PATENT-TECH

 PATENT U -A Glance at the Patent World

USPTO Patents Issued YTD = 164,533

• +22.2% over 2009

USPTO Applications Published YTD = 223,680

• +0.3% over 2009

as of September 3, 2010

What's New?

USPTO Update on New Programs

  Donald Gibson meeting with David Kappos to discuss USPTO issues.

Mr. David Kappos, USPTO Director, addressed the Inventors Alliance on February 27, 2010 and gave a summary of his new programs and there progress.  The presentation announced two new proposed programs:

•  24 month provisional application
• A fee based 1 year fast track examination

A complete report follows.

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USPTO Presentation 2/27/10

Mr. Kappos was very positive about the programs he has put in place and is pursing to improve the quality and response of the USPTO.  He is encouraging greater interchange between the Examiners and the Applicants believing that such interchange will result to improved quality of patents.  Mr. Kappos noted that patent allowances were up 4% over a similar time period a year ago.  Revenue has also increased in the same time period.

Several new programs were discussed.

• Provisional Patent Application (PPA) – Planning to add an option whereby the term of the PPA is extended to 24 months.  Kappos expects to implement this program by summer 2010.
• Multi-track Patent Application Program. Kappos expects to implement this program in 12-18 months.
  • 1^st Track: First office action in 12 months with the payment of a higher fee.
  • 2^nd Track: Same fees and response as today
  • 3^rd Track: USPTO would delay prosecution for a period of time or until requested by the Applicant to proceed.  Fee to be determined.
• Project Exchange or otherwise know as “bump and run”.  A small entity may cancel one application in exchange for accelerating the examination of another application.  Program is now available.
• Legal Support – Mr. Kappos is exploring alliances with legal organizations and university to provide legal support to individual inventors.
•  Green-Tech – The USPTO just announced a program whereby if the application qualifies as a “Green Technology program”, it will receive an accelerated examination.  The program is limited to the first 3,000 qualified petitions.
• Revisions to the Examiner Count System.  This is the system that awards points (i.e. credit) to the Examiner for work completed.  Mr. Kappos has revised a number of elements to encourage great productivity from the examiner.  One example is the reduction in the number of points for the Request for Continued Examinations (RCE).  By reducing the number of points, the Examiner has less benefit to continue the examination and may purse interviews with the Applicant to come to a conclusion on the patent application.
• Patent Drawings – Mr. Kappos is aggressively evaluating methods to improve the USPTO IT system.  One area of review is to adapt a XML format for the drawings in order to give greater flexibility in the format to which drawings may be submitted.
• Remote USPTO sites – Mr. Kappos is evaluating possible remote sites for the USPTO. Silicon Valley is an obvious choice.

David Kappos USPTO Interview 

October 22, 2009.

 On October 22, 2009, I had the opportunity to participate in a small group meeting in San Francisco with David Kappos, Director of the USPTO.  As indicated in the attached notes, Mr. Kappos has agressive plans for his organization. These plans include pushing to reduce patent pendency (i.e. time for the first office action).  Mr. Kappos' targets are:

• 10 months for first office action
• 20 months for allowance.

Notes from the meeting with Mr. Kappos:

1. The USPTO is interested in supporting small inventors (small entities).  One program the USPTO is considering would allow small entities to expedite one application if a second application is canceled.

• The proposed initial program will only consider patents currently in process.  If the USPTO get at least 10K participants, they will consider a permanent program.
• Any permanent program would include provisions to prevent frivolous patent applications, i.e. application that could readily be cancelled.

2. Cost of Enforcement.  Mr. Kappos offered the following comments:

• Validation – Currently, the post grant opposition and validation takes approximately 3 years, and of course is expensive.  Mr. Kappos is proposing a new adjudication process to validate (or not) the patent.  The key elements of this process would include:

- The challenger would present a prima facie case

- The proceeding would be administered by the USPTO by 3 Administrative Law Judges (ALJs)

- The time for this proceeding ~ 12 months.

