The Glass Cage: Unleashing America’s Underrepresented Innovators

DANIEL SLOAN

In the patent game, there are more losers than winners.1 During the last decade, there has perhaps been no bigger loser than the small inventor.2 And even if small-time inventors do manage to produce their golden goose, they often lack the time and financial resources to protect their egg-layer. Congress recently sought to change that by appending two bipartisan bills3 affecting intellectual property to the Consolidated Appropriations Act, 2023. This article addresses one of those bills, The Unleashing American Innovators Act of 2022. President Joe Biden signed the Consolidated Appropriations Act, 20234 into law on Dec. 29, 2022. Despite best intentions, a glass cage5 persists.

At its core, the act tries to make the U.S. Patent and Trademark Office (USPTO) more accessible to America’s innovators regardless of geographic or demographic origin.6 It has seven sections: (101) the short title, (102) definitions, (103) satellite offices, (104) community outreach offices, (105) patent pro bono programs updates, (106) pre-prosecution assessment pilot program, and (107) small and micro entity fee reduction. Section 101 gives us the appropriate cita- tion for the act as a division of the Consolidated Appropriations Act.7 Section 102 expands the definition of “patent pro bono programs” and creates a new “Southeast Region of the United States” for the USPTO.8 The definitions section also explains that the term “Office” means the USPTO and that “Director” means the Under Secretary of Commerce for Intellectual Property and Director of the Office.9 Thus, this article uses the terms Office and USPTO interchangeably and uses the term Director as used in the act.

Connecting with the Patent Office:

Outreach is the focus of § 103. The previous congressional statutory note from the 2011 Leahy-Smith America Invents Act (AIA)10 established a satellite office program. Its purpose was to “increase outreach activities to better connect patent filers and innovators with the Office.”11 As a result, the USPTO now has offices in San Jose, CA, as well as Dallas and Denver.12 These offices were selected under the AIA’s consideration guidelines and followed the 2010 selection of Detroit as the first USPTO satellite office.13 These offices have been a success.14 Even so, “millions of potential American inventors from underrepresented groups” have been left behind.15

Section 103 directs the USPTO to increase outreach activities, consistent with the AIA’s previous congressional note. The amended note in § 103 is broader in scope than the AIA note, referring to “individual inventors, small businesses, veterans, low-income populations, students, rural populations, and any geographic group of innovators” that the Director determines are underrepresented. It also expands the AIA’s instruction to “enhance patent examiner retention” to retain administrative patent judges and examiners from broader economic, geographic, and demographic backgrounds.16

What’s more, this section reflects congressional intent to create satellite offices that reach underrepresented communities without unmooring the USPTO from community institutions. Section 103 specifies the existence of “anchor institutions,” like hospitals and institutions of higher education, as factors the USPTO will consider when selecting sites for new satellite offices.17 More specifically, the act instructs the Director to complete a study to determine whether more satellite offices are necessary to achieve the original aims of the AIA’s satellite office subsection and to achieve increased participation by diverse innovators in the patent system.

The new “Southeast Region of the United States” created in § 102 of the act includes Virginia, North Carolina, South Carolina, Georgia, Florida, Tennessee, Alabama, Mississippi, Louisiana, and Arkansas. Essentially, this takes all the southeastern parts of the former Texas and East Coast regions and combines them into a single sixth region. So, the act’s satellite subsection creates the southeast regional office and instructs the Director to consider the existence of patent-intensive industries near proposed new satellite offices. The Director must consider how many research-intensive institutions are near the site as well as how the state and local government already support intellectual property intensive industries near a proposed site before selecting a new site for the southeast region’s satellite office.18 The Director has three years to establish the new office.

Section 104 works together with the AIA’s establishment of satellite offices by establishing a new type of outreach office. It instructs the Director to establish at least four “community outreach offices” within the next five years.19 At least one of these offices will be in a new northern New England region, serving Vermont, New Hampshire, and Maine. The Director must give preference to a location that has at least one public and one private institution of higher education.20 The location should also have fewer than 15 patent attorneys.21 The Director must also give preference to a location where women, minorities, or veterans own less than 45% of businesses.22

The purposes of these community outreach offices are to assist with the AIA’s satellite office outreach activities and to partner with local groups (local community organizations, higher education, businesses, and so on) to create community-based programs.23 Although the act uses the term “institute of higher education” several times, it does not define it. In comparison, the AIA, at 35 U.S.C.A. §§ 123, 273, uses the definition from the Higher Education Act of 1965, 20 U.S.C.A. § 1001(a). Because part of this act concerns micro entities, and the AIA section defining micro entities uses the definition from 20 U.S.C. § 1001(a), perhaps the USPTO will also use that particular definition.

