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[A Patent Lawyer]

This is my opinion on what this will lead to:

First, the quality of the applicant's search will be critical in litigation.  By that I mean that if an application examined under this expedited procedure is granted, then it will be almost per se invalid if the opposing side in litigation finds more relevant prior art than was found in the original examination search conducted by the applicant (or applicant's agent).  I believe that courts will hold this way because the expedited procedure is tantamount to a self-examination of the patent application.  Thus, the burden of conducting a thorough search and examination will be on the applicant.

Therefore, because quality searches will be paramount, more searching companies will spring up.  These searching companies will need experts who are very good at finding the closest prior art.  The experts will come from the rank of experienced examiners at the USPTO.  Thus, the first thing that will happen is that the PTO will begin to lose experienced and talented examiners to searching companies who will probably pay them twice as much.

Eventually, all that will be left at the PTO is examiners with less than 2 years of experience.  At this point, the PTO will outsource the examining of patent applications to the searching companies.  The searching companies will charge the PTO 3x what the PTO was previously paying patent examiners.

In summary, I believe this will lead to the outsourcing of patent examinations for 3x the price, when the PTO could just raise examiner salaries by 50% to 75% and get all the examiners they need right now.

Most of the above is partially tongue-in-cheek.  This actually seems like a pretty good idea.  What do the rest of the peoples here think?

[eric stasik]

I think this is an excellent initiative from the USPTO.

The quality of the search is ALWAYS critical. Applicants who do not do their own search for prior art, but allow the overworked examiners at the USPTO to conduct the search might find it easier (and less expensive) to get a patent issued, but they might also find it extremely difficult to license/enforce/litigate their patent.

Moreover, how does it serve an inventor to pay an attorney to prepare and prosecute an application without FIRST having a very good idea in advance that a patent will be issued having claims that are valid and enforceable? I have always been perplexed by applicants who do not want to have a comprehensive search performed BEFORE spending lots of money on drafting.

Finally, for an applicant THE BEST USE OF PRIOR ART IS IN PROSECUTION. Arguing validty over prior art in front of a jury -when it could have been dealt with in ex parte examination at the USPTO - is pennywise and pound foolish, if not straight out stupid.

I am a licensing guy. I promise you, people do not willingly pay license fees for patents they believe are invalid. I have lost count of the number of prospective licensors who have walked away with their tails between their legs when my searcher produced prior art that put their "broadest protection possible" claims into question.

When someone hands me a patent with three or four US patents listed as prior art - all found by the examiner - my immediate impression is that the patent can probably be successfully challenged. On the other hand, when there is an IDS listing prior art patents, as well as non-patent prior art, I am inclined to view the patent as a stronger one.

It seems to me that the burden to search for prior art should ALWAYS be shared by the applicant and the patent office - and not just in this special case.

Patent quality is not just the job of the patent office - it is the responsibility of everyone involved. Applicants and attorneys who criticise the USPTO for "poor quality" should first look into a mirror and see where the problem really lies.

As far as outsourcing goes, I don't see any problem at all with this - especially if it results in higher paying jobs attracting more skilled people into this business. That the employer might be someone other than the Federal government seems to me to be a good thing.

But of course, this is just my humble opinion.

/Eric Stasik

[Isaac]

I agree with Eric about the value of an applicant's search.   Applicants who search the prior art are more likely to get stronger and broader protection than those who do not.

I'm far more concerned about the need to make affirmative statements on the record about each "close" piece of prior art.    Surely the Applicant's decision about what constitutes close art, and the Applicant's distinguishing remarks are going to be litigation fodder.  

Also, in order to guarantee a 12 month final answer, it seems to me that some changes in PTO practice other than removing backlog must be involved.

I'm least concerned about the loss of "broad interpretation" of claims.   If the applicant gives the claims a narrow interpretation as evidenced by the remarks on the prior art, the Applicant is going to be stuck with narrow claims.

I don't have any problem with the PTO offering an optional path.   I'm just wondering under what conditions an applicant ought to take it.

[Isaac]

Link to summary of the proposed accelerated program:

http://www.uspto.gov/web/offices/com/sol/notices/71fr36323.htm

[JimIvey]

then it will be almost per se invalid if the opposing side in litigation finds more relevant prior art than was found in the original examination search conducted by the applicant (or applicant's agent).

