Statement of
James F. Cottone, Past President
National Intellectual Property Researchers Association - NIPRA before the
Subcommittee on Courts, the Internet, and Intellectual Property
Committee on the Judiciary
U.S. House Of Representatives
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Oversight Hearing on
Patents: Improving Quality and Curing Defects
Thursday, May 10, 2001
Good Afternoon Mr. Chairman, and members of the Subcommittee.
My name is James Cottone, of Leesburg, Virginia. I'm here today testifying on behalf of the National Intellectual Property Researchers Association, NIPRA,
which represents the professional and business interests of nongovernmental professional people and firms who specialize in worldwide intellectual property
information retrieval and dissemination. Our members are intimately linked to the information dissemination functions of the PTO and typically have many
years of experience - 10 to 20 or more - working with the PTO in various capacities, as well as in using all branches of the PTO's facilities. Our members serve
as the world's main concentration point for intellectual property (IP) information from the PTO. Every working day of the year, they receive thousands of
requests from clients worldwide, and, using their knowledge of and access to the PTO's facilities, locate, retrieve and interpret the information needed to
respond to these requests.
My testimony today will cover selected areas of special concern to NIPRA which I believe will make a contribution to the purposes of this hearing. These are:
[A] the continuing need for serious PTO Classification effort; [B] Problems with the existing PTO Quality Review procedures; [C] The need for full
maintenance of the public's Hard Copy (paper) Files; [D] A new Proposal for a Single Central Search Facility (SCSF); and [E] Parallel Trademark considerations.
** [A] - Classification **
A serious problem that arisen in the last ten years is that of Classification. It has been asserted by many that the proper classification of patents and other
references is no longer necessary because "we have word searching." NIPRA disagrees.
A quality patentability examination results when the examiner has a
complete, closed set of all the pertinent references before him/her. Considering all the members in this complete set, the examiner then selects a subset of the references most relevant to the claims of the application under consideration and then applies them in an appropriate Office action. The size of this complete set will vary by technology and particular patent application, but typically will be in the 1000 - 3000 document range. It does not matter if one is using either an electronic retrieval means or the more reliable hard copy search - the examiner needs to consider the complete set of relevant documents in order to determine the "point of departure" for proper patentability determination, as is required by Graham vs. John Deere [381 U.S. 1; 148 USPQ 459]. In the opinion of many senior examiners, a "word search" inherently often cannot support such a determination; only a properly classified search file can do that consistently in most arts.
Retention of employees has been a longstanding problem with the Office - currently it is estimated that 55% of examiners have been with the Office 2 years or
less. This was also a problem back in 1912, as was analyzed in the "Report of the Investigation of the United States Patent Office" of December 9, 1912, to then
President Taft. Their recommendation then was to have senior examiners involved in continuing reclassification efforts. If these senior people left, their
knowledge and expertise would then be left behind in the form of tightly classified search files, so that subject matter could be easily and quickly retrieved later
by those not nearly so skilled. The current downgrading of the Classification operation and the apparent lack of appreciation of its importance by the current
PTO management is a legitimate subject of oversight effort, and NIPRA recommends that the Office be encouraged to reconsider their priorities in this matter.
A reasonable place to start would be to examine the present and near out-year budgeted amounts for classification, and compare these with the amounts
expended in the peak years before the downgrading began to help quantify the trend. Because professional public searchers have virtually the same needs as
PTO examiners in this regard, the subject of classification is important to us. And without serious and ongoing classification efforts, the benefits of the hard
copy files will soon disappear.
** [B] - PTO Quality Review **
On the subject of improving patent quality and curing defects, a good starting point should ask - how well is the PTO now functioning, and at what level of
quality are its patents now being issued? Before recommending any changes in PTO operations, we must have the very best information as to the problems
being experienced and the likely effects of changes thereto.
The Office of Quality Review was originally set up to objectively monitor exactly these quality concerns, and also to provide a teaching tool for all examiners
as to how to properly search and examine patent applications. However, recently much of Quality Review has been folded into the "Technology Centers" and
are under the control of the various Center Directors. Several qualified observers have expressed the view that a Quality Review Office, completely separate
from the PTO (and possibly even separate from the Department of Commerce), is essential to be set up. Appropriate places might be: at the Government
Accounting Office [GAO], or at the Library of Congress, where in past years other reviewing and information gathering offices had been set up to inform
Congress and others with great success.
When Roger Smith was Chairman of General Motors, GM was losing billions of dollars, and losing significant market share. Asked what the problem was by
reporters, Mr. Smith could only answer: "It's all very mysterious." Clearly, Mr. Smith's information had been carefully massaged by layer upon layer of GM
management and staffers until little of validity or importance remained. If it is determined that it is useful to set up such a separate review office (at least totally
separate from the Technology Centers which it will monitor), that organization will need people of skill, great personal integrity, and a loyalty only to the
highest standards of examining and patent granting in order to get reliable, valid data to make appropriate decisions and recommendations. U.S. Patents need to
not only be perceived as valid, but be valid, in order to be enforceable.
