Disclaimer: The opinions expressed in this article represent that of the author and the contributors who have been quoted, and are not the official views of LegalForce RAPC, Trademarkia, or their clients.
A little more than two weeks before the events of Friday’s presidential inauguration, there was a transfer of power of a different kind. The 115th Congress was sworn in on January 3, 2017. After the traditional photo ops (complete with non-traditional dabbing), both chambers got down to the business of proposing and debating laws. While Congressional and White House priorities are currently understandably higher in other areas of public policy, the nation’s intellectual property system is an important engine of economic growth that should not be ignored.
At a time when the new administration has promised a federal hiring freeze and is trying to cut funding for agencies dependent on taxpayer money, the United States Patent & Trademark Office — the nation’s innovation agency — is a rare federal agency that is actually a “profit” center. Not only does the fee-funded USPTO not utilize taxpayer money, but it often runs at a surplus. And therein lies the problem — despite efforts to stop this practice, intellectual property user fees in excess of the USPTO’s actual operating costs often continue to be diverted from the agency’s coffers to fund shortfalls in other parts of the federal government.
Back in September 2005, I characterized USPTO fee diversion as a “tax on innovation” in my draft of Congressman Howard Berman’s (then the Ranking Member of the House IP Subcommittee) opening remarks for the USPTO Oversight Hearing. I phrased it that way in order to gain common ground with the Republicans on the subcommittee, and yet some things never change. Here we are more than 11 years later, and not only does the GOP still tend to focus on tax cuts, but we still don’t have a permanent solution to the problem of fee diversion.
Below is a chart from the Intellectual Property Owners Association (IPO), a trade association comprised mostly of in-house counsel, private practice intellectual property attorneys, and intellectual property owners. It shows that in the five years from 2010-2014, a total of $409.8 million in USPTO user fees have been diverted. Incidentally, even though the America Invents Act (AIA) included measures intended to diminish (although not eliminate) fee diversion, the year in which it took effect (2011) saw the greatest sum ever diverted — $209 million.
I said it in 2005, and I’ll say it again — USPTO fee diversion continues to be a tax on innovation, and unless we see a permanent solution, USPTO efficiency and effectiveness will continue to be hampered.
That’s what I’d like to see come from the 115th Congress in the intellectual property field. But what about other players? What’s on their IP legislative wish list?
Likely the first intellectual property priority for the 115th Congress will be to fill the role of Undersecretary of Commerce for Intellectual Property and Director of the United States Patent & Trademark Office, a position more commonly known as “USPTO Director.”
According to Politico, Congressman Darrell Issa (R-CA), the chair of the House Judiciary Committee Subcommittee on Courts, Intellectual Property, and the Internet during the 114th Congress (current subcommittee assignments are yet to be announced) and holder of 37 patents of his own, wants President Trump to keep Michelle K. Lee in this role. Lee, a former Deputy General Counsel for Google, who was appointed in by President Obama in 2014, is the first female Director of the USPTO (or its predecessor the Patent Office) in its more than two century history, and holds widespread bipartisan support. Just last week during a breakfast meeting for tech industry organizations, Rep. Issa called her “one of the great things to come out of the Obama era.”
Given Issa’s key role in shaping IP policy, it seems likely that bipartisanship may rule the day when it comes to filling this position. But will this be the extent of bipartisanship in this administration? Time will tell.
I asked a number of IP scholars and practitioners what types of IP policy they would like to see come out of the 115th Congress. Below are their predictions and/or wish lists on a number of IP issues.
June M. Besek, Executive Director of Kernochan Center for Law, Media, & the Arts at Columbia University:
“The House Judiciary Committee has issued an initial policy proposal concerning copyright-related legislation, and it focuses on two issues: (1) Reform of the Copyright Office to provide it with greater autonomy in managing the Office, setting fees and upgrading its technology for the 21st century, and (2) relatedly, the establishment of a small claims adjudication process within the Copyright Office.
