Exclusive Interview Part 3: USPTO Deputy Director Terry Rea

USPTO Deputy Director Theresa Rea in her office on January 17, 2012.

This is the finale of my January 17, 2012, interview with Teresa Rea, who is the Deputy Under Secretary of Commerce for Intellectual Property.  We begin by discussing first action allowances and whether they are frowned upon, then discuss the examination process and weave our way to Track 1 and whether you really must use Track 1 for patents likely to be litigated because you get a much more condensed, streamlined prosecution history. For the rest of the interview please see Part 1 and Part 2.

Over the past 10 days I have also interviewed  Peggy Focarino (Commissioner for Patents), Deborah Cohn (Commissioner for Trademarks) and Peter Pappas (Chief of Staff).  These interviews are being transcribed and prepared for publication.  So stay tuned.  To view all of these latest USPTO interviews visit USPTO 2.0.

QUINN: I have noticed a lot of change at the Patent Office on almost every level. Things seem to be very, very different increasingly so. The one thing that I hear a lot is the fact that attorneys believe that when you get a first office action there are examiners that will go out of their way to find something that can be rejected even if there is something that seems it should be allowable. Recently in a stream of comments on one of the articles on our website, somebody who said that they were a patent examiner offered that it was his or her understanding that if you give a first office allowance, those are kicked out into a separate pile for quality review where they may be a little bit more stringent. If this perception is out there then that can be damaging.

REA: And, Gene, I agree with you, perception becomes reality at some point. We’re trying to change the perspective with some of our examiners so that they do a compete review as early as possible and that if an examiner thinks that a first action allowance is appropriate, they have the authority to do it if they’re a primary examiner. I’m no longer in private practice so I haven’t seen a first action allowance for a while. But they do—
QUINN: Neither have I. [Laughter]

REA: Well, but I assure you they do exist. There is no quality check that is directed just to first action allowances. I have really never heard of that before. So there is nothing formal like that going on. We encourage our examiner’s to do a first action allowance if they don’t think that the claims need to be amended in any way and they think you’ve captured all the prior art and that the claims are free from any rejections. It is natural for examiners to second guess themselves in such instances however. But if the examiner believes that you’ve done a good job and that it warrants a first action allowance, our examiners are authorized to do that.

QUINN: Okay. All right, now, how do you combat the rumor mill, or the myth mill? I know Peggy and I think Dave occasionally meet with folks. Do you do that as well?

REA: Yes.

QUINN: Just to keep your finger on the pulse?

REA: Yes.

QUINN: Do you find that helpful?

REA: I absolutely find it helpful. We have brown bag lunch meetings with examiners. And we get to hear recommendations of theirs and sometimes complaints of theirs. We have targeted new hires recently and IP experienced hires and just finding out what their experience has been so far. We like to make sure we hear from the new examiners that we’re bringing in because there are so many of them. We want to make sure that they are trained with the correct perspective. And so I think that you, Gene, as one of our members of our user community should feel a change when you bring a case before an examiner now, versus how it was a few years ago, and we hope you will see more of a change as time goes on. We want to give you a quality work product in a timely manner. And we don’t want to throw up any unnecessary hurdles.

QUINN: We noticed in our practice a change almost immediately when Director Kappos came in because a lot of what I do is in the software/business method systems/internet area. And it went from no, no, no, no to occasionally actually getting a call from an examiner saying, ”You know, I think you got something here. Can we talk about language?” That was a total sea shift. And I hear about that in bits and pieces. And then we’ve also had a situation where one thing has worked in the last ten similar cases and then you start dealing with an examiner and you start offering those same amendments and it’s not going to work in this particular case. And it’s like, well, why not? You know? Well, that doesn’t satisfy Bilski or whatever. Well, it did the last ten times. Obviously you don’t pick fights, I mean, you want to work with the examiners, that’s not what I’m saying, but it gets me to wonder how do you go about trying to strive for uniformity? That seems to be just an enormously daunting task. We have what now, 6500 plus examiners?

REA: More than 7000.

QUINN: More than 7000 examiners now. And all of them are dealing with stuff that is supposed to be brand, spanking new on some level.