The goal of having community outreach offices partner with local groups to create community-based programs is to provide education about the patent system and to “promote the career benefits of innovation and entrepreneurship.”24 The outreach offices will also educate underrepresented populations about the resources available to potential patent applicants, which relates to the goal mentioned in § 103.25

Though the act’s goals are admirable, I would like to bring attention to several minor issues. First, the USPTO already has a method to file applications electronically.26 Given this, the physical expansion of larger satellite offices into only a few areas makes little sense. If Congress’s aim is to increase innovation across the United States, it makes more sense to establish smaller satellite offices in cities across the country rather than establishing the functional equivalent of innovation “super-markets.” Using a multiple “neighborhood market” sized office approach would do more to achieve Congress’s goal of reaching underrepresented groups. And while higher education deserves a place in the discussion, putting satellite and outreach offices in locations where there are already places of higher learning reinforces the idea that institutions of higher education are where innovation has to happen.

Further, prioritizing locations with 15 or fewer patent attorneys conflicts with the act’s main goal to increase pro bono involvement. Perhaps the new locations would bring in more attorneys after the fact. That assumes patent attorneys will prioritize USPTO’s locations instead of personal factors, like the presence of their extended family, the initial availability of jobs, and the status of industry in the area.

In sum, the act’s expansion of the satellite program is progress, but it also seems a bit misguided in that it adheres to some out-ofdate ideas about how innovation happens in 2023.

USPTO Studies:

Like the satellite program, the pro bono patent programs have expanded over a brief period.27 Even in the limited time the AIA-created programs have operated, they have “empower[ed] low-income innovators” while educating future lawyers.28 Along with the satellite office study and to build on the AIA’s initial success, § 105 requires the Director to complete a patent pro bono programs study within a year and submit the results to both the House and Senate Committees on the Judiciary. The study will assess (i) if patent pro bono programs sufficiently serve prospective and existing applicants, (ii) whether the programs are sufficiently funded, (iii) whether the patent pro bono program’s participation requirements deter prospective applicants, (iv) whether prospective inventors are aware of patent pro bono programs, (v) what factors deter attorneys from participating in these programs, (vi) whether the programs would be improved by expanding them to non-attorney advocates (presumably, patent agents), and (vii) any other issue the Director determines appropriate.29

Similarly, § 107 gives the Director two years to complete a study on the fees charged by the office and submit the results to the same legislative committees mentioned in § 105.30 The study will determine whether fees deter patent applications filings by small and micro entities, whether fees should match examination cost, what incentives are created by using maintenance fees to cover examination costs, and whether the assessment’s results suggest changing the office’s fee structure. For both the pro bono programs and fees studies, the Director will make recommendations for administrative and legislative action as appropriate. The Director will also work with the advisory council and other parties to update the patent pro bono programs in response. The Director will work to expand eligibility to people who live in a household where the gross household income is less than or equal to four times the federal poverty line.31 In 2023, that number is around $58,000 for a household of one.32 Between the three studies mandated in the act’s seven sections, the Office has an interesting supplemental workload ahead.

Immediate Impact of Practical Components:

The act’s final two sections have the most immediate relevance to practicing attorneys. Section 106 gives the Director a year to estab- lish a pilot program to help first-time patentees assess their potential patent applications’ strengths and weaknesses. The Director will ensure the notification process advises prospective patentees that this assessment is not an official patentability ruling from the office. The Director will also establish the conditions to participate in the program and determine reasonable limitations on resources the patent office can dedicate to helping prospective patentees. As a component, the Director will establish procedures to refer patent applicants to legal counsel (including through the patent pro bono programs) and establish procedures to protect confidential information disclosed by prospective patentees.33

It is hard to anticipate the ramifications of the new pre-prosecution assessment pilot program. On one hand, it will, with any luck, do exactly what Congress aims with these amendments. That is, to break the glass cage and encourage innovation in underrepresented parts of the American population. If new inventors obtain information about their applications’ strengths and weaknesses prior to filing, they may become more knowledgeable of the patent system’s complexity. Inventors receiving positive feedback on their application who may have otherwise been on the fence about filing a patent application might be convinced to take the plunge. On the other hand, new inventors may receive false encouragement leading them to spend time and resources on a patent that will never be granted. In any event, attorneys advising new inventors will want to keep an eye on this program, as well as any interactions with the statutory prior art and disclosure requirements of 35 U.S.C. § 102.

