Prosecution Delays and Patent Term Adjustment on the Rise Again

by Dennis Crouch

In the standard case, a US utility patent will expire 20 years from its effective filing date.  But, there are several circumstances that might alter the patent term. As a consequence, only a minority of patents fit the standard.  One circumstance involves unduly delayed patent prosecution that results in “patent term adjustment” or PTA under 35 U.S.C. 154(b).  The two chart below show PTA awards over the past 17 years.  Of some importance here — over the past 18 months PTA has been steadily creeping-up.  This is generally an indication that the prosecution process has slowed down.

These numbers will likely continue to rise as indicated by the USPTO’s delays in issuing an initial office action rejection — only about 30% of cases are receiving a first office action within the 14 months allotted by Congress.  I’ll note here that the PTA does not ‘cost’ the USPTO anything in terms of up-front money and, may make it more likely that the patentee will pay the issue and back-end maintenance fees.

62 thoughts on “Prosecution Delays and Patent Term Adjustment on the Rise Again

  1. 8

    I have no direct internal knowledge pertaining to the increase in PTA, but I’d guess the cause is primarily examiner turnover.

    The PTO is burning through examiners at an elevated rate, and the number of examiners currently employed is only flat due to agressive hiring. This is really bad for productivity because newer examiners “produce” much less than established examiners. I’ve heard rumors of new hire cohorts having less than 50% of the new hires making it to the 1 year mark.

    The upcoming recession should increase the candidate pool quality a bit, so the new employee retention rate may go up in the short term. But inflation is shrinking federal employee compensation and the special pay rate structure means that examiners get even worse raises than typical federal employees. Combine that with there being more work from home opportunities, and we should expect lower and lower examiner quality going forward.

    Management doesn’t have that many levers to work with here, so I expect they will “deal” with these problems by further reducing the standards for quality.

    1. 8.1

      “But inflation is shrinking federal employee compensation”

      Yeah I was wondering how much they were going to adjust our pay.

      1. 8.1.1

        4.1% for examiners and regular feds getting an average of 4.6%.

        1. 8.1.1.1

          Compares to ____ [real world inflation, and not the fake politically selective ‘basket of goods’ number]…

        2. 8.1.1.2

          “4.1% for examiners and regular feds getting an average of 4.6%”

          Lol wut, how’s that?

          1. 8.1.1.2.1

            Examiners are on a special pay scale and do not receive the locality pay adjustment (the 0.5%) that other feds in the DC area are getting. This has been going on for many years–in a couple years, the special pay scale will probably disappear for most examiners because regular GS pay will be higher.

            1. 8.1.1.2.1.1

              Lol wouldn’t doubt it. Thx tho. I thought the special table was supposed to be the regular table +% tho. Not sure what all is up there.

              1. 8.1.1.2.1.1.1

                Right. Our pay is regular table * special pay rate. Most feds are paid on regular table * locality rate.

                When they allocate raises, they send part of the money to the regular table component and part of it to the locality component. But the special pay rate component stays the same.

                Since we don’t get a share of the locality component, examiners get smaller raises.

          2. 8.1.1.2.2

            I honestly don’t understand how you can have worked here 10+ years and not know this.

            1. 8.1.1.2.2.1

              It basically works like this:

              1. Understand that almost all employment is scamming you nowadays nickel and diming you compared to yesteryear if in no other fashion than gov caused inflation as well as keeping wages low importing cheap labor/”talent” for 40+ years. Know this is the case just about across the board nowadays so also know there is nothing I as an individual can do.

              2. See some money in my account, it’s way more than what I actually need, as I have no dependents, so I just go about my day, keep costs low and invest.

      2. 8.1.2

        What is POPA saying? Are these primaries retiring?
        Count yourself lucky that the USPTO is still fairly generous with medical and retirement benefits. Not too long ago, someone I knew in USPTO management (higher than a SPE, lower than a Commissioner) stated that they were seeing older folks joining the Examiner ranks to secure the retirement benefits.

        1. 8.1.2.1

          POPA doesn’t talk about what they’re not allowed to negotiate over. They’re currently negotiating how much square footage future examiners working in-office will get because that’s a subject where they’re allowed to negotiate. The work definitions and performance metrics that are causing people to quit are within management prerogative’s.

          Health and retirement benefits are set by statute, so the PTO isn’t giving examiners anything on this front. The clerks at the Department of Housing and Urban Development get identical medical/retirement benefits, and it’s much harder to fire them.

