Monday, April 11, 2005

Patent reform: on incentives for disposals at the USPTO

In an article in 307 Science 1566 (March 11, 2005) [Patents on Human Genes], Jordan Paradise, Lori Andrews, and Timothy Holbrook of Chicago-Kent wrote:

The USPTO could also revamp financial incentives to promote decisions based on the quality of the patents rather than their quantity. Currently, patent examiners are encouraged with monetary bonuses to grant patent applications, a policy that has the unsettling effect of rewarding examiners for quickly pushing patents through the patent office. Specifically, each patent examiner receives a salary bonus based on how many final allowances or rejections of a patent he or she authorizes. Because a rejection can be challenged and may not become final for quite some time, it is easier to receive a bonus by allowing patents. (citing to Merges, Berk Tech L J, 14, 577 (1999)). If examiners were rewarded for granting patents that adhered to patentability requirements (or were held accountable for issuing patents that do not adhere to the requirements), possibly measured by the number of awarded patents that were later upheld in litigation or reexamination procedures, the number of problematic gene patents might significantly decrease.

There is the following response:

The issue of whether patent examiners are more easily rewarded for "pushing patents through the patent office" is a combination of myth, misunderstanding, and misinformation. Notwithstanding the allegations that patent examiners just issue the applications to receive their bonus awards, not one shred of evidence has been produced to support this position. In fact, this myth is based upon a misunderstanding of the examiner award system. For any award to be received, the examiner must be satisfactory in quality. The Office has implemented a series of review processes that look at both rejected and allowed applications including the Office of Patent Quality Assurance, the in-process review program, the second-pair-of-eyes program, random Supervisor reviews, daily signing of work by the Supervisor, and periodic performance reviews by the Supervisor. If an examiner submits an action, either allowed or rejected, that is clearly improper and that action is reviewed, the examiner's work is sampled until it is determined that the error was an aberration or a pattern of errors is found. Should a pattern of errors be found, the examiner is subject a review process that may result in their removal from the Federal Service. Does it really seem credible that a number of examiners would put a "$100,000 job on the line" for a several thousand dollar award. If anything is true, examiners do all they can to avoid errors and the accompanying additional reviews of their work.

Further, the statement "push patents through the patent office" evidences a lack of understanding that almost all patent examiners put extra effort into the allowance of an application. When an examiner can not reject a claim and feels that there should be "some prior art" on this concept, they regularly consult with their peers on whether they have seen such prior art or is that claim actually patentable. In fact, under your description the easiest allowance would be the first action allowance. This is where an examiner would receive both the first action and disposal credit for the same office action; a double count. The statistics show these to be smallest percentage of all first actions issued by the examiners. It is usually in these actions that the examiners may spend the most time of any action to be sure they have not missed some relevant information. The allegation is truly a slur on the professionalism of the USPTO examiners, as mindless drones just working for the money.

Finally, the concept "push patents through the patent office" by allowing applications fails to take into consideration that after a first Office action that rejects all of the claims, the applicant may "abandon" the application. Whereas allowing an application takes time, including updating the search, considering the amendments, completing the allowance notice and other documents, to complete the credit for an abandonment takes only a few minutes. Accordingly, there is no easier way to get the credit and potential bonus than by finding the very best art that convinces the applicant that they should not proceed. Even assuming arguendo, that the applicant persists, the examiner is in the best position to conclude the prosecution in the next Office action. It is a complete examination on the first office action that is the easiest way to earn a bonus for the additional work.

Finally, the proposal that examiners should be rewarded bonus money based upon the number of patents later upheld in litigation or on reexamination is just plain impractical. Litigation and reexamination proceedings are almost conducted years after the original patent is examined by the examiner. Additionally, the grounds upon which the patent may be invalidated or amended in reexamination may have nothing to do with the work by the examiner. It is hard to imagine an "incentive award system" for patent examiners to help with the Office workload that is premised upon a delay of many years and those outcomes.

[the response is not by LBE]


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