Thomas Jefferson Symposium on Patent ADR & Litigation

Randy Berholtz, Vice President & General Counsel, ACON Laboratories, Inc., and Adjunct Professor, Thomas Jefferson School of Law, opens the symposium.

I am writing from San Diego, California this morning.  I am sitting in an auditorium at Qualcomm, where the Thomas Jefferson School of Law is holding a symposium titled Improving Patent Adjudication Through ADR and Federal Court Reform.  This is a special event for me personally because not only am I a speaker, but I also inspired the research project started by the Alternative Patent Dispute Resolution Project (APDRP) at Thomas Jefferson School of Law, which lead to this symposium.  When I returned to Franklin Pierce Law Center in 1997 to obtain a Master of Laws (LL.M.) I had to engage in meaningful and unique research and prepare a thesis, which was then a degree requirement.  My thesis article Using Alternative Dispute Resolution to Resolve Patent Litigation: A Survey of Patent Litigators, included empirical research on patent application filings, patent litigation cases brought and a survey of patent litigators, to attempt to understand a litigators perception of the use of mediation and arbitration.  The students and faculty at Thomas Jefferson School of Law have worked to update this research and identify what, if any, changes have occurred.  I am anxious to hear the results of this research they have conducted.  I am on the last panel this afternoon, at about 4pm Pacific Time, and that is when the updated survey results will be presented, so look for me to write about that more next week.

The symposium is already off to a great start.  The opening panel is largely setting the table for the remainder of the panels and presentations.  Fred C. Hernandez, of Mintz Levin Cohn Ferris Glovsky and Popeo, P.C., lead off giving an overview of the patent process from the practitioner’s perspective.  He was followed by Bob Spar, who spoke of the patent process from the perspective of the Patent Office.  Bob is the former (now retired) Director of the Office of Legal Administration at the United States Patent Office. 

Left to Right: Fred C. Hernandez, Bob Spar and Bruce W. Greenhaus; answering questions from symposium attendees.

During Bob’s presentation he made some interesting observations about the internal workings of the Patent Office.  For example, Bob explained that the cost to the Patent Office for each application prosecuted is approximately $4,000.  At the same time, the cost of an application is typically about $1,000.  Even with the additional fees that are paid by the applicants during prosecution it can easily be seen that the Patent Office is losing money on every application examined, and that is even worse when the applicant qualifies for small entity status.  I realize that the Patent Office is not in the business of “making money,” but the USPTO gets its budget from user fees. 

Unfortunately for the Patent Office, the lion share of the revenues come from maintenance fees, but with the allowance rate  decreasing over the last few years to the point where the allowance rate is now 42%, that will significantly impact the amount of money the Patent Office can bring in through maintenance fees.  Bob also had some very interesting statistics, explaining that 31.7% of applications in FY 2008 were RCEs and continuations.  We didn’t get too much into detail on that point, but I will certainly pursue that with Bob and others over the coming weeks.  I suspect that number is so high because of failed quality review efforts, examiners afraid to issue any patents and applicants forced to file continuations and RCEs to keep applications alive rather than simply giving up.  Bob also explained that an allowance rate that is below 45% “is way too low; it is just ridiculous.”  Amen to that!

There just are not any maintenance fee revenues for applications that were finally rejected and did not result in an issued patent.  I would have thought that the management within the Patent Office would have figured that out at some point years ago, but much like those who thought the housing market would always increase, it seems that the Patent Office believed applications filed would always increase, and have been caught off guard by the decrease in applications so far this year.

So far everyone is talking about the claims and continuations rules and patent reform, which I suspect will dominate the conversation throughout the day, and will be weaved into just about every panel presentation whether the subject the panel is talking about allows for it neatly or not.  When you get a room full of people who love talking about patent law, and you have such hot issues occurring within the industry, it is understandable.  Lets face it, when we all go home and talk to our family and friends most of them don’t find it at all interesting to talk about the backlog of cases, the low allowance rate, whether the Senate really understands the patent reform bill they are considering, etc. etc.  So this symposium comes at a great time.  Lots of things to talk about, and many if not all of the big ticket patent issues in the industry impact litigation and, therefore, also impact alternative dispute resolution and settlement. 

I am happy to be here, looking forward to a great day and a great program, and being in Southern California is just a bonus!


Warning & Disclaimer: The pages, articles and comments on 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 as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of Read more.

Join the Discussion

4 comments so far.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 13, 2009 01:51 pm


    I agree with you, particularly the part about “breaking their arms patting themselves on the back…”

    We also won’t have to hear from those folks at every conference. With the budget the way it is the USPTO is eliminating travel. But then we are never going to know what is going on inside the walls of the PTO. I am not sure that is a good thing. At least every so often those on the inside would come out, take lumps at a conference and go back. Admittedly, it was never the folks who were responsible. I think we have shot a lot of good messengers over the years, when our ire was really directed at those a rank or two above the ones on tour.


