Testifying before the House Commerce, Justice and State Appropriations Subcommittee, John Dudas thanked the subcommittee and the House for the March 3 passage of H.R. 1561, which raised patent fees, authorized certain agency reforms, and permitted the PTO or patent applicants to keep all fees.
Asked by Rep. Jose Serrano, D-N.Y., ranking member of the subcommittee, what would happen if the Senate does not pass a similar measure, Dudas replied: "It will put us, and the [patent] system, in a pretty tough bind."
He said the office "would not be able to hire" enough patent examiners to address a backlog of 475,000 applications and that the backlog would grow to 1 million. Pendency, or the length of time it takes for the average patent to be approved, would climb from its current 26 months to 40 months.
Pendency for technology-intensive fields like computer and communications would climb higher, to nearly 52 months, he said. Whether or not the Senate passes the bill, Dudas said pendency will rise slightly in the near-term, to a projected 31 months, because it takes about two years to begin addressing the backlog. "We are trying to make stabilize it at an acceptable point."
In addition to heading the PTO, Dudas is Commerce's acting undersecretary for intellectual property and on Tuesday was nominated by President Bush to assume the formal position. He also addressed questions from Chairman Frank Wolf, R-Va., about intellectual property piracy in China, outsourcing the patent searching functions, telecommuting by PTO employees, and technical integration with the European PTO.
Dudas said the patent office by itself could do little to combat piracy and other ills in China highlighted by Wolf, a critic of permanent trade relations with the country.
"We are finding that we are making strides" although "they are not dramatic strides in educational efforts with judges and prosecutors" in respecting patents, Dudas said.
From the perspective of U.S. patent-holders, he said, the greater problem was lack of "market access," or the inability for U.S. rights holders to offer their own legitimate goods in competition to the Chinese-produced counterfeit versions.
He also said China's portion of the seizures of counterfeit goods at the U.S. border had risen from 16 percent in 1999 to 70 percent in 2003.
On telecommuting -- another of Wolf's key interests -- Dudas said the office continues to support having its trademark examiners work primarily from home. "We now have 44 percent of 250 trademark examiners teleworking, and we intend to increase that to 60 percent." Moving patent examiners to telecommuting must await a fully electronic filing system, something Dudas promised by the end of the year.
Dudas also said he fully intends to comply with restrictions on "offshore outsourcing" of patent researchers that Congress imposed when it passed H.R. 1561.