Returning to § 107, Congress has increased across the board fee discounts to small entity and micro entity patent application fees from 50% to 60% and from 75% to 80%, respectively.34 In exchange for this reduction in fees, the act adds a penalty for asserting false entitlement to small or micro entity status.35 The Director will determine the fine, but it will be at least three times the amount that the entity failed to pay as a result of the false assertion.36 Patent attorneys have had the duty to investigate entitlement to claim small entity status since its inception.37 That said, these penalties add a client consequence bite to the Office of Enrollment and Discipline’s toolkit. There is no mens rea for this new requirement, so it doesn’t matter if the falsehood was known.

Kurt Vonnegut stated it well when he wrote, “[the] most destructive untruth is that it is very easy for any American to make money.”38 So too, to innovate. We live in a time of cutting-edge CRISPR39 advances and artificial intelligence. The wide-spread availability of these technologies may do more to decentralize the innovation monopoly than any legislative action. Thus, time alone will tell if the Unleashing American Innovators Act can smash the glass cage. Until then, the small inventor remains the biggest loser. 

Daniel Sloan, Esq. is a 2021 Washburn Law School graduate and a term clerk with Justice Melissa Standridge of the Kansas Supreme Court. He will join the New Lawyers Group at Jones Day’s New York, NY office in Fall 2023 with the intent to work primarily in intellectual property matters. Daniel thanks the Federal Bar Association, Ira Cohen, for inspiring him to submit an article for publication, and his colleague, Michael Raven for edits. He also thanks his wife, Jessica Sloan, for her love and support. The views expressed within this article do not reflect the views of the Kansas Supreme Court and are purely the author’s own.

Endnotes

1Richard Gruner, Does Anybody See What I See?: Abandoned Patents and Their Impacts on Technology Development, 11 NYU J. Intell. Prop. & Ent. L. 77, 83 (2021).

2See, e.g., Paul Morinville, Why the IP system works against the small, IpWatchdog (Feb. 13, 2018), https://ipwatchdog. com/2018/02/13/ip-system-works-against-small/id=93634/.

3The “Inform Consumers Act” is the other bill that affects IP in the consolidation bill and it is beyond the scope of this article.

4Consolidated Appropriations Act, 2023, Pub. L. 117-328, 136 Stat 4459. For clarity purposes, only the Unleashing American Innovation Act of 2022 is referred to as “the Act.”

5The term “glass cage” as used in this article is an extension of the “glass ceiling” concept. Instead of the invisible barriers to upward mobility in the professional world, the cage is a metaphor for invisible barriers that constrain innovation due to systemic differences in geographic or demographic origin that plague underrepresented American innovators. It encompasses not only the acknowledged barriers that deter those in certain demographics from professional success, but also those unacknowledged barriers so pervasive as to create an invisible, yet nearly inescapable cage.

6This article refers to the United States Patent and Trademark Office as “USPTO” and to the Under Secretary of Commerce for Intellectual Property and Director of the Office as “the Director.”

7The Act, supra note 4, at div. W, sec. 101.

8Id. § 102.

9Id.

10Leahy-Smith America Invents Act, Pub. L. 112-29, 125 Stat 284 [hereinafter AIA].

11Id. § 23.

12See USPTO locations, https://www.uspto.gov/about-us/usptooffice-locations

13U.S.C.A. § 1 Note, (c)(1)(B).

14Report on the Satellite Offices, prepared by USPTO, https:// www.uspto.gov/sites/default/files/aia_implementation/USPTO_ AIASatelliteOfficesReport_2014Sept30_Online.pdf

15See Steve Brachmann, Inventor Diversity Advocacy Group Launches ‘Patent Academy in Latest Effort to Reach Underrepresented Inventors, IpWatchdog (July 14, 2022), https://ipwatchdog. com/2022/07/14/inventor-diversity-advocacy-group-launchespatent-academy-in-latest-effort-to-reach-underrepresentedinventors/id=150223/

16The Act, supra note 4, at div. W, sec. 103(a)(1)(B).

17Id. § 103(a)(2)(C).

18Id. § 103(b)(2).

19Id. § 104.

20Id. § 104(a)(3)(B)(i)(I).

21Id. § 104(a)(3)(B)(i)(II).

22Id. § (a)(3)(B)(ii).

23Id. § (b).

24Id.

25Id. § (b)(3).

26See, EFS-Web Guidance and Resources, USPTO (last visited Feb. 14, 2023), https://www.uspto.gov/patents/apply/applying-online/efsweb-guidance-and-resources.

27Jennifer M. McDowell, Saurabh Vishnubhakat, The USPTO Patent pro Bono program, 7 Cybaris Intell. Prop. L. Rev. 1, 46 (2015). continued on page 40