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Patent Business Goals Comment on Advance Notice of Proposed Rulemaking

To: regreform@uspto.gov


From: Robert S. Katz

Patricia E. Hong

Brian E. Hanlon

Banner & Witcoff, Ltd.

Washington, D.C. 20001


Date: December 4, 1998


Re: Patent Business Goals

Comment on Advance Notice of Proposed Rulemaking

Topic 15, 37 C.F.R. 1.155

Docket No.: 980826226-8226-01

RIN 0651-AA98


As attorneys representing many design applicants, we commend the Patent and Trademark Office's efforts to adopt business goals in its operations. We have been early proponents for expediting design patent applications through the PTO, and we welcome the opportunity to comment on the topics announced in the Advance Notice at the inception of the rulemaking process.

This Comment is directed to Topic 15 concerning the creation of a "rocket docket" for design applications (37 C.F.R. 1.155).


I. A Rocket Docket for Design Patent Applications Fulfills a Need


An ultra expedited procedure for the prosecution of design patent applications is a much needed avenue for patentees concerned with the design and marketing of seasonal, high volume consumer goods. A rule enabling rapid processing of design patent applications will fulfill a critical need in many industries for patent protection to stop infringement and deter would-be infringers.


A rocket docket for design applications may also attract new customers to the PTO for design patents from industries which had long dismissed design patent coverage as too slow and out of step with the marketing of their products.


II. Seasonal Consumer Products and Marking Requirements


The nature of the apparel and seasonal consumer good industries is such that copyists are able to bring knock-offs of the designs to the retail marketplace at the same time or even before the launch of the authentic products. In order for design patent protection to be effective and be in step with the commercial realties of the marketplace, patentees must be able to introduce authentic products which are patented and marked with the patent number.


In most of high volume apparel and consumer good industries, the creation, production and retail launch of products follow in rapid succession, often in a time window of several months. We encourage our clients to file design patent applications as soon as a design is finalized. Because of overseas production and shipment timing, the manufacture of the products commonly begins shortly after a design is finalized. To have a patent number for marking the products at the start of manufacture, design applications must issue within three to four months of the filing date.


Recent court interpretations of the marking provisions require patented products to be marked with the patent number no matter what monetary remedy the patentee pursues. Timely filed design patent applications for seasonal products must issue from the PTO within three months so that products manufactured at the beginning of a production cycle will be marked with the patent number. Having all of the products marked with the patent number will maximize a patentee's protection by synchronizing protection with the retail market launch.


III. Timed Goal for Issuance of Rocket Docket Design Patent Applications and Refund of Processing Fee


Many of our clients are willing to pay an additional fee for expedited processing. In the language of the proposed rule itself, we view our clients as customers and the PTO as the provider of services. The additional fee, estimated to be $900, is payment for a service. As with any business purchase, the customer must have a tangible expectation of receiving service in a timely manner. Further, good business practice dictates that the customer receive a money back guarantee or other recompense if the service is not delivered as promised by the provider.


We urge the PTO to adopt a timing goal for the issuance of design applications which are filed complete and ready for expedited processing. The issuance goal would prescribe a target issue date from the filing date of any application which meets all five requirements outlined in the proposed rule (Page 53522), accompanied by a signed Declaration and all proper filing fees, and which is found allowable on the first Office Action. We urge an issuance goal of three months or less from filing for complete design applications filed with a Request to Expedite. Given the estimated reduction in examination group pendency and the resources that can be applied with the additional fee, this goal appears to be reasonable.


The proposed expedited procedure puts several burdens on the applicant in exchange for the PTO's special treatment of expedited applications. Although this proposed rule is initiated by a need for rapid examination and issuance of applications, the missing element is a timing goal. We urge the PTO to consider and adopt a reasonable filing-to-issue target time period.


In addition to a timing goal, we urge that a refund provision be added to the rule stating that any applicant who paid the extra processing fee with a completed application at the time of filing, but whose design patent does not issue by the target date be automatically refunded at least a portion of the processing fee. A refund of 50% would be reasonable if the three month pendency goal is not met. A 100% refund is reasonable if the design patent does not issue in six months. Without a refund, the extra processing fee is a significant fee paid by an applicant for a wish and a prayer. With a refund, the extra fee is a meaningful cost for a service.


Without setting a goal for issuance and offering a refund or other recompense, the PTO's additional fee for the expedited procedure is a one-way bargain, and one that customers are not likely to utilize especially given the high processing fee. We would advise against use of the rocket docket by our clients without both of these provisions.