          I am skeptical about people joining the PTO to secure some retirement benefit. The pension is paltry and expensive. It’s nearly pointless for anyone without 20+ years of service. We’re talking like $500/month territory for someone with a 5 year career in federal service.

          The best benefit from a short career in federal service is the possibility of extending employer health insurance contributions into retirement. But that requires a 62 year old to have been serving for 5 years prior to retirement. The idea of 57 year olds going to work for the PTO for 5 years at relatively low salaries so that they can retire at 62 and keep their health insurance for 3 years prior to getting medicare at 65 seems… unlikely.

          1. 8.1.2.1.1

            “The work definitions and performance metrics that are causing people to quit are within management prerogative’s.”

            Exactly.

            Anon btw will never understand that, he thinks that popa liek totally gets a say just because they take over for examiners in their negotiating. It’s basically a non-negotiable aspect of the job mandated by the gov. Unless you do so under the table which I recommend since this is obviously a terrible system in place right now.

            Here’s how it works:

            1. ban employees from negotiating anything because the union leik tots takes over that.
            2. set across the board time/prod reqs that do not take into account the actual individuals ability to wisely use this or that time (this actually in response to an ancient negotiation with the union to set a floor below which mgmt wouldn’t fire people, that started off a super low floor)
            3. ban the union from negotiating on anything having to do with the actual job performance

            1. 8.1.2.1.1.1

              “Anon btw will never understand that, he thinks that popa liek totally gets a say just because they take over for examiners in their negotiating”

              There is no point in engaging with him on this (or any other subject, but that is beyond the scope of this comment) because he is determined to not understand the rules because his current misunderstanding keeps his conscience clean.

              1. 8.1.2.1.1.1.1

                So typical of the typical examiner posts here, as BOTH 6 and Ben get wrong my views on examiners, their internal metrics, and my suggestions that they stop their whining and actually take charge of their own union and what that union may or may not have agreed to.

                Ben’s “no point in engaging” is wrong both coming and going, because I have been one of the most vocal for having the opaque rules MADE PUBLIC, and I have refuted his whining that somehow ANY rules that are internally based should somehow be made a concern for practitioners and our clients. There is simply no aspect of “keeps his conscience clean” that even impacts ANY level of understanding – to which I have been the most vocal FOR.

                But both Ben and 6 – keep on showing your level of understanding for examiners.

          2. 8.1.2.1.2

            “We’re talking like $500/month territory for someone with a 5 year career in federal service.”

            I mean, you do know that is plenty to keep a standard boomer who just so happened to not plan entirely perfectly for retirement afloat right? Do your 5 years and now your retirement is “saved” (skin of the teeth style).

            “The idea of 57 year olds going to work for the PTO for 5 years at relatively low salaries so that they can retire at 62 and keep their health insurance for 3 years prior to getting medicare at 65 seems… unlikely.”

            Yeah I’m not really sure what he’s talking about unless they have a super large medical condition and they really need gap coverage until medicare.

    2. 8.2

      The compensation hits at both ends. The pay increases are not as good as the private sector, which makes starting less attractive. Then, for the primaries that can actually do extra work the statutory cap on earnings prevents them from doing overtime.

      Next year I will be paid less in terms of purchasing power and I can’t even work as much overtime to make up the difference. Which is fine if you want to do less work, but less fine if you’d prefer the money. I understand that there has to a level of uniformity in the government, but you’d think they’d just let me do as much work as I want to – it has to be cheaper to pay me extra than to train and give benefits to a junior to make up the marginal production difference.

      The main benefit of the job was working from home and setting your own hours, and now everyone has the former.

      Not too long ago, someone I knew in USPTO management (higher than a SPE, lower than a Commissioner) stated that they were seeing older folks joining the Examiner ranks to secure the retirement benefits.

      I mean that may be a true story but the person you know simply isn’t smart then. I think it is 3% of your pay they take for retirement now? And for that you get (average of your 3 highest base pay salaries) * 1% * number of years.

      If you joined and got all your immediate promotions, you would be eligible for a retirement of about 5-6k a year after 5 years. If you reached primary ASAP and then held it for three years to get the most out of your average salary calculation (which would take 8 years of work) you’d have a retirement benefit of 10.5k a year.

