Pre-Grant Publication – The perilous deviation from the patent bargain that causes long patent application pendencies

By Ron Katznelson, Ph.D.
October 25, 2016

“Those who push for 18-month publication of all applications have it all backwards. Non-publication is not the problem – it is the solution.”

Procrastination businessman which delay his work for later | simply modern flat design colorful cartoon icon isolated on green backgroundMany 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.

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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.

The Author

Ron Katznelson, Ph.D.

Ron Katznelson, Ph.D.  
Dr. Katznelson is the Founder and President of Bi-Level Technologies in Encinitas, CA. From 1990 to 2005, he was Chief Technology Officer, Founder and Chairman of Broadband Innovations, (formerly known as MCSI), where he led the company’s entry into the digital RF CATV industry. From 1983 to 1989, he was with the VideoCipher Division of M/A-COM Linkabit Corp., later acquired by General Instrument Corp. (GIC), where he served as Director, New Technology Development. At GIC, he directed R&D in the areas of Advanced Television Systems that led to GIC's video compression technology, now forming the core of the MPEG-2 standard and a basis for the Grand- Alliance ATSC High Definition Television standard. His responsibilities also included the management and development of the VideoCipher Division's intellectual property portfolio as well as representation in industry groups and standard bodies.

From 1982 to 1985, Dr. Katznelson was a Professor of Electrical Engineering at the University of California, San Diego (UCSD). He taught courses in Linear System Analysis, Probability and Stochastic Processes.

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 23 Comments comments.

  1. Anon October 25, 2016 8:24 am

    Excellent article – bravo.

  2. EG October 25, 2016 8:30 am

    Hey Ron,

    As usual, you provide the evidence to point out the fallacy, in this case, pre-publication doesn’t decrease application pendency.

  3. Anon October 25, 2016 9:42 am

    An additional note for the US side concerning a “divide and conquer” approach can be seen in the historical record concerning negotiations for Patent Term Adjustment, as the initial time period started to NOT be met. The powerful Pharma group acquiesced because the added term for the Office not being timely in its job occurred at the end of the term – when Pharma patents are their most valuable. For all other art units though, this turns into more of a mirage than anything else.

    (Another consideration is the trend towards delayed effective examination with RCE gaming, which both rewarded intransient examiners and pushed for “amendments” which largely voided out the other part of the compromise of early publication).

    Another “reason” for early publication – submarine patents – was effectively dealt with the change in treating when term started and tieing children patents to the filing date of the earliest parent.

    All in all, the de-evolution of the most basic bargain undergirding the patent system has been nothing but a disaster.

  4. Benny October 26, 2016 6:05 am

    The article glosses over the huge benefit to industry of pre-grant publication – preventing excessive channeling of resources to innovation or design which cannot be profited from when a competing patent issues.

  5. Anon October 26, 2016 7:07 am

    Benny,,

    Would not that effort lay the foundation to leapfrog the competitor’s patent?

    (and if done correctly, obtain PUR)

  6. Gene Quinn October 26, 2016 9:06 am

    Benny-

    There is absolutely no doubt that pre-grant publication has been a tremendous benefit to the industry. Innovators who do not opt out of publication lay open their trade secrets without any expectation of getting a patent any more, or if a patent might be obtained only 5 or more likely 10 years later after the technology is largely irrelevant and the industry has moved on. In the cases where the technology is still relevant and valuable the industry will just IPR the patents and never pay a dime anyway.

    Clearly, pre-grant publication has been a tremendous benefit to the infringer lobby. Yet another way they can gain technical information without any worry of rights ever being enforced.

    -Gene

  7. Anon October 26, 2016 10:49 am

    Gene,

    Your thoughts here very much tie this article to the next.

    My advice for the “simple” elevator speech:

    What does “Quid Pro Quo” mean today, and how would Abraham Lincoln view it?

  8. Ron Katznelson October 26, 2016 12:02 pm

    Benny,
    Your statement that my article “glosses over the huge benefit” is a non sequitur, essentially saying “the problem with long pendencies is that pendencies are too long.” The article does not “gloss over” benefits of early notice – it provides a prescription to achieve early notice to provide the benefits. Your statement presumes that a patent grant takes much longer than 18 months and therefore a pre-grant notice is ostensibly necessary for the benefits you cite.

    You apparently missed the point of my article that patent grants will be made rather promptly if no pre-grant publications take place – the prompt notice to the public will be given (upon patent issue). Not only will notice of the disclosed subject matter be prompt, but the actual allowed claims will be published earlier, which should provide more certainty for “channeling of resources” to non-infringing designs.

  9. Anon October 26, 2016 12:05 pm

    Excellent distinction Ron.

