Patent Pendency: Tired of Waiting for You

This week I’m proud to present to you the first in a series of blog posts about the future of US patent law. We hope that you will comment with your thoughts on the topics presented, and that you will join us at Patent Resources Group’s panel on the same subject, titled The Future of U.S. Patent Law: An In-Depth Discussion on the Congress, the Courts, and the USPTO. This panel will pack a series of distinguished panelists, moderated by Michael Meurer, Professor of Law at Boston University and co-author of Patent Failure: How Judges, Bureaucrats, and Lawyers Put Innovators at Risk, the controversial book about the failings of the US patent system and why they mean so much to the future of innovation in the United States. A variety of opinions and arguments will be on display, including issues relating to this post’s topic: pendency.

To parlay some lingo from the patent industry, it is well known in the art of US patent law that this is a turning point in US patent history. Here on the blog, and yet in further detail at the Patent Resources group panel, we will be examining the contentious and controversial plans and practices that define patent reform as well as the current state of the US Patent and Trademark Office, US Supreme Court, and US Court of Appeals for the Federal Circuit as they relate to patent law.

Pendency is defined as the time lapse between the filing of a patent application and action taken by the US Patent and Trademark Office (USPTO). Pendency is measured in two main ways: the time between filing and the first action on behalf of the USPTO, and the time between filing and the final action (either a granted patent is issued or the application is abandoned by the applicant). As part of the Financial Year 2009 USPTO Performance and Accountability Report, the USPTO addresses pendency by providing information on their goals and accomplishments regarding the subject. As can be seen in the charts on right side of USPTO webpage, Average First Action Pendency stood at 25.8 months for 2009 while Average Total Pendency clocked in at 34.6 months. From 2007 to 2009, Average First Action Pendency has increased from 25.3 months in 2007 to 25.6 months in 2008 and finally 25.8 months in 2009. Meanwhile, Average Total Pendency has increased from 31.9 months in 2007 to 32.2 months in 2008 and 34.6 months in 2009. Both Average First Action Pendency and Average Total Pendency have increased every single year in the last 10 years according to the USPTO Annual Reports. Why is pendency a problem? Pendency prolongs the legal uncertainty relating to invention, causing delays in time from innovation to production and fear of lawsuits if in fact a patent is not eventually granted. Pendency is a form of patent Limbo.

In order to combat pendency, the USPTO has, or is willing to try a number of solutions. Among the proposed solutions cited in the Financial Year 2009 report are: improving training, increasing hiring of new patent examiners, fast-tracking certain examinations, implementing the Enhanced First Action Interview pilot program, ramping up the Accelerated Examination program, and further evaluating the Peer Review pilot program.

Current director of the USPTO, David Kappos, has made clear that he does not expect increased hiring to solve the pendency problems and supports patent reform to combat pendency, saying (according to a December 11, 2009 article by CNN)

The American innovative spirit is stronger than ever. If we’re able to get patent reform through, we absolutely can take processing times way down and get innovations through to the marketplace.

Kappos has gone on to announce an agreement with the UK Intellectual Property Office to develop an “action plan” to address patent pendency through work-sharing, saying (according to a March 10, 2010 article by The Hill’s technology blog, Hillicon Valley)

Thus far, however, our work-sharing efforts at the USPTO have largely been applicant driven and therefore dependent on whether individual applicants know about, and appreciate, the clear benefits of work-sharing. So I am particularly delighted that we are today embracing with the UK an office-driven mechanism for reutilization of work.

The final shape of patent reform legislation is ultimately up for debate in Congress, but the current version of the Patent Reform Act of 2010 shows some indication of the increase in fee authority that the USPTO seeks to offset decreased filings, therefore increasing revenue to increase hiring and further support the programs listed above.

It seems like there are many ideas floating around for decreasing pendency, but there is no clear panacea for this problem. Given greatly increased funds, it seems clear that the USPTO could reduce or solve its patent backlog with the current ideas, but such a scenario is simply unreasonable. Instead, the USPTO must focus on the most efficient and cost effective solutions to reduce this 10+ year problem, or face even further reduction in revenue as potential applicants face reduced value for their in-Limbo applications and continue to pull back on filings.

What do you think? What is the best solution to reduce pendency? Is it one that hasn’t been addressed in this article? We would love to hear your thoughts on this issue.

Patent Reform is a controversial topic because so many people have opposing opinions. PRG’s panel discussion on “The Future of U.S. Patent Law” will be just as controversial. Panelist Michele Boldrin argues that, “The current U.S. patent system does little or nothing to promote innovation, causes more harm than good, and should be drastically reduced and eventually abolished.” Panelist Tom Irving disagrees, saying: “The U.S. patent system is a powerful force in the U.S. economy. Court rulings in the past few years have weakened it to the detriment of innovation and business. Rather than be abolished or further undermined, it needs to be bolstered and supported given its role in the global marketplace.” Whether you agree or disagree with these two panelists, you can bet that there will be intense and intelligent discussion on all sides of the issues.

Patent Resources Group

This post was contributed by Intellogist team member Chris Jagalla.

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