More Work, Less Money for the PTO is a BIG Problem

By Gene Quinn
August 17, 2009

Something came up in the comments to a post earlier today and I want to address it and definitively debunk the rewriting of history that seems to already be started with respect to who is to blame for the problems of the patent system.  The question arises with respect to whether the Patent Office has created their own mess by artificially forcing down the number of patents granted because it was believed the allowance rate was too high and fewer patents should be issued.  Of course, to the extent that this happened, which we all know it did, this would be malfeasance of the first magnitude.  The law says that applicants are entitled to a patent unless the examiner can articulate a justifiable reason for not issuing a patent.  For some government official to simply believe the allowance rate is too high and institute means to guarantee it dropped violates not only common sense, not only the spirit of the patent laws and the Constitution itself, but it also runs contrary to the dictates of the relevant statute.  As a result, during the first quarter of 2009 the allowance rate sank to 42%, and the Patent Office budget is a mess.

Many will erroneously attribute the reduced number of patent filings to the recession, but this would be the first time in at least recent memory that the number of patent applications did not grow despite a recession or economic downturn.  See chart below.

There is more to the decreased number of applications than the recession, as I have pointed out numerous times.  The reality is under the previous regime at the Patent Office the likelihood of receiving a patent dropped to unacceptable levels, particularly in light of the many years it takes to receive a decision thanks to the growing patent backlog.

Now to the particular matter at hand.  It is now being suggest by some, and this is not the first time I have heard this, that the Patent Office did not create their own budget problems, and that the Patent Office of the past is not to blame for the horrible state the patent system is in.  I know I have talked about moving forward, but one of the things that Director Kappos has to do, and quickly, is get the patent examiners to understand that the patent bar and inventors and applicants and corporations are not the problem.  The previous regime instilled almost hatred toward users of the patent system and these folks who work for the PTO that believe that will someday run the Office, so this has to be rectified or we are in for a lost generation of innovation in the United States.

The reality is that unwise business decisions and unjustified tinkering with interpretations of the statute and role of the Patent Office lead to a significant reduction in the number of applications allowed based in terms of the work done by the Patent Office.  The figures simply do not lie.  Take a look at the charts below, copied from the 2008 PTO annual report.

Utility Applications Filed Utility Patents Issued


It does not matter that the number of utility applications allowed in 2008 approximates the number of patents issued in 1999, for example.  In 1999 there were 259,618 utility patent applications filed and 142,852 utility patents issued, which correlates to 55% of the number taken in were issued, which is similar to the 54.7% that existed for 1994 and the 56.7% that existed for 1988. I realize that those filed in these years were not issued in these years, but it is an interesting thing to look at this number when compared with the similar number for 2008.  In 2008 there were 464,541 utility patent applications filed and 154,699 utility patents issued, which corresponds to 33%.

Why is this analysis important?  The Patent Office receives significant portions of its overall budget from maintenance fees due 3.5, 7.5 and 11.5 years after the issuance of a patent.  The Patent Office also receives $1,055 for the publication and issuance of a patent for a small entity, and $1,810 for the publication and issuance of a patent for those not qualifying for small entity status.  Because the Patent Office is receiving far more applications then they used to, that means more work, but fewer or even the same number of allowances reduces the amount brought in in terms of fees relative to that increased workload.  Far more work even with the same amount of fees is a problem, and that is something that everyone seems to understand except perhaps those inside the Patent Office who cling to the erroneous beliefs that got us into this situation in the first place.  Unfortunately, there are many who cling to erroneous beliefs as if they are fact, and those that believe the PTO is blameless.  I have no particular interest in playing the blame game any more, but when clear, documented facts are ignored in order to not face reality there is a problem.

Whether people choose to ignore reality or not, the facts are what they are.  The artificial lowering of the number of patent applications issued has created real financial burdens for the Patent Office.  Congress will eventually have to step in and subsidize the Patent Office or innovation that could and should lead to the creation of new jobs will continue to languish inside the walls of the Patent Office.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 38 Comments comments.

  1. scrappy August 18, 2009 7:51 am

    John Schmid and Ben Poston of the Milwaukee Journal-Sentinel has some great investigative articles on the state of the Patent Office at:

    http://www.jsonline.com/business/53319162.html (part 1 of 2)
    http://www.jsonline.com/business/53367952.html (part 2 of 2)
    http://www.jsonline.com/business/53365652.html

  2. Mark Malek August 18, 2009 9:12 am

    I think you hit it right on the head. While I have concern over the current state of the financial crisis at the Patent Office (they just borrowed a big pot of money from the Trademark Office, right?), it pales in comparison to my concern for 2013 – 2020, when the Patent Office will see a significant decrease in maintenance fee collections. Something has to be addressed now, but I don’t know how to solve the issue that the Patent Office is sure to face in 2013.

  3. Gene Quinn August 18, 2009 11:36 am

    Scrappy-

    Yes, I know. I saw that. For many months I spoke with the reporters, providing information and background to them. Unfortunately, my name didn’t make the series, which struck me as odd given the amount of time I invested to help them understand the patent process and problems of the Office. Not that I expected to be the only source or even quoted heavily, but given all I provided and the hours I spent I at least thought I would get some kind of mention. Oh well. Lesson learned.

    -Gene

  4. Jules August 18, 2009 1:12 pm

    I’ve said it before, and I’ll say it again… PGPUBS of 102(e) introduced with AIPA-1999, and now coupled with KSR, contribute significantly to the PTO’s changing mentality (among other things).

    See how the number of issued patents was increasing until aprox. 1999-2000? Notice the number of issued patents leveled out at the exact time when PGPUBS started to be phased in.

    I agree that a solution needs to be taken. Let’s avoid fear mongering and one-sided zeal. Let’s all be honest about what part we play in the system, so that a full comprehensive picture can be made.

  5. Gene Quinn August 18, 2009 3:42 pm

    Well said Jules.

  6. Alan McDonald August 18, 2009 3:58 pm

    Has anyone given any consideration to the possibility that when the PTO was granting at a rate of 60-70% per year they were not doing their job effectively and that the current 42% allowance rate is what it should have been all along?

