
applicant would surely be accused of attempting to mislead the PTO as to
the thoroughness of his search or with an intentional failure to fully
disclose\--to fully search for and disclose information. The result
would be damaging to the patent system by providing yet further grounds
for holding valuable patents invalid or unenforceable in court.

In contrast there is no liability attached to searches conducted by
patent examiners. This fact, together with the fact that the applicant
is already fully burdened by his onerous duty of disclosure suggests
that the patent system is best served if the PTO, as the government
agency charged with responsibility of issuing valid patents, focuses on
enhancing the quality of its own searches.

The specific steps that the section recommends to the PTO in this regard
are as follows: one, work more closely with the JPO and EPO to make sure
that foreign art is both available to U.S. examiners and properly
classified for reliable searching; second, enhance examiner training in
rapidly advancing technologies so examiners can better understand the
significance of prior art disclosed to them; third, cooperate with
industries or other members of the public that are concerned about the
quality of PTO searching to seek assistance with examiner training and
in providing access to data bases of non-patent literature that would
improve the quality of PTO searches.

In this regard, I must compliment the SIA for offering suggestions that
are truly heading in the right direction and are certainly consistent
with the recommendations of the section. I think the SIA and probably
other industry associations who perceive themselves to be negatively
affected by overly broad patents would be happy to assist the patent
office, and certainly the SIA has offered to do so. I think that is
truly the right way to go.

In closing, on behalf of the ABA Section of Intellectual Property Law, I
want to thank the PTO and its leadership for providing us with this
opportunity to comment. I also want to assure the PTO that the section
stands ready to work with the PTO to take whatever steps it can to
assist in improving the patent system; and if there are any questions,
I\'ll be happy to address them.

COMMISSIONER DICKINSON: Thank you, Mr. Maier.

Mr. Kunin.

MR. KUNIN: Thank you, Mr. Maier, for your testimony and your
suggestions. I have a question for you which is not really directly
related to your three suggestions. It relates to your view with respect
to the question of proper claim interpretation as perhaps a foundation
for knowing where to search and basically recognizing what the claim
covers and then finding the prior art that relates to what the properly
interpreted claim language is.

Do you have any comments with respect to your own views or the views of
the section with respect to how well you perceive the examiners are
properly interpreting claims for search and examination?

MR. MAIER: I would say first that we have not addressed that specific
issue. We have not studied the manner in which examiners are
interpreting claims. So I feel that the ABA has not taken a position on
that. I personally feel that a problem in some of the emerging
technologies is simply that the examiners may not be aware or to
understand enough of some of the new technology to fully understand what
is comprehended or what is covered by certain claim terminology.

I don\'t think it\'s so much a question of interpreting the claims as
interpreting the prior art that\'s available, and then I think it could
be improved by educational opportunities exactly of the type that the
SIA recommended, that examiners be coached a bit in some of the newer
technologies and then will understand exactly what the claim terms would
cover.

COMMISSIONER DICKINSON: We received testimony and also got additional
information informally. Much of it I think is fairly characterized as
anecdotal, but generally premised on information like the number of
citations on the face of the patent. The Rule 56 obligation is not being
complied with uniformly or maybe even broadly.

You have addressed Rule 56 in your testimony specifically. Would you
care to comment on that kind of information which we have been
receiving? I would note, though, for the record, that we have done a
study, and the average patent cites about ten U.S. patents and four or
five foreign patents on the face of it.

MR. MAIER: As I understand your question, I would say there\'s two
aspects. First of all, to the best of my knowledge, the members of the
Section of Intellectual Property Law comply fully with the rules of
practice. I believe every attorney that I know or have been associated
with certainly believes that he or she is fulfilling completely his
obligation to disclose all known information as material to the PTO.

We see anecdotal situations in which attorneys are, you know, alleged
not to have disclosed information. We don\'t think that is the general
rule. We don\'t think that is common at all. There are a full situations
that reach court, and that situation is proven. We don\'t think it is
the general rule.

In terms of\--let\'s see. Well, the second part of your question, will
you repeat the second part of your question?

COMMISSIONER DICKINSON: I think you actually addressed most of my
question, is whether you think that the Rule 56\--based on the kind of
information that we have received, let\'s called it anecdotal
statistical-type information, in your experience would that suggest a
failure to comply with Rule 56. I think you\'ve primarily answered that.

MR. MAIER: The other point that I was going to make is that you\'re sort
of between a rock and a hard place. On the one hand, you want full
disclosure. On the other hand, you don\'t want too much disclosure, and
the implication seems to be that the ideal would be for the applicant to
write an application and then deliver some prior art and then reject the
application and then respond to that without being worked on by the
patent office. It\'s not possible to do that.

The other thing that I would like to mention is that although the patent
office does not draw any distinction between the different applications,
in the real world, there\'s an enormous distinction among applications.
The rules that you have work perfectly for a private inventor or a small
law firm that\'s got one or two applications. No problem. You can
disclose all the related applications, disclose all the prior art. One
attorney or maybe two know everything.

They don\'t work when you\'re deal with a huge organization or a huge
organization working through a group of huge law firms that have an
international technology market and are trying to get patents to cover
their situation. Nobody, no one individual knows everything. A company
might have research activities going on in four or five different
countries, and while the executives and department heads try to
accumulate the information, nobody knows absolutely everything, and in a
situation like that, the rules don\'t work very well.

If you then\--if you, on top of the existing rules, recommend further
rules requiring more information, you\'re going to find that applicants
will have to disclose everything. They will wind up delivering tons of
information to you to meet the rules. Now you\'re not going to be happy
with that. You\'re going to say, well, you\'re delivering too much
information. Sometimes that is the only way to do it. You have to
deliver all the information called for by the rules, and as I say, the
real problem is that not all patent applications and not all applicants
are the same and some are radically different from others.

The world technology that\'s going to be marketed and has, you know,
millions of dollars of research, applications filed in every country is
going to have a different disclosure problem than, you know, just as a
private inventor that invents, you know, something locally and the rules
don\'t account for that. They don\'t accommodate that. I don\'t know. I
don\'t have a recommended solution. I\'m just pointing out that is one
of the problems, and so as the earlier witnesses mentioned, sometimes
when you propose changes in the rules, you wind up with result that is
are unanticipated, mainly because the rules don\'t really apply equally
because the situations that they apply to are not the same.

COMMISSIONER DICKINSON: I have a final question. You addressed in your
testimony the incentives, I presume under Rule 56 for your members to
make full disclosure to us because the downside of not doing that is, to
characterize your testimony, I think rather extraordinary and very
potentially damaging to the attorney\'s reputation and livelihood,
however there\'s often a circumstance when obviously the client has to
communicate information to the attorney, however, and there obviously
could arise a situation in which the client does not communicate that
information to the attorney, the prior art information, the materiality
of it and that there may be a disconnect.

The applicant has a rather substantial downside to not disclosing as
well but not nearly as much perhaps as the attorney. Should there be a
requirement that attorneys inquire of their clients about prior art of
which they\'re aware, and material? Most, I assume do, but should there
be a requirement that they do to try to enhance that obligation?

MR. MAIER: Well, two things, two parts of the answer. One is generally
speaking when you\'re dealing with law, you can never simplify it. You
can only make it more complicated, and as Commissioner Mossinghoff
testified earlier, every rule you add is going to reduce the number of
valid patents, the percentage of valid patents because it\'s going to
provide an opportunity to question what was done.

Secondly, every time you add a rule, it always winds up being looked at
in an ex post facto way by the courts. In other words, you put the rule
in effect tomorrow. The day after that a patent which was issued ten
years ago goes to court, and the question is, well, now we have this
rule, did you follow the rule. Well, you couldn\'t have followed the
rule because it didn\'t exist then, but yet the courts take into account
patent office policy as the way things should be done.

So the rules always create a problem, but secondly, applicants, that is
companies, industries all over the world are looking at their patents
much more seriously now than they ever did as major, you know, financial
assets, as corporate assets. We are in the knowledge economy. Today
knowledge is the feed stock of industry, and the only way that you can
own or control now is through patents.

