“Those who push for 18-month publication of all applications have it all backwards. Non-publication is not the problem – it is the solution.”
Many in the patent community decry the long pendency of patent applications and the harm it inflicts on patent applicants. In their recent article, Mark Schultz and Kevin Madigan document the extent of this problem internationally. I explain below that we suffer from long pendencies in part because we have pre-grant publication laws. For the reasons I explain below, we must avoid mandatory 18-months publication in order to fix the ever-enduring pendency problem.
The Origin of Pre-grant Publication Laws
Pre-grant publication is a rather recent practice in the annals of world patent law, originally intended to alleviate the potential public harm of the then newly introduced practice of deferring examination up to 7 years. Had mere public notice been the goal for pre-grant publication, the 18-month publication practice would have been much shorter. Application publication practice was never designed or intended as a stand-alone policy for public notice. Rather, it only came about when deferred examination laws were introduced. At that time, it had been widely accepted that an examination deferral elected by an applicant should not prejudice the public and that there should be no material change in the timeline of making inventions public even if patent examination and grant is deferred. This is why deferred examination laws were coupled with pre-grant publication after a period approximating reasonable grant time. The Netherlands was the first country to formally adopt an 18-month mandatory publication period in 1964 as part of its adoption of the deferred examination system. The 18-month period was apparently set to approximate the search and preliminary examination timeline practices of the time. However, the crucial problem (and I maintain, a grave mistake) with this policy was that the 18-month mandatory publication rule was coupled too broadly and was imposed on all applicants – not merely on those who elected to defer examination.
The Misguided Policy of Overreaching Publication Laws Pushed by Large Incumbent Industry players
The fundamental patent bargain has been perilously breached by forcing publication on every application. Sound policy would have avoided upsetting the core patent bargain – disclosure upon grant of exclusive rights – and would have provided an equitable incremental quid-pro-quo: applicants can reap the additional optional benefit of deferral of examination for several years in exchange for early disclosure of their application. That way, applicants who do not wish to defer examination would then be unaffected and their core patent bargain would have been undisturbed – disclosure only upon grant of exclusive rights.
Thus, the Netherlands’ 1964 law in support of deferred examination had failed spectacularly in adhering to the patent bargain by granting the public more than its part of the bargain – guaranteed disclosure at 18 months, for any application, whether ultimately granted or not. Hence, a major paradigm shift was imposed on applicants in the Netherlands: trade secrets in applications were disclosed not in exchange for exclusive rights – but in exchange for an uncertain option for an exclusive right. No guarantee for time-to-grant was provided to applicants who did not elect deferral of examination. There was no assurance that applicants will receive their part of the bargain within 18 months, or at any time thereafter. This blatant deviation from the patent bargain was soon followed by other European states whose patent laws were essentially written by established industry incumbents, and 18-month mandatory publication periods for all applications whether deferred or not, were instituted by Denmark, Finland, Norway, Sweden and Germany in 1968 and by France in 1969. Other countries including Japan followed suit in the early 1970’s. Under the most charitable interpretation, this policy indicates a profound misapprehension of the purpose of the patent system and the patent bargain, favoring dedication of private rights to the public. As I show below, mandatory pre-grant publication all but guarantees that publication will be years before grant, thereby benefiting established incumbent industry players by exposing disruptive competitive innovators after 18 months but delaying their ability to enter the market with patent protection for many years hence.
The consequences of the breach of the patent bargain – long pendency
The choice in this matter is indeed up to each country but this deviation from the patent bargain is fraught with more serious consequences: the broadly-applied pre-grant publication policy gives “the public” its part of the patent bargain unconditionally and upfront. In so doing, it strips-out any incentives for “the public” through its public institutions to timely deliver on its obligation to the applicant (a patent grant), which it would otherwise achieve by pushing for sufficient public examination resources to catch up with workload and maintain short pendency.