    The patent statute says “A patent shall be granted, unless…” but maybe the PTO wasn’t looking as hard as it should for the “unless” until recently.

    I know that messes up the PTO finances big time, but junk patents mess up the country alot more.

  7. Just an idea August 18, 2009 4:23 pm

    Gene – an idea of reforming the patent examiner quota system for your consideration:

    Introduction

    In order for the patent office to effectively promote innovation and prosperity (i.e. promote the progress of science and the useful arts), it is necessary that the office timely, effectively, and efficiently reach a final determination on patentability. From the position of a patent examiner, this final determination is only achieved with one of three deliverables:

    1) a case is allowed;
    2) a case is abandoned; or
    3) a case is sent to the BPAI for further review.

    As such, the performance goals of patent examiners should be based upon these deliverables. Under the current outdated system, no longer applicable time constraints and rigid procedures are applied that ultimately result in fewer cases achieving these deliverables in a timely manner Further, it is generally recognized by stakeholders that simply taking the existing count system and giving examiner’s more time cannot solve all the systemic problems (e.g. size of the backlog). As such, the entire count system should be reconsidered in view of the true patent examiner deliverables.

    Proposed System

    As an initial matter, it is submitted that any feasible change to the current system that could possibly get support from all the stakeholders, even a vast departure from the current system as proposed herein, must at least start with a foot in the current system to minimize the potential for creating unintended consequences and to facilitate a better understanding of the premise of the change.

    As a starting point for a proposed modified system, the current hours/application alloted to the examiner are used, as follows, to determine the time allowed for an examiner to reach 1 of the 3 ultimate patent examiner deliverables for an application:

    Take the current time per application allocated for an examiner, add the time given for an RCE under the current system, then take the new number and increase it by 3 hours as a quality enhancer

    For example, if an examiner gets 15 hours to “complete” an application today (which does not necessarily or even usually take the application to an ultimate deliverable), under the new system they would get 33 hours to reach an ultimate deliverable [(15 hours + 15 hours for an RCE) + 3 hours = 33 hours].

    While, at a cursory glance, it may sound like an overly large increase in time and raise backlog concerns, experienced personnel on both sides of prosecution may agree that it is not a very large increase in time in view of the current prosecution realities. In actuality, such a modified system links performance to the ultimate deliverables in a way that cannot exist with the current count system no matter how it is tweaked.

    Such a modified system should result in more cases reaching an ultimate deliverable status more quickly. Accordingly, such a system should have a positive effect on reducing the backlog.

    It is further noted that applications that go abandoned under today’s production system may have an increased likelihood of having somewhat narrower patentable subject matter identified by the examiner, since time and incentive is given and, as such, the proposed system further promotes long-term funding of the office in the form of increased maintenance fees of more allowed applications.

    Under such a system, the examiner is incentivized to drive towards an agreement with the applicant through his attorney. Under such a system, the examiner is incentivized (with time and as a performance metric) to pull allowable subject matter from the specification or propose combinations of dependent claims as allowable. Under such a system, time is built in to achieve these important results and doesn’t just throw more time at the current count system, or worse, take time away from the current count system (e.g. reducing initial examining hours, giving less time for RCE’s, etc.) under the likely to backfire premise of reducing the backlog. Examiner morale and retention would improve under such a system while simultaneously reducing the backlog and improving customer and stakeholder satisfaction with the patent office.

    Just an idea.

  8. Gene Quinn August 18, 2009 4:32 pm

    Alan-

    I would entertain the idea that there might be something to a 42% allowance rate being a better, true figure except for the fact that there are many innovations that should receive a patent that simply were weeded out and pushed into the abandon files. Since I know this to be true from my own experiences and through talking with attorneys and companies (particularly start-up companies with real technologies) I cannot accept a 42% allowance rate as appropriate. Perhaps it should be between 42% and 70% and in the 55% to 60% range, but what transpired over the end of the Dudas administration seems like a perversion of the system if you ask me.

    -Gene

  9. Noise above Law August 18, 2009 4:46 pm

    I find myself disagreeing with Alan McDonald yet again.

    First and foremost, setting ANY percentage allowance rate is a grave misjudgement and perpetuates an errant relationship between allowance rate and quality. The use of loaded words such as “effectively” and “should have been” reinforces this dogma.

    Second, there is an implied assumption that the PTO is now looking harder (working better?) than it was. This rather blatently misses the point and general view amongst the bar that the Office is indeed doing a far worse job now than it had been. One of the resounding complaints is that even in this era of anti-patent fever, bad patents STILL make it through.

    Alan, I just don’t see how your position is tenable.

  10. Noise above Law August 18, 2009 4:51 pm

    Gene,

    Is there allowance rate data available prior to 1975? The off-the-cliff graphs I have seen from the USPTO have 1975 as the starting date. I would love to take the data as far back as possible and plot a simple +/- sigma to see outliers.

    The cliff is a unmistakably clear sign that the allowance rate was tampered with unnaturally. This screams due process violations if nothing else.

