Exclusive Interview Part 3: USPTO Deputy Director Terry Rea

By Gene Quinn
February 5, 2012

USPTO Deputy Director Theresa Rea in her office on January 17, 2012.

This is the finale of my January 17, 2012, interview with Teresa Rea, who is the Deputy Under Secretary of Commerce for Intellectual Property.  We begin by discussing first action allowances and whether they are frowned upon, then discuss the examination process and weave our way to Track 1 and whether you really must use Track 1 for patents likely to be litigated because you get a much more condensed, streamlined prosecution history. For the rest of the interview please see Part 1 and Part 2.

Over the past 10 days I have also interviewed  Peggy Focarino (Commissioner for Patents), Deborah Cohn (Commissioner for Trademarks) and Peter Pappas (Chief of Staff).  These interviews are being transcribed and prepared for publication.  So stay tuned.  To view all of these latest USPTO interviews visit USPTO 2.0.

QUINN: I have noticed a lot of change at the Patent Office on almost every level. Things seem to be very, very different increasingly so. The one thing that I hear a lot is the fact that attorneys believe that when you get a first office action there are examiners that will go out of their way to find something that can be rejected even if there is something that seems it should be allowable. Recently in a stream of comments on one of the articles on our website, somebody who said that they were a patent examiner offered that it was his or her understanding that if you give a first office allowance, those are kicked out into a separate pile for quality review where they may be a little bit more stringent. If this perception is out there then that can be damaging.

REA: And, Gene, I agree with you, perception becomes reality at some point. We’re trying to change the perspective with some of our examiners so that they do a compete review as early as possible and that if an examiner thinks that a first action allowance is appropriate, they have the authority to do it if they’re a primary examiner. I’m no longer in private practice so I haven’t seen a first action allowance for a while. But they do—
QUINN: Neither have I. [Laughter]

REA: Well, but I assure you they do exist. There is no quality check that is directed just to first action allowances. I have really never heard of that before. So there is nothing formal like that going on. We encourage our examiner’s to do a first action allowance if they don’t think that the claims need to be amended in any way and they think you’ve captured all the prior art and that the claims are free from any rejections. It is natural for examiners to second guess themselves in such instances however. But if the examiner believes that you’ve done a good job and that it warrants a first action allowance, our examiners are authorized to do that.

QUINN: Okay. All right, now, how do you combat the rumor mill, or the myth mill? I know Peggy and I think Dave occasionally meet with folks. Do you do that as well?

REA: Yes.

QUINN: Just to keep your finger on the pulse?

REA: Yes.

QUINN: Do you find that helpful?

REA: I absolutely find it helpful. We have brown bag lunch meetings with examiners. And we get to hear recommendations of theirs and sometimes complaints of theirs. We have targeted new hires recently and IP experienced hires and just finding out what their experience has been so far. We like to make sure we hear from the new examiners that we’re bringing in because there are so many of them. We want to make sure that they are trained with the correct perspective. And so I think that you, Gene, as one of our members of our user community should feel a change when you bring a case before an examiner now, versus how it was a few years ago, and we hope you will see more of a change as time goes on. We want to give you a quality work product in a timely manner. And we don’t want to throw up any unnecessary hurdles.

QUINN: We noticed in our practice a change almost immediately when Director Kappos came in because a lot of what I do is in the software/business method systems/internet area. And it went from no, no, no, no to occasionally actually getting a call from an examiner saying, ”You know, I think you got something here. Can we talk about language?” That was a total sea shift. And I hear about that in bits and pieces. And then we’ve also had a situation where one thing has worked in the last ten similar cases and then you start dealing with an examiner and you start offering those same amendments and it’s not going to work in this particular case. And it’s like, well, why not? You know? Well, that doesn’t satisfy Bilski or whatever. Well, it did the last ten times. Obviously you don’t pick fights, I mean, you want to work with the examiners, that’s not what I’m saying, but it gets me to wonder how do you go about trying to strive for uniformity? That seems to be just an enormously daunting task. We have what now, 6500 plus examiners?

