Patently-O Bits and Bytes No. 98: Economic Downturn and the PTO

Marketers see an economic downturn as a time to emerge with a new business paradigm. Better start working.

• Hearsay: A Patently-O reader paraphrased the PTO's James Toupin who spoke at a recent USC conference: "New patent filings are down 16% so far in 2009." Patents were previously thought to be rather inelastic to price. There is a confluence of issues: (1) downturn in the US economy reducing cash-on-hand and a strong dollar discouraging foreign investment; (2) Increased PTO bureaucracy making it more difficult to obtain a patent with a valuable scope; (3) increased in patentability standards making it more difficult to obtain patent protection; and (4) decreased potential returns in litigation.
• PTO Budget: The falling numbers has the PTO worried about its budget. I would say that the falling numbers are signs of much larger worries than just the PTO budget.
• PTO Cuts: PTO Director Doll was previously reported as saying that the PTO has stopped hiring.
• PTO Cuts: Now, the PTO has announced that all legal and technical studies programs have been suspended because of "budget constraints." One PTO reader noted that the Examiner's Union (POPA) knew about the cuts to this cherished development program for the past week, but remained silent.
• Superduperextraordinary: CCIA calls for further tightening the standard for patentability. (Via Greg Aharonian)
  

Comments

[You reap what you sow]

Cause and effect.

Be hostile to patents, patent owners, patent applicants, and patent practitioners; impose silly 101 rejections that require minor changes to overcome and serve no real purpose except act as a fly in the ointment; drag applicants through countless reopening of examinations because some examiner or some QAS "knew" the application wasn't patentable but didn't have the prior art to prove it; begin the process of imposing onerous after onerous rule packages that will greatly increase the cost of obtaining a patent, and guess what happens? Companies have found better things to do with their money than to fund the inept, bloated carcass that is the USPTO.

[Humorless Democrat (that's redundant)]

But ain't it great that them new rules to reduce that backlog - most of 'em, anyhow - surived? Gawrsh, with the number of filin's down and more sure ta folla with th' 5/25 limitation and the ESD's, there just might not be any overtime pay left there for the 'xaminers. How'll they all make their quotas? Oh, I know - with unlimited continuations intact, and a higher filing fee than for an RCE, we might see more "reject, reject, reject".

Or maybe th' applicant's will just give up and they'll have to fire some 'xaminers due to reduced revenues.

I nominate 6 as the first to go.

[S]

Evidence of the PTO killing the golden goose(i.e. innovation) with the New Rules... or merely results of the economy slowing down.

Not only do they appear to be solving the problem of the backlog... They appear to have solved the problem of people FILING PATENTS also.

[PTO social security]

I fear that the money generated by and required to examine the backlog has already been spent. That leaves new application fees and maintanence fees to pay for examination of the backlog. Both of those are dropping (due to both the downturn and the PTO's poor management under Dudas). I predict either a miraculous uptick in the allowance rate (pto line: "patentees finally started filing worthwhile applications in response to our quality measures!") or the PTO going to Congress asking for money (pto line: "you owe us for all the fee deferral in the past").

[Tazistan Jen]

The reason my clients aren't filing many patent applications is because the economy is horrible and they are cutting costs wherever they can. They don't even know about most of the stuff we talk about here - that sort of thing takes a long time to percolate through to businesses.

[me]

Doll repeated all of this on a BIO call recently. He was there trying to figure out how much companies were cutting budgets. BTW, late fees are down hugely, even more than filings (did he say 40-50%?).

I think they made this bed and they deserve it. Now they want more filings and fees after sticking it to the bar for years? Ya, like we will have your back after the way you treated us...

[me]

S-

Didn't some suspect Dudas' real goal was to ruin the patent system? Well, looks like he may have succeeded. Just think how much larger the revenue fall off would be if the new rules had been implemented? LOL!!!!

[me]

Tazistan Jen-

That may be true for smaller filiers, but the big boys with big in house departments are very aware of how the new patent reform act, new rulings, and the new rules, if partially implemented, will cause a rather quick change, for the worse, in patent filing numbers. Bilski has already ended alot of biz method filings (this is likely a good thing).

[Inviting body punches]

My client base has basicallly dried up.

I still do lots of consultations, but with my advice, many potential clients choose to not file in this climate of increased costs and uncertainty (all small entities).

I can't blame them. If you're going to invest in IP, better ROI and more certainty in business marks, etc..

The cruel irony is, that while I am looking for work, I will now finally have enough time to file my OWN applications!

[S]

To Me-
the theory that Dudas (Bush's buddy) would surreptitiously "ruin" the PTO in the same modus operandi of other shady Bush special interests have effected us would not surprise me at all.
The puppets always dance... If I were Dudas, I would feel worse than Cheney or Bush should feel right now.

[Tazistan Jen]

"That may be true for smaller filiers, but the big boys with big in house departments are very aware of how the new patent reform act, new rulings, and the new rules, if partially implemented, will cause a rather quick change, for the worse, in patent filing numbers."

True. I don't have many of those clients, so I wasn't thinking about them. They are the ones who pay large entity fees too.

[6]

It's true, we have no monies.

Lol, you guys take this sht way too seriously. What do you expect to happen after KSR, Bilski, and a major econ downturn? Imo we should cut back on the OT expenditures, reimplement community day, and we're golden :) Also, up the filing fee by 1/2. Then we're shiny golden. And Jen, you're right that most apps wouldn't know wtf Bilski was about, but that doesn't mean that their attorney looking over their newest biz method idea might not give them quite as good of a prospect for a patent, leading them to not file.

[Malcolm Mooney]

"A Patently-O reader paraphrased the PTO's James Toupin who spoke at a recent USC conference: "New patent filings are down 16% so far in 2009." Patents were previously thought to be rather inelastic to price."

LOL. And housing prices were just going to keep going up, UP, UP!!!!!

