"The current backlog is about 490,000 applications -- the highest ever," Dudas said during a Senate Judiciary Intellectual Property Subcommittee hearing on overhauling the patent system.
Dudas said PTO has received a record number of patent applications every year for the past 20 years, but did not begin hiring in record numbers until this year.
PTO received $1.6 billion in FY05, $342 million more than it received in FY04. Dudas said PTO is using much of that increase to hire 860 new examiners this year, for a total of about 4,400.
"Three years down the line, four years down the line, the hiring we're doing will have an effect," Dudas said, noting that it takes an average of 28 months for PTO to decide whether to grant a patent. He said for more complex subjects, such as data-processing technologies, the average patent pendency is about three years.
"Without fundamental changes in the way [PTO] operates, the average pendency in these areas could double by 2008," Dudas said.
Judiciary ranking member Patrick Leahy, D-Vt., noted that PTO receives more than 350,000 patent applications annually and approved 187,000 applications in 2004.
"That is more than 500 approved patents every single day, and I think that could be a matter for concern," Leahy said. "When non-innovative inventions are patented, some patent-holders fear they will spend more time litigating than they do innovating."
Leahy said lawmakers should consider modifying the process to allow for patent challenges "before costly, highly technical litigation is required." Judiciary Intellectual Property Subcommittee Chairman Orrin Hatch, R-Utah, said there is a "high degree of agreement" among stakeholders on the need for a post-grant review process.
But Hatch noted that "significant differences remain" on other issues, including whether to change the rules by which patent holders can obtain injunctive relief against patent infringers.