IP Scientific Integrity Watch.info Blog
The USPTO's Quality Review Systems birthed in the Dudas Era are Dysfunctional and have Stifled Innovation and Subverted Scientific Integrity.
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The Role of USPTO Dysfunction in the US's Economic Decline
The truth of the matter is that during the Dudas-Doll Era, some USPTO managers began to accept and deliberately facilitate a future where the jobs and industries of tomorrow will take root beyond US borders. The initiation of a "rejection culture" at the USPTO where many of the quality metrics and measurements were non meritorious has had the effect of bringing to fruition the current present of US economic malaise. During the Dudas-Doll Era, attrition of patent examiners was encouraged in large part by a "rejection" culture and quality review culture that too often was dependent on non-meritorious rejections and quality review measures which bottled up innovation, by permitting patent applications reviewed by patent examiners to languish. During the Dudas-Doll Era, as a result of mismanagement, the poor quality work of some patent examiners was often deliberately overlooked, while other patent examiners' work was often saddled and targeted with non meritorious quality reviews. During the Dudas-Doll Era, innovation, and inventors' patent applications were sacrificed and given second fiddle to the goal of perpetuating a culture at the USPTO, where poor quality work was deliberately overlooked by some USPTO managers, while other patent examiners' work was deliberately obstructed with inappropriate and non meritorious quality reviews. The damage that these Dudas-Doll Era Quality Review measurements wrought in terms of languishing patent applications is still being felt today in the decrease in maintenance fees. The USPTO's own FY 2009 Performance and Accountability Report (Source: USPTO's website), states that maintenance fees are the largest source of fees collected from patent operations, comprising over 80% of fees generated from patent operations; the FY 2009 Performance and Accountability Report states that maintenance fees decreased 2.7% from FY 08 or by $15.1 million, decreasing at all 3 stages of maintenance fee renewals. Since maintenance fees are due on all utility patent applications filed on or after December 12, 1980 at 3 and half years, 7 and a half years, and 11 and a half years from issuance, the fall in maintenance fees is attributable to the fall in issuance in patents by the USPTO which occurred at least 3 and a half years ago; since the majority of maintenance fees are traditionally collected at the first and second stages of renewal, the majority of the fall in maintenance fees are attributable to the actions of the USPTO during the past 8 years preceding FY 09.
At the Independent Inventor's Conference, USPTO Director Kappos States that the USPTO is Struggling
During the Independent Inventor's Conference which took place at the USPTO on November 5, 2009, USPTO Director Kappos, stated that the USPTO is struggling. Click here to read Director Kappos's remarks on the USPTO's website. He stated: "But the truth is; the USPTO is struggling; it’s not working efficiently for inventors—corporate or independent. When the USPTO doesn’t work, ideas—whether born on the high plains of Africa, a garage in Hoboken, a research facility in Raleigh or a dorm room in Berkeley—falter." His comments seem to be in direct contrast to former USPTO Director Dudas's recent comments, which appeared to ignore the role of a faltering USPTO in stifling the American economy, and instead, blamed the faltering economy for the USPTO's current woes. I believe that the crux of the faltering of the USPTO is attributable to initiatives such as second pair of eyes reviews, initiated during the Dudas era, which permitted patent applications to languish as a result of mismanagement. The suppressed allowance rates which dipped below the 50% level in recent years, is also a result of applications languishing and mismanaged quality review programs, in my opinion.
Former USPTO Director Jon Dudas coauthors article which blames the USPTO's Funding Woes on the Economy
Former USPTO Director Jon Dudas, is a co-author in an October 26, 2009 article entitled, "Let the PTO Pay It's Own Way", which appeared in the National Law Journal. The article appears to deny any role of mismanagement under the Dudas regime, in causing the USPTO's funding shortfalls. The article with Mr. Dudas as a coauthor, even attributes comments to the new USPTO Director to support the assertion that the economy was responsible for the $200 million shortfall that exists at the beginning of fiscal year 2010, stating:
"Kappos warned that the economic crisis has caused a downturn in patent application filings, issuances and maintenance fee payments that will cause a $200 million shortfall for the PTO in Fiscal year 2010, which will hamstring the agency's ability to uphold its
mission."