The decrease in filings is a much needed correction, albeit quite a few years too late. You folks have heard of the housing bubble that begat the mortgage crisis that begat the banking crisis?

Frankly the comments here expressing glee over the cutbacks at the PTO are quite pukeworthy as they appear to be coming from the same crowd of mouthbreathers who believe that the patent bubble was a sign of a healthy patenting system, rather than a system that was totally out of control and catering to the least innovative elements in our society (unless of course you find new ways of laundering money worthy of patent protection).

[David Stein]

"Be hostile to patents, patent owners, patent applicants, and patent practitioners; impose silly 101 rejections that require minor changes to overcome and serve no real purpose except act as a fly in the ointment; drag applicants through countless reopening of examinations because some examiner or some QAS 'knew' the application wasn't patentable but didn't have the prior art to prove it; begin the process of imposing onerous after onerous rule packages that will greatly increase the cost of obtaining a patent, and guess what happens? Companies have found better things to do with their money than to fund the inept, bloated carcass that is the USPTO."

Quoted for truth.

Frankly, I think patent owners need to take the next step. "Voting with your wallet" is great, and often the only thing that will get through to management. But now that we have the attention of the PTO, it might be helpful to tell PTO management what it needs to do to restore filings. Clearly, it hasn't gotten the message yet - even as demand for its service ebbs, the PTO continues to act in ways that further strangle the value of a patent.

- David Stein

[Jules]

DC gets bonus points for successfully using the word paradigm.

Some patents applications are claiming methods of patent prosecution, for example application 11/227510. I've heard of some containing 100's of claims. That's the kind of stuff that should stop. With enough money you are allowed to burden the patent system, apparently an approach used by some - no doubt some big anti-patent corps.

[Malcolm Mooney]

"Increased PTO bureaucracy making it more difficult to obtain a patent with a valuable scope"

All things considered, if you have a valuable INVENTION, I believe that changes at the PTO have made it easier to obtain a patent with claims to that invention now versus ten years ago. Such claims continue to be valuable.

None of this is any consolation, however, to those who made a career out of the gaming the system by sitting at a computer and churning out crap.

[David Stein]

Tazistan Jen wrote:

"The reason my clients aren't filing many patent applications is because the economy is horrible and they are cutting costs wherever they can."

I'm experiencing a slowdown among my small clients as well - partly for this reason (hoarding cash and trimming budgets), and partly because startups are having incredible difficulty getting funding. They're depending on small grants that are dribbling out from the city and state.

Larger clients don't seem to be so badly affected. But I wouldn't be surprised if some of them ratcheted up the culling of their disclosure banks, and focused their efforts on more valuable inventions.

One interesting collection of observations:

(1) This recession is truly global - right?

(2) Apps filed with any particular national/regional patent office are rarely limited to that region, but come from applicants from all over the world - right?

Putting (1) and (2) together - if the drop in patent business were caused by the recession, we'd see a drop in patent business evenly (or at least proportionally) distributed across all national patent offices. However, we're seeing oodles of stories about dropping filings/maintenance fees/budgets/hiring at the USPTO... but not one whiff of any such happenings at the EPO, JPO, etc.

I feel confident that this speaks MUCH more strongly to the yawning gap in patenting trends and patent hostility of the USPTO/CAFC vs. the corresponding bodies in every other part of the world. There's really no other way to explain it.

- David Stein

[Frip Chissom]

Three cheers for Malcolm Mooney. Anything that stops the flow of garbage that describes many patent applications is welcome.

[Nero fiddling as Rome burns]

"All things considered, if you have a valuable INVENTION, I believe that changes at the PTO have made it easier to obtain a patent with claims to that invention now versus ten years ago. Such claims continue to be valuable."

hahahahahahahahahahahahaha

What changes are those?

hahahahahahahahahahahahaha

Always good for a laugh that moon pie.

[Argues with MM]

MM wrote: "I believe that changes at the PTO have made it easier to obtain a patent with claims to that invention now versus ten years ago. Such claims continue to be valuable."

Unfortunately, your beliefs do not coincide with reality.

Reality 1: 101 rejections on everything, not just business methods and software.

Reality 2: Reject, reject, reject on everything, using 101 and 103, not just business methods and software.

R1 + R2 = higher prosecution costs.

Reality 3: Decreased likelihood of injunctions has decreased the value of an issued patent.

Reality 4: After Bilski, defendants argue 101 = increased cost of enforcement.

Reality 5: Same for KSR and 103.

Note that R3, R4, and R5 apply even if patent is a great invention even according to MM. You still have to fight the battle to prove it = $$$$. I am seeing it already in existing litigation.

R3 + R4 + R5 = all patents are worth less, regardless of the quality of the invention. Less in licensing fees and less if you are forced to enforce in court.

Increased the cost of obtaining patents = decreased demand for patents.

Decreased the value of a patent = decreased demand for patents.

If your clients don't already know this, you are shirking your duty if you don't tell them. Business folks grasp the implications immediately and cut patent prosecution budgets and goals.

Now add in a new factor of crappy revenue to fund this, budgets get slashed further.

Every one of your clients should be looking to abandon existing apps except for the most protectable, detectable, and valuable/important inventions.

E6k, you might want to start looking for a job. I'll bet examiner retention is at a high in this economy. When this bow-wave of lost maint. fees hits for real, you guys are having layoffs. I hope you took advantage of all that free training.

On the other hand, there's always work for a savvy lawyer that saves/makes businessmen money.

[curious]

"PTO Director Doll was previously reported as saying that the PTO has stopped hiring." Now is the time to recruit an even better quality of examiners and to make significant progress in reducing the backlog. Now is not the time to stop hiring.

(The PTO got credit the past few years for all of those application fees when they were just throwing the applications into a large pile of unexamined applications.)

