- Although having grown considerably larger and more complex, the art of examining patent applications at the U.S. Patent and Trademark Office (USPTO) has remained fundamentally unchanged since its establishment more than 200 years ago, when each application was reviewed and ruled upon by the first commissioner, and then only examiner, Thomas Jefferson, and two assistants. Examiner Jefferson would "docket in" a patent application, at that time limited to a single page (there were no claims), together with a small filing fee (about $4) to establish the filing date of the application. Jefferson would then make a search of the "prior art" from documents and gadgets in his own library and issue what could be considered an office action or else approve a patent. During his first year of business in 1790, Jefferson issued three patents. The first for converting wood ashes into farm fertilizer.
The applications began arriving in increasing numbers, sometimes several in a single week. Jefferson soon found himself overwhelmed by an outpouring of American inventiveness. A total of 55 patents examined by Jefferson personally were issued between 1790 and 1793. Between July 31, 1790, and July 2, 1836, under a short-lived law in which patents were issued without examination, nearly 10,000 U.S. patents were granted by Jefferson’s office, now called the Board of Arts. By 1793, patent examining duties had been reassigned to a U.S. Department of State clerk, until the U.S. Patent and Trademark Office was formed in 1802. Patent number one million was issued in 1911. In 1935, patent number two million was issued and patents number three, four and five million issued in 1961, 1975 and 1991, respectively.
Today, more than six million patents have been issued, growing by 175,000 annually. Nearly 375,000 new applications are filed each year, atop a current backlog of about 400,000 pending applications.
Currently, when a patent application is received by the USPTO, it is stamped in to codify a filing date and forwarded to a formalities examiner at the Office of Internal Patent Examination (OIPE) for confirmation that the application is complete, including payment of the correct filing fee. From there, the application is forwarded to the appropriate examination group art unit for classification into an art area and assignment to an examiner. The examiner will make an initial examination to confirm that it claims a single examinable invention, and if not, issue a requirement for restriction to an invention elected by the applicant. The examiner will next make a search of the prior art, using hard copy patents located on shelves distributed throughout the USPTO facilities, and a number of available databases. Then the examiner undertakes a substantive evaluation of the application and either grants a patent or issues an office action detailing grounds of refusal. Following exchanges of correspondence between the examiner and applicant, when claims may be amended and arguments in support of patentability made, the patent will issue, be "refiled" or abandoned. If the patent applicant fails to persuade the examiner as to the merits of the invention, there are avenues of appeal to the courts.
This system works well when the number and complexity of applications filed each year conform to the capacity of the USPTO to examine them. That appears to have been the case in the mid 1970s, when the average pendency of an application was at 18 months, down from an all-time high of 35 months in 1964. By 1980, however, pendency had climbed to 23 months and was projected to reach 48 months by the end of the decade. In 1982, USPTO fees were increased substantially to fund an enhanced USPTO workforce, and, consequently, by the end of the 1980s pendency was reduced again to 18 months and remained approximately at that level until the end of 1995.
Since 1996, the number of annual filings has increased dramatically, with some the largest growth occurring in patent filings in the electrical technologies and computer-implemented business methods. Average pendency currently surpasses 24 months. Despite an examining corps of a record 3,400 in number, the number of new filings (aggravated by a considerably increased complexity of the average application in content and size) is expected to rocket pendency into the range of three to four years or more in the near future, a situation some have called a "crisis."
Enter James Rogan
James Rogan, a conservative Republican, came from humble beginnings. His mother was troubled and stepfather an alcoholic (Rogan never knew his biological father). Rogan was a high school dropout, but, with the support of his grandparents, he attended community college, U.C. Berkeley and then UCLA law school where he served on law review. He worked at a law firm for a short time before becoming a prosecutor for Los Angeles County, specializing in prosecution of gang murderers, rapists, child molesters and drug traffickers. At the age of 33, Rogan was appointed California’s youngest judge. He was next elected to the California State Assembly and then recruited to serve as assembly majority leader. In 1966, Rogan successfully ran for the U.S. Congress as Representative of the 27th District in Southern California. Rogan is a devoutly religious, pro-law and order, pro-life, social conservative, considered a rising star in the Republican Party. He was a house manager of President Clinton’s Senate impeachment trial. Rogan has co-sponsored a number of pro-technology bills, and he is often seen as a USPTO outsider.
