“Chien argued that employing a separate prior art search system as is done at the EPO would increase the efficiency of prosecution because applicants would be more likely to voluntarily withdraw their applications after receiving their search results.”
On October 30, the Senate Judiciary Committee’s Subcommittee on Intellectual Property heard from five witnesses on ways to improve patent quality at the United States Patent and Trademark Office (USPTO). The Subcommittee subsequently posed questions to the witnesses, including professors Colleen Chien, R. Polk Wagner, and Melissa Wasserman, to supplement their testimony. Those witnesses have now submitted their responses, which expand upon their various suggestions for improving patent quality.
Delving Into Examination Time Stats
Professor Melissa Feeney Wasserman of the University of Texas at Austin School of Law told the Subcommittee during the hearing that more examination time will result in higher quality examination at the USPTO. In response to Senator Thom Tillis’ (R-NC) request for more information on this point, Wasserman said that, at the USPTO, the complexity of the invention dictates the hours given to patent examiners, and the higher the pay grade of an examiner, the fewer hours that are granted to them for review. Wasserman’s research thus followed individual examiners throughout their careers to track the evolution of their examination behavior as less time was allotted to them upon promotion. Her research found that as examiners are given less time to review applications, they become less active in searching for prior art, less likely to make “time-intensive rejections” and more likely to grant patents. Exemplifying this, her research indicated that an examiner at GS-level 14 has a grant rate that is 13% to 29% higher than when they were at GS-level 7, without any indication that those at higher levels are given “more patent-worthy” applications than those at lower levels. Wasserman argued that giving examiners double the examination time would cause the grant rate to fall by roughly 19%, or 80,000 issued patents per year. These patents, according to the research, would likely be invalid if issued, as evidenced by the number of U.S. patents granted that have been rejected by the European Patent Office (EPO) and the Japanese Patent Office (JPO).
Second, Wasserman answered a question on how to accomplish allotting examiners more time while reducing prosecution fees, and how the costs of increased examination time would be paid for. Wasserman suggested that improved examination could decrease the number of rounds of review at the USPTO, increasing financial savings for applicants, but it could also mean more attorney costs as attorneys spend more time responding to better thought-out and potentially complex arguments from examiners. Her research suggested that extended examination times may save the patent system $602 million per year, and no evidence exists of an increase in legal fees. Furthermore, Wasserman proposed increasing examination fees and doing away with issue fees to cover any increased examination costs, while offering a rebate to small and micro-entities to continue making the patent system accessible.
Third, Wasserman was asked by Senator Chris Coons (D-DE) if she disputed the USPTO’s numbers indicating that examiners were applying the statutory patentability criteria correctly between 92% and 97% of the time. Her research found that the year of training and the culture of the Office at the time the examiner was hired had more to do with patent granting behavior; for instance, examiners hired into a permissive culture have higher grant rates than those hired into a restrictive culture. Therefore, she said she believes the USPTO is being overly optimistic in its estimate.
Lastly, Wasserman denied the Subcommittee’s suggestion that she believes lower grant rates necessarily imply higher quality patents. Instead, she argued that her research looks for markers of low-quality patents, one of which happens to be the excessive granting of patents at the USPTO.
Professor Colleen Chien of Santa Clara University School of Law, responding to questions posed by both Tillis and Coons, agreed with Professor Wasserman’s view that better search initiatives lead to higher quality patents, further offering evidence that examiners search and apply non-patent literature, which generally takes more time than is currently allotted, as prior art to a lesser extent than PTAB judges, applicants, or European examiners. She concluded that the USPTO should focus not only on time allotted to examiners, but also on strengthening team approaches among examiners and quality search/vetting (curation).
