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`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
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`Remarks by Director ancu at the
` ntellectual Property Owners
`Association th Annual Meeting
`
`September ,
`Remarks delivered at the ntellectual Property Owners Association th Annual Meeting
`
`Director of the U.S. Patent and Trademark Office Andrei ancu
`
`September ,
`
`Chicago, llinois
`
`As delivered
`
`Good morning everyone, and thank you, Henry [Hadad] for that generous introduction. And thank you for
`inviting me. t’s a pleasure to be with all of you this morning and to have this opportunity to kick off PO’s
`Annual Meeting. Much to the benefit of the U.S. innovation community, our two organizations—the USPTO and
` PO—have had a wonderful, longstanding relationship—a relationship that hope will continue for many years
`to come.
`
`We have been quite busy at the USPTO. Among other things, we are addressing some of the thorniest issues
`surrounding the patent system, attending to important trademark developments, and dealing with challenges
`posed by our legacy T systems. And all while maintaining our high standards and pendency goals.
`
`On the trademark side, in fact, we have been consistently meeting or exceeding our goals for the past years.
`That has not changed, despite a very significant growth in the number of applications. That growth has required
`us to hire, train, and integrate more trademark examiners, while maintaining our culture of organizational
`excellence.
`
`A significant part of the growth in applications has come from China. n fact, over the past years, the number
`of trademark applications from China has risen almost percent. This has presented increased issues with
`the unauthorized practice of law from individuals outside the U.S. n light of this and other issues, we are
`considering a possible notice of proposed rulemaking that would require foreign trademark applicants and
`registrants to be represented by a U.S. licensed attorney to file trademark documents with the USPTO.
`
`We are also taking a look at various options for decluttering our Trademarks register, and we have also recently
`launched a campaign aimed at reducing counterfeiting. We are likewise taking action on a variety of other P
`issues.
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`1/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 1 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
`We have played, for example, a leading role in the Music Modernization Act, which passed the House earlier this
`year, and was amended and passed by the Senate just last week. This major bipartisan legislation updates
`copyright law to reflect the realities of music licensing in the digital age and adequately compensate legacy
`artists and music producers for the fruits of their labor.
`
`There is indeed a lot of great work being done at the USPTO on all aspects of intellectual property.
`
`We’ve also been very busy with our T systems. Some of you are no doubt aware of the week-long outage the
`USPTO experienced last month, affecting some patent filings systems, among other things. The immediate
`culprit was a corruption of some tables in the PALM database. We were able to restore the system without loss
`of data, and in the process we upgraded the servers on which this particular database resides. However, a lot
`more work remains.
`
`As a general matter, our legacy systems are old and it is time—indeed, well beyond time—to undertake a
`fundamental modernization effort. And so, we are taking a broad, fresh look at our T systems. To that end, we
`have assembled a task force of USPTO leaders, and we are also working with outside consultants, to tackle this
`issue head-on and as quickly as possible. No options are off the table when it comes to modernizing these vital
` T systems.
`
`We’ve also posted a job opening to fill our vacant chief information officer position, and are looking for the very
`best applicants, both from inside the government, as well as from industry. So encourage you to ask the
`highest qualified T leaders that you might know to apply. nformation is available at the USPTO website. This is
`a unique opportunity to help us fundamentally transform our T systems and transition to state-of-the-art
`technology.
`
`Now as to patents: Discussing everything we are doing on the patents front would probably take the rest of this
`conference, something Henry would probably not be happy about. So in the interest of time, ’ll focus my
`remarks on a specific proposal for Section —patentable subject matter.
`
`As many of you know, we recently issued to our examiners two new guidance memos on Section : the first
`dealing with the “conventionality” step in the Mayo/Alice framework, and the second on “methods of treatment”
`claims. Our data shows that these two memos have already improved the analysis during examination.
`
`But significantly more work needs to be done, especially on the “abstract idea” exception.
`
` know that PO committees have been hard at work on a legislative fix to Section . ndeed, PO and A PLA
`have joined forces recently and proposed new statutory language. Should Congress be interested in moving
`forward with hearings or legislation, the USPTO would be very happy to help. As we all know, however, any
`legislative effort takes a long time, and the result is uncertain.
