Compact Prosecution in the USPTO is Anything But Compact

Much has been said about the fact that the USPTO has struggled for too many years yet fails to keep up with filings.  In a message dated January 25, 2012, Professor Harold Wegner pointed out that, currently, 46% of “new” applications are not new at all but are actually RCE’s.  USPTO “count reform,” intended to encourage greater efficiency in the examination process, had only reduced the rate of growth of RCE filings to 10.7 percent.  At least one response to Prof. Wegner, shared in another posting on January 25, stated the view that doing away with RCE practice would serve only to generate a staggering number of appeals and shift the backlog to the Board of Appeals, make the application process inordinately costly, and discourage inventors from ever applying for a patent at all.  As things stand, there is not much doubt about such a result.

Considering the amount of hand-wringing that has occurred over the matter, and the disappointing results thus far, it appears that, as things stand, there is little hope for the PTO to get is work done in any timely manner except by hiring a veritable army of examiners, legions of administrative patent judges, together with innumerable support staff.   It is not difficult to foresee how a budget request for such an approach would be received in Congress.

Perhaps the root of the problem is in the way things stand.  It appears that the USPTO, and the profession as a whole, regards as fundamental a premise that limiting the number of actions on a patent application leads to faster examination, shorter pendency, and efficiency in operation of the Office.  This is a concept known as “compact prosecution.”  At least it was known by that name.  The concept has been around so long, however, that it seems all but forgotten that it has a name, or that patent examination was ever done in a different way.

In fact, patent application examination was done differently.  Examiners wrote as many actions as were reasonably necessary to develop and resolve issues, permit applicants to amend claims to accurately set forth the invention in view of prior art uncovered during examination, define the invention in a manner that was agreed to be allowable, or define clearly the issues to be considered on appeal.  This process often resulted in a fair number of office actions (more than two) per application.  This was the norm at a time when the level of examiner productivity and efficiency were not of paramount concern.

That changed – apparently sometime in the 1960’s, a number of years before this author entered the profession in 1972 and well before the tenure of mostly everyone in the profession today.  “Compact prosecution” became the order of the day.  Examiners were expected to prosecute a patent application thoroughly in the first office action.  Assuming that all went according to the plan, the second action could be made “final” at which time the applicant’s ability to prosecute further would be limited.  The objective –get it done completely and correctly on the first action, and then move toward a close of prosecution.  Efficiency counted, and a system was devised to keep track of what an examiner generated in the time worked.

In the USPTO, equipped (in those early days of compact prosecution) with computers that could read punch cards and generate reports, it became all too easy to monitor and reward examiners based on the “work” that could be so easily tabulated.  The Office adopted a new system to “count” how much work was completed by an examiner, measured in “balanced disposals.”   The time-honored “balanced disposal” or “BD” is the number of first actions on the merits of an application, plus the number of applications disposed of (by allowance, abandonment or forwarding to appeal), divided by two [BD = (N + D)/2].   All was well.  For many years the workings of the USPTO proceeded apace, without great incident and without great objection from its constituency.

The times they were a-changin’, however.  The decades that followed brought innovation at record pace.  Patent protection took on greater importance in a changing world economy.  The number of applications filed (and the backlog) in the USPTO grew steadily. Generations of examiners and PTO administrators have come and gone, procedures were tweaked here and there, and the methodology underlying   “compact prosecution,” designed to take a bite out of Office inefficiency, seems to have evolved into a creature eating away at the very ability of the Office to function. Moreover, that creature has been in residence so long – it has been around longer than nearly every member of today’s patent profession – it appears to have been overlooked that the Office need not be at the mercy of the beast.

What was likely conceived well over forty years ago as a reasonable measure of useful output has evolved into justification and encouragement for counter-productive action.  The measure, BD = (N + D)/2, has become a way for examiners to generate “counts” that bring reward and acknowledgement, yet defeat the very mission of the Office to examine, in the most efficient way reasonably possible, the many truly new applications that are filed day in, day out.  With few exceptions, in the examination of applications in the USPTO, a second action final rejection is now the norm regardless of how complete or incomplete the initial search or consideration of the application may have been.  Instead of being encouraged to actually search an invention thoroughly and address and resolve all issues, examiners are rewarded for pumping out as many first actions as possible followed by quick disposals, and further rewarded generously with additional, easy “first” actions and further disposals for forcing applicants to re-file.  Lots of apparent “work” is measured, but the backlog continues to grow and, in reality, not so much real work is getting done.

The situation described in the preceding paragraph is hardly news, and is surely understood by substantially everyone in the profession.   Also, before going any further, it is important to appreciate that this is not cause to point fingers in the direction of PTO examiners.  They are rewarded for certain actions and activities and it should be a surprise to no one that they do what they are rewarded for doing.

The problem, it seems, is in the disconnect between PTO policies, on the one hand, and the objectives of the Office, on the other hand.  The Office surely wants and intends to reduce the amount of unproductive work, including the need to deal with the many RCEs being filed.  However, stuck in the “two actions and out” mode of compact prosecution, the PTO continues to reward examiners with easy “production” for forcing applicants to re-file.  It seems safe to postulate that the backlog will not go away as long as this continues.

There has been lots of discussion about how to tweak the count system to encourage more efficient operation of the Office.  However, to the best knowledge of this author, it has never been seriously proposed to do away with the “two actions and you are out” approach to examination.  Perhaps this is because it is counter-intuitive to suggest that examination might proceed more efficiently in a system that permits any number of office actions per application, rather than taking every imaginable measure to limit actions to two.   Such an approach has not been seen in about forty five years and is, thus, not even showing up on the radar any longer.