• Infringement – Currently the USPTO has no jurisdiction relative to proving infringement.  However, Mr. Kappos is exploring options where the USPTO would participate in this area.  A new Administrator for External Affairs has just been appointed, Arti Rai.  Professor Rai will consider options fo USPTO involvement in infringement
• Mr. Kappos believes the post-grant validation process will reduce litigation because of the perceived strength of the post grant validation.

3. Reduction in patent pendency, i.e. the time to get a patent. Currently, the patent pendency is 34 months for the USPTO, with a backlog of ~800K applications.  The Accelerated Examination program has not been successful because of the documentation requirements of the ESD (Examination Support Documentation).  The applications for Accelerated Examination peaked in 2007, and have declined in 2008-2009.  Mr. Kappos is aggressively pushing to reduce patent pendency.  His targets are:

• 10 months for first office action
• 20 months for allowance.

Mr. Kappos described the following proposed programs to assist in reducing patent pendency:

• For small entities, drop one application; accelerate a second application, as described in #1 above.
• Pay a fee to accelerate the examination.  For large enitiy, the fee will be substantial, for small entity the fee will be modest. No ESD will be required.
• Energy related applications.  For applications that can claim to have a substantial impact of the environment, the USPTO will offer accelerated examinations.
• Other programs that would assist in reducing patent pendency are described in #4 and #8.

4. Deferred Examination.  Some other counties, for example Japan, offer the option to postpone, or defer the examination of an application.  Mr. Kappos wants to implement such a system with an option of deferring examinations 2-3 years.  Besides giving applicants an additional option, this program would reduce the examination requirements since more applications would be examined by foreign PTOs. Currently, since the USPTO does not offer deferred examinations and foreign PTOs do offer such options, the USPTO tends to become the defacto PTO for examinations, since the application has been deferred at the foreign PTO.

5. 1 year grace period for foreign PTOs– Currently US patent law (102b) allows a one year grace period.  That is, the application can disclose his invention and have one year to file a US application.   Mr. Kappos believe that the Germany/Japan/EPO can be convinced to implement a similar rule.

6. Biliski Supreme Court Decision – Mr. Kappos expects that the Supreme Court will adjudicate software patent consistent with the lower court decisions.   Relative to business methods, Mr. Kappos does not expect the Supreme Court to support business methods as patentable applications.

7. -License of Rights.  Mr. Kappos wants to offer patentees an option to discount annuity fees in exchange for an agreement that the patentee will license their patent under fair and reasonable terms.  Effectively, the patentee would agree to terms similar to the terms required if the patentee participates in a technical standard cross license agreement.  The patentees benefit would be a significant reduction in the annuity fees.

8. Improvement in Patent Quality. Mr. Kappos was very strong on the importance of improving patent quality.  Some of his points:

• Increase the amount of time allotted for Examiners to conduct patent examination.
• “Blow-up” the count system. Mr. Kappos just received news that the union has approved his new system.
• Change how quality is measured.  Currently, the Examiners are subject to de-merits if they reject any claims.  Institute the notion that quality is not equal to rejection.  Do not drive actions that force RCEs.  Implement a system that measures the Examiners actions in a granular manner and reward positive credits to Examiners.
• Increase communication with in the USPTO.  Mr. Kappos is implementing a Directors Blog.  It should be live next week.

9. Skype – Mr. Kappos will evaluate whether Skype could be used for Examiner’s Interviews.

- Donald Gibson

Should I Apply for a PCT Application?

There are a couple of considerations in the decision to file a PCT application.

1. What is the value of the IP in different countries?

Patent protection is territorial. That is, a U.S. patent provides no IP protection in any other country of the world. Although the PCT process offers convenience in making world wide patent applications and will result in an aggregate savings for multiple applications, there will still be individual prosecution and maintenance fees for each country.

