(Source: Dino Vournas)
Leadership is desperately needed as patent backlog piles up, misconduct allegations mount, and trolling attempts rise

U.S. President Barack Hussein Obama II has nominated Michelle Lee, a former Google Inc. (GOOG) legal executive, to fill the position of Director of the Patent Office, the top post at the U.S. Patent and Trademark Office (USPTO).  If she is confirmed by the U.S. Senate, she will become the first lawyer to hold that key office in over a year.

I. Nepotism, Lack of Leadership Plague The Office

The appointment will hopefully bring some stability to the nation's intellectual property system, whose top ranks have been in disarray.  In Jan. 2013 David "Dave" J. Kappos, stepped down as Director of the Patent Office, a post he had held since 2009.

Widely viewed as a strong leader, the former Internation Business Machines Corp. (IBM) attorney carried out a fair degree of patent reform with the 2011 America Invents Act.  That law went too far in the minds of some and not far enough in the minds of others.  Still Mr. Kappos quickly found a position at a top corporate law firm after leaving and exited to broad praise from the legal community.

David Kappos
Former USPTO Director David Kappos departed in Jan. 2013. [Image Source: Center for Am. Progress]

The acting Interim Director, Teresa Stanek Rea, failed to fill the big shoes of her predecessor, and exited the agency altogether by Nov. 2013.  Her replacement Margaret A. (Peggy) Focarino did little to bring strong leadership to the office, which was widely viewed as poorly performing when it came to patent grants, at times granting patents too quicky and at other times delaying review, leading to a backlog of hundreds of thousands of patents.

To make matters worse, in Sept. of this year Deborah Cohn, the commissioner for trademarks, announced she would be resigning before the end of the year amid a federal nepotism probe.  She was accused of allowing a live-in boyfriend of an immediate family member to advance illegitimately in the hiring process.  

Deborah Cohn
Deborah Cohn tried to help the live-in boyfriend of an immediate family member circumvent the interviewing process at the USPTO.  After a nepotism probe she agreed to resign.
[Image Source: YouTube]

A first stage screening had ruled this young lawyer too not competent enough to be consider for a key position, but she allegedly pulled strings to make sure he advance to the next stage where he finished next to last out of 76 candidates.  He was still being considered for the post, when the probe started.  After the probe, he did not receive the position.

And the crisis of leadership couldn't have come at a worse time.  Industry leaders are demanding fixes to curb so-called "patent trolls" who are filing masses of junk litigation.  Prominent judges have joined the call for patent reform from the bench

But those seeking reform received no relief from Congress, where the Republican-controlled House and the Democrat-controlled Senate spun their wheels, but couldn't reach an agreement on how to legislate the issue.  The tech industry is now being forced to look for relief from the USPTO, but without a strong leader the prospects of reform remain uncertain.

II. At Last a Leader?

Michelle Lee could be precisely the kind of leader that's needed.

Michelle Lee
Michelle Lee spent a nearly a decade leading Google's legal efforts during its formative years.
[Image Source: Dino Vournas]

Like David Kappos, she brings experience from the industry.  She served as Google's Deputy General Counsel during its formative years from 2003 to 2012.  After leaving Google she served as Director of the USPTO's critical Silicon Valley patent office.

In January she received a promotion to acting director, succeeding the struggling former director Focarino who agreed to resign shortly after an inspector's general audit which revealed rampant employee hour fraud both among attorneys and paralegals at the USPTO.

The last director of the USPTO, whose Alexandria, Virg. headquarters is pictured, left amid allegations of rampant employee hours fraud and other forms of misconduct. [Image Source: AP]

Allegedly under the previous acting director's lead employees claimed to "work" from home and billed hours to the U.S. taxpayers, but were actually not working at all.  This unauthorized paid leave didn't just cost taxpayer dollars -- it endangered the state of intellectual property in the U.S., as more than 600,000 unexamined patent applications piled up.  And to make matters worse the negligent employees reportedly rushed exams, sometimes approving patents they didn't even examine, to try to cover up for their hours fraud.

The results of the probe were released a couple months ago by The Washington Post and various other media organizations following Freedom of Information Act requests.

The Obama administration hadn't originally planned on nominating Lee to advance to a permanent director position.  Instead it proposed bringing in an outsider -- Johnson & Johnson (JNJ) executive Philip Johnson to replace her as a permanent director.  

Phil Johnson
Phil Johnson (left) -- an anti-reform patent lawyer -- was a potential nominee for Director of the USPTO.  He is seen here with former USPTO Director David Kappos (right). [Image Source: IPWatchdog]

Mr. Johnson quickly came under criticism, though, for his vocal opposition to patent reform leading an anti-reform group (ironically) titled Coalition for 21st Century Patent Reform ("21C").  Sen. Charles Ellis "Chuck" Schumer (D-N.Y.) in a comment to The Wall Street Journal on the potential nomination, wrote:

We needed somebody who understood that the patent trolls, which are hurting so many tech startups, had to be reined in, and Mr. Johnson was unsympathetic to that viewpoint.

By July the Obama administration had scrapped plans for his nomination.

Patently-O, a blog by University of Missouri School of Law Professor Dennis D. Crouch, was among the first to report the news.  In his post he was generally enthusiastic, writing:

Congratulations to Michelle Lee and the Patent Office on this important move forward.

It was almost one year ago that Michelle Lee was appointed as deputy director and de facto director.  At the time, I praised the selection of Lee, but questioned both the legality and the wisdom of appointing a prominent deputy director while leaving the slot of director still vacant.   Because of legal limitations, Lee has not be identified as the “Acting Director” but only “acting as Director.”
Up to now, Lee has largely followed the lead set by former Director Kappos and Acting Director Rea. The unanswered question is whether the new role will now embolden and empower Lee to shift USPTO policies in a new direction.

About the only concern or protest against Ms. Lee's nomination might come from concern from Google's numerous legal enemies.  Ever since Google's Android morphed into the world's top smartphone and tablet platform, Google has been assailed in court by the likes of Apple, Inc. (AAPL), Microsoft Corp. (MSFT), and Oracle Corp. (ORCL).

Provisional patent
Someone needs to lead the USPTO in clearing out the backlog of applications, cracking down on trolling with open-minded patent reform, and cracking down internally on employee abuse.
[Image Source: InventorsEye]

Some of these rivals might grumble over fears that Ms. Lee could lend Google a subtle advantage with reform-minded policies that curbed the kind of acrimonious patent lawsuits that have targeted Android in recent years.

That said, IBM has plenty of legal rivals too, and concerns over bias didn't sink David Kappos's nomination in 2009.  Ms. Lee has already expressed a view that benefits both Google and its rivals -- the need to purge patent trolls who buy old patents and litigate as a business model, rather than produce goods.  She calls such entities a "bug in the system", which is telling, perhaps of her background as a computer scientist.  (She holds degrees in computer science from Stanford University and the Massachusetts Institute of Technology (MIT).)

The USPTO needs a leader, and it certainly seems worth giving Ms. Lee a shot at proving her mettle, given her strong track record thus far.

Sources: The White House, via Patently-O, via Gigaom

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