However, the article fails to mention that the new USPTO Director, unlike the former USPTO Director Jon Dudas, made a clear connection between the dysfunction of the USPTO and the stifling of innovation.
For example, in his remarks to the AIPLA, Director Kappos stated: "The backlog of nearly 800,000 patent applications is unacceptable; it stifles innovation and restricts the growth of our economy."
I explored in a previous blog entry how the former USPTO Commissioner of Patents, John Doll, in my opinion, also seemed to adopt the viewpoint, that the economy, and not a dysfunctional USPTO, was responsible for the USPTO's funding crisis.
Mismanaged quality initiatives initiated under the former USPTO Director Jon Dudas, exacerbated the patent backlog, depressed allowance rates to below the 50%, and contributed to a drop in maintenance fees.
When allowance rates dropped to below the 50% level well before the start of the current recession, as illustrated by the USPTO's own graph, one would expect, that this precipitous drop in allowance rates would contribute to a drop in future maintenance fee collections.
Yet the article, "Let the PTO Pay It's Own Way", ignores the connection between the precipitous drop in allowance rates and declines in maintenance fees.
Several USPTO official emails provided to the public through FOIA, show that patent applications undergoing the dysfunctional quality review programs during the Dudas era, were permitted to languish as a result of mismanagement. Click here to read of an email, wherein patent applications reviewed under quality initiatives during the Dudas era were permitted to languish as a result of mismanagement.
USPTO Quality Review is Dysfunctional says USPTO Director Kappos at the 2009 AIPLA Annual Meeting
Director David Kappos stated in his remarks to the 2009 Annual Meeting at the American Intellectual Property Law Association (AIPLA), that the USPTO's Quality metrics, quality review process, and quality reward systems are "all dysfunctional and backwards". These comments can be heard here in an audio recording on the AIPLA's website of the Director's remarks, but are not available in the printed version of the remarks available on the USPTO's website. The new USPTO director also stated that a USPTO task force is working in conjunction with the Patent Public Advisory Committee (PPAC) to "completely re engineer our quality metrics, our quality review process, and our quality reward systems." Click here to read these remarks posted on the USPTO's website. He also reiterated that "Quality does not equal rejection".
The USPTO Director also stated in his remarks to the AIPLA, that "The backlog of nearly 800,000 patent applications is unacceptable; it stifles innovation and restricts the growth of our economy."
This blog has been stating for some time that the USPTO's quality review metrics, quality review process and reward systems are dysfunctional due to mismanagement; I will go even further to say that the USPTO's quality review systems are key drivers of the USPTO's unprecedented suppression of allowance rates and budget woes which were birthed in the Dudas/Doll era of the USPTO.
At the June 2009 PPAC meeting, USPTO officials reported that the USPTO faced a funding shortfall of approximately $140 M.
The USPTO Director David Kappos recently stated at the September 14, 2009 IPO Annual Conference, that the USPTO is entering fiscal year 2010, with a budget shortfall that now stands at $200 M, which "puts into question the agency's ability to address its mission at any acceptable level". Click here to read the Director's remarks at the USPTO's website. The Director further states that as a result of the USPTO's budget woes, there will be "probably no progress in cutting into the backlog."
During the Dudas/Doll years, the USPTO's quality review systems caused patent applications that endured 'quality review" to languish; and the languishing of these applications was due to USPTO mismanagement. Click here to read an official USPTO email procured under FOIA, where a USPTO official laments the fact that USPTO management permitted patent applications reviewed under the second pair of eyes quality review program, to languish.
During the Dudas/Doll years, quality review was characterized by a rejection culture where managers forced certain examiners to put misguided rejections into their work; these same managers overlooked actual errors in the work of other examiners.
The USPTO's dysfunctional quality metrics, quality review process, and quality reward systems have exacerbated the backlog of patent applications, stifled innovation, restricted the growth of the US economy, and contributed to the USPTO's current budget woes.