`
` n the meantime, the USPTO cannot wait. We have thousands of examiners who struggle with these issues on a
`daily basis. Our examiners need additional guidance now. And so do patent applicants, patent owners, and the
`public. Whether through legislation or otherwise, there is a growing consensus that the issue must be promptly
`addressed.
`
` n fact, several Federal Circuit judges have recently filed concurrences or dissents explaining the uncertain nature
`of the law and calling for change.
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`2/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 2 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
` n order to “work its way out of what so many in the innovation field consider are § problems,” Judge Lourie
`—in an opinion joined by Judge Newman—appealed to a higher authority. “Resolution of patent-eligibility
`issues requires higher intervention, hopefully with ideas reflective of the best thinking that can be brought to
`bear on the subject.”
`
`Judge Plager, in another case, noted that “the state of the law is such as to give little confidence that the
`outcome is necessarily correct.” He explained that, given current § jurisprudence, it is “near impossible to
`know with any certainty whether the invention is or is not patent eligible.” And he concluded that we currently
`have an “incoherent body of doctrine.”
`
`And Judge Linn explained that the abstract idea test is “indeterminate and often leads to arbitrary results.”
`
` agree with all these sentiments.
`
`Judge Giles Rich, an icon of patent law with an unparalleled understanding of—and impact on—our system,
`stated, in , the crux of the problem with respect to § jurisprudence. He said at the time that problems
`can arise due to the “unfortunate … though clear commingling of distinct statutory provisions which are
`conceptually unrelated, namely, those pertaining to the categories of invention in § which may be
`patentable, and to the conditions for patentability demanded by the statute…”
`
`This was almost years ago! How perceptive and prescient Judge Rich was.
`
`Let me put this in my own words: How can a claim be novel enough to pass and nonobvious enough to
`pass , yet lack an “inventive concept” and therefore fail ? Or, how can a claim be concrete enough so that
`one of skill in the art can make it without undue experimentation, and pass , yet abstract enough to fail ?
`How can something concrete be abstract?
`
`These problems confound the most sophisticated practitioners in our patent system. People simply don’t know
`how to draw these distinctions. f something is not inventive, then invalidate it under or . f something is
`indefinite, or too broad to be fully enabled or described, then invalidate it under .
`
`We have decades of case law from the courts and millions of examinations at the PTO which guide us in our ,
` , and analyses. People know these standards and how to apply these well-defined statutory
`requirements.
`
`The genius of the Patent Act, of which Judge Rich is widely viewed as a principal author, was that it
`categorized the bases for patentability. Our recent § case law mushes them all up again. As Judge Rich said,
`this “may lead to distorted legal conclusions.” And it has. And it must end.
`
`So propose that we go back and heed Judge Rich’s direction, and keep rejections in their own distinct lanes—
`as directed, in fact, by the Act. Let’s stop commingling the categories of invention on one hand, with the
`conditions for patentability on the other. Section is about subject matter. t is meant to address categories
`of matter that are not ever eligible on their own, no matter how inventive or well-claimed they are.
`
`Here is a hint: f the claims can be fixed by slightly different claiming, by narrower claiming, or by more definite
`claiming, this is likely a “conditions” problem—not a subject matter problem. A pure discovery of nature, like
`gravity for example, is not eligible no matter how new, how brilliant, and how carefully the claims are written.
`This is an example of a subject matter issue. The category itself is problematic.
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`3/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 3 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
`Alright, but what are these problematic categories? ask because believe that we must define the categories
`for these exceptions clearly, lest—in Justice Clarence Thomas’s words—we “swallow all of patent law.” Because—
`again quoting Justice Thomas—“at some level, ‘all inventions…embody, use, reflect, rest upon, or apply laws of
`nature, natural phenomena, or abstract ideas.’” Clearly, though, not all inventions are subject to a judicial
`exception. So what is the specific subject matter that is problematic and we must exclude? We must be clear, lest
`we perpetuate the current state. People should know up front. f nothing else, for the sake of a predictable
`ecosystem, let’s be transparent.
`
`And in particular, the issue needing most attention is, what precisely is the meaning of the “abstract idea”
`exception? Section itself lists four categories: process, machine, manufacture, and composition of matter.
`The judicial exceptions should likewise be clearly categorized. As Judge Rich explained, when we deal with § ,
`“the sole question…is whether the invention falls into a named category, not whether it is patentable...”
