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April 10, 2009

Gimped

Acting Director John Doll sent this memo around the shop: "As you know, the USPTO has made a number of difficult budgetary decisions this fiscal year.  Among these challenging decisions is that to limit - as detailed in the attached memorandum - even revenue-generating overtime.  All Patents production, revenue-generating overtime will be limited, effective Sunday, April 12, 2009."

Posted by Patent Hawk at April 10, 2009 2:33 PM | The Patent Office

Comments

So let me see if I've got this right. The PTO is short on revenue. Some overtime "generates revenue." Therefore, to help solve the revenue shortfall, the PTO is limiting revenue generating overtime.

Since the overtime/revenue cycle could transform the agency, perhaps someone else is patenting the correct solution?

Or maybe when the allowance rate is artificially low (churning), overtime just adds to the budget deficit:

http://www.nipra.org/budget.htm

Posted by: niRPa at April 10, 2009 4:15 PM

ALLOWANCE RATE

I believe that the allowance rate is artificially low, although not due to churning...at least not exactly.

I am a current examiner. Under Dudas, the PTO pursued a policy of "increased patent quality". The way that the PTO enforced this quality initiative was by reviewing office actions. Not reviewing all office actions, mind you, but only reviewing allowances.

Unfortunately, the PTO failed to see the problem that they were setting up. An examiner is then left with two choices:

1) An examiner could generate rejections without ever incurring quality review, or
2) An examiner could generate an allowance that would be scrutinized by quality review and possibly find themselves assessed a quality review error.

So, it has been safer for an examiner to always reject...at least until very recently. There has been some loosening of the allowance quality review rules in recent weeks as it appears that "reduced pendency" is the new key motivation under Obama.

OVERTIME

As for overtime...it's elimination appears to be working against the expressed motivations at the PTO to reduce the backlog and reduce pendency.

Posted by: Examiner B at April 10, 2009 4:41 PM

Examiner B - thank you for your comment. The churning does not produce the artificially low allowance rate - rather, the opposite occurs: the artificially low allowance rate produces the churning and the increased pendency (reject, reject, RCE, churn, reject, reject, RCE, churn, reject, reject, RCE, churn, allow in 60 months, instead of reject, allow in 20 months or reject, reject, appeal, decision in 26 months).

The endless churning/RCEa is somewhat necessary in some arts, though: only with "easy counts" (RCEs, continuations) can an Examiner make his outdated hrs/BD numbers. The churning has actually enabled the PTO not to revise/revisit the count system: it is a stop-gap phenomenon that makes working at the PTO with the outdated count system bearable.

OVERTIME

If the allowance rate is low (e.g. in business methods, 3600) allowing overtime in that area will merely increase the operating budget deficit. That is, your salary (and overhead) cannot be paid by the filing, examination, and search fees of a rejected (and subsequently abandoned) patent application. I think (hope) Doll understands the economics of a low allowance rate.

Posted by: niRPa at April 10, 2009 4:58 PM

niRPa,

It is dangerous, very dangerous to assume any type of knowledge by anyone at the Office.

(not so clever retort by 6 [BYOR]in ...5 ...4 ...3 ...)

Posted by: Noise above Law at April 10, 2009 6:14 PM

In response to NiRPa, I think you are correct about the budget deficit factor. I don't think that the fees generated by RCEs and churning rejections cover the examination costs involved (e.g. an examiner's salary and overhead for examination time). I've been told that the real agency money is made on allowances and maintenance fees...which is why there has been a new push for allowances.

I agree the count system is totally outdated and needs to be revised...unfortunately, the PTO works at the speed of government.

And just so no one in the outside world misunderstands, overtime pay is not time-and-a-half at the PTO but just additional hours at an examiner's base rate.

Posted by: Examiner B at April 10, 2009 6:27 PM

"Some overtime "generates revenue.""

Not in the short term.

Don't worry NIRPA, this is why you don't run a business.

Bottom line is, the revenue generated is less than the revenue generated if they pay us normal time pay rather than 1.5x, and in any event, you'll have to wait months, or years, to see the return on the OT pay.