[carnac]

"you reap" makes an excellent point when he said "drag applicants through countless reopening of examinations because some examiner or some QAS "knew" the application wasn't patentable but didn't have the prior art to prove it"

[Malcolm Mooney]

""All things considered, if you have a valuable INVENTION, I believe that changes at the PTO have made it easier to obtain a patent with claims to that invention now versus ten years ago. Such claims continue to be valuable."

hahahahahahahahahahahahaha

What changes are those?"

The e-filing system, primarily.

[curious]

Dennis,

Referring to David Stein's comment above, are the EPO and the JPO similarly suffering?

[Mary Prosecutor]

Malcolm writes: "All things considered, if you have a valuable INVENTION, I believe that changes at the PTO have made it easier to obtain a patent with claims to that invention now versus ten years ago."

Malcolm, you are obviously not a patent prosecutor or at least have not been practicing for ten years.

[David Stein]

Interestingly, when I searched for news from the JPO, I see nothing about their stats (or any hand-wringing over them.) However, I do encounter these two articles in Google's first page:

"JPO bucks trend by cutting filing fees"
http://www.managingip.com/Article/1852293/JPO-bucks-trend-by-cutting-filing-fees.html

"JPO considers making software and business methods patentable"
http://271patent.blogspot.com/2009/01/jpo-considers-making-software-and.html

Obviously stark differences with regard to the USPTO's practices (brand-new "practitioner licensing fees" and Bilski.)

- David Stein

[Malcolm Mooney]

AWMM, that's a lot of wanking for a comment that refers repeatedly to "reality".

The reality is that patent applications are still being filed at crazy, absurd rates.

"Business folks grasp the implications immediately and cut patent prosecution budgets and goals."

Actually business folks are evidently very slow to grasp the "implications" because the "implications" were quite obvious several years ago (at least) to anyone with open eyes who wasn't drunk on kool-aid. And yet rates are just slowing down now? Go figure.

A lot of money was thrown down the toilet by "business people" making very bad bets on crappy applications. I suggest you go back a couple years in the archives here and look at what some folks (i.e., me) were telling you and others about what to expect in the future. And mind you, I was predicting much of the same even before I started commenting here.

Yes, it's a beloved pasttime of certain commenters here to blame everything (literally: everything) on the PTO and the CAFC, as if these institutions existed only to encourage and promote as much patent application filing and granting as humans (or computers) could handle. That pasttime, of course, was designed to promote a status quo where a certain breed of "entrepeneur" could continue to manipulate and exploit our patent system in hopes of achieving a windfall. See, e.g., a certain Mr. Harris ("We were talking about all sorts of schemes that we could make wealth and fame off the Internet.").

So congratulations to all you "ordinary" inventors and "little guys" out there. Just like all the "ordinary" hedge fund managers out there playing games with pieces of paper, you had your fun. Now the party's over and you left a big mess for others to clean up and yet you STILL complain and point your fingers at everyone else. Truly disgusting.

[Malcolm Mooney]

"(The PTO got credit the past few years for all of those application fees when they were just throwing the applications into a large pile of unexamined applications.)"

A very wise move on the PTO's part: take the filing fees, then Bilski that pile of crap into oblivion. Because ****NOBODY*** wants that crap to issue, ever, except for the patent gamers. And the PTO will win this battle. They will win because there aren't enough lobbyists in the world to hide the stench from the public.

[Nero fiddling as Rome burns]

"The e-filing system, primarily."

I'll admit that it is the only good thing that came out of the USPTO the past decade or so. However, it does nothing to improve quality/speed of examination.

Interesting, the one thing of value that comes out of the USPTO (i.e., its information technology) involves technology that you don't believe deserves patent protection. I guess we have different views on what is "useful."

[David Stein]

Malcolm Mooney writes:

"The e-filing system, primarily."

Hmm. Now that is a very interesting comment, Mooney.

The e-filing system has certainly made the *process* of patent prosecution easier. It's certainly easier to file and access documents and to get status information.

However, practitioners and clients care much less about the process than about the substance: What kinds of patents can we get? How quickly, and for what price? Do we get a thorough, objective examination, etc.? ... for practitioners, the process is simply a means to an end.

In fact, the only folks who are interested in the process - OBSESSIVELY so - are:
(1) PTO administrators;
(2) examiners; and
(3) law firm paralegals and administrators.

Care to specify your role, Mooney?

- David Stein

[Malcolm Mooney]

"Malcolm, you are obviously not a patent prosecutor or at least have not been practicing for ten years."

Dear Mary,

Wrong, and tough luck.

Love,

[Inviting body punches]

Mooney presents a mix of good observation and obfuscation:

MM: "Actually business folks are evidently very slow to grasp the "implications" because the "implications" were quite obvious several years ago (at least) to anyone with open eyes who wasn't drunk on kool-aid. And yet rates are just slowing down now? Go figure."

Yes. My clients' new filings began to drop precipitously a couple of years ago, as I informed them in real-time about developments in PHE, obviousness, injunctive relief, etc..

MM: "A lot of money was thrown down the toilet by "business people" making very bad bets on crappy applications."

Maybe. But not my clients. And this says nothing about the increasing barriers to, and uncertainty in, the securing and enforcing of patent rights on inventions disclosed in GOOD applications.

[Inviting body punches]

David--

You forgot to include academics in your list.

[Malcolm Mooney]

"Care to specify your role, Mooney?"

It's none of those, David. I prosecute, advise, opine, and dabble in the dark side. But more importantly, I highly recommend that you avoid engaging in these silly What's My Line type comment games. If you aren't careful, you may end up a psychotic nutjob like Just Brayin' who can't write ten sentences without mentioning my name.

[Ignorance is bliss]

"A very wise move on the PTO's part: take the filing fees, then Bilski that pile of crap into oblivion. Because ****NOBODY*** wants that crap to issue, ever, except for the patent gamers."

Of all the claims that get Bilskied, only about 1% cannot be saved. The rest can be easily amended to overcome Bilski. Bilski is a dog decision with all bark and no bite.

