Patents Statistics and Program Updates
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2 Patents Statistics and Program Updates ABA-IPL s 32 nd Annual IP Law Conference April 5, 2017 Remy Yucel Assistant Deputy Commissioner for Patent Operations
3 Topics for Discussion Patent Statistics Filings Pendency Hiring Regional Offices Examination Time Analysis (ETA) Program Updates First Action Interview Pilot Track One Patent Prosecution Highway 3
4 Filings Filing Trends Compared to This Time Last Year Total UPR filings down 1.1% Serialized (non-rce) filings up 4% RCE filings down 4.5% UPR Filing by Entity 76.1% large 20.9% small 3% micro 4
5 Pendency First action pendency was 15.9 months as of February 28th Total pendency was 25.7 months as of February 28th Pendency from RCE filing to next Office action was 2.9 months as of February 28th 5
6 Unexamined Patent Application Inventory UPR application backlog = 546,690 RCE application backlog = 35,010 Total backlog = 581,700 Backlog totals are of February 28th 6
7 Hiring Total of 12,796 employees, including: 8,323 patent examiners 640 supervisory patent examiners 144 patent examiner hires on board Total of nine Technology Centers 528 art units Total pending applications as of February 28, 2017: 1,103,693 7
8 REGIONAL OFFICES 8
9 Regional Offices Detroit 7/13/2012 Denver 6/30/2014 Silicon Valley 10/15/2015 Dallas 11/10/2015 9
10 Purpose of Regional Offices Established in view of the American Invent Act (AIA) Increase outreach activities to better connect filers and innovators to the Office Enhance patent examiner retention Improve recruitment of patent examiners Decrease the number of patent applications waiting for examination Improve quality of patent examination 10
11 Changes at Regional Offices All Patent contract staff and PTAB are being moved under the chain of command of the Regional Director As office matures the SPE position will be filled by permanent art unit SPEs like Patents in the Alexandria HQ facility while reducing/replacing Resource SPE positions 11
12 Examination Time Analysis 12
13 EXAMINATION TIME ANALYSIS: Why now? Properly calibrated examination time is critical for establishing optimal pendency and quality levels Patent prosecution has substantially changed since goals were established. For example: New technologies and increased technological complexity Exponential growth of available prior art Transition to the Cooperative Patent Classification (CPC) Increased use of Electronic tools Changes in policy and legal interpretations 13
14 EXAMINATION TIME ANALYSIS: Why now? There has not been a comprehensive reevaluation of examination time since the current examination time expectancies were established in the 1970s. Recent reports by oversight bodies such as the General Accounting Office and Office of the Inspector General have recommended that the USPTO reevaluate examination time. 14
15 Next Steps Analyze the results of both external and internal stakeholder outreach. Continue to evaluate additional factors impacting examination time such as: Application data and prior art searching by technology Recently established quality initiatives Grouping of like technologies leveraging CPC 15
16 Next Steps Recommend changes to current examination time and negotiate these changes with the labor union. Additionally, the effort will seek to develop an agile, reproducible process that will allow the UPSTO to revisit and revise examination time on a more frequent basis in order to readily adapt to any future changes. 16
17 Prosecution Program Updates First Action Interview Pilot Track One Patent Prosecution Highway 17
18 First Action Interview Pilot - FAI Promotes personal interviews prior to issuance of a first Office action on the merits Facilitates resolution of issues and advances prosecution of applications for timely disposition Conducted in accordance with current policy and practice, applications taken up in turn 18
19 Participating in the FAI An application suitable for FAI must: Be a non-reissue, non-provisional utility application under 35 USC 111(a) or national state application under 35 USC 371(c) Contain three or fewer independent claims and twenty or fewer total claims Not contain any multiple dependent claims Claim only a single invention Applicant must file a request for a first action interview using the USPTO s electronic filing system, EFS-Web, at least one day before a first Office action on the merits appears in the Patent Application Information Retrieval (PAIR) system) 19
