The Inspector General’s Patent Office Report Should Have Considered Patent QualitySeptember 8, 2016
“The granting of improper and illegal patents defeats every object and purpose of patent laws. It serves to mislead and deceive the public, and to subject them to the annoyance of unjust and invalid claims. It throws distrust and discredit upon patented property, and injures the salable value of meritorious inventions.”
These words of Elisha Foote, Commissioner of the United States Patent Office in 1869, ring perfectly true almost a century and a half later. Low-quality patents, those that fail to be about new inventions and instead describe simple, basic, and obvious concepts, abound today. One study suggests that 39% of software patents and 56% of business method patents are invalid; another finds that “roughly half” of patents challenged in litigation are invalidated. Patents of questionable validity are regularly the basis of abusive lawsuits, where they are used to threaten small companies into paying settlements to avoid million-dollar litigation. Just about everyone—big companies, small companies, the White House, the Supreme Court, members of Congress—has criticized this problem of low-quality patents.
The U.S. Patent and Trademark Office is the first line of defense against these undesirable patents, so it is highly commendable that the Patent Office has engaged in its long-term Enhanced Patent Quality Initiative. Begun in early 2015, this initiative aims to improve the quality of issued patents through a number of efforts, including examiner training, better measurement of quality, and improved recordkeeping of Patent Office proceedings.
This patent quality initiative has received widespread support. Besides public interest groups like us applauding the initiative, numerous companies, trade associations, and even the Federal Trade Commission and Department of Justice weighed in to approve the Patent Office’s efforts to improve the quality of issued patents.
And this should come as no surprise, because issuing patents is the number one goal of the Patent Office. As the Supreme Court said once, “the primary responsibility for sifting out unpatentable material lies in the Patent Office.” Another court has explained that patent examiners are those government officials “whose duty it is to issue only valid patents.” The Patent Office is the first line of defense against wrongly issued patents and all the harms that they cause.
The recent report of the Inspector General of the Commerce Department needs to be read in light of this primary goal of the Patent Office. That report compared patent examiners’ timesheets to hours logged in the office or computer system, and found about 288 thousand timesheet hours unexplained. This is a small amount compared to the Patent Office’s overall output—about 2% of all hours worked—but it certainly has raised a number of eyebrows.
I have concerns about whether the methodology of the study reflects actual examiner practices—an examiner who pulls a 15-hour day and then works five hours the next might write down two 10-hour days to even out the timesheet, which the Inspector General would interpret as five unaccounted hours. But the larger question is this: Should the Patent Office and its examiners be evaluated simply by number of hours worked?
Patent examiners have a uniquely difficult job. They are asked to understand new inventions, and to interpret technical and legalistic language often designed to confuse them. These are skills that an examiner must acquire over time, and they are skills that must be creatively adapted to the specific circumstances of each application that comes across an examiner’s desk. Focusing on examiner hours rather than on examiner output mis-prioritizes the Patent Office’s mandate. Certainly patent examiners ought to put in the work that they are paid to do, and to the extent that examiners were improperly recording hours, the Patent Office ought to detect and prevent it. But considering that examiners’ work is technical analysis, the Patent Office’s performance requirements need to be tailored to the type of work done by an expert agency.
In particular, the risk of putting too much time pressure on examiners is that they will issue lower quality patents. Issuing a patent is a simple matter for an examiner of filling out a few forms. But rejecting a patent application takes work: The examiner must search the relevant technical literature and write up a detailed explanation of the defects of the application. Again, as Commissioner Foote noted in 1869, rejections of patent applications are heavily scrutinized within the Patent Office, but:
“An examiner’s action receives no such scrutiny when he allows a patent. If he be pressed for time, or be indifferent as to his duties, he may put an end to his labors by a simple indorsement….It may have happened that in some instances the allowance of patents has served to cloak incapacity and indifference to duty.”
If we’re concerned about the dangers of bad patents, about the harms of a “simple indorsement” of questionable inventions presented to the Patent Office, then we should be concerned with making examiners “pressed for time.”
Unfortunately, the Inspector General takes almost the opposite approach, suggesting that “performance standards have become easier” and so the Patent Office should give examiners less time to perform examination. If the goal of the Patent Office were to churn out patents as quickly as possible, then perhaps this would be right. But the Patent Office is not a factory, and patents are not widgets; they are legal obligations that demand compliance by every citizen of the United States, under threat of a patent infringement lawsuit. Formal instruments such as patents ought to be issued with care, not with mere concern for speed.
Particularly, the Inspector General’s report notes that the examiners with the most unaccounted time were those receiving the highest performance ratings. If the result of the Inspector General’s recommendations is to demand more work from the best examiners, that could potentially exacerbate a longstanding examiner retention problem that the Patent Office has faced for years. The Patent Office needs to keep the best of its examining corps, and rewarding high-performing examiners with more work is not the way to do that.
In the next few months, it is expected that the current director of the Patent Office, Michelle Lee, will step down in advance of the new administration, and a new director will be appointed. Director Lee spearheaded the current patent quality initiative, and it will be important to ensure that the next director continues her ongoing efforts to ensure that the Patent Office issues high quality patents. Many of the programs within that initiative are still in planning or pilot stages, and it will be up to the next director to ensure that they are followed to completion. There certainly will be other concerns that arise, such as the employee time issues raised by the Inspector General. But the Patent Office, under any leadership, must ensure that it remains true to its defining purpose: to only issue high quality patents.