Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem

David Boundy’s writing often focuses on the intersection between administrative procedure and Patent Office operations. In his new Patently-O Law Journal essay, Boundy explains the role of guidance (the MPEP, memoranda to examiners, checkboxes on forms, etc. — anything the PTO uses to govern the public or its employees outside the Code of Federal Regulations). Boundy explains when the PTO may act by guidance vs. when the PTO must use a full statutory rulemaking procedure.

Boundy walks through how bad PTO guidance practices is leading to lost patent protection, companies not formed, companies that fold because of delays and unpredictability of their patent applications, business opportunities not pursued, and similar economic effects, etc.  He estimates the cost as several billion dollars per year.

Boundy’s essay then explains how that law applies to several specific rules that PTO improperly promulgated by guidance that create difficulties for patent applicants.

  • Example 1: The secret 2007 restriction memo
  • Example 2: Unpublished rules for ADS submission of bibliographic data
  • Example 3: MPEP § 2144.03(C) misstatement of the law of intra-agency Official Notice
  • Example 4: MPEP § 1207.04 and an examiner’s power to abort an appeal
  • Example 5: the PTAB’s Trial Practice Guide (The right way)

Boundy’s essay is directly relevant to the pending en banc petition in Hyatt v. USPTO that challenges the agency’s right to “reopen prosecution” following a second rejection rather than allowing issues to be appealed.  Although the Federal Circuit ruled that Hyatt’s petition was time-barred, Boundy explains, inter alia, that PTO procedural failures likely divested the agency from any statute of limitations defense.  See, e.g., National Resources Defense Council v. Nat’l Highway Traffic Safety Admin, 894 F.3d 95, 106 (2d Cir. 2018) (a rule does not go effective until published in the Federal Register, and that’s the event that commences the limitations period). 

Read it here:

  • David A. Boundy, Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem, 2018 Patently-O Patent Law Journal 20. (Boundy.2018.BadGuidance)
Prior Patently-O Patent L.J. Articles:

 

  • Colleen Chien and Jiun-Ying Wu, Decoding Patentable Subject Matter, 2018 PatentlyO Patent Law Journal 1.
  • Paul M. Janicke, Patent Venue: Half Christmas Pie, And Half Crow, 2017 Patently-O Patent Law Journal 13. (Janicke.2017.ChristmasPie.pdf)
  • Paul M. Janicke, The Imminent Outpouring from the Eastern District of Texas, 2017 Patently-O Patent Law Journal 1 (2017) (Janicke.2017.Venue)
  • Mark A. Lemley, Erik Oliver, Kent Richardson, James Yoon, & Michael Costa, Patent Purchases and Litigation Outcomes, 2016 Patently-O Patent Law Journal 15 (Lemley.2016.PatentMarket)
  • Bernard Chao and Amy Mapes, An Early Look at Mayo’s Impact on Personalized Medicine, 2016 Patently-O Patent Law Journal 10 (Chao.2016.PersonalizedMedicine)
  • James E. Daily, An Empirical Analysis of Some Proponents and Opponents of Patent Reform, 2016 Patently-O Patent Law Journal 1. (Daily.2016.Professors)
  • Tristan Gray–Le Coz and Charles Duan, Apply It to the USPTO: Review of the Implementation of Alice v. CLS Bank in Patent Examination, 2014 Patently-O Patent Law Journal 1. (GrayLeCozDuan)
  • Robert L. Stoll, Maintaining Post-Grant Review Estoppel in the America Invents Act: A Call for Legislative Restraint, 2012 Patently-O Patent Law Journal 1 (Stoll.2012.estoppel.pdf)
  • Paul Morgan, The Ambiguity in Section 102(a)(1) of the Leahy-Smith America Invents Act, 2011 Patently-O Patent Law Journal 29.  (Morgan.2011.AIAAmbiguities)
  • Joshua D. Sarnoff, Derivation and Prior Art Problems with the New Patent Act, 2011 Patently-O Patent Law Journal 12 (sarnoff.2011.derivation.pdf)
  • Bernard Chao, Not So Confidential: A Call for Restraint in Sealing Court Records, 2011 Patently-O Patent Patent Law Journal 6 (chao.sealedrecords.pdf)
  • Benjamin Levi and Rodney R. Sweetland, The Federal Trade Commission’s (FTC) Recommendations to the International Trade Commission (ITC):  Unsound, Unmeasured, and Unauthoritative, 2011 Patently-O Patent Law Journal 1 (levi.ftcunsound.pdf)
  • Kevin Emerson Collins, An Initial Comment on King Pharmaceuticals: The Printed Matter Doctrine as a Structural Doctrine and Its Implications for Prometheus Laboratories, 2010 Patently-O Patent Law Journal 111 (Collins.KingPharma.pdf)
  • Robert A. Matthews, Jr., When Multiple Plaintiffs/Relators Sue for the Same Act of Patent False Marking, 2010 Patently-O Patent Law Journal 95 (matthews.falsemarking.pdf)
  • Kristen Osenga, The Patent Office’s Fast Track Will Not Take Us in the Right Direction, 2010 Patently-O Patent L.J. 89 (Osenga.pdf)
  • Peter S. Menell,  The International Trade Commission’s Section 337 Authority, 2010 Patently-O Patent L.J. 79
  • Donald S. Chisum, Written Description of the Invention: Ariad (2010) and the Overlooked Invention Priority Principle, 2010 Patently‐O Patent L.J. 72
  • Kevin Collins, An Initial Comment on Ariad: Written Description and the Baseline of Patent Protection for After-Arising Technology, 2010 Patently-O Patent L.J. 24
  • Etan Chatlynne, Investigating Patent Law’s Presumption of Validity—An Empirical Analysis, 2010 Patently-O Patent L.J. 37
  • Michael Kasdan and Joseph Casino, Federal Courts Closely Scrutinizing and Slashing Patent Damage Awards, 2010 Patently-O Patent L.J. 24 (Kasdan.Casino.Damages)
  • Dennis Crouch, Broadening Federal Circuit Jurisprudence: Moving Beyond Federal Circuit Patent Cases, 2010 Patently-O Patent L.J. 19 (2010)
  • Edward Reines and Nathan Greenblatt, Interlocutory Appeals of Claim Construction in the Patent Reform Act of 2009, Part II, 2010 Patently‐O Patent L.J. 7  (2010) (Reines.2010)
  • Gregory P. Landis & Loria B. Yeadon, Selecting the Next Nominee for the Federal Circuit: Patently Obvious to Consider Diversity, 2010 Patently-O Patent L.J. 1 (2010) (Nominee Diversity)
  • Paul Cole, Patentability of Computer Software As Such, 2008 Patently-O Patent L.J. 1. (Cole.pdf)
  • John F. Duffy, The Death of Google’s Patents, 2008 Patently O-Pat. L.J. ___ (googlepatents101.pdf)
  • Mark R. Patterson, Reestablishing the Doctrine of Patent Exhaustion, 2007 Patently-O Patent L.J. 38
  • Arti K. Rai, The GSK Case: An Administrative Perspective, 2007 Patently-O Patent L.J. 36
  • Joshua D. Sarnoff, BIO v. DC and the New Need to Eliminate Federal Patent Law Preemption of State and Local Price and Product Regulation, 2007 Patently-O Patent L.J. 30 (Download Sarnoff.BIO.pdf)
  • John F. Duffy, Are Administrative Patent Judges Unconstitutional?, 2007 Patently-O Patent L.J. 21. (Duffy.BPAI.pdf)
  • Joseph Casino and Michael Kasdan, In re Seagate Technology: Willfulness and Waiver, a Summary and a Proposal, 2007 Patently-O Patent L.J. 1 (Casino-Seagate)

