Sunday, April 15, 2007

Patent quality and patent reform, 88 JPTOS 1068

There is text in 88 JPTOS 1068 (2006) which says:

In their third paper, Quillen and Webster disagree that their second study (QWII) revised earlier findings to correct for inaccuracies in the first study (QWI). [FN35] QWIII state: "Our first study determined upper and lower bounds and intermediate values for USPTO Allowance Percentages and Grant Rates, employing *1076 all of the plausible assumptions given the data available to us, with all the assumptions specified." As noted above in the discussion of footnote 17 of QWI, Quillen and Webster in the first paper were aware that patents do issue on both a parent and a continuing application in some patent families and thus that the 97% patent grant bound, which is predicated on an assumption that a patent CANNOT ISSUE for both a parent and a continuing application, is NOT a number reflective of actual practice before the USPTO. An assumption which is contrary to known fact is not a plausible assumption.


Complaints about bad patents and the related costs are not unique to tax strategies. 291 Complaints about bad U.S. patents can be traced back as early as 1827. 292 The popular press frequently comments on the bad patent problem. 293 Data suggests that the Patent Office eventually approves "as many as 97% of the applications placed before it." 294 "[I]n litigated cases [*287] that actually result in a final judgment on [patent] validity, issued patents are held invalid forty-six percent of the time." 295 When patents are "re- examined" 296 for validity, the patent is modified 64% of the time, is completely thrown out 10% of the time, and "comes through unscathed with no changes" 26% of the time. 297 While the tax area may be more prone to social costs from patented inventions that fail to meet the utility requirement, 298 the IRS has authority to publicly rule that a patented tax strategy does not work, which should end the social costs relating to the bad patent. The other two categories of bad patents-patents on inventions that are not novel and patents on obvious inventions-may be just as likely to occur in other industries as in the tax area. 299

The structure of footnote 294 in 59 Fla. L. Rev. 229 is tricky: Thomas, supra note 202, at 728 (citing Cecil D. Quillen, Jr. & Ogden H. Webster, Continuing Patent Applications and Performance of the U.S. Patent and Trademark Office, 11 Fed. Cir. B.J. 1, 13 (2001-2002)). But see Patenting of Tax Advice Hearings, supra note 6 (statement of James A. Toupin, General Counsel, U.S. Patent Office) ("As of mid-year, fiscal year 2006, the allowance rate for business method applications was approximately 20%, which is lower than the overall [Patent Office] allowance rate of approximately 54% at mid-year.").

In turn, footnote 202 states: John R. Thomas, The Responsibility of the Rulemaker: Comparative Approaches to Patent Administration Reform, 17 Berkeley Tech. L.J. 727, 754 (2002).

The interesting part is that Thomas says something about the 97% patent grant rate that Quillen and Webster didn't really say. As seen in the 2006 paper by Quillen and Webster, the paper in 11 Fed. Cir. B.J. 1 established upper and lower bounds for patent grant rate. By 2002, Quillen and Webster had adjusted these bounds; by 2003, Clarke had criticized the formalism of 11 Fed. Cir. B.J. 1 and by 2004, LBE had criticized the adjusted formalism. The viability of the 97% number had been strongly questioned before the year 2007. Further, given the information within footnote 17 of 11 Fed. Cir. B.J. 1, the lack of validity of the 97% number was apparent at the time of the writing of 11 Fed. Cir. B.J. 1.

As noted in footnote 1 in 4 Chi.- Kent J. Intell. Prop. 186 (which otherwise criticizes the approach of Quillen and Webster):

John R. Thomas wrote: "Global patent administration is strained to the breaking point. Domestic commentators have persistently suggested that the U.S. Patent and Trademark Office ("USPTO") has become more lenient, allowing an increasing number of patents to issue which appropriate knowledge previously within public domain. This impression recently received a quantitative boost from Cecil D. Quillen, Jr. and Ogden H. Webster, whose data analysis leads them to conclude that the USPTO may approve as many as 97% of the applications placed before it." 17 Berkeley Tech. L.J. 727 (2002).

An interesting aspect of the law review business is that cite checkers, and indeed law review authors themselves, are under NO DUTY to shepardize the papers that are cited within law reviews. One is free to cite exaggerated numbers (here the 97% patent grant rate number) long after the numbers have been shown to be inaccurate in the published literature. One wonders who is making more errors, the patent office, or the academic commentators writing about the patent system.

Separately, the LEXIS version of On Patent Quality and Patent Reform, 88 J. Pat. & Trademark Off. Soc'y 1068 (which appeared only in April 2007) includes:


In turn, the WESTLAW version of ON PATENT QUALITY AND PATENT REFORM, 88 JPTOS 1068, does not have footnote 32, which was cited in the text in the following way:

Apart from the self-evident numerical problems with the approach, there is an underlying difficulty with the application of the law to the issue of "repeated attempts to patent the same invention". The claims define the invention. If the claims are changing in later continuation attempts, one cannot say that there is a repeated attempt to patent the "same" invention. The Court of Appeals for the Federal Circuit in Innova/PureWater, Inc. v. Safari Water Filtration Systems, Inc. (doing business as Safari Outdoor Products), 381 F.3d 1111, 1115- 1116 (Fed. Cir. 2004), cited the Supreme Court in Altoona Publix Theatres, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477, 487, 79 L. Ed. 1005, 55 S. Ct. 455 (1935) for the proposition "*1075 Under the statute it is the claims of the patent which define the invention" and cited Smith v. Snow, 294 U.S. 1, 11, 79 L. Ed. 721, 55 S. Ct. 279, 1935 Dec. Comm'r Pat. 757 (1935) for the proposition "The claims of the patent, not its specifications, measure the invention." The Court of Appeals for the Federal Circuit, sitting en banc in Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) reiterated that it was a bedrock principle of patent law that the claims define the invention, citing to the Innova case. [FN 32]

***For the record,

Footnote 32, as submitted to JPTOS, stated:

See also Varco v. Pason, 436 F.3d 1368, 1372 (Fed. Cir. 2006).

Also, certain headings in 88 JPTOS 1068, as submitted to JPTOS:




Also, a portion of footnote 28

note also James H. Wilson’s cavalry raid of March 1865 employing Spencer rifles in which a successful charge was made against forces of legendary Confederate commander Nathan Bedford Forrest, even though Union forces were outnumbered 6 to 1.

is relevant to an (incorrect) claim about Forrest in a book by (now Senator) Webb of Virginia.


Post a Comment

<< Home