  11. Mr. Xaminer August 18, 2009 8:39 pm

    Gene –

    I respect your positions and read IP watchdog on a weekly basis. I think inventors and attorneys are more to blame than you think for the allowance rates plummeting, even though that’s not what you want to admit.
    I work in the mechanical arts and search through many old patents from the 1890’s – present (unlike some of the more modern arts such as electric circuits, etc) and have noticed that many older patents (even into the 1990’s) contain claims that are written more comprehensively, recite more structure and actually get down to the crux of the invention (which would obviously make them more allowable than a broad claim). The fact is that more and more prior art exists every year, so in theory, new claims should be written narrower, not broader. The opposite seems to occur, however, as attorneys are submitting broader and broader claims and then arguing until they are blue in the face. This type of prosecution is clogging up the patent system!! I have SO MANY applications in which the prior art cited on the IDS (by the applicant) easily encompasses the claims submitted!! Inventors and attorneys LOVE playing the game of submitting very broad claims and then letting the PTO decide how narrow the claim should be. THIS IS WRONG, and it puts a heavy burden on the PTO!
    Do I think the allowance rate is as low as it is solely because of broader and broader claims? No, only partially. But I can say confidently that the patent applications filed in the past (the higher allowance % numbers you keep citing) got down to the crux of the invention much better than the broad garbage that keeps getting filed in today’s applications. Let’s stop kidding ourselves. Start drafting claims that actually recite WHAT the real invention is. I’ve examined claims that recite “1. An articulated coupling.” Are you kidding me? Or “1. A ground vehicle having ground engaging elements that frictionally engage a traction surface.”. Yet again, are you kidding me? Attorneys want us to consider all the dependent claims and narrow it up for them, yet again which is WRONG!! We get this garbage all of the time, so don’t be so surprised IF we are getting sick and tired of garbage being filed and clogging up our Patent System!
    There are some stubborn examiners that have grudges against inventors and attorneys alike, I am not one of them. I allow applications if they so deserve a patent. But WE MUST ALL WORK TOGETHER, and the attorneys and inventors are PART OF THE EQUATIO N in fixing the patent system….the problem is not all internally at the PTO. Start filing more reasonable claims in the applications and we’ll produce faster decisions with more allowances. You can help by doing your part. It’s not just the PTO that needs to change. Many of the incoming applications need to change as well.

  12. Gene Quinn August 19, 2009 12:08 am

    Mr. Xaminer-

    I appreciate your comments, and if you do read IPWatchdog on a regular basis you realize I am an excitable type from Jersey, which explains a lot I suppose.

    There is plenty of blame to go around, and I certainly know some patent attorneys are a part of the problem. I do really think though that patent attorneys and patent examiners are least to blame in all of this. So much of what patent attorneys do is as a result of inconsistent rulings from the Federal Circuit, and perhaps over reacting to the old PTO regime.

    I agree that claims should be drafted to be allowable, and recently I have been looking over some files that have me scratching my head. I think patent attorneys are to in love with the doctrine of equivalents, which is dead anyway. I think the effort to get broad claims leaves some still wondering what, if anything, can be patented after final rejection because original claims were so broad and then hardly amended in the first response.

    Just today I started wondering a good many things. For example, there has been downward pressure in fees that companies want to pay, and I wonder if that causes bad applications with overbroad claims? I wonder if there is not enough money for firms to do it right the first time, not because attorneys are malicious or fraudulent (although there are some no doubt) but because there is not enough time to do it right when a company wants to pay $3,000 or $4,000 for an application that should easily cost double.

    Stay tuned for more. I would love to chat with you, and any others. I have been trying to get folks on both sides to talk. I think we are ships passing in the night.

    Thanks for reading.

    _Gene

  13. Gene Quinn August 19, 2009 12:09 am

    Noise-

    I am sure it exists, and I have to get it. I can’t find it online anywhere, so maybe a FOIA request, or driving down to the PTO and looking at old editions of annual reports.

    If anyone has any other ideas I would love to hear them.

    -Gene

  14. Gene Quinn August 19, 2009 12:12 am

    Noise, Alan and Mr. Xaminer-

    How much do you suppose inadequate time being spent by examiners plays in all of this? It seems universally understood that examiners do not get enough time to do an adequate job. They are pressured to produce more, quicker and with more complicated technologies than a generation ago. Not a recipe for success if you ask me, nor a recipe for keeping good examiners.

    Also, how much do you think this problem is cause by companies pushing down fees paid to attorneys who similarly have less and less time?

    Thanks.

    -Gene

  15. Gene Quinn August 19, 2009 12:13 am

    Just an Idea-

    Any interest in turning your comment into an article? If you want to stay anonymous we can come up with some interesting handle for you.

    -Gene

  16. scrappy August 19, 2009 7:31 am

    In reply to Just an Idea, I certainly agree the examination hours need to be increased from the current hrs/BD. Here’s another idea for revising the count system to stop the “incentivizing” the “churning” of applications:

    Currently, Examiners get one count for each FAOM [FOAM] and one count for each disposal (allowance, abandonment, or RCE equivalent). This current system thus rewards Examiners who can stall the resolution of true issues (e.g. with piecemeal rejections) rather than bring them to a head. How about revising the count system to stop rewarding conduct that merely recirculates applications in the following manner:

    1) if a continuation is filed of an application which goes abandoned, don’t give the Examiner a count for the abandonment (since obviously the applicant has not “abandoned” pursuing the invention), but he still gets a count for the next FAOM;

    2) if an RCE is filed, don’t give the Examiner a count for the RCE disposal, but give him one count for the next action on the merits.

    To give the Examiner’s counts for actions that resolve nothing (abandonment/continuation, forcing a continued examination but not doing any continued examination) seems to just promote resolving nothing.

    And to make up for the lost Examiner counts, maybe you could give Examiners two counts for:

    3) abandonments that don’t result in subsequent continuations;

    4) allowances that terminate a family or perhaps a family chain (i.e. no subsequent continuations filed).

    Regarding 3) a killer rejection with killer art would thus be granted double-count credit. I understand that 4) might be dangerous (prompting Examiners to issue the cases as filed) but perhaps there could be a second review of all first action allowance attempts (or of cases issued without any significant claim amendments)… resulting in loss of counts for the Examiner and/or other actions in the case that errors are determined.

  17. Gene Quinn August 19, 2009 10:44 am

    Scrappy-

    Some very good ideas.

    -Gene

  18. Just an idea August 19, 2009 2:10 pm

    Gene,

    I think it is best that I stay anonymous. However, please feel free to use my comments in the spirit they were intended in an article if you would like. Also, I would be glad to explain any of my comments in more detail if they are unclear.