Posted by: 6000 at April 11, 2009 12:20 AM

"And just so no one in the outside world misunderstands, overtime pay is not time-and-a-half at the PTO but just additional hours at an examiner's base rate."

Apparently you've never worked OT. This is falsehood.

OT=1.5x

Either that or my pay stubs lie, and so does my bank account. As well as the bank accounts of many of my buddies.

Posted by: 6000 at April 11, 2009 12:43 AM

"Don't worry NIRPA, this is why you don't run a business."

Wrong again, 6K. (It just rolls off the tongue.)

You're wrong about overtime too - primaries do NOT get time-and-a-half. (I believe GS-7s, 9s, and 11s can get approx. 1.5X, but only up to approx. a GS-13 salary.)

Overtime pay is covered by 5 USC 5542. (Employees up to GS-10 get 1.5X in the Federal government.) There may be special definitions for "exempt" employees at the PTO.

http://www.law.cornell.edu/uscode/uscode05/usc_sec_05_00005542----000-.html

So does that mean that all your buddies are GS-7s, 9s, and 11s, 6K?

Oh my gosh, WE. ARE. DOOMED.

Posted by: niRPa at April 11, 2009 4:27 AM

I have and usually work overtime.

For lower GS levels it is set at a flat per-hour rate, not tied to your specific grade or step. At least that was how it was explained by HR. So, to a lower GS-level examiner it would be more than their hourly rate.

The only documentation I could find for this was in the Millenium Agreement - "USPTO shall request OPM to establish a GS10 special pay rate for the purposes of computing overtime pay only. The USPTO shall recommend that the GS10 step 1 be set at a level halfway in between the GS 9 step 1 and
GS 11 step 1 rate."

Once you cross a grade threshold (I think GS-11 but it may have been GS-12)it switches to your hourly base pay.

That is why the union created a max overtime chart based upon overtime as additional hours at an examiner's base pay rate and not a multiple of it. The reason there is a max overtime chart is that an examiner (although, I think it extends to all non-SES government employees) cannot earn more $153,200 a year. So, as an examiner's base pay rises, he cannot work as much overtime.

http://www.popa.org/pdf/misc/maxot-2009.pdf

Posted by: Examiner B at April 11, 2009 1:17 PM

Apologies to niRPa, as I posted before fully reading your linked webpage. Your interpretation is correct...and a much better written response than my own.

Posted by: Examiner B at April 11, 2009 1:27 PM

"As for overtime...it's elimination appears to be working against the expressed motivations at the PTO to reduce the backlog and reduce pendency."

Examiner B,

Since when can anyone take what the Office expresses on its face value?

When you define "Quality" not in terms of what the Office controls (examination), but as you put it - in only reviewing allowances, also known as the reject-reject-reject mantra, the duplicity wears thin any veneer of respectability of PTO (mis)management.

Likewise, "reduced pendency" as a new mantra STILL does not indicate that the Office recognizes its appointed function or focuses on what it is supposed to do: thoroughly examine applications according to the law (and not the law unto 6, or the like) and allow patents to those that deserve them.

Bad management, bad focus, bad results. Pendency is but a symptom of the disease, yet another noise obfuscating the signal.

Posted by: Noise above Law at April 12, 2009 7:56 AM

As to Noise Above the Law, you'll get no disagreements here about management.

At a recent meeting, my SPE stated the removal of quality review procedures (which is supposed to go into effect soon) to encourage allowances and reduce "churning" is analogous to removing the brakes on a train to encourage it to go faster. He chuckled and shrugged, as he's only middle management and is merely parcelling out the edicts of upper upper management.

Posted by: Examiner B at April 12, 2009 12:21 PM

Examiner B, I think your SPE has made a perfect analogy, unfortunately.

"All aboard!"

Posted by: niRPa at April 12, 2009 3:56 PM

If only the PTO dumbasses tried to do the right thing at least some of the time, the innovators of the world would not be penalized by these morons lurching from one side of the bureaucratic fence to the other. Allow everything! Wait, don't allow anything!

