Digging Out

Patent law is redesigned to tackle a mounting backlog and streamline applications.

On Sept. 16, President Obama signed the first revision to patent law since 1952. It came not a moment too soon for the 9,700 employees of the U.S. Patent and Trademark Office, who are gaining new staff, a stabilized funding source and a revived opportunity to whittle down a stubborn application backlog.

"We're extremely pleased with the legislation passed because it gives the USPTO the resources it needs to better serve the innovation community," says Chief Communications Officer Peter Pappas. "We now anticipate hiring 1,500 to 2,000 examiners in the next year, and adding 100 judges" to the Board of Patent Appeals and Interferences.

The much-debated America Invents Act shifts the two-centuries-old patent process from one that rewarded the "first to invent" to one that rewards the "first to file." That potentially reduces litigation and streamlines procedures, but alters the calculations of inventors and companies about when to publicize their nascent brainstorms.

In addition, the law raises patent fees, so the self-funded agency can use the proceeds to help improve its performance. The Patent and Trademark Office receives no congressional appropriation. "We are keenly aware of the challenges ahead of us," Pappas says, "and we are focused like a laser beam on the timely and effective implementation of this bill."

The agency's famously frustrating backlog of applications had risen to 750,000 by the time President Obama took office and appointed David Kappos as Commerce undersecretary. In 2007, processing times were averaging nearly 32 months, according to USPTO's annual performance report, with wait times for communications-related patents as long as 43 months.

That unfinished workload has since been trimmed by 10 percent, to 675,000, according to Pappas. "The legislation will give us tools we need to drive the backlog down further and to reduce the amount of time it takes to get a patent," he says. The goal is lower overall average pendency from its current 34 months to 20 months by 2015, and to "reduce overall first-action pendency to 10 months," he says.

Like all federal agencies, USPTO has embraced efficiencies of the digital revolution-electronic filings have rocketed from 2.2 percent of patent applications in fiscal 2005 to nearly 90 percent in 2010. The new fee-setting authority, Pappas says, "will enable us to set our fees at a level so the agency actually recovers the cost of the services it provides." Because the law requires a series of consultations with industry before long-term fee rates are set, he explains, USPTO "as an interim step" has levied an across-the-board 15 percent surcharge, which took effect Sept. 26.

Even before the legislation became law, the agency was ramping up a patent reform implementation team, consisting of senior members of USPTO business units and chaired by Kappos. "Each business unit will educate and train its employees," Pappas says. The drivers of the implementation will be the undersecretary's office, the team and, of course, the flow of patents.

Morale has moved steadily upward, he says. "USPTO employees are excited about the ability that this legislation gives the agency to better perform its core mission."

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