      I cannot imagine anyone 8years from retirement who would spend 3-4 years making <100k so that they could get a retirement benefit of 10.5k a year. That's only the equivalent of 262k in a 401k, which you could probably make up with higher private sector pay.

      To really have the retirement benefit kick in you need to be there for 30-40 years, so that you are at the top of gs-14 scale (166k) and you get the 1.1% modifier. 166k x 1.1% x 30 = 55k a year, which is equivalent to a 1.37m retirement egg just by itself. That's a more significant value, but it comes with foregoing 30 years of private sector earnings.

      1. 8.2.1

        >The main benefit of the job was working from home and setting your own hours, and now everyone has the former.

        Not a government pension?

        1. 8.2.1.1

          No, because you can get that same pension from other government jobs.

          Also, the federal pension isn’t what it used to be. If I could opt out and instead send the contributions to a 401k, I would.

          1. 8.2.1.1.1

            I guess 401(K)’s are OK for the modern, private-sector workplace — in which you expect to get involuntarily laid-off a few times during your career…. but I’d *strongly* prefer the defined-benefit pension + job security I was promised when I started my career.

            1. 8.2.1.1.1.1

              When did you start?

              I’d greatly prefer the pension system that was phased out in 1987, and I’d be happy to have the pension system phased out in 2013.

              Defined benefit plans sound great, but if the term of the “benefit” are sufficiently miserly, you’re better off with a 401k.

          2. 8.2.1.1.2

            The pension isn’t the same at other government jobs since you’re liking not making nearly the same money at another agency as examiners are capable of making.

    3. 8.3

      Primaries should receive a $250 – 500 bonus for every app they allow.

      They work hard and deserve it.

      1. 8.3.1

        Respectfully Pro Say – I call out this as B$.

        You do realize that the Anti’s would jump all over this, right? Further, simply properly applying the law would result in PROPER allowances, and it is only PROPER allowances that anyone should be after.

    4. 8.4

      What is causing the turnover?

  2. 7

    So what percentage of U.S. patents now issue with terms in excess of 20 years? [More precisely under the term statute more than 2o years from their earliest claimed U.S. priority date not counting provisionals?]

    1. 7.1

      “Issue with”? Surely ~0%, no? PTA just gives you back term that was chewed up in prosecution, but it does not add more than the original 20-from-filing. In order to get more that the 20, you have to invoke PTE. Theoretically it is possible to get a patent issued with PTE, but I do not believe that I have ever seen it happen.

      1. 7.1.1

        PTE is commonly given in pharmaceutical patents. But the cap there is that the PTE cannot extend the patent patent longer than 14 years from the approval date of the product.

        1. 7.1.1.1

          Thanks for the reminder of the separate patent term extension statute for pharmaceutical patents who’s time period of economic value was reduced by FDA approval delays.

        2. 7.1.1.2

          PTE is commonly given in pharmaceutical patents.

          Right, but my point was about at the time of issue for the patent. PTE for any given patent generally comes later than the time of issuance for the patent. Can you think of a specific instance in which the PTE was included in the patent’s term at the time of the patent’s issuance?

  3. 6

    The minimum reached at around mid-2018 that plateaued for a few years was clearly ended by the implementation of USPTOs TRP initiative in late 2020.

    Since implementing this program the USPTO has faced significantly higher than average attrition.

    Expect it to get much worse before it gets better.

    While attrition is lower among primary examiners, the USPTO is trying to hire its way out of the problem. It requires (in my estimate) the full time of one primary examiner to train 4-6 junior examiners. With more primary examiners training junior examiners that ultimately quit (attrition is as high as 60% among first year examiners), and primary examiners quitting simply due to conditions of the job, there will be a continued decrease of labor available to examine patent applications. This will lead to a continued increase in pendency and average time to first action until an equilibrium is met.

    Eventually congress will have a hearing on how the USPTO is failing to meet congress’ demands of pendency. If they want to get to the heart of the problem, they should investigate the policies that are making people quit examining.

    1. 6.1

      It requires (in my estimate) the full time of one primary examiner to train 4-6 junior examiners.

      I think the exact amount is a partial SPE detail, plus one primary on 100% detail as a trainer, plus three primaries on 80/20 details to train a class of 20ish. That’s not counting large lecture speakers. That’s only for the first three months, after that its subject to the individual SPE in their art unit.

