Patent Application Outcomes: Rising Allowances and Falling Abandonments

By Dennis Crouch

The USPTO patent allowance rate has seen a steady rise since David Kappos took the helm as Director in 2009. Early-on Kappos announced that his version of patent quality meant that bad patents should not issue and that right-sized inventions should be allowed. That statement was a shift from the prior administration that publicly focused solely on the side of avoiding the issuance of bad patents. Kappos' ideas and theories have permeated the USPTO, both in its culture and in performance reviews.

The first chart below shows a monthly time series of the USPTO allowance rate.

The allowance rate is calculated based solely upon the number of applications that either (1) receiving a notice-of-allowance or (2) being abandoned within a single month. The allowance rate is calculated as the percentage of allowances within that that total number of disposals. Allowance-Rate = Number-Allowed / (Number-Allowed + Number-Abandoned).

I should note that, although data includes utility, plant, and reissue applications, there are not enough plant or reissue applications to shift the results. At times the USPTO reports count RCE filings as abandonments. For the figure above I ignored RCE filings – meaning that they do not directly impact the allowance rate shown below. Because RCEs are filed in so many applications, counting RCEs as abandonments would dramatically push-down the allowance rate. Conversely, there is also a credible argument that the allowance rate shown above is unduly low because a substantial percentage of abandoned applications are re-filed in the form of a continuation or divisional application. If the allowance rate is calculated as the percentage of US patent families stemming from a non-provisional application that include at least one issued patent, then the allowance rate would likely be closer to 80%.

In several recent posts, I have written about the reality that the USPTO is issuing more patents than ever – a historical high. Up to now, my working hypothesis has been that the increased allowance rate represents only a minor explanation for the increase in the number of issued patents. Rather, my hypothesis has been that there has generally been an increased throughput that means both more allowances and more abandonments. However, my thoughts have shifted in the process of rethinking the substantial increase in allowance rates demonstrated above.

The chart below shows the number of allowances compared with the number of abandoned applications for each fiscal year.

As is apparent, increase in throughput at the USPTO is entirely accounted-for by an increase in the number of allowances. The chart below divides the data on a monthly basis (but uses a six-month average because of a large amount of monthly variance).


I like to think of patent prosecution as a negotiation between the patent applicant and the USPTO over the proper claim scope and patent coverage. As with any negotiation, changes in the practice of one party will normally result in changes to the practice of the other party. We have public statements from Director Kappos suggesting intention to move toward a higher allowance rate, but it is unclear whether part of the shift is also due to changes in practice by patent attorneys. One change in practice that I suggested earlier is the general increase in the number of provisional patent applications as well as foreign applications. I have a working hypothesis that applicants have increased their reliance on those tools as mechanisms to self-select the best applications for filing and abandoning the patent even before filing a non-provisional. Still, it is cognitively difficult for me to separate the clear shift in the data in 2010 from the cotemporaneous statements and managerial moves by Director Kappos.

It will be interesting to see how this chart develops over the next two years as the next PTO director takes over and provides her own imprimatur.

26 thoughts on “Patent Application Outcomes: Rising Allowances and Falling Abandonments

  1. 25

    I do know what he is talking about. I’m surprised that Examiner Moooney hasn’t chimed in with his usual strident, vehement denials that any such policy, either de jure or de facto, ever existed, and demand for serial numbers and names of examiners that were following any such policy.

    Recent e-mails from Gren Aharonian and Hal Wegner shine a light on PTO malfeasance in several pre-GATT applications. To even consider taking patent term from any patents that may issue from those applications is outrageous. But what’s more outrageous is the complete lack of responsibility, accountability, and liability from the lifer clowns at the PTO whose malfeasance has kept those applications pending.

  2. 23

    The decline in abandons could be partly explained by the expanding RCE queue.

    If applications entering RCE have a higher ultimate abandon rate, then the change that slowed RCE turn-around, has just shifted RCE abandons out in time.

    That is, RCE’s that previously would have already gone through enough cycles to become abandoned, are still sitting in the RCE queue.

  3. 22

    I also work in the Bio/Chem area and have not noticed much of a change from the previous era in overall allowance rate.

    I recently was involved in a cost project for our group of attorneys– close to 60% of our applications need at least one RCE. Further, a large % of the RCEs are allowed on the first action…maybe a re-think of what can be done after final is in order.

  4. 19

    Malcolm, throughout history, there are ebbs and flows. In morals, for example, looseness is followed strict propriety, which is followed again by looseness, with smaller waves oscillating about larger trends.

    In patents, looseness yields obvious patents of great breadth. These patents are easily abused leading to demands for tighter controls. After a time, the reason for the tighter controls is forgotten and a period of looseness again ensues.

    Such is life.

