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Patenting in the new age of patent office overload

16 Apr 2008

When a significant legal decision issues or law change is made, pundits have great fun writing about the implications for patent applicants “going forward” in the “new age”, myself included. Generally these revolutions of patent law swing into two areas – getting a patent or enforcing a patent. You’ll also see qualifiers like “harder” and “more expensive” feature heavily in conclusions, especially as the law struggles to keep up with advances in science and technology, and bold patent drafting.

There is one big issue bubbling under the surface of the patent system at the moment that stands to change our approach to patenting just as much as any court ruling or law change: patent office backlogs.

Backlog?  What backlog?
The increase in patent filings combined with under funding and over worked patent office examiners has led to some remarkable situations in the last several years. Here is a sample of some of those consequences.

All patent offices have sizeable backlogs of pending applications. The United States Patent and Trademark Office (USPTO) backlog in 2007 was about 750,000 applications.  The European and Japanese patent offices report similarly daunting backlogs, while the Australian and New Zealand patent offices generally just keep quiet.  The Saudi Arabian patent office has unexamined cases dating back nearly 20 years!  Many smaller states simply don’t bother supporting their patent system because of the insurmountable workload.

Hiring and retaining patent examiners is very difficult. The USPTO is hiring 1,200 examiners each year until 2012.  All patent offices struggle with staff training and retention.

Both the European Patent Office (EPO) and USPTO have attempted, and so far failed, to make controversial rule changes that constrain the number of applications filed.

The patent offices of Australia, Canada, Germany, Japan, Korea, the UK and the USA are developing trial collaborations to re-use the first examination report issued by one of those offices, the first steps to truly international patent examination.

In 2004 the Argentine patent office asked all applicants of 34,000 pending applications to act within three months or their applications would be automatically lapsed.

Idea!  Charge patent applicants into submission
The latest “initiative” to combat backlogs is to increase fees.  The USPTO and JPO increase their fees annually.  IP Australia dramatically (and quite unreasonably) increased some of its processing fees in 2007. And now, the EPO has announced large fee increases that may limit applicants’ enthusiasm for filing large European regional applications.

Without going into detail, the latest EPO fee increases are based on the number of pages and the number of claims in the patent application.  The claims fees are jumping from 45 Euros per claim over ten claims, up to 200 Euros per claim over 15 claims in April 2008. And there will be another increase in April 2009 to 500 Euros per claim over 50 claims.  The page fees are hopping from nothing, up to 12 Euros per page over 35 pages.

By itself, the EPO increases are not that large and do loosely compare with other patent offices’ fees.  But read on.

They taketh away and then giveth a little
At the same time, the EPO has also announced the introduction of the London Agreement that will decrease the cost of nationalising a granted European patent.

So what do patent office initiatives mean for us?
You will all be familiar with the obligation on patent applicants to provide a thorough description of the claimed invention, especially in the US.

For many pharmaceutical or biotechnology cases, there is often also a justifiable need to have a large claim set.

And more and more countries, including Australia, China, Europe, Japan and the US, are charging fees based on the number of claims pages that are filed or examined or accepted, and the number of excess pages.

So there is a growing tension between the need to disclose, the need to adequately claim, and the need to find someway to pay!  Disclosure laws are pushing costs up through larger specifications.  Stringent examination is increasing costs and also narrowing claim scope after paying for a large application to be filed.  Offices are charging more to support their examination staff and clear their backlogs.  If the USPTO has its way, there will also be tight constraints on how many applications can be filed.

There’s only one message for small biotech companies: it is getting even harder to justify filing patent applications without:

• a clear understanding of the prior art
• well developed exemplification
• a fair amount of foresight regarding the commercial goal
• some understanding of your infringement risk and regulatory burden, and
• a good business plan justifying the spend.

A hard ask perhaps; but this is a solid checklist if you want your patent portfolio to work for you as an investment, rather than just a cost.

Anton Gibson
Partner, A J Park Auckland
anton.gibson@ajpark.com
DDI +64 9 356 7661

An edited version of this article was published in NZBio Report, March 2008