IPO White Paper Calls for Update to Patent Examination System

IPO #2A white paper authored by two members of the Intellectual Property Owners Association (IPO) U.S. Patent Office Practice Committee argues that the current patent examination system "has run its course," and needs to be changed.  In its place, the paper proposes a revised examination system that would "offer[] a break from the past system . . . and provide[] a new path to accomplishing the twin goals of reducing the unexamined new case backlog and expeditiously concluding the examination process once it is started."

The paper, authored by William F. Smith, a former Administrative Patent Judge at the U.S. Patent and Trademark Office with over 30 years of experience with the USPTO, and Dr. Joseph Mallon, and entitled "In Order to Form A More Perfect Patent Examination System -- It Is Time to Update Compact Prosecution to Compact Prosecution 2.0," notes that for the past 40 years, the U.S. patent examination system has been operating under the tenets of "compact prosecution," which the authors refer to as "Compact Prosecution 1.0."  The authors explain that "[t]he key to Compact Prosecution 1.0 is the PTO policy that, normally, the prosecution of every patent application can be carried out in a single round consisting of an office action and an applicant response, such that, in the event that the applicant response does not place the application in condition for allowance, every second office action on the merits should be a final rejection."  However, because the landscape of patent examination has changed so dramatically since the implementation of Compact Prosecution 1.0, the authors argue for "a makeover of the current patent examination system to transition from Compact Prosecution 1.0 to Compact Prosecution 2.0."

The paper's Compact Prosecution 2.0 proposal is based on the authors' identification of "two significant dead zones in Compact Prosecution 1.0 that needlessly delay the ultimate disposition of a patent application once examination on the merits is initiated -- final rejections and the manner in which RCEs are docketed."  In place of the current examination system, in which the second office action on the merits may be a final rejection, the authors propose an initial examination period in which the applicant will be given two actions on the merits (with an opportunity to present evidence or amendments as a matter of right) and, if needed, a third action.  In response to the third action, however, the applicant must pay the RCE fee, which will give the applicant two additional actions (with an opportunity to present evidence or amendments as a matter of right).  In response to the second action after an RCE, the applicant will have to pay an increased RCE fee.  Under the Compact Prosecution 2.0 proposal, third actions in the initial examination phase and second actions after an RCE filing would have to be approved, preferably by a conference consisting of the examiner and two neutral conferees.  The authors also suggest that interviews after third actions in the initial examination phase and after the first action following an RCE filing would be "expected."  Finally, in Compact Prosecution 2.0, the applicant would be allowed to attend appeal conferences in which the Office considers applicant's appeal brief, and the applicant would have the option of choosing mediation after briefing is completed (with an individual APJ serving as the mediator).

In addition to outlining the Compact Prosecution 2.0 proposal, the paper also proposes changes to examiner productivity metrics.  The authors note that:

PTO management makes changes to the patent examiners' docket management criteria based in large part of which cases have policy priority.  For example, when the current administration began its focus on reducing the number of unexamined patent applications, it changed the docketing system for RCEs so the examiners were no longer required to take an RCE up for action within two months of its filing.  Instead RCEs are docketed such that a patent examiner need only take one RCE up for action every 1-2 months.

According to the authors, under the current system, "the examiner is actually 'rewarded' for stopping and then re-starting the examination."  In place of this system, the paper suggests assigning each examiner an expectation of initially examining "X" number of unexamined cases per fiscal year, wherein "X" is based on such factors as the complexity of the technology and of the application, the experience level of the examiner, and historic analysis of the number of claims examined in the first action on the merits in a particular art area.  The paper also suggests that "office actions should be submitted for mailing/review no later than two-three months from the filing date of applicant's response, not by the end of the pay period where that date falls as is the present case," thereby eliminating the "so-called 'Count Monday' where SPEs are inundated with work to review and approve."

In addition to the above docket management changes, the authors propose that first continuations and divisional applications be docketed based on priority date, which will "avoid needless term loss in continuations and term extension in divisionals," and provide examiners with an "opportunity to pick these cases up while the parent examination is fresh, thus, providing more efficiency in the patent examination process."  As for continuation-in-part applications and subsequent continuation and divisional applications, the paper proposes that such applications be docketed based upon their filing dates because CIPs are essentially new applications, and therefore should not receive priority in the examination queue, and subsequent continuation and divisional applications "have by definition already obtained a complete examination of at least one application."