REA: More than 7000.

QUINN: More than 7000 examiners now. And all of them are dealing with stuff that is supposed to be brand, spanking new on some level.

REA: Right. Gene, I can tell you that the patent academy training never stops. Examiners are constantly updated training and they get constant communications. We try and strive for consistency and uniformity by training examiners in one topic in a consistent organized way. Training for examiners never stops here. We need to continually update them because either statutorily or some recent court decision we’re forced to revisit something and to modify perhaps something we’ve done before. When training over 7000 examiners in different technologies, consistency can be a challenge, but we do an amazing amount of training here to ensure examiners are updated on the law and it is endless. And would you mind if I digress and go back to your interview idea?

QUINN: No, no, go right ahead.

REA: Okay. Interviews have now become a big, big part of the agency. And we encourage examiners to conduct interviews more than ever before. They are given sufficient time to do these interviews and are benefited by the interview process. The amount of interviews has increased significantly, and a lot of those are examiner-initiated interviews. So no longer does the request for an interview only come from the patent applicant or the patent applicant’s representative but it’s actually the examiner who initiates the interviews. Examiners who do interviews have found that their lives have improved significantly. They have a clearer idea of what the allowable subject matter is much earlier. And it’s really helped a lot with trying to make our patent examination process more efficient.

But for examiners who didn’t feel comfortable giving interviews or asking for interviews, we have specific training modules on interview practice and procedure, even for our most experienced examiners, because many of them have not done many interviews and we really want to encourage them to interview more. We have also had courses on handling the more complex and confrontational interview; how examiners are to handle even those in a graceful professional manner. All this specific training on interviews has put interviews first and foremost in their brain, they actually have been initiating a whole lot more interviews than before and I think the user community has seen the benefits of that.

QUINN: Yes, I agree. I think it does. There is always the question about what is that interview going to wind up doing to the prosecution history and in patent litigation as we know I think it has taken yet another downward turn in terms of everything is fought. Now some of the more recent Federal Circuit cases you see litigators getting slapped or sanctioned for lying and making arguments up out of whole cloth. And I think to some extent that the patent community is a little fearful of that. But I am a fan of getting the patent for the client and we realize what any given year, maybe 3000 or so, 4000 cases are litigated where you are giving 250,000 patents.

REA: Right, very few cases are litigated. Keeping litigation in mind, I do want to mention, Gene, that along with this new interview practice procedure that we’re training our examiners on, we’re also training examiners that the examiner interview summary form should really capture the heart of the interview. And while in years past what was given on the summary form might have been rather brief, you know, all rejections of record were discussed, and no agreement was reached, now if agreement is reached our examiners are trained to provide more clarity or specificity in that examiner interview summary form so that if somebody years down the road in litigation wanted to know why was this interview successful, their will be greater insight into what the examiner was thinking.

QUINN: Okay. Now, what if you get that, the examiner writes that down and you’re like, well, that’s not exactly what we talked about?

REA: Then in the applicant’s next communication simply acknowledge receipt of the examiner interview summary form and if you think that greater clarity is needed or a better explanation is needed, that is a good opportunity for the applicant to put it in their next communication.

QUINN: Okay. And I know that this isn’t maybe exactly the topic we’re talking about now, but there is a connection. Track I seems very successful. We recently published a guest article on accelerated examination, where the author went and talked to five different practitioners who have had experience with acceleration. The author found that they all like it and are happy with it. And one of the things that one of them raised was the fact that he thought that if you had a particularly valuable invention that may wind up being litigated, you probably have to go Track I or at least suggest it because it seems like you’re going to get a smaller prosecution history.

REA: Frankly, Gene, I never actually thought about it in that manner before. Track 1 will probably result in a more targeted prosecution history, but I think that the heart of the discussion is still going to be there in the public record. You are still going to have an office action and you are going to still have a response. It will probably be a little bit more complete and targeted than maybe what you’re used to.