So people know that, and they know that their patents aren\'t going to
be worth anything unless they\'re forthright in disclosing information
in the patent office. Certainly, again speaking as a practitioner, this
is the first thing we do in talking to a big company. We say look, you
want stronger patents. The one single thing that you can do to make your
patents stronger and more effective is to disclose everything to the
patent office. That is the simplest and most effective step that you
could possibly take, and I think people realize that. I don\'t think
that you have a situation\--at least in the\--I suppose there\'s some,
you know, companies in the backwoods of some obscure country that maybe
don\'t follow the rules, but I think the world\'s main industrial
companies that rely on patents pretty well know exactly what the U.S.
Patent Office demands and understands the importance of disclosing
information.

I\'m not sure that no matter what you say in terms of new rules you can
come up with anything better than is already on the books and anything
more effective either.

COMMISSIONER DICKINSON: I appreciate that.

Any further questions?

\[No response.\]

COMMISSIONER DICKINSON: Hearing none, thank you very much. I appreciate
the testimony.

[9. CHARLES E. VAN HORN]{.underline}

COMMISSIONER DICKINSON: We will next hear from Charles E. Van Horn.
Again, I\'m a bit of a broken record today, but another great friend of
the Patent and Trademark Office and an individual with a long-standing
personal relationship here, and we\'re pleased to see him back here
today.

MR. VAN HORN: Thank you very much, Commissioner Dickinson. I\'m here
today on behalf of Intellectual Property Owners which is a trade
association whose members own patents, trademarks, copyrights, and trade
secrets. Our members file about 30 percent of the patent applications
that originate with U.S. inventors.

I\'m going to address today the 10 questions that you have thrown out
and provide a general response for IPO members. It\'s very difficult for
us to assess the difficulty or whether the most pertinent prior art is
cited in patents. Clearly, there are situations that we learn about
either through the citations and counterpart foreign applications,
validity studies, litigation, examination in related applications that
would demonstrate that the most relevant prior art is not of record.

Clearly, some of the PTO statistics from quality review would indicate
that that\'s not the case. Seventy-five percent of the re-examination
certificates at issue indicate that some claim is changed in some way in
each of those re-examinations. So there is certainly some data to
suggest that there are changes. The most pertinent prior art is not of
record. The extent to which that problem exists however, really requires
some type of study which has been suggested before.

For the most part, I think applicants\--moving on to number two\--do
submit the most relevant prior art that they are aware of, and although
there are reported decisions which would demonstrate that some people
intentionally do not submit the art that they\'re aware of, that
situation is generally rare. Certainly, it is more frequently that they
are charged with some type of inequitable conduct that, in fact, they
are found to have behaved in an inequitable manner. It is much more
likely, we think, that a competitor doing a validity search would find a
most pertinent prior art than a patent applicant would not intentionally
bring information that they\'re aware of to the attention of the PTO.

It\'s also a significant and related problem that the most pertinent
prior art is not identified by the patent examiner, either in the search
or in the information that\'s brought to the attention of the office by
the applicant. This is a problem of training and supervision and indeed
the turnover of patent examiners, and they leave before they gain real
experience and knowledge of the pertinent art.

Moving on to number three, the current rules and procedures that are set
forth in the regulations are generally adequate and effective, although
I must say I\'m not an unbiased observer of that, having had a lot to do
with the generation of those regulations, but I think it does provide a
fair balance between the need for the office to obtain the most
pertinent information early in examination process and the ability
of\--indeed the burden of the patent applicants to comply with their
duty of candor and good faith.

We applaud the office for taking a look at these particular procedures,
although the last proposal that was offered I believe received some
fairly negative comment from the public, but we think one should
continue to search for better ways to bring information to the attention
of the office.

One proposal that we would make is the office to reconsider the
requirement that the applicant provide, for example, copies of U.S.
patents. The reason that that was put in there early on back in 1977 was
because it was the best and most effective way to get a copy of U.S.
patents before the patent examiner. I\'m not sure that\'s true today
with the examiner having the opportunity to get any issued patent, U.S.
patent, before them by simply pressing a button at their workstation.

We also applaud the office\'s effort to accelerate its cooperation with
other significant examination and search offices as was announced in the
May 25, 1999 official notice relative to cooperative search exchange
between these three significant offices.

Whether prior art searches are conducted on a routine basis, I think is
largely dependant on the particular individual or organization. Some
corporations tell us that they do some type of search in each and every
application. The level of that search will highly depend on the
particular subject matter, the knowledge and experience of the
inventors, and indeed the needs of the business at that particular point
in time. Others will say they do not do a prior art search before filing
an application but are more focused on incremental commercial
developments and making sure that they are adequately covered in patent
applications.

Number five, information disclosure statements are frequently submitted
in patent applications. I know the office has done studies in 1986 and
1993 which would suggest that in those particular time frames when those
studies were done that information disclosure statements were filed in
somewhere between 40 and 60 percent of the applications that were filed.
I have not seen any recent effort to assess exactly the frequency with
which information disclosure statements are filed at that particular
time. However, there is some data to give you some background relative
to where we were 20 years ago as opposed to today.

Information is brought to the attention of applicants because of our
global patent strategy in foreign counterpart applications as a result
of validity studies or the result of licensing efforts, and to the
extent the application is still pending, in my experience this
information is brought to the office in a timely way in almost all
cases.

Moving on to number six and the real first suggestion of the PTO was
whether an applicant should be required to conduct a prior art search.
This was uniformly greeted as a bad idea and unlikely to provide the
kind of information that the PTO is really seeking. The kinds of
problems that it would create include what would be an appropriate
search. For example, there\'s a provision under Rule 102 where a
petition is filed to make an application special that some type of prior
art search be conducted and the results given to the PTO in order to
make a case special. In my personal experience, the search that was done
oftentimes was inadequate, and the petition was denied because of
inadequate search, and so there is a question about what is an adequate
search, who is going to monitor whether it\'s an adequate search.

Certainly, a requirement to conduct a search may add a significant cost
probably to those who are least able to afford the additional cost, and
many applicants do not have the kind of sophisticated search equipment
that is present and available to all patent examiners so that they\'re
really going to give you the kind of information that you really want. A
searching requirement would create an unnecessary risk to the patent
owner and the patent practitioner.

There\'s a case of General Electric Music Corporation where a patent was
held to be procured through inequitable conduct a search was not made in
compliance with the regulations for a petition to make it special. So
there is a risk involved in terms of the enforceability of the patent.
What the PTO\'s likely to get if this requirement is made is a lot of
information that is not relevant to patentability. The quality of the
search made by the practitioner who is trying to comply with such a rule
is likely to vary very greatly.

The PTO may, in fact, create new opportunities for former patent
examiners and indeed create even greater burdens on the PTO to retain
qualified examiners if they\'re going to start this cottage industry for
searchers. And finally, the PTO would shift to applicants the
responsibility to conduct the search which would mean either that the
patent examiner is going to do a duplicative search and perhaps that the
patent applicant will be paying for this particular service on two
separate occasions.

A requirement to submit all prior art\-- moving on to number
seven\--relied upon during the drafting of claims of a patent
application creates some additional uncertainties. You know, what is a
document or prior art which is relied upon? Consider, for example, a
corporate practitioner who was sitting amongst cases that they have
prosecuted in the last ten years and uses some of that knowledge in the
creation or formulation or preparation of a patent application. What
prior art is really relied upon for that particular effort?

So the difficulty of definition becomes one that it could create greater
costs in trying to comply with the requirement and also greater risk for
both for the patent applicant and the patent practitioner.

Number eight, applicants should not be required to submit all non-patent
literature directed to the same field of invention. This would obviously
create an significant amount of additional work probably for the patent
applicant or patent practitioner and the patent examiner. In many cases,
one would simply use some type of author index, provide a copy of all
the literature that this person authored or co-authored and provide a
copy of each of those documents to the office to let them discern what
is relevant and what is not relevant, or the practitioner would
undertake or the applicant would undertake to decide what is material
and what is not material, a both timely and risky venture at best.

So this type of requirement, we feel would raise an additional burden on
both applicants and the PTO and is really not likely to create any
better information during the examination process.