It is not surprising that the most spectacular increases in patent pendency at major national patent offices began creeping-in after these offices adopted pre-grant publication rules. For example, as the figure below shows, the unprecedented rise in the US Patent & Trademark Office’s (PTO) pendency after 2001 was around the same time that 18-months publication started taking effect. Prior to that, pendencies exceeding 2 years have provided strong impetus through public (congressional) pressure and resources to bring down pendency. Similarly, the Canadian patent office (CIPO) average pendency measured from request for examination to patent grant increased by nearly 2 years after its adoption of a pre-grant publication in 1989. For more than a decade, CIPO even stopped publishing its total pendency – it published only incomplete percentile statistics about its first action pendency that concealed the average value. The European Patent Office (EPO) started operating in the late 1970’s with the 18-months publication rule and I cannot remember when the EPO ever had pendencies of 18 months, except perhaps in its startup phase. When taking into account and excluding applicant’s deferral of examination, the EPO and the Japanese Patent Office (JPO) current pendencies average more than 4 years.
Consider this thought experiment: had “the public” not received upfront more than its fair part of the bargain (i.e., had there have been no advance publication), would “the public” have quietly allowed pendency of secret applications to reach 4-7 years as now found in patent grants? Would there not have been an orchestrated public outcry from industry groups calling for substantial increases of patent office examination resources every time a key patent issued after such long delay and secrecy? Would large pendencies have been allowed to fester this long? I think not. Advance pre-grant publication is certainly problematic for some applicants. The individual patentee gets the short end of the bargain with very little power to compel specific performance by “the public” on the “patent contract.”
Abolishing mandatory publication of non-deferred applications is the only way to keep pendency down
Clearly, if every patent application can be disposed of within 18 months, no advance publication would be necessary. Achieving this goal and maintaining it, is much easier than many observers believe. It takes the same amount of examination resources to maintain an 18 months pendency as it takes to maintain 35 months pendency. Pendency is a measure of backlog – not of disposal rate capability. Examination resources only affect disposal rate capability. If the disposal rate capability exceeds the application arrival rate, any pendency goal can be met. If a patent office can build and maintain sufficient resources to reduce the backlog even slightly from current levels, it means that disposal rates exceed the application arrival rate and therefore these resources will ultimately permit achieving pendency of 18 months or less. So the pendency problem is a binary one – either available examination resources exceed and keep up with the incoming application rate, or they do not. This is not rocket science. The resource levels are not accidental – they are determined based on public pressure.
Virtually all patent offices keep examination resources that provide disposal rates that are nearly equal to the application arrival rate. If they did not, they would have rapid ever-growing runaway backlogs and pendency increases. This “near-equality” condition has existed for decades. It is remarkable that for most patent offices, an increase of only 5% in examination resources above their current trajectory would reverse the pendency trend and drive it down to 18 months in only a few years. If they obtained this small resource increment, advance publication would be unnecessary. If they do not obtain this incremental resource and pendency hovers around current levels slowly creeping upwards, advance publication only ensures that nothing will be done about getting the required resources.
As to the US, there are those who contend that “the most efficient way to eliminate long-pending secret applications is to close the 1999 loophole in Section 122(b)(2)(B) and make 18 month publication mandatory.” This sentiment is characteristic of the backward thinking: there is no loophole and the problem is not “long-pending secret applications.” The problem is simply “long-pending applications.” Every patent application should be secret until issued but not long-pending. Following the foreign compulsory publication recipe will not only keep pendency growth unchecked, but it will drive away many American innovators from participating in the patent system. Is it realistic to expect that forcing applicants’ disclosure without guaranteed exclusive rights will have no adverse or chilling effects on patenting? Is this really the purpose of a robust patent system?
The rest of the world had been partially successful in pushing the US towards perilous deviations from the patent bargain. Thomas Jefferson has long been turning in his grave. A return to basic patent policy principles is in order and the best way to solve world patent pendency problems is to abolish the mandatory 18-month publication rules and apply them only to cases elected by applicants for deferred examination. With this type of policy in place, administrators of patent offices will be held accountable for creeping pendency every time a key patent is issued late. Because publication would only apply to deferred examination cases, fewer applicants would likely elect deferral, resulting in earlier issued claims and overall improvements in the public notice function of patents.
Those who push for 18-month publication of all applications have it all backwards. Non-publication is not the problem – it is the solution.