USPTO Proposes Three Track Patent Examination System

June 4, 2010. The U.S. Patent and Trademark Office (USPTO) proposed a three track patent examination system.

David Kappos (at right), head of the USPTO, stated in a release on June 3 that "We recognize that the traditional 'one-size-fits-all' examination timing may not work for all applicants ... By allowing applicants greater control over the timing of examination, the USPTO will be able to deploy its resources to better meet the needs of innovators."

The USPTO published more details in a notice in the Federal Register on June 4. See, Federal Register, June 4, 2010, Vol. 75, No. 107, at Pages 31763-31768.

The USPTO stated in its release that under the first track, applicants would be able, for an increased fee, to obtain "prioritized" and "expedited" examination. The USPTO added that the goal "would be to provide a first Office action on the merits within four months and a final disposition within 12 months of prioritized status being granted".

The second track would be for "traditional examination under the current procedures".

The third track would enable applicants to delay examination. The USPTO stated that "for non-continuing applications first filed in the USPTO, an applicant-controlled delay for up to 30 months prior to docketing for examination".

The USPTO added in its release that "For applications filed in the USPTO that are based on a prior foreign-filed application, no action would be taken by the USPTO until the agency receives a copy of the search report, if any, and first office action from the foreign office as well as an appropriate reply to the foreign office action as if the foreign office action was made in the application filed in the USPTO.  Following or concurrent with the submission of the foreign office action and reply, the applicant may request prioritized examination or obtain processing under the current procedure."

The USPTO also announced a public meeting, and requested written comments. The meeting will be on July 20 at 1:30 PM at the USPTO's Madison building, 600 Dulany Street, Alexandria, Virginia. The deadline to register to attend is 5:00 PM on July 16.

The USPTO's notice in the Federal Register identifies numerous topics upon which it seeks comments, and then propounds 31 specific questions, some of which have multiple parts. The deadline to submit written comments is August 20, 2010.

Some applicants have particularly urgent interests in obtain quick examinations. For example, credit or equity funding may depend upon the grant of a patent.

The USPTO notice states that this three track system will provide applicants "greater control over when their applications are examined" and will "promote greater efficiency in the patent examination process". For example, it states that "applicants who chose Track III because their applications were of lower value might ultimately decide not to pursue their application examination efforts that had been expended on the applications".

It does not address applicants with high value applications who choose to delay for other reasons, such as hiding applications from competitors. However, the notice asks, "Should eighteen-month patent application publication be
required for any application in which the 30-month queue is requested?"

The USPTO does not currently have statutory authority to set fees. This proposal would entail fee changes. However, pending patent reform legislation could be the vehicle for granting such authority. The Senate and House bills are S 515 [LOC | WW] and HR 1260 [LOC | WW]. Both are titled the "Patent Reform Act of 2009". The March 2010 draft [105 pages in PDF] of the Senate bill, at Section 9, gives the USPTO fee setting authority.

Also, on May 18, Rep. John Conyers (D-MI) and Rep. Lamar Smith (R-TX) introduced HR 5322 [LOC | WW], the "Patent and Trademark Office Funding Stabilization Act of 2010". It would give the USPTO authority to set fees by rules.

The USPTO's release and notice both state that this proposal will better provide the USPTO with resources, and enable it to better align and deploy its resources. However, neither document addresses the circumstance that that Congress often does not allow the USPTO to keep and use all of the fees that it collects. The Congress takes some of the fees collected by the USPTO to fund other government programs. HR 5322 would prohibit this practice. However, members of the House and Senate Appropriations Committees in particular have successfully opposed such fee retention proposals in the past.

Neither the release nor notice contain proposals for the actual increased or additional fees for expedited examination. However, the notice describes a methodology for calculating the Track I fees.

Small businesses and independent inventors may have cause to complain that the USPTO, by charging higher fees for expedited examination, is establishing a pay to play system that is biased in favor of well financed entities, and that discriminates against innovative inventors.

That Kappos was Assistant General Counsel for Intellectual Property at IBM before his appointment to the USPTO may exacerbate the perception of bias. The USPTO reported in April of 2010 that IBM received 4,887 patents in 2009, more than any other company. See, report titled "Patenting by Organizations: 2009".