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respond to market forces in a cost effective and efficient manner is the fundamental purpose of the government corporation and the clear weakness of the PTO operation. As a government corporation, subject to the oversight of Congress, and with the benefit of informed advice from a private sector advisory committee, the PTO could at last make meaningful inroads into longstanding difficulties in delivering optimal quality patent and trademark examination in a cost-effective manner. Upgrading the performance of the PTO would provide substantial benefits to the American business community.
Resolution Two: PRIVATE-SECTOR ADVISORY COMMITTEE
RESOLVED, that the American Intellectual Property Law Association favors
(a) analyze the effectiveness of the administration of the patent and
(b) consult with and otherwise advise the PTO on its policies and programs
(c) report to the President of the United States and to the United States
(d) undertake studies or investigations, evaluate proposals, or develop
(e) establish and oversee the work of a professional staff of the committee,
A purpose of the patent and trademark laws is to benefit the American public by providing useful commercial rights to the business community, and as to patents, to the innovative business sector. The users of the PTO services who now completely fund the PTO operation merit an effective voice in defining PTO goals, priorities, and administrative practices and procedures. The advisory committee would have no authority over PTO operations save the authority to offer advice. However, the users of PTO services are in a better position than both Congress and the PTO to evaluate whether the manner in which those services are provided meet their needs. Providing a formal mechanism for the private sector to advise Congress and the PTO on how the patent and trademark laws are being administered can only provide useful information to those who have the affirmative responsibility to ensure the PTO is operating with optimal efficiency and effectiveness. Currently, such advice, particularly regarding fiscal matters, is not available. A critical factor to the proper operation of the advisory committee is the authority to retain competent staff support sufficient to allow the committee discharge its responsibilities and particularly to respond to specific requests by Congress for information.
Resolution Three: BORROWING AUTHORITY
RESOLVED, that, in the event the funding of capital and other extraordinary
(a) to purchase assets and hold such assets for the exclusive benefit of the
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(b) to borrow money up to a statutory limit for the purpose of acquiring such
(c) to guarantee the payment of the principal and interest from any such
SPECIFICALLY, favors that the PTO itself be empowered to act as such a
A PTO borrowing entity should be created which would be authorized by statute to acquire capital assets for the exclusive use of the PTO, which the debt instruments of such an authority being serviced from PTO user fee collections. The borrowing authority would assure necessary flexibility in PTO operations and provide a mechanism for normal "business planning." The PTO could use this authority for its APS deployment activities, future automation projects, and purchase of permanent facilities. The latter could conceivably result in a lower net cost to users than the reliance on General Services Administration (GSA) to contract for facilities. At the time the PTO is established as a government corporation, the corporation should be empowered to act as its own borrowing authority.
Conservative "band-aid" changes in PTO operations are unlikely to achieve costeffective, quality examining operations. One fact seems invariable and inevitable based upon the history of PTO reform efforts: without a fundamental change, the PTO will perform its mission in the future as it has in the past. In the context of a completely user-funded PTO, such a prospect cannot be reconciled with the public interest or the future success of the American patent system.
If for any reason the establishment of the PTO as a government corporation is delayed or deferred, then certain elements of the government corporation could be implemented immediately. One element most certainly would be the private-sector advisory committee. No reason exists for not creating such a board immediately to serve as oversight for the existing PTO operations and to further study the merits of government corporation status for the PTO. Similarly, while the government corporation would inherently hold its revenues for its own account and would by statute be given authority to borrow and hold assets in its own right, these results could be accomplished immediately through a separate borrowing entity.
Finally, the AIPLA appreciates the efforts of this Subcommittee, and particularly Senator Grassley, to direct the Office to begin to disseminate patent information in electronic form. After hundreds of millions of dollars spent on the APS, we believe it is high time that the public begins to realize some benefit from it. The CD-ROM demonstration project is the first initiative since the beginning of the deposit library system in 1871 to improve the fundamental mission of the Office to provide the public descriptions of patented inventions so that others may improve those advances.
Unfortunately, the PTO does not share our enthusiasm with the prospect that in the near future, inexpensive use-efficient remote access to millions of U.S. and foreign patents, and the wealth of applied technical information contained therein, could be available to private, government, and university researchers. Therefore, while the law provides that the demonstration project will include an offer for sale of CD-ROMs with electrical, mechanical, and chemical technologies, the PTO has chosen to only offer two chemical technologies. The AIPLA recommended to the PTO a number of electrical (computer-related) and
mechanical fields for inclusion in the project but these were rejected. We wrongly assumed the PTO would choose electrical and mechanical fields for itself because of the requirements
of the law.
Limiting the scope of the demonstration project to chemicals greatly diminishes the worth of the project in two ways. First, the number of persons which may be interested in using this new product because it relates to their own field of endeavor is significantly decreased. Second, the true value of patent image technology is the ability to see and search drawings, tables, and mathematical and chemical formulae which are currently not available on electronic patent search systems. The mechanical and electrical arts would demonstrate this great advantage even more than would the chemical arts.
The CD-ROMs will not be available until July and the program is scheduled to end in October. We urge the Subcommittee to very seriously consider extending the demonstration project through 1993. Meaningful results cannot be obtained in the short truncated project now underway. Also, all of the arts need to be included. This important effort needs a fair opportunity to prove its worth.
This concludes our statement. I would be pleased to answer any questions the
members of the Subcommittee have.