Deferred Examination: PTO Roundtable

Today in the PTO roundtable on deferred examination, several important points have been made (some of which directly relate to deferred examination):  

  • Gordon Arnold made a compelling point regarding harmonization: "The world's largest economy may be an economy that should have a system that is different from the rest of the economies." Mr. Arnold then focused on patent quality: "The lack of quality of patents is due to failure [of the examining corps]. . . English as a second language is a problem [and] many of the office actions are not excellent. . . . We see RCE's because the applicants feel that they have not had a good examination the first time around."
  • Arti Rai: Athough I do not have an exact quote, Professor Rai focused on the notion that the PTO may well not have authority to structure fees for the purposes of modifying applicant behavior rather than to "reasonably compensate" the office.
  • Ken Patel from P&G reported that their experience with deferred examination - especially in Japan - has not been good. They face lots of infringement actions against P&G products that have been on the market for five or more years.
  • Hans Sauer from BIO reported the result of a survey of BIO members. BIO members use the deferred examination system wherever it is available. The members do not believe that it negatively impacts patent quality or certainty in those systems. BIO members report that they do not use the US system available under 37 CFR 103(d) because it forfeits any patent term adjustments.
  • John Doll: I only saw a small portion of Director Doll's presentation. He was open to discussion. He noted that the poor economy is having a substantial downward pressure on PTO fee receipts. At the same time, a slowdown in filings will have the benefit of helping reduce the backlog. In his statements, Doll continued the facade that requests for continued examination somehow create a new application for statistical purposes. The office is expecting 17% more RCE filings in FY2009 than they saw in FY2008.

33 thoughts on “Deferred Examination: PTO Roundtable

  1. Garbage in, garbage out, folks. Garbage can be very patentable, it just has to novel and unobvious. Okay, statutory and enabling too…a little.

    As put by the head attorney of AT&T to me once, patent attorneys are like dogs chasing cars. They are so want to their application allowed they receive eventually a patent for their client, is like when a dog finally catches the car. The question is, what does the dog do with the car?

    In his experience, errors caused by the prosecution patent attorney, rather than PTO errors, caused him the most trouble during litigation. Especially from poorly drafted specification and claims written and submitted by the attorney. He also stated in if the PTO made a mistake, even in allowance, it is the attorney responsibility to point out and try to correct those errors.

    Who has the ultimate responsibility for a quality patent, the one who examines it or the one who originally writes the patent application? The one who receives allot money from the applicant to properly represents him or the PTO who, the applicant, is one out 770,000 other pending applications?

    So you just want the PTO to be a rubber stamp, so you can collect your fees or become a rainmaker?

    Allowance does not equal quality; ask any attorney who have to defend your patents you prosecuted in litigation.

    Anyway, this is the Federal Government under Obama, he won, tough. Get use to it.

    Where are you going to get your patents anyway?

    We are the Federal Government, we are here to help you….

  2. 705Exmr — yes, many foreign origin applications have terrible translations and the first OA will just be a guess. But the foreign applicants usually get down to serious business after the first OA and narrowly focus their claims (unlike many U.S. origin applications which continue to pursue broad claims)

  3. Re: “..P&G reported that their experience with deferred examination – especially in Japan – has not been good. They face lots of infringement actions against P&G products that have been on the market for five or more years.”
    ? That means that the applications for those patents would have had to have been filed at least 5 or more years earlier than that, and then published and searchable only 18 months after their filing. Were their claims broadened after publication? Otherwise, why is this any worse than all the U.S. applications that now regularly take more than 5 years to issue WITHOUT deferred examination?

  4. well put moocow. but is deferred examination the most important topic of the day? Or is it just the only topic that has a chance. Maybe these other issues that generate so much steam are just naturally controversial and elude any productive discussion on account of people being more passionate than rational? kind of like a discussion about abortion. ‘RCEs are bad ’cause the PTO says so.’ ‘RCEs are about choice!’ ‘Patent Quality!’ ‘Patent Rights!’

  5. “one of the stooges outside of the chem/bio art unit.one of the stooges outside of the chem/bio art unit.”

