By Kevin E. Noonan —

As reported by Patent Docs on April 30th, Jon Dudas (at right), Undersecretary of Commerce and Director of the U.S. Patent and Trademark Office, has a message for the public (and Congress, and the courts and particularly the patent community):  one of the problems that ails the Patent Office is that "[w]e [the Patent Office] are getting more and more unpatentable ideas, worse and worse quality applications."  His "evidence":  falling allowance rates, which he asserts dates from about 2003, when the allowance rate was about 70%, until now when the allowance rate is less than 50%.  This is convenient, because it roughly correlates with the beginnings of the examination backlog that began under his watch and has gotten steadily worse under his leadership.  This even while Congress has (for the past 4 fiscal years) reversed a twenty-year trend of raiding Patent Office receipts to fund other parts of the federal government.  The Patent Office is getting full funding, and hiring thousands of new examiners, and yet it still can’t reduce the backlog of pending applications.  The Office’s answer, as it has been for several years, is that patent applicants and the patent bar are to blame (see "New Rules, New Threats: More on the Office of Enrollment and Discipline").  The reason used to be a proliferation of continuation applications and RCEs (before Judge Cacheris enjoined the ill-advised "new rules" designed to reduce the backlog by precluding applicants from filing more than two continuations in an application family).  Now the mantra is "quality" (which ranks with the flag, motherhood, and apple pie in the Patent Office pantheon) and the Patent Office cannot "do its job" because of these "poor quality" applications.

On May 6th, the Intellectual Property Owners Association (IPO) joined the ranks of those understanding these Patent Office pronouncements for what they are:  desperate attempts to shift the blame for the application backlog to anyone other than the managers whose incompetence is actually to blame.  In a letter to Mr. Dudas, the IPO stated it was "not aware" of any such quality decline.  The IPO reminds the Director that IPO members file almost 30% of all U.S. patent applications by U.S. citizens, and "take patent quality very seriously."  The IPO also reminds the Director that, as an organization, the topic of patent quality "is a regular subject of discussion within IPO committees and at public conferences attended by our members."

The IPO’s letter also reminds the Director what the other side of the Patent Office’s mouth has been saying for several months:  that the reduction in the allowance rate was not because patent quality has declined, but because patent examination quality has increased (see "USPTO Announces ‘Record Breaking’ 2007 Performance").  In addition, the letter specifically cites comments at a public conference on March 17, 2008 by the former Chief Administrative Patent Judge of the Board of Appeals and Interferences, that "it was not clear" (presumably to the Office) why patent allowance rates were falling.  However, the artificial "abandonments" recorded with the filing of Requests for Continued Examination ("RCEs") were mentioned by the Judge as a possible reason.  Considering this rationale, it appears reasonable that RCEs may be contributing to the statistic, especially if "patent quality" initiatives were resulting in a decrease in the number of allowances and an increase in the time and number of Office Actions needed to reach agreement with Examiners about the scope of patentable subject matter in an application.

The IPO’s letter also points out, accurately, that declining allowance rates today occur in applications filed several years ago, in view of the time it takes for an application to be examined (which, by the Patent Office’s own measurements were, on average, 31.9 months in 2007).  And if there is a basis for "declining quality," according to the IPO, it may reside in the greater number of prior art citations applicants make today than they did in the past, in an effort to forestall inequitable conduct allegations when patentees attempt to enforce patent rights.

The IPO closes its letter with a challenge:

Therefore, we request that the USPTO share the data it has to support the proposition that the quality of applications submitted to the office is declining.  If the data does indeed support this position, IPO would be very interested in working with the USPTO to improve application quality, consistent with keeping the responsibility for examining patent applications with the office and not transferring it to patent applicants.  As you are aware, we oppose legislation mandating "Applicant Quality Submissions," but we remain willing to explore voluntary actions that could be taken by patent applicants to reverse any demonstrated decline in the quality of submitted applications.

The challenge is likely to fall on deaf ears, since Mr. Dudas’ comments were not intended to address an actual problem.  No, the answer to "bad quality" patents is easy:  don’t allow them.  If they are of particularly poor quality, or don’t claim a patentable invention, it should be easy to continue to reject them without expense or extensive Patent Office resources.  And these applications, if pursued, will continue to be a boon to patent examiners, who can continue to exploit the antiquated "count" system with these applications and allocate more time to other applications containing patentable subject matter.

Thus, Mr. Dudas’ comments are yet another Patent Office straw man raised to deflect attention from the real root of the problem:  mismanagement.  The management problem exacerbated the lack of funding that started the Office down this path at a time of great technological advances in several scientific and industrial fields.  This was coupled with changes in what was considered within the scope of patentable subject matter, and with Patent Office rule changes (like publication) that created strong incentives for applicants to file new, continuing, and divisional applications before these rule changes went into effect in the fall of 2000.  As a consequence of all these factors, the Office (as well as patent offices worldwide) experienced a large increase in the number of applications, an application "bubble," that is the true "cause" of the application backlog.  Instead of pointing fingers, the more productive approach would be to accept the IPO’s invitations (and others like it from other groups and organizations in the patent community) to join with the Office in an attempt to solve these problems, rather than merely assessing blame.  Perhaps the next Administration will be able to field a Patent Office team capable of doing so.

For additional information on this topic, please see:

• "New York Times to Innovation: Drop Dead," April 30, 2008