The Peer Review Pilot Program at the USPTO

Under 35 U.S.C. ' 122(c), the USPTO cannot accept prior art references and comments by a third party submitter without the express written consent of the applicant. Although the proposed Patent Reform Act of 2009 includes a provision that, if enacted, would allow third-party submissions without consent, until Congress changes the law, any program taking advantage of Peer-to-Patent will require such consent. As an incentive to obtain broad participation, and in order to allow quick evaluation of the Pilot in a short time frame, the USPTO offered to advance the examination of any participating application.

By including input from the public, the Pilot expanded the scope of the prior art search to non-patent publications for which an Examiner may not have ready access or even knowledge of its existence. Initially, the Pilot was limited to patent applications assigned to Technology Center 2100, which encompasses computer architecture and software. In the second year, the Pilot was expanded to include business method patents. Non-patent publications in these technology areas include conference presentations and software code, as these often are distributed only to a limited audience or are not well annotated or cataloged. For example, most software code is difficult for an Examiner to search because it may not always be sufficiently or correctly labeled. However, individuals with detailed knowledge of the materials can readily locate and provide them to the Examiner, and identify the relevant section. In this role, the public can provide a particular expertise that serves as an asset to the USPTO.

Participating applications were published on the Peer-to-Patent Web site run by New York Law School at www.peertopatent.org. The application remained on the site for four months, allowing a wide range of interested parties to discuss the application, submit prior art, critique other prior art references, and vote on the relevance of the prior art reference. At the end of the four-month period, the 10 best prior art references, as ranked by the online review committee, were sent to the Examiner for use in the examination process, along with any comments regarding the relevance of the prior art references.

Considerations for Applicants

Participation in the program can be beneficial to an applicant. If the applicant files a Request for Early Publication and consents to the submission of prior art by Peer-to-Patent, the time to a first office action is typically reduced by as much as a year. Getting Started with Peer-to-Patent, www.peertopatent.org/getting_started. For many applicants and their companies, having a patent complete examination and issue quickly is typically very desirable.

However, a serious consideration for applicants is that additional prior art documents that may not have otherwise been found by a typical search in the USPTO may be brought to the attention of the Examiner by the peer review process. For example, a study of the results after the first year of the pilot program found that in 24% of the applications, the information provided by Peer-to-Patent did not turn up in the Examiner's search. Indeed, 21% of the Examiners stated that the prior art submitted by Peer-to-Patent was inaccessible by the USPTO. See First Anniversary Report, page 14.

Due to the increased availability of prior art from commentators, an applicant who succeeds in obtaining a patent has an additional basis to defend against contentions of invalidity. However, no higher presumption of validity is given to patents that have been peer-reviewed. Moreover, there is no guarantee that all the relevant prior art references will be found, because some companies or individuals aware of such references may choose not to participate, either through apathy or by choice.

The subject matter of the application has a significant impact on the type of prior art raised. According to the First Anniversary Report, IBM accounted for 44% of the reviewers who were willing to reveal their affiliations in the first year of the program, so the quantity of prior art cited is likely to increase if IBM has prior art in technology related to the application. Linux Defenders, an organization dedicated to defending the open source community against software patents, has identified the Pilot as one of its priorities, and is building a defensive publications database that can be used as a repository of prior art for use in this program. Therefore, applications directed toward software, especially if there is an open source competitor, can expect significant participation in the peer review process. The quantity of prior art cited is also likely to increase if the industry practice includes publication of non-patent documents that are typically inaccessible by the USPTO.

Additional considerations include the relative size of the particular field and the extent to which a certain subject permeates the mainstream. The degree of difficulty associated with reading the application may reduce the number of potential reviewers for an application. To solicit more reviews, at least one applicant has posted a simplified version of the application on the Peer-to-Patent Web site. See Soberteentm Driving Insurance, www.peertopatent.org/patent/20090063201/activity.

While the prior art references that are uncovered during the peer review process are still available to invalidate the patent post-grant, there is a higher burden of proof on the party asserting invalidity, because an issued patent has a presumption of validity. Also, the patent claims may be amended in prosecution to distinguish over prior art references that are likely available only to a small number of potential infringers. For example, sources for the information cited in the first year of the peer review program included university sites, IBM internal documents, and personal files. Exposure to such prior art during prosecution enables applicants to draft more-focused, and perhaps narrower independent and dependent claims that may survive later validity challenges.

Considerations for Reviewers

Any member of the public who is not employed by the USPTO may submit comments, including the applicant. However, a comment made by the applicant on the Peer-to-Patent Web site may become binding on the applicant. Even if the comment is not considered by the Examiner during prosecution, an alleged infringer is likely to claim that such comment is an admission that may affect the scope of the claims. Given such risk, the better course for the applicant is to avoid participation in the peer review process, and only provide responses when required in an Office Action.