20 Treatment of an Application in the FAI The examiner will conduct a prior art search and notify applicant of rejections and/or objections which the examiner believes are applicable to the application in a preinterview communication Applicant has one month (30 days) from the date of the pre-interview communication to request an interview, submit a reply (in which case the communication serves as the first Office action on the merits), or remove the application from the program 20
21 Track One Prioritized Patent Examination Program Track One program applications are accorded special status during prosecution until a final disposition is reached The Office s goal is to provide a final disposition within twelve months of prioritized status being granted Final disposition includes mailing of a notice of allowance or final Office action, filing of a notice of appeal, completion of examination as defined in 37 CFR , filing of an RCE, or abandonment of the application 21
22 Track One Requirements Original utility or plant non-provisional applications filed under 35 USC 111(a), may be continuation or divisional applications Track One utility applications must be filed via EFS-Web Must contain four or less independent claims, thirty or less total claims, and no multiple dependent claims Applicants are advised to submit Prioritized Examination Request Form PTO\AIA\424 when filing the application Prioritized examination fee must accompany the request 22
23 Track One Requirements for RCEs Requests for prioritized examination may be filed concurrently with or subsequently to the filing of a request for continued examination (RCE) The request for prioritized examination must be filed before the mailing of the first Office action after the filing of the RCE Prioritized examination fee must accompany request The same claim limitations apply to RCEs as to other applications 23
24 Track One Termination Prioritized examination of an application in the Track One program will be terminated If applicant files a petition for an extension of time to file a reply or a request for suspension of action If applicant files an amendment to the application resulting in more than four independent claims, more than thirty total claims, or a multiple dependent claim Upon termination of prioritized examination, the application will be placed on the examiner s regular docket in accordance with its stage of prosecution 24
25 Track One Pendency (cumulative through 12/2016) Filing to Petition Grant: 1.4 months Petition Grant to First Office Action: 2.1 months Petition Grant to Allowance: 5.2 months Petition Grant to Final Disposition: 6.5 months 25
26 Patent Prosecution Highway (PPH) An effective way to leverage work done by other patent offices When an applicant receives a decision from a first patent office, where at least one claim in their application is allowable, the applicant can request to enter the PPH program in a second patent office If the request is granted, the second office can use the work done by the first office as a starting point That PPH case is then fast-tracked in the second office The second office is now looking at a case where most, if not all, of the major issues should already have been addressed 26
27 Patent Prosecution Highway (PPH) Benefits to Users and Offices Cost savings from fewer Office Actions, RCE s, etc. Higher quality shared search results Quicker allowances due to preliminary amendments matching scope of allowed subject matter in first office Provides a useful tool to expedite prosecution of claims in second office yields higher allowance rates. 27
28 Patent Prosecution Highway (PPH) Participation in the PPH program has grown steadily since starting in January 2012 Cumulative filings number close to 45,000 PPH Applications have: Reduced Appeal Rates (1.7% vs. 2.5%) Higher Overall Allowance Rate (84% vs. 67%) Higher First Action Allowance Rate ( 20% vs. 14%) The Role of a Patent Examiner 28
29 Patent Application Initiatives 29
30 The Patent Office and China: Advocacy and Engagement Mark A. Cohen, Senior Counsel Office of Policy and International Affairs U.S. Patent and Trademark Office
31 Table of Contents 1. The USPTO China Team and the IP Attaché Program 2. The Evolution of US Involvement in China s IP Regime 3. Impact of China s Innovation Policies 4. Current Trends 5. Legislative Developments 6. Current Issues of Concern 7. U.S. Government Efforts
32 1. USPTO s China Team Washington, DC, Beijing, Shanghai and Guangzhou 12 US lawyers, 5 Chinese lawyers Collectively, over 200 years experience in Chinese legal issues; 150 years in Chinese IP issues Mark Cohen Senior Counsel (Mark.Cohen@uspto.gov) Elaine Wu Patents/Pharmaceutical Matters Larry Lian China Resource Center/Pharmaceutical Matters Cynthia Henderson Trademarks Neil Graham Copyright Duncan Willson, Conrad Wong Trade Secrets, Enforcement IP Attachés in China Joel Blank, Beijing; Michael Mangelson, Shanghai; Guangzhou. 32
33 IPR Attaché Program
