On average, patent applications spend 3-5 years pending at the United States Patent and Trademark Office (USPTO), mostly as a result of its slow turnaround time. For example, the USPTO can take more than a year to initially pick up an application and many months to over a year for responding to applicants’ many Office Action responses. Because time is of the essence for IP protection, such delays could be crucial.
For example, because technology moves so quickly, a patent granted earlier is much more advantageous to protect a company compared to later when the technology may be long obsolete. In another example, in the startup world, receiving one or more issued patents may go a long way toward the valuation of a company when VCs consider funding or a potential buyer considers an acquisition price.
Fortunately, applicants may now turn to the Track One Prioritized Examination program, in which the USPTO will prioritize the handling of a patent application with the goal of arriving at a final disposition within 12 months. A prioritized application is “accorded special status and placed on the examiner's special docket throughout its entire course of prosecution before the examiner until a final disposition is reached.” It should be noted that a final disposition does not mean that the patent application cannot be pursued further- it means the patent application has reached either allowance, abandonment, or a final rejection. Further prosecution can be pursued through an appeal or a request for continued examination (RCE).
Various accelerated examination options have been and continue to be offered, but now Track One examination is more available and in many instances a superior option to both regular examination and other accelerated examination options. Applicants must pay more for this prioritized examination option, but from a business strategy perspective, the cost may be well worth reaching final disposition earlier. For instance, the Track One cost may be negligible compared to the total cost necessary to acquire a patent, and especially compared to the strategic cost of acquiring a patent at a later date.
Today marks the two-year anniversary of the Track One program. Applications filed under the program had about a 96% allowance rate in 2011, about a 93% allowance rate in 2012, and at the time of this writing, on trajectory for about a 94% allowance rate in 2013 (see the USPTO Track One page for more details). These allowance rates are significantly higher than regular examination allowance rates.
What this means for applicants: While it’s a business decision, one strategy is to file only those key and/or time-sensitive applications through the prioritized examination program. Another approach is to file applications directed to narrower subject matter and then pursue broader subject matter after granting of the prioritized application.
To qualify for the program, applicants must satisfy certain requirements, some of which include:
- The application must be filed with a request for prioritized examination.
- The application must be filed using the USPTO's electronic filing system.
- The application must be “complete” upon filing (e.g., all filing fees included).
- The application must not contain more than 4 independent claims and 30 total claims.
- Applicants must not file a petition for extension of time to extend the time period for filing a reply to an Office action, otherwise the prioritized examination status of the application will be terminated.
- A $4,000 fee must be paid in addition to the normal filing fees. The fee is reduced to $2,000 for applicants claiming small entity status and $1,000 for applicants claiming micro entity status.
See the USPTO Track One page for more information. It should be noted that other countries also have accelerated examination programs, albeit with their own characteristics.
Inventors have mixed feelings about the use of their patents to prevent others from using new technologies. More inventors are even more opposed to the abuse of their patents in litigation by patent trolls that aggressively attempt to extract settlements out of companies (both large and small) who wish to avoid costly patent litigation. Such patent trolling stifles innovation, and as a result, some inventors are apprehensive about using or even outright opposed to the patent system- the very system that is in place to protect inventors and reward them for their innovations.
Today, Twitter addresses this problem with some legal innovation- the Innovator’s Patent Agreement (IPA). Twitter summarizes the IPA best:
"The [IPA] . . . is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from a company to its employees that patents can only be used for defensive purposes. The company will not use the patents in offensive litigation without the permission of the inventors. This control flows with the patents, so if the company sells the patents to others, the assignee (owner) can only use the patents as the inventor intended."
Twitter’s VP of Engineering, Adam Messinger, characterizes the existing landscape and highlights the advantage of IPA usage:
"This is a significant departure from the current state of affairs in the industry. Typically, engineers and designers sign an agreement with their company that irrevocably gives that company any patents filed related to the employee’s work. The company then has control over the patents and can use them however they want, which may include selling them to others who can also use them however they want. With the IPA, employees can be assured that their patents will be used only as a shield rather than as a weapon."
In short, Twitter promises it won’t use their IPA patents to sue anyone, except for defensive purposes. So, for example, unless a party sues Twitter first, Twitter won’t use the patent in a lawsuit. It should be noted that the IPA includes a provision where the assignee (owner) of a patent assigned under the IPA can use the patent as a sword, not just a shield, provided the assignee seeks and receives all of the inventors’ approval. Twitter’s existing patent filings, including Loren Brichter’s famous pull-to-refresh patent (U.S. Patent No. 8,448,084), will fall under the IPA.
Twitter has made the IPA available here for use by everyone, and they've included information about how to use it and answers to some FAQs for companies, inventors, and investors. Patent applicants should consider the IPA not only because it serves to honor the inventors' wishes and help prevent patent trolling, but its usage is a good PR move and could have the added benefit of attracting some of the industry’s brightest talent.
The United States has long followed the First-To-Invent system, where the United States Patent and Trademark Office (USPTO) would grant a patent to whoever was the first in time to invent. However, as part of the America Invents Act, Congress decided to adopt a First-Inventor-To-File system. The change, which brings the US into alignment with all other countries of the world, applies to patent applications having an effective filing date on or after March 16, 2013. Accordingly, a patent will be granted to whoever files a patent application with the USPTO first, regardless of their invention date.
While this approach alarms some who are concerned that they may lose rights to a patent that would have otherwise been theirs had they simply filed first, two things should be noted: First, if someone copies an inventor’s idea and files a patent application on the subject matter before the inventor does, they won’t be entitled to a patent. Only inventors are entitled to a patent, and this rule is underscored by the title of the new system: First-Inventor-To-File. In fact, a “Derivation Proceeding" is provided to ensure that the first person to file the application is actually an original inventor and that the application was not derived from another inventor.
Second, if an inventor publicly discloses the invention (e.g., at a conference, trade show, etc) before the filing of a patent application, that disclosure will not be considered prior art and act to prevent the inventor from obtaining a patent. The United States affords inventors a one-year grace period to file a patent application in these situations. However, inventors should be aware that most, if not all, other countries do not honor the one-year grace period, and so care should be taken if inventors plan to seek protection in foreign jurisdictions.
If that’s not enough, a report by IP WatchDog shows that, in reality, the conflict is very rare. For example, in 2007, interference proceedings between contesting parties arose in fewer than one percent of all patent applications. And, of these, the patent was awarded to the second-to-file party only 7 times. In addition to being rare, the proceedings were also expensive: a 2005 MHM Law survey showed that the average cost was over $650,000. In fact, one of the motivations for first-to-file systems is to prevent additional litigation that also serves to cloud patent rights.
For more information, see the USPTO First-Inventor-To-File FAQ page.
Please note that all information provided by this website is simplified and should not be construed as legal advice or definitive statements of the law or practice.