QUINN: Yes. And that’s I think where this person was going with this. It seems that the people who have had experience with it are leaving with the idea that the examiners are extremely serious about this and about reviewing the application and about getting to patentable subject matter. And that the consideration that is given is you get to the point where you get the examiner’s attention maybe a lot quicker. So therefore there’s not a lot of paper that is passing in the mail or now passing electronically. So you get to the heart of the matter quicker. Is that the way that you’ve seen it unfold?

REA: I think because the first office action issues so promptly and the communications between the examiner and applicant are so compressed that memories are clearer both the attorney and examiner remember more about the case,so there are greater efficiencies. But any statements the applicant makes in a Track 1 case would likely have been done in a regular case, things will just move along faster. You would still have to put some of those same statements on the record even during Track I accelerated examination.

QUINN: Yes, I know. And I didn’t mean to say that there was anything nefarious going on. But when I read that I thought to myself that this was not something that I had thought of. But we always talk in the patent community about the fear that you are dealing with an examiner who’s not necessarily going to give you real consideration until either the final review or in some cases until the examiner’s answer is filed. So it seems like you get much better, much quicker, much more substantive consideration early on. So then you do not wind up with the ships passing in the night with the office actions.

REA: I think you’re right, Gene. I think Track I gives you a more focused or targeted examination. Some day when we reach the point where we have 10 months to first official action and 20 months to a resolution of whether or not patentable subject matter has been identified in the case, I think that we will start seeing how the Brave New World will look once we handle our backlog. Because I think that accelerated Track I examination right now will frankly be the norm of the future once our backlog is eliminated.

QUINN: Well, that was the next question I was going to ask you. It seems to make all the sense in the world to me that if you condense this stuff over a span of three to six months versus over a span of three to six years, memories are better and the examiners have worked on fewer cases in between and that you really could speed that up. So it’s interesting to hear you say that. Have you noticed any other kind of efficiencies or any kind of surprises of a good kind? By that I mean, whenever you start a new process you don’t know what you’re going to get into. And with every experiment there is going to be some intended consequences and some unintended consequences and sometimes the unintended ones really wind up being good.

REA: Right. I would not say this was an unintended consequence, but we realized that if people paid the additional money for Track I or accelerated examination, and they saw the need to amend their claims that they would do so perhaps earlier in the proceeding. I think that we are seeing that, but frankly, I think that was expected. I think, as you know, some of our cases have, from the time of filing to receiving a notice of allowance could be something as short as two months. So we’ve got greater efficiencies with the examiner being focused on Track I cases and realizing that they really have to do the best job they can at the outset. But we also have the applicant, or applicant’s representative being willing to amend the claims earlier if it’s necessary instead of rolling the dice yet one more time.

QUINN: Right. And eventually once you get the fee making authority, the micro entity fee will be $1200? Is that 25% of the regular fee?

REA: That is what we believe is the case. We have fee-setting authority, and we are actually in our fee setting procedures right now. PPAC will soon be doing hearings to get public input on our fees and then you’ll see our notice of proposed rule making. It’s a Herculean effort. We’re putting a tremendous amount of time into that right now. The exact definition of micro entity and how it’s going to be implemented is not entirely clear. But I believe that it will apply to Track I accelerated examination once the fee setting has been implemented.

QUINN: Okay. All right. There is one more thing I’d like to ask, if I can. For the first time that I can remember, we have a female Deputy Director and we have a female Commissioner for Patents, Peggy Focarino. I think that’s a great thing, and from what I can tell Peggy is very, very well respected. It seems rather historic so I was wondering if you might want to share a comment or thought? The sciences have been male dominated and the Patent Office for many, many years has been male dominated, although I know there’s been great strides in hiring female examiners and so forth. But this seems like a special time.

