Remarks By Director Michelle K. Lee at the IP5 Heads of Office and Industry Meeting

USPTO Director Michelle K. Lee

IP5 Heads of Office and Industry Meeting

Valletta, Malta

May 31, 2017

Thank you, President Battistelli. Why don’t I jump right into an update from the U.S. Patent and Trademark Office?

The USPTO remains dedicated to carrying out its core mission – issuing the highest quality patents as quickly and efficiently as possible. Which is why I’m proud to report that we have reduced our backlog of unexamined patent applications by almost 30 percent from its peak in January 2009, despite a 32 percent increase in applications over this time.   We have brought down our first action pendency by 43 percent -- from 28 months in 2011 to 16 months today. Our total pendency is down by 26 percent – from 35 months in 2010 to 26 months.  We were able to achieve this even though our utility, plant, and reissue filings increased more than 5% in fiscal year 2016 to over 650,000 applications. Our backlog of ex parte appeals – that’s not AIA proceedings, but our internal appeal process to the Board after the examiner issues her decision – has also gone down. We have reduced our inventory of ex parte appeals by 45 percent from a high of about 26,000 in 2012 to about 15,000 today. And, we have reduced the average pendency for appeals by 30 percent from 28 months in 2016 to 19 months. In short, our backlog and pendencies are now lower than they’ve been in more than a decade, and they will continue to go down.

Our shrinking backlog, along with greater finances, and strong support from the public, has allowed the agency to engage in an exceptional effort to enhance patent quality. Our Enhanced Patent Quality Initiative, or EPQI, was established in 2015 to provide dedicated resources to enhance overall patent quality.  Based on feedback from internal and external stakeholders, we have launched 12 EPQI programs which can be grouped into four areas: Search and training, prosecution, post-examination, and evaluation.

Some of our recent efforts have focused on improving consistency across our over 8,000 examiners. We use a number of different means to identify examiners or areas that may not be applying our policies and procedures in a consistent manner. One such effort started in FY 2016.  Each of our technology centers identified examiners employing best practices or having quality concerns with respect to reopenings of prosecution, rework of Office actions, and consistency of decision making. The technology centers performed a root-cause analysis involving the work of over 1,000 examiners. Main root causes of negative performance were identified to be 1) improper claim interpretation and 2) failure to identify/apply the most appropriate prior art. Some of the main best practices were 1) searching both the claimed invention and the inventive concept set forth in the specification and 2) identifying allowable subject matter early in prosecution. The technology centers are currently planning to conduct focused training for the examiners who were found to need that help, and developing further training based on the identified root causes and best practices. This particular effort is just one of the many different ones that we’re exploring in our effort to achieve further consistency in examination.

We’re also working to improve our methods for measuring quality. We’ve had quality metrics in place since at least 1983, but we continue to identify new metrics, so that we can get a more thorough understanding of our work products and processes. We will now categorize quality metrics as follows: Product indicators, which include metrics on the correctness and clarity of our work products. Process indicators, which assist in tracking the efficiency and consistency of internal processes, and perception indicators, which use both internal and external stakeholder surveys to solicit information that can be used for root cause analysis and to validate/verify other metrics. Another part of our quality initiatives focuses on harnessing the art raised during PTAB AIA trails to enhance the examination of related applications.  Also, by reviewing the results from the PTAB proceedings, we may be able to identify both best practices and deficiencies that arise in examination, and we can utilize that information in examiner training that we provide.

Why don’t we turn now to another one of the USPTO’s strategical goals, which is to provide domestic and global leadership to improve intellectual property policy, protection, and enforcement worldwide? One of the ways we meet this goal is by providing educational and training programs for government officials, both from the U.S. and from countries around the world, for small and medium-sized enterprises, for universities, and for other sectors of the public. In FY2016, we conducted a total of 143 such training programs. We also offered IP capacity-building programs throughout the year to patent, trademark, and copyright officials, judges, prosecutors, police, customs officials, policymakers from around the world, examiners, and IP rights owners, among others. Through FY2016, USPTO provided training to over 7,000 individuals from 114 countries. We also continue to support innovators, including through our four regional offices across the U.S., and through over a dozen IP attaches across the globe. Our attaches are positioned to help innovators obtain and enforce IP rights outside of the U.S. and also help advocate for improved IP laws in the regions where they are posted. We’re also very proud of our Patent Pro Bono Program, which provides free legal assistance to under-resourced inventors who wish to secure patent protection for their inventions. Located across the country, each pro bono program matches independent inventors and small businesses with volunteer patent attorneys to help them navigate the process for obtaining a patent. 

Now let’s take a look at the work that lies ahead – one of our top priorities is to make sure the Patent Trial and Appeal Board’s AIA proceedings are as effective and fair as possible – within our Congressional Mandate. As you know, since 2012, under the America Invents Act or AIA, our Patent Trial and Appeal Board or “PTAB” has been accepting petitions for post-grant review of patents. With the experience we've gained since 2012, and now five years worth of data, we are continuing to work to improve these proceedings for all parties.  You may be interested in some statistics about the decisions coming out of our PTAB. You can see on the slide the status of every petition filed since the beginning of AIA, of those petitions that have reached some sort of final disposition (i.e., are not pending), about one third of all petitions are denied institution and do not go to trial; about one third of all petitions settle either before or after the decision to institute; and only about one third of all petitions ever reach final written decision. Of the portion of petitions that reach final written decision, 66 percent of petitions will find all instituted claims of the patent unpatentable, 17 percent of petitions will find all instituted claims of the patent patentable, and an additional 17 percent will have mixed results (some instituted claims will be found to be patentable and some will be found to be unpatentable). With respect to the institution rate, here is some helpful data from the years the AIA trials have been in effect. As you can see, the institution rate in our proceedings has been steadily declining from a high of 87 percent in the beginning to about two-thirds today.

Needless to say, we’re very busy at the USPTO, and I hope that this update has given you a glimpse at some of the progress we have made on some of our important priorities, and the work we have on the horizon. I look forward to today’s very informative discussions!