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america invents act, IP, Patent

Patent Office Deputy Director Rea Lays Out Administrative Initiatives

Speaking to a group of IP lawyers at Mackinac Island, Michigan, Deputy Director Teresa Stanek Rea spoke candidly about changes to the USPTO under the leadership Director David Kappos. Among the topics she addressed were patent reform, administrative procedure, patent reform, international collaboration, patent reform, the COPA initiative, patent reform, patent office morale, patent reform, the patent back log, and also patent reform. (Are you seeing a pattern?) Also on the table is a 15% fee hike to be implemented within days of patent reform passage.

About patent reform, Ms. Rea was highly optimistic about the bill’s fate this term, saying, “We do think it’s highly likely that with this session of congress, we will have patent reform.” In particular, she expects congressional leadership, and in particular Senator Pat Leahy and Congressman Lamar Smith, for whom the “Leahy-Smith America Invents Act” was named. “You don’t put your name on a bill unless you think it’s highly likely that it will pass.”

The PTO is so optimistic about patent reform passage that the Deputy Director specifically asked that wanting to provide thoughts on how to implement the house version of the bill should contact the office now. Implementing reforms on the time frame requested in the bill will likely not provide the patent office to provide the transparency and account for feedback on the time scale that Director Kappos reportedly prefers. In a private conversation with Ms. Rea, she specified that because no Federal Register notice has issued, there is no official correspondence point for these comments, and interested parties should send their comments and suggestions “anywhere” at the USPTO.  The mailing address for the patent office can be found on their website, and any readers are welcome to contact me directly for Deputy Director Rea’s contact information.

Among the patent reform aspects that will require new rules are (naturally) implementing first to file, new procedures for non-signing inventors, and the new post-grant procedures. In particular, the patent office’s goal ultimately involves moving post-grant “re”-examination procedures to the (to be formed) Patent Trial and Appeals Board, and expects to employ between 200-300 administrative patent judges (APJs) if patent reform passes. The office currently employes less than 100 APJs.

About patent office funding, Rea was likely as disappointed as any other stakeholder when Congress first stole almost $100 M in patent office funding, and, in a stunning encore, told the office to pound sand in their request for a revolving fund to support PTO operations. However, despite these events (not to mention the diversion of nearly $1 B in patent office funds over the years), the administration continues to support H.R. 1249 in the hopes that fee diversion will end. Deputy Director Rea told the group, “We are optimistic with the statements made on the house and senate floor and promises that we’ve received.” She also mentioned a 15% fee hike that will go into place ten days after the bill is signed, creating a surplus to be retained by the PTO.

Getting down to specific dollars and cents, this year’s budget allocation of $2.02 B included a nearly $100 M shortfall imposed by Congress. The effect of the budget shortfall caused the office to postpone implementation of so-called “track one” accelerated examination, placed their hiring initiatives and overtime on hold, and reduced the scope of certain IT projects, international application prior art search outsourcing and employee training. Of these, the elimination of overtime might actually be the most significant, since Rea explained that overtime is actually a “moneymaker” at the patent office. The most skilled examiners were previously allowed to work overtime, which they naturally wanted to do. This resulted in applications being issued more quickly, which reduces pendency and ushers in lucrative issue fees and post-issuance maintenance fees.

About patent office morale and backlog initiatives, Deputy Director Rea noted several improvements. In particular, the allowance rate dropped under the previous administration thanks to patent quality review initiatives that reviewed and criticized the Examiners’ efforts after allowance. According to Rea, this discouraged Examiners from allowing applications, causing the overall allowance rate to drop to 42%, thereby giving birth to the hefty backlog. Now, instead of criticizing an Examiner’s work on the back-end, support is provided on the front-end to help out in the early examination phases. Among the new quality metrics being tracked are the “First Action on the Merits Search Review” and “Complete First Action on the Merits Review” to ensure that USPTO best practices are conformed with early in the process. Rea specifically lamented the problem of Examiners who, after multiple office actions and an interview, would tell Applicants that the Examiner would conduct a new search. Attrition in the examining corps has dropped to between 2-3%. Again, unlike the previous PTO administration, Rea claimed that Examiners truly “buy-in” to the changes Director Kappos is initiating.

Meanwhile the “COPA” initiative hopes to clear out the oldest patent applications. Remarkably, numerous applications have waited more than five years for a first office action (see graphic below). The office’s goal, by 2014, is for every application to receive a first action within 10 months of filing, and final disposition within 20 months. Another initiative having a positive impact is the “First Action Interview” program, which is now open to any application without a first office action. Applicants that participate in this program will receive a search report and “mini” office action to facilitate discussion with the Examiner. First action allowance rate under the program is 33%.

Number of Applications Without First Action Based on Age (in Months)

On international harmonization and foreign patent office collaboration, Deputy Director Rea spoke about her recent meeting at the IP5, where representatives of patent offices from the US, Japan, China, Korea and Europe met in Tokyo to discuss a common classification system, and a single portal system where Examiners from any country could simultaneously get information about applications pending in other countries. The event included meetings for both the deputies of these patent offices, as well as the patent office leaders themselves. Unfortunately, Deputy Director Rea stood in for Director Kappos and attended both meetings. While Rea is obviously qualified to represent the interests of the USPTO, it’s extremely disappointing that Director Kappos couldn’t find the time to personally meet with his Asian and European counterparts.



3 thoughts on “Patent Office Deputy Director Rea Lays Out Administrative Initiatives

  1. Patrick,

    If the American Invents (not) Act is passed, the PTO will not need much in the way of funding. The AIA will completely gut US patent law and the number of patents will likely drop precipitously – see what happened to the number of patent applications in the late 1970s when antitrust rules made patents worthless pieces of paper.

    Posted by dbhalling | July 17, 2011, 2:36 pm
  2. The news of a delay (due to the debt ceiling crisis) should come as a relief to opponents of patent reform. It may be an unrealistic scenario, but considering the circumstances, perhaps Congress will decide that, in the interest of just getting some kind of patent reform passed, it will enact a bill that consists solely of provisions ending fee diversion and granting the USPTO fee-setting authority, and will completely drop all of the controversial provisions (preferably those in the House version). Unrealistic, yes; but we can hope.

    Posted by patent litigation | July 18, 2011, 9:58 pm


  1. Pingback: Another Wolf Cry? Patent Reform Vote Imminent « Gametime IP - September 5, 2011

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