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News from the United States Patent and Trademark Office (the “PTO”)

It’s that time of year again – PTO Set to Increase Fees

In addition to the comprehensive Patent Reform Act which is winding its way through Congress, Rep. John Conyers (D – Mich) and Rep. Lamar Smith (R – Tex) recently introduced the “Patent and Trademark Office Funding Stabilization Act of 2010” (the “Stabilization Act”). The bill combines provisions that would (a) authorize the PTO Director to set or adjust all patent and trademark fees; (b) establish a temporary 15 percent surcharge on patent fees; and (c) eliminate the diversion of PTO fees to other government programs.

As indicated above, the Stabilization Act is competing for attention with a more comprehensive Patent Reform Act, which was reintroduced in 2009. Similar bills failed to pass in 2005 and 2007.

The Stabilization Act is intended to addresses two problems facing the PTO, namely the shortfall in the current budget and the diversion of fees collected by the PTO to other government programs. Over the past several years, Congress has skimmed off over $700 million in fees collected by the PTO. This year alone Congress is expected to divert about $200 million from the PTO’s fee collections. At the same time, the number of unexamined patents has ballooned to over 750,000. Every year, about 500,000 new applications are filed, simply adding to the backlog. These fee diversions, which would be banned by the Stabilization Act, are at least partially responsible for reducing the resources available to the PTO to hire and retain qualified examiners and address patent backlog issues.

Fee increases happen every year – but, if passed, the proposed increase would be larger than usual. If you have any questions or would like more information regarding the Stabilization Act or the Patent Reform Act, please contact Patrick M. Bergin at 414-225-7563 or

Get Your Patent! – PTO Allowance Rate Up

While the Patent Office faces a backlog of about 750,000 applications, with an additional 500,000 being filed every year, there is some good news to report. Over the past several weeks, the allowance rate for applications has increased from just under 50 percent to almost 70 percent, which is closer to the long-term average allowance rate.

A couple of factors likely affected the recent increase in allowance rate. First, the economic downturn in 2009 may have caused a higher than normal number of abandonments, which drove the allowance rate down. Second, with intellectual property budgets still tight, applicants may be focusing on amending claims to gain allowances as opposed to attempting to traverse rejections through argument. If you have any questions or would like more information regarding PTO or to check the status of your application, please contact Patrick M. Bergin at 414-225-7563 or

PTO Director Kappos Proposes Three-Track Examination

The PTO recently announced that it is considering a new multi-track examination system that would offer patent applicants the option to choose between “prioritized” examination, ordinary examination and delayed examination. It is expected that applicants choosing the fast-track will be required to pay an additional fee, while applicants choosing delay will pay a reduced application fee.

Prioritized examination is the most obvious benefit of this proposal. Sometimes it is important to quickly obtain patent protection whether to protect an emerging market or to satisfy potential investors. A major problem with the current system is that there is no easy mechanism to speed up the examination process.

Requesting delayed examination might be appropriate for inventions developed before a marketable product exists. In those situations, applicants benefit from PTO delay because that delay saves the applicant from making cash expenditures to prosecute the application. In the longer run, the delay provides an opportunity for patent applicants to cull their portfolio if the invention or its marketability is not realized.

The PTO could benefit if overall pendency decreased due to the increased resources in the expedited examination track and from applicants who chose deferred examination and ultimately decide not to pursue examination of the application.

If you have any questions or would like more information regarding the proposed multi-track examination system, please contact Joseph S. Heino at 414.225.1452 or