There are a lot of different ways to search for patents but arguably one of the most important ways is to find relevant patent classification codes for a technology and search for them in the country you are interested in. Ordinarily that would involve knowing the different classification systems of each of the individual countries and running the searches using different strategies for each country. Some of the drawbacks of a system like that involve inconsistencies between how classification systems are developed and what technologies they focus on, the likelihood that an individual doing the searching will do so in a country specific manner based on which system they are familiar with and the difficulty of comparing the technological content of patent documents from different countries when they are classified using different systems.

Today the USPTO and EPO took a big step forward in addressing these issues by issuing a joint announcement on a directive that they are going to start working together on a joint classification system which both companies will develop and support. The new system will be based on the European ECLA system which is itself an off-shoot of the International Patent Classification system from WIPO and will be co-developed by the two offices going forward.

The idea of a Common Hybrid Classification has been one of the ten Foundation Projects of the IP5 since the beginning so movement in this area was expected but the announcement of a joint classification system between USPTO and EPO is a distinct step forward and signals how serious the offices are about making this happen in a reasonable time frame.

This was an enormous decision on the part of the USPTO since the US has invested so heavily in its existing system which predated the IPC and ECLA systems. Director Kappos and his office should be congratulated for recognizing the enormous benefits that this change will have on efficiencies between the offices worldwide and the impact on overall patent quality.

Speaking as the Chair of the Patent Information Users Group I also can’t say enough about what this change will mean for the patent searchers of the world. Whether they work for a patent office, a law firm, are in private practice or represent a corporate entity, the ability to use a joint patent classification system will allow patent searchers to find relevant patents easier from around the world and will allow them to compare the technical content of these documents more efficiently since they will be working from a common framework. I spoke to a number of searchers about this development and to a person they greeted this decision with excitement and welcomed the opportunities that a joint classification system would represent.

While this is an exciting day there is still work that needs to be done. Tools will need to be developed to map the existing US system to the new joint system at least initially until users become accustomed to using the new system. There will also need to be work done on understanding where the existing US system can add value to ECLA and merge the two systems into the joint one. There will also need to be considerations made for incorporating other classification systems from around the world. In particular the Japanese F-Term system will have to addressed and hopefully incorporated into a joint system in the future. These issues can be addressed and it looks as if the USPTO and EPO are building momentum to make it happen as quickly as possible.

Both offices have also been working on automatic classification methods and hopefully the creation of a joint system will make this easier and will allow the groups to pool their efforts. Thinking ahead to the future the reader can imagine a situation where automated patent classification tools could be applied to other data sources besides patents. Imagine being able to use a single, specific code for a technology and be able to retrieve worldwide patent documents, non-patent literature and even perhaps documents on the web on that topic. A joint classification system could start us down this road and two of the largest patent offices in the world have taken the first step.

One project directed toward assisting the USPTO in improving its examination is the Peer-to-Patent project operated through New York Law School (NYLS). The USPTO and NYLS have just announced a new expanded Peer-to-Patent project that will open-up 1,000 patent applications to "peer-review" through a novel prior-art submission and commenting system created as part of the project.  To be clear, Peer-to-Patent is not intended to replace the patent examiner's role or the USPTO's examining authority. Rather, the system is designed to support examination by providing prior art deemed important by the peer community and by generating a discussion of how that prior art is related to the invention as claimed.  According to the USPTO press release: "Volunteer scientific and technical experts [will] discuss the applications and submit prior art they think might be relevant to determining if an invention is new and non-obvious, as the law requires. After the review period, the prior art is sent to the USPTO patent examiners for their consideration during examination."  Although the written comments & discussions are not sent to the patent examiner, examiners will be free to read those comments as part of the examination process.

Gold Plating: For applicants, Peer-to-Patent offers a potential mechanism to bolster the credibility of their patent rights. I can imagine the patentee's top litigator explaining to the jury that — in addition to the ordinary rigorous examination process — the applicant volunteered its patent for the gold-standard of academic review — public peer-review. Some applicants do prefer a low-quality examination because they fear that a more rigorous consideration of the prior art would negate any potential for patent protection.  They would rather have a likely invalid patent than no patent at all.  I do not believe that pessimistic view is representative of most of patent applicants.  Instead, most applicants have reasons to believe that their inventions are patentable and prefer strong, predictable rights over facially questionable ones.  The pessimistic view also presents a false patentable/unpatentable dichotomy.  Rather, in the prior pilot, adding Peer-to-Patent to support examination most typically lead to narrowing amendments in the claim scope.  The final claim issued set is hopefully one that is more likely valid while still being valuable to its owner.