The USTPO needed a commissioner under the newly elected Bush administration. Rogan apparently was just the right person for the job.
Two years ago, James Rogan was appointed the first USPTO chief to come from outside the IP profession since the Eisenhower presidency. Although initially resisted by the IP community, Rogan has taken charge, crafting a remake of the USPTO in order to meet the challenges facing it. His 21st Century Strategic Plan, while still a work in process, is winning support by the IP community because reform is needed and as a result of aggressive lobbying and occasional compromise.
The Strategic Plan
The strategic plan is said to be a roadmap for transformation, laying out what the USPTO will do over the next five years to reduce the total time it takes to obtain a patent to 18 months. In doing so, the office vows to make the process almost paperless, to outsource certain functions historically handled by examiners and career staff and to coordinate efforts with intellectual property offices around the world to create a global framework for enforceable intellectual property rights. In exchange, the public will be asked to pay considerably greater filing and processing fees, tone down the complexity of applications or pay additional fees and tolerate change in procedures from business as usual.
Electronic Processing of Applications
As a means to modernize its information handling methodologies, and conform to global trends, the USPTO has resolved to implement a fully operational paperless system by the end of fiscal year 2004, using the European Patent Office’s (EPO) ePHOENIX system when the USPTO has moved to the new Carlyle campus in Alexandria, Virginia. This platform will be used to scan all patent application related papers received by the USPTO. These images will represent the complete file wrapper record, including the initial application, follow-on papers and outgoing correspondence, to be indexed and made available to examiners. An ePHOENIX File Inspection component will be integrated with the current Patent Application Information Retrieval (PAIR) system to provide applicants access to their applications via the internet. The ePHOENIX software is said to be considerably more user friendly than EFS, an awkward, XML-based e-filing platform currently implemented by the USPTO that only about 3 percent of applicants apparently have used.
Paperless processing of patent applications, if reliable, certainly will be welcomed. While the USPTO has struggled unsuccessfully to devise a paperless system, electronic filing and processing of applications has been operational in Europe and Japan for more than a decade.
Outsourcing Searches
The USPTO plans to outsource prior art searches to private contractors and cooperating patent offices of non-U.S. countries, depending on the nature of the application. Applications will be delegated out or retained by the USPTO for searching, depending on which of several so-called examination tracks the application is on. Under current practice, there is only one track: the application is filed with the fee, the invention searched by an assigned examiner, examined by that examiner and ultimately issued or abandoned. The proposed multi-track examination system farms out searches or handles them internally depending on how the application comes in (its "track"), that is, whether the application is an original U.S. filing or a PCT U.S. phase filing and whether a search has already been accomplished. The search is performed internally only if there is no alternative.
Under the strategic plan as initially devised, the USPTO had proposed to leave it to the applicant to retain a contract searcher certified by the office, rather than make the delegation itself. However, that proposal was revised in response to concerns lodged by the IP community, so the USPTO does the delegating. The USPTO will competitively outsource the searches, dictate the report style required by contractors so as to produce an enhanced international-style search report, monitor quality through periodic review and issue certification to qualified global (non-U.S. patent offices) and private search contractors.
The concept of delegating searches is not universally accepted. It is hotly opposed by POPA, the examiner’s union, who point out the synergies that arise when the same person who does the search makes the examination. But in an April 3, 2003, statement read by Commissioner Rogan to the U.S. House of Representatives, Subcommittee on Courts, the Internet, and Intellectual Property Committee on the Judiciary, Rogan expressed an opposite view, tying quality enhancement in examination to outsourcing of the search function so examiners’ concentration can be focused on patentability decision making. In this respect, he noted that the USPTO has long relied upon the European Patent Office’s (EPO) search examiners in The Hague to perform searches of applications filed under the Patent Cooperation Treaty. But what the commissioner neglected to mention is that such searches, when made by the international searching authority, often are found not to be complete or appropriately focused on the claims, to require an examiner-supplementation. The commissioner also failed to note that the EPO is moving in the opposite direction- consolidating searching and examination in a single examiner. This consolidation in Europe is even given a name- the "BEST" program, an acronym for "Bringing Examination and Search Together." The EPO plans to fully convert to combined search and examination by 2005.