83 thoughts on “Agency Bad Guidance Practices at the Patent and Trademark Office: a Billion Dollar Problem

  1. 16

    Just curious: prior to the 2016 Presidential election and after that when I was here commenting endlessly on patent law and the disgusting criminal who was ultimately elected Perznit*, w t f was David “Gotta Follow the Law” Boundy doing to minimize the damage?

    Seriously, David, if you’re going to blow all this hot air at one of the least corrupted agencies in the country because your wealthy clients believe it’s doing too much to protect the public, I can only manage what else you’re doing behind the curtain. Help us out here by shining some light on your good deeds. Or do you spend your spare time harassing the EPA and the Bureau of Consumer Protection, too?

    I’m still reeling from the “I trust Iancu” bal0ney. Why do you trust him, David? Tell everyone. And when do we get to read your brief objecting to the absurd “practical application” test for subject matter eligibility that Iancu is/was intending to drop on the public?

    1. 16.1

      e commenting endlessly on patent law and the disgusting criminal who was ultimately elected Perznit*

      Your rants did NOT intersect with patent law.

      This is a patent law blog.

      How many of your rants need to be expunged before you get this point?

    1. 15.1

      How about adding to the improper Official Notice the current 101 shenanagins vis a vis portions of the Berkheimer memo (for example, go ahead and take Official Notice for a “state of the art” condition, but then ‘do the right thing’ when (if) an applicant calls you out…

  2. 14

    Really great article. As someone who has worked as an examiner in the past, I have some sympathy for the examiners and supervisors who violate these seldom-referenced laws that Boundy mentions; those folks generally have never received training on those laws and as such are naturally skeptical about references to them. And as a practical matter those folks have no impartial source of authority within the USPTO to whom they can take uncommon administrative law arguments (OPLA, where unusual legal issues are usually escalated, seems like it has a conflict of interest because OPLA is the office that promulgates the regulations and examination procedures that are being challenged).

    I have less sympathy for the policy and procedure folks. Knowledge of administrative law is a mandatory prerequisite for those jobs, but as the article points out in great detail, those folks either promulgate regulations/guidance without knowledge or understanding of the relevant laws or they act in bad faith (although I would be interested to review an argument suggesting that the historical activity has been properly compliant).

    Boundy’s article had a fantastic suggestion that I think is worth highlighting: “PTO should establish a compliance department, analogous to the compliance function in any private sector company.” Making a structural change like this would enhance the credibility of the USPTO by showing that the agency takes its legal duties seriously.

    And whether through a compliance office or some other mechanism, it would be great to have an escalation avenue to someone who isn’t OPLA for arguments challenging administrative policies. This would remove OPLA from the conflicted position where it both “drafts regulations and develops practices for the examination of patent applications” and then serves as an informal escalation authority that helps examiners and SPEs adjudicate challenges to those regulations and practices during examination.

  3. 13

    Suzannah — thank you for being willing to share your very informative, thought-provoking, and worthwhile thoughts here.

    As Dennis knows from the 1,000’s of visitors who quietly, silently stop by PatentlyO each and every month, few are willing to do so in the face of likely personal and professional attacks from MM.

    He is the Achilles Heal of an otherwise superb IP resource.

    1. 13.1

      very informative, thought-provoking, and worthwhile thoughts

      LOL

      Tell everyone a good Charles Duell story, Pro Say. You probably got a million of ’em!

    2. 13.2

      I regularly read the PatentlyO articles, but rarely read the comments because of lack of time.

      I am surprised, no shocked, by the bogus information disseminated by such trolls and their lack of civility. Knowledge is power (as well as the written word) so long as one gives it to others. Those who proliferate bogus information and squash speech, communication, and the dissemination of true facts and information by bullying are deplorable.

      I’ve dealt with real bullies early in my life as a result of my race and the area I lived. Trolls such as MM are laughable especially when they hide behind some anonymous avatar and name–it means they know they are spewing bogus information as they themselves do not want to put their name behind what they say (likely because they represent a lobbyist or an interest group).

      It’s really unfortunate when a highly educated and intellectual community such as this allows this type of bullying to scare them off from posting helpful and thought-provoking information. What is MM going to do? Come and throw rocks at me like the real bullies did? Even so, bring it on. It’s just flesh, while the written word can last forever.

      So, MM, if you are not such a troll, unveil yourself. Tell us all who you are and your USPTO registration number if you have one… Then let’s have an honest intellectual conversation and debate the pros and cons with real facts and information.

      1. 13.2.1

        In this context, awarding oneself the coveted status of victim wanders into the realm of hyperbole. It’s surprisingly easy to skip to the next comment when you don’t like an author.