Posted by: dangerous at April 13, 2009 1:52 AM

Examiner B,

Thanks for your candor. And I don't envy what you and the other almost 6000 examiners have had to endure under the Dudas regime (as well as the earlier Rogan and Lehman regimes) and what you're now having to deal with as the aftermath of that regime and the current economic crisis. Believe, we in the patent bar are somewhat in the same "boat" and it's leaking right now.

That the Dudas regime "failed to see the problem that they were setting up," or more likely simply ignored this "problem" in favor of other "political agendas" having nothing to do with quality of examination or reducing the backlog of pending applications, has certainly created what some have correctly called the "perfect PTO patent storm" by creating a PTO budget crisis (insufficient revenue because an "artificially" low allowance rate which eventually denies the PTO 70% of its revenue in the form of maintenance fees). An average allowance rate of close to 70% a few years back is probably too high (I believe an average allowance rate in the 50-60% is probably about right in terms of a tough enough patentability standard that doesn't short change the PTO on revenue), but an allowance rate of close to 42% or so is absurd, for many reasons, including revenue needed for the PTO operations.

Posted by: EG at April 13, 2009 8:13 AM

"Once you cross a grade threshold (I think GS-11 but it may have been GS-12)it switches to your hourly base pay. "

Here's the formula
if (grade==(GS05|GS07))
ot_rate=1.5*hourly rate
else
ot_rate=MAX(annual_pay/2087,MIN(39.9,annual_pay/2087*1.5))

Posted by: 2600examiner at April 13, 2009 8:52 AM

EG- don't believe the hype/progoganda. The 60 to 70% allowance rate was the predominant rate for at least the better part of three decades (1975 on). No problem with 65% allowance rate - historically, that is about right.

Posted by: The Mad Prosecutor at April 13, 2009 9:58 AM

Mad Prosecutor,

Thanks for the info that an allowance rate of 65% is historically where we are (or were). Believe me, as having been a patent attorney for almost 32 years (and a second-generation patent attorney at that), I'm also tired of the hype/propaganda that the PTO has had too generous an allowance rate in the past. I perhaps overstated that an allowance rate upwards of 70% was "probably too high." Also, the proper allowance rate or more properly, range of allowance rates that is on target will vary from art unit to art unit based on the technology involved. I just know (and the current PTO budget crisis is one sign of it) that an average allowance rate below 50% is too low, and one close to 40% is ludicrously low.

Posted by: EG at April 13, 2009 12:04 PM

EG or Mad,

Since PG-Pubs have only been published since 2001, I have no historical take on this question. Perhaps you can shine some light on it.

Are claims drafted today broader than claims drafted a decade or two ago?

Independent claims in most PG-Pubs seem excessively broad to my eyes, as someone who reviews 10K patents/pg-pubs per week. These seem a poor way to start the dialog needed between an applicant and the examining corps...

Posted by: Public Searcher DIP at April 13, 2009 1:46 PM

Public Searcher,

The broader claims in PG-Pubs may be due, at least in part, to Federal Circuit case law which is narrowing the scope of the doctrine of equivalents (DOE). Put differently, if you don't establish literal infringement, you now have a much harder time arguing infringement under a DOE theory. Restricting DOE may not be the entire reason, but I'm willing to bet it's at least part of the reason for starting with broader claims.

Posted by: EG at April 14, 2009 5:18 AM

Thanks EG,

I appreciate the answer and am with you on the DOE and case law aspects of broad claims. But my confusion is the effects this has on an examiners initial handling of the case.

If you file an initial independent claim to something super-broad, isn't the examiner's first reaction going to be that you're an idiot. Instead of searching for the nugget of patentable material within the app and prior art, they'll instead provide you with a crappy non-final which doesn't move the dialogue forward. I would imagine their thinking goes along the lines of "If the attorney won't take the time to figure out what's patentable, why should I?"

And I'm not castigating you personally EG or all attorneys, just the large number that seem to do this on a regular basis. This line of thought is based upon reading 1000's of PG-Pubs with a claim 1 having under 20 words in technology areas where that pretty much covers the preamble of allowable subject matter. (These also make performing FTO's a complete nightmare.)

