USPTO Expands Application Exchange to Reduce Backlog

UPDATED: 5/17/2010 at 6:36 pm

The United States Patent and Trademark Office today announced the expansion to all applicants a “Project Exchange” program. Under the expanded Project Exchange, which will take effect with the publication of the Federal Register notice in the coming weeks, an applicant with more than one application currently pending at the USPTO can receive expedited review of one application in exchange for withdrawing an unexamined application. This initiative was first announced by USPTO Director David Kappos at the 14th Annual Independent Inventors Conference held on the campus of the USPTO and officially announced via press release from the USPTO on November 6, 2009.  At the time it was limited to small entities (i.e., independent inventors or small businesses), but now is being expanded to any applicant.

This unique initiative seeks to reduce the backlog of patent applications by getting rid of those that are no longer important to applicants or are of marginal value.  In exchange for giving up on certain applications and abandoning them another application will be advanced out of order to the front of the examination queue.   The hope is that by encouraging applicants to look at their pending application portfolio a one-for-one exchange will help significantly cut into the backlog of patent applications, a backlog where approximately 700,000 patent applications remain in the queue that have never been substantively considered and await a first action by a patent examiner.

The original press release in which the USPTO announced the start of the initial phase of the Exchange Program, explained:

Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos has announced the agency intends to launch a pilot program that will give small entity inventors having two or more patent applications currently pending greater control over the priority in which their applications are examined while also reducing the backlog of unexamined patent applications pending before the USPTO. This pilot will allow a patent application from a small entity to receive special, accelerated status if the applicant is willing to abandon an application that has not been examined. The announcement was made at the 14th Annual Independent Inventors Conference, being held November 5-6 at the USPTO’s headquarters in Alexandria, Va.

“The program will accelerate protection for important innovations from independent inventors while reducing our unacceptable backlog,” said Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos. “Getting these inventions to the marketplace quickly will also help stimulate the economy and create jobs.”

The expanded Project Exchange, which will be limited to 15 applications per entity through December 31, 2010, will give all applicants with multiple filings greater control over the priority in which their applications are examined and enable priority applications to be examined on an expedited basis. By providing incentives for applicants to withdraw unexamined applications that may no longer be important to them, Project Exchange is expected to appreciably reduce the backlog of unexamined patent applications pending before the USPTO.

In remarks released announcing the expansion of Project Exchange, Kappos said:

This week marks the 50th anniversary of the invention of the laser—a transformational invention that has spawned many other critical inventions, created new industries and generated jobs.  Inventions like the laser remind us of the need for the USPTO to do everything we can to enable the next great innovation to come to market. Project Exchange will help us reduce the backlog and enable us to process applications more quickly.

According to the Patent Office, project Exchange will continue through December 31, 2010, and those who want to take advantage of moving an application to the front of the line and out of order will need to submit the necessary materials before December 31, 2010 in order to fall within this unique acceleration program.

When reached for comment, Peter Pappas, Chief Communications Officer for the United States Patent and Trademark Office, told me:

A significant reduction in patent pendency is Director Kappos’ top priority because the unaccceptably long period of average pendency is hindering economic growth and the creation of high paying jobs.  This is another important step toward enabling applicants to bring innovation to the marketplace sooner.

Over and over again the message directly from Kappos and his top Lieutenants is that the backlog is costing America high paying jobs.  This theme also picks up on the recently released PTO study that quite clearly concluded what everyone in the industry already knows, which is that high-tech jobs are high paying jobs, innovators rely on patents and an overwhelming majority of Venture Capitalists say that they want to see issued patents before they invest in start-up companies.  So this expanded Exchange Program is yet another attempt to help give the Patent Office the tools necessary to unleash commercially viable innovation into the marketplace so that funding can be obtained, jobs created and innovation can play its role in economic recovery.

This program was initially criticized by some, particularly those in the independent inventor community.  Many times independent inventors and small businesses have only one application pending, or due to financial restraints do not have the luxury of proceeding with patent applications that are anything other than vitally important.  Certainly if you have only one patent application pending you will not be able to avail yourself of Project Exchange, but to the extent that Project Exchange is a success it will reduce the backlog and that would, at least in theory, allow for a reduction in both the backlog of pending patent applications and a reduction in the average pendency of patent applications.  Essentially, the weeding out of certain patent applications that no longer have enough relevance to the applicant there would be a benefit to all patent applicants, even those who do not have more than one application pending.  The more patent applications that can be disposed of, particularly when no time needs to be invested by the Patent Office, the quicker action will be on the remainder of the backlog.

Of course, I would like to see a program put in place for those independent inventors and small businesses that have only one or a small number of patent applications that are core and cannot be abandoned.  I have previously written that the Patent Office should endeavor to expedite or accelerate patent applications when it can be demonstrated that there is commercial viability, such as a licensee waiting to take a license, investors willing to provide capital pending issuance of a patent application or jobs waiting to be created pending a patent being issued.  At the Inventor Roundtable event at the USPTO Kappos indicated that the Patent Office is working on just such an initiative.  That being the case, I hope Project Exchange does not receive criticism for not being a complete solution.  It does seem to me to be an important step and one that in combination with other steps can and should result in a decrease in the patent backlog, which should also result in an associated reduction in pendency.

For non-press inquiries on Project Exchange contact Pinchus M. Laufer, Office of the Associate Commissioner for Patent Examination Policy, by phone at 571-272-7726 or e-mail at


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Join the Discussion

2 comments so far.

  • [Avatar for Gena777]
    May 24, 2010 03:29 pm

    I suppose they didn’t have much choice other than to extend this program to large companies, since the patent application backlog has reached critical mass. But won’t the big corporations be able to game the system by paying for initial BS applications and then withdrawing them, just to speed approval of their “real” patents? Has the USPTO come up with any safeguards to prevent this kind of thing, or will we just have to deal with it?

  • [Avatar for Humphrie Dumphrie]
    Humphrie Dumphrie
    May 18, 2010 09:30 am

    “if you have only one patent application pending you will not be able to avail yourself of Project Exchange”

    What is to stop you from filing a second application with the same spec and some different set of claims that you don’t care about and then abandoning that filing to be able to take advantage of the exchange? Of course, it would not help the backlog at the PTO but it would give them “talking points” of another disposal. Systems are built to be gamed.