    3. 13.3

      Yes, and unfortunately MM is not the only commentator here who habitually makes non-substantive personal attacks on comments of others, resulting in a very limited number of participants and the low public readership of comments noted below.
      The Quinn patent blog has a similar problem [and a far less neutral editor] but somewhat better commentator controls.

      1. 13.3.1

        Quite the contrary Paul, the Quinn blog does NOT have the Malcolm blight issue because of the better commentator controls.

        Those controls permit appropriate sharp words.

        Sharp words are an assualt on the unthinking, and your type here of “politeness at the expense of thinking” is simply not accurate, nor desired.

        Further, (at least my) sharpness is NOT the mindless ad hominem of the Malcolm type, and your insinuation otherwise is simply false.

        If on the other hand your “nameless” accusation is directed to some other poster, please feel free to be specific in such accusations.

        1. 13.3.1.1

          Obviously, Paul was referring to the randomly generated word salad with the occasional IP malapropism thrown in. I rarely try to parse those comments and never know if it’s just bad AI or demonstration of the Dunning-Kruger effect. Why did you take ownership?

          1. 13.3.1.1.1

            I did not – it is quite clear that I seek clarity from Paul (a clarity that you rather presumptuously insert).

            And let me as well seek clarity from you: what specific poster are you referring to?

          2. 13.3.1.1.2

            I wonder, Tommy, do you think that Paul was referring to postings of “S. Morse”…?

  4. 12

    Suzannah One should be able to read and follow the MPEP like a recipe book. Patents are all about the written word. Thus, it should be easy for the USPTO to provide rules and guidance that are clearly written and concise, just as is required for the patent applications and claims the USPTO examines.

    How about a rule that requires applicants to use the term “software” in their claim when the only novel feature in the claim is software? How about a rule that requires applicants to use the term “logic” in a claim when the only novel feature in the claim is allegedly “new” logic? How about a rule that requires applicants to identify which terms in their claims describe data content? How about a rule that requires applicants to identify which terms in their claims are functional and lack any ties to objective physical structure?

    How about a rule that requires applicants in the writing instructions for computer arts to deposit at least one example of bug-free working code on a contemporary operating system, where that example falls within the scope of the claim?

    How about a rule that requires applicants in the algorithm arts to claim their “novel” algorithms in a prescribed formal manner that allows the algorithms to be easily deposited into a searchable database?

    Or are these things just far too onerous to ask of the world’s lowest form of patent attorney as they attempt to patent the most important and valuable logic that is totally different from previous logic and is going to change the world if only the PTO weren’t so unfair boo hoo hoo?

    1. 12.1

      MM,

      Those who know me know that I, in the past, I’ve put the primary blame of poor quality patents and poor quality prosecution on patent practitioners. However, over the last several years, I’ve seen a significant decrease in the quality of Office Actions with unfounded, inapplicable, or conclusory assertions, and requirements that have no basis in the MPEP.

      Based on your rants, it is clear you are doing a disservice to your clients and the patent bar. I suspect you have a wealth of experience doing the wrong thing, which you are completely unaware of, for your clients, but you are deluded enough to believe you are a rock-star at patent prosecution. If you are not a patent practitioner, you must be a Millennial who works for some anti-patent pro bono group.

      In any event, how about a rule that doesn’t try to put all technologies in the same box such that a future technology that doesn’t yet exist is able to bloom into an industrial sector that employs millions, or even just thousands, when the next scientific dogma is completely shattered. You know, a while back the USPTO asked for comments on a proposal that would require all applications to be written in a specific manner, like a plug and paste into a template document. It arose from the USPTO Customer Partnership Meeting for Computer Software. Personally, I’m glad nothing became of it because I’d hate to imaging the types of inventions we have yet to realize that cannot be described in the same way as what we know today.

      1. 12.1.1

        you are deluded enough to believe you are a rock-star at patent prosecution

        The projection is strong in this one.

        1. 12.1.1.1

          Says the one who projects the most (and whose number one meme is Accuse Others Of That Which Malcolm Does/Is)

    2. 12.2

      Why do you hide behind initials MM?

      Note, the last I checked, I am the only Suzannah on the patent roster. I am Suzannah K. Sundby. I do not hide behind initials or an anonymous handle.

      1. 12.2.1

        A few people on these boards know who MM is, though I’m not sure that putting a real, human face on the MM name would change much of anything, and I respect his right to anonymity if he so chooses.

        1. 12.2.1.1

          cat drink,

          Comments on each of three points you present:

          1) “A few people on these boards know who MM is,

          Highly doubtful. While he does exhibit certain “tells,” and there have been a number of “guesses,” the number of commentators not associated with the blog (or its editorial controls) really knowing who Malcolm is has had zero substantiations.

          2) “though I’m not sure that putting a real, human face on the MM name would change much of anything,

          Here, I fully agree. As documented on past “let’s have a nice ecosystem” threads, Malcolm has been a consistent blight for the better part of 13 and 3/4 years. He also has the most posts that have been expunged. More than anyone else. More than everyone else combined.

          I’ve provided recommendations for this blight, including shunting non-patent law rants to a different part of the blog, cycling the Internet “Shout Down” style of repeating points that have had substantive counterpoints presented to not be a part of any ongoing conversation, and other mechanisms, which, if objectively applied, would neuter the blight and rampant propaganda machine that is Malcolm.

          3) “and I respect his right to anonymity if he so chooses.

          I absolutely agree with this, even defending Malcolm on this point (so much for the “one-bucket,” eh?)

          1. 12.2.1.1.1

            (12, not 13; although the odds are strong that nothing will be done and a year from now that “13” will apply)

      2. 12.2.2

        Suzannah,

        You may be new here, so let me bring you up to speed with “MM.”

        MM is shortened from Malcolm Mooney, and Malcolm has been posting exactly the same type of blight for over 12 and 3/4 years now (verified during one of the occasional “let’s play nice and have a nice ecosystem” threads.

        Also, while I deride pretty much anything that Malcolm vomits forth, I defend the ability to engage with anonymous and pseudonymous posting, and point to a long and hallowed tradition of such in this country. It is a logical error then to “attack” because of the moniker (the “what are you afraid of” line has no place in forums such as this).

        I do hope that you become a regular though, as you quite apparently put thought into your posts.