[Malcolm Mooney]

"Interesting, the one thing of value that comes out of the USPTO (i.e., its information technology) involves technology that you don't believe deserves patent protection."

Yes, there is certainly an aspect of "information technology" that doesn't deserve patent protection. However, I don't think it's the "technology" aspect.

[question]

"(The PTO got credit the past few years for all of those application fees when they were just throwing the applications into a large pile of unexamined applications.)"

Has Bernie Madoff been in charge of the PTO?

[Malcolm Mooney]

"And this says nothing about the increasing barriers to, and uncertainty in, the securing and enforcing of patent rights on inventions disclosed in GOOD applications."

If anything, I believe there is increasingly *less* uncertainty relative to, say, five years ago. Back then I could only look around me and say "There's no way this madness can be allowed to continue." Now the answer cards are pretty much filled out and lo and behold: we apear to be entering a period of relative sanity.

[fisher ames]

Why is the USPTO given credit for the paperless filing system? Didn't Director Rogan go tin cup in hand over to the EPO asking for the EPO's ePHOENIX system? If so, give credit where credit is due on the count- Mr. Rogan and the EPO.

[Inviting body punches]

Mooney-

I believe that there was very much uncertainty five years ago. What has happened in the interim has been that some well-heeled litigants have taken the opportunity to ask questions, at the appellate level, that careful practitioners have been asking themselves, and each other, for years.

Unfortunately, the "answers" we have received have done nothing to enhance certainty. Where the decisions have been clear, I think that they have tended to reinforce well-established, if misunderstood, areas of patent law. As PO commentators often write, "nothing new here."

Where the decisions have been unclear, I believe that they have done much to diminish PREDICTABILITY in litigation.

Combine this with what I have seen as the increasingly cavalier attitude of the PTO, which results in increased prosecution costs and the need for prosecution devices such as continuations, RCE's and appeals, and what you get is the situation where, even where the invention is GREAT and the application sound, an applicant is increasingly uncertain about the course prosecution and enforcement will take after initial filing.

And, even though many nagging questions have recently been asked at the appellate level, there are still many others out there waiting to be asked.

[Inviting body punches]

Although I don't practice in areas other than patents/business, I do speak with attorneys in other areas of practice, and have come away with the distinct impression that the FUNDAMENTAL and SUBSTANTIVE changes to, and uncertainty in, patent law far exceed that in any other area of law that I have heard about.

[Night Writer Patent Attorney]

>>FUNDAMENTAL and SUBSTANTIVE

What I've noticed since KSR is a greater variance in the way an application is examined. Some examiners just stick to their guns that it is obvious 'cause they think so. Appeal seems to be the only recourse. Other examiners seem to be operating under the old rules and remain reasonable and try to back up their assertions with real evidence.

I think Dudas wanted to burn it down from the inside just like other Bush appointees. He did an excellent job.

[Inviting body punches]

Night Writer-

That sort of description is one example of what I was talking about when I said "an applicant is increasingly uncertain about the course prosecution...will take after initial filing".

[Malcolm Mooney]

"I think Dudas wanted to burn it down from the inside just like other Bush appointees."

Baloney. The PTO is not the EPA. What traditional Republican interest group is served by diminishing the ability of investors to gamble at the expense of the public welfare?

[newExaminer]

This doesn't quite add up.

Decreased filings should be offset by the decreased number of examiners needed to be hired.

As for those thinking the PTO should be hiring, it's likely many of those wanting to join the PTO would jump ship once the economy recovers.

[Malcolm Mooney]

"Decreased filings should be offset by the decreased number of examiners needed to be hired."

That assumes that the current number of Examiners is sufficient to deal with the backlog in a timely manner.

[me]

The Bush administration was very anti-patent as they viewed patents as anti-free market. I know that kmakes little sense to those who know patents, but that is how right wing nutball the neo-cons are.

[Night Writer Patent Attorney]

MM: the big picture is government is bad. Government regulation or interference in the markets is bad. (At least before Greenspan's mea culpa.) Patents are seen as unnecessary and regulation in the innovation market (or business) and as such are bad.

The big picture is that many of Bush's appointees were there to burn down regulations from the inside. PTO is just one of many.

[Really?!?]

Government is bad to the Bush admin? Are you kidding me, government grew larger than ever under them. The small government/Republican crap is a myth.

[TJ]

Dennis, you are making it sound like decreased patent filings is, in and of itself, a bad thing.

[anonymously yours]

Yes, 8888 you PTO very much.

[curious]

"That assumes that the current number of Examiners is sufficient to deal with the backlog in a timely manner."

I agree with you, Malcolm.

[is there any hope]

So, what happens now? A lot of good patent attorneys will certainly be out of work, some perhaps will have to leave the field and will never be able return. If applications drop 20%, that doesn't mean the bottom 20% will be out of work.

[That's Right - It's Gideon Pope - Long live the Empire]

Only in the government.

They've been trying to reduce filings for years. Now that they get what they want, they're in full panic mode because they don't have enough money. Brilliant.

Here's my suggestion for saving money:

If an applicant files an Appeal, the following cost scale should apply to the Examiner:

1. Write an Answer - Free.
2. Write an Answer with new grounds of rejection - 2,000.
3. Pull the case from Appeal and reenter it in prosecution - 5,000.
4. Examiner overturned at BPAI - 2,000.
5. BPAI overturned at Fed Cir - 5,000 each member.
6. Examiner reopens prosecution on new grounds after applicant wins at Board - 10,000.

That's just a start.

That oughta help out duh budget.

[John Doll's nightmare]

"New patent filings are down 16% so far in 2009."

Maybe the PTO will finally learn that when you treat your customers like cr@p, sooner or later the customer uses you as toilet paper . . .

[Sn@ke]

The filings are down because the economy is in its worst state in decades. Hardly surprising, and certainly not indicative of a change in attitude toward the patent system any more than the recent decreased revenue at Disneyland is indicative of a growing disdain for Mickey Mouse.

