Comment of the United States Federal Trade Commission and the United States Department of Justice Before the United States Department of Commerce Patent and Trademark Office: In the Matter of Request For Comments On Enhancing Patent Quality

Before the
United States Department of Commerce
Patent and Trademark Office
In the Matter of
Request for Comments on Enhancing Patent Quality
Docket No: PTO-P-2014-0043
Comments of the United States Federal Trade Commission and the United States Department of
Justice
May 6, 2015

Federal Trade Commission and Department of Justice
May 6, 2015
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The U.S. Patent and Trademark Office (“the PTO” or “the Office”) issued a Federal
Register Notice on February 5, 2015 (“the Notice”), requesting public comment on a
comprehensive initiative to increase the quality of granted patents.1 The initiative focuses on
improving three “pillars” of patent quality: (1) excellence in work products; (2) excellence in
measuring patent quality; and (3) excellence in customer service. The Federal Trade Commission
(the “FTC”) and the Department of Justice (together the “Antitrust Agencies”) support increasing
patent quality as part of their mission to protect and promote competition and consumer welfare.
Because the first pillar, “excellence in work products,” directly impacts competition and
innovation, the Antitrust Agencies focus these comments on the PTO’s proposals under this
pillar.
Promoting “Excellence in Work Products” Facilitates a Well-Functioning Patent System
A well-functioning patent system can promote competition, innovation, and consumer
welfare.2 Patents encourage investments in innovation by enabling the patent holder to prevent
others from appropriating the value of its technology without compensation. Because patents
publicly disclose the inventions that they embody, the patent system also promotes the
dissemination of scientific and technical information that might not otherwise occur. Working in
tandem with the patent system, market competition stimulates innovation by creating consumer
demand for new or better products or processes. Patents can also promote innovation by
preventing copying for the term of the patent, while at the same time making clear the
boundaries of the protected inventions so as to facilitate their transfer and the ability to design
around them. 3 The patent system serves its intended purpose if it promotes and protects
innovation and does not inadvertently serve as a barrier to it.
1 Request for Comments on Enhancing Patent Quality, 80 Fed. Reg. 6475 (Feb. 5, 2015)
[hereinafter Notice].
2 For more than 20 years, the Antitrust Agencies have addressed the complementary role of
intellectual property and competition in their policy and enforcement efforts. See U.S. DEP ’ T OF
J USTICE AND FED. TRADE COMM’ N, A NTITRUST GUIDELINES FOR THE LICENSING OF
I NTELLECTUAL PROPERTY (1995), available at
http://www.usdoj.gov/atr/public/guidelines/ipguide.htm; FED. TRADE C OMM’ N, TO PROMOTE
I NNOVATION : THE PROPER BALANCE OF COMPETITION AND P ATENT LAW AND POLICY (2003)
[hereinafter 2003 Report], available at http://www.ftc.gov/os/2003/10/innovationrpt.pdf; U.S.
DEP ’ T OF J USTICE & FED. TRADE COMM’ N, ANTITRUST ENFORCEMENT AND I NTELLECTUAL
PROPERTY R IGHTS : PROMOTING I NNOVATION AND COMPETITION (2007), available at
http://www.justice.gov/atr/public/hearings/ip/222655.htm; FED . TRADE COMM’ N, THE EVOLVING
IP M ARKETPLACE : ALIGNING PATENT NOTICE AND REMEDIES WITH COMPETITION (2011)
[hereinafter 2011 Report], available at http://www.ftc.gov/os/2011/03/110307patentreport.pdf;
U.S. DEP ’ T OF J USTICE & U.S. PATENT & TRADEMARK OFFICE , POLICY STATEMENT ON
REMEDIES FOR STANDARDS -ESSENTIAL PATENTS SUBJECT TO VOLUNTARY F/RAND
COMMITMENTS at 1−2 (2013), available at
http://www.justice.gov/atr/public/guidelines/290994.pdf.
3 Comments of the Antitrust Division of the U.S. Dep’t of Justice & the U.S. Fed. Trade
Comm’n, In re Notice of Roundtable on Proposed Requirements for Recordation of Real-Party-