It is unclear to me whether a negative inference will also be created — with judges inferring that a patentee who failed to participate in the peer-review system did so because of a lack of confidence in the patentability of its invention.

Accelerating Examination: In addition to the "gold plating" perception discussed above, it appears that the USPTO is offering a queue-jumping incentive to participating patent applicants. Applications that are part of the program will be "advanced out of turn" for initial examination on the merits.  Following this approach, application submissions for the first pilot ended in June 2009 and all of those applications have received at least a first action on the merits.

Objections: Over the past week, I spoke with a number of participants in the earlier US Peer-to-Patent pilot.  I was initially concerned that the reviewer-comments might look like ad hominem attacks with little factual support (as often seen on certain blogs).  Others were concerned that they would see a tremendous flood of prior art that would greatly increase the workload of prosecuting attorneys.  Neither of those concerns were realized. Rather, the reviewers and review communities appeared at with a high level of professionalism, and only a few of the applications under review received more than six prior art submissions.  

Patent Attorney's Duty: At this point in the project, I suspect that patent attorneys and agents are almost under an ethical duty to inform their clients of two-aspects of the project: (1) that applicants can volunteer their own applications for peer-review in the project (under a fairly tight time-schedule discussed below) with the benefits and objections discussed above and (2) that the patent applications of competitors may be available for peer-review.  In the US there is almost no history of third-party participation in the initial patent examination process. That approach is almost unique in the world. As an example, applications at the Japanese Patent Office (JPO) are open for third-party submissions. Over the past year, the JPO has received third-party submissions of prior art in over 8,000 pending cases. Most of the time (~75% of cases), the submitted prior art is used by the JPO examiner in making a rejection. 

Details of Participation in the New Pilot: The new pilot, which begins next week, relies upon patent applicants to volunteer their cases for review. The real timing trick is that applicants must file a consent-to-participate with the USPTO 30–days of publication. (Consent can be filed before publication; there is no fee).  Eligible applications must be published between September 23, 2010 and September 30, 2011. Once the peer-review begins, it will continue for a three-month period. The pilot has expanded to include software, business methods, biotechnology, bio-informatics, telecommunications, and speech recognition technologies.  To participate, the application must have been classified in one of the following technology classes: 260, 370, 380, 424, 435, 455, 504, 514, 518, 532, 534, 536, 540, 544, 546, 549, 554, 556, 560, 562, 568, 570, 702–705, 709, 713, 726, or 987.  The program will have a limit of 1000 participating applications with no more than 25–applications per company.

Links:

• Peer-to-Patent Website
• USPTO Peer-to-Patent Website
• MBHB Snippets Article on Peer-to-Patent
• Peer-to-Patent Press Release
• Article-One-Partners Press Release
• OG Notice explaining rules [Not yet available]

This dramatic increase in the rate of granting patents is impressive — especially in light of the fact that during this time, the USPTO eliminated examiner overtime hours for an extended period of time and hired only a handful of new examiners. 

From the Patent Office perspective, the long backlog-queue does not hamper compact prosecution because substantive examination generally begins only once the patent application makes its way to the front of the backlog queue. 

The applicant perspective is somewhat different. For applicants, substantive prosecution begins with preparing the patent application and eventually continues with office action responses and potential agreement on final claim language.  I am beginning a project that looks at how the backlog impacts prosecution from the attorney side. As the first blunt analysis, I looked at the prosecution history files for 90 randomly selected recently issued patents and compared the practitioner signature of (1) the application as filed; (2) the first response to a non-final office action (if any); and (3) the issue fee transmittal.

Findings: The signing practitioner (attorney/agent) changed in 71% of the cases.  Of the cases with response to a non-final office action rejection, the practitioner that signed the application was different from the practitioner that signed the initial response 61% of the time. (+/–  11% at 95% CI).

Note, these figures include UPR applications (Utility, Plant, and Reissue). However, because of their small numbers, the plant and reissue applications do not impact the result.

