Over the past year or so ever more patent data has been made publicly available thanks to Google. In collaboration with the USPTO Google is scraping information from the USPTO servers, transferring the many image files into searchable text documents. The availability of this information has allowed companies like Reed Technologies to offer interesting and useful patent analytics. For example, the PatentAdvisor™ product, which is powered by PatentCore, allows users to find rejection, allowance, RCE and appeals information relating to individual Art Units and individual examiners. Armed with this information better prosecution strategies can be developed, saving time and money in the long run.
As I have dove into the PatentAdvisor statistics I jumped to those Art Units charged with so-called business method patents in class 705. This has lead me to write several articles critical of one Art Unit in particular for having an extremely low allowance rate, with many of those allowances ordered by the Board. For example, see Allowance Rates for Art Units Examining Business Methods.
But what is a business method? That is the very question that dogged the United States Supreme Court in Bilski. In fact, a definition of “business method” has proven to be as illusive as a unicorn or Bigfoot. The goal of those who care to try and define “business methods” is almost universally so that they become non-allowable subject matter. But with every definition there comes the realization that some of what seems like it should be swept up in the definition remains on the outside and some things that really ought not to be considered “offensive” business methods are swept up in the definition. The trouble is that methods have been patentable since 1790 in the United States and on some level virtually every method could be characterized as a method of doing business, or more generally a method that facilitates one or another business goal.
UPDATED: Jan. 22, 2013 at 11:43am (see comment #2)
USPTO Director David Kappos speaking a White House event on April 11, 2012.
Today President Barack Obama publicly started his second term in Office with a celebration in Washington, DC, marked by his second inaugural address to the Nation. Unfortunately, it doesn’t seem that President Obama will mark his second inauguration quite the way that President Abraham Lincoln did with a grand ball held at the United States Patent Office in the model room, but today is a very special day in America. We transfer power without a shot fired, which can’t be said for a great many places in the world. Soon we will turn from celebration back to partisan politics, if that hasn’t happened already.
One of the things that President Obama will be faced with in his second term, which I understand he was not expecting to have to deal with, is selecting a new leader for the United States Patent and Trademark Office.
On November 26, 2012, news broke that David Kappos, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, would be stepping down and leaving the agency effective the end of January 2013. In fact, Director Kappos’ last day as Director will be January 31, 2013. At that time the mantle of leadership will pass to soon-to-be Acting Director Teresa Rea.
One of the criticisms of the PatentCore database in the past was that the database was not a complete representation of the case files at the USPTO and gave a false impression. I never personally found that persuasive given that even when the database first became public there were approximately 1.5 million application files within the database. Still, many patent examiners scoffed at the notion that this data was accurate.
If I were a patent examiner that hadn’t issued patents for years I wouldn’t want anyone to know that either. Similarly, if I were a Supervisory Patent Examiner (SPE) in an Art Unit that routinely only issued patents after a long drawn out appeal process that resulted in the Board overturning the rejections I wouldn’t want the public to know about that either. Sadly, this type of gaming exists at the Patent Office. There are examiners who only rarely issue patents and Art Units that openly tell patent attorneys that they don’t issue patents unless ordered to do so by the Board. Knowing that this happens, which is supported by hard data, makes it impossible to tolerate the anti-patent zealots who routinely opine about just how easy it is to get a software or business method patent issued. Really? You have to be kidding!
David Kappos is Under Secretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office. He assumed that role within the Obama Administration when he took over the USPTO in August of 2009, nearly 32 months ago. Upon arrival Director Kappos found a largely dysfunctional Patent Office, which had really become the “No Patent For You” Office owing to the philosophical and ideological beliefs of the prior Administration. This lead to the development of a massive backlog of un-examined patent applications and played no small part in the severity of the economic collapse and the sluggish rebound. We have a technology based economy and start-up companies that are the backbone of our economy struggled without patents to attract capital investment, expand and hire.