Fees
The USPTO is proposing some considerable increases in fees, euphemistically termed "Fee Modernization," that will require amendment of 35 USC §41, the menu of filing and processing fees under which the Office operates. It is not just the fee amounts for filing a patent application that will be increased, the structure under which fees are charged will be changed fundamentally. The USPTO proposes to establish three separate fee components, a filing fee, a search fee and an examination fee, replacing the current single filing fee. All three components will have to be paid when the application is filed
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Fee Proposal Comparison Chart |
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Current |
Proposed |
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Patent Filing Fees: |
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Filing Original Patent Application |
$750 |
$300 |
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Search Fee |
$500 |
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Examination Fee |
$200 |
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Total Due at Filing |
$750 |
$1,000* |
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PCT National Stage Fees (example): |
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USPTO Is Neither IPEA nor ISA |
$1,060 |
$1,000** |
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Claims Fees: |
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Independent Claims in Excess of 3 |
$84 |
$200 |
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Claims in Excess of 20 |
$18 |
$50 |
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Patent Extension Fees (example): |
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Extension for Response within Second Month |
$410 |
$450 |
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Patent Appeal Fees: |
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Notice of Appeal to Board of Appeals |
$320 |
$500 |
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Filing a Brief in Support of an Appeal |
$320 |
$500 |
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Request an Oral Hearing |
$280 |
$1,000 |
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Pre Grant Publication: |
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Publication Fee |
$300 |
$300 |
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Patent Issue Fees: |
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Issue of Original or Reissue Patent |
$1,300 |
$1,400 |
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Patent Maintenance Fees: |
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First Stage Maintenance |
$890 |
$900 |
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Second Stage Maintenance |
$2,050 |
$2,300 |
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Third Stage Maintenance |
$3,150 |
$3,800 |
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Total Patent Life-Cycle Costs: |
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Filing, Issue and Maintenance Fees |
$8,140 |
$9,400 |
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Filing, Issue, PG-Pub and Maintenance Fees |
$8,440 |
$9,700 |
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* Refundable in part depending upon stage of express abandonment
** Refundable in part depending upon standing of prior search
Post Grant Review
The USPTO proposes to eliminate the recently overhauled inter partes reexamination in favor of permitting any member of the public feeling threatened by an infringement suit to oppose claims in an issued patent. The level of threat necessary to qualify for this action is "some substantial apprehension of being sued." An opposition must be brought within four months of the threat.
Accelerated Examination
Current practice allows an applicant to petition for expedited examination upon payment of a small fee and presentation of a patentability search and report. The applicant is required to prosecute expeditiously- no extensions of time and no restriction traversals permitted. Although expedited, the period of examination is uncertain and depends, for one thing, on the particular examining group art unit to which the application is assigned.
Under the strategic plan, the USPTO will offer applicants an option to choose an accelerated examination with a guaranteed pendency time of no longer than 12 months. The cost is expected to be substantial, perhaps $6,000. The applicant for an accelerated examination will be required to file the application electronically. A thorough pre-examination search must be carried out by the applicant, with references submitted in electronic image format with an IDS and must include a relevancy discussion. The applicant must propose a classification of the invention for examination purposes. Only up to 20 claims, including up to three independent claims, may be presented. Only the independent claims will be examined. Multiple inventions will not be permitted.
Responses to offices’ actions must be filed by facsimile or e-mail transmission within two months of the action date. The applicant will be required to submit a publication-ready version of the application along with the issue fee, within one-month from the mailing date of an allowance. No extension of time will be permitted.
The time for replying to a final office action is two months. Any amendment after final rejection must place the application in condition for allowance. Otherwise, a reply to the final rejection is limited to a notice of appeal under 37 CFR 1.191 or a request for continued examination (RCE) under 37 CFR 1.114. A notice of appeal or RCE will remove the application from the expedited examination process. After allowance, an application subject to the expedited examination process will be given top priority for printing.
