On August 10, 2020, Senator Thom Tillis of North Carolina urged the Director of the United States Patent and Trademark Office (USPTO), Andrei Iancu, to adopt two patent reform proposals suggested by Lisa Larrimore Ouellete and Heidi Williams. Senator Tillis is the Chairman of the Senate Judiciary Committee’s Subcommittee on Intellectual Property. Stanford University professors Lisa Larrimore Ouellete and Heidi Williams proposed the reforms in a paper, Reforming the Patent System, The Hamilton Project, Policy Proposal 2020-12 (June 2020).
The first proposed reform would require patent applicants to more clearly distinguish between hypothetical experimental results and actual experimental results. The USPTO allows applicants to include so-called “prophetic examples” in a patent application. The patent applicant is supposed to distinguish between prophetic examples and actual working examples by the verb tense used to describe the example. Prophetic examples should be described in the present or future tense, while working examples should be described in the past tense. However, the verb tense is not always clear. Moreover, the verb tense distinction may not be appreciated by foreign language translators, scientists and engineers, especially in countries where prophetic examples are not allowed. Ouellette and Williams proposed that prophetic examples in patent applications be clearly labeled. This would reduce confusion by the public. Senator Tillis noted that confusing data in patent applications could be used to mislead the public and pump up profits for a company that has little to offer the economy or the public.
The second proposed reform would require patent owners to disclose ownership of patents in a more transparent and standardized manner. The lack of a transparent and standardized recording of patent assignments increases the costs and uncertainties of freedom-to-operate searches, licensing, negotiations and patent litigation. There is currently no requirement by the USPTO that the assignment records be updated when there is an ownership change of a patent. There is no requirement that hidden owners of patents be listed in an assignment record. Moreover, a single patent owner can be referred to by different names in different patents. Ouellette and Williams proposed: 1) Congress or the USPTO should require standardization of entity and inventor names across patent records, 2) Congress or the USPTO should increase incentives to record changes in patent assignments, and 3) at least for patents involved in litigation, parties having ownership interests in the patents should be identified.
Ouellette and Williams also proposed adjusting patent terms for pharmaceuticals so that pharmaceuticals that have to undergo a lengthy clinical trial would still have a sufficient patent term once they are approved by the Food and Drug Administration. However, patent term changes require a change to the patent statute, and therefore this proposal needs to be approved by Congress.
Senator Tillis explained that the two proposed reforms would enhance “the patent system so that it provides optimal incentives for innovators and inventors while also minimizing transactional costs that may discourage the development of new products.” Senator Tillis noted the two proposed reforms could be implemented by the USPTO under its current regulatory authority, and would impose no costs on the taxpayers.