    Although, as with continuations, the max total patent possibilities are set with the material originally filed, and not necessarily that which is (first) granted.

  10. Edward Heller October 26, 2016 3:21 pm

    Food for thought Ron, especially the point that it is relatively easy to provide resources to maintain 18-month file-to-issue. But, since we exist in a world of political pressure, getting those resources in not guaranteed.

    Perhaps a compromise.

    Provide non publication (only?) to those who choose fast track prosecution that will normally issue the patent within 18 months.

  11. Anon October 26, 2016 3:38 pm

    Mr Heller,

    That sounds in the same (exact) promise made previously (at the initiation of the Patent Term Adjustment “compromise”).

    Sorry, fool me once shame on me, (try) to fool me twice, shame on you.

    Maybe something as simple as making the default NON-publication, with the open option (untied to anything) of publishing as soon as possible?

  12. Edward Heller October 26, 2016 5:32 pm

    anon, the remedy for failing to issue a patent within 3 years is extended term. I think the remedy for failing to issue a patent with 18 months under fast track, with no delays by the applicant, should be that, with the payment of an issue and publication fee, the claims should be deemed granted in the state they exist on month 18, and should be enforceable from that date on in court regardless of publication of the grant, and without the further intervention of the examiner or the Director.

  13. Anon October 26, 2016 5:51 pm

    Mr. Heller,

    I am not discussing your instantly made up law here.

    If I wanted to count angels on the head of a pin, I could have done that all on my own.

    As to my comments then, is there anything pertaining to the current state of law that you might want to add?

  14. Anon October 26, 2016 5:57 pm

    …that being said, the vastly different “remedy” you posit seems unsupportable. You want an instant patent with no examination (if that examination cannot be completed by the 18th month timeframe)…?

    You do realize of course where Type A patent term adjustment comes from (and its immediate relation to the 18 months that you are talking about), right?

  15. Edward Heller October 26, 2016 7:18 pm

    anon, I never said “no” examination.

    Have you ever tried Track I? It guarantees final disposition within a year, and might I add, it delivers. There is nothing to suggest that if a case is filed Track I (and it meets all the requirements of Track I) that it cannot be fully prosecuted in one year.

    But, what happens if the one fully complies with the rules, is granted Track I status, files every response on time, but at the one year point, there is neither a final rejection or a notice of allowance? I say, issue the patent at the option of the applicant by deeming the application allowed. The examiner has had a full and fair opportunity, and has failed his legal duty to the applicant.

    Now, an accused infringer might still defend on validity or file a PGR or IPR as the case may be. But the applicant has his patent well before the 18-month window we are talking about here.

  16. Ron Katznelson October 26, 2016 8:31 pm

    Ned,
    Your suggestion indicates that like Benny, you might have missed my point. The same resources (and therefore no extra fees to PTO) are required to maintain 18 months pendency as those required to maintain 36 month pendency. Why should I pay extra fees to expedite examination to 18 months when that is what the PTO should be doing for every application? The PTO is now on a track that reduces backlog because its examination resources are such that the disposal rate exceeds the application arrival rate. Maintaining that trend should get us to 18 months overall pendency in just a few years. Your suggested “solution” will reverse that trend by reducing PTO incentives to match resources to filing rates and work through all the backlog and achieve 18-month pendency.

    Expedited examinations do not take more examination resources to warrant extra fees; examiners do not spend more time on applications that are expedited – these applications are merely taken out of turn and placed in the front of the queue. I believe that the PTO misrepresented to Congress the “costs” for expedited examination when the high fees were set. These fees were set at much higher level merely based on ability to pay and elasticity considerations to avoid a flood of requests for expediting examination. Unfortunately, the concept appeared seductively reasonable and Congress went along with the PTO’s method of creating a two-class system: those who can afford to spend thousands of dollars to get their patent issued on time and those who cannot, thus having their applications consigned to years of PTO pendency purgatory.

    In fact, expedited examination when first instituted was the PTO’s method of reducing whatever public pressure might have been on pendency. Second to pre-grant publication rules, its existence is the next largest threat to short overall pendency because it gets PTO off the hook and engenders a narrative that “if short pendency is what you really need, just take the expedited examination track.” I am concerned that at some point, when pendency reduces further under the current trend, there will be those at the PTO who will object to further reduction in overall pendency to achieve the 18 months pendency goal because it may render the expedited examination track useless, cutting off attended financial windfall for the PTO.

  17. Lost In Norway October 27, 2016 1:49 am

    Realistically, in the international landscape, the patent must publish at 18 months. Regardless of the historical reasons and the perceived error of it, that must happen.

    Can the USPTO actually get this to 18 months pendency? Your solution seems to be to throw more examiners at the problem. Considering the current problems with the USPTO and quality of examiners, I am concerned about this solution as well.