        1. 12.2.2.1

          I too believe one should have the right to post anonymously. When, however, one posts complete BS to hijack an otherwise meaningful discussion and hides behind a moniker, such acts are cowardice. Yes, MM, I am calling you out as a coward who is only brave enough to throw out personal attacks while hiding in the shadows.

          There is no Malcolm Mooney on the USPTO Attorney/Agent Roster. Thus, OED either stripped him of his registration number or “Malcolm Mooney” is another moniker layer.

          (There is one Mooney on the Roster who has “M” for a middle initial. However, his USPTO registration number is really high such that there is little chance this guy was posting 13 years ago and he’s a fellow FPLC grad, so I find it hard to believe that he is MM.)

          1. 12.2.2.1.1

            I agree with the coward portion – I merely note that the “out yourself” is not a viable path, and that even those who post in their own name do so in cowardly manners.

            As I also noted – I do hope that you become active in posting, if for no other reason than you post with some clear thought and effort put into your positions.

  5. 11

    In the grown-up arts, Examination seems to be more or less as robust as it always has been.

    It’s such a complete mystery why the Examination of pure unadulterated sh*t like Gil “Choke on This” Hyatt’s patents and ten zillion “logic on a computer” patents is somehow lagging behind in “quality.” Nobody could have predicted any of this! I’m sure things will improve once design patents — as peddled by Boundy’s hero Kappos — become s00per d00per “hot”.

    I wonder when Boundy will get around to “exposing” the failures of the design patent system to resemble anything remotely “legal”? Just kidding: the answer is “never”, because Boundy doesn’t care about administrative law problems at the PTO. What Boundy cares about is whether his friends are getting their junk patents fast enough.

    1. 11.1

      By “Grown-Up Arts” do you mean Group 1600? I so, I recently received an Office Action with a 101 ineligibility rejection based on the Mayo/Myriad 101 Guidance, i.e., the eligibility factor analysis, that became defunct in December 2014. Do note it is December 2018. How the heck can such an Office Action with an obviously incorrect rejection be mailed under the letterhead of a Government Agency? In the real-world, one would be fired for such clear mistakes and one’s supervisor would be held accountable.

      1. 11.1.1

        That’s nice “Suzannah”? Let’s see the claim and the rejection and then we can discuss the great injustice done to you and your client.

        Otherwise you’re just w@ nking yourself really hard here and it’s depressing to watch. Those of us who have been practicing a while have seen this storyline and all the performers before.

      2. 11.1.2

        Do note it is December 2018.

        Indeed. And I also note that over the course of the past year all of the 101 rejections I received were well-considered and not unreasonable.

        [shrugs]

        People are going to make mistakes from time to time. What you seem to have difficulty grasping is almost all of the PTO’s mistakes are in the favor of patent applicants, which makes your whining seem rather ridiculous. Oh but wait! Your client is s00per d00per important and children will perish if he has to address an eligibility rejection. That must be it. My bad.

        1. 11.1.2.1

          Given your own “this is so easy,” why are YOU getting 101 rejections Malcolm?

          Or are you dissembling as usual?

  6. 10

    David Boundy, a genuine p.o.s. I’ve met with Director Iancu

    I bet you have, David. I bet you have.

    and seen his press. I trust him to do the right thing,

    LOL! That’s sooooo reassuring coming from (LOL) “David Boundy”, a guy who wouldn’t know the “right thing” if it came up and slapped him in the face. First of all, you don’t trust a Re pu k k ke to do the right thing because they are not installed to “do the right thing”. They exist to take money from grifters, shove a bunch of it into their own pockets, and s c r e w the public in return while making sure their benefactors are made wealthier. This is doubly true of a Mang0 H@irb@ll appointee.

    Anyone who knows anything about patents and who has read Iancu’s ridiculous speeches to his “customers” knows that Iancu is a lying fraud who’s number one objective is to make it easier for his slick attorney buddies to continue to manipulate and destroy the system to the detriment of everyone except themselves.

    be the kind of reformer that PTO needs (to finish the work Kappos began, and that Lee dismantled).

    ROTFLMAO Kappos’ legacy is that he helped blow up the entire system by turning the Examination of logic claims into a j0 ke, and then he began promoting design patents which are even more of a j0 ke. Kappos was loved not because of his “administrative” reforms but because he turned the spigots up to 11 and pretended not to understand what all the fuss was about. The AIA was passed as a direct result of Kappos’ miserable failure to do his job.

    Thanks for the laughs anyway, David. You’re still good for those. Keep on doing what you do best: protecting the interests of the world’s worst patent attorneys, who are so deeply deserving of your eternal coddling love.

    1. 10.1

      Your rants have zero connection with reality, Malcolm.

      1. 10.1.1

        Yes, Iancu’s rants are unconnected to reality. I proved that much earlier this year.

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        link to patentlyo.com

        Maybe someone should email that thread to Iancu. And David Boundy. LOL

        1. 10.1.1.1

          You cannot be that full of yourself to really want to post that many rants and think that you are proving anything except that YOU are not connected to reality…

          Can you?

    2. 10.2

      While it is clear that you don’t agree with (most/all) of Director Iancu’s initiatives, MM – is there any room for the idea that he actually believes he is doing the right thing by strengthening Patent holder rights (to the best of his ability)?

      I would posit that, in Dir. Iancu’s mind, the “right thing” is doing whatever it takes to incentivize current/future inventors to file their ideas as patents rather that just sitting in them.

      While this will, no doubt, make it easier for NPEs to collect $, perhaps Iancu believes this is a fair trade for keeping US inventors engaged…?

      1. 10.2.1

        While this will, no doubt, make it easier for NPEs to collect $,

        Put
        The
        Kool-Aid
        Down.

  7. 9

    The only way to “fix” the “count system” is to take away the ability of examiners, and their useless, know-nothing, do-nothing, brain dead GS-15 “managers” to re-open prosecution in response to an appeal brief. But the PTO is fighting tooth and nail in the Hyatt case to retain their unlimited right to do-overs until they “get it right” or until applicants amend to less than they are entitled to or just give up.

    The position of the PTO is crystal clear: They believe they have the right to get it wrong as many times as they darn well please.