Recent court decisions, however, such as throwing out all the claims in the Rambus litigation case, do not bode well for the widespread perception of validity of
issued U.S. Patents. Indeed, Mr. James Pooley of Gray, Carey issued a report in February, 2000, at the National Academy of Sciences Intellectual Property
Conference indicating that in many areas industry leaders have recently switched from patents to trade secrets as a preferred IP protection tool. Such recent
controversial court decisions as In re Festo additionally have the effect of significantly diminishing the value of issued patents to such an extent that the honored
Mr. Joseph N. Hosteny of Niro, Scavone in a recent Intellectual Property Today column [Volume 8, No. 5, May 2001, p. 44, at p. 45] under section "Fourth,
Don't File a Patent" has suggested that property holders consider trade secrets as opposed to patents for intellectual property protection. If widely taken to heart,
a rise in trade secrecy would represent a major step backwards in the status of the U.S. as a world technological leader.
Because NIPRA's members constantly carry out Validity, Infringement, Right-to-Use and Due Diligence searching, in addition to the more routine patentability
seaches, we see first hand the many weaknesses that flow from a less than ideal quality review process.
** [C] - The Public's Hard Copy Files **
NIPRA is on record as being strongly opposed to any decrease in the quality or quantity of the publicly available hard copy (paper) files for patent and
trademark searching. Based on many years of experience, we feel certain that should the PTO build down these hard copy files it would lead to important losses
in the ability of the worldwide IP community to investigate and determine the value and quality of their intellectual property. We also believe that PTO
examiners have identical (or at least parallel) needs for their hard copy files - but we leave that issue for resolution between the parties affected - the Office and POPA.
There are sound and simple reasons for not only continuing full maintenance of the publicly available hard copy files, but for expanding their content as well.
First, they are available 24 hours a day, 365 days a year with virtually zero down time. They are dirt cheap to maintain compared to automated files, and
provide an ultra reliable and secure back up search medium which is almost 100% failure resistant to the problems/threats of power outages, computer crashes,
desktop terminal glitches and lockouts and hacker/terrorist attacks. However, beyond these basic strengths, the hard copy files provide a statistically
independent search medium, which significantly improves the quality of searching, and hence the validity of issued U.S. patents and registered trademarks.
Because of the unique watchdog role public searchers play in the worldwide IP system, they are relied upon by all parties having an interest in IP - mergers
and acquisition (M&A) firms, initial public offerings (IPO), patent departments of fortune 500 companies, small start up companies and independent inventors -
to find and provide the highest possible quality information regarding patents and trademarks. So its absolutely crucial for the health of the U.S. IP system that
public searchers continue to have rapid and unhindered access to patent and trademark information, and that the information the PTO disseminates be of the
highest possible accuracy, reliability and retrievability. For the foreseeable future, we believe only the classified hard copy files meet these criteria.
How long is the foreseeable future - does NIPRA believe that hard copy paper search files are needed forever? Most likely not, we envision the need for hard
copy files to be in the range of the next 8-10 years before transitioning over to totally electronic media. Ideally, this interval should be divided into two distinct
stages. We suggest first a three year side-by-side comparison of newly issued patents be accomplished by knowledgeable outside referees. When the automated
search results are judged to be fully equivalent to those obtained by combined hard copy and online searching (the present system) for a sustained three year
evaluation interval under a well defined quality measuring protocol, then the PTO should be allowed to start building down the examiner's hard copy files. The
second stage of building down the publically available hard copy files could then be started. This second stage should be incremented slowly over a five year
period so as to detect and respond to any unintended adverse side effects. Prudent risk managment demands nothing less.
** [D] - Proposed Single Central Search Facility (SCSF) **
In view of these 'need-to-have' factors, NIPRA is seeking the support of this subcommittee for our hereby submitted proposal to expand the existing public's
hard copy search facility, now housed in the Crystal City PSR+ and environs, into a new facility that would establish and maintain allU.S. and foreign patent
and trademark documents, searchable in U.S. classification order. We would be interested in working with the subcommittee's members and staff to flesh out
the details of our proposal. As a starting point, a few specifics are proffered. Looking forward to the planned space consolidation move to the new Carlisle
Campus, our proposal calls for the establishment of a Single Central Searching Facility (SCSF) to house this expanded hard copy file. The facility would
include complete copies of all U.S. and foreign patent documents and all U.S. trademark documents housed in the first and second floors of Crystal Plaza
buildings 3, 34 and 4. The SCSF would support the needs of all searchers, public, PTO and government, and its foreign art collection would be initially seeded
with any foreign art and digests that are surrendered by the examining corps, as is now being considered by the Office/POPA/OPM approval process.