There are also risks for non-applicant reviewers who participate in the peer review process. Most notably, participation in the peer review process may serve as evidence of knowledge of the patent. If the reviewer or the reviewer's company should later be found to infringe the patent, such knowledge may be relied upon as proof of willful infringement, which can result in treble damages being awarded to the patentee. Employers should consider that employees may participate in the program outside of their employment, but their knowledge may in some cases be imputed to the employer.

In practice, it remains to be seen whether a court will find that participation in the peer review process gives rise to a finding of willful infringement. The code of conduct on the Peer-to-Patent Web site restricts applicants from seeking enhanced damages for willful infringement against an alleged infringer that became aware of the patent through participation in the Pilot. However, it is not clear that these terms will be held binding on the applicant. The consent form required by the USPTO requires that the applicant consent only to the submission of prior art from Peer-to-Patent, and does not require the applicant to consent to the code of conduct or any other rules posted on the Peer-to-Patent Web site. Nor is any such restriction mentioned in the Official Gazette notices that introduced or extended the program. Accordingly, any reviewer should realize the risk involved in the review process.

Beyond the legal risks, there also may be business risks in participation. For example, businesses may retaliate against submission of a prior art reference by cutting ties with the reviewer. Reviewers may also lose business opportunities by participating in this process. Such considerations should be weighed by applicants and reviewers alike prior to participation.

Conclusion

Based on the comments from both the current administration and the Pilot, peer review of patent applications on Peer-to-Patent is likely to be brought back in some form. There are benefits to participation in the program as both an applicant and a reviewer. However, both applicants and reviewers should carefully consider the risks involved before participation.

Walter M. Egbert is counsel at Hughes Hubbard & Reed LLP. Brian Boerman is an associate at Baker Botts, LLP.

The U.S. Patent and Trademark Office (“USPTO”), in collaboration with academic and business professionals, established the Peer Review Pilot Program (the “Pilot”) to test whether “the organized collection and submission of documents together with comments by the public will produce better examination results by presenting prior art known by the public to the Examiner early in the prosecution.” The Pilot began accepting applications and prior art submissions on June 15, 2007 on “Peer-to-Patent,” the software framework for the Pilot. The last day for submitting patent applications to the PTO's peer-review pilot program was June 15, 2009. The USPTO is currently in the evaluation phase of the Pilot, and is expected to publish a comprehensive report outlining the results and next steps.

Whether the Pilot will be extended or become permanent is currently unclear. The Pilot appears to have the support of the Obama administration. During his presidential campaign, the President stressed the need for “opening up the patent process to citizen review,” as discussed at www.barackobama.com. As President he appointed Beth Noveck, a creator of Peer-to-Patent, to the Technology, Innovation, and Government Reform team, which is dedicated to “fostering innovation within government.” Upon launching the Open Government Initiative, which is intended to solicit ideas from the public for increasing transparency in government, the White House Web site featured the Pilot as one example of how government can use “transparency, participation, and collaboration to achieve [its] mission.” Open Government Innovations Gallery, www.whitehouse.gov/open/innovations. The Pilot also received praise in an initial evaluation from Examiners, applicants, commentators, and government officials, as noted in the First Anniversary Report. Center for Patent Innovations at New York Law School: Peer-to-Patent First Anniversary Report, available at http://dotank.nyls.edu/communitypatent/P2Panniver saryreport.pdf (hereafter “First Anniversary Report”). The First Anniversary Report tracked participation on the Peer-to-Patent Web site and surveyed reviewers and Examiners during the first year of the pilot program. Therefore, it seems possible that the program will be extended and even expanded.

The Pilot Program

Under 35 U.S.C. ' 122(c), the USPTO cannot accept prior art references and comments by a third party submitter without the express written consent of the applicant. Although the proposed Patent Reform Act of 2009 includes a provision that, if enacted, would allow third-party submissions without consent, until Congress changes the law, any program taking advantage of Peer-to-Patent will require such consent. As an incentive to obtain broad participation, and in order to allow quick evaluation of the Pilot in a short time frame, the USPTO offered to advance the examination of any participating application.

By including input from the public, the Pilot expanded the scope of the prior art search to non-patent publications for which an Examiner may not have ready access or even knowledge of its existence. Initially, the Pilot was limited to patent applications assigned to Technology Center 2100, which encompasses computer architecture and software. In the second year, the Pilot was expanded to include business method patents. Non-patent publications in these technology areas include conference presentations and software code, as these often are distributed only to a limited audience or are not well annotated or cataloged. For example, most software code is difficult for an Examiner to search because it may not always be sufficiently or correctly labeled. However, individuals with detailed knowledge of the materials can readily locate and provide them to the Examiner, and identify the relevant section. In this role, the public can provide a particular expertise that serves as an asset to the USPTO.

Participating applications were published on the Peer-to-Patent Web site run by New York Law School at www.peertopatent.org. The application remained on the site for four months, allowing a wide range of interested parties to discuss the application, submit prior art, critique other prior art references, and vote on the relevance of the prior art reference. At the end of the four-month period, the 10 best prior art references, as ranked by the online review committee, were sent to the Examiner for use in the examination process, along with any comments regarding the relevance of the prior art references.

