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America Invents Act in Action: New Satellite USPTOs

By April 14, 2014Featured

by: Monique Carter
Intellectual property is at the core of novel biotechnology product development and commercialization. Effective use of the legal protection afforded by the branch of law encourages risk and innovation that benefits the public while protecting the investments and development endeavors of the inventor. Patents are generally considered the strongest form of protection available for intellectual property. Therefore, they are the keystones of strong biotechnology-pharmaceutical industry protection portfolio strategy. Utility patents provide exclusivity at any time point along the development lifecycle of a drug, biologic, or medical device regulated by the Food and Drug Administration. The legal lifetime of a patent is generally 20 years from the date of application filing. This allows for inventors to exclude others from making, using, offering for sale, or selling the patented invention during the active term.

Despite the numerous beneficial assets that patents afford the general public and the inventor, they are not automatically granted by default. At the global level they are regulated through treaties administered by the World Trade Organization (WTO) and the World Intellectual Property Organization (WIPO). In the United States, they are subject to expert scrutiny and examination by the United States Patent and Trademark Office (USPTO). Applications are thoroughly assessed for invention patentability. Per section 101 of the United States Patent Act, a utility application is deemed patentable if it is statutory, new, novel, useful, and non-obvious.

According to statistics provided by the USPTO, patentability assessment and claim validation takes approximately 24.6 months from initial application filing. However, significant increases in the volume and complexity of applications being filed with the agency have lengthened the aforementioned time frame. A report released by the United States Government Accountability Office (GAO) concerning this issue revealed that a total of approximately 620,000 patent applications filed over the course of the last 5 to 7 years have yet to be examined. This number is compounded annually by the filing of approximately 500,000 new applications and a significant number of requests for continued examination (RCE) of previously filed applications. Many patent experts and intellectual property policy scholars attribute the examination backlog issue largely to the structure of the USPTO patent system and the lack of experienced patent examiners employed by the agency. A number of provisions that seek to combat examination backlog were included in the Leahy-Smith America Invents Act (AIA) and signed into law on September 16, 2011 by President Barack Obama. Based on these provisions, the Director of the USPTO must establish new agency satellite offices across the nation.

Per section 23 of the AIA, congress mandates that the USPTO establish three or more satellite offices within three years of the date of enactment of the Act (i.e., September 16, 2014). This is the first time in the 200-plus year operating history of the USPTO that the agency will be expanded beyond suburban Washington, D.C. These new offices will be funded by patent fees as opposed to government expenditures. The AIA requires that the satellite offices be located in regions that boast highly skilled, talented, and diverse patent communities that have strong collaborative ties to world-class universities and research institutions. It is hypothesized that this will draw a significant number of examination candidates with biotechnology and engineering degrees to the agency at minimal recruitment cost. The Act states that the offices should be located in areas with increased examiner retention prospects that will foster USPTO workforce stability. To support this requirement, locations should provide a reasonable cost of living, diverse cultural amenities, and balanced lifestyle.

During the USPTO office selection period, politicians from all regions of the nation initiated strong bipartisan lobbying campaigns to make their case for the coveted agency regional presence. The addition of a satellite office has the potential to significantly strengthen a region’s economy. According to a study conducted by the University of Colorado Leeds School Of Business, the presence of a USPTO satellite office is predicted to generate more than $400 million dollars in economic activity over the first 5 years of operation. Research suggests that this impact would be made through a number of different contributing elements, including the creation of new jobs, investments, and population growth.

Following the extensive regional location selection process, the USPTO announced that 4 new satellite offices would be opened to fulfill the AIA Section 23 requirements. The first satellite office was opened in Detroit, Michigan on July 13, 2012. The Detroit office is located in the heart of the city (300 River Place, Suite 2900) and named after a prominent African-American inventor of steam engine lubricants, Elijah J. McCoy. The USPTO primarily selected this site based on the intellectual capital that the region possesses in terms of automotive innovation and advanced high-tech manufacturing methods. According to the 2014 Center for Automotive Research report, greater than a third of all the nation’s automotive related research and development activities occur within Michigan, Indiana, and Ohio alone. Traditionally, 3 to 5% of all patents issued by the USPTO are automotive in nature. The agency is confident that the regional concentration of automotive experts and engineering focused research institutions in the Michigan region will strongly support their mission and President Obama’s goal to “cut the red tape that stops too many inventors and entrepreneurs from quickly turning new ideas into thriving businesses.”

The remaining 3 satellite office locations were announced on July 2, 2012. Out of a pool of 50 qualified sites, the agency selected Denver, Colorado, Dallas, Texas, and Silicon Valley, California. The USPTO will model the infrastructure of each location based on the Michigan office. Due to sequestration issues in the summer of 2013, the efforts for locating permanent buildings for the offices in the respected cities was delayed. Since that time, locations have been announced for all three offices. The Denver office will be housed in the Byron Rogers Federal Building (1961 Stout Street) located in the city’s central business district. The Terminal Annex Federal Building (207 Houston Street) has been confirmed as the location for the Dallas Office. The Silicon Valley office will be located in San Jose City Hall Building (200 East Santa Clara Street). The PTO plans to employ 100 patent examiners, 20 administrative patent judges, and support staff, on site in each regional office by the end of the first year of operation. The Director’s Forum (http://www.uspto.gov/blog/) is a blog currently managed by the Acting Director of the USPTO, Michelle K. Lee, that can be accessed for the most comprehensive and accurate details about the ongoing developments of each office.

I think that it is extremely exciting to have the opportunity to witness the execution of provisions mandated by the most significant United States patent reform Act since 1952. I anxiously await the advances and breakthroughs in biotechnology that will result from the establishment of the new USPTO satellite offices. It will be more than amazing if the establishment of these offices further promotes industry efforts to create innovative inventions that address the most pressing healthcare issues of our time.

Email me at Monique_J_Carter@hotmail.com to keep the discussion going!

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