There is still a massive backlog of patent applications, but things are undeniably turning around. There are certainly some pockets of resistance within the USPTO, See Business Methods by the Numbers, but the Patent Office is by-and-large open for business. The USPTO has returned to the historical philosophy that patent examiners should work cooperatively with patent applicants to identify allowable subject matter and issue patents on what is allowable, not just focusing on rejection after rejection after rejection.
While there are quite a few positive changes, with more in the works, Track One is by far the most successful policy initiative that has come to bear during the Kappos Administration. The only problem with Track One is that more applicants are not using it! What are you waiting for? A look at the numbers shows that Track One is a huge success and ought to be employed far more than it has been.
You may have heard of them, but as a rule I think it is safe to say that most patent attorneys and patent agents have never seen one, at least not in certain technology areas. They are called “first action allowances” and this happens when you file a patent application and the patent examiner does not reject any claims and instead finds that your submission is in order and allowable without amendment.
In some technical areas, such as class 705 – business method patents for example, first action allowances likely seem like the patent equivalent of a unicorn. Perhaps an even better analogy would be to Bigfoot! There are rumors of sightings but no hard proof to know that they exist for certain, or at least not proof that would stand up to true scientific scrutiny.
As a general rule patent examiners will always find something to reject, and, in fact, there is growing evidence to support the anecdotal stories about certain Art Units and Supervisory Patent Examiners simply refusing to ever issue a patent unless the applicant appeals. See Denial of Due Process. Obviously, such a refusal to award patents is troubling and evidence of an enormous problem facing the Patent Office. The data capable of being obtained by PatentCore is voluminous and eye-opening. I have no doubt that it will eventually lead to significant changes and the eradication of patent examiners who refuse to issue patents.
If you have been in the patent industry for any length of time and you represent individuals or small entities, you have almost certainly heard complaints about the perception that corporate giants are treated differently at the United States Patent and Trademark Office. Until recently determining whether there was any merit behind the often mumbled whispers alleging disparate treatment was exceptionally difficult. With the recent unveiling of PatentCore, however, it is easy to collect all kinds of information about Patent Examiners and Art Units.
Although not a part of their basic offering, PatentCore also provides detailed analysis of assignee portfolios, including issued patents, pending applications and abandoned files. So what do you suppose those numbers show? It does seem clear that the allowance rate for large corporations is much higher than the average allowance rate for all patent applications. But does that suggest some nefarious bias? Not so fast my friends!
Last week I wrote an article titled Business Methods by the Numbers, which took a look at the allowance rates for a variety of Art Units assigned to examine patents in class 705, the primary class where business methods and financial data processing inventions are classified in the United States. The article has raised a few eyebrows and has caused some to question whether there is disparate treatment among Art Units at the United States Patent and Trademark Office.
The fact that there is disparate treatment between and among various Art Units and patent examiners shouldn’t catch anyone by surprise. Everyone in the industry knows that some patent examiners feel they work for the Patent Granting Authority while others work for the Patent Rejection Office. Notwithstanding, there are some who are excusing what can only be characterized as truly alarming statistics as having something to do with the various types of patent applications assigned to each Art Unit. Allow me to call that out for what it is – hogwash! Class 705, including the applications handled by Art Unit 3689, is dominated by a who’s who of the largest technology and financial companies in the world. These companies hire some of the best attorneys in the world, they well understand how to write a patent application to articulate allowable subject matter and yet these large, well-funded companies represented by some of the best and brightest legal minds are incapable of obtaining a patent? If you believe that I have a bridge I want to sell you!
Class matters. Technology class, that is. In some of the more rapidly growing areas of our economy, like Social Networking and Mobile Phone Apps, it looks like you can almost double patent allowance rate by making sure your patent application is classified in the more technological patent office art units. For entrepreneurs, a faster allowance rate and earlier acquisition of patents can directly translate into better fund raising, more secure commercialization and more profitable licensing. For large corporations, it means substantially reduced patent costs. And with some forethought you can probably influence which class your application is placed in while at the same time creating a more comprehensive patent application.
