The U.S. Patent and Trademark Office (USPTO) has proposed a new patent quality initiative. See Director’s Blog and Federal Register. In response, I have submitted a formal comment, Tracking Number 1jz-8ipa-7jnk, as set forth below. I contend that any discussion of quality patents should take into account the need for quality examination, that is, prompt allowance of good claims and sound reasons for rejected claims.
The Director admits that she is not the first to proclaim the need for patent quality. Every few years the USPTO responds to the perennial complaint that some patents fail to fully disclose and distinctly claim a new, non-obvious invention.
In a typical situation of patent infringement, the infringer exclaims, “They can’t patent that!” Many inventions seem obvious with the benefit of hindsight. But the legal standard is whether the invention would have been obvious to one of ordinary skill in the art at the time the patent application was filed. The smartphone might seem obvious today, but it was astonishingly elegant and novel when it was first unveiled. Many complaints about quality are versions of Aesop’s fable of The Fox and the Grapes. At least the fox left the the grapes and went on his way; the infringer eats the grapes while pronouncing them sour.
In the ebb and flow of the patent system (which seems to run in 30 year cycles), criticism of patents seems to be nearing a local peak. In previous blog posts, I have discussed the Director’s attack on the Patent System and the roles of lobbyists and fearmongers in creating an epidemic of ogrephobia.
Quality is an ogrephobic term for whacking inventors.
The Director and the lobbyists are too smart to openly criticize inventors. Instead, they have created ogres (which they call trolls), and they propose to slay them with new quality standards and patent reform legislation. Who’s to complain? Nobody loves an ogre! But it’s inventors who will be slaughtered.
Lost in the current discussion of patent quality and patent reform is any real consideration of inventors, who created new technologies like electric lights, affordable cars, and smartphones. If the Constitutional purpose of patents—to promote the progress of technology—is to be fulfilled, meritorious patent claims should be allowed promptly. Inventors should not be called names, and they should not be treated badly by the USPTO.
Ogrephobia is unsupported by the facts. Stanford Law Professor Mark Lemley observes, “Litigation is focused on the very few patents (1-2 percent) that turn out to be important and about which parties cannot agree in a business transaction.” See M. Lemley, Fixing the Patent Office (Stanford). Surely some of those patents have merit, and some of the patent owners have legitimate complaints against infringers. As Lemley recognizes, “bad patents” usually disappear into oblivion. Few bad patents are ever asserted, and when they are, they are going down in flames in Inter Partes Review.
In terms of USPTO economics and productivity, the cost of rejecting a patent application is far higher than the cost of allowing it to issue. M. Frakes & M. Wasserman, Does the Patent Office Issue Too Many Bad Patents?, 67 Stanford Law Review (forthcoming in 2015). Rejections add to the backlog of pending applications. Poorly reasoned rejections are costly to all concerned.
As I mentioned above, I have submitted a formal comment, Tracking Number 1jz-8ipa-7jnk, on the USPTO quality initiative, presumably to be published soon by the USPTO along with other timely comments. As stated in the Federal Register, the USPTO’s proposed rulemaking includes several “proposals” under certain “pillars.” My comment pertains to “Review of and Improvements to Quality Metrics” (USPTO Proposal 4 Under Pillar 2).
In my formal comment, I pointed out the need for quality examination:
As indicated in the PTO proposal, quality applies not just to issued patents but also to search, examination, and office actions. Too often, improved quality is equated with more rejections—anything to keep a patent from issuing. But poor quality rejections impose high costs on the PTO (including wasted time and effort, reduced productivity, and more backlog) and on applicants, many of whom simply cannot afford to pay legal fees and costs associated with protracted prosecution, RCEs, and appeals.
Sadly, the USPTO literally counts a victory when an inventor “throws in the towel” for lack of money or sophistication. I say “count” because the Patent Office measures each one of its unionized examiners with a “count” of allowances, final rejections and abandonments. My comment on the USPTO’s celebration of abandonment is as follows:
Abandonment of a meritorious application is not a successful outcome.
Recognizing that a quality office action should be more than a knee-jerk rejection, I have suggested that the USPTO should make greater efforts to allow good patents and to do so promptly:
Every patentable claim should be allowed (or indicated to be allowable if rewritten in independent form) as early in examination as possible. There should be more first office action allowances of meritorious claims.
My comment further addresses current, poor examination practices, along with proposed solutions:
Present PTO practice is to reject routinely, applying a broad brush to all claims, often with poor reasoning, especially in a first office action, and frequently again (sometimes simply repeating the first rejection without addressing amendments) in a second office action, which is usually made final. All claims and all amendments should be addressed separately. Presently, far too many cases are pushed into RCEs and/or appeals.
Here is the conclusion of my comment on need for improvement in quality of examination:
More effort should be made by examiners to identify patentable subject matter and to work with applicants and attorneys to agree on allowable claims, commensurate with the scope of the invention.
In sum, the USPTO should focus at least as much on allowing good claims as on rejecting bad ones. After all, the presumption built into the patent law is that an applicant is entitled to a patent unless the USPTO proves otherwise.
Here’s my prediction: I think the USPTO will adopt harsher rules and practices that will increase the already high rejection rates. First office action rejections will continue to exceed 90%. Second office actions will usually be final rejections. Applicants in many or most cases will be forced to pay the USPTO additional fees before there will be any serious consideration of allowance. Examiners will continue to be rewarded for rejections and subjected to USPTO criticism and financial penalties for allowances, especially early allowances.
In view of the current, developing situation, here are my recommendations for inventors and innovative companies: Think strategically about which inventions to patent, and invest in thorough, skilled preparation of detailed patent applications with targeted claims. Put yourself in good position to deal with inevitable rejections, and stay the course with skillful prosecution. For more, see my recent blog posts, Build Your Patent Portfolio: Preparation, Prosecution, Appeals and 7 Tips for General Counsel. The recommended practices will help you build a portfolio of valuable patents and applications that will stand the tests of time, examination, and other challenges, including the coming. new, yet to be announced, USPTO rules and practices.