Despite the paradigm of USPTO management during the Dudas/Doll era, of expending an inordinate amount of USPTO fees in hiring significant numbers of newer examiners, while simultaneously, seeking to purge the organization of some of the older examiners, this graph that I've generated and posted below, shows that there is very little significant linear correlation between expenditures for personnel (most of which went to costs associated with new hires) and increase in actual patent compliance rates. The graph below shows that only 33 % of the variation in actual patent compliance rate percentages between fiscal years 2005 and 2008 is due to increases in direct personnel services and benefits from 2005 to 2008. I believe the fact that a significant portion of the USPTO's fees were expended in Direct Personnel Services and Benefits, yet only weakly correlated, linearly, with improvements in actual compliance rates, represents a part of the waste of fees that has occurred, contributing to the current budget woes at the USPTO.
The Number of Patents Granted in years 2002 to 2008 by the USPTO for Wisconsin falls
The above graph was generated from the USPTO's own data on its' website, which shows a dramatic decrease in the number of patents granted for the state of Wisconsin from years 2002 to 2008. The graph indicates a dramatic plunge that spiked in 2005, a year after controversial, and mismanaged quality initiatives began at the USPTO, where patent applications subjected to some of these programs such as the second pair of eyes programs were permitted to languish. This above graph showing the steep decline in patents granted in Wisconsin is particularly relevant in light of the two part series written in the Milwaukee Wisconsin Journal Sentinel, which chronicled how the USPTO's dysfunction harmed Wisconsin inventors. An editorial written in that newspaper about this series' findings, stated that if the deficiencies of the USPTO are permitted to continue, these deficiencies would "threaten to meet any gains made in U. S. research with obstruction and delay, doing serious damage to the driving force behind much of the inventiveness these days." It is my belief that the evidence will show that the dramatic fall in patent grants in Wisconsin is due in large part to the mismanaged quality review programs which resulted in an anti-patent rejection culture that characterized the Dudas-Doll era. Other papers such as the Voice of San Diego are also reporting that the USPTO's long delays in granting patents harmed local inventors. Click here to read the story in the Voice of San Diego entitled, "The Long Wait for Innovation". While patent issuances were being held up, and delayed, by mismanagement at the USPTO during the Dudas-Doll era, Japan surpassed the US in patent grants in 2007. Click here to read the article.
Secretary Gary Locke expresses outrage at USPTO's Patent Pendency times and states that the USPTO Needs to be Overhauled
In a recent article published in MSN's "Business in the Main", Secretary Gary Locke expresses his outrage at the USPTO's long processing times for patent applications. He says: "Quite frankly, the Patent and Trademark Office needs to be overhauled. I find it absolutely outrageous and unacceptable for the time it takes before we can even get a look at a patent application. We call it a "first action" and it can take more than two years. And then it may take another year for patent approval or rejection. This stifles innovation and creates too much uncertainty in the marketplace. It is my goal to dramatically revamp and streamline patent processing time." Click here to read Secretary Locke's comments.
Mismanagement during the Dudas Era, has significantly contributed to the long processing times of patent applications. For example, a USPTO official states that USPTO management permitted patent applications reviewed under the second pair of eyes review program to 'languish". Click here to read the USPTO Official's comments in a USPTO email obtained through FOIA.
We, the public, don't know if some USPTO managers have destroyed some of these emails in a bid to cover up mismanagement. There is one email, (click here to read), that has been shown here at this blog before, of a USPTO manager ordering USPTO workers to "throw away" second pair of eyes lists, that would shed light into the USPTO's patent operations regarding the second pair of eyes program.
In his September 14, 2009 remarks to the Annual IPO Conference, USPTO Director David Kappos, states that the USPTO is facing approximately a $200 Million shortfall in funding because of the downturn in filings, issuances, and maintenance fee payments. Click here to read the text of Director Kappos's address.
As I've expressed here at this blog in previous entries, I believe that mismanagement during the Dudas era, which severely suppressed allowance rates, and hence suppressed maintenance fees, has greatly contributed to the funding shortfall.
