Thursday, August 27, 2009

New PTO Director Must Change the Agency’s Culture

David Kappos’ biggest challenge as the new Director of the United States Patent and Trademark Office may be to change what has been called a “culture of fear” among patent examiners into a “culture of cooperation” with the patent community.

After consistently rejecting about 35% of patent applications for many years, the patent office is now rejecting nearly 60% of all applications and there is no sign that the increase in rejections is peaking. Exaggerated tales of low patent quality based on anecdotal evidence of a handful of dubious patents eventually led the patent office to penalize examiners for allowing marginal applications. Rather than seeing a problem, Interim Director John Doll repeatedly boasted about the increase in rejections as a sign of improved patent quality.

Now the reduction in allowed applications is having its inevitable impact on patent office operations. More rejected applications has lead to more appeals to the patent office’s Board of Patent Appeals and Interferences merely helping to create a backlog of appeals, with appeals being filed faster than they are being decided, to go along with a backlog of unexamined patent applications. Fewer allowed applications has also lead to fewer new applications, which has yet to make a dent in the application backlog. Most immediately, it has led to reduced revenue to the patent office, primarily in the form of maintenance fees and new application fees, without any offsetting reduction in office costs.

Director Kappos needs to find a way to reform patent office operations so that Examiners can do their jobs properly without fear of reprisal if they make a mistake, as all people eventually will do. This will go a long way toward restoring the patent community’s trust in the patent office. It would also help improve patent quality, patent office revenue, and backlog.

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