On number nine, it seems that the applicant should not be required to
submit any particular type of non-patent literature documents. Rather,
the focus should be as it is now on the type of information be on the
relevance of that information to patentability. It seems to me that if
you\--simply submitting the type of non-patent literature documents,
you\'re more likely to get information that is not material to
patentability and again increase both the burden on patent applicants
and the patent examiner. So the obligation to submit information should
focus on information that is most pertinent to the task before the
patent examiner.

In number 10, a general observation is that the office can take steps to
improve training and supervision of its patent examiners. It has
undertaken a very significant challenge in trying to hire, train, and
retain 700 patent examiners in at least the last two fiscal years. That
is a tremendous burden, indeed an opportunity and challenge.

It is unlikely that the patent examination process, at least the ex
parte system in the U.S. can be significantly improved outside of
improved training and supervision without significantly increasing the
cost of examination. The burden is on the patent applicants or the
patent examiners or substantial delays in the grant of the patent.
Improvements, we believe can be obtained by improving cooperation among
offices engaged in search and examination of patent applications.

One might consider the hiring of searching specialists. I know in the
area of biotechnology, the office took the position of hiring some
searching specialists to assist patent examiners not only in the search
but also in actually conducting searches for the assistance of the
examiner. There was one effort, a private sector effort in the past to
collect the information relevant to patentability in the software area.
I think it was called the Software Patent Institute. I do not know what
the fate of that particular organization or its utility to the office
was.

The re-examination process should be looked at in terms of making it
more effective by permitting participation by third parties and staffing
in a party\'s re-examinations with highly qualified patent examiners.
Under the present re-examination system, however, competitors are very
reluctant to bring prior art to the attention of the PTO because of the
significant variability in the quality of the examination, the inability
to participate in that process, and the inability to appeal a decision
by the patent examiner.

That concludes my testimony. I\'ll be very happy to respond to any
questions.

COMMISSIONER DICKINSON: Thank you, Mr. Van Horn. Mr. Kunin.

MR. KUNIN: Thank you, Mr. Van Horn, for your testimony. I have a general
question that relates to some observations that have been made in the
earlier part of this public hearing. There have been suggestions made by
at least two prior speakers with respect to seeking assistance from I,
Triple E or SIA. What is your view with respect to the PTO, for example,
publishing a Federal Register notice seeking the kind of assistance
which these individuals indicated might be helpful, and if we did so,
what do you believe would actually be the response to that kind of a
Federal Register notice in terms of providing technical assistance, in
terms of teaching examiners the current levels of knowledge in a
technology, or in creating data bases, or any other kind of thing?

MR. VAN HORN: I don\'t have the benefit of IPO\'s views on that
particular question, but I would be happy to share with you a personal
view which may or may not be consistent with what IPO would think, but
it seems to me those ideas are not new ideas. They\'re something that
have been tried in the past, and indeed, for all I know, are continuing.

The Patent Institute, for example, had a collection of information of,
you know, what the office\'s particular experience was with that, and
why it is no longer active and vibrant, I have no idea. Certainly, the
office has always encouraged people to come into the office to provide
seminars on new technology, and indeed has made that a practice over a
large number of years.

I think the office should reach out as they have done in this particular
request for public comments for any ideas, good or bad, that would
improve the information that\'s available to the patent examiner. Of
course it has to be reliable information. It has to be information that
you can verify it\'s particular date and what existed at what particular
time. That\'s of course very important.

COMMISSIONER DICKINSON: Other questions?

COMMISSIONER GODICI: Just a clarification. You mentioned the fact that
significant improvements may not be there unless we wanted to have a
significant increase in fees or a significant increase in the time. Am I
understanding that the IPO considers that we\'ve reached about the right
balance with respect to fees and timeliness and that we should
concentrate the efforts more on the areas you\'re talking about in terms
of specific one-on-one training and supervision and so on?

I guess the real question is have we set the right balance with fees and
the pendency targets that we\'re shooting for?

MR. VAN HORN: Yes. I really can\'t answer that question on behalf of
IPO. I don\'t know that it\'s been discussed, quite frankly. I think the
office should always continue to seek out ways to improve its services
as it has done with this particular offer for public comments and
hearing and continue to seek to improve those services and the quality
of its product.

I know some suggestion has been made, for example, for additional time
and additional cost. It has always been a problem in terms of how do you
capture that additional time in terms of the quality of the work product
or the rapidity with which you can examine the application, and is the
quantum of improvements that you can get by this additional cost, you
know, worth\--is it that kind of value? And it\'s a very difficult thing
to assess.

In terms of where you are right now, I don\'t know. In some areas I\'m
sure it\'s very good. In some areas, I\'m sure it\'s very bad, but I
couldn\'t identify those areas for you.

COMMISSIONER DICKINSON: Let me ask this question. You have a long and
varied experience here within the office as well as without. Either
based on that individual experience or the feedback of your members, how
would you characterize the compliance with Rule 56 that we experience
here? Are we being provided with the most material prior art of which
the applicants are aware, do you believe?

MR. VAN HORN: Yes, I do. Obviously, there\'s some exceptions. You can
see those in the reported cases, but the efforts of certainly people
that I work with and people that I counsel, I believe clearly that\'s
the case, that people are trying to comply. The procedures are fairly
well defined in terms of how you get information brought to the
attention of the office, that there are many occasions\--I don\'t know
what the frequency is\--where cases have been withdrawn from issue, from
consideration of prior art that just came to your attention.

The frequency of which that particular event is happening, I think is
one indicia that people are certainly trying to comply with their duty
of disclosure.

COMMISSIONER DICKINSON: Other questions?

\[No response.\]

COMMISSIONER DICKINSON: Thank you very much, Mr. Van Horn. I appreciate
it.

Consistent with our approach to customer service, Mr. Van Horn suggested
that we hire his searching specialist in the computer and software
areas, and I\'m informed by our assistant commissioner we have done so.
So very good. I hope you appreciate the rapid response to those
suggestions.

[10. JOHN R. ORANGE]{.underline}

COMMISSIONER DICKINSON: The next witness is Mr. Orange from FICPI, and I
will apologize in advance. I need to absent myself at some point here to
fly to the west coast. So I will turn it over to Commissioner Godici
when I do so.

MR. ORANGE: Thank you, Mr. Commissioner and members of the panel. My
name is John Orange. I\'m president of FICPI, the international person
to FICPI, and I will not try to repeat the eloquent way in which Mr.
Jennings announced the origins of that acronym.

We are an organization of intellectual property practitioners with over
4,000 members in approximately 17 countries in the world that include
all the major IP countries. We have NGO status at WIPO. We participate
in the advisory commission in the OPM patent office and are generally
involved with matters relating to intellectual property around the
world.

What I would like to do today is to address the issues of identification
of prior art from an international perspective rather than a purely U.S.
perspective. Mr. Jennings from FICPI-U.S. has already addressed some of
these issues from that U.S. perspective.

At the outset, I think it should be noted that many practitioners and
applicants outside of the U.S. find the U.S. practice of information
disclosure statements both unusual and burdensome, and in the context of
the patent cost containment discussions in which FICPI and, indeed, the
U.S. PTO are actively participating, the need to comply with the IDS in
European circles is seen as a major cost factor in getting patent
protection, and I think it\'s fair to say that any increase in those
requirements as might be suggested in some of the questions would be
seen in those circles as counterproductive.

Having said that, however, the objective at the U.S. PTO to enhance the
confidence and the validity of issued patents is to be lauded, and
provided it can be done in a cost effective manner, it will find support
of the practitioners internationally. I don\'t think, however, we should
lose sight of the fact that no examination can be perfect, and the
acquisition of prior art can never be exhaustive.

It\'s important to recognize that there is a law of diminishing returns
so that a doubling of effort and costs will not necessarily produce more
relevant art. The challenge presented by the U.S. PTO, therefore, is how
to balance the requirements of cost and effectiveness in the information
retrieval.

In reviewing the questions posed by the U.S. PTO, one fundamental factor
that mitigates against the overall objective of identifying the most
pertinent prior art may be considered to be the definition of prior art
itself under section 102. In particular, 102(a) and 102(c) qualify a
significant body of activity as prior art that is simply beyond the
knowledge of the applicant. By contrast, the definition of prior art in
a first-to-file country is much more certain, mainly that which is made
available to the public before the filing date and is more ready
identifiable. So perhaps if one of the objects is to enhance the
confidence in the validity of issued patents, then a fundamental change
in entitlement under the U.S. law would be one way to achieve that.