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The Antitrust Agencies endorse the PTO’s recognition that patent quality affects these
innovation incentives. As the Notice observes, “high quality patents permit certainty and clarity
of rights,”4 which, in turn, can promote innovation and “reduce[] needless litigation.”5 Similarly,
ensuring that “issued patents fully comply with all statutory requirements [of validity],” among
other steps, can “effectively promote[] … innovation.”6 The FTC has reached the same
conclusions in its own policy efforts, recognizing that “chief among the attributes of a well-
functioning patent system … are appropriately granted, valid rights with well-defined boundaries
that provide clear notice of what technology is protected and what is not.”7
Notice is important to an effective patent system because it “enables parties to contract
efficiently … facilitating both collaboration among firms with complementary expertise and
competition among inventions in technology markets.” 8 This function can promote specialization
among firms and create alternative pathways for innovative products to come to market,
benefiting both competition and consumers. 9 In other words, when issued patents provide
certainty regarding their validity and the scope of their claims, they function most like property
rights that facilitate market transactions benefiting competition.10
By contrast, uncertainty regarding the validity or scope of granted patents can undermine
the benefits of the patent system. 11 This uncertainty can impede business planning and deter
investment in ventures that may be clouded by the threat of third party patent claims.12
Uncertainty may impose transaction costs through needless litigation to determine the scope and
in-Interest Information Throughout Application Pendency and Patent Term, Docket. No. 2012-
0047 at 4 (Feb. 1, 2013) (“In an optimal marketplace for patents, competing technologies would
be well known, claims would be well specified, and the applicability of claims would be clear.
… [So], firms developing products could weigh the relative merits, likelihood of licensing, and
licensing costs of competing technologies and decide whether to license the patented technology,
develop a non-infringing competing technology, or omit the covered feature.”) [hereinafter
Filing], available at https://www.ftc.gov/policy/policy-actions/advocacy-
filings/2013/02/proposed-requirements-recordation-real-party-interest.
4 Notice, supra note 1, at 6476.
5 Id.
6 Id. The FTC has previously observed that “the statutory standards of patentability appear
largely compatible with competition,” and, when the standards are “properly interpreted, they
tend to award patents only when necessary to provide incentives for inventions, their commercial
development, or their disclosure.” 2003 Report, supra note 2, Exec. Summ. at 4.
7 2011 Report, supra note 2, at 46; Filing, supra note 3, at 3.
8 2011 Report, supra note 2, at 74.
9 Id. at 33.
10 Id. at 74 (noting that the issuance of high-quality patents that provide notice as to their scope
“is essential for patents to operate as a property system”); 2003 Report, supra note 2, ch. 6, at 3
(“Patent rights render innovation a tradeable commodity by reducing transaction costs and
enabling licensing negotiations.”).
11 2011 Report, supra note 2, at 74 (“[P]oor-quality patents [are] a significant competitive
concern and a potential impediment to innovation.” (citing 2003 Report, Exec. Summ. at 5)).
12 2003 Report, supra note 2, ch. 5, at 3−4.

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validity of granted patents.13 It may raise costs by encouraging manufacturers to take licenses to
avoid the risks of infringement of unclear claims. 14 It may also prevent parties from entering into
otherwise beneficial license arrangements because of an inability to agree on the scope or
strength of the patents to be licensed.15 This uncertainty can distort market behavior, preventing
innovation and commercialization of otherwise valuable technologies.
The Antitrust Agencies understand that the PTO must effectively “balance between the
interests of patentees and the interests of the public.”16 For example, steps to enhance patent
quality may add costs or delays to patent applicants. The Antitrust Agencies believe, however,
that the public benefits of certainty and patent quality to innovation and competition outweigh
these potential costs to private parties. Consequently, the Antitrust Agencies fully support
implementation of the new procedures, outlined below, that would more clearly define patent
boundaries and provide more “certainty as to their validity to encourage investment in research,
development and commercialization.” 17
Proposal 1: Applicant Requests for Prosecution Review of Selected Applications
The PTO proposes expanding the scope of review by its Office of Patent Quality
Assurance (“OPQA”). 18 The OPQA currently conducts reviews of randomly selected office
actions from examiners, collecting data that allows the PTO to identify trends and challenges to
improve future training and improvements to examination processes.19 In the Notice, the PTO
proposes a mechanism for patent applicants to request OPQA review of their application where
an applicant believes that the application contains an issue that would benefit from further
review.20
The Antitrust Agencies support expanded OPQA review. In 2003, the FTC recommended
that the PTO expand its “second-pair-of-eyes” review program to identify problems and issues in
certain technical fields and industries where the examiner could benefit from additional review
and experience.21 The FTC noted, however, that because of the potentially high costs of such
additional review (e.g., additional examiner time needed), the PTO should focus on areas where
it would have the most impact.22
The same principles apply to the proposal outlined in the Notice. Additional oversight
from OPQA can enhance the PTO’s institutional knowledge and capability by identifying and
understanding issues during the examination process that challenge patent examiners. Using the
OPQA process to improve guidance and training can increase prosecution consistency over time.
13 Id. at 3.
14 Id. at 2−3.
15 Id. at 4; 2011 Report, supra note 2, at 46−47.
16 2003 Report, supra note 2, ch. 6, at 21.
17 Notice, supra note 1, at 6476 (emphasis added).
18 Id. at 6478.
19 Id. at 6478−79.
20 Id.
21 2003 Report, supra note 2, ch. 6, at 19−20.
22 Id.

