Wednesday, September 08, 2010

Lemley on Fixing the U.S. Patent Office

What WON'T work:

Preventing Fee Diversion:  "[S]topping fee diversion is hardly a panacea. In the last several years, the UPTO has been fully funded – that is, Congress didn’t divert fees.  Nonetheless, the backlog grew.  The addition of 10-­20% of operating revenue wasn’t enough even to enable the PTO to hold steady."

Increasing PTO Fee-­Setting Authority:  "[I]t is likely not a good idea simply to spend more money to weed out bad patents.  Most of that money will be wasted on applications that are of no consequence to anyone.  And because of the structure of the examination system, it might not even succeed in weeding out bad patent applications.  Even if it did, however, the current fee structure makes patent quality self-limiting . . . the more bad patents [the USPTO] rejects, the fewer patents will pay maintenance fees, and the less money it will have to conduct a detailed examination."

Retaining Patent Examiners:  "There may well be benefits to reducing examiner attrition. But the evidence suggests that weeding out bad patents is not among them. Empirical research by Lemley and Sampat shows that the longer examiners spend at the PTO, the less searching they do, the less likely they are to issue initial rejections or demand claim amendments, and the more likely they are to ultimately grant a patent. (Lemley & Sampat, 2010). It is the most junior examiners who are most likely to reject applications. The reason is not precisely clear, but may have to do with increased workloads on senior examiners, or with acculturation into a corps whose ethos is to grant rather than deny patents."

Outsourcing Patent Searches:  "[R]ecent empirical evidence suggests that it might not work. [A recent study] found that [examiners] rely almost exclusively on art they find for themselves, not art submitted by applicants. And that doesn’t appear to reflect either applicants drafting around the art they found or the weakness of that art; U.S. examiners largely ignored even art that was submitted because it was found important by a foreign patent examiner during examination of a counterpart application. (Cotropia et al., 2010). If examiners are psychologically primed to rely principally on things they find for themselves, it won’t help to have others provide them with the best art. And it might even hurt, causing examiners not to focus on the best prior art."

What MIGHT Work:

"Second Pair of Eyes": 

Shortly after the Federal Circuit held business methods patentable in 1998, the PTO was inundated with business method patent applications. Most of those applications went to class 705. Indeed, by 2001 class 705 had the largest application volume. In response to this flood, the PTO initiated a specific “quality control” measure in this class in March 2000: the “second pair of eyes” review (SPER), under which applications are subjected to mandatory assessment by more than one examiner before being allowed. (Allison & Hunter, 2006). Requiring two examiners to agree seems to have had a dramatic effect: a 2009 study found that class 705 has the lowest grant rate among high volume classes. (Lemley & Sampat, 2008). One possible explanation for the low grant rate in this class is that the second pair of eyes is working, and that the grant rate reflects better rigor during examinations, rather than application volume. The fact that SPER leads to more rejections in Class 705 doesn’t mean it is an unalloyed success . . . Interestingly, the PTO recently shut down the SPER program in business methods. Too much success, it seems, carries its own risks.
Changing Examiner Incentives:
[PTO] human resource policies could be brought to bear, training examiners to search better, or giving them more time, or finding other ways to debias them. And it seems obvious – though likely politically infeasible – that the rules should not treat allowances differently than rejections. (Katznelson, 2010). These are good ideas, and they are worth exploring further. But implementation may be politically difficult. And some of the possible explanations point in different directions: should we give examiners more time to search, or less, for example?
Tiered Review (AKA "Gold Plated Patents"):
The Patent Office should focus its examination resources on important patents and pay little attention to the rest. But it is difficult for the government to know ahead of time which patents are likely to be important. There are two groups, however, that have better information about the likely technological and commercial value of inventions: patent applicants and competitors. To harness information in the hands of patent applicants, we could give applicants the option of earning a presumption of validity by paying for a thorough examination of their inventions. Put differently, applicants should be allowed to “gold plate” their patents by paying for the kind of searching review that would merit a presumption of validity. (Lemley et al., 2005) An applicant who chooses not to pay could still get a patent. That patent, however, would be subject to serious—maybe even de novo—review in the event of litigation. Most likely, applicants would pay for serious review with respect to their most important patents but conserve resources on their more speculative entries.6 That would allow the Patent Office to focus its resources, thus benefiting from the signal given by the applicant’s own self-interested choice.
Read/download: Mark A. Lemley, "Can the Patent Office Be Fixed?  (link)

12 Comentários:

Anonymous said...