Posted by: Public Searcher DIP at April 14, 2009 6:11 AM

Public Searcher,

No offense taken, you're asking a very thoughtful question. Another aspect of this "broad claim" issue, and one you're probably aware of, relates to how many inventions are actually searched before the application is filed. My view has always been "knowledge is power," i.e., do the search to find out what's out there so you can steer around the potential "rocks" (anticipatory references) by drafting the claims accordingly. But not all applicants/clients agree with doing search first. Also, the applicant/clients may have filed a provisional, and are in "rush" to convert close the end of the 1 year period, so have no time for the search.

Posted by: EG at April 14, 2009 8:32 AM

EG,

I admire your respect for Public Searcher DIP.

That said, I do take issue with Public Searcher's comment of "I would imagine their thinking goes along the lines of "If the attorney won't take the time to figure out what's patentable, why should I?""

Public Searcher DIP, put simply, it is NOT the job of an applicant or the applicant's attorney to figure out what's patentable (at least not until Tafas v. Doll is finally settled). That job belongs to the examiner. That is what the examiner is paid for. On some blogs (IP Watchdog), we have examiners wanting to be claim writers. Let's keep our roles straight.

When (if?) Tafas v. Doll is finally settled and the Office can require NEW levels of effort from applicants (Search, analysis, and claim mapping to MPEP level requirements), then the requirement of figuring out what is patentable will belong to applicants.

As far as Knowledge is Power, I agree with you EG 100%. I think it is smarter to know what lies ahead. You might be surprised (but I think not) at the number of CLIENTS who not only don't want to search, but specifically request that I do NOT search. I am indeed torn by such requests. It is as if my client purposely would rather choose ignorance at the onset just to avoid any "knowledge factor" down the road if an infringement battle erupts. To me, this not only just isn't smart, it defeats the stated quid pro quo - of what use is others' sharing with the public, if my client, a portion of the public, refuses to look at what is shared?

Posted by: Noise above Law at April 14, 2009 6:46 PM

EG,

I admire your respect for Public Searcher DIP.

That said, I do take issue with Public Searcher's comment of "I would imagine their thinking goes along the lines of "If the attorney won't take the time to figure out what's patentable, why should I?""

Public Searcher DIP, put simply, it is NOT the job of an applicant or the applicant's attorney to figure out what's patentable (at least not until Tafas v. Doll is finally settled). That job belongs to the examiner. That is what the examiner is paid for. On some blogs (IP Watchdog), we have examiners wanting to be claim writers. Let's keep our roles straight.

When (if?) Tafas v. Doll is finally settled and the Office can require NEW levels of effort from applicants (Search, analysis, and claim mapping to MPEP level requirements), then the requirement of figuring out what is patentable will belong to applicants."

Lol. Double lol at claim mapping.

"As far as Knowledge is Power, I agree with you EG 100%. I think it is smarter to know what lies ahead. You might be surprised (but I think not) at the number of CLIENTS who not only don't want to search, but specifically request that I do NOT search. I am indeed torn by such requests. It is as if my client purposely would rather choose ignorance at the onset just to avoid any "knowledge factor" down the road if an infringement battle erupts. To me, this not only just isn't smart, it defeats the stated quid pro quo - of what use is others' sharing with the public, if my client, a portion of the public, refuses to look at what is shared?"

Look, noise actually said something worthwhile. Basically he is stating how useless he is to impose proper behavior on his clients. Even though he is an officer of the court. In short, they buy his ethics. Don't worry Noise, nobody blames you, it is the court's role to dictate to you weenies how to be men.

Posted by: 6000 at April 14, 2009 9:59 PM

6,

Please crawl back under your rock. The courts and the Office realize just how ineffectual you are and that's the only reason why the Office is being granted substantive power cloaked in procedural guise. Start looking for another job (I notice this thought being picked up by others - must be that you thought it was bs, so others now know it has merit).

Even as an officer of the court, my duty (not yet) clearly does not impose prior art search. I believe that prior art search is more effective. The googling is easy. Claim mapping is easy but time consuming (thus costly). These activities have less to do with any ethics towards Duty, and more to do with a preferred manner of creating value. You have much to learn about Law and ethics.

