The ‘Play and Pause’ for USPTO’s ‘Track-One’- April, 2011 Update

In the first week of April 2011, the USPTO fused life into the much-awaited system of allowing prioritized and expedited examination of patent applications. On 4^th April, 2011, the USPTO announced its plans to begin accepting requests for fast-track or prioritized examination of patent applications from one month of this announcement, i.e. 4^th May, 2011. This was to take effect with the aid of the USPTO’s program called ‘Track One’ accelerated examination program. But no-sooner that those dreams could be even reared, leave apart cherished, the Federal Budget, 2011 enacted on 15^th April 2011 put a severe blow on the said pre-mature Program. The USPTO currently expects to receive about $2.19 billion from fee collections for Fiscal Year 2011, but the most recent federal budget compromise (H.R. 1473, the Full-Year Continuing Appropriations Act, 2011) would strip approximately $100 million from the fees collected by USPTO and divert that money to other federal programs. It would, thus, limit the USPTO’s spending to $2.09 billion. The surplus of $100 million would be utilized to pay for other govt. expenses. The Federeal Govt.’s move has not only shattered the USPTO reform spree but has also invited much criticism especially for the reason that the USPTO is funded by applicant-fees rather than taxes imposed on public. In the wake of this, the USPTO is also taking the following steps to reduce spending[1]:

• Track One of the Three-Track program, which offers expedited patent examination and was scheduled to go into effect on May 4, 2011, is postponed;
• The opening of the planned Nationwide Workforce satellite office in Detroit, as well as consideration of other possible satellite office locations, is postponed;
• Hiring—both for new positions and backfills—is frozen; 
• IT projects will be scaled back;
• Funding for Patent Cooperation Treaty (PCT) outsourcing will be substantially reduced;
• Employee training will be reduced;
• All overtime is suspended.

In addition, business units will be required to reduce all other non-compensation-related expenses, including travel, conferences and contracts. Trademarks, however, will remain unaffected and maintain normal operations.  Despite the above, it would be worth-while to discuss the major reform sought to be brought and implemented by the USPTO, i.e., the ‘Track-One’ Program.   ‘Track-One’ Program   The system had proposed to enables itself from the 4^th May, 2011[2] to reduce the time that it usually takes in processing of patent applications. Where in normal course, it takes about 3 years in obtaining a patent grant, ‘Track One’ will facilitate the same within 12 months. An application for Track One examination will require a request for prioritize examination with an accompanying fee of $4,000, pursuant to 37 CFR 1.102(e), in addition to the regular filing fees. The USPTO is also working on a system to offer a 50% relaxation in filing fees of applications afforded small entity status, as it does with many other standard processing fees, but nothing has been concretized yet on this front. The Under Secretary of Commerce for Intellectual Property and Director of the USPTO David Kappos throws light on the said program in the following words, “Track One provides a comprehensive, flexible patent application processing model to our nation’s innovators, offering different processing options that are more responsive to the real-world needs of our applicants. The Three-Track program will bring the most important new products and services to market more quickly, helping to build businesses and create new jobs in America.”  The program ‘Track One’ was a part of a new Three-Track system which the USPTO proposes to implement by September 2011. Under this system, patent applicants may request[3]:

• prioritized examination vide ‘Track One’;
• traditional examination under the current procedures through Track Two; and
• for non-continuing applications first filed with the USPTO, an applicant-controlled delay for up to 30 months prior to docketing for examination under Track Three.

  The ‘Track One’ system, initially, was to be implemented almost on a trial basis, where in the first phase starting 4^th May, 2011 upto 30^th September, 2011, a limited number of 10,000 applications were allowed to be processed. This would have been re-visited and reviewed at end of the fiscal year 2011 to examine its efficiency and efficacy as well as to see if adjustments are needed for future. The new system was to be introduced considering the fact the traditional ‘one-size-fits-all’ approach may not work for all applicants. As David Kappos put it, “By allowing applicants greater control over the timing of examination, the USPTO will be able to deploy its resources to better meet the needs of innovators.  We look forward to input from the public as we shape this proposal.” For applications filed in the USPTO that are based on a prior foreign-filed application, no action would be taken by the USPTO until the agency receives a copy of the search report, if any, and first office action from the foreign office as well as an appropriate reply to the foreign office action as if the foreign office action was made in the application filed in the USPTO. Following or concurrent with the submission of the foreign office action and reply, the applicant may request prioritized examination or obtain processing under the current procedure. This proposal would increase the efficiency of the examination of these applications by avoiding or reducing duplication of efforts by the office of first filing and the USPTO. Overall pendency would be decreased in four ways:

1. increased resources in Track I would result in increased output;
2. reuse of search and examination work done by other offices would result in greater efficiency;
3. applicants who chose Track III because their applications were of questionable value might ultimately not pursue their application examination;
4. applicants with applications first filed abroad might ultimately not pursue their application examination.

  Hoping against Hope!   The House Judiciary Committee has approved the America Invents Act (H.R. 1249) on 14^th April, 2011, a bill that proposes two major USPTO practice changes, viz:

• Fee Setting Authority:The USPTO would be given authority to adjust its fees in a way that “in the aggregate” recover the estimated costs of its activities.
• Fee diversion:Provides a special USPTO Public Enterprise Fund from paid-in user fees, ending fee diversion from the Office.

This Bill may be up for a full vote when Congress returns in May, 2011. If this law comes into force, the USPTO’s proposed reforms may soon see the light of the day by providing the USPTO its real financial independence. Come what May (2011)??