Patent Reform Proposal: Codify USPTO Rule 56

Over the past several years I have been a harsh critic of the United States Patent & Trademark Office because there are substantial problems facing the US patent system and I do not believe any of the reforms urged by the USPTO are calculated in any meaningful way to address those problems.  According to the recently released 2008 USPTO Performance and Accountability Report the overall average pendency of a patent application is 32.2 months, and the average wait for the Patent Office to respond to the applicant on the merits of the application by returning a First Office Action is 25.6 months.  So on average you file your application and then wait more than two years for the Patent Office to give any substantive response.  If your invention relates to computers or communication technology the wait for the First Office Action is even longer; 30.8 months for computers and 32.5 months for communications.  Of course this means that the average pendency in those areas is well more than the overall Office average as well; specifically 42.4 months to completion for computers and related technologies and 43.6 months for communications technologies.  This is extremely disheartening given that for many of these inventions by the time the Patent Office ultimately gets around to responding to the applicant on the merits or actually issues a patent technology has moved on to the next generation, which will undoubtedly wait around at the Patent Office until it to is obsolete.

As of the end of Fiscal Year 2008 there are 1,208,076 patent applications still pending at the Patent Office, so it is no great mystery why it takes so long to get a patent examiner to respond in a substantive way to applications that are filed.  The backlog continues to grow year after year after year, so there is really no reason to believe that things will change unless swift, strong and determined action is taken to implement rules and laws that are specifically aimed at solving the crisis facing the US patent system.  Now is not the time for half-measures.  If nothing is done soon the US patent system will slip into irrelevance because at some point it just doesn’t make sense to file a patent application on a technology with a limited life cycle when the Patent Office cannot recognize rights until after the life cycle has passed and the next generation of technologies is in use.

In an earlier post I suggested that patent examiners will examine patents based on the prior art that is submitted by the applicant. If no prior art is submitted by the applicant then the patent will be reviewed to make sure it meets the format and formalistic requirements, nothing more.  If implemented that could significantly help get through the backlog, but I am not a fan of changing the rules in mid stream so there are at least 1.2 million applications that I would be reluctant to capture with such a new rule.  Retroactivity is just offensive.  Nevertheless, one thing that could significantly help right away would be if Congress would define what the duty of disclosure is that is owed by those substantively involved in the prosecution of a patent.  Yes, the USPTO has Rule 56, which attempts to define the duty and obligation, but the United States Court of Appeals for the Federal Circuit does not feel that it is bound by the definition of the duty owed to the Patent Office, even though Rule 56 was set forth by the Patent Office.  Apparently the judges on the Federal Circuit feel that they know better than the Patent Office.  The trouble is this leads to patent attorneys being unwilling to say much of anything useful to an examiner for fear that what they say would open the door to a charge of inequitable conduct, which would render any patent and potentially any related patent unenforceable. 

We in the patent bar and those who utilize the U.S. patent system are caught in the crosshairs between the Patent Office and the Federal Circuit. The Patent Office wants us to disclose only information that is material to examination, meaning that we disclose only those things that would make for a good rejection, which is what Rule 56 requires. The Federal Circuit, however, wants us to disclose everything that could possibly be used by an examiner to issue any rejection, good or bad. See e.g. Digital Control v. Charles Machine Works. Given that examiners weave together some rather illogical and almost impossible to believe rejections, particularly in a first office action, the patent bar is stuck disclosing mountains of information that is no doubt objectively not relevant or risk the Federal Circuit ruling that any patent obtained is unenforceable for inequitable conduct. Who among us has been willing to take that risk? No one will take that risk because it is ultimately the Federal Circuit who will speak last on the issue in the event a patent litigation is filed and inequitable conduct is alleged, as it ALWAYS is alleged by the defendant in a patent infringement litigation.  Whether or not there are facts to support the allegation of inequitable conduct is of no consequence, it gets alleged every time and is the 800 pound gorilla sitting in the office of every patent attorney who drafts patent applications, prosecutes patent applications or litigates patents.  Despite the fact that the Patent Office rule makes sense and the Federal Circuit rule is irrational, illogical and nonsensical, we follow the Federal Circuit view because they are the ones who will decide whether to make a patent we obtain for our clients worthless.

The trouble with allowing the Federal Circuit to drown out the Patent Office on the issue of what needs to be disclosed is that the Federal Circuit is mucking with the Patent Office docket.  Would the Federal Circuit like it if the Patent Office issued rules that significantly affected the workflow and docket management of the Court?  Of course not!  So why then should the Federal Circuit make laws that do that same thing to the Patent Office?  This is particularly ridiculous given that the patent system is on the brink of irrelevance and the Federal Circuit still says that those substantively involved in the prosecution of a patent application must disclose everything you know.  This uses up client resources, it wastes Patent Office resources and it is the main contributing factor to the resistance most in the patent bar have with respect to many of the rules packages the Patent Office has tried to push through.  Of course, the continuations package is an exception and that is just against the plain meaning of the Statute, but would you protest so much about the IDS rules or a sensible Examination Support Document if it meant that the patent process would work better, faster and you would not have to worry about inequitable conduct making the right you obtained worthless to the client?  I think a lot of things would be different, and different in a positive way, if the Patent Office definition of the duty of candor were followed by the Federal Circuit.

So how do you get the Federal Circuit to follow the duty of candor rule announced in Rule 56?  I am not foolish enough to think that persuasive arguments and the impending doom of the recession will matter at all.  That is why Congress needs to step in immediately and codify Rule 56, or a variation of Rule 56 that would allow the patent bar and applicants to feel comfortable helping the Patent Office and patent examiners do their job while at the same time not running the unacceptable risk that inequitable conduct will be argued by every desparate defendant. 

Hey… if there is inequitable conduct then the patent should be unenforceable.  But the word “intent” needs to mean something in my opinion.  The truth is that even the Judges on the Court recognize this has gotten out of hand.  During the oral arguments in the USPTO appeal of the GSK and Tafas matter Attorney Toupin started quoting the Kingsdown case, which says that gross negligence cannot be construed as intent to deceive.  Judge Rader asked Toupin if he had read any of the recent inequitable conduct cases of the Federal Circuit.  Toupin said he had, but that since Kingsdown has not been overruled it must stand for something.  If only that were the truth.

About the Author:

Gene Quinn is a patent attorney and the founder of and is a member of the PLI Patent Bar Review faculty.

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