  4. 5

    Who is “ignoring” Congress? Congress did not write that the PTO shall mail a first office action within 14 months. Rather, Congress provided that if a first action is not mailed within 14 months, then the patent term shall be extended accordingly. The PTO is extending accordingly, which is all that Congress has required that the PTO do. No Congressional directive is being ignored.

    1. 5.1

      Whoops, sorry. This was meant as a response to 3 below.

    2. 5.2

      Way to look woodenly at WHY the guarantee was put in place.

    3. 5.3

      Yes, and the then-clearly-expressed expressed “why” of the complex plus and minus patent term adjustments [& 20 years from the oldest claimed U.S. priority date rather than issue date] of the current patent term statute was to:
      1. Continue to give applicants approximately 17 years of issued patent enforcement time, yet
      2. discourage applicant delays and Lemelson-like submarine patents issuing for 17 year patent terms after 25 or more years of serial continuations and divisonals.

      [I think this could have been accomplished more clearly and avoided some of the subsequent litigation over this complex statute, but the final draft of this legislation was done and enacted in a big rush.]

      1. 5.3.1

        Whether or not done in a big rush, no one (and especially Greg) should be taking such a wooden view here.

  5. 4

    only about 30% of cases are receiving a first office action within the 14 months allotted by Congress. I’ll note here that the PTA does not ‘cost’ the USPTO anything in terms of up-front money and, may make it more likely that the patentee will pay the issue and back-end maintenance fees.

    Several things here.

    First, let’s not be glib as to that 14 months being a part of an expected deal (to Congress) in preserving the (US Sovereign) notion that the Quid Pro Quo is for a granted patent in exchange for shared (and then publicized) inventor disclosure. Decidedly, the US does not share any ROW view that the QPQ exchange is publication for a mere chance at patent rights. There is NO sense of “we get to take the quo and share what you have with your quid being you are permitted to apply for a patent.”

    Such may be the deal other Sovereigns have put out there, but that is decidedly NOT the US deal.

    That 14 month mark was intended to give the applicant ample time to review a first (and complete) examination result, with which to evaluate going ahead with the patent process or abandoning (with abandonment removing the ‘existence’ of the applicant’s disclosure from written history).

    Second, looking at the situation as “not costing the USPTO any money” is more than crass in evaluating what Congress expected. It is a not-so-subtle way of reneging on the deal that underpins the US patent system. “Cost” may not be in dollars, but make no mistake that “cost” is indeed involved.

    Third, There is no indications in any sense of facts on the record to support the assertion that NOT living up to the deal “may make it more likely that the patentee will pay the issue and back-end maintenance fees.

    That statement is beyond ludicrous.

    1. 4.1

      “… (with abandonment removing the ‘existence’ of the applicant’s disclosure from written history).”

      What?

      1. 4.1.1

        Come now Malcolm, you are well old enough to remember that applications submitted to the Office that are abandoned prior to publication are treated as having never existed (for prior art purposes).

        Have you forgotten the phrase “provisional rejection?”

        1. 4.1.1.1

          I’m aware that under Rule 138 you can expressly abandon to avoid publication. But I can’t think of a single application that I’ve received a first OA on the merits within 14 months of filing where the OA caused me to advise a client to expressly abandon the application to avoid publication. I mean it’s an option, but not really an option. (Responding even though you misidentified me. No point in trying to disabuse you of your own certainties.)

          1. 4.1.1.1.1

            Well thanks for clarifying (even with snark) that you are not Malcolm.

            It’s only like the fifteenth occurrence since you posted under this moniker.

            As to whether or not a (any) client would expressly abandon with receipt of action at 14 months is quite different than understanding the legal mechanism (and underlying rationale) for doing so, eh?

            1. 4.1.1.1.1.1

              I’m well aware of the legal mechanism for doing so. I’ve never had to use it. I doubt many others have either.

              1. 4.1.1.1.1.1.1

                Your post at 4.1 will lead others to the opposite conclusion in regards to that “well aware of legal.”

  6. 3

    It’s amazing how they can ignore Congress when it benefits them.

    1. 3.1

      Yes (sadly), the Executive Branch disregarding its primary duty of enforcing the law (and read that as also including selective — and political based — enforcing) is one of our greatest shortcomings of this modern era.

      And it certainly does not help that Mainstream Media is complicit in this.

  7. 2

    One way to get the PTO to take PTA seriously would be to give it to patentees upfront. So, for example, if you get 3 years of PTA, your first maintenance fee wouldn’t be due for 6 years.