34 Resource Center - Need for Data in Policy Discussion - WTO IP Customs Case
35 2. Evolution of U.S. China IP Involvement 35
36 First License of Chinese Patent to US Corresponding patent in China granted by Zongli Yamen (China s imperial State Dept) Then-U.S. Secretary of State, John Milton Hay (also President Abraham Lincoln s personal secretary) exchanged communications on the enforcement of these patents in China in
37 First Chinese Patent of China Resident 37
38 3. Impact of China s Innovation Policies Third Plenum Original Language: Implement the National IP Strategy and Strengthen IP Protection. Proposed change: Deepen the National IP Strategy, Strengthen the Practical Protection of IP. Final: Strengthen the Utilization and Protection of IP, Investigate Establishing a Specialized IP Court
39 China s IP Metrics Targets Per 10,000 patent ownership rate Patent Applications filed under PCT (10,000) Domestic invention patent average maintenance duration (years) Copyright Registration Volume (10,000) Computer Software copyright registrations (10,000) Total Technology based contracts (Trillion Yuan) IP financing annual amount (100 million Yuan) Patent royalty revenue to foreign companies (100 million US Dollars) IP services revenue annual growth rate (%) IP protection satisfaction rate (points) Average length of substantive examination of invention patent application (months) Average length of Trademark registration review period (months)
40 China aims to reach 14 patents per 10,000 by What State will China Statistically Resemble? California, U.S. State with highest per capita patent ownership rate, comes closest at 11.4 patents per 10,000 residents. 40
41 4. Current Trends Patent Filing Landscape 3,000,000 2,799,000 2,500,000 2,377,061 2,361,243 2,000,000 2,050,649 1,633,347 1,500,000 1,222,286 US China 1,000, , , , , , , ,
42 Trademark Filing Landscape 2015: 2.9 million trademark applications (26% increase from 2014) Compared with USPTO FY2015: 503,889
43 Enforcement and Examination Trends SIPO Patent Application Filings vs Administrative Passing Off Enforcement Number of Patent Applications Filed Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Patent Filing 2013 Patent Filing 2014 Patent Filing 2015 Administrative patent passing off 2012 Administrative patent passing off 2013 Administrative patent passing off 2014 Administrative patent passing off Number of Administrative Passing Off Cases
44 Do Foreign Litigants Win in China? All Plaintiffs Foreign 1 st instance win rate 2 nd instance win rate 71% 81% 70% 71% Average 1 st Instance compensation Median 1 st Instance compensation Duration at 1 nd instance RMB158,643 RMB85,000 9m RMB213,036 RMB100,000 10m *Courtesy of Tim Smith of Rouse & Co. Data from Jan 2014 Nov
45 US Companies Do Not Fully Participate in China s IP Markets Foreign Related Civil IPR Cases/Total IPR Cases Foreign Related IPR Civil Cases Foreign-Related China
46 Bilateral Licensing Flow Bilateral technology licensing volume from U.S. to China (million $) based on BEA/Census data High tech exports by China (million $) based on World Bank data Industrial Processes Computer Software Total IP receipts from China* Total high tech IP receipts from China* China as a percentage of total licensing volume from all countries Total Technology Export by China** 46 China tech export as a percentage of global tech export (Combination of Industrial Processes and Computer Software)** ,966 $3, % ,824 $4, % 2014 $558, % ,778 $3, % 2013 $560, % , ,786 $2, % 2012 $505, % , ,870 $2, % 2011 $457, % , ,043 $2, % 2010 $406, % ,190 $1, % 2009 $309, % ,310 $1, % 2008 $340, % ,939 $1, % 2007 $302, % ,550 $1, % 2006 $273, % $ % 2005 $215, % $ % 2004 $163, % * **
47 5. Legislative and Judicial Developments Draft 4 th Amendment to the Patent Law SCLAO Released draft for comment on December 2, Placed in Urgent tier of legislative priorities for 2017 Key Issues: Expanded administrative enforcement authorities Amended SIPO Patent Examination Guideline Effective April 1, 2017 Key Changes: Explicitly mentioned Business Methods as protectable subject matter. New guidelines regarding Post-filing Data Supplementation Draft Anti-Unfair Competition Law Released for public comment on February 25, 2017 First Reading at the NPC in February Key Issues: Trade secret protection is hampered by the awkward shoehorning of trade secret concepts into the framework of the AUCL (e.g., operators vs. individuals) Trade dress protection remains insufficiently clear to provide a meaningful improvement in the ability of rights holders to protect product shapes and packaging. Overlap with the AML has not been completely removed. Enhanced administrative investigatory authority still without sufficient oversight and limitations.