    One of my largest concerns about modifying the examiner production system is that the office will take a piecemeal approach that could actually make things worse or make things only slightly better while still doing nothing positive about the culture of the office. For example, simply taking the current system and giving examiners more hours would make examiners happy, but it would not help the backlog (unless POPA somehow has it right in that giving more time would ultimately reduce the backlog – although I doubt that would be the case if the change is made as a minor tweak of the current system). Similarly, tweaking the system by eliminating one of the counts associated with RCE’s may theoretically reduce churning (I should note, however, that it is my opinion that such a change by itself would increase churning due to further reducing true examination time and forcing some good examiners to resign/get fired because they would not be able to keep up with the outdated production requirements at a required level of quality – said differently, the RCE’s have allowed the office to not have to address the outdated time allotments up to this point) it would further reduce quality and retention. Similarly still, you could take the best parts of both of those ideas and add 50% more examining time for a first round of prosecution while eliminating one of the RCE counts, thereby front loading the process, but that would not change the adversarial relationship between examiner and attorney and the culture at the office. It would not create a, “if there is something allowable in this application we will find it and present it to the inventor” culture that I think needs to be created.

    To be truly effective, the modified system needs to address the system as a whole and promote resolution of cases with positive incentives. In this regard, the examiner bonus system would need to be modified as part of the wholesale change to more effectively reward differentiated performance. I would propose a broader range of performance indicators and bonuses, as follows:

    The performance management system for examiners would be based upon a ratio of the actual number of cases that achieve an ultimate determination (i.e. allowance, abandonment, sent to BPAI) and the expected number of cases in a given year (1.0 means that the actual number of cases = the expected number of cases)

    A. Generally Expected Performance relative to the target (>90% of non-probationary examiner’s expected to be in this broad grouping).

    0.70-0.85: no discipline, but no raise or bonus – base pay stays flat [This takes into account that some unintended consequences will likely arise with the implementation of a completely new system. It further recognizes that some people are good examiners, but can’t do the job as quickly as others. These people want the job and they can pretty much do it. These people cannot be unduly rewarded at this performance level, hence no raise or bonus, but it is counterproductive, and cost and quality ineffective, to terminate/discipline someone like this who understands and can perform effective examination in a world where many people who would have the ability to perform examination, either don’t have the inclination or the personality to do it. In other words, you wish these people would do better, but they are still valuable to the patent system.]

    0.85-1.05: no problem. Employee eligible for basic GS raises (cost of living and within grade), but receives no bonus

    1.05 – 1.15: raise and bonus: 1% bonus for each 0.02 above 1.05 [5% bonus at 1.15 – which works out to the same bonus for 110% production under the current, separate, two award system]

    1.15-1.45: raise and bonus: 1% for each 0.015 above 1.15 [25% total bonus at 1.45. The office benefits by getting incrementally more work at a reduced cost (i.e. 1.5% more work for 1% more cost), while the examiner is rewarded commensurate with the additional contribution]

    1.45 – 1.50: raise and bonus: 1% for each 0.01 above 1.45 plus preferential consideration for career details, etc.

    B. Performance at the extremes (<10% of non-probationary examiners expected in this group)

    1.50 – no additional bonus beyond the 1.50 maximum bonus, but 2-3 years in a row at >1.50 provides a potential promotion to GS-15 examiner for primary examiners – thereby providing a realistic path to have a respectable number of GS-15 examiner’s (instead of a system where most GS-15’s are as far away from examining as possible)

    Conclusion

    The proposed modification to the patent examiner production system would simultaneously address issues that, by their nature, are difficult to positively impact at the same time. The proposed system holds promise to reduce the backlog of unexamined applications, reduce pendency, improve the quality of issued patents, improve the quality of rejections leading ultimately to the issuance or abandonment of applications, improve stakeholder and customer satisfaction, and improve patent examiner retention and morale.

    Just an idea

    Miscellaneous funding and BPAI backlog reduction idea

    Initiate a program where either the appellant and/or the examiner can initiate a further review of an appealed case in an attempt to find common ground. For example, grant an examiner 4 hours of time to come up with potential examiner amendments to get the case to allowance instead of waiting in an ever-growing appeal line

  19. Just an idea August 19, 2009 2:17 pm

    I accidentally deleted my discipline process, relative to the targets, in my last post:

    <0.6: automatic demotion to next lower GS level and a 2 quarter period to get above 0.7 of the new, lower, target. Inability to do this in the required 2 quarter time period would result in an additional demotion and a repeat of the 2 quarter review. Inability to get out of this grouping after 4 quarters would result in termination

    0.6-0.7: First year: warning; no raise, no bonus, plus no overtime allowed until out of this grouping. Second year: demotion to next lower GS level with correspondingly reduced production requirement

  20. scrappy August 19, 2009 2:36 pm

    Just an idea said,

    “…said differently, the RCE’s have allowed the office to not have to address the outdated time allotments up to this point) it would further reduce quality and retention…”

    Agreed completely.

  21. scrappy August 19, 2009 2:58 pm

    P.S. I don’t really agree with Just an idea’s award scheme….

    When I was an Exaimner, it honestly seemed to me that the super-producers (140%+) were the ones who learned how to cut corners and or ignore equitable considerations) while the Examiners getting warning letters (e.g., <90%) were often the conscientious and helpful ones who applicants (and other Examiners) wanted to deal with.

    Why not some quality metric for awards? (I know, the PTO hasn't been known for measuring true quality.)

  22. Just an Idea August 19, 2009 4:47 pm

    Scrappy,

    I do agree that the office would have to be careful about super-producers and that your impression of the super-producers is similar to mine. My hope would be that by only giving credit for actions that really matter some of the corner cutting and ignoring of good arguments that happen today could be further reduced. However, it is a challenge to watch out for, I agree. Maybe a production level above 125%, or something like that, could trigger an increase in quality review of office actions (both rejections and allowances) for those examiners as a throttle of sorts.

    It seems that at the lower end of the production scale (<90%) we agree that there should be more options for those examiners beyond warning letters.

  23. Just an Idea August 19, 2009 5:08 pm

    Scrappy

    I agree that the office would have to be careful of the super-producers. I think it is a valid concern that would need to be addressed. My hope would be that by changing the system to focus more on the important deliverables some of the corner cutting and ignoring of arguments would be reduced by a change in the culture. Realizing that my thoughts may be somewhat too idealistic, a throttle could be instituted where folks with >1.3 production, or something like that, would have a higher percentage of their office actions (rejections and allowances) pulled for a thorough quality review. In that way, there would still be a financial incentive for increased throughput, but it would be understood that only quality work will be rewarded.