    When pressure has been put upon the USPTO to drop pendency (Regean years), the reaction of the USPTO seems to have been a “let them sort it out in litigation”. There was not a noticed improvement of patent quality. The issues with IPR and PGR are unfortunately only make the situation worse.

    However, I agree with your basic tenet. The USPTO, and patent offices in general, are violating the covenant with inventors. If they want publication at 18 months, then it is only right to get something enforceable by 18 months.

    Heck, many of my clients would be ecstatic with something to enforce at 24 months. Not a single one of them has been happy with the difference to when their idea is published and when they get a patent. They shouldn’t be.

    I recently got a patent through prosecution at the USPTO at 11 months. This did not make me happy, it made me worried that the examiner hadn’t actually done his job. But maybe just throwing more examiners at the problem and waiting the time for them to transition from crappy examiners to decent examiners is the way to go.

  18. Anon October 27, 2016 6:57 am

    Good examination, albeit perhaps difficult, is indeed critical to have.

    That should be the primary focus of any efforts of improving patent quality.

  19. Edward Heller November 4, 2016 1:29 pm

    Ron, good comments.

    What publication seems to have done is place the whole patent examination docket on delay.

    Given this reality, we might give it more teeth and say that one must actually request examination, and make the examination fee large. Also provide that after 7 years of pendency without a request for examination, the application goes abandoned.

    This system seems more sensible to me.

  20. Anon November 5, 2016 10:09 am

    Mr. Heller,

    One rather large problem is that all you are doing is presenting a large fee for what applicants already want.

    The current system IS a “request for examination,” as that is what the filing does.

    Inserting fee-based actions (especially large fee based actions) plays directly into the hands of the Efficient Infringer crowd (those entities who would rather compete on existing size and resources).

    Such also runs counter to the historical set up of the US system, which was geared to be purposefully rather inexpensive so that cost was NOT a limiting factor.

  21. Ron Katznelson November 5, 2016 6:18 pm

    Ned,
    Your suggestion for a system under which “one must actually request examination” is not only reasonable but it has been supported by many, including David Kappos when he was at IBM. This method, used in other foreign patent offices, has been contemplated by the PTO in 2009 and rejected with no reasoned explanation. Because this is a very serious and sound concept, I have submitted detailed comments showing how the PTO can implement DE under existing statute and I further provided an analytical model showing that the PTO would save up to 25% in workload by adopting DE. See http://bit.ly/DE-Comments. Apparently, the problem was that implementing DE would have caused the PTO to suffer a transient decline in short term examination fee revenue of about $300 million per year. Fees collected to examine the pending applications have been largely diverted by Congress. Thus, for current examination of applications pending for several years, the PTO relies on fees currently collected for applications it will examine several years down the road.

    As to your comment that the PTO should then “make the examination fee large,” it seems to reflect a fundamental view that patent fees should be used to limit patenting, a view held by large market incumbents and IT Megatechs. Had I not known you better, I would not have known that this is not your personal philosophy. The problem, however, is that the PTO believes in this philosophy and thus abuses its fee-setting authority. It sets fees to “encourage or discourage a particular activity.” Imposing fees in that way, deviating from the actual costs of providing the service, is legally deemed a tax that requires an explicit delegation from Congress, a delegation that the PTO does not have. See my article: “The U.S. Patent Office’s Proposed Fees Under the America Invents Act – Part I: The Scope of the Office’s Fee-Setting Authority, 85 Patent, Trademark & Copyright Journal, 206 (Dec. 7, 2012) at http://bit.ly/PTO-fees-per-AIA-PtI . Rather than use the “stick” approach, charging according to costs properly creates the “carrot” for DE as applicants get to defer the examination fee, or save it altogether should they elect to abandon obsolete patent claims.

  22. Edward Heller November 7, 2016 3:49 pm

    Ron, what I was thinking about was lowering the initial filing fee substantially, effectively to cover only the initial paralegal review and publication costs. The ability to defer examination fees is also a boon to both the impecunious and to the large patent department that might have to balance filing quotas and budgets.

    I agree that the examination fee should cover only the patent office costs for examination. These of course would require fees for excess claims that fairly reflect their examination costs.

    One could almost say that in a first-to-file world, where resources may be slim to the small inventor, but where race to the patent office nevertheless remains as a Damocles sword, deferring costs should always be an option.

  23. Ron Katznelson November 7, 2016 3:59 pm

    Ned, I agree. And my comments specifically call for lowering initial filing fees in deferred examination cases (set based on cost of receiving but not examining the application). Deferring examination costs, not incurring examination costs if claims are later abandoned for obsolescence, and saving examination resources on such obsolete or useless claims, are all benefits of the DE system.