    Now I understand why Mooney has no friends…

  6. Hah – the discussion above is an excellent example of how yesterday’s PTO roundtable could have been hijacked into a hostile debate over PTO management, RCEs, continuations, fees, restrictions, and lousy examination.
    Instead, Whealan kept a polarized group of participants – including some pretty cantankerous individuals, and some with agendas having nothing to do with deferred examination – on track and on topic, resulting in a very productive roundtable. Kudos, I say.

  7. @curious:

    In all fairness, there are enough applications that come in (at least in my area) that are just…indecipherable. It’s true that yes, some blame falls on the examiners, but really when it comes down to it, some applications are just bad. I can think of certain Japanese applications that look to be machine-translated.

    How the hell are we supposed to give them a thorough examination the first time through? They use nouns modifying adjectives, very unclear sentences that can mean one of three things, stuff like that.

    I’m also thinking of the Korean language, where things are written in a much more unclear sense – my experience with it shows me that you barely need to mention subjects, objects, etc…so direct translations to English – where our best attempt at shortening dialogue is the “understood you” – is quite hard. It ends up with statements like “a system comprising components A, B, C, where the component contains…”. Completely unclear.

    Again, I’ll agree that some applications are the fault of the examiner. But seriously, if you do a direct translation from an Asian language (maybe others too?) and send that in as your spec, you’re not exactly a saint yourself. Even if it’s amended after that, it’s nigh-impossible to tell whether there’s any new matter…which makes examination tougher and we have to spend less time on material issues.

  8. Dear Anon, are you there? You want to know about the allowance rate at the EPO. So, ask an EPO practitioner how many refusals s/he has suffered. One per cent maybe. You want a patent out of the EPO? I’ll get you one. EPO is better, OK?

  9. Anyone have allowance stats for the EPO and JPO?? We constantly hear (at least from the drones on this board) about the EPO doing a much better job at examining than the PTO, so just wondering what their allowance rate is compared to the USPTO.

    Dennis, are you listening?? This is another perfect assignment to handout to your 1L/2L graduate assistants to drudge up some numbers that you can work into a nice bright new Excel-generated pie chart that you’re so well-known for.

  10. MPHTCSOAM: “Yes … and your odds of getting really broad claims on a mostly mechanical application being examined in an electrical unit also increases…Examiners who work on applications outside their “niche” are almost always not going to be able to find the best art.”

    Right. You get “garbage work product”. Oh, but wait: someone upthread said that garbage work product leads to fewer allowances, not more. Hmm …

    “Examiners who work on applications outside their “niche” are almost always not going to be able to find the best art”

    So with respect to that computer-implemented parts supply claim in the ’627 patent, what kep the Examiner from finding the best art in that case? Did the Examiner have his head in the wrong niche?

  11. “Funny you should suggest that because it’s the nearly universal experience of people in my ‘micro-niche’ that your odds of getting an absurdly broad claim allowed soar dramatically if you can convince the PTO that the application should be examined by one of the stooges outside of the chem/bio art unit.”

    Yes … and your odds of getting really broad claims on a mostly mechanical application being examined in an electrical unit also increases, as well as getting really broad claims on a materials-related application being examined in a mechanical unit.

    Examiners who work on applications outside their “niche” are almost always not going to be able to find the best art. If I have an application that involves partly bio-tech and partly electrical and it goes to the bio-tech unit, odds are that if the invention resides in the “electrical” portion of the invention, then it isn’t going to be searched properly.

    Simple common sense — something that eludes you.

  12. don’t bother: “You should try prosecuting an application outside your micro-niche area of whatever it is you claim to prosecute.”

    Funny you should suggest that because it’s the nearly universal experience of people in my “micro-niche” that your odds of getting an absurdly broad claim allowed soar dramatically if you can convince the PTO that the application should be examined by one of the stooges outside of the chem/bio art unit.

  13. “in a really slimy tone of voice that implied she was suggesting to him that he should raise RCE fees substantially to discourage the filings of RCE’s. ”

    How is it that Prof R is so awesome while so many others fail so hard?

    “They also discussed the 6% shortfall in collected fees this year. ”

    KSR?

    PTO gossip: Budget cuts NOW! Cutting back on new hiring etc. etc. Hardly anyone filed in Jan 09′!

    Seems to me like it is just a good time to up the examination fees a bit. Maybe … 2k?

  14. “We see RCE’s because the applicants feel that they have not had a good examination the first time around.”