48 Legislative Developments Draft IP Abuse Rules Released on March 23, 2017 by the Anti-Monopoly Commission of the State Council Key Issues: Treatment of grant back provisions General Principles of the Civil Code Passed in March, 2017 Key development: Trade Secret rights as a civil right, possible expansion of enforcement. Service Invention Remuneration Regulation Lower legislative priority for coming year. Other laws and regulations: Draft E-Commerce Law First reading at the NPC Standing Committee Amendment to the Copyright Law Likely to be worked on this year
49 Judicial Reforms Guiding Cases SPC Guiding Cases project Beijing IP Court s precedential case project Availability of Judicial Decisions 2016 U.S.-China Judicial Dialogue
50 6. Current Pressing Issues Technology Transfer Bad Faith Trademark Filing preemptive filing of another party s trademark Trade Dress Protection Protection for Live Sports Broadcasts Illicit Streaming Devices ( Media Boxes ) Patent Linkage
51 Issue of Concern: China s Technology Import Export Regulation ( TIER ) Article 24(3) If use of the technology provided by the transferor as agreed by the transferee under a technology import contract infringes the lawful rights and interests of a third party, the transferor shall bear liability therefor. Article 27 During the valid term of a technology import contract, the fruits of improvements to the technology shall belong to the party making the improvements. The 2002 TIER overrides Article 353 of the 1999 Chinese Contract Law because Article 123 of the 1999 Contract Law provides that where other laws stipulate otherwise on contracts, such provisions shall govern. 51
52 Issue of Concern: Live Sports Broadcasts/MediaBoxes Protection for live sports broadcasts Unclear copyright protection in China ifeng found originality; case on appeal (Beijing IP Court) PTO-NCA program in June 2017 will address issue Illicit streaming devices (ISDs) (aka media boxes ) Allow users, via infringing apps, to access unauthorized content China is global hub for manufacture of devices 2015 JCCT: China agrees to step up enforcement against both devices and apps
53 Issue of Concern: Patent Linkage in China Patent Linkage in China Administered by China s Food and Drug Administration (CFDA) Pertinent Legislation: Drug Registration Rules (DRR) The Current DRR Article 18: Requires generic applicants to state that their products do not infringe patented drugs in terms of products, substance, manufacturing or use, etc. CFDA will publicize this information on their website. In case of IP disputes that occur after the marketing of the drug, the dispute will be settled according to China s relevant laws and regulations. Article 19: Any applicant must submit a drug application two years prior to the expiration date of any third-party patent in China. The CFDA will not approve an application before the patent expires.
54 Patent Linkage Con t: Proposed Revisions to the DRR may eliminate Patent Linkage Concerns regarding Proposed Revisions Proposed revisions to the DRR issued in 2015 would eliminate Article 19. Under the proposed DRR, any applicant can submit a marketing authorization application regardless of the existence of third-party patents. But Possible Progress? On February 27, 2017, the CFDA Commissioner publicly noted that CFDA wants to improve patent linkage in the context of encouraging drug innovation. On October 31, 2016, the CFDA Commissioner said in an interview that efforts should be made to research patent linkage to transform and upgrade the pharmaceutical industry.
