US Debates Patent Exam Deferrals; Patent Reform Bill Expected This Year 13/02/2009 by Liza Porteus Viana, Intellectual Property Watch 1 Comment Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)The United States Patent and Trademark Office (USPTO) is considering a deferred-examination procedure to help reduce the backlog of the more than 770 million [CORRECTION: 770,000] patent applications that have not yet been looked at. And the US Congress may be willing to help give the agency the authority to do so in this year’s patent-reform legislation. The USPTO hosted a roundtable discussion Thursday on deferred examination – a common practice in patent offices around the world but not frequently used in the United States. It’s a practice in which many patent applications do not receive substantive examinations unless an applicant submits an express request for one. Failure to submit such a request often results in the application being abandoned or withdrawn. In the United States, the simple act of submitting an application is considered a request for examination. Many see deferred examination as a vital piece to patent harmonisation. “The position that the United States takes on deferred examination will have a domino effect as to whether the United States will efficiently proceed with harmonisation and patent worksharing,” said Harold Wegner, a patent attorney with Foley & Lardner. USPTO offers an optional deferred examination procedure, which allows an applicant to defer up to three years. This gives patentees a chance to defer paying fees, which could save them money if the delay allows them to determine that some patents are no longer worth pursuing. It also allows for non-deferred cases to, in theory, move faster through the system. Despite those perks, since November 2000, fewer than 200 applicants have deferred. Some cons include the potential for patentees to change the scope of their patents as time goes on. Opinion appears to be split among stakeholders – biotechnology, pharmaceutical and technology industries, as well as intellectual property owners groups, patent lawyers and business groups. Organisations such as the Intellectual Property Owners Association and some software companies, already frustrated at the often glacial pace of examinations, are against deferring. “Do we really know this is the answer to the problem or can we really focus on getting things granted quickly with a high quality and focus on the fundamentals first and this deferred thing as a potential problem?” asked Marc Adler, former IPO president and current member of the Patent Public Advisory Committee. “I would caution people around the room for falling in love with deferred examination because you think you might save money,” added Nicholas Godici, a former patent commissioner. “This is a government agency … and it’s a fee-funded government agency. If you are saving money at one end, the office is either going to fall behind or they will raise fees.” Cautious Industry Support IBM is in favour of deferring as long as it speeds up the process, while Microsoft is not opposed to it, provided it is done in a way they approve of. “The devil’s in the details,” said Microsoft’s associate general counsel for intellectual property policy, Dick Wilder. “We have more of an interest in seeing that our applicants be processed quickly.” Some companies, such as Biotechnology Industry Organization (BIO) members, defer whenever they can when filing in other countries. Although there were some complaints that the deferral period may be too long, “there is, not more dissatisfaction generally, with the way foreign deferral systems operate [compared] with the way the USPTO system operates today,” said Hans Sauer, associate general counsel for IP at BIO. “We really look to see how that technology’s going to play in that marketplace” before requesting a review, added Live Technologies Corporation’s Alan Hammond. “I think it is working [internationally] and it can work in the US.” But the Procter & Gamble company said it does not see much benefit to utilising deferred examination in other countries such as China or Japan, both of whom use a three-year deferral. “It’s kind of a wash when we look at it,” said Ken Patel, IP counsel for Procter & Gamble. “But if the PTO were to say that implementing deferred examination would most definitely guarantee an 18-month pendency rate, I think we could reconsider.” Patel was referring to what it considered to be the “sweet spot” of the US patent examination process – an ultimate goal of 18 months from the time of filing to final disposition of the application. What’s Good for the US is Good for the World? Even though some advocated looking abroad for guidance on deferrals, others said the US should set a global example for how to increase efficiency, not follow others’. “If the change that you’re talking about is good for the world’s biggest economy, then it should be done, because it will be good for the world’s economy,” said Gordon Arnold, chair of the American Bar Association’s intellectual property law section. “If the change is not good for the world’s largest economy, then it should not be done, regardless of whether we’re out of sync, whether we’re outside of harmonisation.” Although there was an argument made that deferred examination should not be considered by itself, but rather a piece of overall reform at the USPTO, others said the USPTO simply cannot wait to act. Nancy Linck, former solicitor for the USPTO, stressed that the office has “huge, huge challenges in examining the applications coming through the door” and that, other than deferred examination, no one has come up with any better ideas. “You can only hire so many examiners and they need to be trained. It really is an impossible situation for the office,” she said. “I think we should give deferred examination a chance, try it. You can always get rid of it if it doesn’t work.” The USPTO has been hiring thousands of patent examiners to keep up with the number of applications coming in. The Patent Office Professionals Association argued that this tactic has been working, and that it must be given time to work. “We reduce pendency by getting boots on the ground, so to speak. We are hiring people …we’re at the point where we’re turning that corner now,” said Robert Budens of the POPA. “Then we want to throw in another variable to the pile that may actually have unintended consequences we haven’t thought of? …It’s not clear to me deferred examination is the answer at all.” Patent Reform Legislation on the Way Agreeing on the need for speed, Arti Rai of Duke University and an IP adviser to President Obama, said USPTO might not want to wait for legislative authority via a congressional bill, but that, if agreed to, the USPTO might rather try to adopt deferred examination through a rulemaking procedure. But it appears there is at least some interest on Capitol Hill in ensuring the USPTO has such authority. Joseph Matal, counsel for Senator Jon Kyl, an Arizona Republican on the Senate Judiciary Committee, said he would not dismiss the idea of using legislation as a means to adopt deferred examination, particularly since, “more likely than not,” there will be a patent reform bill passed this year in which it could reside. “I’m actually surprised at not only how much support there is … it might be possible to work out some of these issues” from the opposition in the patent reform bill, Matal said. “Capitol Hill would be perfectly happy to look at it.” Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window) Related Liza Porteus Viana may be reached at email@example.com."US Debates Patent Exam Deferrals; Patent Reform Bill Expected This Year" by Intellectual Property Watch is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.