I\'ll now turn to the specific questions. Is the most pertinent art
being considered by the patent office? Yes, I believe it is, at least as
far as the applicants are aware. The documents that are available to the
U.S. PTO through the data bases that Commissioner Dickinson referred to
earlier, when coupled with the existing obligations to disclose what the
known to the applicant, suggests a reasonably comprehensive solid search
has been conducted for the typical application; however as noted above,
much of that art is simply not available and may not even be part of the
literature.

If we consider the art that should theoretically be available to the
applicant, then clearly non-patent literature is the most difficult to
identify. I don\'t believe this is necessarily restricted to emerging
technologies. It\'s equally difficult to identify what has been
published by way of, for example, technical manuals or service bulletins
in the mechanical or electrical areas. Examiners and applicants simply
do not have this type of material available to them.

Do applicants submit the most pertinent prior art, and are the current
rules adequate and effective? Yes, I believe they do, and they are
adequate and effective. Not to comply with those requirements exposes
you, as the representative from the ABA mentioned, to very harsh
remedies, and I don\'t think anybody willingly does that. To suggest
that there may be even harsher remedies when art is overlooked would
lead, in my opinion, to a devaluation of the value of the patent and
would, in fact, bring the whole patent system into disrepute where, for
example, the existence of a piece of prior art in a particular
applicant\'s German research establishment could be used as a basis for
rendering invalid or enforceable an otherwise value U.S. patent.

Are prior art searches typically conducted? I believe this varies from
country to country, and it should not be assumed that all practitioners
in all countries of the world have the search facilities available that
exist in the U.S. PTO. The public search room of the U.S. PTO is a
resource that should be jealously guarded. It\'s an exceedingly cost
effective way of conducting the search.

In other countries such a facility may not exist or may not be available
to the public. In some cases, the cost of conducting a search with these
limited facilities may indeed be greater than the cost of filing
applications. The advent of electronic data bases and searching by the
internet has helped greatly and has indeed enabled applicants to conduct
their own investigations, but to use these effectively, sophisticated
search tools are needed, and those must be made accessible to the
practitioner at a nominal cost and should be included in the search room
whenever practical.

Are IDSs frequently submitted? I think they are invariably submitted
where art does exist. I think it is well known within established
practitioner circles that there is a need to file prior art in the U.S.,
and the consequences for not doing so are significant, and so it\'s
usually complied with.

What types of art are likely to be submitted? Well, I think patent art
is the most likely to be submitted under IDS, and the least likely to be
submitted is non-patent commercial literature. Now, it\'s probably not
any intention on the part of the parties. It\'s just a common fact that
such literature is probably spread throughout an organization and is not
well cataloged or easily retrievable.

Should a search be done prior to filing? I would say certainly not\--or
should a search be required to be done before filing? I should say
certainly not. I don\'t think such a search should be compulsory. It
would increase the cost. It would introduce delay and would probably
open up a whole new area of litigation. There is also a question from an
international basis of where such a search, if mandated, would have to
be done. Are you going to tell someone who has searched in the Hague in
the European patent data base that their search is not sufficient to
comply with the requirements of U.S. filing? I don\'t think that would
be too well received on an international basis.

Should applicants be required to submit all prior art relied upon?
Again, I think this is much too broad. It\'s been suggested in
discussions that we\'ve had within FICPI that this would include
textbooks, dictionaries, even high school notes. I think the present
requirements to submit pertinent art are adequate to ensure that you get
what you need, and that is enough.

Should applicants be required to submit all non-patent literature
directed to the same field of invention with common authors? No, again,
I think that\'s too burdensome. The present requirements for all
pertinent information is sufficient, and people will comply with that.

What type of non-patent literature document should be required? Again, I
think the current rules requirement that require you to submit is
pertinent regardless of the type of literature you are submitting.

Now Number 10, any suggestions you have to obviate the problem, is, I
believe, an opportunity to set out a certain wish list or some
suggestions from FICPI because we always like to be practical rather
than critical. Firstly, I think a deposit system should be made
available for non-patent literature. This has been alluded to by SIA and
also by IPO but not just for specific areas. I think a properly
classified, readily accessible deposit system would be attractive for a
number of reasons, not only to establish the data base but also for
defensive purposes.

We are frequently asked by clients how they can ensure that other people
did not get a patent for something that they may want to use but are not
interested in pursuing by way of a patent. There is no readily available
way of doing this, and I think a deposit system available through the
U.S. PTO for the documents they want to submit would be great step
forward. You can ensure access to the search tools that are developed
within the patent office for patent examiners to the general public to
enhance their searching capability where the time constraints may be
different from those of the examiner.

This also requires proper training which can be done on a cost recovery
basis, and I don\'t think anybody would have a problem in paying to
attend a course that allowed them to search more effectively. Provision
of links to academic data bases and coordination or harmonization of the
classification systems is something that could very well enhance the
amount of prior art that the average patent practitioner can access.

A particular problem that seems to occur with the submission of prior
art from patent circles is the staggering of examination as between
various offices around the world. There are two ideas that FICPI has
that might address this. First, some years ago we suggested the
incorporation of a supersearch or supplementary search into the PCT by
which the applicant could request a search in another examining
authority rather than preliminary examination in his examining
authority. This would allow, for example, an applicant to have an
initial search done by the U.S. PTO and subsequent searches at his
expense done by the JPO and EPO. As we\'ve seen from Mr. Cattone\'s
graphs this morning, cumulative searches yield better results, and I
think this is one way of getting the applicant to pay for it which will
give great benefit to applicant.

A further way of reducing the stagger between applications and the
availability of search results would be to remove the reservation for
the 102(e) date under the PCT. At present, there\'s a great incentive to
file as early as possible in the U.S. for foreign applicants to preserve
their 102(e) date, and that means that this U.S. application can go
through before the results of the search are available from the PCT or
perhaps one of the other significant examining authorities.

Other items, under 11, I was not going to suggest this, but since Mr.
Van Horn did, furnishing copies of patent literature, I think has been
likened to shipping half of the forests of Europe across the Atlantic
each year, and I think if we could avoid that, it would be of great
benefit to the whole IDS system. I think clarification of the
translation needs for prior art submitted in non-English languages would
help to clarify exactly what needs to be translated and what are the
obligations of the patentee or the applicant to do that.

Those are FICPI\'s comments from an international perspective, and I
would be very happy to answer any questions you may have.

COMMISSIONER DICKINSON: Thank you, Mr. Orange.

Questions? Mr. Kunin.

MR. KUNIN: The concept of the supersearch was brought up many times
among both the PCT assembly and PCT ad hoc, and of course it was not
supported. Part of the aspect of the problem of that is that it favors
people who use PCT to the disadvantage of people who don\'t use PCT
because of the PCT time frames which force earlier consideration of PCT
under the treaty and then subordinates national applications.

Do you think that it\'s realistic to believe that the supersearch
concept, if brought up again, would find support?

MR. VAN HORN: Well, whether or not it would find support, I\'m not sure,
but I think the concept is still viable. I understand that one of the
major concerns was loss in revenue to the international preliminary
examination authorities who would not see the examination fee because
searches were being done in other offices instead of the preliminary
examination. From an applicant\'s point of view, if you get a search
from, say, the EPO that shows that the only art they have found is
background art, then what is the value to you of going ahead with the
preliminary examination, because you have already got a reasonably
positive indication of allowability.

It is not better to spend the money, the applicant\'s money in having
the search done in the JPO or in the U.S. PTO or in the Australian
patent office or the Russian patent office, wherever, to try and find
the piece of prior art that may be relevant and will emerge if your
patent every gets into litigation. So I think the concept is viable. I
have never fully understood why it did not enjoy support.

In terms of deferral, that is your pushing local applicants to the back
of the lineup. By having a supersearch, you may find there\'s less
examination time required in those offices so they would, in fact, be
able to advance the local applicants.