    Go to the EPO model: summons to oral proceedings. If the examiner won’t allow the application after applicant’s first response, give them the opportunity to argue the rejections and/or to submit auxiliary requests. And the auxiliary requests have to be considered. If the examiner still won’t allow, then applicant can appeal. And the examiner, and his/her useless managers can’t pull the rug out.

    Very simple. Beyond simple.

    But the PTO will never do it. Why? Because it would cut off the shenanigans that they are engaged in to get their promotions and bonuses.

    1. 9.1

      Thank you. In my article I had to sound like a lawyer. But you’re closer to (one part of) the truth.

      There are multiple symptoms — incomplete, non-compact Office Actions, merry-go-round 1207.04 reopens, really bizarre legal analysis in petition decisions, and the like, and your remedy concerns only one. But your diagnosis of the disease — that the PTO is being run for the benefit of the career staff, not for the public, and that ignoring the administrative law is the mechanism — is spot on.

      I hope that my article (maybe with a bit of help from the Federal Circuit in the Hyatt case) will steer PTO political appointees toward observance of administrative law to set the outer boundaries of conduct, and PTO’s metrics and compensation schemes will be retailored to incentivize good, compact, complete examination within those boundaries.

      I’ve met with Director Iancu, and seen his press. I trust him to do the right thing, and to be the kind of reformer that PTO needs (to finish the work Kappos began, and that Lee dismantled). I think there’s a good chance he may do so.

      Email him. Ask him to read this Patently-O article, the Anthony article, and my Part 1 and Part 3 articles. As you know, I can’t put URLs into this comment because WordPress will convert them to links. But the URLs are in the paper.

      Thank you for your comment.

      1. 9.1.2

        Email him. Ask him to read this Patently-O article

        99.99% sure that Iancu doesn’t need to read an article to achieve his mission, nor does he need to be aware of any facts about anything.

        He’s already made that perfectly clear.

    2. 9.2

      Really well said. They play this game because it allows them to not worry about the quality of their work. They wait until you write the appeal brief and then can re-evaluate. It is ridiculous.

      1. 9.2.1

        Exactly. The time to decide if the rejections are proper is not when the Appeal Brief is filed and sitting on the examiner’s docket for a couple months. It’s when the final rejection, or any second action or higher, is written.

    3. 9.3

      One thing I would like to emphasize since there seems to be some misconceptions about the count system based on some posts here:
      Examiner’s receive ZERO counts for reopens/rework. They receive Zero counts for a 2nd (or 3rd, 4th) non-final in a single prosecution round, and Zero counts a 2nd (or 3rd, 4th) final in a single prosecution round.

      So reopening after appeal brief does nothing to help an examiner “get their promotions and bonuses”. It is actually detrimental because all the time they lose working for free. If you are getting repeated reopens from an examiner it is almost certainly an issue with the SPE since there is not a single incentive for the examiner to reopen, whereas if they forward it to the board or allow they can get their half-count and move on.

      1. 9.3.1

        “So reopening after appeal brief does nothing to help an examiner ‘get their promotions and bonuses’. It is actually detrimental because all the time they lose working for free.”

        There’s no misconception(s) about how the count system works on my end. I know exactly how it works. And you do too. Sending out crummy final rejections is a game of chicken. And a volume game. You know that. Examiners know that applicants are likely to file an RCE at least once before appealing, so why not send out a final rejection and cross your fingers and hope for the RCE and that applicant won’t appeal. The number of applications that are appealed is relatively few, but the number of cases in which at least one RCE is filed is relatively high. So send out a lousy final, cross your fingers, and enjoy those RCE gravy train tickets. Yeah, once in awhile some applicant will appeal and you’ll have to re-open for no counts, but it’s a small price to pay for the bonuses and promotions the shenanigans routinely provide.

      2. 9.3.2

        Would like to see more actual facts about the count system, but it is important to note that examiners DO receive a big workload relief by reopening prosecution with another office action. By thereby not having to prepare and file an “Examiners Answer” to the Appeal Brief.

        1. 9.3.2.2

          “it is important to note that examiners DO receive a big workload relief by reopening prosecution with another office action. By thereby not having to prepare and file an “Examiners Answer” to the Appeal Brief.”

          How so? As noted above, there is no time credit for an additional non-final action but there is a time credit for an examiner answers.

          1. 9.3.2.2.1

            Thanks Ben. I do not know how much credit examiners get for an examiners answer to an appeal brief, but I wonder if it is enough for that work effort? Also, it is merely my prior impression, which may be wrong, that some examiners, including those who have not ever prepared an examiners answer before, seem to want to avoid that experience? I wonder if that is because the Board can be quite critical of papers that do not comply with their formal requirements or have substantive errors?

            1. 9.3.2.2.1.1

              “if it is enough for that work effort?”

              The time credit given for an examiner’s answer ranges from 3 to 10 hours, depending on grade and technology. The time credit for a second non-final is always zero hours. When a second non-final is called for the rejection is probably deficient and a significant amount of work needs to be done to send out a proper non-final. When appeal conferencees approve of the rejections (proper or not), the examiner’s answer probably does not require a significant amount of work. Thus the incentives for a lazy examiner lean heavily towards sending out an examiner’s answer if the SPE will permit it.

              “it is merely my prior impression, which may be wrong, that some examiners, including those who have not ever prepared an examiners answer before, seem to want to avoid that experience?”

              I suspect that if this is a real phenomenom, it does not play a significant role driving aggregate examiner behavior.

        2. 9.3.2.3

          Clarification: I do not dispute AAAJJ’s point regarding the numbers game of bad finals. But once an appeal has been filed, a bad examiner wants to send out a examiner’s answer with the same bad arguements in the final and then allow the case once it’s been reversed by the board. SPEs prevent this in theory, but the incentives tilt towards examiner’s answer.

  8. 8

    Imho, patent prosecution is not an adversarial process (until an appeal to the Board) as applicants and Examiners are trying to get to a valid claim scope. After all, no one wants an invalid claim as it is completely worthless.

    Unfortunately, the prosecution process becomes adversarial because examiners push for a claim scope that is narrower than what applicants are usually rightfully deserving of because of the “count” and “ding” system. Many examiners are afraid of getting penalized for allowing a claim that their supervisor or Quality Control believes is too broad. Hence, those examiners believe that they run less risk of getting less “dings” if the allowed claim scope is significantly less than what is rightfully justified.