    I don’t think it has anything to do with “feelings”

    “…no way on earth that 55% of the crap…try a new salad dressing”

    Now if you want to know about “feelings” drama queen Mooney is all about feelings, no fact, just feelings. I wonder where 55% came from or was otherwise pulled out of? I’m afraid I might know…

    Try a new white wine Mooney.

  15. “Horrible examination leads to a net decrease in allowances? Really?”

    Really.

    You should try prosecuting an application outside your micro-niche area of whatever it is you claim to prosecute.

  16. ” If you don’t consider RCE’s to be new applications, the allowance rate is more in the neighborhood of 56%. A reduction for sure, but not entirely due to horrible examination. Horrible examination is a factor though.”

    Oops, you did it again! LOL. “I never said that,” he protests. Then he says it again.

    Horrible examination leads to a net decrease in allowances? Really?

    Keep spinning. There is no way on earth that 55% of the crap filed at the PTO is patentable. If you believe that, you are deluded, confused and (most likely) invested in a different result.

    Try a new salad dressing.

  17. “Always a hoot to hear someone suggest that higher allowance rates correlate with better examination.”

    Never said that, friend. The reason why the allowance rate is now allegedly 44% is because the PTO is endlessly churning applications, resulting in an ever increasing number of RCE’s. If you don’t consider RCE’s to be new applications, the allowance rate is more in the neighborhood of 56%. A reduction for sure, but not entirely due to horrible examination. Horrible examination is a factor though. As has been noted, applicants do give up on applications that are not regarded as essential rather than continue to feed the examining corps’ RCE habit.

    I do think the increase in RCE filings is a result of the terrible OA’s being issued. There is a direct correlation there.

    When the PTO needs more revenue, the allowance rate will go back up.

  18. “Always a hoot to hear someone suggest that higher allowance rates correlate with better examination.”

    The comparison being made was with bad examinations and a low allowance rate. Not the opposite. Next time, try to address the point that was actually being made. I have no doubt that attorneys like yourself are the reason why that the profession, as a whole, has been given the reputation for being “slimy.”

    Bad examinations come in two flavors: (i) applications being allowed that should be allowed, and (ii) applications being rejected that shouldn’t be rejected.

    Applicants and their representatives know a bad examination that prevents a good application from issuing when they see it. In this situation, Applicants will eventually file RCEs and/or Appeals. Thus, instead of prosecution concluding in a couple of actions, prosecution is dragged out over years.

    How much backlog exists at the USPTO is a combination of a number factors (i) the applications being received; (ii) the number of Examiners examining the applications; and (iii) how long it takes for an application to be disposed. Although the number of applications being filed has increased, so has the number of Examiners. The biggest change is that it is taking far longer for applications to be disposed of. This is a direct result of bad examinations and has caused the explosion in the backlog at the USPTO and the BPAI.

  19. “The office is expecting 17% more RCE filings in FY2009 than they saw in FY2008.”

    You can’t always get what you want. You can’t always get what you want. But if you try sometimes … you just might find … you get what you need … after five RCEs.

  20. don’t bother wrote: “Mr. Doll did acknowledge the “dramatic” reduction in the allowance rate. Gee, I wonder what’s causing that? Could it be the garbage work product of the examining corps”

    Always a hoot to hear someone suggest that higher allowance rates correlate with better examination. That is truly idi0tic.

    Pay attention, friend. It’s reactionary comments like yours that ensure the need for more steamrollers while your boots continue sink into the asphalt.

  21. I pray the economy, KSR and the politically engineered low allowance rates at the PTO causes RIFs and stagnation beyond biblical proportions. God, please make this happen, please punish these people.

  22. One of the strongest arguments I have encountered for not implementing deferred examination is that published applications that aren’t examined for years create a great deal of uncertainty for market participants regarding options for inventing around competitors’ IP. The need to invent around competitors’ IP is one of the most substantial motivators for innovation. I have witnessed that the uncertainty created by unexamined, published applications is a substantial deterrent to such efforts. Thus, creating additional delay in the examination of published applications will likely decrease innovation.

  23. It’ll be classic Govt. run amok . . .

    Push push push with lies for a reduction in filings.

    Get reduction in filings.

    Moan and complain that you need more funding because “receipts are down.”

