Patent Law

Appeallusion

By Gary Odom and Jordan Kuhn

The current affirmance rate of the USPTO Board of Patent Appeals and Interferences (BPAI) yields the illusion that examiners deserve a pat on the back for a job well done, but behind every illusion lies reality. Let's peek at the man behind the curtain.

Professor Dennis Crouch goes stochastic, all the while thinking he's got the skinny:

The table below looks at board decisions for each technology center. The relative numbers are interesting - showing a low affirmance rate for rejection of business method cases (TC 3600) and a high affirmance rate for chemistry cases (TC 1700). The BPAI offers its own calculation of these numbers based on all of its decisions that are roughly parallel. [LINK]

(Note, the table does not add-up to 100% because I excluded decisions to remand and deny rehearing).

Thus, according to the BPAI, examiners write legitimate final rejections in 59% of the cases that are appealed. Yet, experience makes these numbers hard to swallow. Do prosecutors have unrealistic expectations of what constitutes allowable subject matter? Is the board completely biased in favor of the examiner? Or, are these numbers merely skewed?

The table is deceiving, as it fails to account for applications that are appealed but never make it to the BPAI. Many notices of appeal result in the withdrawal of the final rejection by the examiner, and never even reach the board.

Bear in mind that patent examination is a game; this is relevant to all PTO transactions.

But first, a quick refresher course on examiner productivity requirements. Examiners are reviewed based on four factors: production quantity (45%), production quality (35%), workflow management (10%), and customer service (10%). Production quantity is by far the most significant measure, not only because it is given the highest weighting factor, but also because it is the only objective assessment. Each examiner is given a production requirement in terms of hours per count. This requirement varies based on art unit (technology complexity) and seniority (GS level). One count is awarded to an examiner for a first office action on the merits, and a second for disposal of the application. Disposal includes abandonment and allowance. Additionally, a count is given when an RCE is filed, and the application is reset to have an additional 2 counts available.

The breakdown:
Restriction requirement = 0 counts
First action rejection = 1 count
First action allowance = 2 counts
Second action non-final rejection = 0 counts
Final rejection = 0 counts
Abandonment = 1 count
Allowance after attorney reply = 1 count
RCE = 1 count
First action rejection after RCE = 1 count
Examiner's response to an appeal brief: 0 counts

This makes obvious why patent examination is a game. Examiners have zero incentive to withdraw a rejection and find new prior art even when an attorney makes valid arguments against a first action rejection. Instead, examiners roll the dice.

Forgetting for a minute about compact prosecution, let's walk a short mile in an examiner's shoes. An examiner writes up a non-final rejection, rejecting all the claims over the prior art. The attorney responds and traverses all of the rejections. Let's assume the attorney makes some valid arguments and the examiner agrees that the rejections should probably be withdrawn. The examiner still has three options: 1) withdraw the rejections and allow the claims; 2) withdraw the rejections and find new prior art to write a second non-final rejection; 3) maintain the rejections and issue a final office action. Option 1 usually won't fly based on the current management mentality of "reject, reject, reject." Option 2 will chew through numerous hours for zero count. Option 3, although also zero count, takes less than an hour.

So, option 3 it is. Worst case scenario: the applicant files a notice of appeal, the examiner is forced to withdraw the final rejection, and then at that point allow the application or find new prior art. In this case, the only loss is the hour or so it took to write up the final rejection. Best case scenario: the applicant abandons the application or files an RCE. Sweet! Free count! And the examiner saved countless hours.

This constant gambling by examiners cause many notices of appeal to never result in an appeal that reaches the board. Additionally, the dice rolling skews the board affirmance rate, masking actual examination quality, but reaps sweet numbers for the PTO to parade to the public.

The game is rigged, and for those eating up the numbers like they were candy, congratulations to the PTO for pulling the examination wool over the eyes of the unknowing. Way to go!

Full post as published by The Patent Prospector on March 05, 2008 (boomark / email).