USPTO Patent-Quality Initiative Can Go Further | Commentary

Posted April 20, 2015 at 1:29pm

The Senate recently confirmed Michelle Lee — who questioned congressional patent reform efforts — for the top gig at the U.S. Patent and Trademark Office. At the SXSW festival in March, Lee spoke on the PTO’s patent-quality initiative and upcoming adjustments to the patent system, including better search methods for prior art, crowdsourcing tools to help researchers and enhance overall patent quality, and improved training for PTO examiners.

These improvements are necessary for strengthening the U.S. patent system. However, they do not currently apply to all types of patents, such as design patents, which lag behind the utility patent review and approval processes. While the PTO addresses ways to improve patent quality, it’s missing design patents in its reforms.

Design patents, in short, protect inventors from infringement on the basic look, feel or shape of their patent. They are becoming increasingly used due to their role in technology. For example, Apple sued Samsung over several design patents — including the rounded rectangle shape of a smartphone. The litigation spotlights how outdated design patent law is and the implications of extensive lawsuits on consumer pricing. The design or shape of a smartphone is not the determinant of its usefulness or appeal, nor can anyone realistically claim it has an impact on a product’s sales. Yet the way the law is interpreted, Samsung could have to pay full profits of all alleged infringing devices to Apple.

The two companies have spent several years in court and millions of dollars, if not more, in legal fees. Currently, Samsung is appealing the U.S. District Court for the Northern District of California’s order for Samsung to pay $930 million for infringing Apple’s patents. For small businesses in a design patent infringement dispute, the result of this court case could mean their doors stay open — or close for good.

The Hispanic Leadership Fund previously raised concerns over Apple’s penchant for patent litigation. Just last year, we filed an amicus brief with the Northern California Federal Court of Appeals on the smartphone design patent case. Citing a Pew Research study, we hoped to show the court that the rate of smartphone ownership is growing among Latino adults faster than other demographic groups; a full 16 percent of Latinos’ only point of access to the Internet is their smartphone. Excessive damages awarded to Apple exacerbate the digital divide — the gap between broadband access for lower-income individuals and others. Competitors must worry about paying high damages and removing supposedly infringing products from the market, which of course limits consumer choice.

Much of the patent litigation in the news concerns third-party trolls and their aggressive lawsuits targeting small and large companies alike. Unfortunately, the company initiating lawsuits on the design patent front is the number one distributor of smartphones in the world: Apple.

The PTO ought to broaden its focus beyond patent quality in utility patents and encompass concerns about design patents as well. If design patents are not made more transparent with pre-grant publication (an issue Congress would have to change) and more easily searchable prior art (design patents only have images, not text to search), smaller companies could soon be disputing over shapes and ornamental features — putting manufacturers at risk of injunction and consumers in danger of higher prices for fewer product options. This would of course raise costs for all consumers and hurt lower-income individuals and families. The unfortunate result of eliminating competition in the marketplace would be a further widening of the digital divide.

The PTO has already identified patent quality as a priority and should work closely with Congress to identify and adopt legal reforms where changes require congressional action. While we await the ruling in Apple v. Samsung litigation, which will help pin down proper interpretations for design patent damages claims, it would be best for consumers for the PTO to not leave design patents behind but to instead include them in its Enhanced Patent Quality Initiative.

Mario H. Lopez is president of the Hispanic Leadership Fund, a national advocacy organization that promotes liberty, opportunity and prosperity for all Americans.