    It seems like at the lower end of the production scale (<90%) we agree that those folks are not necessarily in need of discipline.

  24. Just an idea August 19, 2009 6:04 pm

    I agree that the office would have to be careful of the super-producers. I think it is a valid concern that would need to be addressed. My hope would be that by changing the system to focus more on the important deliverables some of the corner cutting and ignoring of arguments would be reduced by a change in the culture. Realizing that my thoughts may be somewhat too idealistic, a throttle could be instituted where folks with >1.3 production, or something like that, would have a higher percentage of their office actions (rejections and allowances) pulled for a thorough quality review. In that way, there would still be a financial incentive for increased throughput, but it would be understood that only quality work will be rewarded.

    It seems like at the lower end of the production scale (<90%) we agree that those folks are not necessarily in need of discipline.

  25. Gene Quinn August 19, 2009 6:53 pm

    Just and Scrappy-

    We definitely need to handle the over achievers and the under achievers. Rather than having blind metrics I would like to manage like management should be done. You have a manager manage a group of 6 to 10 people, then those managers are managed by someone upstream who also manages 6 to 10, etc. etc. This is a tried and true management system, and allows for support to be given without micromanaging employees and managers. If a case takes longer then so be it. There just needs to be checks and balances. Right now we have a system full of checks, no balances and no real supervision.

    I believe the overwhelming majority of employees, examiners and supervisors are good, hard working people. They need HR systems in place to help them to succeed!

    I feel an article coming on! Be on the lookout!

    -Gene

  26. Guest August 20, 2009 3:09 pm

    Gene – I’m sorry, but have to stop reading your blog. You are agreeing with people who think that all over achievers cut corners and that all under achievers try to do a high quality job.
    I must be in the Twilight Zone. How do you rationalize that? Do you have any data at all to support agreeing with such an illogical set of unsubstantiated conclusions? Lumping over achievers and under achievers together for extra scrutiny sounds like you advocate a whole bunch of mediocrity.
    Do you think the same about the folks in the bar? That folks with high billable hours do a worse or better job simply because they bill more or less than someone else?
    The fact is that there are a spectrum of people that work in all fields. Some can work quickly and still keep quality high – no matter which side of the fence they are on. Similarly, there are people who just can’t hack the job because they don’t get it or because they really don’t like writing specifications or claims or office actions or whatever. It doesn’t necessarily follow that they are slower or bill more because they are trying to do a better job.
    I’m disappointed that you agree with such illogical statements without much apparent thought about what was said in the first place.

  27. Gene Quinn August 20, 2009 7:53 pm

    Guest-

    First, I have absolutely no idea what you are talking about. Your comments are exceptionally unclear. Are you suggesting that the PTO have a metric to measure examiners without regard to the fact that it could be manipulated by over achievers who are concerned only with numbers and not as much about quality? Are you suggesting that it is unimportant to have a metric at all and force people to do their fair share of work? It would be helpful if you could articulate your point in a coherent manner allowing an answer to be provided. I would also appreciate you pointing out where I have said that ALL over achievers cut corners and ALL under achievers do not do a quality job. Basic management demands that meaningful metrics be put in place to ensure people do what they are paid to do. The same “good management” also requires that there be measures in place to make sure that examiners are not being over worked and punished for having to deal with inordinately long applications with a ridiculous number of claims. Reality should matter, and what I proposed in terms of management is understood to be how well functioning organizations operate.

    With respect to you being disappointed, I will lose no sleep over that whatsoever. You chose to provide a fictitious e-mail address and I am guessing your name is not Guest. So whoever you are please know that I take anonymous criticism for what it is worth, which is nothing.

    If you have to stop reading IPWatchdog that is fine. Go for it. My information and analysis is correct, so if you cannot handle the truth it seems pretty clearly a YOU problem.

    -Gene

  28. ~~Logan~~ August 20, 2009 8:40 pm

    Gene,

    While I may not agree with all of what “guest” said, I think that you are being unfair in saying that what they said was not clear. The basic thrust of their remarks were very clear, at least to me.
    They didn’t say that no metrics are needed or that any such metrics are without regard to quality or not monitored.

    What they were complaining about is that many people start with the assumption that overachievers are somehow “gaming the system” and are guilty of that until proven innocent. And that underachievers can do the work but art probably just “too conscientious” or “a little slow but still doing good quality” until proven guilty. I’ve seen people (mostly lawyers) making similar arguments (unsound arguments in my mind). “Just an idea” again pushes this idea forward, above (see the repeated post).

    You (the genenic “you”, not “you”specifically) can never assume that the amount of work is any way reflective of the quality of the work. That is something PTO management was too often guilty of doing. Some people can work very fast and do high quality work. Others Others can only do high production by cutting corners. Similarly, low production can mean that the person is “too careful” & “too thorough”. Or it can mean that they can not do the job well. Examination, like prosecution on your side, requires the ability to do quality work in a reasonable amount of time.

    And like “guest” asked, if you have a an associate cranking out a lot more work than anyone else his level would you automatically assume they are doing bad work? Or if you have an associate doing 85-90% of the norm for his level would you assume that they are doing good work? I hope not in both instances. The work would need to be checked & evaluated on their own merits without assumptions.
    .

    Now, as to the various ideas about “quality” and evaluating it, there is no clear-cut standard. I with there was. It would make my life easier. Unfortunately, “quality” is much like the old saying about p0rn0graphy. You can not define it but you know it when you see it. 🙂 Quality is very subjective. To further complicate things, the what examiner PAP defines as “a clear error” and what a normal person (examiner or attorney) would consider “a clear error” are two different things & that (PAP) is another thing that would need to be completely redone in any change to production & evaluation.