Considerations for Applicants

Participation in the program can be beneficial to an applicant. If the applicant files a Request for Early Publication and consents to the submission of prior art by Peer-to-Patent, the time to a first office action is typically reduced by as much as a year. Getting Started with Peer-to-Patent, www.peertopatent.org/getting_started. For many applicants and their companies, having a patent complete examination and issue quickly is typically very desirable.

However, a serious consideration for applicants is that additional prior art documents that may not have otherwise been found by a typical search in the USPTO may be brought to the attention of the Examiner by the peer review process. For example, a study of the results after the first year of the pilot program found that in 24% of the applications, the information provided by Peer-to-Patent did not turn up in the Examiner's search. Indeed, 21% of the Examiners stated that the prior art submitted by Peer-to-Patent was inaccessible by the USPTO. See First Anniversary Report, page 14.

Due to the increased availability of prior art from commentators, an applicant who succeeds in obtaining a patent has an additional basis to defend against contentions of invalidity. However, no higher presumption of validity is given to patents that have been peer-reviewed. Moreover, there is no guarantee that all the relevant prior art references will be found, because some companies or individuals aware of such references may choose not to participate, either through apathy or by choice.

The subject matter of the application has a significant impact on the type of prior art raised. According to the First Anniversary Report, IBM accounted for 44% of the reviewers who were willing to reveal their affiliations in the first year of the program, so the quantity of prior art cited is likely to increase if IBM has prior art in technology related to the application. Linux Defenders, an organization dedicated to defending the open source community against software patents, has identified the Pilot as one of its priorities, and is building a defensive publications database that can be used as a repository of prior art for use in this program. Therefore, applications directed toward software, especially if there is an open source competitor, can expect significant participation in the peer review process. The quantity of prior art cited is also likely to increase if the industry practice includes publication of non-patent documents that are typically inaccessible by the USPTO.

Additional considerations include the relative size of the particular field and the extent to which a certain subject permeates the mainstream. The degree of difficulty associated with reading the application may reduce the number of potential reviewers for an application. To solicit more reviews, at least one applicant has posted a simplified version of the application on the Peer-to-Patent Web site. See Soberteentm Driving Insurance, www.peertopatent.org/patent/20090063201/activity.

While the prior art references that are uncovered during the peer review process are still available to invalidate the patent post-grant, there is a higher burden of proof on the party asserting invalidity, because an issued patent has a presumption of validity. Also, the patent claims may be amended in prosecution to distinguish over prior art references that are likely available only to a small number of potential infringers. For example, sources for the information cited in the first year of the peer review program included university sites, IBM internal documents, and personal files. Exposure to such prior art during prosecution enables applicants to draft more-focused, and perhaps narrower independent and dependent claims that may survive later validity challenges.

Considerations for Reviewers

Any member of the public who is not employed by the USPTO may submit comments, including the applicant. However, a comment made by the applicant on the Peer-to-Patent Web site may become binding on the applicant. Even if the comment is not considered by the Examiner during prosecution, an alleged infringer is likely to claim that such comment is an admission that may affect the scope of the claims. Given such risk, the better course for the applicant is to avoid participation in the peer review process, and only provide responses when required in an Office Action.

There are also risks for non-applicant reviewers who participate in the peer review process. Most notably, participation in the peer review process may serve as evidence of knowledge of the patent. If the reviewer or the reviewer's company should later be found to infringe the patent, such knowledge may be relied upon as proof of willful infringement, which can result in treble damages being awarded to the patentee. Employers should consider that employees may participate in the program outside of their employment, but their knowledge may in some cases be imputed to the employer.

In practice, it remains to be seen whether a court will find that participation in the peer review process gives rise to a finding of willful infringement. The code of conduct on the Peer-to-Patent Web site restricts applicants from seeking enhanced damages for willful infringement against an alleged infringer that became aware of the patent through participation in the Pilot. However, it is not clear that these terms will be held binding on the applicant. The consent form required by the USPTO requires that the applicant consent only to the submission of prior art from Peer-to-Patent, and does not require the applicant to consent to the code of conduct or any other rules posted on the Peer-to-Patent Web site. Nor is any such restriction mentioned in the Official Gazette notices that introduced or extended the program. Accordingly, any reviewer should realize the risk involved in the review process.

Beyond the legal risks, there also may be business risks in participation. For example, businesses may retaliate against submission of a prior art reference by cutting ties with the reviewer. Reviewers may also lose business opportunities by participating in this process. Such considerations should be weighed by applicants and reviewers alike prior to participation.

Conclusion

Based on the comments from both the current administration and the Pilot, peer review of patent applications on Peer-to-Patent is likely to be brought back in some form. There are benefits to participation in the program as both an applicant and a reviewer. However, both applicants and reviewers should carefully consider the risks involved before participation.

Walter M. Egbert is counsel at Hughes Hubbard & Reed LLP. Brian Boerman is an associate at Baker Botts, LLP.