Yesterday David Kappos, the Director of the United States Patent and Trademark Office, wrote on his blog an article titled Reflections on the USPTO Dashboard. Largely the article discusses the statistical reporting of the USPTO, and provides a look back at fiscal year 2010 and offers some comparisons to fiscal year 2009. One paragraph in particular captured my interest:
Overall in FY 2010, the allowance rate increased to 45.6%, compared to an allowance rate of 41.3% in FY 2009. In addition, actions per disposal decreased to 2.42 from 2.73 in FY 2009. Furthermore, as a result of a concerted campaign to begin turning the tide on our backlog, the patent application backlog dropped from 718,835 at the end of FY 2009, to 708,535 at the end of FY 2010. Pretty remarkable considering that application filings were up about 4%, that our examiner workforce shrunk and we were unable to authorize overtime for most of the year due to funding challenges, and that we affirmatively gave our examiners *more* time to examine each application as a clear signal that quality is our first priority.
Q. Todd Dickinson at IPO event at Smithsonian on 6/10/2010
Being in the greater Washington, DC area allows me to show up at IPO events, USPTO events and a host of other events. In June when IPO honored Judge Michel at the Smithsonian I caught up with Q. Todd Dickinson, who is the current Executive Director of the American Intellectual Property Law Association and a former Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office. I asked him if he would speak with me on the record, and he agreed. My travel schedule for the PLI patent bar review got in the way a bit, but throughout the summer we bumped into each other several times. At the USPTO Roundtable on Three Track we again talked about and interview, and shortly thereafter the interview date was set. On August 18, 2010, I had the privilege of sitting down for an extended one-on-one interview with the man known simply as “Todd” to practically everyone in the patent community.
Nick Godici, the former Acting Director of the United States Patent and Trademark Office, sat down with me on Tuesday, June 29, 2010, for an extended interview. Nick is one of a select few who have seen the Patent Office on every level, from patent examiner, to SPE, to Group Director, Commissioner for Patents and ultimately Acting Director. In Part 1 of the interview we discussed his philosophy on examining patent application, the historic allowance rate vs. the depressed allowance rate of the pre-Kappos PTO and a variety of other topics. In Part 2 we discussed how President Obama’s approach to revitalizing the USPTO under Director Kappos’ direction parallels President Reagan’s attempts under Gerry Mossinghoff. We also discussed building relationships between patent examiners and the patent bar, what the PTO is likely doing to announce 101 guidelines in the wake of Bilski v. Kappos, and what it is like to be Director of the USPTO.
In this final installment of my interview with Nick Godici we learn just how close the Patent Office was to sending out 9,000 furlough notices (to all those on the patent side of the building) during the Summer of 2009 as a result of lack of funds. We also discuss the historic patent allowance rate versus the 42% rate the Patent Office got down to during the Q1 of 2009. Godici also humors me by answering the fun questions and we learn that he was the primary examiner on a somewhat famous (or infamous) patent relating to a bird trap and a cat feeder, and he goes off the board with an interesting selection for most famous fictional inventor.
In the popular press there have been a number of stories over the last week or so regarding how the US is losing its edge in innovation as indicated by the drop in patent filings between fiscal year 2008 and fiscal year 2009. The headlines have been sensational at times, claiming that the recession is affecting US innovation. While such headlines no doubt grab attention, they largely mischaracterize what is really happening, which is unfortunate because in today’s sound-bite news culture such headlines could well sway the hearts and minds of the public, and more importantly sway those in Washington, DC who may otherwise be able to help. The truth is that fiscal year 2009 saw more patent applications filed than any other year in the history of the United States, save only one year — fiscal 2008. So while many will no doubt want to blame the dip in filings on the recession, doing so misses the larger picture and obfuscates the real problem, which has little to do with the recession and everything to do with what became an enormously dysfunctional US Patent Office during President Bush’s second term.