The Broken Patent System: A Threat to American Economic Security?

05/27/2010

Chief Judge Paul Michel of the United States Court of Appeals for the Federal Circuit recently addressed the examiners of the United States Patent and Trademark Office (“USPTO”)1  calling for “an improved patent system” as the “primary engine of American recovery and resurgence,” with a need for “faster, sounder and clearer patents, plus faster, stronger enforcement.” These remarks seem well-received and are considered to be on-point by many in the innovation community, perhaps because they parallel the recent concerns of both consumers and technology companies.

Judge Michel outlined three areas where the patent system, and in particular the USPTO, is “failing” and “dysfunctional.”  He views these areas as a threat to American economic security:

    1.  Examination Delay and Application Backlog

  • “In some technologies it now takes 4-6 years even to get a patent.  The product life-cycle may be shorter.  For all technologies the average is three years.”
  • “Over 700,000 applications sit unread in a warehouse in Alexandria, Virginia, often for years. Although 400,000 are under examination, their progress is far too slow. And every year almost 400,000 more are filed.”

    2.  Examiner Turnover

  • “[T]he [USPTO] workforce is still declining, losing 500 examiners last year when hiring was frozen because of fee short-falls in the worst recession in several decades.  So just when it needs more examiners, it has fewer.”
  • “[The USPTO] lacks . . . enough examiners, especially experienced examiners . . . .”
  • “Most examiners leave after only three years for better pay and working conditions in private industry.  The average experience level of the 6,000 examiners has fallen to only about three years.  But it takes that long for new examiners to become both competent and efficient.”

    3.  Lack of Patent Quality

  • “Inexperienced examiners harm the system: they allow patent claims they should reject and reject ones they should allow, further increasing delays and costs.  And the lack of quality assurance undermines the presumption of patent validity provided by law and the credibility of patents in the eyes of Congress.”

In other words, the Chief Judge attributed examination delay and application backlog to a lack of examiners and the lack of patent quality to a lack of experienced examiners.  However, unlike many who criticize the U.S. patent system, Judge Michel provided several bold solutions to help address the problems he identifies.

For example, Judge Michel exhorted Congress to appropriate “an immediate capital investment of one billion dollars” to the USPTO.  Such an amount would far exceed the temporary 15 percent increase in fees that the USPTO is presently seeking through legislation.
With such increased funding, Judge Michel next proposed:  (1) hiring “thousands of additional examiners” to decrease the application backlog and the delay in examination time of applications; and (2) paying increased “competitive salaries to highly-skilled examiners” to reduce turnover, thereby (3) retaining experienced examiners who could increase examination quality and therefore patent quality.

Although Judge Michel recognized that more money alone will not "fix the patent office," increased funding appears to be an important first step to improve our patent system and consequently our economy. 

Judge Michel’s speech coincided with a slew of other changes at the USPTO that have been implemented by new USPTO Director David Kappos following his August 2009 confirmation.  For instance, Director Kappos has introduced and promoted several innovative programs to decrease application backlog, such as the Patent Prosecution Highway, the First Action Interview Program, the Green Technology Pilot Program and the Project Exchange – Patent Application Backlog Reduction Stimulus Plan.

In order to navigate through the nuanced requirements necessary to participate in each of these programs, innovators may find significant benefit in the assistance of competent and experienced legal counsel.  As for patent applicants that don’t qualify for these programs, such legal counsel may be able to provide tactics to navigate the rocky shoals of the patent application process such as, interviewing inexperienced examiners with their supervisors or increasing the quality of granted patents and the likelihood of success in the patent application process by preparing robust applications with superior disclosures that support the claims to comply with the various legal requirements of the patent system.

1The text of Judge Michel’s speech is available at the Journal of the Patent and Trademark Office Society website.

For more information on the Patent practice group and its members, you may visit the Patent Prosecution page of the Haynes and Boone, LLP Web site. If you have questions or desire further information, please contact one of the following:

Texas
Randall C. Brown
214.651.5242
randall.brown@haynesboone.com

California
Edward C. Kwok
408.660.4149
edward.kwok@haynesboone.com

Washington, DC
Jeffrey Wolfson
202.654.4565
jeff.wolfson@haynesboone.com

You may also read the alert in the PDF linked below.

 

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