REA: Indeed, I agree with you completely, Gene. The U. S. Patent and Trademark Office, we are fantastic with diversity. We can still get better and we are striving to do so right now. But to see that you can get a female at the top of patents, of that business unit is more than impressive. And I’ve got to tell you also Debbie Cohn, the Commissioner of Trademarks is also a female. So I’d like to think that, to some extent Debbie, Peggy, and I run the agency.

QUINN: (Laughs) And Dave just thinks he’s in charge.

REA: Well, maybe you better not quote me on that.

QUINN: (Laughs) Okay. Well, that’s really all that I had. If there’s anything else that you’d like to put in there, I think you know at that length this is probably two segments.

REA: I think this was fantastic, Gene. Thank you so much. Your understanding and support of the agency is awesome. We appreciate all that you do for the patent community. And keep your comments coming and continue with your blog, please.

QUINN: Will do. Thank you very much! I appreciate it.

REA: Thank you.

 

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 17 Comments comments.

  1. Steve M February 5, 2012 6:16 pm

    Another great and eminently worthwhile interview for the entire innovation world.

    Thank you both for your time and effort.

    What a super change from how things used to be.

  2. Gene Quinn February 6, 2012 10:37 am

    Thanks Steve. I agree. This Patent Office is all about letting the public and community know what is going on and why. These interviews, reaching out to provide speakers to many conferences and the upcoming Road Show on the AIA are all excellent examples of the meaningful outreach the Office engages in. Not everyone will agree with them on every issue, but it is hard not to notice the transparency.

    Cheers.

    -Gene

  3. AAA JJ February 6, 2012 12:40 pm

    I received two first action allowances within the past 6 months. I deal with the examiners of those applications on other applications quite frequently and I know that they are very good at identifying the best prior art up front, and that their claim constructions truly are the broadest reasonable interpretation. The examiners were also hired prior to the “quality = reject, reject, reject” regime of the prior administration.

  4. BWise February 6, 2012 1:25 pm

    Great set of interviews, Gene. These are truly value-add blog posts for all of us patent attorneys, and we really appreciate the time and effort you put in on this. Looking forward to future interviews.

  5. Stan E. Delo February 6, 2012 6:40 pm

    Gene-

    I would agree with Steve M that your interviews are a real breath of fresh air for some of us independents, and I would imagine practitioners as well, that are trying to figure out what might happen in the near future. I had a fair amount of trepidation when the AIA was passed, as I could easily imagine things getting pretty bad for independents very quickly, but fortunately my fears would seem to have been mostly baseless. As you personally might know, I was being influenced by some of the paranoid fear mongerers that actually tried to ostracize me from as much of the US patent community as they could, because I happened to cast a few doubts upon their whole premise, which you were smart enough to mention during part 1 of your interview.

    What a difference a new Director has made! A really intelligent director will of course surround himself with very smart and efficient folks, which your series of interviews would seem to elucidate very clearly.

    Thanks to Teresa for her very candid answers, as I would tend to think that nearly nobody could have just spun stuff like this to be politically correct or something.

    If the fast track for small entities becomes only $1200, I think it would be a very wise investment to use that avenue. If my application pends for only 2 years, it could easily cost me about $40,000 in lost licensing revenue, if I can even get a deal done without a valid granted patent in the first place.

    Thanks a million Gene and Teresa!

    Stan~

  6. PTOExaminer February 6, 2012 9:22 pm

    Thanks for asking about first action allowance quality checks (and everything else). I’ll be sure to pass this information onto my junior examiners.

    The PTO is quick to develop training material based on the latest relevant court decisions. Unfortunately most of this training material is outrageously baffling. Every examiner has his/her own interpretation of training material which results in 7000+ different opinions on, for example, 101 and 112(2) issues (maybe 7000 is an exaggeration). I remember when I was on the partial sig. part of the program, I consulted with 1 QAS and 2 SPE’s regarding a single 101 issue I had. Guess how many conflicting answers I got… 4! I merrily ignored them all and came up with my own 5th answer based on ambiguous 101 memos.