I think this is somewhat over stated.  I don't think patents will ever be "almost per se invalid" without a dramatic change in substantive patent law (not just procedure).  If the examiner doesn't follow up with a supplemental search (my understanding is that every step of prosecution currently includes a supplemental search), the patent owner would simply be at greater risk of having unconsidered invalidating art out there.  But the burden to establish invalidity would be the same.  

I don't expect the examiner or the Patent Office to just rubber stamp these applications.  I'm betting the review by the Office will be as substantial as review of applications with a Petition to Make Special under the D-I-Y Office Action option.  And, as a result, I would expect the same presumption of validity to apply.

[Isaac]

One thing that bothered me about the accelerated procedure is that the applicant must agree t not to separately argue the patentability of any dependent claim on appeal.    Coupled with the limit to 3 independent claims, this would IMO require the applicant to give up significant ground in exchange for a fast turn around.    I'm not sure that there'd be any point to arguing the patentability of any dependent claims during prosecution if the examiner's rejections are not reviewable in any substantial way.

Maybe this procedure is a pilot program for some of the PTOs proposed changes.   If the program proves popular or successful measured in some other way, maybe parts of it will get imported into the normal prosecution procedure.

[Running Scared]

I appreciate the concerns of "A Patent Lawyer."

I have another concern. I think a somewhat adversarial relationship between an applicant and an examiner is a good thing. There are already too many Yes-Yes hand shake relationships in the world where foxes watch hen-houses. The proposals may put patent practitioners in a darker conflict than already exists in reporting search findings to clients. My concern is from the bottom of the totem pole at law firms. What partner wants an underling to report little likelihood of patentability to clients? ... in the real world folks ... where little likelihood of patentability may cancel a fee lucrative project. I have already many times been uncomfortable in reviewing prior art and feeling pressured to paint coal as diamonds. So now reviewing the prior art AND examination may fall under that pressure. THE IDEA IS BAD. I am fearful enough already about questionable IDS omissions. Law firm culture in the US is simply not ready to embrace examination ... and likely will never be ready.

With the world of cost-concious clients as it is ... I doubt any double digit percentage of clients would clamour forward to pay for the obvious extra costs in practitioner fees ... and that's a good thing. I have no doubt that many underlings would then have to choose between professional improprieties and keeping their jobs.

So this is a question for the underlings ... not for you partners ... Do you want to be put in that position? The partners don't respond to your e-mail questions around questionable tactics because they want you to do what they say ... without records that they said it. They want you holding the bag when the dust clears and OED calls.

I can only sleep at night by clutching to the hope that a Patent Examiner is going to do a thorough job in a fashion that is entirely free of the taint of conflict of interest. I don't want Examiners rubber-stamping the things I have to sign to keep my job.

Regarding my cynical view of partners, those of you reading this aren't likely within the profile that concerns me. You're too busy reading these posts. This website is an idealistic place. The kind of folks who concern me don't visit this place.

[eric stasik]

I'm far more concerned about the need to make affirmative statements on the record about each "close" piece of prior art.   Surely the Applicant's decision about what constitutes close art, and the Applicant's distinguishing remarks are going to be litigation fodder.

No doubt Issac and I share, to some extent, this concern. Let's face it though: prosecution is a bit of game where, on one hand, the examiner tries to get the applicant to say in clear text what her invention is and how it is different than the prior art. On the other hand the applicant and her professional representative try not to be so clear so that the "invention" becomes something of a moving target. This is part of the "broad" protection. You don't want to limit yourself in the future by being overly, or unnecessarily, precise during prosecution. As any comments from the applicant will be "fodder" for litigation, applicants prefer to say as little as possible.

I can find this infuriating. I have been in licensing discussions where patent holders have completely changed their tune when confronted with prior art or arguments against infringement. I even had one patent holder get his hat handed to him in a Markman report, only to "invent" an entirely new interpretation of his invention.

It is hard enough to determine what a patent covers when you know where the "metes and bounds" lie. It becomes very difficult when those boundaries are fluid. Lack of precision and clarity promotes fluidity.

The more I think about this initiative, the more I like it. I think the public will benefit from placing a greater burden on the applicant, the applicant will benefit from faster - and better - examination, and the beleagured patent system will benefit from enhanced public support that faster and higher quality examination produces.