PTO Director Dave Kappos additionally sees the dashboard as providing patent office accountability and publicly facing the challenge of reducing patent pendency. Kappos writes on his blog:

An important part of the effort to reduce pendency is better understanding the numerous factors that contribute to examination delays and measuring their impact in a way that makes the USPTO more transparent to the public.  By looking at the whole picture, we can more effectively develop ways to increase the efficiency of the examination process.  While we know we have to hire more examiners to reduce the backlog, we also know that we must re-engineer the way we do business at the USPTO and have already implemented a series of initiatives designed to improve efficiencies.  These process changes will empower our workforce to be more effective and have already begun to yield important gains.

. . . [The Dashboard] will help the entire IP community to better understand our processes, and enable applicants to make more informed decisions about their applications, especially as we develop more opportunities for applicants to control the timing at which their applications are examined.  The new dashboard, which will be updated monthly, will also be used internally by the USPTO to analyze and improve our examination process and to track the effectiveness of our improvement efforts.  We intend to further refine the dashboard and welcome your input about ways we can improve it.  A dedicated mailbox [feedback@uspto.gov] has been set up for your comments and we intend to monitor your feedback carefully. 
 
The dashboard introduces six new measures of pendency designed to give a better overall picture of the contributions of different parts of the examination process to application pendency.  For example, the traditional total pendency measure stops the clock with the filing of an RCE, which may not provide an accurate measure of the total time it takes to complete the examination of an application through request for continued examination (RCE) practice.  A new measure, called "Traditional Total Pendency Including RCEs," looks at pendency of applications from filing of the original application to ultimate disposal of that same application, including any additional time attributable to RCE filings in those applications where RCE filings are made.  Similar measures are provided relative to divisional applications and other types of continuation practice.  We also provide information about pendency for applications in appeal practice.

Links:

• Data visualization center and patent dashboard
• Kappos Blog
• [It appears that the site has a few kinks to work-out as the data downloads are not working properly]

The count of patents granted each week continues to remain at an all-time-high. If the trend continues for the last three months of the year, the USPTO will likely issue more than 220,000 utility patents for the year — 50,000 more than in 2009.  Of the top-ten highest historic grant-weeks, all ten came from this summer (June – August 2010).

The following chart shows the historic patent grants per year. The figure for 2010 is forecasted based on data available as of August 18, 2010.

The Study: To answer Mr. Pinkos question, I looked at the Patent Term Adjustment (PTA) History for 1,860 randomly selected patents issued April-July 2010.  Ordinarily, a patent’s enforceable term is 20–years from its application filing-date.  However, an adjustment is provided when the USPTO delays in issuing a patent.  However, the PTA is reduced by patent applicant delays that go beyond the ordinary two and three month deadlines for responding to USPTO requests.  To be clear, the applicant-delay offset does not account for all applicant delay, but rather only delays that show a failure “to engage in reasonable efforts to conclude prosecution.”  Thus, for this study, I term the calculated applicant delay offset as the “unreasonable applicant delay.”

Results: The 1,860 patents in my sample had an average application pendency of 46.1 months. The average unreasonable applicant delay was only 1.9 months per patent (+/– 0.2 months).  This applicant delay represents 4.2% of the pendency time for all of the patents. As the cumulative frequency chart (below) shows, a large percentage of the patents (43%) had no unreasonable applicant delay and the median unreasonable applicant delay was only 11 days.  Many of the longest delays were associated with revival of abandoned applications and late submission of information disclosure statements.

The PTA history also provides a mechanism for calculating the USPTO’s responsibility for the backlog. Based on those figures average unreasonable USPTO delay is 17.5 months per patent.  That “unreasonable” USPTO delay represents about 38% of the total pendency. 

Notes:

• See also: Beating the Deadline: Timing the Responses to Non-Final Office Actions
• This post was updated with data from a larger sample of patents.