In comparing patent quality between the European Patent Office (EPO) and the USPTO, Chien found that outcomes in inter partes review (IPR) proceedings and German nullity proceedings were very similar. Additionally, because the law is ever evolving in the United States, she argued that it can be challenging to make an objective claim about U.S. patent quality. However, regarding process claims, she argued that it is undisputed that the EPO has the highest quality claims. Diving deeper, the EPO spends 30-32 hours on examinations, whereas the USPTO only spends 21, the examination costs at the EPO are double what they are in the United States, examinations are conducted by teams at the EPO opposed to individuals, the prior art search is separate from the examination at the EPO, and the EPO only allows one refiling for mistakes. Regarding her opinion on search strategies that could be employed, Chien argued that employing a separate prior art search system as is done at the EPO would increase the efficiency of prosecution because applicants would be more likely to voluntarily withdraw their applications after receiving their search results. She claimed that by taking more time to search before an examination, a resolution may be achieved more quickly “as the parties come to a meeting of the minds” sooner.
Chien further responded to a question asking how greater collaborative efforts could be put in motion to identify the most relevant prior art during examination. She argued that the job of the USPTO is to evaluate applications in view of the most relevant prior art, and in doing so, examiners should only use curated references that include relevant context with correct keywords and indexing. She also argued that curing data deficiencies, such as making regular updates to datasets, would greatly facilitate better analysis of the patent examination process. Regarding Senator Richard Blumenthal’s (D-CT) the Patent Pro Bono Program, which ensures that pro se inventors lacking financial resources have access to the patent system, Chien urged attorneys to continue helping applicants through issuance because small entities continue to drop out of the process at a higher rate than large entities.
Harmonizing Standards to Improve Quality
Professor R. Polk Wagner of the University of Pennsylvania Law School expanded in his written response on the suggestion that claim construction standards should be the same across the district courts, the PTAB, and at the USPTO, which still uses the “broadest reasonable interpretation” (BRI) standard for examination. The Subcommittee asked if the USPTO would still be able to identify the full scope of the relevant prior art and enforce statutory clarity requirements under the claim construction standard articulated by the United States Court of Appeals for the Federal Circuit in Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005). Wagner emphasized that this would still be possible and that the USPTO should use the aforementioned claim construction standard for examination purposes. He argued that the driving factor in poor quality patents is uncertainty regarding patent scope; thus, having a uniform claim construction standard would resolve this issue with claim language being given the same meaning across the board. Additionally, he argued that the scope of the prior art search would not be reduced because examiners could search for prior art that is “reasonably related” to the scope of the claim language, and therefore review the same subject matter as would be reviewed under the BRI standard. According to Wagner, higher quality patents would be issued: 1) due to more certainty as to the operation of the patent system; and 2) through homing in on the technical expertise of examiners to bear on the problem of claim construction.
Wagner also agreed with Wasserman on raising examination fees for large entities but was cautious regarding higher fees directed toward smaller entities and the front-loading of issue and maintenance fees. According to Wagner, the inventions most important to the patent system are those “wherein the benefit to society is potentially quite large, but development would not likely occur without the (modest) security of a patent grant.” He also expressed mixed views on increasing the time allocation for examiners. Although he agreed that more time would likely yield higher quality patents, he argued that harnessing the knowledge of the patent applicant in individual applications should be a top priority, in addition to offering faster processing times for applications with pro-quality features or offering applicants a choice in priority tracks proportionate to the fees paid. He maintained that taking this tailored approach would incentivize patentees to learn more about their inventions, thus increasing the quality of examinations. He also made known his desire to expand the Patent Pro Bono Program.
Lastly, in clarifying his statement that the switch from a first-to-invent to first-to-file system harmed individual inventors and small startups, Wagner explained that large firms have an advantage in the new system with well-established patenting processes and in-house counsel. Although, he explained, the U.S. switch is too new to yield any meaningful evidence as to the effect on individual patentees, the results from the shift in the Canadian system suggest that the share of individual patentees never recovered after the switch, and therefore the United States should expect the same.
Teresa Stanek Rea of Crowell & Moring, and former acting and deputy director of the USPTO, also submitted responses to questions form Tillis, Coons, and Senator Mazie Hirono (D-HI) expanding on her claims that quality can be improved via international work sharing efforts and crowd sourcing of prior art searches.
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