    Imho, examiners should get dings for things that are clearly wrong in their Office Actions, e.g., requiring applicants to amend a specification to update or add the related application data, making a rejection that is completely unfounded, not setting forth the required analysis and instead making a conclusory statement, etc. Examiners should also get a half a point or one whole point deducted when they make a clear error in an Office Action… as I suspect examiners often rush to get points and therefore make such errors in haste. Such errors cost applicants significant time and money. Such errors are also likely costly to the USPTO in examiner time (and hence human resources), processing, and metrics by which the USPTO is evaluated.

    Throughout my career, I have found very few examiners who believe the prosecution process is or should be adversarial. Newbie examiners erroneously believe prosecution is an adversarial process unless they have a good training supervisor or they have an interview with a practitioner who shows them how applicants/practitioners and examiners can (and should) work together to achieve the objective of strong valid patent claims. Regularly (at least about 90% of my interviews with relatively new examiners whom I had not previously interacted with) the Examiner says something like “wow, I didn’t know that interviews could be like that”. Then they tell me some horror stories of some jerk-of-an-attorney who came in to an interview with guns blazing. I even had a junior associate (who was a former examiner) I was training tell me the exact same thing after we had our first interview on a case together.

    Imho, it is the responsibility of practitioners to show examiners that the process need not be adversarial.

    Examiners are not attorneys and the majority do not have a legal education. Hence, examiners likely do not know how to read, interpret, and apply case law. I firmly believe that the blame of sub-par patent examinations cannot be placed solely on examiners for being lazy, not following the rules, or not understanding the case law or technology. Instead, USPTO MANAGEMENT should be held primarily responsible (and to a small degree, us practitioners). One cannot blame an examiner who is not properly trained or who does not have the resources to do the job. Based on Office Actions of late (over the past few years), imho, it seems proper examiner training is woefully inadequate. And, imho, the MPEP is a horrible mess of cutting and pasting to the point of incoherency. Regularly, us practitioners are compelled to consult with each other to determine whether we understand and/or interpret the requirements of a given rule correctly. Such consultations should not be necessary. One should be able to read and follow the MPEP like a recipe book. Patents are all about the written word. Thus, it should be easy for the USPTO to provide rules and guidance that are clearly written and concise, just as is required for the patent applications and claims the USPTO examines.

    Additionally, as practitioners, we are responsible for using and applying the law and rules of practice for the benefit of our clients. Thus, we also have the responsibility of explaining (to Examiners) why certain laws and rules should be applied to our client’s specific case/facts in a certain way. As such, practitioners are also responsible for properly educating examiners on laws and rules as applied to a given case.

    Assuming examiners have the proper training and resources needed to do their jobs correctly, the examiners who continue to do their job incorrectly should be fired. However, I understand that it is extremely difficult to fire a primary examiner because of the examiners’ union, which is also why it is extremely difficult to do any meaningful overhaul of the count/evaluation system in order to improve patent examinations.

    Nevertheless, I understand that USPTO Management/Supervisors do not belong to the union and therefore can be more readily fired. Thus, it may be that USPTO Management/Supervisors must be held accountable (and fired) before we see any actual improvement in the average examination by examiners.

    FWIW

    1. 8.1

      Sage words – thank you.

    2. 8.2

      “Thus, we also have the responsibility of explaining (to Examiners) why certain laws and rules should be applied to our client’s specific case/facts in a certain way. As such, practitioners are also responsible for properly educating examiners on laws and rules as applied to a given case.”

      You can’t educate the willfully, triumphantly ignorant. Cutting and pasting case law cites into rejections gets the OA signed, as long as the claims are rejected. Are those cases applicable? Who cares?! Certainly not the examiners. And most certainly not their useless managers. So there is all the incentive in the world (e.g. RCE gravy train tickets, promotions, bonuses) to just cut and paste In re Aller in there again, and zero incentive to actually learn what the case stands for and when it is applicable, and when it is not.

      Solution?

    3. 8.3

      “Nevertheless, I understand that USPTO Management/Supervisors do not belong to the union and therefore can be more readily fired.”

      How many have been fired in the last, oh say, 20 years?

      1. 8.3.1

        And, hence, that’s part of the point.

        1. 8.3.1.1

          Not only have none of them been fired, they’ve been promoted.

          Why? Because they are “high producers” and as everybody who works at the PTO knows, doing high production automatically means that your work product is “record breaking outstanding quality.” So the worst abusers not only don’t get fired, they get rewarded. So they couldn’t “properly train” the examiners even if they wanted to. Because they never learned how to do it properly. And because doing it properly is for suckers. Play the game, engage in every form of shenanigans ever devised to game the count system, and get ahead.

          Not gonna fix that by asking the practitioners to “educate” them.

    4. 8.4

      the prosecution process becomes adversarial because examiners push for a claim scope that is narrower than what applicants are usually rightfully deserving of

      LOLOLOLOLOLOLOLOL

      Any evidence for this? Not my experience at all.

      1. 8.4.1

        Your experience at all…?

        I suppose when you start with razor thin picture claims….

      2. 8.4.2

        As a matter of fact, I do. I had a case where the client agreed to settle for a narrow claim scope that was still sufficient for them. Quality Control withdrew the allowance as QC thought the Examiner was allowing something he shouldn’t in view of the art. When prosecution was reopened, because the way the rejection was “reformulated”, I was able to completely destroy the logic/reasoning for the art rejection. I then broadened the claim scope (I also noted that Applicant was explicitly recapturing previously disclaimed subject matter by the amendment). It took a LONG time for any action on my response. However, I received an “off-the-record” call from the Examiner who said he just wanted to let me know that I will be receiving an allowance and that QC was quite reluctant to allow the application especially considering the claim scope is even broader than before when they withdrew the allowance. It took quite a few months after that to receive the allowance… but when I had it in hand I had (and still do) personal satisfaction.

  9. 7

    “When the PTO may act by guidance vs. when the PTO must use a full statutory rulemaking procedure” seems quite loose and vague to me. I remember back when interference practice was drastically changed [and desirably speeded up] under SAPJ McKelvey by a guidance package sent to all parties which seemed as thick as a telephone book for a medium sized city. It was NOT just for APJ guidance, it was full of specific practices and papers requirements rigidly enforced against attorneys.
    Was not some of that carried over into IPR practice as guidance and some enacted by rulemaking into 37 CFR Part 41?