[Malcolm Mooney]

"Hardly surprising, and certainly not indicative of a change in attitude toward the patent system"

Indeed. The PTO is not going out of business and I don't imagine there would be great resistance to the government "bailing it out" of any perceived funding disaster, particularly now when it appears to be (very mildly) anti-troll.

[TrenchCoat]

Mooney, didn't we figure out that you are just an angry little twink? (Hint: the constant references to dog poop, white wine, glory holes, tapping heels together and the like gave it away.) Not that there's anything wrong with that.

When are you going to tell your wife?

[TrenchCoat]

The funny thing is Mary, that if Mooney were really, even a crappy, prosecutor, he wouldn't have so much time to post on PatentlyO.

QED

[anonymous]

"Maybe the PTO will finally learn that when you treat your customers like cr@p..."

Applicants aren't the PTO's "customers" any more than pharmaceutical companies are the FDA's "customers."

[P.S.]

If there is really not going to be enough new PTO patent work to go around for everyone for awhile, one would think more registered patent practitioners would be supporting [instead of opposing] getting real MCLE practitioner testing requirements to "weed their garden"?

The increasingly anti-patent decisions of many current CAFC panels and the Sup. Ct. still have a long way to go to be nearly as bad as most courts were more than 40 years ago. It has been a great pro-patent swing while it lasted over my career, but the pendulum does now seems to be swinging partly back. Although I think that the related co-evolution in recent years of inadequately examined broad business method or software patents and their acquisition and enforcement by patent troll companies have been contributing factors, there are others.

[David Stein]

"Applicants aren't the PTO's 'customers' any more than pharmaceutical companies are the FDA's 'customers.'"

The FDA does much more than review and approve food and drugs. It sets health and safety standards; it conducts inspections; it sponsors research. Check out its website to see the range of fields in which they participate: medical devices, animal care, cosmetics, radiation and environmental stuff...

By contrast, the patent side of the PTO has exactly one primary function: it vends patents. Someone asks it for a patent, and if the laws are met, it dispenses a patent. Sure, it also publishes patents, maintains a database, "maintains" patents (whatever THAT means), dabbles in education and policy making (*ahem* with typically disastrous results), licenses practitioners, and on rare and limited occasions, mediates disputes between parties. But these tasks are secondary and incidental to its single, primary function: issuing patents.

Moreover, those efforts are wholly paid for by the people filing such requests. The fees paid by an applicant (in theory) cover the entire cost of the process performed on behalf of that applicant.

So what do you call someone who pays an organization to perform its sole primary function and dispense a product for the payee to own? Care to explain why "customer" is not an appropriate term here?

- David Stein

[as]

LOL at all the attorneys gloating over the drop in applications. That's gonna hurt them the most.

[some guy]

I hope the hiring freeze coupled with attrition does not result in the examining corps decreasing faster than the backlog. That could result in the PTO getting into a backlog hole they can't dig out of.

[An RC Cola and a Moonpie]

I have been floating an idea about starting a second patent office that would compete with the existing one. First, lobby to change the law to allow non-US citizens to work at this new patent office. The office also would provide a quick path to citizenship for any foreign scientist willing to work for a small salary (say, 35k for ten years or pay by piece-work). Tell me, would you really notice any difference in the work product?

[MaxDrei]

Filings at the EPO are down. Of course. For the reasons offered above. Applicants are spending less. But filings are not down by as much as at the USPTO. Of course. For the reasons offered above. The EPO take on 101, 102, 103 and 112 patentability has advanced steadily over the last 30 years, and is still advancing, but always in the same direction. With such legal certainty, Applicants make rational long term filing strategies. The EPO has an advantage however. The international substantive patent law experts at the EPO make the patent law, and the national courts have to swallow it.

[EG]

"The international substantive patent law experts at the EPO make the patent law, and the national courts have to swallow it."

Max,

You're blessed in that regard. Having a technology-challenged and patent law ignorant SCOTUS mucking up our patent law is extremely unpalatable to swallow. Now the Federal Circuit, previously our great bastion of patent law jurisprudence, appears to be running off the tracks, the recent Bilski and Tafas decisions being good examples of muddled thinking. My favorite poster child of "illogic" from the Federal Circuit is the 2004 case of In re Ngai which ruled you could no longer patent what we used to call "products with instructions for use." The reason: "If we were to adopt Ngai's position, anyone could continue patenting a product indefinitely provided that they add a new instruction sheet to the product." Not very convincing reasoning or grounded in 35 USC 101, 102, 103, or 112.

[Fire them all ... it cannot get much worse]

"Applicants aren't the PTO's 'customers' any more than pharmaceutical companies are the FDA's 'customers.'"

Anybody who has worked in the real world and/or received an MBA would immediately and unquestionably recognize patent applicants as the USPTO's customers.

There is a difference between "stakeholders" and "customers." However, like any good USPTO troll, you don't understand these terms of art and you butcher the interpretation of the language at issue.

[Fire them all ... it cannot get much worse]

"LOL at all the attorneys gloating over the drop in applications. That's gonna hurt them the most."

Another examiner that missed out on his allotment of common sense when it was being passed out. There is still a huge backlog out there, and for every Office Action that gets issued, there is an attorney waiting to respond to it.

The bad economy will do what all bad economies do -- which is weed out the weak and let the strong survive. What will be funny is to watch the consequences of decreasing filing rates. If filings ever drop dramatically, there will be plenty of people more than willing to point their fingers at the USPTO, their policies, and the dropping allowance rates.

What will even be more amusing will be see how the likes of 6 react when his SPE starts to push him to allow more cases. The one thing about a pendulum is that you better not get accustomed to it going in only a single direction.

[Jerry Harvey]

eFiling is neat. Unfortunately, it still interacts with humans, which has a tendency to nullify the benefits. When I look at my cases in PAIR, I see stuff like:
Amendment filed Dec 2008
Amenddment put on examiner's docket April 2009.