    For example, if an examiner makes a shotgun 103, points to the wrong sections of the reference, provides no motivation for the rejection and does not explicitly address any limitation, most people would consider that to be a “bad” rejection, whether the references _could_have_ been properly combined to make a proper rejection or not. Now, according to the PAP, IF the rejection can be rewritten to be proper (now after-the-fact and the applicant will probably never see the rewrite) it is NOT an error. The same applies to signatory programs. Personally, I think there is something wrong with that.

  29. Gene Quinn August 20, 2009 8:59 pm

    Logan-

    Perhaps you are right. I went back and re-read what Guest said. I just do not see where I agreed with the premise that all over achievers are gaming the system. I know that is not the case. I know that in years past many examiners would work to exceed their numbers up to 110%, 120% and 130% of their production goals. I do not see anything wrong with that, and in fact have argued in the past that quality review and second pair of eyes, from what I have heard, have caused fewer and fewer examiners to not try and exceed their production goals, which is one of the reasons the backlog has gotten out of control. As it was explained to me, an examiner who has had signatory authority for years that then has to have his/her work reviewed by a second pair of eyes would justifiably be upset. I heard from a number of old-timers who said that they would be quite upset had that been the case while they were reviewing applications.

    Having said this, I see absolutely nothing wrong with a metric that address the over-achiever problem, assuming the over-achiever is over achieving because of gaming the system. There are rules set up for attorneys to this affect, and one of the reasons that the Rose Law Firm got into trouble during the Clinton years when at least one attorney (I think it was Webster Hubble) was billing more than 24 hours a day. If a research project took 10 hours that is what he would bill everyone, even after the research had been done and took 0 hours for the next client. That is a problem and action was taken.

    If there are over achievers who over achieve because they are dedicated that is a wonderful thing. I wouldn’t know, but I suspect PTO management could find out if they wanted to know, whether the examiners who game the system (and we all know they exist) are over achievers or trying to do it just to break even with their production goals. My guess is those who game the system are not over achievers, but rather struggle to make their production goal. While I do not like gaming, I have written over and over that these examiners are not to blame. Who among us would do anything different? That is why this is a huge human resources problem.

    Perhaps I was over sensitive. It seems any more there are plenty of folks commenting lately that like to put words in my mouth, and I do not appreciate that one bit. I am fully well capable of putting my own foot in my mouth, and really do not need others to make up things, taking things out of context or engaging in dramatic hyperbole, particularly when it is intellectually dishonest. As I have said many times, little tolerance when it is done by someone using a fake e-mail. I have never given out an e-mail address for anyone who comments or subscribes, yet many use fake e-mails. What exactly is there to hide from? That type of hit and run is not something I tolerate.

    -Gene

  30. ~~Logan~~ August 20, 2009 9:24 pm

    Gene, can you approve my previous entry. I got caught by you filter thanks.

    Now, as to the various ideas for changes in production. Like nearly everyone else, I agree that changes need to be made. Unfortunately, many of the proposed ideas here & elsewhere do not take into account that many of the changes would require agreements with POPA (e.g., changes in the PAP or rating system) or changes approved from Congress (I think – e.g., denying or withholding cost of living increases). Further, most of the changes are not things that the office probably can not legally implement arbitrarily.

    That said, many of the ideas are coming from the outside & are ways to improve things to make prosecution easier for applicant/attorney but not always what is best for the examiner (and often puts the examiner in a worse position than they are now). Any new system has to help both sides get to disposal much quicker than they do now. That would probably take REAL patent reform as well as drastic changes to the way the PTO does business internally (production, ratings, awards, etc.)

    Some of the things that I would propose (which still have the issues of being implementable) include:

    1) Make at least part of the examiner rating be based on actions per disposal. Most should (currently) be between 2.0-3.0, preferably under 2.5. This would penalize examiners for reopenings & sending out repeated non-finals.

    2) Re-evaluate the hrs/bd based on the currents amount of areas to be examined, average length of specs & # of claims, the way rejections are “supposed” to be written today & not based on the old short forms, etc. Most would probably increase, but the exact amounts would vary depending on arts.

    3) Change the count system so that each new case gets 3 counts -1st action, final, disposal, with an early disposal getting any remaining counts. Every non-final after the 1st would be a -0.5 count as would any reopening. Hrs/bd would similarly need to be modified.

    4) Change the OPQA evaluation, and reviews within the TC, so that “bad” rejections are considered error if they are written badly. Simply getting good art is only half the job. So maybe give partial credit if the case “could have been” rewritten to be a good rejection.

    5) Give examiner “bonus points” on their evaluations based on the amount of “proactive” things they do. E.g., early indication of allowable material, making examiner’s amendments to get things allowable, etc.

    6) Provide some bonuses based on “quality” as defined above.

    7) Reduce the total # of counts available for each RCE. Maybe by .5 per RCE (i.e., 1st RCE has only 2.5l 2nd only 2 etc.)

    8) Get rid of bonuses for high production of over 110%.

    9) DRASTICALLY speed up petitions so petitions re. bad finals & such get responded to soon enough for applicant to proceed. Or stop the applicant’s clock until a decision is rendered.

    And a few ideas that will PO the attorneys/applicants out there 🙂

    1) Limit the number of claims that will be examined (maybe 15-20?). You can still file as many as you want, but we examiner only the limit unless a VERY high additional fee is paid (and the examiner gets accommodated with additional credit/time based on the amount of extra work). You can, of course, still file as many claims as you want. Those others just will not be examined, except for maybe 112, 2nd issues.

    2) Require that the applicant file an IDS based on prior art that they are aware of that is “closest” or “most similar” to their invention, including ALL of their own (inventor or assignee) that is directed to the same or similar subject matter (I am NOT saying that they have to do a comprehensive, or any, search. Just cite things that they are aware of. Additionally, the law would need to be changed so that such submissions would NOT be admissible for an inequitable conduct/fraud/etc. charge in an attempt to invalidate the patent. Though I would suggest that IF in numerous cases by the same applicant/assignee/attorney show evidence of them “hiding” references it may be possible the office can take action (e.g., removal of the right to prosecute before the office). Of course this should be something very rate.

    3) Applicant be allowed to abandon before 1st action any application and get back the majority of the fees paid to the office (75-80%?).