COMMISSIONER DICKINSON: Let me ask a couple of quick questions because I
need to leave. You indicated that IDS\--you believe IDSs are filed where
the art exists. Our statistics show that IDSs are filed in about 58
percent of the cases. So I\'m trying to recognize whether you believe 42
percent of cases don\'t have any relevant prior art associated with
them; and I guess by extension I\'ll ask the question I asked the
previous witness, should we require IDSs and/or a statement that no art
has been promulgated which we believe should be disclosed on an IDS?

MR. VAN HORN: I think the current rules, interprets that you do require
IDSs where art exists or where the applicant knows about it. From my
experience in my office\--I\'m from Canada, so we have fairly direct
correlation to what goes on in the U.S.\--the majority of\--well, all
applicants are asked to identify art. Not all applicants have researched
them prior to filing. They choose not to, and that\'s their choice, and
we cannot compel them to.

So in a significant number of cases, there is no art that the applicant
brings to the attorney\'s attention for filing, but I think\--I don\'t
think you can say 42 percent of the people are not being asked. I think
every one of the people are being asked, and what you get is what
they\'ve been told about.

COMMISSIONER DICKINSON: Let me ask the follow up question that I asked
Mr. Maier. Should attorneys be required to inquire of their clients of
art of which they\'re aware?

MR. VAN HORN: Well, again, I think de facto they are and they do. It may
not be the letter of the rule that requires them to make that inquiry,
but from a purely professional ethical and practice point of view, it\'s
such a significant pitfall if you don\'t make that inquiry that you do
it inevitably, and I suspect most automated diary systems that all
attorneys have will spit out the letter requesting submission of prior
art.

COMMISSIONER DICKINSON: Let me ask another question that relates to your
comment with regard to making our internal search tools available to the
public, an idea that I have to tell you I generally support. One of the
challenges we face, though, is that when we get access to search data
bases. The owners of those data bases license them to us, and those
licenses often restrict our ability to make them available to others,
certainly to make them available generally to the public. They
presumably feel that would gut the value of the license if it was
available publicly.

Do you see any way around that problem or any opportunities we might be
over looking?

MR. VAN HORN: Well, I think the U.S. PTO also makes a lot of information
available to the owners of commercial data bases, and there is a quid
pro quo there, I think. Certainly, I would be not enthusiastic to see
the base data that comes out of the U.S. PTO such as you have on the web
site now. That is useful data, but it is not as useful as when it\'s
coupled with sophisticated search tools, and to have that partitioned
off and say we\'re selling that additional information to commercial
organizations so that the average applicant now has to engage in a
license with some of these commercial vendors and the computer time can
get very expensive, I think that would be a retrograde step.

So maybe there is a bargaining to say if you need to enhance the data
that you\'re getting from the U.S. PTO, we need at least some access to
your commercial data bases.

COMMISSIONER DICKINSON: Thank you.

Any other questions? Mr. Drost. I\'m going to take my leave.

MR. DROST: Could you expand on your proposal to have a deposit system
for non-patent literature? How do you envision that working?

MR. VAN HORN: Well, it may be rather grandiose, but we all have to start
somewhere, I guess, and I go back to when I started in the profession
20-something years ago. I worked for Massey Ferguson in the U.K., and
what we had there was in our library, in our patent library, an informal
classification system that basically collected all the brochures,
manuals, any piece of information, articles, according to what piece of
equipment it may be related to. And over the years this grew up to be a
very valuable resource, and it was a cost classification, and it was
fairly easy to retrieve.

Apply the same type of principles here that if a client has a bulletin,
service bulletin, whatever on their new piece of software that they are
implementing or the patch they\'re putting into their software. If they
could deposit that service bulletin with the U.S. PTO to get a data
filing for it, to get it classified under the normal U.S. classification
system, to have it included in the prior art listing, classification
listings, I think that would give a good resource to at least it would
capture those transient pieces of information that otherwise flow around
but everybody knows they\'re there, but they can never find them when
they need to.

MR. DROST: Thank you.

COMMISSIONER GODICI: Thank you very much.

[11. J. MICHAEL THESZ]{.underline}

COMMISSIONER GODICI: Our next speaker is Mike Thesz, representing the
AIPLA. Mike.

MR. THESZ: Good afternoon. My name is Michael Thesz from the law firm of
Morgan, Lewis, Bockius, and I am here today to speak on behalf of the
American Intellectual Property Law Association. The AIPLA appreciates
the opportunity to present its views of the notice of public hearing and
request for comments on issues related to the identification of prior
art during examination of patent applications.

The AIPLA, as you know, is a national bar association of more than
10,000 members engaged in private and corporate practice and government
service and in the academic community. The AIPLA represents a wide and
diverse spectrum of individuals, companies, and institutions involved
directly or indirectly in the practice of patent, trademark, and
copyright unfair competition law, as well as other fields of law
affecting intellectual property. The AIPLA will be submitting written
comments before the due date published in the notice.

First of all, I\'d like to say that the AIPLA certainly supports the
interest of the Patent and Trademark Office in ensuring that patent
examiners consider the most pertinent prior art during examination of
patent applications. In general, as I will discuss a little bit later,
we feel that the PTO is doing a good job in providing a good quality
examination at a reasonable cost.

That being said, I will comment on the questions raised in the request
for comments, and as I said, our written comments will provide more
detailed answers.

With regard to whether the most pertinent prior art is being considered
by patent examiners during examination of patent applications, as others
have said today, I think it\'s very difficult to make an objective
assessment of the extent to which the most pertinent prior art is being
considered during examination, and as also was said, I think to rely on
subjective evidence or assessments based on one particular case or even
worse on rumor is not reliable. One place that the PTO does have some
statistics, I would think is from their quality review program, and that
could be looked to to get some indication at least as to whether the
most pertinent prior art is being considered during the initial
examination.

Do applicants submit the most pertinent prior art that they are aware
of? We think that responsible applicants and their representatives do
submit the most pertinent prior art that they are aware of in connection
with a patent application so as to obtain a strong patent. There
continues to be reported decisions of the federal reports where patents
are held unenforceable for failure to comply with the duty of
disclosure, but we think that the cases where the courts find that
material prior art is intentionally withheld from the PTO are relatively
rare.

Competitors are highly motivated to find prior art, and so situations
where a competitor gets in a litigation and conducts a validity search
and finds prior art which was not previously considered, I don\'t think,
surprisingly, show that a far greater number of those type of cases are
found that where a patent owner intentionally withholds prior art from
the PTO.

The AIPLA feels that the current rules and procedures for submitting
prior art during the examination of a patent application are adequate
and are effective. We feel that they provide a fair balance between the
need of the PTO to obtain pertinent prior art early in the examination
process and to complete that process in a timely fashion, and the burden
is on patent applicants to comply with their duty of candor and good
faith.

Of course, the PTO should consider changes that would reduce the burden
on applicants. For example, several people have mentioned the submission
of copies of references along with information disclosure statements,
and we certainly agree that the PTO should accelerate its efforts to
share searching information with the other significant search and
examination patent offices which I know you are already doing.

Are prior art searches typically conducted before filing a patent
application with the U.S. PTO? We think not. A search may be made where
an applicant is entering a new field and when there is some doubt about
making the significant investment or preparing and prosecuting a patent
application or where it is desirable to obtain some background
information to assist in the writing of the specification and the
drafting of the claims. Also, in that process, if a search is made and
relevant documents are identified, I believe that they are identified
usually in the patent specification or in an IDS or both.

Are IDS statements frequently submitted? Our members say that, yes, they
are frequently submitted during the course of examination of the patent
applications. Many applicants have a global patent strategy, and
relevant documents are frequently identified in counterpart applications
in other countries. Relevant prior art also may be identified through
validity studies of related patents and through licensing efforts, and
the type of prior art submitted, patents, foreign patents publications
depends on what is identified as relevant rather than depending on the
type of document that exists.

I think it also depends on the technology. I think some technologies the
inventors tend to publish more before filing, and so there are always
more prior art available for submission in those type of applications.

Should applicants be required to conduct a prior art search and submit
corresponding search results including where they search to the PTO in
filing a patent application? The AIPLA thinks that applicants should
definitely not be required to conduct a prior art search when filing a
patent application or to state whether a search was conducted. The
problems created by such an approach would be significant, but the
benefits would be few if any.