`
`So at the USPTO we are contemplating revised guidance to help categorize the exceptions—and indeed to
`name them—and instruct examiners on how to apply them.
`
`More specifically, the contemplated guidance would do two primary things: First, it would categorize the
`exceptions based on a synthesis of the case law to date. And second, if a claim does recite a categorized
`exception, we would instruct examiners to decide if it is “directed to” that exception by determining whether
`such exception is integrated into a practical application. These two clarifications would help drive more
`predictability back into the analysis while remaining true to the case law that gave rise to these judicial
`exceptions in the first place.
`
`So first, what exactly should be captured by the judicial exceptions to § ? n essence, and because we no
`longer want to mush subject matter with the conditions of patentability, the exceptions should capture only
`those claims that the Supreme Court has said remain outside the categories of patent protection, despite being
`novel, nonobvious, and well-disclosed. And what are the categories of inventions that the court told us that we
`should not patent even where the applicant demonstrates full compliance with Sections , and ? The
`Supreme Court gave us the answer: the “basic tools of scientific and technological work.”
`
`And what are these “basic tools?” believe that the Supreme Court has also told us that, at least through their
`examples. For example, they certainly include pure discoveries of nature, such as gravity, electromagnetism,
`DNA, etc.—all natural and before human intervention. So, no matter how brilliant the discovery of a certain DNA
`sequence in nature might have been, the court said we should not issue a patent in the absence of more. The
`Myriad case is a recent example.
`
`Also, fundamental mathematics like calculus, geometry, or arithmetic per se. That is, no matter how novel and
`well-described Newton’s calculus may have been, it is still not patentable by itself. t can be thought of as
`abstract no matter what. Perhaps “inherently” ineligible, some might say. The Benson case is an example.
`
`Some basic “methods of organizing human activity,” such as fundamental economic practices like market
`hedging and escrow transactions, have also been excluded by the Supreme Court in Bilski and Alice.
`
`And the court has also warned against pure mental processes such as forming a judgment or observation.
`Again, by itself, something performed solely in the human mind can be thought of as abstract no matter how it
`is claimed.
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`4/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 4 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
`The Supreme Court has been interpreting this statute for the past years or so, and throughout that time has
`given only a limited number of examples of these “basic tools of scientific and technological work”—and
`arguably they can all generally fit into the categories just mentioned. So let’s turn now and ask in a bit more
`detail, what do the various exceptions articulated by the Supreme Court really encompass? There is less difficulty
`with understanding the categories for laws of nature and natural phenomena.
`
`Folks can arguably identify things like gravity or DNA in a claim. Abstract ideas, on the other hand, have proven
`more challenging to define. But a thorough review of the relevant case law helps us draw more clear lines. At the
`USPTO we have undertaken just such a review and have studied every relevant case in detail.
`
`And so, the proposed PTO guidance would synthesize “abstract ideas” as falling into the following three
`categories:
`
`Mathematical concepts like mathematical relationships, formulas, and calculations
`Certain methods of organizing human interactions, such as fundamental economic practices
`commercial and legal interactions; managing relationships or interactions between people; and
`advertising, marketing, and sales activities
`Mental processes, which are concepts performed in the human mind, such as forming an observation,
`evaluation, judgment, or opinion.
`
`Under the first step of the proposed guidance, we would first look to see if the claims are within the four
`statutory categories: process, machine, manufacture, or composition of matter. This is not new—we always do
`this. f statutory, we would then check to see if the claims recite matter within one of the judicial exceptions,
`categorized as just mentioned. This is the new approach.
`
` f the claims at issue do not recite subject matter falling into one of these categories, then the analysis is
`essentially concluded and the claim is eligible. This alone would resolve a significant number of cases currently
`confounding our system. f an examiner does not find matter within the disallowed categories, he or she can
`move on.
`
`Now, on the other hand, if the claims do recite subject matter in one of the excluded categories, the Supreme
`Court has instructed that we need to do more analysis. Specifically, the court instructed us that in such cases we
`need to decide whether the claims are “directed to” those categories.
`
`To that end, we must first understand what the line is that the court wants us to draw to decide whether the
`claim is “directed to” an excluded category or not. The proposed new guidance would explain that Supreme
`Court jurisprudence taken together effectively allows claims that include otherwise excluded matter as long as
`that matter is integrated into a practical application. The line, in other words, delineates mere principles, on one
`hand, from practical applications of such principles, on the other.
