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Patent quality hearing failed to debate quotas and rejected rights

After the recent US Senate hearing on patent quality, in-house counsel say that some good points were raised but that nothing was said on the examiner count system or high-quality patents that are rejected



Politicians should consider the examiner count system and the need to improve the ‘good patent’ success rate more carefully in their discussions on patent quality, according to in-house counsel at software and technology companies.


The US Senate IP Senate Committee held a hearing last week called “How can Congress prevent the issuance of poor quality patents”, headed by Senator Thom Tillis of North Carolina, to discuss ways to stop too many ‘bad patents’ getting through at the USPTO.

The committee heard from five witnesses who made a range of suggestions, including fixing patent eligibility jurisprudence, strengthening efforts on international work-sharing, increasing patent application fees and allotting more time for the examination process.

Professor Wagner argued that the term ‘poor quality patent’ should not be used as shorthand to denigrate a patent that may in fact be strong on substance but that stands in the way of someone who wishes to use the invention it covers.

But sources tell Patent Strategy they would have liked panellists to delve more into the count system, which measures and encourages USPTO examiner productivity by awarding ‘counts’ for the completion of examination-related tasks, and debate whether it should be revised or removed.

“The examiner count system was the big elephant in the room at the Senate hearing, although it was touched upon in the discussion on examiner time,” says the senior patent counsel at a high-tech company in the US. “Getting rid of that system is a tremendously challenging prospect that I would love to see someone tackle.”

She adds that the count system is responsible for incentives that are not entirely consistent with the need for high-quality patents. The system pushes examiners to meet production numbers and does not incentivise them to spend sufficient time on individual applications.

“I understand the need for a quota system to help properly manage examiner output. But considering the technologies such as AI and quantum computing and other incredibly complex things that are crossing examiners’ desks, I’m not sure a count system is sufficient.

“We need to look at a new system that is consistent with the challenges examiners face in 2019. That is not an easy task, but it is needed.”

The head of a software industry representative organisation adds that revising examiner quotas is a good idea to give examiners additional time and further remove incentives that force applicants to launch a request for continued examination (RCE).

“Former USPTO director David Kappos renegotiated the time allocation from the count system, but he did not entirely wipe out the incentive to file for an RCE, and I would like to see that.”

The chief IP counsel at a US tech company agrees that revising the count system is a good idea if it gives examiners greater flexibility on cases that demand more time, but adds that it is important for politicians to debate the matter to hammer out potential problems such as budgetary constraints.

“It is a budget issue because relaxing quotas means more examiners might be needed. The funding for that must come from somewhere. The matter is not as simple as giving examiners more time, and there are other issues that will need to be resolved.”

Take the good with the bad?

Other sources say the Senate IP Subcommittee’s hearing focused too heavily on getting rid of bad patents and not enough on ensuring that good patents get through.

The vice president of IP at a US technology company says he was concerned that he did not hear anything said about erroneous rejections at the USPTO, even though in his experience there are plenty of them.

“No one in the pro-reform community complains about unfair rejections because applicants are expected to battle through with continuation requests,” he says. “But just because patent filers have a means to challenge rejections does not mean those rejections do not have a negative effect on the US economy.”

He argues that the focus on the acceptance of low-quality patents is indicative of the idea that some businesses are only considering the patents that affect them when they talk about patent quality.

The IP vice president says he agrees with hearing panellist Professor Wagner, who cautioned that ‘bad patents’ can be a catch-all term for those that are asserted against businesses.

The Innovation Alliance, a coalition of R&D-focused technology companies, sent a letter to the Senate IP Subcommittee yesterday that made a similar point.

The letter stated that while the alliance agrees that patent quality is a good thing, the term ‘poor quality patent’ is “often used as shorthand to denigrate a patent that may in fact be strong on substance but that stands in the way of someone who wishes to use the invention protected by the patent without taking out a licence to do so”.

But the software senior patent counsel disagrees with this point, and adds: “Anyone in the field knows that ‘quality’ simply means that a patent complies with the law; that it is non-obvious and eligible for patent protection.”

Fallbrook Technologies' Jeffery Birchak in San Diego says one way to avoid this situation in future discussions is to debate on, and find a definition for, the term ‘patent quality’.

“I would like to see someone define the term ‘patent quality’ so stakeholders and witnesses in future hearings know what they are trying to aim for,” he says.

Time waits for no one

In-house counsel tell Patent Strategy that the hearing did a good job of covering a lot of ground in a short space of time, particularly on finding ways to increase examiner time and taking advantage of efficiency-driving AI solutions. 

The software senior patent counsel says she was disappointed that the meeting was limited to an hour in the end, but adds that its witnesses made a significant effort to flesh out how the USPTO could give examiners more time to analyse applications. 

“People often take examination time for granted, but it is important for examiners to be able to search rigorously through potential sources of prior art, and for the USPTO to encourage those examiners to do that.”

Panellist Professor Wassermann argued that examiners could be given more time if the USPTO increased its application fees so it could invest more in hiring examiners. However, speakers argued that an increase in – or even a frontloading of – fees would benefit wealthy applicants over small companies and independent inventors.

The tech chief IP counsel adds that the points made on introducing AI systems were good, but adds that the implementation of such technologies is a long way off.

“I don’t know how long it would take to make major inroads with AI. I’m not sure a few years is enough – but it depends on what people have in mind for it. Some people think the machine will do everything – from sorting through the prior art to drafting a rejection and everything in between.

“But we are quite a bit more than a few years away from all those processes becoming so automated.”

Last week’s hearing did well to highlight some of the ways that the USPTO can improve the quality of patents making their way onto its register.

But if the Senate committee wants to make significant in-roads in this pursuit, it needs to convince pro-patent stakeholders that it intends to reduce the number of good patents being rejected as much as it wants to find ways to weed out invalid applications.

Politicians also need to spend more time looking at examiner quotas and how they might create a system that is more befitting of the complex technologies springing up at the moment.

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