On a thread at IP Watchdog there is an examiner posting that you could learn a lesson from, since you refuse to learn from the patent bar (or from Aaron). Take your useless tricks away.

Posted by: Noise above Law at April 15, 2009 3:19 AM

"As far as Knowledge is Power, I agree with you EG 100%. I think it is smarter to know what lies ahead."

Noise above Law,

What I also tells clients is that, by doing a search, you may avoid making much more expensive mistake by filing a patent application that may be doomed to fail, or will be a much more expensive prosecution headache, including opening yourself unnecessarily to PHE because you have to amend to the fall back position to avoid art you likely wouldn't have been surprised by if you did the search.

Fortunately, I've never been told yet by a client not to search. I'll often do a very quick search for at least the obvious 102 when drafting the application (at no additional charge to the client), especially if i'm not familiar with the art involved. Doing even a quicky search may be helpful too in drafting the application to get the terminology right. If a client specifically told me/ordered me not to do a search, I might think very seriously about telling that client to go elsewhere for representation (even in the current economic climate). A client that handcuffs you that way is likely to be trouble on some other down the line. My 2 cents for what it's worth.

Posted by: EG at April 15, 2009 3:50 AM

Noise,

I wasn't asking about the legal obligations of pointing out the patentable subject matter, merely the reality of interfacing with other human beings which prosecution is. I'm pretty sure EG understood that and answered appropriately. I think this is particularly relevant as the age and experience level of the examining corps has lowered... I have rarely found legal grandstanding to a 23 year old to be effective.

Regarding a pre-filing search, unfortunately I live in the real world and know that many search firms will take your money and send you a work product of questionable value. And this encourages your clients to avoid searching as a value-less enterprise and gives my line-of-work a bad name.

Thanks for the dialog.

Posted by: Public Searcher DIP at April 15, 2009 6:15 AM

"The courts and the Office realize just how ineffectual you are "

Ineffectual "I" am? lol. Whatever, learn teh lawzors lol. I still can't understand how you guys didn't see from the outset that if they let those rules be substantive it would have thrown a blanket across agency rulemaking everywhere and they're not about to do that. It wasn't but just a few years ago where the SC got through reminding everyone that the courts position is not to just sit around and countermand its sister branch and that it should only do so in straight forward and extreme cases. I heard the oral arguments on CSPAN of some case where they were talking about that :)

"Start looking for another job (I notice this thought being picked up by others - must be that you thought it was bs, so others now know it has merit)."

Others? O RLY? WHO? One more "the sky is falling" interneter?

Let's say worst case they put in some furloughs, and maybe let some newbies go. I'm decently well established in my AU now, and my boss likes me, I'm not worried. I could stand to lose 10k per year and still be doing just fine, my savings just wouldn't go up as much, and I might not shop at wholefoods as much.

"Even as an officer of the court, my duty (not yet) clearly does not impose prior art search."

Yet your heart tells you otherwise, according to your own admitted ethical beliefs. Don't worry, we all knew this from the get go,

Compare and contrast:

"To me, this not only just isn't smart, it defeats the stated quid pro quo - of what use is others' sharing with the public, if my client, a portion of the public, refuses to look at what is shared?"

"I believe that prior art search is more effective."

"You have much to learn about Law and ethics."

You're absolutely right! And that's why I read a paper by some old timers that admitted that the majority of their number are willing to admit the likely unethical behavior they exhibited throughout their career when they retire and will no longer be biting the hand that feeds them. They also admitted they did it because of pressure to keep their jobs. The rest of their number are presumed ignorant (this is your category). Finally, they presented the need for reform, but said that it would never get off the ground because too many lawyers are still in the workforce and beholdin' to the clients. Sounds like a job for the authority of the court to step in and make things right to me. I think I have it favorited at work if you're interested.

"Fortunately, I've never been told yet by a client not to search."

Probably because you're persuasive.


Ok, now, whare did I put mah rock?

Posted by: 6 at April 15, 2009 1:33 PM