    4) Something extreme (& I have doubts about the reasonableness, but I’ll throw it out), and maybe not compatible with 1 above, limit the ability of the applicant to amend beyond what is in the claims at the time of 1st action. Prior to 1st action, the claims can be amended as desired. After that, they can only be amended to rewrite dependent claims as independent, or maybe minor amendments to overcome 112, 2nd. This would require the applicant to make sure the claims were in good form before they are examined & would save time by all. Also, it would help to speed prosecution as the complete scope of the claims would be before the examiner on the 1st action. It would make it easier to identify any allowable material. The applicant would need to draft their claims in accordance with the suggestions on the MPEP, of course. Specifically, from the broadest that they think they are entitled to to the narrowest they are willing to accept. If done, and updated as time proceeds before 1st action, I think most cases would get to disposal much sooner.

    Just some ideas to throw out there. Comments??

  31. scrappy August 21, 2009 6:36 am

    “Limit the number of claims that will be examined (maybe 15-20?).”

    Logan, when I first heard of the Claims and Continuations rules (before I read them), I thought (conceptually at least), “That would be great!” No one likes invalidating a patent with 100 claims or weeding through a string (or tangled web) of continuations.

    When I read the rules, though, I honestly couldn’t believe how inept the PTO implementation was, and how equity was completely disregarded for agency ease. The implementation showed the Rule writers either 1) didn’t know the law or 2) were incapable of thinking (and expressing themselves) logically.

    “Require that the applicant file an IDS based on prior art that they are aware of that is “closest” or “most similar” to their invention, including ALL of their own (inventor or assignee) that is directed to the same or similar subject matter….”

    Logan the fact of the matter is that the EPO or JPO does not require any “information disclosure” of prior art, and their offices work better much than ours. Why the difference in what should be required of applicants? Why don’t their examiners need such help as you say ours do? I have come to believe that Rule 56 should be eliminated (it’s become like a dumpster into which applicants must place tons of art and then face charges that, “Oh he hid the reference!!… well, duhh) and that other avenues should be used for applicants that are really intent on deceiving the Office or the public.

    For example, any claim anticipated by prior art known to the applicant (all prior work by the inventors would be deemed to be known) invalidates the whole patent. Boy, that would get rid of the broad claim problem in a hurry… and make the inventors have to understand the claim scope. Now that would be novel!

  32. AgentG August 21, 2009 5:52 pm

    The management at the USPTO has done a miserable job managing their HR resources, which I believe is the root of all evils relate to throughput. Their attrition rates are enormous and a CBO study has proved that they are undermining all their own efforts to increase througput and increase quality by setting up systems that treat people like numbers and do not reward quality work.

    Fundamentally, IMHO there needs to be the following procedures implemented:

    1) there need to be FORMAL standards for outgoing office correspondence, incl. formatting, proper English, proper citations
    2) there need to be MATERIAL standards incl. standards for objections, reasoning, analysis of subject matter, closest references, and key word formulation
    3) based on 1) and 2) a peer-review process that quantifies the quality of the work product needs to be put in place. For example, a rating system of 0-100, such that only over 80 goes out the door, 79 and below goes back for revision/correction of specifically identified items.
    4) patent examiners need to be evaluated on a production scale that weights both quality and quantity
    5) specific improvement/traiing processes for both quality and quantity need to be implemented — that means improvement of the USPTO infrastructure and improvement of human capital skills
    6) there MUST be a malus – bonus system, such that high performers OUTEARN, yes EARN MORE than poor performers, instead of basing pay primarily on seniority

    and furthermore, for long-term restructuring:

    7) the work processes should be broken down into various tasks:
    – initial review and understanding of claimed subject matter and scope
    – formulation of pertinent keywords
    – search using keywords (at least as efficient as Google patents with instant view of figures and patent reference hierarchy — not EAST and WEST archaic text search bullcrap — 100x too inefficient!!!)
    – recordation and prioritization of references in search result
    – formulation of argument against claims and relevant prior art citations
    – drafting of office action according to 1) and 2)

    8) new examiners should rotate through these tasks until they are progressively trained, that is, gain repetitive expertise in each of these areas in a systematic fashion

    THIS IS A PLAN FOR OVERHAULING THE USPTO THAT WILL WORK. WHY IS THIS SO HARD FOR THE USPTO TO IMPLEMENT?

  33. AgentG August 21, 2009 6:04 pm

    I want to reiterate that any comments suggesting that the punishing the highest performers, i.e. a certain performance scale cap or malus for too high values, are simply a perversion of the entire HR process. How would you react if the better you performed by the standards on which you would be judged are now causing you to be penalized? Such ‘punish the overperformer’ ideas reflect a fundamental failure of management skills and an ignorance of the positive motivating human factors that the USPTO desparately needs to be successful.

    The problem is not the high performers, but that the performance scale is fundamentally flawed!! If people can game the system by producing crap at a high rate of production, then the system is at fault. The USPTO need to create system that rewards quality AND quantity, and so they must develop METRICS that are fair and peer-reviewed. By breaking down the aggregate contribution of the scale into invididual sub-components, an amazing level of objectivity can be attained, and capriciousness can be kept in check.

    If there are statutory constraints to the USPTO to be successful, THEN THEY NEED TO LOBBY CONGRESS TO GET THE RIGHT PERSONNEL LEGISLATION IN PLACE. WHO IN THE WORLD WOULD OBJECT TO THAT?

  34. ~~Logan~~ August 21, 2009 8:54 pm

    AgentG,

    Personally, I do not disagree with your suggestions. I do have a few comments, though, and one addition.

    The addition is for examiner to learn to search by classification (class/sub) FIRST and then go to text searching. That way they can learn the art & terms of art, before they try to throw terms into a search engine. Of course, the classification would need to be updated & maintained as well.

    I would like to see #1 apply to the applicant’s specs, claims & responses as well 🙂 No more machine translations of the claims & specs without revision until the examiner objects/rejects on the 1st action. And a little more care in responses. I (& others, I am sure) get sick & tired of seeing things like applicant cancelling claims & not correcting dependencies so that they no longer have claims depend on cancelled claims.