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Furthermore, by incorporating applicant input in the OPQA process, the PTO can better allocate
its limited resources on areas where private parties have identified uniquely challenging issues,
and which are likely to have the greatest impact for their respective industries.23 Incorporating
applicant input is also consistent with the FTC’s prior suggestion that the PTO strengthen the
examination process by allowing examiners to take better advantage of the information and
knowledge possessed by applicants.24
Proposal 2: Automated Pre-Examination Search
In its second proposal, the PTO proposes providing examiners with access to improved,
automated, pre-examination prior art searches.25 The Notice notes that there have been
significant recent advancements in computerized searching algorithms and database
technologies, and includes a request for input on new tools that might be useful to conduct a pre-
examination search.26 The Notice likewise explains that the PTO “is continuously looking into
better ways to get the best prior art in front of an examiner as soon as possible in the examination
process.”27
The Antitrust Agencies support the PTO’s efforts to pursue automated tools to assist the
examiner in prior art discovery. As the FTC has previously noted, “enhancing examiners’ access
to and ability to appreciate and deal with prior art … could improve patent quality and remove
impediments to competition.”28 Enhanced access includes access to both prior patents as well as
relevant non-patent literature.29
Advancements in information technology, including digitization, have improved access
to potential sources of both patent and non-patent prior art. Nevertheless, this improved access
may create a novel problem: the difficulty of sifting through the large volume of electronically
available information to identify and digest the prior art that is relevant. Novel advances in
search technologies, including the use of advanced natural language and linguistic software tools,
can help examiners evaluate the scope and content of the available prior art more quickly.30
In general, more tools to identify and evaluate the prior art will improve patent quality. It
is important, however, that there be some tools that can search sources of non-patent prior art.31
As the Notice indicates, the pre-examination search currently conducted by the PTO’s Scientific
and Technical Information Center (STIC) is “limited to U.S. patents and U.S. patent application
23 Id.
24 Id., ch. 5, at 32.
25 Notice, supra note 1, at 6479.
26 Id.
27 Id.
28 2003 Report, supra note 2, ch. 5, at 10.
29 Id. at 7.
30 See id. at 11−14 (FTC recommendation that the PTO employ procedural mechanisms
including the expanded use of relevance statements and examiner inquiries to enlist the
applicant’s expertise in identifying relevant art).
31 Id., ch. 4, at 40. (FTC suggestion for such tools in the context of examining business method
patents).

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publications.” 32 The PTO should consider whether there are search tools that will allow its
examiners to include non-patent publications in the pre-examination search.
A more comprehensive pre-examination search will improve patent quality by
compensating for the inherent limitations of an ex parte process in which an examiner is largely
on his or her own in conducting prior art searches, save for some assistance from the applicant
under the latter’s duty of candor.33 Although competitors may have information and expertise
about the prior art that an examiner would find useful, waiting for such prior art to surface during
infringement litigation only adds transaction costs and inefficiencies to the patent system. The
PTO’s efforts to discover and consider more relevant prior art during prosecution could reduce
some of these costs.
Proposal 3: Clarity of the Record
In its third proposal, the PTO addresses the clarity and accuracy of its Official record.
The Antitrust Agencies agree that a clear patent record is necessary to “provide[] patent
boundaries that are clearly defined to the benefit of the patent owner, the courts, third-parties,
and the public at large, giving inventors and investors the confidence to take the necessary risks
to launch products and start businesses, and the public the benefit of knowing the precise
boundaries of an exclusionary right.” 34 Due to the importance of the prosecution history in
providing the public notice of the scope of issued claims and the importance of this notice in
promoting investment in innovation and commercialization, the Antitrust Agencies fully support
the PTO’s efforts to improve the clarity and accuracy of the record.
Information exchanged between applicants and examiners is potentially a fertile source of
information regarding the intended scope of the claims.35 Often, a simple statement on the record
may cut through considerable ambiguity.36 The Antitrust Agencies agree that a well-documented
prosecution record will inform the scope and interpretation of the issued claims in light of the
prior art of record, providing notice to the public of what subject matter is covered by patent
claims and what is not. This much-needed guidance on claim scope and clarity will, in turn,
promote the invention, development, and commercialization of innovative products by helping
third parties and patentees avoid uncertainty as to their rights.37
First, the PTO recommends making claim construction explicit in the prosecution
record.38 The Antitrust Agencies agree that explicit statements regarding claim scope in the
prosecution history would provide enhanced notice to the public.39 Such statements could
include enhanced reporting of “exchanges [between the examiner and applicant] discussing what
32 Notice, supra note 1, at 6479.
33 2003 Report, supra note 2, ch. 5, at 7−8.
34 Notice, supra note 1, at 6479.
35 2011 Report, supra note 2, at 112.
36 Id.
37 Id. at 75.
38 Notice, supra note 1, at 6479.
39 2011 Report, supra note 2, at 112−13.

