Last week, The Kojo Nnamdi Show on Washington, D.C. public radio station WAMU had two programs about patent reform. On Tuesday, there was a panel discussion on “Innovation and Patent Reform.” On Wednesday, Kojo talked with USPTO Director David Kappos about “Updating the U.S. Patent Office.” While I usually cringe when mainstream media discusses patent issues, I found these shows to be very good, even if I didn’t agree with everything that was said. One issue I would like to press Director Kappos about is his assertion that the pending patent reform legislation will help the USPTO solve the problem of the examination backlog.
The Examination Backlog Problem
If you have filed a U.S. patent application, you are well aware of the examination backlog problem. According to the USPTO’s Patents Dashboard, there are over 700,000 patent applications awaiting examination. Pending applications experience an average 26 month delay before receiving the first action from the examiner, and are pending for an average of almost 34 months.
Patent Reform: The Leahy-Smith America Invents Act
Now that both the Senate and the House have passed similar versions of patent reform (now referred to as the Leahy-Smith America Invents Act), it is getting more and more likely that some version of patent reform will become law, and more and more likely that we have a pretty good idea of what it will look like. Some of the major changes in the bills passed by both the Senate and the House include:
- Moving the U.S. from a “first to invent” to a “first to file” system
- Creating a new “derivation” proceeding to address certain situations where the “first to file” derived the invention from an earlier inventor
- Deeming certain tax strategies to be in the prior art (and hence unpatentable)
- Creating new post-grant review proceedings
- Ending the diversion of USPTO user fees to the U.S. Treasury’s general fund
- Eliminating the “best mode” requirement as a basis for invalidating a patent
- Providing for limited prior user rights under certain circumstances
- Limiting standing to bring false marking cases
Fixing the Backlog?
When Director Kappos expressed his view that patent reform will help the USPTO clear the backlog, reduce the time it takes to get a patent to 18-20 months, and put more Americans to work as innovators are able to move their ideas to the marketplace more quickly, the only provisions of the patent reform bills that came to mind are those relating to USPTO funding and spending authority. However, Director Kappos also touted the “first to file” change as having the potential to simplify the patent process, permitting inventors to know their rights more clearly, and allowing the USPTO to decide patentability more efficiently. You can count me among the skeptics.
First to File Is Not The Problem
While I think the “first to file” provisions may impact more patent applications than many people realize, I do not believe that the current first to invent regime has much—if anything—to do with the examination backlog or uncertainty surrounding patent rights. Yes, there are cases where a “first filer” loses out to a “first inventor,” but if I am reading the USPTO’s statistics correctly, there are only 44 pending interference cases. To put that number in context, there are over 22,000 pending appeals from examiner decisions. Clearly “first to invent” is not the rate-limiting step here.
The “first to invent” issue also comes up in ex parte prosecution, when an applicant uses evidence of prior invention to “swear behind” a reference that was published less than one year before his filing date. But, these issues come up much less frequently—and usually are resolved much more easily—than other issues such as written description, enablement and obviousness. Thus, I doubt that taking away the ability to antedate an independent, third party reference will make any dent in the examination backlog.
Patent Reform Will Cause More Delays and Create More Uncertainty—At Least At First
Many of the provisions of the patent reform bills will complicate proceedings at the USPTO, at least over the next several/many years it will take to understand what the provisions actually mean. If the Leahy-Smith America Invents act is passed, the USPTO will have the first stab at interpreting its many new substantive provisions when it promulgates rules to carry out the changes. As patent applications are prosecuted under the new regime, the Board, the District Court and/or the Federal Circuit will be called upon to iron out details and settle disputes over the meaning of specific terms. Until then, we will be prosecuting patent applications and evaluating patents without a clear understanding of what the new law means.
Patent Reform Will Tap USPTO Resources
From a logistical perspective, the USPTO will have its work cut out for it if and when patent reform becomes a reality. The USPTO will have to study the law, promulgate regulations, train its personnel on the “first to invent” provisions and the derivation and post-grant review proceedings (among other changes), and educate the public. The USPTO will need every penny of its user fees in order to take on these new responsibilities while still maintaining its daily operations.
I’m not saying that patent reform is bad, or that no good will come of it. I am just having a hard time understanding those who are hailing patent reform as a panacea for all of the problems at the USPTO. While I wholeheartedly support letting the USPTO keep and spend its user fees, I am not convinced that the patent reform aspects of patent reform will streamline patent examination or enhance the certainty of patent rights.