I think some of the problematic issues have been discussed by Mr. Van
Horn, and I won\'t repeat them here, however one other problem that
comes up is that often applications must be filed within a short period
of time to preserve important patent rights, and there physically may
not be enough time to have a search adequately done.

Number seven, should applicants be required to submit all prior art
relied upon during the drafting of the claims of the patent application?
The AIPLA believes that a requirement to submit all prior art relied
upon during the drafting of the claims of a patent application is
unnecessary and may exacerbate the PTO\'s concerns regarding getting too
much prior art to consider in some applications. Most practitioners will
submit such art today in an IDS, as I\'ve said.

One possible draw back for the PTO is that a lot of prior art may be
considered in the drafting of the claims of an application, but it may
not be considered by the practitioner to be particularly relevant or to
be material to the claimed invention. Would this be required to be
submitted? Would this be prior art relied upon during the drafting of
the claims of the patent application? Applicants have no duty at this
point to submit such information which is not material to the claimed
invention, and I think a requirement by the PTO that such information be
submitted which is not material would not be wise.

As a practical matter, if there was such a requirement, I think most
applicants would submit everything from their files, and I think that
would be counterproductive to what the PTO would like.

Question eight, should applicants be required to submit all non-patent
literature directed to the same field of invention attributable to,
authored by, or co-authored by the applicant? The AIPLA thinks that
applicants should not be required to submit such information. Such a
requirement would necessitate a significant amount of work and cost on
the part of applicants, and, again, the information would not
necessarily be material to the application being filed. Again, a wise
applicant would be prone to submit all information, all publications
whatever they might be to the office for their independent
consideration, which I think would be counterproductive to efficient
examination process. So to adopt this requirement would increase the
cost and burden on both applicants and the PTO and would not be likely
to result in assisting the PTO in identifying the most pertinent prior
art during the examination process.

We feel that applicants should not be required to submit as a matter of
course any particular type of non-patent literature documents even in
specific types of application. The requirement to submit information
known to be material to patentability should be the limit of
applicant\'s duty to the PTO. Any general requirement that focuses on
the type of information as opposed to its relevance to the issue of
patentability is more likely to increase the burden on both applicants
and the PTO for handling information that is not relevant or material to
patentability, and information which is material will obviously take
many forms depending not only on the invention and the practices and the
technology to which the invention results, but also on the activities of
the inventors prior to the filing of the application.

Chapter 2000 of the Manual of Patent Examining Procedure contains
already discussions of\--examples of material information, and it also
contains a checklist as an aid for compliance with the duty of
disclosure. The obligation to submit information is more properly
focused now on the information most pertinent to the task before the
patent examiner.

In summary, I would say that once again that the PTO is doing a good job
in providing a good quality examination for a reasonable cost. We feel
that the ex parte examination system in the United States cannot be
significantly improved without significantly increasing the cost of
examination, the burdens on applicants and patent examiners and/or
delays in the grant of a patent.

There have been examples stated today which we agree with as possible
areas of improvement. One, again, would be cooperation among the various
patent offices and exchange of information on searches. Also, as
previously mentioned, legislation is being considered which might make
re-examination more effective and more attractive to participation by
third parties.

The AIPLA appreciates the opportunity to provide comments on the
specific topics under consideration by the PTO. We look forward to
working with the PTO to achieve its goals in ways that will not
necessarily\--I\'m sorry\--in ways that will not unnecessarily burden
applicants or their representatives. In fact, we are anxious to work
with the PTO to develop workable solutions to the problems it has
identified. Thank you.

COMMISSIONER GODICI: Thank you, Mr. Thesz.

Steve?

MR. KUNIN: Thank you, Mr. Thesz, for your testimony. I\'d like to
explore with you perhaps an item that you have addressed and other
previous speakers have addressed, and that is the question of the extent
of collaboration among offices. I think, as you\'re aware, nearly 50
percent, somewhere between 45 and perhaps 48 percent of applicants for
U.S. patents are foreign origin, and of the remaining 50-plus percent of
U.S. applicants who are obtaining protection in the United States also
seek protection in other countries.

And Mr. Orange mentioned the question or the problem of misalignment of
timing of action by the office. What if any views might you have with
respect to trying to get\--and perhaps this would require an
applicant\'s cooperation because there are special procedures, at least
in the JPO and the EPO upon request by the applicant that you can adjust
the order and timing of examination to perhaps align with what is done
in the United States.

So, you know, what if any are your views with respect to things that can
or should be done with respect to forcing alignment or trying to get the
applications that essentially are the counterpart applications that are
handled in multiple offices handled in a way to perhaps reduce the
duplication of effort and perhaps produce a better composite result?

MR. THESZ: The AIPLA did not consider specific examples of how to
suggest that the time periods among the various offices be coordinated,
but I think one relatively simple example of things that the office
might undertake would be in PCT cases where the search is done in a
foreign office to make sure that the search results and copies of search
results are in the application when the U.S. examiner picks up the case.

I think there are some practical, relatively minor steps like that that
would be helpful, but we would\--the AIPLA would be glad to consider and
enter into further discussions with you about ways that we could foster
better cooperation.

MR. DROST: Mr. Thesz, question eight, I understand AIPLA objects to the
proposal to require the submission of non-patent literature to the same
field of invention. It is because of the\--that there\'s no definition
now for same field of invention? Obviously, if we published a rule, we
would have a definition, and we would tighten that up a bit, or is it
just that anything that goes beyond 56, Rule 56, the AIPLA is opposed
to?

MR. THESZ: Well, you could attempt to define it, to define what the same
field of invention is, but I think practically the result would be that
even a good faith attempt to\--on an applicant\'s part to determine
whether they\'ve complied with it or whether they meet that definition
of the same field of invention would make the patent vulnerable to an
attack on the basis of inequitable conduct.

We already have a rule in place that went through an extraordinary long
rule making process to balance the concerns, and Rule 57 and I think
Rule 97 and 98, I think strike the proper balance, and I think it\'s
dangerous to do something that\'s going to affect that balance unless
you\'re going to be assured of a very good result.

COMMISSIONER GODICI: Thank you very much, Mr. Thesz. I appreciate it
very much.

Before we go on to our final speaker, I\'d like to find out are there
any other people here today that would like to testify or have signed up
other than Mr. Wise?

\[No response.\]

COMMISSIONER GODICI: Okay. So Mr. Wise will be our final speaker.

[12. GLENN E. WISE]{.underline}

COMMISSIONER GODICI: Mr. Wise. As with many of our other speakers, Mr.
Wise is a friend of the PTO and has been involved in many committees and
interactions with the PTO to help us improve our processes, and we
appreciate very much that you\'re here.

MR. WISE: Thank you, Commissioner Godici, and thank you for the
opportunity to present some remarks. I\'ve had laryngitis the last few
days, so I might have to pop a cough drop during this episode.

My background is that of a patent agent. I\'ve been in practice,
primarily in search practice for a little over 43 years. I was also an
examiner and a classifier within the office, and I am also an inventor
and have been granted 16 U.S. patents in times past, not for a while,
but I intend to file some more when I retire which won\'t be too long
probably.

My remarks are not going to be directed to the questions posed by the
notice of hearings directly, but a lot of them will apply to various of
the questions as you\'ll see as we move along, and such remarks will
touch a considerable number of different areas and will present
different ideas and suggestions, as other speakers have, all related to
increasing the reliability and quality of the prior art developed both
by the examining corps and by the public.

I\'m going intersperse several asides in these remarks. One thing I
might say at this point is that within my experience, and particularly
within the last 20 years since the duty of candor has really risen its
head, the burden of examination has shifted somewhat to the public side.
Twenty years ago there was hardly any prior art cited in cases. Maybe
25. I forget. I didn\'t actually pull a lot of earlier patents to make a
statistical analysis on this, but let\'s say 20 years ago you might have
two or three patents or publications mentioned in column one of a
specification but not certainly page after page of ideas and disclosure
material which we find often now and in which, in my opinion sometimes,
as I\'m sure in yours, tends to obscure the invention a little bit.

So the public in effect in a lot of cases has taken over part of the
examining process. If they hadn\'t done this and weren\'t submitting the
prior art they are, I feel that your examiners would be nowhere near the
state of quality that they have now, although from my point of view,
particularly because I do a great many validity searches, the process
still has quite a ways to go both internally and externally.