The speed of getting the amendment to the PTO, bypassing the mailroom and all of that, is for naught if the examiners don't even look at it for months after it should be available to them.

[EG]

Fire them all et al.,

Love your comments. Kept me in stitches. And so true.

[The Mad Prosecutor]

One of the most satifying consolations to me is the elimination of the law school and engineering programs at the PTO. Examiners, when you ask why the tuition reimbursment programs were eliminated, look in the mirror for the answer. It was your poor examining/low allowance rate that led to lower filings, which led to reduced revenue, which led to the programs being cut. No law school for you! Now, let's see how you deal with the increased pressure, perhaps wage cuts or freeze in promotions . . .

[Roger Karp]

"I have been floating an idea about starting a second patent office that would compete with the existing one."

There used to be a second patent office in America. During the American Civil War, the Confederate States of America had their own Patent Office. IIRC, there were about 260 patents issued by the CS patent office.

[iwasthere]

You would be foolish to file a patent application on any matter that you have a least a fair chance of maintaining as a trade secret in this environment. It's not worth the publishing risk in 18 months, in return for the uncertainty in issuance/cost/distraction/protection.

[Jules]

Mad Prosecutor ... On the contrary, the lower allowance rate is more likely due to the increased amount of information available. We don't do paper file searches anymore. Everyone and their grandmother posts their inventions on the internet.

Often enough the job of the examiner is to find a needle in a haystack, let alone 100 needles for the more obnoxious filers. That means part of the examiners job is to learn when to quit. If that means that some rejections are stretched until the opportunity to find another reference is found, then so be it.

But I maintain that people, whether they pursue law school or not, will have different standards of quality based on many different factors. Also, someone motivated enough to work full-time and do school part-time more than likely has a strong work ethic.

[Malcolm Mooney]

Lots of government and private institutions have had firing freezes in places for some time, and have cut certain programs to save money. The PTO surely is not exempt but it's not going anywhere. I would be surprised to see substantial cuts in the Examination Corp. without evidence that certain art units are extremely overstaffed.

Unlike a law firm, there are no "partners" running the PTO whose compensation is directly related to the salaries being paid.

The folks here who relish the idea of people at the PTO losing their jobs need to adjust their medications and/or grow up.

[Night Writer Patent Attorney]

>>On the contrary, the lower allowance rate is >>more likely due to the increased amount of >>information available. We don't do paper file >>searches anymore. Everyone and their grandmother >>posts their inventions on the internet.

This is exactly whey the TSM test should remain in place.
Two basic laws of of the PTO are:

(1) The more patent applications filed the easier it should be to examine the applications.
(2) The more information available the easier it should be to examine the applications.

If a good administrator is put in place, the quality of the rejections could soar. But, then it would require putting in someone that focuses on the actual work done at the PTO.

[BigGuy]

"You would be foolish to file a patent application on any matter that you have a least a fair chance of maintaining as a trade secret in this environment. It's not worth the publishing risk in 18 months, in return for the uncertainty in issuance/cost/distraction/protection."

That's pretty remarkable advice, iwasthere. You know, if you're willing to give up patent protection in favor of trade secret protection, then you're clearly willing to give up foreign patent protection. And if you're willing to give up foreign patent protection, then you can opt to keep the US application from being published. If publication is the main risk, then doesn't this undercut your advice?

[Fire them all ... it cannot get much worse]

"Often enough the job of the examiner is to find a needle in a haystack, let alone 100 needles for the more obnoxious filers. That means part of the examiners job is to learn when to quit. If that means that some rejections are stretched until the opportunity to find another reference is found, then so be it."

Finding prior art is your job? Isn't it? ... That is what you get paid to do, right? Then do it.

How would you like if some police officer, pretty sure that you are guilty of some felony, but doesn't have the evidence to prove it, arrests you anyway because he was in a time crunch?

There is a simple phrase for this -- ABUSE OF POWER.

BTW -- saying that everybody else is doing it and/or my supervisor told me to do it is no excuse. History treats those that say "I was just following orders" very poorly.

I've seen hundreds of "stretched rejections." In the past, when you called an examiner out on these, they would allow the application or find better art. Now, the Examiner just issues a final rejection. What is sad about this is that there is a whole generation of new Examiners (e.g., 6) that think this is a perfectly acceptable practice.

[Here's hoping that a cetain biotech attorney gets the pinkslip]

"The folks here who relish the idea of people at the PTO losing their jobs need to adjust their medications and/or grow up."

Moonpie taking the high road. What a f'n joke.

[Smallfry]

I don't know about you guys, but the main problem I see with the current system is that you get a rejection, you overcome those rejections, and the examiner comes back with a new search and makes new ones. Kill those, and repeat. One of my cases had FIVE, count 'em, FIVE, office actions before a final. It's just a complete waste of resources and infuriates clients. You know, obtain 1.132 Declarations, spend all this money, only to come back with a whole set of new rejections. We've got a pretty big client in Europe who is about to just abandon a large set of patent applications because of this crap.

[Malcolm Mooney]

"My favorite poster child of "illogic" from the Federal Circuit is the 2004 case of In re Ngai which ruled you could no longer patent what we used to call "products with instructions for use."

LOL. What a terrible blow to innovation!

There is nothing "illogical" about that case whatsoever, nor is there any controversy about its holding.

By the way, who does "we" refer to in your comment? I've never seen a claim to a "product with instructions for use" that wasn't a pointless piece of garbage. It was such claims that led me many years ago to discount just about every bit of "wisdom" that the senile old partners tried to pass down to the associates.

Never trust a patent prosecutor over 60. Most of them are dinosaurs hung up on silly habits that passed under the bridge decades ago.