  7. office hack February 6, 2012 9:29 pm

    They were definitely serving the interview koolaid with firehoses a couple years ago. The propaganda is admittedly appealing, but in reality most interviews tend to be disruptive rather than beneficial. Examiners get one hour of non-production time to prepare for, conduct, and document an interview. This may be doable if he/she sent out an action recently enough to remember it, and the attorney merely wants to quickly run by him/her a proposed amendment incorporating previously identified allowable subject matter. Otherwise, an examiner who adheres strictly to the one-hour limit could well be stuck nodding his/her head absently during the interview and saying “that’s beautiful, man, but I’ll have to wait until a formal amendment comes in to fully consider it”. There may not be time for any useful or constructive feedback. This is not to say that any examiners approach an interview with a stopwatch, but the assertion that interviews are universally beneficial and have no negative side effects is a bit unrealistic.

    The above is not meant to be a plea for more non-production time. Instead what is needed is for people to remember that interviews should not be necessary in the first place. Folks could try submitting reasonable original claims once in a while. If an examiner can allow the claims in the first action, no interview will be needed, right? AAA JJ will no doubt want to call me an “office hack” for suggesting such heresy, so I’ve used that name to spare him the effort. You know, to be consistent with the so-called “new spirit of cooperation” that people keep saying was forbidden under the allegedly unholy regime that preceded Special K…

  8. Gene Quinn February 7, 2012 8:32 am

    office hack-

    You say: “what is needed is for people to remember that interviews should not be necessary in the first place.”

    Do you read every single word of the specification before you start to examine claims?

    Your comment suggests that you don’t read the specification and want only allowable claims. But how do you know what is allowable if you don’t read the specification and appreciate the uniqueness of the invention? The fact that examiners don’t read the specification is exactly why interviews are helpful. It takes far less time to bring an examiner up to speed than to just have you all aimlessly maneuver around claims without having read the specification.

    -Gene

  9. Gene Quinn February 7, 2012 8:34 am

    PTO Examiner-

    Have you noticed any change in guidance under Kappos? While I’m on the outside looking in it seems to me that the guidance is much better and more clear now than it was a few years ago.

    -Gene

  10. Umm... February 7, 2012 9:53 am

    Gene, with regard to your reply to Office Hack, I have a question:

    Do you consider it the examiners primary job to review the specification to identify patentable subject matter or to examine the claims the applicant has filed?

    When an applicant files ridiculously broad claims with little apparent novelty, should the examiner really be expected to review a 107 page specification and say ‘this stuff in para. 675 is pretty neat, maybe you should claim it?’ Isn’t a better use of their limited resources (time) to move on to a case with more ‘polished’ claims? We on the outside do not like clients with unreasonable expectations, why should examiners be any different?

    (And yes, I know the answer to my primary job question is: ‘a little bit of both’. But I think we have to give them something to work with rather than putting the entire onus upon them. Many applicants do this, but there is large swathe of folks who do not and it damages all of our applicant-examiner relationships.)

  11. AAA JJ February 7, 2012 10:29 am

    I don’t recall using the term “hack” in any posts. I have other terms that I prefer.

    If you’re denying that under the Dudas/Doll/Love administration the mandate was “quality = reject, reject, reject” than you’re either lying or you weren’t paying attention. Take your pick.

  12. PTOExaminer February 8, 2012 8:33 pm

    Gene, the guidance is more frequent and more detailed and very theoretical in nature. However, the theoretical nature of the legal details makes it very difficult for examiners to apply the concepts in office actions. Examiners (unfortunately) always look for examples or sample statements (such as form paragraphs) but most of the new material does not have corresponding material to fall back on. Furthermore, the office’s (various) interpretation(s) of material from case law often clashes with applicants interpretations and this makes examiners go bananas.

    I think the real problem is that examiners do not read case law and are not really expected to do so. Thus, to be trained on subject matter derived from case law with no real understanding of where its coming from and then to be expected to properly apply the derived material is simply nonsensical.

