Does the USPTO’s Roadmap to Improved Patent Quality Lead to Lake Wobegon?

The U.S. Senate Committee on the Judiciary’s Subcommittee on Intellectual Property recently held hearings on the topic of Protecting Real Innovations by Improving Patent Quality. The Subcommittee is to be commended for seeking practical solutions to improve patent quality. To this end, the author respectfully recommends that the Subcommittee and the intellectual property (IP) community take a close look at the United States Patent and Trademark Office (USPTO)’s revised Performance and Appraisal Plan (PAP) for patent examiners.

Revised PAP Portrayed as a Roadmap to Improve Patent Quality

In 2019, then IP Subcommittee Chairman Senator Tillis held hearings entitled Promoting the Useful Arts: How can Congress prevent issuance of poor quality patents? In his testimony, witness Drew Hirshfeld, then-Commissioner for Patents, now performing the functions and duties of the Under Secretary of Commerce for Intellectual Property and Director of the USPTO, announced “beginning next fiscal year, there will be a new performance evaluation that will serve as a roadmap to improve patent quality” (page 5). In his questions for the record, Senator Chris Coons (D-DE) requested the revised PAP. Six months later, the USPTO inserted the revised 2021PAP, “which the USPTO plans to implement in FY2021” (between pages 11-12 of their Response).

So What’s Changed?

This article compares the quality element of the 2021PAP with prior versions to identify changes affecting patent examination quality. Copies of PAPs, current or prior, are not readily available on USPTO and Patent Office Professional Association (POPA) websites. The 2010PAP quality element was archived from the PAP Guidelines, formerly made publicly available by POPA (April 19, 2012). The 2014PAP is found in the Statement of Robert D. Budens before the House Committee on the Judiciary and the House Committee on Oversight and Government Reform (November 18, 2014). The 2015PAP quality element was published by National Academy of Public Administration (NAPA), in their Telework Internal Control and Program Review. Pages 112-113 of the NAPA Report.

The USPTO relies upon criteria set forth in the PAP to rate the examiner’s annual performance into one of five categories: Outstanding, Commendable, Fully Successful, Marginal or Unacceptable. The 2021PAP contains at least five changes that would permit examiners to receive higher ratings while performing lower quality work. These five changes will likely reduce the quality of the examiners’ work products—rejections and allowances—while increasing the number of examiners eligible for Commendable or Outstanding ratings.

First, the weight given to the quality element is reduced from 35% of the overall rating in the prior PAPs to 30% in the 2021PAP.  This reduction will likely incentivize examiners to devote less time and attention to their work quality than they did under the 2010PAP and 2015PAPs.

Second, the 2021PAP permits examiners to make significantly more quality errors while still earning top ratings. Under the prior PAPs, an error rate higher than 4.49% would have prevented an examiner from obtaining a Commendable or Outstanding rating. Now, the 2021PAP permits examiners with an error rate as high as 6.49% to qualify for an Outstanding rating

Third, the 2021PAP lowers the standards for evaluating whether an examiner properly complies with 35 U.S.C. Sections 102, 103 and 112.

The Office of Personnel Management (OPM) Position Classification Standard sorts patent examiners’ functions into three levels of activity:

The 2021PAP lists 19 functions, renamed by the USPTO as Quality Major Activities (QMAs)), required for the examination of patents. In the second column of Table 3, the USPTO has assigned an activity level for each QMA, resulting in six Basic QMAs, four Advanced QMAs and nine Legal QMAs.

In Table 3, black boxes outline two QMAs now downgraded from the 2015PAP’s Advanced level to Basic level:

(4) Analyzing disclosure and claims for compliance under 35 U.S.C. Section 112 and

(6) Making proper rejections under 35 U.S.C. Sections 102 and 103 with supporting rationale, or determining how claim(s) distinguish over the prior art.

Determining whether the specification contains a brief description of each drawing is an example of a Basic activity that can be performed with little more than cursory review. Basic activities do not require the examiner to apply “a sound understanding of the procedural and substantive law generally, and of the statutory and case law to patents specifically, which are applicable to the patent examining process.”

Regardless of whether the examiner is entry-level or a GS14 seasoned primary examiner, the 2021PAP lowers the bar they must meet in determining compliance with Sections 102, 103 and 112 from Advanced to that of a Basic activity. See Excerpt from 2021PAP Quality Table 1:

In contrast, the 2015PAP evaluated the examiners’ analysis for compliance with Sections 102, 103 and 112 in terms of the more difficult, Advanced activity.

From 2015-2021, no change to patent statutes or MPEP guidance occurred which would have simplified an examiner’s analysis for compliance with Sections 102, 103 and 112. Downgrading the activity level of QMAs (4) and (6) from Advanced to Basic will likely incentivize examiners to spend less time, effort, and analysis when reviewing applications for compliance with Sections 102, 103 and 112.

If Congress and the IP community seek to improve the USPTO’s compliance with Section 112, they may wish to consider discussions with the USPTO to reinstate the Advanced level for compliance with Section 112 or even increasing the standard to the Legal level.

Fourth, the 2021PAP invents a new non-error-based assessment evaluation standard shown in Table 3, red boxes, and applies this mulligan to seven of the nineteen (37%) QMAs as listed in Table 4.

Errors made in QMAs (1)-(2) and (11)-(15) are seemingly excluded from the newly expanded 6.49% error rate threshold. Correctly performing QMAs evaluated under the non-error- based assessment standard is apparently left up to the examiner’s discretion. Some QMAs now evaluated under the non-error-based assessment standard are replaced by optional indicia.  Others are not. Apparently, the 2021PAP does not require examiners to correctly evaluate/apply case law as necessary (QMA (11)) or evaluate the sufficiency of affidavits/declarations (QMA (12)). Examiners who fail to correctly perform any of the QMAs listed in Table 4  may still be rated as Fully Successful.

