The Future of IP
It arrived unceremoniously. A blog post arriving in the email box. USPTO Commissioner for Patents Peggy Focarino reporting on the status of the patent office's transition from the venerable US Patent Classification System (USPC) to the new Cooperative Patent Classification System (CPC). The post starts with a reminder that the transition to the new system developed jointly by the USPTO and the European Patent Office (EPO) is an investment in the future of IP. The real news in the communique, hidden in the last paragraph of the post, is that the backlog of patent applications is expected to explode by 50,000 patent applications between now and May. The backlog won't return to its current sizable level (600,053 unexamined applications as of February 26th) until September 2014.
Commissioner Focarino writes,
As I am sure you can appreciate, transitioning about 8,000 patent examiners to a new classification system is no small feat. This investment of examiner training time is an important investment in quality, and it is having a temporary impact in our examination output. This impact, combined with continued increases in filings, is resulting in a temporary increase in our new application backlog. We expect the backlog to rise as high as 650,000 by May 2014 before resuming its decline again falling below 600,000 by the end of this fiscal year, which ends September 30th..
A 50,000 patent application increase in the backlog over the next three months. If the volume of new applications exceeds the expected run rate of new applications, the backlog could be even larger.
Commissioner Focarino continues,
During the next fiscal year we will continue to reduce our backlog, which remains a core mission as stated in our proposed 2014-2018 Strategic Plan.
The next fiscal year starts October 1, 2014. This CPC conversion related backlog explosion essentially negates the much touted improvement in patent pendency from USPTO's most recent draft strategic plan which cites,
Our Patent business unit achieved an 18 percent reduction of the unexamined patent application backlog, an 7.4 month reduction in first office action pendency, and a 5.2 month reduction in average total pendency..
Efforts to reduce patent pendency are out the window this year. USPTO will get back to dealing with the exceptionally long patent pendency times, at least for those who can't afford to pay for accelerated examination, sometime in Fiscal Year 2015. This is inconsistent with the Leahy-Smith America Invents Act (AIA) goals,
… which focused on the need to get quality innovations to the marketplace faster and more efficiently to help create new jobs, stimulate economic recovery and ensure our country’s position as the global innovation leader.
There are troubling issues here. First, An exploding backlog means significant opportunity cost to organizations waiting on patent protection to launch new products and to build new businesses. It will have an impact on all IP intense industries that rely on patents to support their growth. As a fee-based agency one would expect a more customer service focused approach to making sure patent applicants receive the services they are paying for in a timely manner.
It appears that USPTO can't multi-task to get its examiners up to speed on the new classification system without a significant impact patent pendency. This raises the question of whether after this training patent examiners will really be able to rely on the CPC to find relevant prior art or if this introduces a third classification system to the mix (Even more when you consider things like Derwent and the specialty patent indexes found in the chemical and pharma worlds.) We understand that the patent examiners only have so many hours in their day and are already under a great deal of pressure to improve patent quality. We haven't heard the patent examiners weigh in on this change and if they believe it will help them support the inventors they work with. For a program that went into effect in 2013 one would think USPTO would be further along in its implementation and transition.
USPTO has made clear that the USPC will become another collection of static information that will no longer be maintained. But the USPC classifications are used to determine which group of patent examiners, the Technology Center and the Art Unit, will receive a patent applications. USPTO hasn't
USPTO hasn't provided information on how, when, or if that transition is going to take place. Economic researchers and innovation economists don't have definitive tools that map the CPC to the USPC. They have a statistical mapping between the USPC and the CPC which provides first, second, third and in some cases more possible CPC choices for a single USPC classification. It is unclear how or when information like the patent database at National Bureau of Economic Research or the North American Industrial Classification Mapping from the NAICS to the USPC will be accomplished, an important tool in mapping patents to industries and industries to the innovation clusters in US cities, counties, and states. There are a lot of issues impacting USPTO's customers, constituents, and the public at large that remain unresolved. USPTO's outreach to external users throughout the process of making this transition to a new classification system has been very limited.
We are concerned about the potential for a classification explosion. It is not uncommon to see recent patents that have three USPC classifications and 15 CPC classifications. Have a look at the ubiquitous and iconic Amazon One Click Patent, US 5960411, Method and system for placing a purchase order via a communications network. One of the most cited patents in the digital economy. Three USPC classes require 11 CPC classes to represent the same inventions. Hopefully this is just anecdotal.
And finally there is the real transition. The transition that will impact the examiners and the inventors. The ability of inventors and their support teams to find the right relevant prior art and the ability of patent examiners to facilitate conversations and engaging to resolve issues using the new classification system.
But first we start with an explosion of the backlog of pending patent applications to make an investment in the future of IP. This doesn't seem to align with the USPTO goal of increasing examination efficiency and reducing backlogs. We'll add the pendency count to the box scores each week to keep you up to date.