We believe that allowing the present attitudes on the hard copy files to prevail, as is repeatedly expressed by the Office, will continue a de facto, salami slice
decommissioning of these hard copy files. This will cause the loss of a searching capability which is badly needed for several years to come. We also believe
that failure to establish the proposed SCSF will do irreparable harm to many aspects of the U.S. IP system, not the least of which will be a downward spike in
the quality of issued patents and a generalized slowdown in worldwide IP activity due to the business uncertainty which will follow the inability of public
searchers to do their historical best for their clients.
** [E] - Trademark Considerations **
The issue of improving and curing defects in U.S. patents has a virtually exact analog in trademark considerations. Because the two branches of IP intersect so
closely in matters of automated and hard copy searching, it is worthwhile to briefly look at related trademark quality matters.
The quality of both the PTO examination and those tools used to accomplish it are of paramount importance as the publication or issuance of a confusingly
similar mark can result in costly litigation and/or the dilution or diminution of a prior mark's value. It is the responsibility of the Office to deny registration to
such marks, and failure of the PTO examination process leaves owners of legitimate marks with the aforementioned unpleasant and expensive consequences. It
should be noted that adversarial proceedings can result in legal fees that many businesses simply cannot afford. In those instances, the owner of a legitimate
mark then suffers the economic injury of having its trademark diminished by dilution.
In the course of daily research , our members have seen a dramatic decrease in the quality of trademark examination. These observations are bolstered by
similar observations of many trademark practitioners. We believe this deterioration can be linked to three principal factors: 1. Errors and omissions in the data
created by the PTO; 2. poorly configured search software; and 3. Examiners who have been inadequately trained in the use of those systems and who have
insufficient experience in trademark law.
The quality of the PTO Trademark Search Databases and the performance of the electronics search systems are of great interest and great concern to
professional searchers and those businesses they ultimately serve. Currently, the PTO offers two publicly accessible trademark search systems, X-Search, the
trademark search system used by the PTO examiners, and TESS, an online version of X-Search. A comparison of the data on those systems with hard copy
paper records indicates that a significant percentage of the data contained in the automated systems is either corrupt or missing. Regular experience with these
databases has revealed countless errors with regard to the identification of the trademark, design codes, ownership information, etc. Many of these errors come
about as a result of data entry and scanning errors, errors which go uncorrected as the PTO appears to have little if any quality control measures in place to
detect them. For example, PTO clerks have assigned the famous design of the "Playboy Bunny" the design code for a costumed primate - and have keyed in
marks such as "Lido" as Lid0. Such errors make these marks virtually impossible to find online even when using proper search commands and techniques. The
effect of these errors is compounded by additional problems typified by omitted registrations, applications, pseudomarks and missing or illegible images.
Further, the search systems, particularly TESS, are plagued by search engine problems that make it impossible to perform certain types of trademark research.
Our members regularly review examiners' search strategies and in many instances have determined that the examiner will repeatedly restrict the scope of a
given search until only a handful, or in many cases, no citations are returned. Similarly, our members have found search strategies that limit potential citations
to those owned by the owner of the mark being searched and thus ignoring all potentially conflicting marks. Such poor search strategies must be the result of
inadequate training or ignorance of the fundamentals of judicious trademark research. Additionally, our members have consistently found examiners who do not
enter phonetically similar terms into their search strategies, instead relying on the database to search those terms for them. Unlike many commercial databases
whose search engines perform this task with varying degrees of success, X-Search relies on the manual entry of those terms in the pseudomark field. A cursory
review of any sampling of X-Search records reveals that this data entry is deficient at best. Although our members do not suggest that the examiners have the
time and resources to conduct their research in the manner that public professional searchers do, they do assert that absolute reliance on the X-Search system
will continue to have a negative impact on the quality of the trademark searches conducted by PTO personnel.
Assuming that the PTO can not afford to conduct the same in-depth research as that performed by professional public trademark searchers, it is critical that the
hard copy paper records presently maintained in the Trademark Search Library continue to be properly and fully maintained. These hard copy paper records
serve as the only check to the erroneous, missing and illegible data on the automated systems. Thus, given that the hard copy paper records provide an
inexpensive, easily maintained and constantly available search tool that serves such a valuable check of online data quality, they must also be maintained,
possibly for the same 7-10 year interval as recommended above for patents.
Mr. Chairman, I want to thank you and the other members who have provided us this opportunity to present our views on several key quality related issues
facing the PTO and its many constituencies. I especially want to thank those on the Subcommittee on Courts, the Internet, and Intellectual Property for the
invitation to present NIPRA's views and concerns on the matters of patent and trademark quality. I hope that the views expressed here find sympathetic ears,
and we look forward to working closely with your staff to more fully develop the proposals and ideas provided. We also are pleased to be able to contribute to
the continuation of the preeminent position now enjoyed by the PTO.
That concludes my prepared remarks, and if my oral presentation today has departed from this written testimony, please consider this written version as the
official position of NIPRA on all matters covered. I'll stand by for a few questions if our chairman will so allow.
James F. Cottone
Past President
National Intellectual Property Researchers Association
Washington. D.C.