As a patent professional, I feel the winds changing. There is a growing hostility towards the patent system from nearly every direction. Even engineers, who are the natural supporters of patents, are starting to question the value and importance of patents. It is actually quite disturbing.  

The patent system MUST change tack. Maintaining the status quo is not an option. If we - and by we I mean the professional patent community - do not take steps to significantly improve the situation at the USPTO, EPO, etc. we will find the pendulum swing back to the 1970s when patents were more or less worthless.

But, of course, this is just my paranoid opinion.

In any case, I think this is the sort of innovation that the USPTO desperately needs and I applaud John Dudas and the USPTO for coming up with it.

/Eric Stasik

[eric stasik]

My concern is from the bottom of the totem pole at law firms. What partner wants an underling to report little likelihood of patentability to clients? ... in the real world folks ... where little likelihood of patentability may cancel a fee lucrative project. I have already many times been uncomfortable in reviewing prior art and feeling pressured to paint coal as diamonds. So now reviewing the prior art AND examination may fall under that pressure. THE IDEA IS BAD. I am fearful enough already about questionable IDS omissions. Law firm culture in the US is simply not ready to embrace examination ... and likely will never be ready.

What partner wants an underling to report little likelihood of patentability to clients? A responsible, ethical one who is in the business for the long haul.  Moreover, applicants pay for and deserve accurate and unvarnished opinions from their professional representatives.

Yes, there is a built-in conflict of interest for agents and attorneys. If you make your living doing "prep and prosecution" it does not help your business model to tell inventors to NOT file an application for patent. I think most agents and attorneys deal with this in a pretty good way, but I have my doubts at times.

This conflict of interest is why I don't file and prosecute applications anymore. If I advise a client to file or not file an application, it makes no difference to my income. Consulting is a tough business - feast or famine - and I would not want periods of famine to influence the advice I provide. It's not for everyone, but it works for me.

/Eric Stasik

[Isaac]

Mr. Stasik, I don't think your observations are paranoid.   Instead I find them very perceptive.  I was very surprised by the response from some industry segments to the PTOs proposed changes to prosecution and continuation practice, to the KSR petition for cert, and to some extent by the support for legislative reform.   It increasingly seems that at least some players are coming around to positions regarding the patent system that the open source crowd has been advocating for years.

It will be interesting to see to what extent people will take the PTO up on their fast track.

[JimIvey]

FWIW, I've told a number of clients (potential and/or actual) that their proposed application was a "challenging" and/or "risky" one and explained that it meant significant odds of failure (or very narrow coverage) and more money.  I leave it to the client to decide whether to proceed.  But I don't lie or misrepresent -- or at least do my best to avoid doing either of those knowingly.  The clients who expect me to check my conscience at the door seem to find representation elsewhere.

I think one important consideration here is that the accelerated examination is optional.  If you find stuff you don't want to characterize on the record, simply file a garden variety IDS and allow the application to go through regular channels.

At this point, I doubt I'll use the new system much.  I'm expecting the search and analysis requirements to add $5-10k or more to the cost of prosecuting an application (in the short term), based on my experience with the DIY Office Action variety of Petitions to Make Special.  Even for those clients who could really use accelerated examination, I'm betting they'll go the normal route most of the time.

Regards.

[Isaac]

This conflict of interest is why I don't file and prosecute applications anymore. If I advise a client to file or not file an application, it makes no difference to my income. Consulting is a tough business - feast or famine - and I would not want periods of famine to influence the advice I provide. It's not for everyone, but it works for me.

The conflict really does not exist for people who rely on repeat business from a long term relationship with a client.   Such clients aren't going to keep giving business to practitioners who lie to them or who are wrong to often even for honest reasons.

[eric stasik]

I was very surprised by the response from some industry segments to the PTOs proposed changes to prosecution and continuation practice, to the KSR petition for cert, and to some extent by the support for legislative reform. It increasingly seems that at least some players are coming around to positions regarding the patent system that the open source crowd has been advocating for years.

It is not so surprising Issac. Companies like MSFT and Cisco built their businesses largely without patents and for them patents present more of a threat than a promise. They do not want to pay to use technology that they have been using for free.

On the other hand, they also don't want others (namely free and open source software) to use THEIR technology for free which is why MSFT, as one example, is massively increasing the number of patents they obtain.