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a claim means” and “exchanges regarding patent scope.”40 By reducing ambiguity in the
exchange between the examiner and the applicant, this proposal would allow the public to better
understand the applicants’ arguments that pending claims are patentably distinct from the prior
art and to understand applicants’ intent when amending claims during the patent prosecution
process. In addition, making explicit how the examiner understood the meaning of pending
claims will serve the patent system’s notice function by providing additional intrinsic evidence
of claim construction in the prosecution history for the public’s subsequent use.41
Second, the PTO recommends that examiners include further detail when recording their
interviews with applicants.42 Interviews are unique in prosecution because they reflect an
interactive discussion between an examiner and an applicant, with a give-and-take dialectic that
may not arise in the more formal, written exchange of office actions and responses/amendments.
The FTC has previously supported “increasing and recording examiner [and] applicant
exchanges” and meaningful reporting of interviews 43 because putting these exchanges “down on
paper produces an information product that then feeds into claim interpretation later down the
road.” 44 Making record of applicant interviews may capture the views of applicants who
otherwise may be hesitant to make statements that could later be used to narrow the
interpretation of their claims. 45 This proposal would provide a more robust record of exchanges
between examiners and applicants, which, as noted above, would increase the clarity of the
intrinsic record available to the public.
Third, the PTO proposes improving examiner use of statements of reasons for
allowance.46 The FTC has previously recommended that “the PTO continue to encourage
examiners to make greater, and more informative, use of statements of reasons for
allowance…”47 The FTC advocated that these statements be utilized as interpretive guides in the
prosecution history.48 By requiring the examiner to recapitulate in a statement, for example, how
the granted claims are distinct from the prior art of record, this proposal would provide further
record evidence of claim scope. In addition, enhanced statements in the prosecution history
would later assist the patentee and third parties assessing the impact of additional prior art on the
validity of granted patents. An examiner that determines, for example, whether additional prior
art is redundant of that already considered during prosecution could avoid the costs and
inefficiencies of needless litigation.
In general, the availability of a more complete and accurate prosecution history will
provide greater clarity of the metes and bounds of patent claims. As the PTO recognizes, this
40 Id.
41 Id.
42 Notice, supra note 1, at 6479.
43 2011 Report, supra note 2, at 112−13.
44 Id.
45 Id. at 85 (citing workshop testimony indicating “that the system generally creates ‘an incentive
to be as vague and ambiguous as you can with your claims’ and to ‘defer clarity at all costs.’”)
46 Notice, supra note 1, at 6479.
47 2011 Report, supra note 2, at 115−16.
48 Id.

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clarity benefits both inventors and investors by providing greater confidence to innovate,
knowing that improvements are more likely to be protected. This same clarity also benefits the
public by delineating the boundaries of an exclusionary right, thereby providing competitors (and
other potential licensees) with better information when deciding whether to seek a license of or
to design around the claimed technology. Based on years of observing the marketplace for
patents and patented technology, the Antitrust Agencies fully support the PTO’s efforts to create
a more detailed prosecution record.
Conclusion
The Antitrust Agencies commend the PTO for its continuing efforts to enhance patent
quality, and supports efforts to define more clearly the boundaries of a claimed invention.
Clearer patent notice can encourage market participants to collaborate, transfer technology,
or—in some cases— to design-around patents, thus leading to a more efficient marketplace for
intellectual property and the goods and services that practice such rights.