"What WON'T work:"

Lemley

Anonymous said...

"Empirical research by Lemley and Sampat shows that the longer examiners spend at the PTO, the less searching they do, the less likely they are to issue initial rejections or demand claim amendments, and the more likely they are to ultimately grant a patent. (Lemley & Sampat, 2010). It is the most junior examiners who are most likely to reject applications."

Because we all know that Reject = Quality. Oh wait, that was a Dufas line - Kappos said something different, didn't he?


Clearly this shows the unstoppable bias of Lemley - newby examiners who don't know jack and have to be trained in the proper application of law are better examiners than seasoned vets who have grown both to know the technology they are in and appreciate the law - because they reject less patents.

Anonymous said...

There is no question that Lemley is a patent-hater. What about applying the Second Pair of Eyes concept to final rejections, or, better yet, non-final rejections, to ensure that each prosecution gets off on the right foot?

Anonymous said...

...most junior examiners who are most likely to reject applications. The reason is not precisely clear, but may have to do with increased workloads on senior examiners...

Actually, I don't think the issue is that difficult to figure out. Workload is one of two main reasons why senior examiners are less likely to reject claims or demand claim amendments. The other main reason is that after obtaining sig, examiners don't need to consult with someone else on allowance, which for junior examiners can take a lot of time and effort. I've kept track of the quality of office actions of several examiners before and after they've obtained signatory authority. Here's what I've noticed:

Before sig authority, when they had less production requirement and it might take less time to just reject claims than to seek approval from someone else and convince them of the allowance, they were more likely to reject.

After sig authority, they have greatly increased workload and no longer have to consult someone else on allowance. These two factors lead to "easier" allowances.

The problem, as I see it, is that many, many times the increased work load for senior examiners results in allowance of claims that should have and could have been validly rejected as obvious. Instead, what many senior examiners seem to do is make sure there's no glaring 102 reference for the claims and allow the case. There's no error for the examiner if they miss a 103 rejection, but there is if they miss a 102. Hence the senior examiner is effectively eliminating 35 USC 103 from consideration in many cases.

With junior examiners, they're more likely to have the time to find references to make that valid 103 rejection, so these rejections are made. The problem with them though is that because it can take so much time and effort to convince someone for permission to allow (as opposed to just sending out a rejection) is that many times claims that should have been allowed are instead improperly rejected. Despite the decreased production requirements for junior examiners, they too may not have enough time to convince the senior examiner for permission to allow (if they can even find someone willing to look over their cases).

So there you go. On the one hand you have the senior examiner who is willing to give you easy allowances, but those allowed claims may very likely be found obvious if you try to enforce them. Then on the other hand, you have the junior examiner who is likely to improperly reject your claim which should have instead been allowed, but any allowances you do get from the junior examiner is more likely to actually be non-obvious and therefore stand up in court or re-exams.

EG said...

I'm not a fan of Lemley, but not all he says is off target. For example, preventing fee-diversion would help but won't completely solve the backlog. Giving the PTO fee setting authority is analogous to letting the fox guard the chicken coop.

But what affects greatly the credibility of what Lemley says in this paper is that he's never been an examiner, or even a prosecuting patent attorney. That he discounts the impact of retaining patent examiners is evidence of such naivete. When you have ~50% of the new examiners leaving within 3 years, that affects not only the stability of the PTO examining corps, but more importantly means you're wasting resources training new examiners. This goes beyond the issue of "weeding out bad patents" which, in my view, is a red herring. No process is perfect in "weeding out the bad" and nothing that's done to improve in the PTO in this regard will make it a perfect screen.

What's more important to the patent examination process is making it more efficient. Put differently, the key problem is the backlog of applications, not "weeding out of the bad patents." The 3-tiered approach and especially deferred examination could help make the the examination process more efficient. But if you have a retention problem where ~50% of your newly hired workforce is turning over within 3 years, there's no way you can make the examination process more efficient.