Omitting 37% of the MQAs from the USPTO’s overall quality statistics will create the impression that patent quality is higher than it actually is. What if 37% of the critically important car components were optionally or haphazardly installed by autoworkers, without risk of running afoul of quality control?

This new evaluation standard appears in conflict with OPM’s Position Classification Standard, which governs the USPTO and which does not identify any assigned patent examination activities for which correct performance is optional or unreviewable.

Fifth, the 2021PAP expands indicia under which examiners may obtain higher level ratings. The use of indicia to justify higher ratings (Outstanding or Commendable) is not new.  The 2010PAP provides the following Indicia 1-3, with which examiners must fully comply in order to receive higher ratings.

To earn a Commendable rating under the 2010PAP, examiners must comply with all three indicia in substantially all actions. Examiners failing to meet all three indicia were to be rated one level lower—Fully Successful—even if they met the 5.49% error rate required for a Commendable rating. See 2012PAP Guidelines.

In contrast, to earn a Commendable rating under the 2021PAP, the examiner must only comply with the three indicia in the majority of all actions, i.e., 51% of their applications. In their other applications, the examiner can fail to comply with Indicia 1-3 and still be rated Commendable. It appears the 2021 PAP allows commendable-rated examiners to select applications to which the more lenient criteria would be applied.

Further, the 2021PAP permits examiners to pick-and-choose between open-ended lists of sub-indicia for activities to apply in their Office actions and allowances.

          “The examiner may demonstrate compliance with this indicia when office actions, or prosecution histories taken as a whole, include some or all of the exemplary activities listed below, as appropriate, or any additional activities or characteristics not listed below.”  Emphasis added.

Indicia 1, Search and Prior Art, lists 4 optional activities:

Indicia 2, Clarity of the Record, lists 8 optional activities:

Indicia 3, Compact Prosecution, lists 9 optional activities:

An examiner who fails to perform all these activities can still be rated Fully Successful, defined as “good sound performance” in the 2014 PAP.

The newly touted indicia make it easier for an examiner to obtain a Commendable or Outstanding rating. Some indicia are redundant. An examiner can demonstrate simultaneous compliance Indicia 1 and 3 by choosing to:

 Search the inventive concept as defined at the time of the first office action on the merits (Indicia 1(a)) and

Perform a thorough search for the claimed invention as defined in the application at the time of the first office action. (Indicia 3(i)).

Some indicia impose burdens on applicants. To demonstrate compliance with Indicia 3, examiners may “make a complete restriction/election of species requirement” in every application. Indica 3(f).

To demonstrate compliance with Indicia 2, examiners may include, whether warranted or not, “their interpretation on the record of claim language that is functional, expresses use/result, or is non-functional descriptive material, or means for language.” Note such “documenting may include but is not limited to the interpretation of claims under 112(f) using the appropriate form paragraph.” Indicia 2(b).

Extraneous 112(f)-like statements in Office actions and Notice of Allowances may create the appearance that examiners are focusing more on Section 112(f) analysis. However, the bar for evaluating examination for compliance with Section 112 has been reduced to the Basic level, so cursory review suffices. No sound understanding of Section 112 and its related caselaw is required by the 2021PAP.

Déjà vu All Over Again?

This is not the first time the USPTO has travelled down this road. In 2015, the Department of Commerce Office of Inspector General (OIG) determined in their Final Report entitled USPTO Needs to Strengthen Patent Quality Assurance Practices, that the “USPTO’s official quality metrics may underrepresent the true error rate.” OIG-15-026A

OIG found that “over 95 percent of all patent examiners received outstanding or commendable ratings for the quality element of their annual performance evaluations (see Figure 2) even though the Department defines Commendable performance as ‘unusually good’ and Outstanding performance as ‘rare, high quality performance’ that ‘rarely leaves room for improvement.’”  The distribution of scores does not align with the ratings descriptions contained in the Commerce Department’s guidelines for performance appraisals.”  OIG-15-026A pages 5-6.

Even PAP Appendix A defines Outstanding as “rare high-quality performance” and Commendable as “unusually good performance.” 2014 PAP.

The OIG found that, between FY2009 and FY2013, higher rated examiners earned on average $6,000 in annual bonus awards. Page 4.

The OIG’s concerns from 2015 seem relevant today:

The weaknesses we identified with the current performance plan make it difficult to distinguish between patent examiners who are issuing high-quality patents and those who are not. In July 2014, the Deputy Director of the USPTO stated that “issuing high-quality patents not only improves the overall vitality of our patent system but can also play a significant role in curtailing abusive patent litigation.” We are concerned with USPTO’s inability to distinguish and reward examiners performing at a truly Outstanding level of performance versus those who are not. OIG-15-026A page 9.

2021PAP’s Roadmap to Quality leads to Lake Wobegon

Note the USPTO portrays the revised plan as “a valuable tool to assist in performance improvements” intended to  “foster the Outstanding work that the vast majority of the examiners already do.” Response.  The USPTO’s goal is seemingly to increase the quality ratings for patent examiners, not to increase patent examining quality itself. The 2021PAP significantly erodes five aspects of the quality element.

These revisions will likely result in examiners obtaining higher ratings without actually performing higher quality work. As such, the 2021PAP’s Roadmap to Quality leads directly to Lake Wobegon—that happy place where all examiners are rated above average.

IPWatchdog reached out to the USPTO for comment on this article, but we had not received a response as of the time of publication.

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