Has the Recession Hit the PTO?

One would think at first glance that the 2008/2009 global recession has also affected the U.S. Patent and Trademark Office (“PTO”). However, based on patent application filings made through June 30, 2009, this does not appear to be the case. Table 1, below, shows the total number of patent applications filed with the PTO over the past 15 fiscal years (the PTO fiscal year starts on Oct. 1), including Request for Continued Examination (“RCE”) filings. As can be seen, patent application filings have increased at a steady rate during this time period. Patent application filings with the PTO through June 30, 2009 are 338,093, which extrapolates to 450,790 patent application filings for the entire FY 2009, which is comparable to the 2007 and 2008 patent application filings numbers.

Companies Might Change Their Filing Practices

As patent application filings could be considered by companies to be a discretionary spending, and not a mandatory spending, one would think that the patent application filings would have dropped off significantly in FY 2009, but this is not the case.

If the recession is sustained, and lasts into 2010, it is possible that companies will change their patent application filing strategy and only make patent application filings for their most important cases. To this end, it is important that companies have a procedure in place for making correct categorizations of invention disclosures submitted by their employees, in order to choose only the ones that are important enough to the company to justify the tens of thousands of dollars required to obtain a patent. For example, a simple three-level categorization of invention disclosures into “A,” “B” and “C” disclosures would suffice, whereby “A” disclosures are ones that are deemed to be in a company's primary line of work and/or a major competitor's line of work, “B” disclosures are ones that are deemed to not be in a company's line of work or a competitor's line of work but are in a technical area that the company would like to branch out to, and “C” disclosures are ones that are not related to a company's line of work or a line of work that the company would like to branch out to.

Based on such a categorization of invention disclosures, such as by a multi-person invention disclosure review committee (preferably including at least one intellectual property attorney and at least one technical expert employed by the company), decisions can be made to only file patent applications based on “A” invention disclosures with the PTO until the recession ends (and possibly make a Patent Cooperation Treaty filing one year from the earliest patent application filing date in order to protect rights outside of the United States), at which time patent applications based on “A” and “B” invention disclosures would be filed with the PTO.

Another possible patent application filing strategy is to only file provisional patent applications while the recession lasts, and hope that the recession ends or at least eases up in the next six to 12 months, whereby at that later time the company's bottom line will have improved enough to cover the patent attorney costs and PTO filing costs associated with preparing and filing a regular utility patent application (which must be filed no later than one year from the date a provisional patent application is filed). A provisional patent application typically requires less patent attorney time to prepare than a regular utility patent application, but be aware that the provisional patent application should be sufficient in description so that a proper claim for priority can be made to that earlier-filed provisional application.

PTO Appeals Backlog Unaffected By the Drop-off

Like the patent application filings numbers, another area that does not seem affected by the recession is the PTO appeals backlog. A recent article by Professor Dennis Crouch, titled “Timeline of the BPAI Backlog,” published on June 25, 2009, in Patently O (www.patentlyo.com), included a chart that showed that the pending patent application appeals backlog is approaching 12,000 and is increasing at an exponential rate. A drop-off in patent application filings due to the recession might have affected these numbers in the future, but since the recession does not appear to have made an appreciable dent in patent application filings, this appeals backlog will likely only get worse in the next few years.

Conclusion

Surprisingly, it appears that patent application filings with the PTO have been unaffected by the current recession. Whether or not this trend will continue through 2009 and into 2010 waits to be seen. Also, companies that are experiencing financial difficulties due to the recession should consider changing their patent application filing practices so that only the most important patent applications are filed with the PTO, in order to trim their intellectual property spending budget until times get better.

[IMGCAP(1)]

Phillip Articola is a Special Counsel with Foley & Lardner LLP, in the Washington, DC, office and specializes in patent prosecution, particularly in the fields of computers and communications.

One would think at first glance that the 2008/2009 global recession has also affected the U.S. Patent and Trademark Office (“PTO”). However, based on patent application filings made through June 30, 2009, this does not appear to be the case. Table 1, below, shows the total number of patent applications filed with the PTO over the past 15 fiscal years (the PTO fiscal year starts on Oct. 1), including Request for Continued Examination (“RCE”) filings. As can be seen, patent application filings have increased at a steady rate during this time period. Patent application filings with the PTO through June 30, 2009 are 338,093, which extrapolates to 450,790 patent application filings for the entire FY 2009, which is comparable to the 2007 and 2008 patent application filings numbers.

Companies Might Change Their Filing Practices

As patent application filings could be considered by companies to be a discretionary spending, and not a mandatory spending, one would think that the patent application filings would have dropped off significantly in FY 2009, but this is not the case.

If the recession is sustained, and lasts into 2010, it is possible that companies will change their patent application filing strategy and only make patent application filings for their most important cases. To this end, it is important that companies have a procedure in place for making correct categorizations of invention disclosures submitted by their employees, in order to choose only the ones that are important enough to the company to justify the tens of thousands of dollars required to obtain a patent. For example, a simple three-level categorization of invention disclosures into “A,” “B” and “C” disclosures would suffice, whereby “A” disclosures are ones that are deemed to be in a company's primary line of work and/or a major competitor's line of work, “B” disclosures are ones that are deemed to not be in a company's line of work or a competitor's line of work but are in a technical area that the company would like to branch out to, and “C” disclosures are ones that are not related to a company's line of work or a line of work that the company would like to branch out to.

Based on such a categorization of invention disclosures, such as by a multi-person invention disclosure review committee (preferably including at least one intellectual property attorney and at least one technical expert employed by the company), decisions can be made to only file patent applications based on “A” invention disclosures with the PTO until the recession ends (and possibly make a Patent Cooperation Treaty filing one year from the earliest patent application filing date in order to protect rights outside of the United States), at which time patent applications based on “A” and “B” invention disclosures would be filed with the PTO.

Another possible patent application filing strategy is to only file provisional patent applications while the recession lasts, and hope that the recession ends or at least eases up in the next six to 12 months, whereby at that later time the company's bottom line will have improved enough to cover the patent attorney costs and PTO filing costs associated with preparing and filing a regular utility patent application (which must be filed no later than one year from the date a provisional patent application is filed). A provisional patent application typically requires less patent attorney time to prepare than a regular utility patent application, but be aware that the provisional patent application should be sufficient in description so that a proper claim for priority can be made to that earlier-filed provisional application.

PTO Appeals Backlog Unaffected By the Drop-off

Like the patent application filings numbers, another area that does not seem affected by the recession is the PTO appeals backlog. A recent article by Professor Dennis Crouch, titled “Timeline of the BPAI Backlog,” published on June 25, 2009, in Patently O (www.patentlyo.com), included a chart that showed that the pending patent application appeals backlog is approaching 12,000 and is increasing at an exponential rate. A drop-off in patent application filings due to the recession might have affected these numbers in the future, but since the recession does not appear to have made an appreciable dent in patent application filings, this appeals backlog will likely only get worse in the next few years.

Conclusion

Surprisingly, it appears that patent application filings with the PTO have been unaffected by the current recession. Whether or not this trend will continue through 2009 and into 2010 waits to be seen. Also, companies that are experiencing financial difficulties due to the recession should consider changing their patent application filing practices so that only the most important patent applications are filed with the PTO, in order to trim their intellectual property spending budget until times get better.

[IMGCAP(1)]

Phillip Articola is a Special Counsel with Foley & Lardner LLP, in the Washington, DC, office and specializes in patent prosecution, particularly in the fields of computers and communications.