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Patent examiners will lose a big chunk of their workload — searching for prior art related to applications — under a proposal announced in early June by the U.S. Patent and Trademark Office. Along with the job of examining applications, patent examiners currently search for prior art. Under the plan announced June 3 by PTO Director James Rogan, applicants could have searches done by one of four sources: a private outside contractor, the patent office of another country, a country certified to do searches under the Patent Cooperation Treaty or the PTO. The PTO, however, will limit its searches to those involving small, independent inventors. Rogan said the goal of the plan is to reduce the length of time applications are pending at the agency from the current average of more than two years to 18 months by 2008, and to make the patent and trademark process almost entirely electronic. Over a period of five years, the program will reduce the PTO’s costs by $500 million, according to Rogan. Critics worry that outsourcing will result in inconsistent quality and may lead to an abuse of the system. “I have grave concerns that [the plan] may harm patent quality and increase pendency,” says Ronald Stern, president of the Patent Office Professional Association. Rogan says the new patent program is designed to move the PTO from a one-size-fits-all process to a four-track examination process that “leverages search results of other organizations and permits applicants to have freedom of choice in the timing of the processing of their applications.” The use of private industry for prior art searches is one of several revisions to the PTO system outlined in the agency’s “21st Century Strategic Plan.” Among other changes, the PTO would allow applicants to defer examination and pay a smaller initial filing fee. The plan also calls for applicants to pay a new examination fee, plus graduated filing fees based on the number of claims in their applications. They would also pay a reduced fee if they use an outside source for searching. Applicants also could opt to use an accelerated examination procedure with priority processing and a pendency time of no longer than 12 months. The agency expects to receive 340,000 patent applications this year, which will join a backlog of 408,000 applications. The office has about 3,400 patent examiners and plans to hire 950 this year. Rogan says a reduction in patent searches by the PTO would eliminate the need to hire an additional 2,500 examiners through 2008. But the Patent Office Professional Association, the union representing patent examiners, says outsourcing searches to private companies, deferred examination and the new fee structure included in the plan could have negative consequences. Stern says deferring examination and putting the search under the control of the applicant could result in “patent flooding,” whereby larger companies overwhelm smaller companies with patent applications that claim minor variations on the smaller company’s patent. “A well-financed, big corporation will be able to abscond, in essence, with the small company’s invention,” he says. Q. Todd Dickinson, Rogan’s predecessor at the PTO, says he was pleased with the overall plan but acknowledges that outsourcing of prior art searches may be controversial. He notes that Europe used to separate searching and examination functions but now handle them together. “Examiners may be concerned whether they can rely on [outside] searches,” he says. “We’ll have to wait and see. I hope people don’t use [private search firms] as an opportunity to game the system.” David Stevens, a patent prosecutor and partner at Stevens & Westberg in San Jose, California, says, “I think quality control is a bigger issue than conflict of interest. If searching is done exclusively by the PTO, you at least get the same quality since it is managed fairly uniformly. If it is outsourced, it is difficult — if not impossible — to monitor the quality.” But Michael Kirk, director of the American Intellectual Property Law Association, says that “if a company gets a reputation as doing shoddy work, companies won’t use them and the PTO will pull their certification.” He adds that the ability to use searches by other patent agencies might improve pendency. Currently, says Kirk, PTO examiners usually ignore searches done by foreign patent agencies. Kirk is critical, however, of the PTO’s plan to allow applicants to defer examination of their patents for 18 months. “This shifts the burden from the office and applicant to the public at large,” he says, since it creates an inordinate amount of time before the public knows whether a patent might be issued. Kirk also questions the way application fees vary depending on how many claims are in a specific application. “An application with hundreds of claims imposes a burden on the PTO,” he says. “I’m not opposed to use of fees to discourage that behavior.” But, he says, it would be problematic if the additional fees discouraged a “reasonable” number of claims. While the PTO has been swamped with patent applications, the agency has seen a sharp decline in trademark applications. As a result, Rogan plans to let go 135 of the PTO’s 383 trademark examiners at the end of September. “Last year new applications dropped 21 percent, which was the largest annual decrease ever,” Rogan wrote in an early June e-mail message to examiners. “This year looks worse: The drop in filings will give us a 33 percent decrease in filings over the last two years. . . . There simply is insufficient work to retain a staff of 383 attorneys when we only have enough work for about 248 of them.”

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