REA: Right. Gene, I can tell you that the patent academy training never stops. Examiners are constantly updated training and they get constant communications. We try and strive for consistency and uniformity by training examiners in one topic in a consistent organized way. Training for examiners never stops here. We need to continually update them because either statutorily or some recent court decision we’re forced to revisit something and to modify perhaps something we’ve done before. When training over 7000 examiners in different technologies, consistency can be a challenge, but we do an amazing amount of training here to ensure examiners are updated on the law and it is endless. And would you mind if I digress and go back to your interview idea?

QUINN: No, no, go right ahead.

REA: Okay. Interviews have now become a big, big part of the agency. And we encourage examiners to conduct interviews more than ever before. They are given sufficient time to do these interviews and are benefited by the interview process. The amount of interviews has increased significantly, and a lot of those are examiner-initiated interviews. So no longer does the request for an interview only come from the patent applicant or the patent applicant’s representative but it’s actually the examiner who initiates the interviews. Examiners who do interviews have found that their lives have improved significantly. They have a clearer idea of what the allowable subject matter is much earlier. And it’s really helped a lot with trying to make our patent examination process more efficient.

But for examiners who didn’t feel comfortable giving interviews or asking for interviews, we have specific training modules on interview practice and procedure, even for our most experienced examiners, because many of them have not done many interviews and we really want to encourage them to interview more. We have also had courses on handling the more complex and confrontational interview; how examiners are to handle even those in a graceful professional manner. All this specific training on interviews has put interviews first and foremost in their brain, they actually have been initiating a whole lot more interviews than before and I think the user community has seen the benefits of that.

QUINN: Yes, I agree. I think it does. There is always the question about what is that interview going to wind up doing to the prosecution history and in patent litigation as we know I think it has taken yet another downward turn in terms of everything is fought. Now some of the more recent Federal Circuit cases you see litigators getting slapped or sanctioned for lying and making arguments up out of whole cloth. And I think to some extent that the patent community is a little fearful of that. But I am a fan of getting the patent for the client and we realize what any given year, maybe 3000 or so, 4000 cases are litigated where you are giving 250,000 patents.

REA: Right, very few cases are litigated. Keeping litigation in mind, I do want to mention, Gene, that along with this new interview practice procedure that we’re training our examiners on, we’re also training examiners that the examiner interview summary form should really capture the heart of the interview. And while in years past what was given on the summary form might have been rather brief, you know, all rejections of record were discussed, and no agreement was reached, now if agreement is reached our examiners are trained to provide more clarity or specificity in that examiner interview summary form so that if somebody years down the road in litigation wanted to know why was this interview successful, their will be greater insight into what the examiner was thinking.

QUINN: Okay. Now, what if you get that, the examiner writes that down and you’re like, well, that’s not exactly what we talked about?

REA: Then in the applicant’s next communication simply acknowledge receipt of the examiner interview summary form and if you think that greater clarity is needed or a better explanation is needed, that is a good opportunity for the applicant to put it in their next communication.

QUINN: Okay. And I know that this isn’t maybe exactly the topic we’re talking about now, but there is a connection. Track I seems very successful. We recently published a guest article on accelerated examination, where the author went and talked to five different practitioners who have had experience with acceleration. The author found that they all like it and are happy with it. And one of the things that one of them raised was the fact that he thought that if you had a particularly valuable invention that may wind up being litigated, you probably have to go Track I or at least suggest it because it seems like you’re going to get a smaller prosecution history.

REA: Frankly, Gene, I never actually thought about it in that manner before. Track 1 will probably result in a more targeted prosecution history, but I think that the heart of the discussion is still going to be there in the public record. You are still going to have an office action and you are going to still have a response. It will probably be a little bit more complete and targeted than maybe what you’re used to.

QUINN: Yes. And that’s I think where this person was going with this. It seems that the people who have had experience with it are leaving with the idea that the examiners are extremely serious about this and about reviewing the application and about getting to patentable subject matter. And that the consideration that is given is you get to the point where you get the examiner’s attention maybe a lot quicker. So therefore there’s not a lot of paper that is passing in the mail or now passing electronically. So you get to the heart of the matter quicker. Is that the way that you’ve seen it unfold?