I also believe that a significant portion of the USPTO's funding has been whittled away to fund one office within the USPTO's Office of General Counsel, that was charged during the Dudas era with defending USPTO mismanagement and waste.
Where was the March on Washington when the USPTO took our country Back (wards) under the Dudas Regime with Malfeasance, Mismanagement and Expansion of Big Government at the PTO?
Beginning in or around 2004, the futures of current and unborn generations were being snatched away by the USPTO, when the USPTO began to contribute to the unraveling of this country's economic picture by stifling innovation and consequently, saddling current and future generations with unsustainable debt. When the seeds of this grand theft were planted, where was the great hue and cry and the March on Washington? Where was the March on Washington on the basis of charges that the USPTO was undermining capitalism with its laying waste to innovation? Where was the March on Washington, DC - when the USPTO's General Counsel, (in my opinion), used at least one of his offices, to defend USPTO mismanagement and stifling and waste of innovation? Where was the March on Washington, when USPTO managers made some of their patent examiners put erroneous and misguided rejections into their office actions, and meanwhile, overlooked poor quality work in the work of other "favored" patent examiners not on "hit lists for removal". Where was the March on Washington when inventor applicants and other members of the public have been forced by the USPTO to expend an inordinate amount of resources defending themselves against bogus claims from the USPTO with little recourse against these bogus claims?
Since FY 04 and before this year's hiring freeze, the patent examining corps was expanded at an unprecedented rate with the hirings of thousands of new patent examiners, even while the USPTO was using hit lists for removal of patent examiners. These "hit lists", euphemistically known as "Second pair of eyes lists" were used by some in USPTO management, in an arbitrary, and unmeritorious fashion to unjustifiably purge the patent corps of certain examiners for reasons that were unrelated to merit principals and fair play. This expansion of "big" government essentially remade the patent examining corps into a corps containing a significant number of newer, more inexperienced examiners, who needed to be trained by the USPTO and to a large extent, could not issue the level of output of patents as their colleagues with higher seniority and productivity goals. The expansion of the patent examining corps was done under the pretext of addressing the need to reduce the patent application backlog and improve patent examination quality. However, the expansion of the corps arguably actually frustrated these goals, because the retention of these new examiners did not improve; meanwhile, public monies were being spent to train these thousands of new examiners, approximately half of whom could not be retained at the USPTO. Furthermore, a newer, more inexperienced patent examining corps has not resulted in substantial increases in patent examination quality or any reduction in patent application pendency. Patent application pendency actually increased as hiring of new patent examiners also increased.
During the Dudas Era, the USPTO also expanded its managerial ranks in an unprecedented fashion, creating a layer of Deputy Assistant Commissioners, to reward some managers who oversaw the unprecedented mismanagement of the USPTO and laid waste to innovation. Where was the March on Washington against this harmful expansion of "Big Government" at the USPTO?
Do we truly want a country, where a true meritocracy reigns, merit principles are applied, and scientific inquiry and knowledge and innovation are promoted and respected? Or do we want a USA where illusion is propagated by public officials about meritocracy, where transparency with regard to governmental operations is thwarted- and where patent applicants are unfairly and unjustifiably denied a patent or obstructed from timely patent prosecution due to USPTO mismanagement, favoritism and lack of observance and appreciation of true merit principles at the office?