  13. AAA JJ February 9, 2012 11:24 am

    Any rejection relying on case law that does not include a discussion of the facts of the precedent and an explanation of why the facts of that precedent are sufficiently similar to the application under examination to permit reliance on the rationale used by the court in that precedent should be kicked back. Any such rejection at the appeal stage should be summarily reversed.

  14. Blind Dogma February 10, 2012 10:57 am

    I find PTOExaminer’s post interesting in that the Office publishes guidance (in the form of the MPEP and guidance letters), advises the publlic (everyone else specifically including applicants) that the MPEP is “not binding” (although it is binding on the Office employees, as I understand it from Administrative and Federal Agency principles of law), and yet mentions that all examination resolves to the law and rules (case law, 35 USC and 37 CFR).

    Here, an admission that what actually matters and what the front line examination depends on are separated by a gulf of understanding.

    Is it any wonder then that quality of patent examination is both such a bone of contention and such a driver for the woes of the Office (i.e. the driver for the backlog of examinations, the backlog of RCEs and the backlog of Appeals)?

    So instead of actually addressing this driver, we have gone and made things so very much more complicated with the passage of the AIA and the phased implementation (read that as the examiners now must understand two radically different bodies of law – when they virtually state that they don’t even understand the old body of law).

    Note that Hal Wegner has had a blistering small series of emails laying into the Office and its attempts to modify applicant behavior at the same time shrinking from dealing with the “root cause” of employee behavior. This “bad employee” bahvior and this “gulf of understanding” are but two sides of the same coin. It’s just not the same coin that went into our legislators’ pockets, nor the coin that the Office is asking the invention community to cough up.

    Not only have we missed the boat on what needed to be changed, we have introduced sharks into the water between the pier on which we stand and the (receding) boat that we are being asked to jump to.

  15. AAA JJ February 10, 2012 1:10 pm

    The biggest problem with the PTO remains the legions of useless, know-nothing, do-nothing middle management types (e.g. QAS’s, SPRE’s, “subject matter experts”, “business process specialists”, “appeal specialist”, etc.) who are given power to force examiners to write idiotic rejections without any accountability to the applicant. These people clearly have no understanding of the law (35 USC, 37 CFR, case law, even the MPEP) but are allowed to tell an examiner, “Eh, looks too broad, go back and do some more searching and reject it.” They haven’t read the application, the references, the Office Action, or the responses, but they have decision making authority. They don’t have to defend the garbage rejections that get sent out, they don’t have to meet with the applicants or their representatives, either in person or at least on the phone, and what’s more, they never face any consequences for their horrible decisions. Send all of these people back to the examining corps and force them to 1) meet the production quotas and 2) be accountable to the applicants. They add zero value to the process, and in fact actually detract from the process. Get rid of them.

  16. Stan E. Delo February 10, 2012 3:29 pm

    BD-

    Perhaps the most disturbing part in all of this is the seeming desire to modify the behavior of the applicants with the new fee structure. Point of order. That is not their job. The AIA has dropped a huge load on their already over burdened backs, so is it any wonder that the fees will go up very substantially? An example of efforts to modify applicant behavior to make things easier for the office can be found on page 11 of the executive summary of Feb. 7th of 2012. That page spells out the proposed new fee schedule, but perhaps the most revealing part of the data is in the Rationale section at the right side of the page.
    http://www.uspto.gov/aia_implementation/fee_setting_-_ppac_hearing_executive_summary_7feb12.pdf

    I think we are going to need a Much bigger boat! Keep those cards and letters coming in to the PTO, so that we won’t possibly regret it later. At least the efforts to implement the AIA have been totally above board and made easily available to any that care to take a look. Good to have you back again, and did you win your case? I will send off a sample of my latest Quizzical Quinine experiment, just in case things didn’t quite go the way you might have liked.

    Cheers,
    Stan~