  • [Avatar for JD]
    April 13, 2009 08:32 am


    I am 35 USC 41’s most ardent champion. I agree the PTO should charge what it costs to actually examine the application. But like I said, the current crop of (mis)managers have absolutely ZERO credibility. Their pronouncements on what it actually costs them are far from transparent. They are in fact beyond opaque. A veritable black hole.

    They also need to do better with the money they’ve already spent, are currently spending, and plan to spend. The billions they’ve spent on the “paperless” patent office are a farce. They still have far too many clerical staff shuffling “electronic documents” around the ether over there. The amount of time it takes to simply docket a response to the examiner is simply disgraceful. I file EVERY response by EFS and I still see 3, 4, 5, and even 6 week delays in having the responses forwarded to the examiner. Some responses don’t move until I pick up the phone and call somebody and ask, “What is going on over there???!!!!!” And then, of course, the examiner gets 60 days. Plus the end of the biweek in which the 60th day falls. And then until noon on count Monday. And even that doesn’t move the cases anymore. I have a response I filed 4/15/2008. Still haven’t received anything from the examiner. That’s about twenty thousand negative work flow points on the examiner’s PAP. But the SPE is simply excusing them all. I’m sure the whole art unit is getting rated as having “record breaking outstanding quality” and bonuses. They’re breaking their arms patting themselves on the back over there.

    There are HUGE pendency reductions to be had if the PTO would stop sending the lifer (mis)managers to every conference of every group that will have them so they can blame the entire backlog and pendency on applicants and practitioners. Like I said, show me that they can actually do something as simple as delivering the mail and they’ll gain some credibility.

    As for your comment on those at the PTO who “don’t bill time” so to speak, that is another ENORMOUS problem over there. They have created platoons, squadrons, regiments, companies, brigades, and ENTIRE armies of donothingknownothinguselessdeadweightGS-15 positions with idiotic titles like “business process specialists” and “subject matter experts” and so forth. If these people want to get paid GS-15 salaries, let them do a little GS-15 production. Enough! Send them all back to examining.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 10, 2009 04:49 pm


    How do you really feel?

    I share your frustrations, and while they do charge more for additional claims I think the problem is that they do not charge enough for the amount of work to be done in terms of a base fee. For example, less assume a small entity files an application with 20 claims. The filing fee will be $540. If the examiner spends 20 hours on the file that averages out to $27 per hour. Now lets assume that the examiner makes $100,000 per year and works 40 hours a week for 50 weeks a year. That means that the base salary for the examiner if $50 per hour, and then there will be benefits on top of that. So lets just add $10 per hour for benefits, which is pretty conservative. That takes our examiner up to $60 per hour. So already the Patent Office is in the whole $32 an hour. Then there needs to be support staff, management and others who will be getting paid but not “billing” time. It is easy to see how the PTO spends more per applicaton than they take in. This is why the PTO makes up the difference on maintenance fees, because there is no additional work. WIth decreasing allowance rates, and decreasing applicaton numbers, it is no wonder the PTO management is quite worried.

    The thought of government raising cost, whether by fees or taxes, is not generally a good idea in my opinion, but something needs to be done. For years the PTO has resisted charging a fee commensurate with the amount of work done. Nevertheless, most users of the patent system, particularly those who are not independent inventors or truly small businesses, would be willing to pay more for better service and higher quality. I think that is something to consider trying!


  • [Avatar for JD]
    April 7, 2009 08:21 am

    “…the cost to the Patent Office for each application prosecuted is approximately $4,000. At the same time, the cost of an application is typically about $1,000.”

    Even if this number is somewhat accurate, and not just pulled out of thin air (like much of the Orwellian Newspeak from the PTO), it’s still a bunch of crap.

    The PTO has been charging for extra claims since the 1980’s and for extra pages since December, 2004, and has never, NEVER, provided either the applicants or the examiners with what was paid for: extra examining resources for extra claims/pages.

    The PTO fee scheme is complete, total, and utter GARBAGE. Until the PTO gets rid of the “one time fits all” examiner production system, and gives applicants what they have been paying for, and not receiving, then every single utterance about fees from their mouths should be jeered into oblivion.

    PTO (mis)management has ZERO credibility on fees. They’ve collected BILLIONS in fees, and spent HUNDREDS OF MILLIONS, if not BILLIONS, on a electronic filing system and image file wrapper system that has not produced one iota of improvement in the handling of responses. I file every single response by EFS and what I see is “11/24/08 – Amendment filed” and then “1/03/09 – Application docketed to examiner.”

    IT IS GARBAGE. When the PTO can show that they can actually “deliver the mail” on time, maybe then we can talk about increasing fees. Until then, forget it.

    Millions for defense. Not a penny in tribute.