    I generally like #3, but it would probably turn out to be very man-power intensive. Not saying that it couldn’t (or shouldn’t) be done, just that by doing all of that review you would be taking (good, preferably some of the best) people away examining on their own. And the review would be time consuming done right. Often, a rejection “looks” good (e.g., all the claims & limitations addressed with citations to the reference for everything), but the real content is garbage because the reference does not really shows what is claimed or the references are not really combinable. That type of careful analysis is time consuming. While it would improve quality, it may hurt the backlog, at least in the short run (may help in the log, though).

    As to #7, that sounds a lot like it used to be years ago when a brand new examiner would get 2 weeks of PEIT & then report 1 on 1 to a good primary that led them through everything & reviewed everything & made sure they were doing things right. Somehow management thought we could train examiners wholesale instead of retail. Didn’t work.

    As to EAST vs Google searches, the problem with Google-type searches is that the searcher is limited in how much control they have over the search. As a very simple example if you put “analog digital converter” as your search in Google, you will get BOTH a/d and d/a converters (unless you try putting in “exclude terms, which can also add their own problems). EAST is a lot more flexible and controllable IF the examiner actually knows how to use the tool & does it properly. The only real advantage of Google vs EAST (for a patent search) would be the order of the results. Having a ranking of the results would be a useful addition to EAST.

  35. scrappy August 22, 2009 9:45 am

    I agree with Logan – if there is no classification search, usually (not always) that means there has been no real examination. The (in)validity rates prove it.

    Multiple Paths to Data – that concept is the key concept to searching that Examiners have not been exposed to, because no one path will ever be perfect. Use keywords, use USPC, use foreign classification, use tricks (forward/backward searches, etc.), use experience (search DE for a manufacturing expedient, JP for general concepts), use combinations of the above (AND classifications together, keywords NOT classifications, etc.)

    I will say I said above, “Why not some quality metric for awards?” Others are right, I should have said, “”Why not some quality metric for awards also, in addition to the quantity metric?”

    AgentG said:

    “The problem is not the high performers, but that the performance scale is fundamentally flawed!! If people can game the system by producing crap at a high rate of production, then the system is at fault.”

    The problem is the high performers who are gaming the system and have been coddled by PTO management for so doing. Yes, performance needs to be re-evaluated, as does the coddling.

    “search using keywords (at least as efficient as Google patents with instant view of figures and patent reference hierarchy — not EAST and WEST archaic text search bullcrap — 100x too inefficient!!!)”

    Multiple paths to data – that’s the key: use EAST and Google (Scholar).

  36. Old Examiner August 22, 2009 11:15 am

    I have been a primary examiner for over 30 years; 20+ of which have been at the GS-15 level. When the Office enacted the current award system such that one could get up to a 9% bonus for doing 130% of their goal I took advantage of it. The award is based upon not only quantity, but quality of work as well. There is a rubric. I have also been rated outstanding every year since becoming a primary. I’m good at my job and don’t take steroids. It is also my observation that most high producers are good at their job; while the less competent examiners flounder around the 90-100% mark.

    There have always been good and poor examiners, and there always will be. As I have pointed out on a prior thread, the biggest problem with the Office in the last 10+ years has been the glut of new filings and the commensurate hiring of large numbers of new examiners. They simply aren’t being adequately trained. As pointed out by Logan supra, training of newbies used to encompass 2 weeks at PEIT followed by assignment to a knowledgeable SPE or primary examiner. I spent my first 6 months being trained by a SPE in an art area in which most of the patents included his name. I was then reassigned to a primary examiner. They knew real quick whether I was getting the job done. Today, 9 months in the academy being monitored (not trained) by a staffer unfamiliar with the art just isn’t the same. The newbies show up in their art units clueless and have worked stamped by SPEs, many of whom are unfamiliar with the art areas they supervise. There is not enough other time for primaries to train the junior examiners, and many of the SPEs merely want the primaries to have more examining time in lieu of allowing them to train. Many of the talented newbies head off to law school and leave the Office. Many of us who attended law school in the past used to stay in the Office.

    The Office has also cut back on second eyes and is now pushing compact prosecution to expedite pendency. IMHO, the biggest impediement to effective prosecution is not finding the best art. The Office has dropped the ball on reclassifying art areas. As an example, when I reclassified my art area 20+ years ago, one of the subclasses had about 9 patents in it; now it has around 4,000 patent and pubs. The pubs are misclassified like crazy since they are no longer classified in the art units. New examiners never have a chance to learn the art. I have enough trouble finding the art. Word searches are a great tool but simply aren’t a substitute for actually knowing what’s in the shoes. Oops, I’m showing my age.

  37. ~~Logan~~ August 22, 2009 11:25 am

    “Old Examiner”,

    AMEN!! Couldn’t have said it better myself.

  38. don't bother August 24, 2009 5:44 pm

    “The award is based upon not only quantity, but quality of work as well. There is a rubric. I have also been rated outstanding every year since becoming a primary.”

    Well, duh. Anybody doing 130% automatically gets a “quality” rating that is sufficient to ensure they get the bonus for the “quantiy” aspect of the rating.

    Why?

    Because no SPE is gonna tell a 130% producer, “Well, you did do 130%, but your quality wasn’t very good so you don’t get a bonus” because to do so would absolutely guarantee that no examiner ever produced 130%, or even 110% (SPE’s know they need 110+% from their AU to get their fair share and their bonus).

    So every examiner doing at least 110% gets rated as “outstanding”, or at the least “commendable” in the “quality” portion of their PAP. It’s pretty much a formality.

    Your work may in fact be very good, even “outstanding,” but let’s not kid ourselves that everybody cranking 110%, 120%, or 130% is doing “outstanding quality” work. That may be the rating they get, but it has no basis in reality. It’s given simply to ensure they get the bonus and keep cranking outstanding quantity.

    The rest of your observations are true. The PTA is a complete disaster and could only have been dreamed up by the bunch of dummies running the PTO into the ground.