Why the USPTO Should Introduce an Automatic Allowance Option

A study by economists Joan Farre-Mensa, Deepak Hegde, and Alexander Ljungqvist, titled “What is a Patent Worth? Evidence from the U.S. Patent ‘Lottery,’” discussed just how critical issued patents are for startup success. The researchers found that startups receiving their first patent grant—compared to similar applicants that narrowly missed out—experienced a 47% higher likelihood of raising venture capital in the following years, a 76% higher likelihood of securing loans (with issued patents serving as collateral that pending patent applications generally cannot), and more than twice the odds of an IPO. For capital-hungry small businesses and startups, the difference between a pending patent application and an enforceable, issued patent is often the difference between thriving and stalling. Yet the current path to receiving a Notice of Allowance—the final signal of approval from the U.S. Patent & Trademark Office (USPTO)—remains slow and expensive. Both of these critical problems can be solved by the USPTO right now through a simple but powerful new tool: an Automatic Allowance Option.

The Background Leading to the Automatic Allowance Option

Non-statutory double patenting rejections from the USPTO are very common when inventors file continuing patent applications. They are issued because continuing patent applications are often patentably indistinct from parent patent applications. In many cases, inventors overcome these rejections by filing a Terminal Disclaimer to align their patent term with another patent term.

Thankfully, the USPTO has a process where inventors can electronically file the Terminal Disclaimer and receive automatic approval. The automatic Terminal Disclaimer saves both time and money—inventors don’t have to wait for USPTO personnel to approve the documentation, and the associated fees are minimal.

Building on the automatic Terminal Disclaimer process, recent initiatives like the Artificial Intelligence Search Automated Pilot Program and the streamlined Automated Interview Request Form, as well as my recent IP Watchdog article discussing other USPTO automation moves that are needed, the next logical advancement in the Office’s modernization efforts is the Automatic Allowance Option.

Part One of the Automatic Allowance Option

Notices of Allowance are issued by the USPTO when all matters have been addressed to an Examiner’s satisfaction. Once they are received and an issue fee is paid, an enforceable patent almost always follows. However, the process of obtaining a Notice of Allowance has not yet caught up with the digital age.

Let’s start with the easier example. During patent prosecution, one very common outcome is that Examiners indicate in “Allowable Subject Matter” sections of Office Actions that “claims A, B, and C are objected to, but would be allowable if rewritten in independent form”. This is boilerplate language that is used verbatim by most Examiners to communicate that they are close to issuing a Notice of Allowance, but are not quite there. This language is a bridge between full rejection and full allowance.

As inventors and patent attorneys are aware, doing what the Examiners say at this stage—rewriting claims A, B, and C into independent form—results in Notices of Allowance being issued almost every time. However, there is an obstacle associated with doing what the Examiner says. Every time inventors see these definitive offers and decide they want to accept, they have to pay their patent attorneys and paralegals to do more work, and they also have to wait for Examiners to review what the patent attorneys and paralegals put together. In practice, this means another $600–$2,500 (2–6 hours of attorney and paralegal time) being spent and another two weeks to three months of waiting before the Notice of Allowance is issued. For small businesses that depend on actual issued patents (not pending patent applications), this obstacle is devastating.

The solution is simple: the USPTO should offer an Automatic Allowance Option after allowable coverage has been clearly identified by an Examiner. When inventors accept allowable coverage, there is no issue whatsoever that requires either their patent attorney’s eyes or the eyes of Examiners. The ensuing Notice of Allowance should be automatic. Patent attorneys learn in law school how to rewrite allowable dependent claims into independent form to lead to allowance. It’s not really a skill—it’s mostly rote work that technology can easily handle.

In practical terms, when an inventor says “Yes, I’ll accept the allowable coverage from the Examiner”, their patent attorney should be permitted to electronically file an automatic amendment in the Patent Center (where patent applications are filed) by making a selection from a dropdown menu—not by doing the rewriting themselves. Computers have been capable of rewriting dependent claims into independent form for many years via straightforward template-based or AI-assisted tools. The Automatic Allowance Option in this sense is the same as the Automatic Terminal Disclaimer that the USPTO already has, only here the time and money savings are much greater.

Part Two of the Automatic Allowance Option

Now let’s turn to the harder (and admittedly more speculative) example—the Automatic Allowance Option beyond accepting allowable coverage that has been put on the record by Examiners. While many criticize the Examiner Corps, the truth is that when you actually talk to them, they are more than willing to work with legal representatives and inventors to get Notices of Allowance issued. They know that their role is to be both an advocate and a judge. This was set forth more clearly in Sue Purvis’s 2013 presentation “The Role of the Patent Examiner”.

However, when it comes to communicating information learned as a judge, rewriting dependent claims into independent form is really the extent of what they do. The overwhelming majority of first Office Actions are filled with rejections and objections. Inventors certainly need to know what Examiners think as advocates, but they also need to know the information Examiners learn as judges.

Examiners spend many hours reading each patent application, hours during which they form thoughts about what might be allowable. Providing the Automatic Allowance Option beyond simply rewriting dependent claims into independent form would involve greater expansion of the “Allowable Subject Matter” section of Office Actions to include suggestions from the Examiner Corps

For example, many Examiners withdraw 35 U.S.C. § 101 rejections when inventors amend their claims to include technical information from their specifications. Moreover, Examiners often suggest the very language that is the subject of these amendments during interviews with legal representatives and inventors. This is a great practice, but the obvious question is why doesn’t it happen with regularity when first Office Actions are issued? Inventors have to pay their patent attorneys to analyze and guess at what the Examiners think might be allowable.

The USPTO should therefore expand the use of suggestions for allowable claim language in Office Actions and make those suggestions convertible into automatically filed amendments via dropdown menus. One way to do this would be via an Allowable Suggestion Pilot that inventors could opt into when filing their patent applications, and which would permit Examiners to tag suggested claim language for auto-amendments.

For example, Office Actions could be mailed with claim language highlighted by Examiners as structured fields that inventors could choose to accept or reject. This Pilot would be a more interactive experience for inventors than standard First Action Interview practice or previous After Final Consideration Pilot Programs. It would also be a more upfront way for Examiners to help shape patent coverage as judges. Most importantly, the Pilot would result in fewer back-and-forth communications with Examiners, which means significantly less time and money being spent to procure Notices of Allowance.

Making the Automatic Allowance Option a Reality

Giving inventors the Automatic Allowance Option in both its easier and harder forms would be a critical move toward a more efficient patent system. For inventors and small businesses, it would mean faster issuance times at lower costs, which means greater chances of success in the business world. For the USPTO, it would mean reduced Examiner workload on rote tasks and faster issuance of high-quality patents. The technology exists and the need is clear. All that remains is the decision to make the Automatic Allowance Option a reality.

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Author: iqoncept
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