    1. 7.1

      I don’t know enough of the history.

      In re Donaldson Co., 16 F.3d 1189, 1194, 29 USPQ2d 1845, 1849 (Fed. Cir. 1994) (the mere fact that “the PTO may have failed to adhere to a statutory mandate over an extended period of time does not justify its continuing to do so.”); Metropolitan Stevedore Co. v. Rambo, 515 U.S. 291, 300 (1995) (“Age is no antidote to clear inconsistency with a statute.”)

    2. 7.2

      Just to expand on that a bit —

      I’ve seen a few decisions by Pat Federico from the 1950s and 1960s that reflect that he understood the APA. After all, the APA was brand new in 1948, and probably still well known in agencies as late as the 1960s.

      Today, it’s clear that PTO and PTAB have lost even the most basic understanding of the APA. E.g., Patent and Trademark Office, Changes to the Claim Construction Standard for Interpreting Claims in Trial Proceedings Before the Patent Trial and Appeal Board, Final Rule, 83 Fed. Reg. 51340, 51357 col. 2 (Oct. 11, 2018) (the PTAB’s claim construction rule is “procedural” because it “will not change the substantive criteria of patentability”). WHAT?!?!?!

    3. 7.3

      So the point I’m trying to make is that there may have been some understanding of and respect for the APA in 1960, but whatever was there eroded bit by bit over years, and by the early 2000s, breakdown was complete. What APJ McKelvey did at some point in the past might not reflect sound knowledge of the law, or be a useful yardstick by which to calibrate one’s understanding of what is legal and what isn’t. I don’t know enough of your facts to be able to opine.

      Two good discussions of the dividing line between “interpretation” and “not interpretation” are discussed in —

      * David Boundy, The PTAB is Not an Article III Court, Part 3: Precedential and Informative Decisions, forthcoming in AIPLA Quarterly Journal, link to papers.ssrn.com at § II(D), pages 12-14

      and

      Robert Anthony, Interpretive Rules, Policy Statements, Guidances, Manuals, and the Like—Should Federal Agencies Use Them to Bind the Public?, 41 Duke Law Journal 1311-1384 (1992) at link to scholarship.law.duke.edu

  10. 6

    I was asked a question. Here’s the answer. You can guess what the question is. It isn’t directly relevant to this article, but it’s the biggest question in the field.

    People act according to their incentives. The current examiner count system rewards delay, and churn ’em and burn ’em examination.

    Remember Hoffman v Red Owl Stores, the promissory estoppel case you read in contracts? A franchisor tells a prospective franchisee “Oh just give us a little more money and we’ll set up your store. A little more. A little more.” Eventually, the franchisee smells a rat and sues, and the court smells the same rat and awards relief.

    Examiners are incentivized to do the same–write an Office Action that looks facially like an Office Action, but with enough omission and plain old nonsense that the attorney is pretty sure that the application is allowable, if the attorney just gives the examiner “a little more.” And a little more. And a little more.

    How do examiners stretch out prosecution? A hundred tricks. Write 102/103 rejections that consider a few of the words in a claim, but skip a lot of words too. Write enablement/written description rejections that skip over the reasoning steps required by the MPEP. An examiner’s goal is to write an Action that leaves it perfectly clear to the attorney that the claim is allowable, if only the examiner would just look at the claim word-by-word, or read and follow the MPEP.

    So the applicant takes the bait, and writes back to ask the examienr to think about the stuff that should have been in the first Action. And pay for the privilege of getting that level of thought.

    But then the system incentivizes examiners to not answer arguments. Keep the applicant dangling on hope that eventually the examiner will engage.

    All of this stretches things out. Examiners keep getting their counts, and the PTO gets its RCE fees.

    Then comes the next layer of the problem. The first two levels of supervisors are on that same compensation system, which incentivizes then to sign off on Office Actions that are just enough to “pretend,” but not enough to bring things to a conclusion. TC Directors are incentivized to deny petitions seeking the relief that the law is supposed to guarantee. (That’s another article — the tricks used by petitions decision-makers to avoid deciding petitions in applicants’ favor. Misquote legal sources. Redefine the issue presented. Skip over key arguments. Avoid precise definitions of legal terms like “moot” and “new ground of rejection.” Ignore inconvenient precedent. You name it.)

    It’s just plain corrupt. Not quite within the Hobbs Act for criminal corruption, but darn close.

    The biggest thing required to fix the PTO is a rework of the count system so that examiners get rewarded for concluding prosecution, instead of extending it. If the application is no-how-no-way allowable, examiners should give the applicant an explanation that is convincing, so that the applicant can explain to the client that it’s time to go home. If the application is allowable, allow it, no bogus rejections just to milk one more count. If it’s somewhere in the middle, an Office Action should explain the problem precisely, and consider all claim language, so that the applicant knows exactly what’s needed to bring things to conclusion, or can explain exactly where the examiner went off the rails. Trying to argue into silence is just fruitless.

    And ANSWER ALL MATERIAL TRAVERSED. As 5 USC 555(e) requires. No bogus stretch-the-case-out passive aggressive Office Actions.

    Ah, you say, but the union.

    Ha. That can be solved. SPEs and TC Directors aren’t union. Adjust their compensation systems to reward concluding prosecution and stop rewarding them for signing off on delay.

    A compensation system that rewards good, thoughtful examination and penalizes delay, instead of today’s reverse, would, I predict, cure most of the PTO’s problems in a year.

    1. 6.1

      Could you provide more information on how SPEs and TC Directors are incentivized to prolong prosecution?

      1. 6.1.1

        The reward for a quick and easy “No” when it is clear that such is bogus and the client is deserving (on the record) AND no penality for such wrong “No’s” promotes the basis for a continued fight for rights.

        LONG have I and other “maximalists” wanted solid examination whereby our client can be assured when to continue fighting and when to stop.

        By having a system that does not promote such, and that system is driven by mere throughput volume (without regard to the veracity of that volume – for BOTH type I and type II errors), the SPE’s and TC directors receive their incentives, and the result of prolonged examination (to fight poor examination) is a direct result.