IV. The Relationship Between the Proposed Rocket Docket Procedure and the Existing Petition to Make Special Procedure, and Consider Application of Small Entity Discount


A. The Additional Processing Fee


It is not clear from the proposed rule whether the rocket docket procedure is an entirely different option from the existing procedure involving a petition to make special. The rule needs to clearly delineate between the two practices. This will also clarify whether the estimate additional fee of $900 is in addition to the $130 fee for Petition to Make Special, or whether the rocket docket supplants the Petition to Make Special procedure.


B. Small Entity Discount


Since the $900 fee is a significant burden to any applicant but particularly to independent inventors and small business entities, we urge consideration of a small entity discount to this processing fee. Since filing and issue fees are subject to small entity reductions, applying a small entity reduction to this additional processing fee would be reasonable.


V. Handling of Post-Allowance Applications and Proposal for Advance Payment of Issue Fees


In the flow of design patent applications through the PTO, one delay which could be eliminated in the post-allowance stage is the time lapse between the mailing of a Notice of Allowance and the filing of the required issue fee. The proposed rule for a design patent rocket docket presents an opportunity to expedite the progress of an application file through this stage.


We propose that the rocket docket rule enable an applicant to file or authorize advance payment of the issue fee at the time of filing of a complete application along with the Request to Expedite and the additional fee. This method of lump payment of the filing and issue fees at the beginning of the process would enable the application to be handled in the same expedited "walk-through" manner throughout examination and to the Publication Division. If completion of the issue fee transmittal form is required, the form could be faxed to the applicant and then faxed back to the examination group as confirmation of the advance payment of the fee. The issue fee transmittal form could also be modified to indicate such advance payment.


Any PTO-form developed for rocket docket design patent applications should include a block designating whether an issue fee was included with the filing papers. Alternatively, an advance payment of the issue fee could be acknowledged in the official filing receipt. The PTO will need to mark any application filed with the issue fee appropriately so that a Notice of Allowance will be faxed to the applicant or counsel upon allowance, and the file is hand-carried to the Publication Division to be put in line for printing.


Since an applicant requesting rocket docket treatment for an application at the time of filing is interested in obtaining rapid issuance of the design patent, a decision to pay the issue fee has already been made. In such an instance there is no reason to wait for the exchange of Notice of Allowance mailings and issue fee transmittals which take up valuable time.


VI. Communication with the PTO During Rocket Docket Application Pendency


A. All communications requiring applicant's response conducted via fax or telephone.

The proposed rule states that courtesy copies of office actions will be faxed if a fax number is provided. We urge all communication between the PTO and the applicant or counsel for a rocket docket application in which a response is necessary be conducted by fax or telephone if the applicant so elects. We envision that implementation of a rocket docket will encourage extensive telephone communication between the PTO and applicants/attorneys. The use of telephones and faxes whenever possible instead of mailed correspondence will speed the progress of rocket docket applications through examination. Other than a required minimum of written communications which are necessary for file wrapper integrity, more immediate means of communication is urged for matters relating to rocket docket applications.


B. Minimize correspondence during pendency.


Absent an Office Action with rejections and objections on the merits, at least the following communications should be forwarded to the applicant or counsel via fax or mail::


1. Official Filing Receipt. The filing receipt may indicate advance payment of the issue fee.

2. Communication regarding acceptance into the Rocket Docket. This paper may indicate advance payment of the issue fee.

3. Notice of Allowance via fax serves as a notice to applicant/counsel that application is proceeding to Publication Division.

4. Issue Notification

5. Granted Letters Patent.


C. Development of PTO Forms for Rocket Docket


We urge consideration of the development of at least the follow PTO-forms:

1. Rocket Docket request and application transmittal form, including option to pay issue fee in advance..

2. Acknowledgment of acceptance into the rocket docket.

3. New/modified issue fee transmittal form acknowledging advance payment of the issue fee.


VII. Public Advisory Committee for Design Rocket Docket


We urge the creation of a Public Advisory Committee for Design Rocket Docket to work with the PTO on the continued progress of this proposed rule though the rulemaking process. The Committee should be comprised of practitioners, applicants and in-house counsel of companies who anticipate using the Rocket Docket rule. The Committee should also be involved in the development of any new PTO forms for this practice.


In addition, the Committee should act at a body for channeling feedback on the rocket docket to the PTO. A formal mechanism for feedback should be implemented so that PTO customers will have a point of contact with suggestions for feedback and continued evolution of the practice. The Committee should also be involved in the improvement and modification of the rule.


VIII. Expected Use of the Rocket Docket


We estimate recommending entry into the design rocket docket of between 100 to 200 design patent applications per calendar year should the rocket docket provide for a targeted issuance date and an automatic refund of a portion or all of the fee for applications which are not issued in the targeted time frame.


The creation new and innovative practices such as a design rocket docket would evidence the PTO's commitment to service its customers and respond to market needs.

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