Some interesting points:

• Allowance rate is up about 3% over last year. At the same time, the USPTO is making more rejections than ever.
• USPTO Interview Rate is up 60% over last year. Director Kappos believes that interviews have been very important for the process of negotiating a set of final claims that are allowable.
• The USPTO is considering potential tools that can help applicants file better patent applications. These include best practices guidelines and potential automated tools that highlight possible problems in applications.
• Hope for the three-track examination system is implementation in under two-years from now.
• Dramatically improve handing of the PCT. And, at the same time champion PPH.
• [Joff's Comments]

The PPH is based on a series of bi-lateral (and multi-lateral) agreements between the various world patent offices.  From the perspective of the patent offices, PPH provides a better avenue for sharing information and for reliance on work done by another office.  The offices hope that PPH will ease their workloads and help eliminate application backlogs.  For applicants, PPH appears to be a valuable mechanism for reducing both the costs and delays associated with multi-national patent protection. 

To participate in PPH, an applicant must first receive a favorable action from the Office of First Filing (OFF).  Upon request, participating worldwide offices will then accelerate examination of the corresponding claims.  In addition to speed, applicants will benefit from examiners taking official notice that claims with the same limitations were reviewed and found patentable by another well-respected office.  Preliminary studies suggest that PPH applications tend to save about one-office-action-response per country.  

The USPTO has ongoing PPH agreement with Australia, Canada, Denmark, EPO, Finland, Germany, Japan (JPO), Korea (KIPO), Singapore, and the UK. [Link]

A pilot PCT-PPH project is ongoing. With the PCT-PPH, the accelerated examination is based upon a favorable PCT written opinion or international preliminary examination report. The PCT-PPH pilot is only between the USPTO and the EPO, JPO, and KIPO.

Applicants appear to have two major concerns with the use of the PPH. First, the PPH claims must directly correspond with those allowed in the Office of First Filing. Although technical amendments are OK, an the particular claims obtained in one country might not correspond to those obtained in another country. Second, the PPH appears to be quite high-speed. Thus, applicants seeking delay might be shocked.

On January 7, 2010, the Federal Circuit issued a decision in Wyeth v. Kappos, No. 2009-1120, regarding the calculation of patent term adjustments under 35 U.S.C. 154(b). The Federal Circuit’s decision rejects the USPTO’s interpretation of the “overlap” limitation in Section 154(b)(2)(A). The Solicitor General will determine whether to seek further review of this decision. Pending that determination, the USPTO is in the process of changing the manner it will calculate patent term adjustments under Section 154(b) to conform with the Federal Circuit’s decision.

Applicants and Patent Owners dissatisfied with a patent term adjustment determination by the agency are reminded of the requirement to seek review of that determination within 180 days of patent issuance and the time periods set in the implementing regulations. See 35 USC 154(b)(4) and 37 CFR 1.705.

Although not 100% clear, the statute appears to put the duty of calculating the the patent term adjustment exclusively in the hands of the USPTO. Thus, anyone claiming additional patent term under 154(b) may only do so based on a PTA “determination made by the Director.” That theory is bolstered by the statutory limitation of 180–days for filing a civil action based on dissatisfaction with the PTA determination.

Action Item: Anyone whose patent is about to issue or whose patent has issued in the last 180–days should quickly determine whether additional patent term is due. It is unlikely that the PTO will go-back and recalculate PTA for those cases. The PTO may also be willing to re-calculate the PTA for patents issued more than 180 days ago. There is also the potential that a court would disregard the 180–day limitation in this instance based on a doctrine such as equitable tollling.

Statistics: In a prior study, I found that over 75% of recently issued patents were awarded some patent term adjustment due to delays during the patent prosecution process. The Wyeth decision should not change the number of PTA eligible patents, but instead will tend to increase the PTA calculation value. For the period June-2008 to June-2009, I found that the average PTA calculation ranged from 9 to 12 months depending on whether the patent was examined by a primary examiner or assistant examiner respectively. [Link]

See also: PTA Strategies Presentation by Polk, Brinkerhoff, & Wegner; Don Zuhn at Patent Docs; Eric Guttag’s post on IPWatchdog; Sheri Qualters at NLJ;

"Bob brings to this position a rare expertise in patent policy and practice, as well as a strong command of the inner-workings of the USPTO and the federal government," Kappos said.  "Working hand-in-hand with Peggy, who has shown incredible skill in Patents management and operations, I know they will meet the formidable challenges facing the Patent organization, including the need to drastically reduce pendency, improve quality and boost efficiency, all while managing costs in a tough budgetary environment."

For his part, Secretary Locke again indicated his focus on patent prosecution pendency: "I have directed the USTPO to pursue an aggressive agenda to significantly reduce the time it takes to process patent applications. The length of time it takes causes uncertainty for inventors and entrepreneurs, stifles innovation and impedes our economic recovery."