What would address this retention problem in one key respect (pay adequate to meet the regional standard of living) is to create satellite offices for the PTO outside of the DC area and in areas where the standard of living isn't as expensive. In other words, make your work environment more attractive so new examiners might consider making the PTO their career. Admittedly, satellite offices is just one suggestion for making the PTO work environment more attractive to alleviate the retention issue. But Lemley's article doesn't even suggest this as a possibility which shows me he doesn't understand (or address) what's more important to the examination process which isn't "weeding out bad patents," but making the examination process more efficient.

Les Virany said...

The place is top-heavy and training is bloated with gurus who teach things like text searching, which still is not officially recognized by the examiner's job description as a substitute for class searching. Contact is not permitted between probationary examiners and the examining 'corps' so no actual art-specific training ever takes place before the new examiner is under the spotlight of 'production' with no mentoring and an ineffective union. Add to that the red tape involved in making each office action into a 10- or 15-page legal case under fluid statues and you get what the office is today - a mess. Juggling the count system is not going to help.

Anonymous said...

I completely agree with the need for better retention and that the PTO should look into satellite offices again despite the hoteling program. It's not exactly a secret that the IT infrastructure at the PTO can't reliably handle the current hotelers now. Set up mirrored data centers at the satellite offices to eliminate having to use vpn and allow those who don't want to work from home to live somewhere cheaper.

Anonymous said...

"And some of the possible explanations point in different directions: should we give examiners more time to search, or less, for example?"

How about we break out of the paradigm that "one size fits all" and allow each application to be examined on the merits of that application? This is a clear direction from the Supreme Court when it continuously slaps down Brightline Rules.

Anonymous said...

"One possible explanation for the low grant rate in this class is that the second pair of eyes is working, and that the grant rate reflects better rigor during examinations...The fact that SPER leads to more rejections in Class 705... Interestingly, the PTO recently shut down the SPER program in business methods. Too much success, it seems, carries its own risks."

The bias is downright palpable. Success is clearly aligned completely with rejections. Merit of any kind is ASSumed to be a nullity for the wholesale entire group of applications.

If one paid any sort of attention to the examiner's viewpoint, one would see that the Second Pair of Eyes program absolutely did not increase examination rigor - it operated purely on a Gestopo style fear factor, and drove true examination quality through the basement. The RCE backlog and the wall of Appeal requests can both in large part be directly related to the fact that applicants know that they have been given a poor examination and the applicants want what they deserve (an examination on the actual merits) and are willing to keep trying to get that.

Lemley has zero credibility.

Even if I were against patents, such blatant disregard for professionalism, such scurrilous and uncontrolled venom would give me pause to be associated with any Lemley article.

patent litigation said...

There are many good arguments for reforming the patent law system in favor of a multi-tiered approach that gives different degrees of patent rights to different types of patents (and would, correspondingly, charge different fees). In any case, it is clear that the traditional patent law structure is no longer meeting our contemporary needs. Unfortunately, I'm not sure Congress is capable of enacting meaningful patent reform ... although I have recently heard at least one insider say that passage of a reform bill is still possible this year.

Anonymous said...

"There are many good arguments for reforming the patent law system in favor of a multi-tiered approach that gives different degrees of patent rights to different types of patents"

I have not heard of one, much less many, good reason to move to a multi-tiered approach.

Anonymous said...

Let's start with what "Patent Litigant" Said about "although I have recently heard at least one insider say that passage of a reform bill is still possible this year."

Considering the premise that ALL readers of this blog are Patent Professionals, in one way or other -- I'm surprised that no one has commented on the FACT that a "Patent Reform" bill would have nothing to do with the problems that even my friend LEMLEY understands. ALL these are clearly problems with THE U.S. PTO!

IF (god forbid) this anti-American Patent, kill-the-Inventors bill, like S.515 passes -- it is designed to exacerbate to the point of immobility -- the progress of a patent through the system and would greatly INCREASE the backlog -- which I believe is actually near one point two MILLION pat apps.

So please consider distinguishing between the System and the PTO.

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