        The reason I say “basis” is that sure, one could simply advise their clients that while they should be granted a patent, they cannot have one (or they can have a nigh-worthless excessive picture claim), but that is NOT serving the best interests of the clients as we are ethically obligated to do.

        On the other hand, good examination takes hard work, and sometimes it is a client’s choice TO fight that hard work, or to obtain even narrow coverage in the face of that hard work. To those who think that the Office should be the “Office of in NO vation,” such ardor from clients is seen as an insult.

        When the Office sets its metrics (and by that, I include the “Quality” programs) in an asymmetric manner — the Just Say No syndrome — you end up discounting even potentially good examination and promote (as in, do not dissuade) poor examination.

        This of course leads to prolonged examination as I indicated above.

        If you go back to the Dudas days and the failure from the Tafas case, what the Office tried to do was to put into concrete its ability for quick (and poor) examination by limiting claims and continuations. On the surface this would “seem” to “place the blame” for protracted examination on applicants.

        But such would not be a true reflection of the situation.

        Yes, it is the client that decides “to continue.”

        But the culpability comes from the actor not doing a sufficient job of examination that prompts the decision to continue.

    2. 6.2

      Exactly! I do not understand why the second action is almost always a final rejection, at least in Group 1600. You may figure out an amendment that could advance the case, but it won’t be entered, because it is after final. You can try AFCP 2.0, but that has been less successful of late.

      I also had an examiner add art to support his position in the Advisory Action. He did not add it to the rejection per se, evidently to avoid having to make it a new rejection and reopen prosecution.

      1. 6.2.1

        You may figure out an amendment that could advance the case, but it won’t be entered, because it is after final.

        File an RCE and get it entered.

    3. 6.3

      “A compensation system that rewards good, thoughtful examination and penalizes delay, instead of today’s reverse, would, I predict, cure most of the PTO’s problems in a year.”

      I think most agree with this. The problem is coming up with that compensation system.

      I agree that middle management’s incentives also need to be examined, but I don’t think that alone will be sufficient. If upper management seriously changed SPE incentives without changing examiner incentives you’d probably just have trouble filling the positions.

      I suspect the count system needs to be ended rather than reworked. I imagine that a healthy system would have supervisors exclusively working on supervisorial activities and gauging employee productivity through review and interaction rather than applying the end-all be-all metrics. I’d also imagine that a countless system would end up in less work “produced”, so examiner salaries would need to be adjusted downwards. Sounds like a nightmare to implement.

    4. 6.4

      But the examiners are not alone.

      We’ve all seen numerous Board ex parte decisions that would earn the panels big “F’s” were they written for their college professors; spewing out the same and similar kinds of “decisions.”

      And as for this count baloney:

      How many of the other millions of American government state and federal employees earn bonuses for merely doing the work they’re supposed to do?

      Any?

      Give all the examiners 20% raises and drop the “count parade.”

    5. 6.5

      I fully agree. In one case I’m handling, we recently received a “final” rejection that recites bases for rejection that weren’t put forth in the first OA – even though we didn’t amend the claims in our response. Which means that those new bases for rejection could and should have been listed in the first OA. So the present OA should not be “final”.

      Now, I could call up the SPE or the head of the group and complain about this, but then what happens when the finality is withdrawn and the case stays with the same examiner, who will have plenty of chances to come up with b.s. “rejections” that look facially proper but substantively aren’t?

    6. 6.6

      I agree that a rework so that “examiners get rewarded for concluding prosecution, instead of extending it” is an admirable goal.

      However, in the current state of the office, a “rework of the count system so that examiners get rewarded for concluding prosecution, instead of extending it” incentivizes allowances, because 1) the applicant can extend proseuction indefinitely, and 2) patent prosecutors rarely believe “the application is no-how-no-way allowable” because patent prosecution has turned into a game.

      It’s often very easy to infer the “solution” in some arts (I rarely receive US applications with “here’s a problem, here’s our solution” style drafting that you get in Japanese and some EU applications, but that’s another story). This should make prosecution simple; you search to see if the solution is in the prior art, and if it is, it should be a sufficient “explanation that is convincing, so that the applicant can explain to the client that it’s time to go home.”

      But it rarely is, because most patent prosecutors have this rather silly idea that “there’s always something allowable” and “the invention isn’t necessarily what my clients say it is.”

      1. 6.6.1

        billy,

        I hear what you say and it comes across as rather empty and misplaced gripes.

        I am not sure that you understand the role (and duty) of a patent practitioner.

        1. 6.6.1.1

          I’m not sure you do, either.

          1. 6.6.1.1.1

            That would be a “YOU” problem, as my posts clearly indicate that I understand and practice those duties quite well.

  11. 5

    Thanks David and Dennis.

    Important, actionable information.

  12. 3

    While I’m glad that David Boundy is one of the few folks who has been challenging certain PTO practices on an administrative law basis, it should be noted that doing so successfully in court has only been successful on very few occasions. In particular, the proposed rulemaking limiting continuations and divisionals under Dudas and his rogue GC, and especially the prior Sup. Ct. unanimous overruling of the Federal Circuit’s unanimous denial of the APA’s application to Board fact-findings in In re Zurko.

    1. 3.1

      P.S. it does not help that some of these PTO challenges have been by Mr. Gilbert Hyatt, whom some would honor as the grand admiral of submarine patent flotillas, following the career of Mr. Lemelson.

      1. 3.1.1

        Paul —

        I agree, Mr Hyatt is not the very model of a modern major pro se.

        But he’s been adjudicated not a submariner. In one of Mr. Hyatt’s § 145 actions, PTO tried to raise prosecution laches. The District Court for District of Columbia decided that the delay was due to PTO’s inaction, circular obstruction, and bad faith, not Hyatt’s. I’m sorry, I’ve read the decision, and can’t find it easily to give you a cite.

      2. 3.1.2

        I will echo that while Mr. Hyatt may be no saint, that it is a form of (baseless) ad hominem to turn and attack the person instead of focusing on a message that that person may be presenting.

        I “get” that when asking for equity, one should come to the table with clean hands. I do not think that that maxim translates into what happens when one is asking that the law be applied (as written).

  13. 2

    Thank you for sharing this research.

  14. 1

    Go Boundy, well done!

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