    It never changes, nor does the capacity of the average human steer to accept it.

  24. 6,

    I commend you on your lack of self-interest and apparent objectivity in backing the RCE limits and additional measures that are in line with the USPTO’s official position that it cannot hire its way out of the backlog problem. Surely you realize that actually paying Examiner’s competitive wages would surely result in many more Exmainer’s coming on board and staying longterm, especially in view of the latest unemployment reports. President Obama has stated that he plans to give the PTO the resources it needs to deal with this problem. If only everyone would be honest about the real need for greatly increasing Examiners’ pay, you could really stand to profit. So good for you. At least you have your principles.

  25. The most fascinating part of the discussion, at least for me, was the exchange between Mr. Whelan and (former Commissioner) Mr. Godici. Mr. Godici suggested that regardless of whether deferred examination is implemented, the PTO should be striving for 18 months for disposing of the case once examination actually starts. Mr. Whelan countered that if applicants wanted/expected that, they shouldn’t be allowed extensions of time, because “Why do you need 6 months when you’ve got the internet?” It’s very clear Mr. Whelan has no idea how applicants make decisions about prosecution, or how the process between applicants and their representatives actually works. Mr. Whelan also said, “You can’t 6 months from a court.” Mr. Whelan is apparently (still) under the delusion that the PTO is somehow similar to an Article III court. Newsflash for you, Mr. Whelan: the PTO is an administrative agency.

    “Athough I do not have an exact quote, Professor Rai focused on the notion that the PTO may well not have authority to structure fees for the purposes of modifying applicant behavior rather than to “reasonably compensate” the office.”

    She actually got that one right. A little late to the party, but welcome aboard Prof. Rai.

    But, she did ask Mr. Doll, “You do have authority to set the RCE fee, don’t you?” in a really slimy tone of voice that implied she was suggesting to him that he should raise RCE fees substantially to discourage the filings of RCE’s. Prof. Rai should be sentenced to a year of responding to the record breaking quality Office Actions the PTO is issuing.

    “Mr. Arnold then focused on patent quality: ‘The lack of quality of patents is due to failure [of the examining corps]. . . English as a second language is a problem [and] many of the office actions are not excellent. . . . We see RCE’s because the applicants feel that they have not had a good examination the first time around.’”

    Mr. Arnold was remarkably restrained in getting across the message: the work product of the examining corps is garbage and discussing topics such as deferred examination is equivalent to rearranging the deck chairs on the Titanic.

    Mr. Doll did acknowledge the “dramatic” reduction in the allowance rate. Gee, I wonder what’s causing that? Could it be the garbage work product of the examining corps, coupled with the increasingly useless appeal process, compounded by the accounting slight of hand that considers the 117,000+ RCE’s as “new applications”?

  26. Doll’s “second set of eyes” is ruining everything. It’s causing the allowance rate to plummet, which means less maintenance fees. And it will get much worse for the PTO, I believe 2008 had the lowest allowance rate yet, so in 4 years the PTO will really be stinging. Plus, my clients’ filings are way down– why file on non-critical stuff when the examiners continue to reject allowable applications and then say when called about it, “I was told to reject it” or “I didn’t want to get in trouble.” (Yes, examiners have actually told me these things).

    Thanks, Mr. Doll.

  27. I meant 6% expected drop expected next year. I wonder what it must be like to be part of the group driving the nails in innovation’s coffin.

  28. 6:

    They also discussed the 6% shortfall in collected fees this year. Filings will decrease, maintenance fee payments are decreasing – corporate America has lost confidence in the PTO. Hopefully, you weren’t counting on a pay increase/bonus, or remaining employed . . .

  29. Arti and D came and I didn’t go? W T F? This is like my missing a concert of one of my fav bands! Except for free!

    “In his statements, Doll continued the facade that requests for continued examination somehow create a new application for statistical purposes. The office is expecting 17% more RCE filings in FY2009 than they saw in FY2008. ”

    Facade? Somehow create a new application for statistical purposes? You mean: in reality create for any and all purposes with the exception of counting strictly how many new applications are filed each year. And how many new applications that are filed each year is largely irrelevant for practical discussions about the backlog if we can never get rid of the old ones.

    17% more RCE’s? Bilski at work?

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