55 7. USG Engagements Government Action China IP Roadshows in U.S. for American rights holders Online enforcement a top priority in bilateral relations Commitments with China to engage/find solutions Bad-faith trademark filings Bilateral and multilateral engagement/training Partners with U.S. law enforcement: The IPR Center ICE/HSI, CBP, FBI, and others PTO s IPR Attaches and the China Team 55
56 2017 China IP Road Shows Boston: April 18 Fort Worth: May 2 Houston: May 5 Detroit, Lansing, and Grand Rapids: Week of July 10 Chicago, Seattle, and Portland (Later in 2017) Contact: Kelly Sheng, Qian.Sheng@USPTO.GOV 56
57 Online Enforcement A Priority Issue 2015 Established a task force in the JCCT 2016 Focus: Big data and training for SMEs Alibaba committed to conducting training in U.S. for SMEs Program on use of Big Data by platforms, 57
58 Bad Faith Trademarks: Fighting at the Front-End SAIC/PTO joint program with Chinese courts (August 2017) TM Appeals, Oppositions, and Cancellations (October 2017) 58
59 Partners with U.S. Law Enforcement: The IPR Center ICE/HSI, CBP, FBI, and others PTO partnership with the IPR Center. Automotive Anti-Counterfeiting Council (A2C2), joint OEM/USG initiative against counterfeit parts. Adjunct to Operation Engine Newity: Air bags, brakes, windshields, and bearings Operation Chain Reaction: Protecting the defense supply chain. Operation In Our Sites: Targeting web sites and operator that sell counterfeit and pirated items. 59
60 Thank you! Mark Cohen
61 Current Initiatives in Work Sharing ABA-IPL s 32 nd Annual IP Law Conference April 5, 2017 Mark R. Powell Deputy Commissioner for International Patent Cooperation 61
62 International Patent Work Sharing and Collaboration 62
63 Work Sharing Trends Leading to Greater Work Sharing BACKLOGS: Backlogs in offices around the world began to explode in the late 1990s FILINGS: The number of applications filed in multiple offices also started to steadily increase INEFFICIENCIES: Duplication of work over common patent applications 63
64 The IP5 Brief History of the IP First Meeting of the Trilateral (EPO, JPO, USPTO) Establishment of Industry Trilateral IP5 Meets for the first time Establishment of IP5 Industry All Trilateral Projects moved to IP
65 Global Dossier Initiative 65
66 Global Dossier Global Dossier is a set of business services modernizing the global patent system and delivering benefits to all stakeholders 66
67 Global Dossier Services Latest Service WIPO CASE Linkage: provides examiners and the public with access to additional participating offices outside of the IP5 Future Services Document Sharing Functionality: sharing documents between office, such as prior art exchanges and supporting documents. Viewed as a first step towards cross-filing On-going Efforts Increasing Data Coverage: Working with IP5 Offices to increase scope of data coverage and hours of availability User Input: Continually engaging users for feedback, input, and comment on current and future Global Dossier services
68 Access to Relevant Prior Art Project 68
69 Project Background Study how the USPTO can increase examination efficiency and quality by leveraging electronic resources to retrieve information (prior art, search reports, etc.) from applicant s other applications. Explore whether or not automatically importing relevant prior art into the US application file at the earliest point in examination would reduce the burden of duty of disclosure for applicants. Consider if patent issuance can be streamlined by eliminating unnecessary information from first page of patent. 69
70 Anticipated Benefits Quality and efficiency of examination is increased Examiner access to relevant prior art and supplemental information in a conveniently searchable manner Decreased applicant expense of submitting information and information disclosure statements Reduced burden for applicant compliance with duty to disclose information material to patentability 70
71 FY 2017 Project Update Request for Written Comment Period Ended October 28, 2016 Application Case Studies 2 nd Quarter FY 17 Examiners Focus Sessions Beginning in 2 nd Quarter FY 17 Gathering and Refining Business Requirements Ongoing Developing Business Solution 4 th Quarter FY 17 71
72 Prior Art Access Contacts Michael Neas Deputy Director, International Patent Legal Administration Jessica Patterson Program Manager, Office of International Patent Cooperation
73 Thank you! 73
74
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