So what is to be done about all this?  Change does not come easily.  At a minimum, the PTO must stop encouraging and rewarding examiners for actions that defeat the objectives of the office. As long as examiners are credited and rewarded for acting upon every application that they can force an applicant to file, examiners can be expected to seek the credit and reward, and the backlog will be with us.   As long as examiner performance is based upon the conventional (N + D)/2, the incentives will foster counter-productive behavior in the examining corps and the Office will not make meaningful strides toward accomplishing its mission.  Examiners will do what they are rewarded for doing – generating as many N’s and D’s as possible without regard to whether anything is really being accomplished.

It would be naïve to suggest that the task of examining patent applications would be accomplished by thousands of different individual examiners in a manner that is orderly and manageable without some approach to monitoring output.  How might this be accomplished?  With the understanding that the following is surely not a complete and detailed proposal, it is believed to represent a reasonable framework and approach to the matter and a basis for further discussion.

The fundamental principle that must guide any approach to monitoring the work of the examining corps is that productive actions must be encouraged and rewarded, and non-productive actions must be discouraged, or at least not rewarded.  This includes setting aside the time-honored but counter-productive notion that getting rid of an application – any application – in two office actions leads to efficiency.  The mission of the Office is to devote its resources to processing and passing judgment on the greatest number of inventions possible, not merely to process the greatest possible number of applications.

With that in mind, for the sake of discussion let’s assume that a meaningful measure of useful output is the number of actual inventions examined.  This might be calculated as I = (NA + TD)/2 where I is the number of hours devoted to examining an individual invention;  NA is the number of first actions on new applications directed to an individual invention (including first filings for an invention, legitimate divisional applications, but not re-filings simply to extend prosecution for any invention that was the subject of an earlier application); and TD is the true number of disposals (completion of examination of an invention resulting in an invention proceeding to allowance, abandonment without re-filing for the same invention, or forwarding an application for the invention to appeal).  No credit would be given for abandonment of an application in favor of an RCE or first actions on an RCE.   There would be no specific preference for fully examining an invention in any particular number of office actions (although true efficiency in examination would result in greater useful output for an examiner).   The objective is simply to get the job done properly, examining each invention completely to disposal within a reasonable number of hours.

It might be argued that this would simply lead to too many appeals.  That is a possibility.  However, if supervision is maintained over examination quality (i.e., at the Art Unit level by supervisors who teach examiners how to do their job correctly in the first instance, not by a quality review that, after the fact, simply disapproves of work by examiners with which they may disagree), and if examiners are graded poorly for sending to appeal an inordinate number of appeals that end up in reversals because they are not doing their job, such a possibility might be kept under control.

How many hours would be reasonable to examine one invention when credit is not given for churning useless continuing applications?  The USPTO has reams of historical data concerning how many hours per application is an appropriate goal for each art/technology under the long-standing system of “compact prosecution.”   A realistic goal might reasonably be higher than historical goals of hours per application, but not as many hours as examiners now justify by acting on truly new applications plus the many RCE’s that are necessitated by present practices.  Bear in mind that each examiner is now producing at some level that is a measure of hours per application but is examining only some lesser number of new inventions per year because many of those individual applications are RCEs resulting primarily from inefficient and/or ineffective examining practices.  If examiners are encouraged and rewarded for engaging in efficient behavior directed toward fully examining an application (i.e., thoroughly searching all of the claimed subject matter for the first action, addressing all claim elements and raising all reasonable issues in the first action, responding fully to all arguments presented by the applicant, engaging in telephone and personal interviews to more readily identify issues and resolutions, etc.) more real work would get done, applications would proceed more directly to issue, abandonment or appeal with well-defined issues, and a lot less time would be devoted to churning RCE’s and other measures to puff up measures of apparent productivity.

Some initial setting of goals under any new system might be accomplished based on rational evaluation of how much real examining work is accomplished presently, with a view toward taking advantage of improved efficiencies and actually examining more new inventions.  That will require a great deal of good faith cooperation between the Office administration and the examining corps and its representatives.  Over time, goals can be adjusted (as existing PTO goals have been adjusted over the years) based on actual experience.  Experience develops norms for such metrics as hours required to do a proper examination, reasonable allowance rates in a particular art, reasonable appeal rates, percentage of appealed issues that are affirmed or reversed, etc.  The extent to which such norms are identified, and the extent to which individual examiners gravitate toward such norms or deviate significantly can be used as measures for adjusting goals as time passes and for evaluating the effectiveness of individual examiners.

Making any such change in PTO culture will require that work quality be taken seriously at every level.  It will be necessary that supervisors monitor examiner work quality with a fair degree of diligence to assure that examiners are actually examining competently and not just “moving paper.”  Good work and a common-sense approach to examination must be acknowledged, appreciated and rewarded, not merely an ability to rack up numbers of actions by any available means.

Arriving ultimately at a fully-reasoned and well-supported method for monitoring examiner performance based on meaningful work accomplished will take some time.  However, the problems faced by the PTO today are at least forty five years in the making.  They will not be resolved conveniently within a PTO bi-week.  There will be the nay-sayers who maintain that any such cultural or managerial change is not possible, too much to expect, will not be accepted by the examining corps, cannot be implemented, cannot be monitored, etc.  Accepting such a negative view is to accept that the problems faced by the Office simply cannot be solved, and that is not acceptable.