By Donald Zuhn --
In February, the House Subcommittee on Courts, the Internet, and Intellectual Property held an oversight hearing on the U.S. Patent and Trademark Office. The Subcommittee heard statements from Jon Dudas, the Undersecretary of Commerce for Intellectual Property and Director of U.S. Patent and Trademark Office; Robin Nazzaro, the Director of National Resources and Environment for the U.S. General Accountability Office; Robert Budens, the President of the Patent Office Professional Association (POPA); and Alan Kasper, the First Vice President of the American Intellectual Property Law Association (AIPLA) and a partner with Sughrue, Mion, PLLC. At the time, we reported on the testimony provided by each of these witnesses (see links below).
In April, Representative Howard Berman (D-CA) (at left), the Chairman of Subcommittee on Courts, the Internet, and Intellectual Property, sent Director Dudas a letter requesting that the Director supplement his testimony (see "Congressman Berman Is on the Case"). In particular, Representative Berman presented the Director with eighteen questions regarding, inter alia, Patent Office proposals for reducing the application backlog, the impact of production goals on examiner attrition, and the establishment of regional offices. Representatives Darrell Issa (R-CA) and Bob Goodlatte (R-VA) added six additional questions. The Representatives gave Director Dudas until May 19th to respond.
Earlier today, a copy of Director Dudas' responses to the Representatives' questions began to circulate online (see, e.g., "Patently-O Bits and Bytes No. 43" and "Dudas Issues Letter to Congress In Response to Berman's Questions"). While a portion of the Director's 26-page letter focuses on a rather mundane discussion of Patent Office realignment and "reprogramming," the Director did provide some interesting bits of information.
In response to Representative Berman's question concerning the actions that the USPTO or Congress could take to reduce patent pendency, the Director provided some suggestions that were expected (Applicant Quality Submissions) and some that were less expected (deferred examination). Continuing the Office's drumbeat on AQSs, the Director labeled the preparation of such submissions a "basic responsibility" of applicants. The Director also listed worksharing (e.g., the Patent Prosecution Highway programs currently being tested with other patent offices) and a number of ways to increase capacity (e.g., creating a Nationwide Workforce via teleworking) as means for reducing patent pendency.
The Director's most intriguing comments, however, concerned deferred examination, which he proposed implementing via a three-step plan. First, the time period for responding to a notice of missing parts would be extended "within [the Office's] existing regulatory and statutory authority" from the current two-month extendible period to, for example, a 14-month extendible period. Next, the Director requested that Congress provide the statutory authority to implement a sliding-scale examination fee, in which "the greatest fee is due on filing, or within one year of filing, and lesser fees for later submissions." Finally, the Director proposed that the time period within which a nonprovisional application must be filed to claim the benefit of a provisional application be increased from one year to five years (which also would require a statutory change). With respect to this last proposal, the Director suggested that applicants be allowed to request publication of provisional applications and to collect provisional rights on published provisional applications (both of which would require changes in U.S. patent law).
Further elaborating on the topic of deferred examination in response to a question from Representative Issa, the Director reminded the Subcommittee that:
[i]n the USPTO's original strategic plan of 2002, the agency proposed three distinct programs which collectively would have reduced the pendency of patent applications to 18 months: (1) deferred examination, (2) competitive sourcing of searches and (3) a 50% increase in fees. When the agency proposed this strategic plan to the public, there was strong and unified opposition to deferred examination from bar associations and patent user groups. In early discussions, congressional staffers advised that no proposal including deferred examination or a fifty percent increase would be acceptable.
Whether one believes that deferred examination (as opposed to the 50% fee increase) was responsible for sinking the Office's 2002 strategic plan, the Office seems to be returning to deferred examination as a way to reduce the application backlog. Patent practitioners, however, should not discount the possibility that Director Dudas had other motives for providing the Subcommittee with a "history" lesson on deferred examination. In particular, in concluding his response to Representative Issa's question, the Director noted that:
[t]he USPTO's experience of proposing deferred examination in 2002 is instructive. The Applicant Quality Submission provision in the Committee passed version of S. 1145 is an even better way to ensure that examination resources are not wasted but are focused on inventions.
On the topic of production goals, the Director refused to acknowledge that examiner attrition was somehow linked to unrealistic production goals. In support of his position, the Director noted that two reports on production goals "made opposing recommendations about the patent examiner production system." Where the 2004 Commerce Office of the Inspector General (OIG) report "seemed to conclude that the production goals are set too low," the 2007 Government Accountability Office (GAO) report "seemed to conclude that the production goals are set too high." The Director contended that because approximately 70% of all FY 2007 examination work was done by examiners with three or more years of experience, and this segment of the examining core has the highest production goals and the lowest attrition rate (i.e., 3.95%, as compared with the 15.5% attrition rate of examiners with 0-3 years of experience), higher production requirements do not necessarily result in higher attrition. The Director noted, however, that the Office was doing some additional analysis on this issue, and would provide the results of this analysis to the Subcommittee by the end of the year.
Finally, in response to Representative Berman's question on the USPTO's interest in opening regional offices, the Director informed the Subcommittee that the Office had commissioned a feasibility study, which indicated that the costs of opening such offices would be "significant." The Director noted that the Office had determined that a more financially and strategically prudent solution would be to expand the Office's teleworking programs.
For additional information on this and other related topics, please see:
• "Congressman Berman Is on the Case," May 14, 2008
• "GAO Testimony Supports POPA's Position on Examiner Attrition," March 13, 2008
• "POPA President Critical of USPTO During House Subcommittee Oversight Hearing," March 4, 2008
• "More on House Subcommittee USPTO Oversight Hearing," February 28, 2008
• "House Subcommittee Holds USPTO Oversight Hearing," February 27, 2008
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