`
`For example, in Le Roy v. Tathem, the court said in that “a new property discovered in matter, when
`practically applied in the construction of a useful article of commerce or manufacture, is patentable.” Then
`years later, in Diamond v. Diehr, the court repeated that “an application of a law of nature or mathematical
`formula to a known structure or process may well be deserving of patent protection.” And recently, in Mayo, the
`court explained that “applications of such concepts to a new and useful end … remain eligible for patent
`protection.”
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`5/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 5 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
`And so, if the claim integrates the exception into a practical application, then the claim is not “directed to” the
`prohibited matter. n such cases, the claim passes and the eligibility analysis would conclude. Otherwise, we
`would move to step of Alice, for example as explained in the office’s Berkheimer memo from earlier this year.
`
` t is important to note that the first step of our analysis does not include questions about “conventionality,”
`which are addressed in Alice Step . That is, it does not matter if the “integration” steps are arguably
`“conventional”; as long as the integration is into a practical application, then the analysis is concluded. This
`helps to ensure that there is a meaningful dividing line between and / analysis. A fully
`“conventional” yet patent-eligible claim may still be unpatentable as obvious. But it is better to address such a
`claim with obviousness law that has been developed over years of practice.
`
`The analysis also does not deny claims as ineligible merely because they are broad or functionally-stated or
`result-oriented. understand the concern with certain types of broad, functionally defined claims that do not
`have sufficient support in the specification. But for these cases, USPTO examiners know, and will receive further
`guidance and training on, how to apply well-defined Section principles.
`
`Put another way, the examination does not conclude merely because we overcome Section ; we must still
`examine for patentability under sections , and . And so for claims that pass because they do not
`articulate matter in a defined category, or that integrate the matter into a practical application, we can rest
`assured that other sections of the code should still prevent a patent if the claim is not inventive or is merely on a
`non-enabled or undescribed or indefinite idea.
`
` n sum, the proposed guidance for Section , which addresses step of Alice, would explain that eligibility
`rejections are to be applied only to claims that recite subject matter within the defined categories of judicial
`exceptions. And even then, a rejection would only be applied if the claim does not integrate the recited
`exception into a practical application. This provides significantly more clarity for the great bulk of cases.
`
`Sure, there will be a number of cases that would still be difficult to resolve when we ask whether a claim is within
`one of the excluded categories, or whether it is a practical application of it. But for the vast majority of cases in
`the big middle, suspect that the proposed approach would be significantly simpler.
`
`And we are certainly in need for some simplification.
`
`For many claims right now, we have an option to reject or invalidate, for violations of patentability conditions,
`under either:
`
`A patentability condition such as , or , or
`Section subject matter.
`
`Judge Rich was again perceptive, when he noted years ago that “To provide the option of making such a
`rejection under either or [a condition for patentability] is confusing and therefore bad law.” Just as Judge
`Rich warned, we have gotten ourselves into a rut when it comes to Section analysis. With the proposed new
`guidance, the USPTO is trying to navigate our examiners out of that rut given the current statute and judicial
`precedent.
`
`And hope other authorities will join in helping us get out of the rut, at least by keeping rejections in their lane
`and by clearly categorizing the subject matter of any exception. Please note that if we are to issue such revised
`new guidance, it would take some time to finalize. During that time, welcome your comments and thoughts on
`this and any other proposal.
`
`https://www.uspto.gov/about-us/news-updates/remarks-director-iancu-intellectual-property-owners-46th-annual-meeting
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`6/8
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`Patent Owner Gree, Inc.
`Exhibit 2008 - Page 6 of 8
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`4/7/2019
`Remarks by Director Iancu at the Intellectual Property Owners Association 46th Annual Meeting | USPTO
` n the end, we all have the same goal in mind. Born of our Constitution and steeped in an inspiring history of
`world-changing innovation, the American patent system is a crown jewel, a gold standard. Working together, we
`can ensure increased clarity in the patent system, and thus ensure that the United States will continue to lead
`the world in innovation and technological development.
`
`Thank you again for the opportunity to be with you here today. would be happy to answer any questions you
`might have.
`
`
`
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