By Kevin E. Noonan —
A day after the day of rejoicing for inventors, patent practitioners, examiners, and seemingly all of civilization, fair-minded people will concede that the U.S. Patent and Trademark Office faces a daunting task. After years of neglect – from Congress raiding the users’ fees, an inadequate number of examiners, technology-driven increases in the number of applications filed, and a "count" system that has not rewarded a style of examination that encourages prosecution to a definitive end point – the Office is facing a massive backlog of applications without sufficient resources to process them in a timely manner.
If the patent bar is gladdened by District Court Judge Cacheris’ decision enjoining implementation of the new rules – representing an attempt, albeit a misguided one, on the part of the Office to address the pendency and backlog problems – it behooves us to propose alternatives. Patent Docs will be posting a series of such proposals, and we invite our readers to provide their own ideas. As they used to say in the days of the counterculture, "if you are not part of the solution, you are part of the problem." Patent Office management clearly thinks the patent bar is part of the problem; it would be satisfying to prove them wrong.
Annuities
To start things off, consider the advantages of requiring an annuity payment to keep an application pending. This device is used in many countries, particularly in Europe, to encourage applicants to maintain only those applications pending that are considered worth the cost of the annuity. Adapting this concept to the American patent system would require a few modifications, however. Small entity applicants would be exempt from the requirement, so as to not put individual inventors, universities, and small businesses at a disadvantage. Divisional applications would require an annuity based on a schedule starting not at the priority date but on the filing date. This would be consistent with divisional applications having claims to patentably-distinct inventions, and not the result of strategic decision-making by the applicant that could be manipulated to extend pendency. What must be avoided is the requirement in Europe that a continuation or divisional application pay the accumulated annuities previously paid in the parent case, which would represent a significant disincentive to serial divisional filing and would exacerbate the backlog problem by encouraging "early" divisional filing.
An additional advantage of this proposal is that it would increase Patent Office revenues in a way tied directly to applicants who file and maintain multiple related applications. Since the Patent Office contends that these applicants are responsible for increased pendency and the backlog, the annuity would have these applicants pay for the privilege. An added benefit would be that over time some of the more controversial assumptions the Patent Office made with regard to the new rules would be put to the test, since it would be expected that if a significant portion of continuation applications represent "gaming the system" or planting potential traps for competitors, adding a cost to the process should shift the cost/benefit analysis in the direction of discouraging unnecessary continuation filings.
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