    I was reading, the other day, a Harvard Law Review article that was discussing reexaminations and oppositions. It appears that the original purpose for reexaminations was to shore up a public perception that most patents were obvious. The idea that they would reduce litigation costs had nothing at all to do with the reason that Congress authorized reexaminations. The article noted that the original purpose had entirely been forgotten.

    Again, such is life.

    I think I see from the data that we are in an era, under Kappos, of lowered standards despite is soothing words to the contrary. If this is correct, the patents issuing today are going to cause a lot of problems tomorrow.

  5. 17

    I think we both know he knows what you are talking about.

    But after having that “de facto” policy denied for so long, can you really blame him when he sees an examiner admit to it?

  6. 16

    Comparing the statements “The first chart below shows a monthly time series of the USPTO allowance rate” and “ For the figure above I ignored RCE filings,” I would be interested in the same treatment going back in time to the great fall-off cliff, when the traditionally rather steady 70%-ish allowance figure quickly (and inexplicably?) fell through the floor down near the 30-40% range.

    Any chance in seeing such a figure to give some perspective?

  7. 15

    Come on, you know what I’m talking about – see the third sentence in Prof. Crouch’s post above. “Reject reject reject” was never an explicit policy de jure, but various review processes made allowance far more difficult and/or risky for the examiner, and that’s why I characterized it as a “de facto” policy.

  8. 14

    And unlike you and your twin brother they’ll admit that they got it wrong and move on.

    From the master of self-defeat (and self-denial)…

    Again, MM, no thank you.

  9. 13

    is that link you so joyfully first provided

    No. That link is actually pretty useful provided you remember to use your brain while reading it. Th problem at the USPTO is that they are applying Prometheus in the exact opposite way instructed by the Supreme Court: i.e., rejecting process claims that “implicate” a “natural law” in some unarticulated fashion or rejecting dependent claims reciting a determining step even where the independent claim is admitted by the Office to be eligible and patentable over 102/103. It’s just incompetence, nothing more. They’ll figure it out soon enough, I expect. And unlike you and your twin brother they’ll admit that they got it wrong and move on.

  10. 11

    (I’m going to go way out on a limb here because I know the powers-that-be at the USPTO are still completely in the dark

    awwwww, is that link you so joyfully first provided still have 101 Integration Expert’s position rather than yours?

  11. 10

    in spite of Bilski and […] in spite of Prometheus

    Didn’t you get the memo? Bilski and Prometheus were huge wins for patentees everywhere. With the notable exceptions of Bilski and Prometheus.

    Maybe we could name something after the guy who lost to Pyrrhus? Anybody remember his name?

  12. 9

    After prosecuting through both eras, I have to say I have not noticed any increase in the ease of obtaining grants in the chem/bio area (if anything, the opposite is true). I have noticed an increase in the rate at which applications are picked up, particularly when they are “follow on” applications of the sort noted by BJA at 1:53.

    So it’s anybody’s guess where/how the bulk of the increased allowance rate is happening … in spite of KSR, in spite of Bilski and (I’m going to go way out on a limb here because I know the powers-that-be at the USPTO are still completely in the dark), in spite of Prometheus. A real mystery. Is the reigning theory really that applicants are drafting claims more narrowly? Seriously?

  13. 8

    I agree, but many of our big clients are still holding tight on the budget and killing many apps.

    I’m also seeing LOTS of ads for in house prep and pros. I’m guessing that it’s an attempt to rein in costs. Good luck with that one. That didn’t work last time and won’t work this time for one simple reason: no carrot and little stick. In a firm, there’s a slight illusion (at least for the newbs) of partnership and getting some of the other 2/3 of what they produce. And if you don’t reach target one month… BOOM. Gone. No questions, no red tape. It’s just not that way in a major corporation. So no incentive and little stick… good luck getting those 80 hour weeks.

  14. 7

    Most applications have allowable subject matter somewhere within them, from what I’ve seen. The key is whether an applicant is willing to lay out the cash for a patent with that claim scope. In the economic downturn, the answer was much more frequently “no”, and although this was exacerbated by the de facto policy at the PTO, it was fundamentally a matter of economics.

  15. 6

    As with anything, you get what you measure.

    Moving from the era of “NO in inNOvation” with Reject-Reject-Reject to an era of “Quality does not equal Reject” is thus easily seen as reflected in the numbers presented here.

  16. 5

    It’s morning again in America. Happy days are here again!!!!!!!!!


  17. 4

    Your commentary leaves out the fact that once you get one case in a family issued, it’s common to permeate the allowable matter throughout the family and turn one allowance into 4.

    There’s a small increase in allowances (easy to do from zero), but I think your original hypothesis is correct – throughput.

  18. 2

    Early-on Kappos announced that his version of patent quality meant that bad patents should not issue and that right-sized inventions should be allowed.

    So incredibly brave.

  19. 1

    What liabilities are there for a patent holder in owning an issued patent that should NOT have been allowed by the PTO?

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