[Anon]

Putting this concept out there on an anonymous basis:

- consider whether the time has come for a new New (IP) Deal

- i.e., government-backed financing to help innovators and creative persons obtain protection on their IP (short term), and to stimulate the IP commons (longer term)

(c) Nobody, No Rights Reserved

[Malcolm Mooney]

"Moonpie taking the high road."

Neither high nor low, my friend. Wishing people ill who have done absolutely nothing wrong to you or anyone else just seems pointless. Save your energy.

[Malcolm Mooney]

"We've got a pretty big client in Europe who is about to just abandon a large set of patent applications because of this crap."

Wow. No patentable subject matter in the entire set?

[bringiton]

Mad/Prosecuter,

I think your response is of base.

"It was your poor examining/low allowance rate that led to lower filings, which led to reduced revenue, which led to the programs being cut. No law school for you! Now, let's see how you deal with the increased pressure, perhaps wage cuts or freeze in promotions . . ."

I challenge you to a prosecution duel. I will even give you the benefit of the case being one of your applications. The challenge is to see who can find the best art via a search, write an office action and address and review all possible embodiments in the search and do it within the average time given to an examiner. Lets say, 10 hours! I will meet you anytime, anyplace, and my bet is that I find a 102 and write the rejection before you get done searching the class the case is assigned to. The issue you take with Examiners is not the examiners fault. My actions are often credited by attorneys as being quite good. In fact, I rarely get responses back that are not amended or abandoned. Low allowances are due to poor claims and poorly written specifications, period. The issues with the office are purely management borne. Examiners follow orders and some do it better then others. So, do we have a duel?

[An RC Cola and a Moonpie]

bringiton, I was required to do it in 8 hours when I was there. What's your point? I with Mad, and will stand on the sidelines to make sure it ends the way it should.

[Night Writer Patent Attorney]

>>- consider whether the time has come for a new >>New (IP) Deal

>>- i.e., government-backed financing to help >>innovators and creative persons obtain >>protection on their IP (short term), and to >>stimulate the IP commons (longer term)

That is what the patent system coupled with loans and tax breaks for start-ups and tax breaks for research at corporations.

One of the most misunderstood advantages of the patent system is the disclosure. Patents often aren't the best place to learn, but the fact that patents exist means that inventors will discuss their ideas with others. And everything that is disclosed becomes part of the commons in 20 years.

I like the idea of the prosecution duel. Maybe it could be an online competition open to more than 2 people with prizes.

[Night Writer Patent Attorney]

>>> "Moonpie taking the high road."

Just isn't credible is it? He probably just wants to get up there to throw a rock on our heads.

[The Mad Prosecutor]

Bringiton:

I don't know what your point is. Sure, some here have far more experience than I do, but I have more than a decade outside the PTO at this point in NOVA/DC law firms (AMLAW 100 firms in the past and currently). I was also an Examiner. The point being, I have enough experience to actually comment on the state of affairs, as opposed to Examiners whose entire IP "career" is a year or so at the PTO (not saying you do, just as a point of reference).

The nonsense propogated by Examiners in this thread is indicative of the nonsense at the PTO. Junior with a year of experience at the PTO is going to tell people who have been doing this for one, two, three, or more decades what's what??? It's embarassing both that the Examiners don't know what they are talking about, and also they are too foolish not to realize they don't know what they are talking about.

An Examiner above seems to indicate the reason the PTO went from the about 75%+ allowance rate from 1975 to 2005 to the current rate of 42% is because now all inventors describe their inventions on the internet???!!! Ridiculous. Virtually 100% of the (nonsense) prior art I see are Patents, Patent Publications, and Journal Articles.

I wrote plenty of Office Action during my time at Club Fed. You also can't con us who have been there with your stories of how hard you work. We worked back there when you actually felt some duty to do a reasonable job and allow an application when it was reasonable to do so. No excuses that "the art is full," or that "we've issued enough patents this year," or that "it's safer to my job performance not to allow anything."

[Jules]

"Finding prior art is your job? Isn't it? ... That is what you get paid to do, right? Then do it."

Yes sir, that is part of my job. I will get right on that. I will do so in a way that I don't get pricked by every needle, or needled by every prlck. I'll adjust accordingly when change demands it, and I'll keep the btchin and moanin to a minimum. Klll them with kindness, that's what they say. You, however, should probably focus on reading between the lines.

"History treats those that say "I was just following orders" very poorly."

I'm not so sure. It does provide for ample discussion though. I tend to agree. The people that simply follow orders may never obtain freedom. America was founded on risin' up and fightin' the man. Take Boston for example. I used to think they were just arrogant jerks, but now I see that they just have some pride about their part in the forming of this country.

[bringiton]

Rc Cola,

My point is I challenge you, Mad or anyone else for that matter to prosecute from the offices position. Does 8 hours really sound like enough time to review thousands of pieces of art, pick two or three to cover all of the embodiments, and then write an office action? or to determine allowability? Give me a break, most cannot read through from cover to cover more then 10 applications in 8 hours, let alone write an office action, address 101, 112, etc. You get what you pay for pal! Just take the complexity of the art progression in Microprocessors from 1990 to today. The art and technology has progressed so much that I believe without adequate training on both sides it is hard to keep up with. Unless you are full time in reviewing changes one cannot possibly keep up with art. Examiner's, attorneys and the like do not go back to school 10 years after they graduate and yet the technology has changed dramatically. Therefore, I challenge anyone to do it better, with the same tools, time and environment that we have. Yes, I am quite sure there are those examiners that cut corners, but there are attorneys that do the same. Yes, I am sure attorneys don't disclose art when they should and examiners write finals when they shouldn't. The system is what it is from years of fee diversions and poor management and the go-go days of filing thousands of overlapping inventions to carve out a single sliver of patentable material. We have one million back-logged applications to show for it. Patents have been monetized so much that the hours to write, search, determine, prosecute, etc a patent have been reduced to make a profit, which is where I think the heart of the problem lies. The office only takes in 25% of the cost to examine a patent and has not invested in examiners to make the process better. Congress takes any excess funds that are left in the patent pool. The average patent costs $4000 to prosecute by the office but the fees are substantially less and noone is making that point. Tell me who in their right mind comes up with a two year budget to prosecute patents that uses current filing fees as a basis. The PTO spends every dollar they take in for processing applications filed three years ago. Filings are down now, and therefore, we dont have the funds to cover prosection of current let alone old cases. But, that is congress and management, not the examiners. On the other side, the inventor pays 10-15k or a bulk rate to cover the legal expense, to which, is further scrutinized by partners to profit as much as possible on each case.I have spoken to countless attorneys who state they only have an hour or so to write a response to the examiner, Less than a week to write a patent, one day to do an appeal, Is that fair? In either case, the inventor loses because there are not enough fees to cover a proper review and the prosecution is limited by the partner to ensure a profit. If we remove the profit from the equation and provide an adequately funded infrastructure to review applications, filings would be down, quality would be up and all of this squabbling over prosecution would go away.