About Bob Stoll: Stoll has been at the PTO for 27 years. Beginning as an examiner and then as a SPE before moving into executive management. He spent time as Director of the PTO's office of enforcement – helping fight counterfeiting and piracy and most recently has been working as "Dean of Training and Education." He has a BS in chemical engineering (Maryland) and a JD (Catholic U). Based on his past work, Stoll might be considered "pro patentee." Notably, he has argued that the US grace period should be extended abroad and has worked to organize private-public cooperative organizations to fight international counterfeiting.  Stoll’s wife Suzanne Stoll is COO of the Raben Group lobbying firm and served as Chief of Staff and IP Counsel for Congresman Wexler (D-FL).

About Peggy Focarino: Focarino may be better known to the patent prosecution community than Stoll. She has been at the PTO for 32 years as an examiner, SPE, Tech Center director, and as Deputy Commissioner for Patent Operations. Her new role as Deputy Commissioner for Patents takes one word from her title, but it is unclear whether this will practically change her role. Rather, the new title may be more of an olive branch offered by Director Kappos since Focarino has been serving as acting Commissioner of Patents (not deputy) since January 2009.  With the departure of John Doll, Focarino will clearly be the PTO executive with the most background and experience in PTO operations.

About John Doll: The Press release also indicates that John Doll is retiring. John Served as Acting Director of the PTO since January 2009 – the capstone of his 35 year career at the PTO. Congratulations to John Doll!  Although I do not know his plans, I suspect that he could find a solid law firm job to take advantage of his extensive understanding of the US patent prosecution system.

Deputy Director Still Unknown: Director Kappos has not yet released his choice for the Deputy Director of the PTO. Like the Commissioner of Patents, the PTO director nominates but the Commerce Secretary has ultimate power to appoint. I expect that the Deputy Director will be someone currently outside of the PTO but inside the beltway.

One key is to expeditiously identify and resolve issues of patentability—that is getting efficiently to the issues that matter to patentability in each case, and working with applicants to find the patentable subject matter and get it clearly expressed in claims that can be allowed. The examiner and the applicant share the responsibility for the success of this process.

On the subject of quality, there has been speculation in the IP community that examiners are being encouraged to reject applications because a lower allowance rate equals higher quality. Let's be clear: patent quality does not equal rejection. In some cases this requires us to reject all the claims when no patentable subject matter has been presented. It is our duty to be candid with the applicant and protect the interests of the public. In other cases this means granting broad claims when they present allowable subject matter. In all cases it means engaging with the applicant to get to the real issues efficiently—what we all know as compact prosecution.

When a claimed invention meets all patentability requirements, the application should be allowed expeditiously. ... [B]y engaging with applicants early on, we certainly can get to the point more quickly, and efficiently allow those claims that are entitled to patent protection.

Download 101 Memo to Directors | Download 101 Examiner Instructions 8 24 09 | Download FLOWCHARTMORT 8 24 09 | Download FLOWCHARTPROD 8 24 09

The guidelines appear to do a good job of synthesizing the highly confusing area of law into a straightforward algorithm. The problem is that next spring the Supreme Court is almost sure to reject the Federal Circuit's Machine-or-Transformation test. At that point, all of the examiner time and applicant money focusing on this "threshold issue" will have been wasted. I understand that the business of the PTO must continue even in the face of potential policy shifts. However, I would have suggested that examination of Section 101 eligibility be put on a back-burner - especially in light of the fact that most questionable subject matter cases will also fail the tests of obviousness, enablement, and indefiniteness.

The guidelines bear the signature of Drew Hirshfeld, Acting Deputy Commissioner for Patent Examination Policy. The PTO recently posted a notice looking to permanently fill this extremely important position.

Are these estimates in the ball park? How many hours are spent preparing a request for ex parte reexamination? Perhaps most importantly - what is missing here from the time spent in reexamination practice? Comments may be submitted to Susan.Fawcett@uspto.gov (Subject: A0651-00XX Patent Reexaminations comment). Notice at 74 FR 39916.

Assuming that the total -- 111,336 hours -- represent the entire amount of attorney time spent on reexaminations. Those hours are the equivalent of about 60 full time patent attorneys.