In my view, reform is essential if we want a 21st century Copyright Office. The Office’s current position within the Library of Congress and the requirement that the Librarian of Congress sign off on most substantive matters is no longer tenable. The Copyright Office has different needs and priorities than the Library — for example, with respect to information technology — which should be addressed separately. Moreover, it is inappropriate for the Librarian, a stakeholder in copyright policy debates, to have the final say on substantive rulemakings by the Copyright Office. The head of the Copyright Office should be a presidential appointee, which would provide greater autonomy.
I would welcome a small claims process with the Copyright Office. Many individual creators can do nothing about infringement of their works because the cost of bringing suit in federal court outstrips any possible recovery. They need a practical alternative.
Of course, both of these are just general proposals, and we don’t yet know how they will develop. As they say, the devil is in the details.
I would also like to see the Copyright Act amended to provide authors with an attribution right to require that their names accompany their works. Such a right would provide authors with the credit they deserve, and would also help users locate authors and reduce instances of ‘orphan works.’ The US is required by international treaties to have such a right, but our current law is inadequate.”
“One legislative change is found in the Separation of Powers Restoration Act that is likely to be re-introduced early in the next term. The proposal passed the House in 2016 and is likely to now be ready to pass the Senate. The one-page bill simply adds the words “de novo” into the Administrative Procedure Act (APA). Under the new law, any appeal from an agency under the APA would require de novo review of ‘all relevant questions of law, including the interpretation of constitutional and statutory provisions.’ Many of the recent Federal Circuit decisions have been based upon deference given to USPTO legal conclusions — the change re-opens debate on all of these issues and substantially weakens USPTO authority.”
Dennis Karjala, Jack E. Brown Chair and Professor of Law at Sandra Day O’Connor College of Law at Arizona State University, and Faculty Fellow of the Center for Law, Science, & Innovation:
“I would like a repeal of the Sonny Bono Copyright Term Extension Act. That will never happen, because the protectionists have control over both House and Senate Judiciary Committees, which is where copyright and patent laws must go.
I would like SCOTUS to admit error in the Feist decision. The Court should abandon the interpretation that reads both originality and creativity (neither term is in the Constitution) as necessary conditions for attachment of copyright, and while they’re at it, they should provide a more limited interpretation of ‘compilation.’ Many courts follow Feist, in an effort to give some protection for compilations that are expensive to create but cheap to copy. In the extreme case, I would not be surprised to see a court decide that copyright covers auto design, because cars are a collection of pre-existing pieces (steering wheel, radio, tires, spark plugs, etc.).”
“I’m not sure what IP issues Congress will prioritize this session. Like many areas of the law, lobbyists routinely dominate Congress’ agenda-setting for IP. If lobbyists are somehow curbed as part of a so-called “drain the swamp” move, then it’s possible that IP will take a back seat to other Congressional priorities. If, on the other hand, lobbyists gain even more influence than they’ve had in the past (and early signs suggest that the Trump presidency will be a golden era for lobbying), then expect to see continued and more aggressive rent-seeking by IP owners. This is particularly likely in the copyright area, where major copyright owners always seem to have a endless wishlist of ways Congress can give them more rights.”
Raj Abhyanker, founding partner of LegalForce/Trademarkia, and former economic policy adviser to the Chief Technology Officer of the White House for the America Invents Act:
“My only request at the moment would be for patent owners to file video/multimedia provisional applications in order to get a filing date instead of ones requiring written specifications.”
So what will the 115th Congress propose in the area of intellectual property? Stay tuned. On this — and every other issue — we’re all watching.
HEATHER A. SAPP is the Senior Trademark Attorney at LegalForce RAPC. Prior to joining LegalForce, Heather was a Trademark Examining Attorney at the U.S. Patent & Trademark Office for more than a decade, and before that she was a Legal Fellow for the House of Representatives Judiciary Committee Subcommittee on Courts, the Internet, and Intellectual Property under then-Ranking Member Congressman Howard Berman. She received her JD from Arizona State University College of Law, where she was a Center for Law, Science, & Technology Scholar. She also holds an LLM in Intellectual Property with High Honors from George Washington University School of Law. Heather is a popular speaker on the writers’ conference circuit, speaking on intellectual property issues for authors under her Young Adult fiction pen name, Amanda Brice.