[Malcolm Mooney]

"Junior with a year of experience at the PTO is going to tell people who have been doing this for one, two, three, or more decades what's what??? It's embarassing both that the Examiners don't know what they are talking about, and also they are too foolish not to realize they don't know what they are talking about."

This is exactly the sort of pathetic misguided anger and arrogance I was referring to upthread. Why not just stick your head out the window and scream "GET OFF MY LAWN!!" The vibe is exactly the same.

[Malcolm Mooney]

Jules "Take Boston for example. I used to think they were just arrogant jerks, but now I see that they just have some pride about their part in the forming of this country."

Forming the country? There are some decent riffs in 'More Than a Feeling' and 'Long Time' but I'm not even sure they were original.

[The Mad Prosecutor]

Malcolm, some may see things differently than you. As I said, it's not that the Examiners know nothing (we are all ignorant about different things, at different times). It is that they wallow in and embrace their ignorance, and can't even see how little they know.

You strike me as intelligent - if you started a new job as some sort of government regulator, and your first day on the job you went into a meeting with an attorney who worked in front of the agency for the last 20 years, I know you would try to learn from him. And if he told you something, you might actually see if he, with two decades of experience, knew what he was talking about, and maybe you were misguided. That's not today's PTO. After eight months of "training" (training is what you give a dog, by the way), the Examiners are going to tell us when claims are indefinite, missing "critical" features, educate us on the requirements for inherency for a hearsay source (the MPEP), etc. Again, I think others easily see how ridiculous this is.

[An RC Cola and a Moonpie]

bringiton, I was the best examiner that ever examined at the PTO. I proved it day in and day out while I was there. And I NEVER compromised my professional ethics and gave in to my bosses (the last one being oliki the dickie) demands to "cut corners." I know that place inside and out, and I know it when I hear a load of PTO b-s!

[Homer in the house]

1. The PTOs source of income is patent filings and prosecution.

2. The PTO has lead a five year war against "easy" inventions by limiting continuations to one, eliminating 103 motivation so that the applicant's specification can serve as a road map to the obvious invention, and making second office action final as the norm.

3. "New patent filings are down 16% so far in 2009."

4. The falling numbers has the PTO worried about its budget.

5. The PTO collectively says "D'oh!"

[bringiton]

Cola, Mad,

To be clear, my challenge is this. A one on one, examiner vs attorney patent application review for art along with crafting an office action using EAST/WEST, OACS and the databases within the PTO, and do this in 8-10 hours or less. The applications put out by the examiner and attorney are to be graded on quality of work product, relevance of prior art and clarity of position along with proper action taken. The point to prove here is that I openly stake my reputation and experience against another to show that the work product would be on par with any ringer the public could provide. If by chance the attorney should clearly trounce my work then at the very least, I would have finally learned from a pro. I have yet to see such a pro after reviewing thousands of office actions. Therefore, the duel is open to all, who is up first?

[David Stein]

bringiton wrote:

"Does 8 hours really sound like enough time to review thousands of pieces of art, pick two or three to cover all of the embodiments, and then write an office action? or to determine allowability?"

Of course that sounds insufficient. But we practitioners never advocated for productivity rules or metrics. In fact, I'd be happy to see examiners take more time on every case - even if the PTO had to raise fees to permit it. The end result would be higher-quality examination.

So take it up with PTO management. No, seriously, please do - we'll back you.

===

"Congress takes any excess funds that are left in the patent pool."

Fee diversion ended in '05.

===

"The PTO spends every dollar they take in for processing applications filed three years ago."

The PTO demanded money up front.
My client paid every penny.
The PTO then spent it on other projects and sat on my client's application for three (or four, or five, or six...) years.
Today, you complain that the PTO doesn't have enough money to examine my client's application in a reasonable way.
Somehow that's my client's fault - is that your argument?

- David Stein

[Malcolm Mooney]

"After eight months of "training" (training is what you give a dog, by the way), the Examiners are going to tell us when claims are indefinite, missing "critical" features, educate us on the requirements for inherency for a hearsay source (the MPEP), etc. Again, I think others easily see how ridiculous this is."

You want to see ridiculous?

61. A computer implemented method for a website, the method comprising:obtaining data pertaining to content transmitted during a data transmission transaction;sending the data pertaining to the transmitted content to a copyright detection system;receiving, from the copyright detection system, information indicating that at least a portion of the transmitted content corresponds to at least a portion of one of a plurality of registered works, the information further specifying one or more business rules associated with the one of the plurality of registered works; andperforming one or more actions with respect to the transmitted content, the actions being defined by the business rules associated with the one of the plurality of registered works.

That claim was filed six months ago and took me five seconds to find. As you know, it's pure unadulterated crap.

Now you and David Stein and your fellow wankers who simply refuse to acknowledge the big picture can reform your sad little circle. I have an endless supply of tissues for all of you and your miserable clients who contribute nothing but want the world.