For the time allotted for examination, I think the examiners do a heck
of a job. It\'s not unusual when I get a validity search to, quote,
knock out at least one to five claims, sometimes all of them, but I may
spend five to ten to twenty times as much time as the average examiner
is able to spend and keep up his production, and I don\'t think we
probably want to pay the examiners, particularly the senior ones, 20
times the 100,000 they might be making at this time.

At this juncture, in my opinion, we have the greatest resources
potentially available for search that we\'ve ever had since I\'ve been
in business certainly, and I say potentially because there are some
concerns and situations that I\'m going to discuss. There are six major
concern areas.

The first of them, and I was\--wanted to congratulate Commissioner
Dickinson before he left on recognizing the problem, was the lack of
classified foreign filings. For nearly four years now, as you gentlemen
know, there have not been very many, in fact let\'s say almost no
classified foreign patents placed in the paper files. Now recently
you\'ve come up with systems that are somewhat attacking the problem,
such as the West Search System which the corps has and the outside
doesn\'t yet have and hopefully will get soon; but for those who are
used to the paper classified, the lack of those four years, particularly
as technical fields are moving so rapidly now days, we wonder how many
references we\'re missing.

There\'s just no way of knowing. Hopefully quite a few of them are being
filed in IDS format. We, as was discussed in the public search area,
hope that the electronic capture will be sufficient to replace the
paper, although I\'m not from Missouri, but I\'m from a show-me-type
generation, and I have my fingers crossed that this proposal to classify
foreign patents will turn out to be a very useful addition to what we
now have available.

The second concern that I\'d like to touch on is the decrease in
reclassification capability by the decrease in staffing of the
classification or division or whatever it\'s called at this moment. I
have difficulty keeping up with sectors and groups and all this sort of
thing. If I am correct, about half of the\--you have about half of the
re-class staff that we had four years ago or, say, three years ago, and
a lot of them, if I get the right input from people I talk to, and I\'m
around various groups and sectors every day, quite a few of them are
doing what I\'m going to call clerical work because they\'re parcelling
out incoming applications rather than doing any substantive re-class.
And although the figures in the annual report might show not too big a
drop in re-class, I don\'t\--I and other searchers, I don\'t think count
a re-class to be where you put a decimal after what was a full numeral
and things like that. You know, that\'s playing with the numbers.

So I believe that emphasis should be given to rebuilding the
classification effort because you have more and more patents issuing,
and a lot of categories are getting too big to handle either in the CSIR
image workstation by subclass or in the paper. As an analogy, I might
suggest that one consider Bartlett\'s Familiar Quotations, which I think
most of us have a familiarity with. Let\'s suggest that they stopped
putting an index of authors and/or first lines in there, and you tried
to use that book after several years, and let\'s say that this was done
back in 1930. You would miss all of Yogi Berra\'s good stuff, you know,
without having to go page by page. Well, that\'s the way we see the
likes of classification here, that it could turn into something like
that.

The third situation or problem that concerns me is the down time on the
PTO\'s various automated search systems, and it\'s hard to predict when
or how or what. We have a system in the search room known as the Casis
CD-Rom system which had been operating, albeit somewhat behind issue
dates, quite well for several years, and in the last quarter, that
system must have been down 50 to 100 times within a month or two, and
the report from the director of information dissemination\'s office was
that they were unable to pinpoint the problem.

They now have apparently pinpointed it because for the last three or
four weeks it\'s been up steadily, but this is a system that has been up
for years and then suddenly boom, and this can happen not only from
updates, which apparently this has something to do with in this case,
but acts of God for example. New York as you recall was recently out,
downtown Manhattan for about 200,000 people.

The point I\'m trying to make is that down time really impacts your work
planning, and I don\'t know. The corps seems to take priority. If
there\'s down time on the system, it\'s more often the public than
if\--yeah, the public system than it is the corps as far as I\'ve been
able to determine, but examiners have also mentioned that there\'s down
time.

I\'m going to mention some studies at the end of my remarks that I would
propose, and one of them includes better log keeping of down time.
Fortunately when we do have down time now, we still have the paper
classified files to fall back on, but the rumors of their demise keep
popping up, and hopefully no one will do anything drastic, and in fact
Commissioner Godici says they won\'t until they have a reliable
automated system. They won\'t do any getting rid of the paper classified
files in mass.

The fourth situation or concern relates to lack of prioritibility in
fast moving high-tech areas, and although I do not generally operate in
these areas, I do have an idea that might alleviate the situation
somewhat and blends in with the concept proposed by the last gentleman,
whose name I didn\'t catch because I couldn\'t quite hear everything,
concerning a deposit system.

The patent office, if I understand correctly, is about to begin imaging
up to 10 percent of the files that they issue beginning next January. I
think the percentage may be a little\--quite a little optimistic based
on the fact that if we multiply out the number of pages in the average
file times 10 percent of the issue, we\'re probably looking at 80 to
100,000 pages that they\'re considering imaging and digitizing on a
given issue week.

That would be all right if they were self-feeding, but you\'ve seen file
histories where the papers are torn in half. The ribbons would catch in
the machinery, etc., etc. So it would be all a hand-feeding process, and
I think they\'re way to optimistic.

But let\'s say that the program does start, even one percent of the
issue. It would give an opportunity, it seems to me, to capture at that
time not only the prosecution of the file but also any publications in
areas that you want to capture, let\'s say in the Class 700 area, so
that you begin building an in-house data base which is lying dormant now
in your warehouse for already patented cases.

There are probably thousands and thousands of prior art references in
high-tech areas that are lying there, and they are not usually
capturable in a full text search unless you\'re lucky because you don\'t
know what the title of Joe Duke\'s highfalutin paper might have been,
and you may guess, luckily, but if you have the full text of that rather
than just the citation from the publication section of the patent copy,
you\'re more likely to get some meat. So I would recommend that that be
considered as a adjunct to their capture.

If I understand correctly, the purpose of the capture is to digitize and
make it immediately available on our express machines in the search room
as well as for document preparation and the certification in other areas
and perhaps for electronic transmission overseas in the case of priority
documents or whatever, not that you would send a patent file over there,
but it would be a learning technique, if I understand correctly.

If such capture should prove useful, and of course as I mentioned before
you could keyword search those documents, and it might be possible to
make some arrangement with other organizations such as this Software
Patent Institute that I don\'t know much about, but there would probably
be considerable redundancy in what was captured\--what you propose to
capture versus what is already available. So before capturing and
putting it on your data base, there would be a check to see is this
redundant or is it a new item sort of thing.

The fifth concern that I have relates to examiner training which has
been mentioned considerably here and also it applies to the public
systems. Examiners keep getting new, almost every other month it seems a
new data base that they\--that sounds wonderful, but until they know how
to use it and they\'re able to work it into their agenda, it might as
well be hieroglyphics. The same thing with the public, although not as
frequently as examiners have been getting them.

The last public system, for example, the CSIR image station, is barely
20 months, and yet the new monitors and controllers are already in place
for the next wave. So that\'s pretty fast generational turnover of
hardware and software and learning processes for\--particularly for the
public where they probably will have to, down the line, pay for the
training or more of the training than they do now.

The sixth concern relates to time. There\'s no way we can expand time
yet, although I don\'t know that it won\'t happen someday. The patent
office seems to allot a rather niggardly amount of time to the examiners
for examination, and, again I said\--as I said earlier, I\'m surprised
that they come up with as good an outcome as they do in many cases.

So just to summarize the major points that I\'ve been making, the first
four related to how resources can be maintained or should be enhanced.
The fifth and sixth relate to time and training which are patent office
policy matters. Well, they\'re all PTO policy matters, but the public
can contribute in some regards relative to some of these things.

There\'s one idea that I\'ve come up with. About a year ago, we had
hearings on revamping the file history, and there was a very minor
amount of revamping done. I submitted a search sheet, for example, that
was much were complex than this one which is out of a current file which
only shows the examiner search. I think most people have seen these. It
shows the classes and subclasses searched, the date searched, and this
particular one conferred with another examiner relative to a class that
he did not\--well, he did eventually search it, yeah, and then it shows
the interference search.