    1. 2.1

      Bravo.

      Malcolm (as Breeze) actually has a worthwhile suggestion. We all should applaud small steps such as this.

    2. 2.2

      tbh, I think my clients would be better off with deferred examination (i.e., the ability to defer examination fees).

      As a lawyer, OTOH, I’m outraged by these delays in my ability to collect fees.

  8. 1

    “I’ll note here that the PTA does not ‘cost’ the USPTO anything in terms of up-front money and, may make it more likely that the patentee will pay the issue and back-end maintenance fees.”

    What is the point of this statement? If it’s to suggest the PTO is indifferent to PTA, I would disagree. While the PTO as an entity is not penalized by PTA, individuals in PTO management have bonus opportunities tied to PTA.

    1. 1.1

      Ben, would you please explain more about how the PTO management bonus opportunities are tied to the PTA. That is definitely an issue I had not heard about in the past. Thanks.

      1. 1.1.1

        I find it sad that this type of thing has to be asked for, and is not openly available to the public.

        1. 1.1.1.1

          Regardless of what bonuses the management get, the actual Examiners get a docket management bonus that would reward avoiding PTA. The docket management award requires no more than 1 “ceiling” action in a quarter (a ceiling would cause a PTA) and would require an average action time, both per type (new, special, amendment, after final, etc) and overall that is well below the PTA numbers.

          The only two situations that the docket management score would not cover is 1) where the examiner takes a substantial amount of time off at once, and 2) a situation where the examiner gets a lot of RCEs at once. The former is extremely rare and may result in a redocketing of their cases. For the latter, only 1 RCE timer runs at a time, so one could conceivably receive a ton of RCEs at once and by the time the last RCE had its timer going it was already a PTA issue. (Unless this is not a PTA situation because of the RCE, I’m not sure on the law) Regardless it is also rare. So the examiner docket management bonus would encourage PTA compliance.

          I would assume that if the PTA rates are on the rise it is due to 1) a mismatch between the work and the examiners (i.e. the PTO probably doesnt have enough AI examiners) and 2) the higher turnover and resultant increase in junior examiners, who have less production and would be more interested in increasing production (to get grade increases) rather than focusing on docket management awards (which are, at most, 4% of your base pay – inferior to a grade increase at every grade).

        2. 1.1.1.2

          Federal employee behaviors are driven by the contractual terms found in their performance and appraisal plans (PAPs) and their bonus/award opportunities.

          Only once in my 20 year career, did TC Group Directors share certain details of their PAP and bonus/award opportunities with their own SPEs and QASs. As front line management, we were routinely left in the dark, trying to decipher what was driving Group Director behaviors.

          It is consistent with my experience that an examiner such as Ben would not know the details of the upper level’s PAP and bonus/awards scheme.

          From 1995-2015, I recall rumors of production, quality, diversity, pendency, timeliness, hiring and/or retention bonuses/awards which appeared to morph yearly and be implemented differently across the TCs, changing priorities and creating unecessary uncertainty.

          These bonuses and awards are sizable. OIG reports have documented USPTO bonus/awards which are out of line with Department of Commerce guidelines and inconsistent with Office of Personnel Management’s standards.

          Because the USPTO’s bonus/award moneys come directly from their “users,” (inventors, patent owners and patent applicants) it seems reasonable for the IP community, along with examiners and the public to know what is in the current management and senior executive service (SES)- level performance plans and bonus/award schemes and how their money is being spent.

          If management and leadership contracts are structured anything like the examiners’ PAP, no wonder things are off track.

          It’s unlikely this sad situation will improve until USPTO PAPs and bonus/awards, from top to bottom, are aligned with Office of Personnel Management’s standards and Congress’s directives.

          For more on this topic, please see

          link to ipwatchdog.com

          1. 1.1.1.2.1

            As all of the career PTO officials are doing record breaking outstanding quality work (just ask them! they’ll tell you!), I’m sure the “bonuses and awards are sizable.”

            1. 1.1.1.2.1.1

              Ha!

              1. 1.1.1.2.1.1.1

                Watching the PPAC meeting this morning. They’re all breaking their arms patting themselves on the back.

      2. 1.1.2

        I honestly don’t know the details of their bonus structure, sorry.

        1. 1.1.2.1

          You “honestly don’t know” but are perfectly willing to assert details that you “honestly don’t know”…

          It is just so difficult to believe that you are an examiner….

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