The problem is not with patents; it is with patents and massively complex systems. CNET news ran an article back in 2002, which summed up the situation quite nicely:

"The laptop computer you may be reading this on most likely contains between 500 and 5,000 patentable inventions from different companies. If you also happen to be taking a certain prescription drug, that drug is more than likely covered by a single patent."

I use the terms discrete and complex. Products covered by one patent (or a few patents) are owned by the same entity are discrete. Products covered by hundreds or thousands of patents owned by dozens of different entities are complex.

The thing is this, the patent statute is, presently, one-size-fits-all and the strong absolute exclusionary protections needed for discrete technologies don't really work in complex technologies. The pharma companies push for stronger patent protections while others want to see it weakened.

The problem is not patents, per se, I believe the problem that has to be solved is what it means to have a patent. Should a patent owner be able to gain an injunction, or make an infringer pay a royalty on every copy of Vista because he or she might have a patent covering some very small portion of the whole? KSR might have to pay a royalty on the foot pedals it sells to Ford, but should Ford have to pay a royalty on the whole car because one part infringes a patent?

In software in particular, the courts don't make this distinction. Frankly very hard to determine the percentage of Vista's value attributable to any one patent so a royalty is generally paid on the whole.

(As an aside, if MSFT bought components from parts suppliers, the royalty base would be much easier and much fairer to determine. This is where a company like Intellectual Ventures could make a huge impact. Sourcing software "components" to large integrators - like Ford and its vendors - is one model of the future. I don't think this is IV's plan, but it might very well should be.)

Moreover, in a dispute between a patent holder and an infringer, the courts can't take into account that there may be hundreds of other patents for which a license might be paid. They treat every patent case as if the patent in question was the only patent and award penalties accordingly.

Consider, if you will, the 3G cellular technology. There are 40+ companies that claim to have essential patents on the WCDMA standard. As Ilkka Rahnasto from Nokia observed in his outstanding book Intellectual Property Rights, External Effects, and Anti-Trust Law: Leveraging IPRs in the Communications Industry, Oxford University Press, p. 175:

”As some commentators have estimated that royatly rates as high as 2% would be paid in the communications industry, the use of such royalty rates by each patent owner would cause the business to be unattractive to any company.”

Typical Finnish understatement, but the point is clear enough. This is the problem. It's not patents - it is what it means to have a patent.

As this problem is easily solved by doing away with patents entirely, increasingly this is being offered as a solution. This is, of course, not a good solution.

The good solution, however, is very, very, very hard to find. And it is even harder if we in the professional patent community do not make the effort to look for it, but throw our heads in the sand and pretend the problem does not exist.

Sorry for the derail.

So again, I am extremely encouraged by this program from USPTO. It does not solve THE problem, but it does address A problem in an innovative and forward looking manner. We need more of that kind of thinking if we are to solve the larger problems.

Regards,

Eric Stasik

[JimIvey]

This is all very thought-provoking, but I believe it's not a problem.  Yes, patents can take royalties of up to 2% and some devices (perhaps laptop computers) have thousands of patents on them.  Yet, we still see laptop computers selling and for very reasonable prices.  How could that be?

Well, it's actually quite simple: not all 2,000 contributors of innovative features get 2%.  In fact, very few, if any, get even 1%.  If two or more innovations are alternatives for each other, they compete -- or they share, further reducing the royalty rate.  If an innovation is easily avoided (i.e., has alternatives, patented or otherwise), it takes very little, if any, royalty.  

The bottom line is this: despite a tendency to treat them as such, patents are not commodities -- each is, by definition, unique.  2,000 patents covering a device in which total profits might be a few dollars share a relatively small piece of revenue whereas a single patent covering a multi-million-dollar pharmaceutical treatment is worth quite a bit.

If you presume that all patents are created equal and treat them as a commodity, yes, the system appears to be broken.  However, it seems to be functioning more or less just fine.  How could that be?  The answer is that each and every patent is unique and has a value commensurate with its influence in the marketplace.  Some patents have a huge influence and are therefore hugely valuable.  Other patents have a very small influence, if any, and accordingly have a small, if any, value.  By covering their own contribution to technology and no more, patents are self-regulating.

Personally, I see the decrying of a patent system run amok as much ado about nothing.

Regards.