REA: I think because the first office action issues so promptly and the communications between the examiner and applicant are so compressed that memories are clearer both the attorney and examiner remember more about the case,so there are greater efficiencies. But any statements the applicant makes in a Track 1 case would likely have been done in a regular case, things will just move along faster. You would still have to put some of those same statements on the record even during Track I accelerated examination.

QUINN: Yes, I know. And I didn’t mean to say that there was anything nefarious going on. But when I read that I thought to myself that this was not something that I had thought of. But we always talk in the patent community about the fear that you are dealing with an examiner who’s not necessarily going to give you real consideration until either the final review or in some cases until the examiner’s answer is filed. So it seems like you get much better, much quicker, much more substantive consideration early on. So then you do not wind up with the ships passing in the night with the office actions.

REA: I think you’re right, Gene. I think Track I gives you a more focused or targeted examination. Some day when we reach the point where we have 10 months to first official action and 20 months to a resolution of whether or not patentable subject matter has been identified in the case, I think that we will start seeing how the Brave New World will look once we handle our backlog. Because I think that accelerated Track I examination right now will frankly be the norm of the future once our backlog is eliminated.

QUINN: Well, that was the next question I was going to ask you. It seems to make all the sense in the world to me that if you condense this stuff over a span of three to six months versus over a span of three to six years, memories are better and the examiners have worked on fewer cases in between and that you really could speed that up. So it’s interesting to hear you say that. Have you noticed any other kind of efficiencies or any kind of surprises of a good kind? By that I mean, whenever you start a new process you don’t know what you’re going to get into. And with every experiment there is going to be some intended consequences and some unintended consequences and sometimes the unintended ones really wind up being good.

REA: Right. I would not say this was an unintended consequence, but we realized that if people paid the additional money for Track I or accelerated examination, and they saw the need to amend their claims that they would do so perhaps earlier in the proceeding. I think that we are seeing that, but frankly, I think that was expected. I think, as you know, some of our cases have, from the time of filing to receiving a notice of allowance could be something as short as two months. So we’ve got greater efficiencies with the examiner being focused on Track I cases and realizing that they really have to do the best job they can at the outset. But we also have the applicant, or applicant’s representative being willing to amend the claims earlier if it’s necessary instead of rolling the dice yet one more time.

QUINN: Right. And eventually once you get the fee making authority, the micro entity fee will be $1200? Is that 25% of the regular fee?

REA: That is what we believe is the case. We have fee-setting authority, and we are actually in our fee setting procedures right now. PPAC will soon be doing hearings to get public input on our fees and then you’ll see our notice of proposed rule making. It’s a Herculean effort. We’re putting a tremendous amount of time into that right now. The exact definition of micro entity and how it’s going to be implemented is not entirely clear. But I believe that it will apply to Track I accelerated examination once the fee setting has been implemented.

QUINN: Okay. All right. There is one more thing I’d like to ask, if I can. For the first time that I can remember, we have a female Deputy Director and we have a female Commissioner for Patents, Peggy Focarino. I think that’s a great thing, and from what I can tell Peggy is very, very well respected. It seems rather historic so I was wondering if you might want to share a comment or thought? The sciences have been male dominated and the Patent Office for many, many years has been male dominated, although I know there’s been great strides in hiring female examiners and so forth. But this seems like a special time.

REA: Indeed, I agree with you completely, Gene. The U. S. Patent and Trademark Office, we are fantastic with diversity. We can still get better and we are striving to do so right now. But to see that you can get a female at the top of patents, of that business unit is more than impressive. And I’ve got to tell you also Debbie Cohn, the Commissioner of Trademarks is also a female. So I’d like to think that, to some extent Debbie, Peggy, and I run the agency.

QUINN: (Laughs) And Dave just thinks he’s in charge.

REA: Well, maybe you better not quote me on that.

QUINN: (Laughs) Okay. Well, that’s really all that I had. If there’s anything else that you’d like to put in there, I think you know at that length this is probably two segments.

REA: I think this was fantastic, Gene. Thank you so much. Your understanding and support of the agency is awesome. We appreciate all that you do for the patent community. And keep your comments coming and continue with your blog, please.

QUINN: Will do. Thank you very much! I appreciate it.

REA: Thank you.