Companies in today’s economy thrive on offering innovative products that differentiate them from those of competitors. They also expend significant resources on research and development for those innovations. The danger for any innovative business is competitors then stealing their ideas or mimicking what makes the innovator successful.
Patent protection enables companies to capitalize those inventions by excluding competitors from duplicating the inventions. For start-up companies, patents also help assure investors the company will be able to profit from its innovations so that the investors realize returns. Today's chief innovation office will want to understand the patenting process, as a proactive strategy to help insure future profit streams and to protect nascent technologies in the product pipeline.
The patent examination process has, however, been fraught with delay, with the average patent prosecution at the U.S. Patent and Trademark Office (USPTO) now taking more than four years. U.S. patent applications are taken up for examination in the order of their effective filing dates, and typically do not receive a first examination action for an average period of eighteen months. A final action allowing or rejecting the application typically takes at least two years, and in some technology areas, as long as five years.
This delay at the USPTO creates uncertainty for innovators over the scope of patent protection. There is some good news, however. There are techniques that expedite the examination process that chief innovation officers should consider as part of their intellectual portfolio management.
Patent Prosecution Highway (PPH)
Several international patent offices—including most of those in important jurisdictions where companies will want their products protected—have agreements enabling an applicant to obtain the same claims at one patent office following the allowance of claims in another patent office. In such proceedings, the patent applicant presents the allowed claims from one patent office to a second patent office with a so-called Patent Prosecution Highway request.
Such requests significantly shorten the examination period by the second patent office. The presented claims will be examined to insure that the claims meet the second patent office’s formal requirements, but the patentability of the claims will be given deference based on the first patent office’s findings. This procedure works well if you have already received allowance of your claims in some jurisdiction. Participating jurisdictions include the U.S., Canada, and the U.K.; China, Japan and Korea; the European patent office (EPO); most Scandinavian countries; and various other patent bureaus. Similar cross-border agreements also pertain in Germany, Mexico and other countries.
Applicants at the USPTO can also request special status. An application can qualify for special status based on (1) an inventor’s infirm health or their being at least 65 years old or for (2) inventions that materially enhance the environment, conserve energy resources or counter terrorism. Many frustrated applicants, however, have found that special status has not resulted in quicker examination.
U.S. applicants may also file requests a special procedure called Accelerated Examination. Such requests must be accompanied with a statement that the applicant conducted a pre-examination search and must also provide support documents explaining why prior art identified from the pre-examination search does not defeat the patentability of the claimed invention. This procedure is not often used by applicants because of the amount of pre-filing diligence required, and the risk that someone could challenge an applicant’s characterization of prior art as misleading—thereby impairing the enforceability of any resulting patent.
Track I Program – Prioritized Examination
Track I requests, also called prioritized examination, became available for U.S. applications on September 26, 2011. The USPTO’s objective with Track I requests is to reach a final disposition on patentability of an invention within a twelve-month period. The patent office, however, will not offer a refund if the deadline is missed. Final disposition occurs when there is a notice of allowance, a final office action, a request for continued examination (RCE) or notice of appeal filed by the applicant, or abandonment. Also, an application reverts to regular status at final disposition or if the applicant files a petition for any extension of time.
Track I procedures result in immediate examination rather than falling into the queue of backlogged applications. Patent office guidelines require the examiner to issue an office action addressing the merits of the invention within four months of the application's reaching his or her docket. Thereafter, prosecution follows normal procedures, with the applicant responding to the office action and the examiner reconsidering the application based on that response.
The USPTO has more stringent, formal requirements for applications undergoing prioritized examination, although the patentability standards are the same. For example, an application can have no more than thirty total claims and four independent claims. Also, the claims cannot be presented in a multiple dependent format.
Normal examination requires payment of about $1,600 in filing fees ($800 for small entities). In addition to the normal examination fee, a prioritized examination fee must be paid that is $4,000 ($2,000 for small entities) plus a $130 petition fee. If a petition for prioritized examination is denied, the prioritized examination fees will be refunded except for the petition fee.
Eligible applications include utility and plant applications and continuation and divisional applications. Design, reissue and reexamination applications, and Patent Cooperation Treaty (PCT) applications are ineligible for Track I.
Finally, applicants also should consider at what point during the year they file a Track I application. The USPTO may suspend the procedure if more than 10,000 Track I applications are filed in its fiscal year which runs from October 1 to September 30. Fortunately, the USPTO identifies the running number of applications filed online and no more than 9,100 applications have been filed in any of the three years since the procedure became available.
Prioritized examination enables a number of new strategies. For example, an applicant can quickly ascertain the patentability of an invention. If unpatentable, this early determination may obviate the need for filings in other national patent offices, thereby avoiding related fees. If an invention is not a strong candidate for a patent, an applicant can request non-publication of the application and maintain the innovation as a trade secret.
On the other hand, following a successful prioritized examination, an applicant can pursue Patent Prosecution Highway (PPH) proceedings in some countries to rapidly acquire foreign patent rights and reduce or avoid some prosecution expenses.
As an example of the procedure, this author filed a Track I application in June 2013 for a company with a medical diagnostic invention. The USPTO approved the Track I request four months later. The patent applicant then discussed the patent application with a patent examiner in an examiner interview, which resulted in an unfavorable office action identifying reasons for rejecting the claims in April 2014. However, following another interview and amendment to the application, the examiner allowed the patent application in September 2014. Thus, the patent application was allowed within 11 months of the granted request for prioritized treatment. To date in 2014, the average period from Track I approval to grant is just over six months in all technology areas.
In sum, Track I examination provides an effective process by which companies can quickly secure competitive advantages arising from patent protection. The procedure can also be used to reduce or avoid costs when pursuing patent protection outside the U.S. too. Selectively applying the Track I process to key technologies can make the difference between a good result years in the future versus a great result within twelve months.