2. Is it desirable to delay patent prosecution?

The PCT process allows for the patent application to individual countries (i.e. entering the national stage for that country) to be delayed as long as 30 months after the priority date. It may be desirable to delay patent prosecution if there is market uncertainty.  Accordingly, there may be a benefit to evaluate the market for the IP, before incurring the prosecution expense. This market evaluation can we world-wide, so that the judgment of which countries to obtain patent protection can be honed.

Also, a delay in patent prosecution can be beneficial if the IP requires a government or industry certification/approval. For example, Big Pharma routinely utilizes the PCT system to postpone the prosecution as long as possible, while they seek FDA approvals.

Of course, the knowledge gained in these market and technical evaluations can be useful in driving the patent prosecution.

Relative to the actual PCT application, there are two fundamental ways to proceed.

1. Apply for a patent in your country, and then make a PCT application based upon that country group application. In the case of the U.S. , one can make a utility or provisional application under 35 U.S.C.111, and then use that application as a basis for the PCT application.

This was procedure utilized by Babak Daneshrad in his application for a Universal Rake Receiver. First, a U.S. utility application was filed, application 10/057,430, filed January 25, 2002. This U.S. filing date became the PCT priority date. Second, a PCT application was filed on January 15, 2003, resulting in the publication WO 2004/057763. Note that this application meets the requirement that the PCT application must be filed within 12 months of the priority date.

Based on these facts, the Applicant had until June 25, 2004 to enter the national stage of the 100+ PCT member states, i.e. 30 months after the priority date.

2.The second method for making a PCT application is to simply make the application directly to the PCT, without a national priority application. This is the process followed by Big Pharma, inasmuch as it gives the applicant the maximum use of the 30 month time line to enter the national stage of the member PCT countries.

In this situation, a U.S. patent application will be made based upon 35 U.S.C. 371.

Regardless of the method used to apply for a PCT application, the procedures for prosecution of the PCT application will be the same. This includes the steps of Chapter 1 and 2 of the PCT procedure.

“What is the value of the IP in different countries?”. One method I have used with clients is to analyze the IP relative to its importance to the business plan of the company. For this activity, the IP was categorized as follows:

• Core IP – File U.S. and PCT application, and plan to file in multiple foreign countries.
• Important IP - File U.S. and PCT application, and plan to file in a few foreign countries, e.g. UK, Germany, and Korea.
• Routine IP – Only file in the U.S.

Another factor is the strength of IP protection in some countries. Of particular consideration and discussion is India and China. Both of these countries may have importance to the business plan, but their ability to provide IP protection is not yet at the level of the U.S. or Western European countries.

Costs are highly volatile for PCT applications, foreign applications and maintenance fees.  For example, 1 ½ years ago, the cost of a U.S. plus PCT application was essentially the same as a U.S. application by itself. That is no longer true. As a ballpark, the cost for preparation and prosecution of a U.S. plus a PCT application is $20-24K. Other country application, prosecution, and maintenance fees are additional. At the moment, the cost to support foreign applications is challenged by the U.S. exchange rate relative to the Euro.

- Donald Gibson

Seminar

Patent Examination Policy and its Impact on Social Cost

By

Donald Gibson

A Presentation at IEEE-CNSV IP Sig Meeting, May 18, 2010

• What are the Social Costs?
• Variables in Patent Examination Policies
• Allowance Errors vs. Rejection Errors
• Novelty, Obviousness Errors.
• Status of the USPTO in 2010 
• What changes should occur in the USPTO?
• Presentation based on two academic studies

 Request a copy of the presentation at info@patent-tech.com

Other Recent PATENT-TECH White Papers:

• The Value of Invention

• USPTO Update - Director David Kappos Continues to Promote and Innovate

• What’s New in the Patent Office?

• Patent Landscape of Augmented Reality

• Patent Examination Policy and its Impact on Social Costs

To obtain a copy of a white paper, go to the tab "Contact Us"

What We Do

• Patent Application and Prosecution
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  • USPTO & PCT