The form that I submitted had a breakdown for classes and sub classes
like this does, and it was dated, and the examiner\'s initials like this
one but also did he search it manually, did he search it on data base,
what was the full tech search strategies, and how much\--how did he
search it, did he search U.S. and foreign, and places to quickly check
off all those things. Now, that would take a little time to fill out
that sheet, but it might be well worth it if coupled with the next idea
that I\'m about to propose.

And that is on a pilot basis that in the transmittal letter there would
be a block where the applicant can say I want a copy of the search sheet
with my office actions. That would give them an opportunity if for
whatever reason they knew of art areas that the examiner hasn\'t yet
considered and he might have already allowed claims for example, he or
she. To come back in our remarks and say I would like to say class so
and so, subclass such and such become part of the record as having been
searched or the alternative is that the public could submit with their
remarks the fact that they did search class so and so, subclass\--and
the subclass, and here is what we found, but they shouldn\'t be charged
at that point for submitting an IDS late, late IDS submission.

I admit that these ideas are just germs at the moment or seeds. I\'d
been happy to work as I have in times past with you and others to try to
flush them out if you feel that they\'re at all worthwhile. I think some
studies are probably in order at this juncture that haven\'t been done
for a while.

I\'m not exactly confident that PTO management knows exactly how their
examiners are searching now, and I certainly don\'t know think they know
how the public is searching. So in times past, we\'ve had what were
called beeper studies. For those that aren\'t familiar with that, a
person is assigned a device that they put on their belt, and at random
times that buzzer went off, the vibrator, and he puts down what he\'s
doing, and after a period of time you can get a running account from a
checklist of was he searching foreign art, was he on the automated
system, is he at lunch break, or whatever, and it gives the management a
pretty handle on what\'s going on.

The last one, if I recall correctly, was about 1989, and Bruce Reynolds
was involved, if you recall, and that was when Group 220 was coming up
on\--well, actually was getting on to the automated system, the first
group that went online.

Another study that I would suggest is statistics on subclass growth. We
have some statistics, we being me personally and Mr. Goyer on
where\--how many subclasses, for example, for over 1,000 patents, for
example, like four years ago. It would be interesting to see with the
drop in re-class where those classes\--how many more now have joined the
1,000 patent club. This is U.S. patents I\'m talking about.

Also, a similar study I think should be done on what impact the failure
to file foreign classified paper patents has had on foreign citations,
which because of your data base that\'s set up now, you can pick that
off with\--to see whether foreign sites have been dropping drastically
and also use it as a tool which you come up with your electronic
classification scheme.

And I would certainly like to see better statistics kept on system down
time so we have some reliable criteria, some objective criteria should
the time come when we\'re going to say we don\'t need the paper anymore
and here\'s why and the systems are up all the time or whatever. I base
this on a\--I made a Freedom of Information Act request covering the
period of October 1, \'97 through April \'98. Now, admittedly, that\'s a
year and three months old now, but I only asked for the logbooks for the
image workstation area, and they were not very revealing as to being
kept accurately. In other words, there was a lot of anecdotal stuff,
system down, but there wasn\'t from one o\'clock to four o\'clock or
sixteen users bumped or things that could be captured fairly easily.

In my opinion, based on experience, there are four things required for
good examination and good searching whether it\'s in resources, which as
I say, we\'ve probably got the best we have ever had right now, albeit
the problems that I mentioned; time; training, and something I\'ll call
tenacity or gut feeling, and most good examiners I\'ve ever run into
have this gut feeling. I know it\'s out there somewhere, and I\'m going
the find it, and that comes from the point of view that was instilled at
least years ago where we wouldn\'t want to give the applicant what he\'s
entitled to and keep for the public what he\'s not entitled to, he or
she.

And so I may be a negativist because my journey in life was to shoot
down anything I could if the art existed, not just for fun but as a
balance between the public and the private rights and still by Article
One, Section 8, and I would suggest that sometimes we can spot claims
that are just ridiculous on their face.

And another idea I would have is you gentleman have been familiar with
the PO conference over the years which has come and gone. I would
suggest what I\'ll call just for a lack of a better term a broad claim
conference. If somebody comes into the SPE, and he\'s got a claim that
says, Boy, I thought I\'d find this, and the SPE says, Yes, I think you
probably should have, maybe there\'s somebody else that he should go to
and have a little conference, a senior examiner in an analogous area or
something like that and sit down and say what do you think; and I know
in years gone by we\'ve had some examiners who would even go out to
Board of Appeals members and try to find that piece of art that we knew
had to be out there, and sometimes they would find it.

It brings a smile to my face because I think you know one of the
gentleman who I\'m referring to. He\'s now deceased. We\'d often
see\--and I can\'t thing of his name at the moment. Darn it.

COMMISSIONER GODICI: Joe Williamowski.

MR. WISE: Joe Williamowski, right, Lord bless his soul. You\'d see him
over in the public arena in the search room or the examiner\'s division
knowing that he was sitting on a case and he just didn\'t feel right
about it, and there are people like that throughout the office, and the
public gets to know who their examiners are, and they should be\--it
would be worthwhile to consider a conference of this type on these
outlandish broad claims sometimes.

I think I\'m about running dry. I\'ll conclude the remarks just by
saying, anectdotally, I find the morale in the corps to be remarkably
high considering what I consider to be a productivity push that has only
increased over the last few years. Now, there are gripes, but like they
say in the Army at lot of times, they\'re not happy unless they\'re
griping.

So I would say that overall the system is working. It can work better,
as systems always can, but we do the best we can, and thank you for
allowing me to present these remarks.

COMMISSIONER GODICI: Well, thank you.

MR. WISE: Any questions?

COMMISSIONER GODICI: Thank you very much, Mr. Wise. I appreciate it very
much.

MR. WISE: Any questions?

COMMISSIONER GODICI: Steve.

MR. KUNIN: Thank you, Mr. Wise, for your testimony. You\'ve, in your
testimony, many times referred to searching foreign patents, and you\'ve
also mentioned that you\'ve made it somewhat of a career of doing
professional patent searching. Through the PTO\'s home page, we provide
hypertext links to other patent offices\' web sites, and many of those,
like the Canadian office, the EPO which has this new S Pass Net, and JPO
that provides search of Japanese documents, more and more offices are
putting their collection of patents on a searchable data base.

From your own experience, if you\'ve had an opportunity to explore the
offerings of the other offices, what is your reaction with respect to
the benefits of searching the other offices\' patents through the
internet?

MR. WISE: The clientele that I have each have a designated one or more
persons that do their data base searching mostly in house. Now, I use
the internet, your internet data base a considerable amount of time.
I\'m probably, noting the gray hair, what we call\--or my daughter calls
it, a dinosaur in so far as data base searching, although I do use it
extensively when I feel it\'s necessary.

But I\'m much more comfortable with the paper, as you can imagine, and
key word searching, I found has its positives when the terms are unusual
or not too numerous, but being in mechanical and electromechanical art,
which is where I come from, I don\'t find the full text data base
searching as useful as people in, for example, the chemical area where
the terms are better defined. Back to your question, though, I
oftentimes get sent to me with leads for search\--in the search areas
coming from other offices and other national offices, at least, and so
they\'re pointed out to me as that\'s how they\'ve got them.

So I\'ve chosen to stick with my forte which is my best of searching is
with the paper classified, and I will push as hard as I can to keep them
as long as I can because so many people have agreed with me that full
text searching, for example, even if you keep going back to 1960, etc.,
with the capability, it doesn\'t somehow come out the same as having
that piece of paper in your hand and being able to do with it without
all the key boarding. And also in the image station where you can bring
up the subclass, you have to do a lot of key boarding to get to page 1
of the drawings to page 31 of the spec, etc., etc.

So I\'m pretty well still stuck on the paper search.

COMMISSIONER GODICI: Any other questions?

\[No response.\]

COMMISSIONER GODICI: Mr. Wise, I want to thank you very much, and I want
to thank all of the participants who are still here. It\'s been very
helpful to us, and I remind those and anyone that we\'re accepting
written comments, and we\'d like them in by August 2nd so that we can
then start compiling and acting on the comments that we receive.

But we want to thank everyone for being here, and this concludes the
hearing.

\[Whereupon, at 1:45 p.m., the hearing was adjourned.\]