After Unprecedented drops in Allowance rates and maintenance fees, the USPTO announces Mr. John Doll's Retirement
The USPTO announced today a Senior management shakeup, including the retirement of Mr. John Doll, who was most recently, Acting Director of the USPTO. Click here to read the USPTO's announcement. Mr. Doll is retiring after overseeing dramatic and unprecedented decreases in allowance rates and maintenance fees. Several stakeholders in the patent community appear to have attributed a mismanaged, and wasteful anti-patent culture, to Mr. Doll's management and tenure as Commissioner and Acting Director at the USPTO. For example, click here and here to read of one blogger's perspective at the Patent Prospector blog, about mismanagement at the USPTO, when Mr. John Doll was in Senior Management. I wondered if I detected dissatisfaction with Mr. Doll's latest performance in Senior Management in Director Kappos's swearing in speech last month at the USPTO, when he stated, "And I especially thank John Doll for his service leading the agency for the latest 7 months. Thanks, also, to the former directors who are here today. I look forward to working with you in my new capacity. " The import of this last statement is not readily apparent from the text of the speech (click here to read the text of Mr. Kappos's swearing in speech available on the USPTO's website) but, if there is any special, subtle meaning to the statement "Thanks also, to the former directors who are here today. I look forward to working with you in my new capacity..." one may catch the nuance of it when listening to the cadence of the speech here:
which is posted on the Anticipate This Blog. I have expressed before, that I agree with the general sentiment and opinion, that Mr. Doll presided over unprecedented mismanagement and waste of innovation during his tenure as Commissioner and Acting Director at the USPTO.
Sharp Rise in Ex Parte Appeals at the USPTO Seen as Beginning Right around Fiscal Year 2004
Above is a graph of the number ex parte appeals received from fiscal years 1997 through the first 9 months of fiscal year 2009. This graph was generated from data culled from the USPTO's website. The graph shows a sharp increase in ex parte appeals beginning well before FY 2009, in or around fiscal year 2004, when it is believed that a sharp suppression of allowances inappropriately began, with new so-called quality initiatives. Attorneys have been quoted in the media as attributing the rise in appeals to extreme and misguided rejections from the USPTO. Click here to read National Law Journal Article about the spike in appeals at the USPTO and click here to read one of my blog entries, which references this topic of the relationship between a spike in appeals and a mismanaged anti-patent culture at the USPTO, whose genesis is based in the Dudas Era.
There is one Office within the USPTO's Office of General Counsel which is a Huge Source of Governmental Waste
Want to know what is driving a significant portion of the USPTO's unprecedented funding shortfall to the tune of over $100 million whose roots were sown in the Dudas era beginning in or around FY 2004? In addition to lack of maintenance fees resulting from the USPTO's suppression of allowance rates, and drops in filings of patent applications, is the USPTO's Office of General Counsel's vigorous defense of some of the USPTO's mismanaged policies and paradigms that have led to these unfortunate occurrences. Essentially, innovation and meritocratic principles have been sacrificed by one of the offices within the USPTO's Office of the General Counsel since at least FY 04, which has placed a premium in using public dollars to defend waste, loss of innovation, and mismanagement. In my opinion, a prodigious amount of public monies have been expended by this one office within the USPTO's Office of General Counsel in defense of programs such as the second pair of eyes program and other mismanaged programs which increased patent application pendency and the patent application backlog. I'm convinced that an investigation into the expenditures of this one particular office within the USPTO's Office of General Counsel will reveal a vast waste of public monies in the defense of unmeritocratic, wasteful, and mismanaged policies, (such as aspects of the second pair of eyes program) which have harmed innovation, inventors, and the American economy. I will even go as far as to say that this Office within the USPTO's Office of General Counsel is confiscatory of public monies in its defense of mismanagement, waste, loss of innovation, and unmeritocratic principles. I believe that a complete overhaul and reform of this one particular office within the USPTO's Office of General Counsel that has been responsible for expending public monies in defense of mismanagement and waste of innovation, will be indispensable to the recovery of the USPTO's fiscal health and fulfillment of its intellectual property mission. The overzealous dysfunction of this office within the USPTO's Office of General Counsel is essentially a creature of the previous Dudas regime. It is not conventional to think of this particular Office, which I will leave unnamed for now, within the USPTO's Office of General Counsel as "bloated". However, this office is a quintessential example of bureaucracy that has become bloated to defend inefficiencies, waste, and mismanagement in patent operations. While government was being trimmed elsewhere during the past 4 years, the attorney staff within this particular office within the USPTO's Office of General Counsel grew, driving a significant expenditure of public monies in defense of mismanagement, waste of funds and loss of innovation.