- Although accelerated examination under the strategic plan can be expected to reliably shorten pendency, the process has some downsides. In addition to the obvious disadvantage of fronting a filing fee that is astronomical by today’s standards, as in the current procedure the applicant must file a patentability report, which is undesirable from an estoppel perspective. Accelerated examination itself has shortcomings because not enough time may be available to the examiner and applicant to thoroughly negotiate the application. Prior art discovered during prosecution of non-U.S. counterpart applications may not make it to the U.S. application on time. Finally, as the number of claims under examination is limited, it will not be possible to submit a broad range of claims of differing formats, to see which ones survive. But if quick examination is the principal concern, and money is not an issue, accelerated examination will be worthwhile.
Assignee Filing
Currently, only the inventor may file an application. The inventor’s signature is required on the oath or declaration. The USPTO proposes to change this practice, so as to enable the assignee of the entire interest in an invention, to stand in the shoes of the inventors. The assignee would be authorized to execute documents, including oath or declaration, and would be the exclusive participant to prosecution. This change in practice is believed beneficial, as it will reduce complexity and processing delays caused by the need to obtain inventor signature initially and occasionally during prosecution and conform U.S. practice to what is carried out in Europe and elsewhere.
Detailed Interview Summaries
The USPTO proposes to require an applicant to more fully summarize the content of an interview with an examiner. This will apply in every case. There will be no option for the examiner to indicate in an interview summary that no response by the applicant is required. This is considered another worthwhile practice, as will be evident to anyone who has studied a prosecution history only to find allowance of broad claims to have been mystically granted following an interview.
Practitioner and Examiner Certification
The strategic plan has a provision likely to give examiners and practitioners a nosebleed- continuing skill level certification. Under the proposal, registered patent lawyers and agents will be required to be periodically tested, suspended from practice if they do not take the required test, or take it and fail. There will be a fee for taking the test and an annual renewal fee for continued registration. On the USPTO side, applicants to the examiner corps will be tested, not only on technical skills, but also on English proficiency. Primary examiners will be periodically tested to confirm sufficient level of knowledge of law and procedure, a practice probably not popular among examiners, but not publicly opposed.
Elimination of Non-Publication Rescission Option
35 USC §122(b)(2)(B) enables an applicant to prevent publication of an application that occurs 18 months after its filing date by certifying that the application will not be filed overseas. If the applicant nevertheless files a counterpart application overseas, he or she must notify the USPTO of the filing within 45 days to prevent automatic abandonment. There also is a procedure for publishing only a redacted portion of the application, corresponding in content to what publishes overseas in a counterpart application. Both of these procedures initially were enacted as an accommodation to independent inventors, and some nonprofit institutions. These entities often do not file applications overseas and want to maintain their applications confidential (non-published).
Simplification of Patent Term Adjustment
Another practice to be watered down, to the regret of very few, is patent term adjustment (PTA). Under The General Agreement on Tariffs and Trade(GATT), the term of a patent is 20 years from filing. The purpose of PTA is to guarantee that diligent applicants will have a patent term of at least 17 years from grant (this was the term prior to enactment of GATT). PTA currently increases the patent term to compensate for certain types of delays committed by the USPTO, reduced by certain types of delays caused by the applicant. But if the USPTO issues the application within three years from its filing date, any patent term adjustment operates to overcompensate the patentee, who will enjoy a patent term that exceeds 17 years from grant.
No one enjoys the process of tracking prosecution timing for term adjustment. It is an administrative nightmare for the USPTO and for practitioners. As a practical matter, the extension of term under PTA benefits only a small class of patentees, such as those in the field of pharmaceuticals, whose products have viable commercial lifetimes that exceed the normal term of a patent. The USPTO believes that patent term adjustment should be limited to situations only in which the USPTO has delayed processing or examination of the patent, and this delay resulted in the application pending before the USPTO for more than three years. The plan, thus, seeks to simplify or eliminate entitlement to term adjustment when the patent has issued within three years.
Postscript
The 21st Century Strategic Plan can be expected to improve USPTO practice in substantial ways. However, the cost of procuring patents inevitably will jump as a result of increases in filing fees, exposure to post-grant opposition and implementation of electronic processing. To control costs, prosecution strategies may have to be modified in a way that is contrary to what is considered prudent, particularly for computer and software technologies, where presenting and prosecuting a large number of claims of differing formats and scope is important. Small entities will be especially hit hard in this respect. Finally, the impact of recruiting third party contractors or non-U.S. patent offices as the searching entity, removing this function from the examiners, may be contrary to the USPTO’s stated goal of improving patent quality.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.
