By Donald Zuhn --
Last week, we reported on appearances by Jon Dudas, the Undersecretary of Commerce for Intellectual Property and Director of U.S. Patent and Trademark Office, and Alan Kasper, the First Vice President of the American Intellectual Property Law Association (AIPLA), at an oversight hearing on the USPTO held by the House Subcommittee on Courts, the Internet, and Intellectual Property. The Subcommittee also heard statements from Robin Nazzaro, the Director of National Resources and Environment for the U.S. General Accountability Office, and Robert Budens, the President of the Patent Office Professional Association (POPA). Today, we address Mr. Budens' statement, in which the POPA President spared no criticism of the Patent Office's efforts to increase patent quality and decrease pendency.
Mr. Budens, who represents more than 5,800 patent professionals at the USPTO, began by acknowledging that "[t]he USPTO has been the target of much criticism in recent years for failing to allow high-quality patents and doing so in a timely manner." He noted that "[t]his criticism has resulted in increased scrutiny of the day-to-day operations of the USPTO as well as review of the laws governing the patent system," but argued that the solutions being proposed by the Patent Office and Congress "go far beyond what is truly necessary to improve performance at the USPTO." According to Mr. Budens, the problems facing the Patent Office -- namely patent quality and pendency -- are "internal problems of the USPTO," and "must be solved in the USPTO." In particular, he contended that these problems could only be resolved by providing patent examiners with the time and tools that they need to do the job right.
The POPA President argued that three key components were required to "do the job right": people, time, and tools. With respect to the first component, Mr. Budens noted that while application filings have continued to rise, "years of inadequate funding and restrictions on hiring [have] left the USPTO severely understaffed." However, in view of the 3,411 examiners the Patent Office hired between 2005 and 2007, Mr. Budens stated that the Office no longer has a significant hiring problem, but rather has a problem keeping the people it does hire. In support of this argument, Mr. Budens pointed out that during the same three-year period, the Office lost 1,478 examiners -- or nearly one examiner for every two it hired.
In addition, the POPA President disputed Mr. Dudas' testimony that the Office's attrition rate for examiners with less than three years experience was only 15.5%, arguing that the Director's attrition statistics "do not appear to correlate with previously published USPTO data," which actually show an attrition rate of between 30 and 44%. Mr. Budens also attacked the initiatives (e.g., retention bonuses, increases in examiners' special pay rate, and part-time employment) the Patent Office "claims" to be instituting to increase examiner retention. Mr. Budens concluded his attack on the Office's retention policies by stating that:
the one thing management could do to increase retention, it has consistently refused to do for more than thirty years -- provide examiners with the time to do the job right. More than any other factor, the most common reason examiners leave the USPTO is the unrelenting stress caused by the agency's outdated production system.
The POPA President summarized that "[w]hen it comes to retention of examiners, the agency's anti-employee actions speak much louder than their words."
Moving to the second component of "doing the job right" (i.e., time), Mr. Budens continued his assault on the Patent Office's antiquated production system, reiterating that "for more than thirty years the agency has refused to adjust examiners' production goals to compensate for the increasing complexity of technologies, larger and more complex patent applications, and an ever-expanding body of both patent and non-patent literature (prior art)." Calling the examiners' high-stress environment the equivalent of a "legal sweatshop," Mr. Budens noted that "a GS-12 examiner has, on average, about 20.4 hours, spread over one to two years, to complete the examination of a utility-type patent application." Depending on the technology area, he explained that some examiners may have as little as 11.2 hours, and no more than a maximum of 22.1 hours, to examine an application.
Mr. Budens also noted that while the Patent Office's production goals have remained essentially unchanged since they were put in place in 1976, examiners currently examine technologies (such as biotechnology) that simply did not exist when the production goals were put in place. In addition, examiners must search ever increasing amounts of information to identify relevant prior art. Using just the collection of U.S. patents as an example, Mr. Budens pointed out that while it took the Patent Office two hundred years to issue its five millionth patent, in the seventeen years since U.S. Patent No. 5,000,000 issued, more than 2.3 million additional patents have issued.
The POPA President argued that "[t]rying to do high quality examination of patent applications in 2008 in the amount of time examiners were given in 1976 has left examiners angry, stressed-out and demoralized." Moreover, he added that "POPA's data revealed that one third of examiners work unpaid overtime just to keep their jobs!" Finally, Mr. Budens noted that while a 2003 National Research Council of the National Academy of Sciences study indicated that providing examiners with a one-hour increase per application would cost the USPTO $11.3 million, the one-hour increase would decrease litigation expenses by more than $17 million.
Addressing the final component of "doing the job right" (i.e., tools), Mr. Budens argued that:
after neglecting the U.S. classification system and eliminating one of the most useful and unique search tools in the world -- the paper search files -- the agency wants to finish the job of effectively outsourcing the search to patent applicants by obtaining statutory authority to require all or nearly all patent applicants to perform a mandatory search and submit an Applicant Quality Submission (AQS) in their patent applications.
Mr. Budens contended that the Office's dogged pursuit of AQS legislation was misplaced since 37 C.F.R. § 1.56 -- when properly enforced -- was more than adequate to accomplish the goal of increasing patent quality. According to Mr. Budens' group:
[a] patent search is an integral part of the examination process and represents an inherently governmental function that should not be outsourced to the private sector. As the patent search forms the very basis of determining property rights in the United States, the search should be performed by U.S. Government employees free of any conflicts of interest -- USPTO patent examiners.
Mr. Budens added that "[t]he only clear effect of the AQS is to dramatically increase the cost of applying for a patent." As for the Patent Office's true motivation in seeking an AQS provision in the patent reform legislation, Mr. Budens speculated that the Office desired "to effectively outsource the patent search to applicants so that it can 'gain efficiency' by reclaiming that search time from examiners thereby requiring them to examine more cases." He suggested that the because AQSs will "dramatically increase the cost of protecting innovation in America" and the benefits of AQSs were speculative at best, the AQS provision should be deleted from the Senate bill.
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