Government Accountability Office Study Confirms: Patent Office Encouraged Examiners To Approve Crappy Patents

from the so-that's-just-great dept

Fri, Aug 5th 2016 1:07pm — Mike Masnick

This shouldn't be a surprise. All the way back in 2004, in Adam Jaffe's and Josh Lerner's excellent book about our dysfunctional patent system, Innovation and Its Discontents, one of the key problems they outlined with the system was the fact that there was strong incentives for patent examiners at the US Patent Office to approve shit patents. That's because they were rewarded for how "productive" they were in terms of how many patent applications they completed processing. Now, you might think that shouldn't encourage approvals -- except that there's no such thing as a true "final rejection" from the patent office (they have something called a final rejection, but it's not -- applicants can just make some changes and try again... forever). So rejecting a patent, inevitably, harms your productivity rates as an examiner. Approving a patent gets it off your plate and is considered "done." Rejecting it means having to spend many more hours on that same patent when the inventor comes back to get another chance.

After Jaffe and Lerner made that criticism clear, it seemed like the Patent Office started to take the issue to heart and they actually started changing some of how examiners were rated. And, for a few years, it seemed like things were heading in the right direction. But then, once David Kappos took over, he noticed that a lot of patent holders were complaining that it took too long to get patents approved. Apparently ignoring all of the evidence that pushing examiners to review patents quickly ends up in disaster, Kappos put back in place an incentive structure to encourage examiners to approve more patents. He kept focusing on the need to get through the backlog and speed up the application process, rather than recognizing what a disaster it would be. Of course, some of us predicted it and were mocked in the comments by patent lawyers who insisted we were crazy to suggest that the USPTO would lower its standards.

Of course, an academic study a few years ago found that was absolutely happening and now, to make the point even clearer, the Government Accountability Office, which tends to do really fantastic work, has written a report that agrees. It blames the Patent Office's focus on rapidly approving patents for the flood of low quality patents and the resulting patent trolling epidemic:

Examiners are rated largely on their production, auditors said, and they are given different times to complete reviews based on the experience of the examiner and the technical level of the field. For example, someone working on an artificial intelligence review gets an average of about 31 hours to complete it, while an application for exercise devices takes an average of 17 hours.

Timeliness and production produce bonuses: From fiscal 2009 to fiscal 2013, examiners who met these goals got an extra $6,000 a year, GAO said, citing the inspector general's office.

But they are not rated for quality work. Examiners work fast, creating “an environment where patents may be granted that do not fully meet patentability standards,” GAO found.

The GAO says that even in the last few years (after Kappos left), when the USPTO said it was focusing more on quality, there's little evidence that's actually happening:

But GAO noted that patent officials, to improve quality, still are focusing too much on the timeliness of reviews, customer service and “process or production goals” rather than quality. And they have not tied bonuses and performance reviews to quality, which needs definition. Is a good patent broad, or clearly defined? How does it prove that the invention is novel, useful, not obvious and clearly described?

The amazing thing is that, in approving crappy patents, the Patent Office actually makes its own job harder, because more crappy patents will lead to more and more people applying for crappy patents, knowing they might get through. Want to crack down on the massive backlog of patent applications? STOP APPROVING BAD PATENTS. That will wake patent lawyers up to the fact that they shouldn't be submitting so many crappy patents, as it'll be a total waste of time and money.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: gao, patent quality, patent trolls, patents, uspto

31 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

Ninja (profile), 5 Aug 2016 @ 1:14pm

It's like sniffing drug dogs. Give them a treat every time they find a positive even if it's wrong and soon enough they'll be finding positives everywhere. Humans are just a bit more sophisticated, they demand Ben Franklins.
[ link to this | view in thread ]
That Anonymous Coward (profile), 5 Aug 2016 @ 1:15pm

Because looking busy means we are productive.
Perhaps its time for some reforms to stop shit patents & patent trolls from being able to extract millions in East Texas because it was easier to approve it than to deny it and keep denying it over & over.
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 1:16pm

Re:
Humans are just a bit more sophisticated

Seen many humans, not sure if true statement!
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 1:40pm

Penalize them for "bad" patents
So go ahead and keep rewarding them for granting new patents, but tie every patent granted to the examiner to approved it.

Examiners get a bonus every year based on some formula:
(Patents approved * 10) - (Patents with lawsuits * number of lawsuits for patent * number of defendants per suit * 100)

something that rewards progress, but heavily penalizes junk patents used for lawsuit purposes
[ link to this | view in thread ]
I.T. Guy, 5 Aug 2016 @ 1:40pm

Re:
"It's like sniffing drug dogs." I've never had the opportunity to sniff a drug dog but will gladly take the treat. ;)
[ link to this | view in thread ]
I.T. Guy, 5 Aug 2016 @ 1:45pm

That's what happens when quality is not a metric.

"these goals got an extra $6,000 a year"
The examiners carry around an "Approved" stamp on their hip like a sidearm. Quick Draw McGraw has nothing on them.
[ link to this | view in thread ]
crade (profile), 5 Aug 2016 @ 2:06pm

Re: Penalize them for "bad" patents
In order to actually resolve the issue You need to penalize the submitter for wasting the patent's office time by submitting the bad patents in the first place
[ link to this | view in thread ]
maxanon, 5 Aug 2016 @ 2:09pm

bill for both
The USPTO has an additional incentive for granting bad patents... As soon as a patent is used in litigation, the defendants will pay the PTO to review the validity with an IPR. One side pays them to give. The other side pays them to take away. It's all profit!
[ link to this | view in thread ]
That One Guy (profile), 5 Aug 2016 @ 2:13pm

Quality vs Quantity
That's what happens when quality is not a metric.

It's not just that quality isn't a metric, but that quantity is. Far too many seem to think that the number of patents is some indicator of innovation, that a country with more patents is a country with a lot of innovation happening, rather than what it actually is, a country with more patents.

As such the general motivation is to grant as many patents as possible without paying much attention to whether or not they're good patents rather than junk ones.
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 4:09pm

New study claims water is wet, legislators waiting for confirmation results.
[ link to this | view in thread ]
David (profile), 5 Aug 2016 @ 6:11pm

Typical gov solution.
There are a few items I have observed over the years. First is the SSA. The 'urban myth' belief is that one needs to apply six or seven times to receive SSI benefits. Of course, my more methodical approach clarified the issue. An application is immediately rejected for *any reason*. Thus the examiner will get a 'completed' for the application while the applicant will have to resolve each and every problem they didn't address incrementally. The applicant gets 1 success while the examiner gets N number of completes for each failure.

Bad managers, bad decisions and a reward system that isn't tied to actual performance. These are hallmarks of a broken system and there is no possibility of fixing beyond throwing them all out and starting anew.

Good luck with that.
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 6:11pm

Re: Re: Penalize them for "bad" patents
Yeah, just double the application fee each time a rejected patent is re-submitted.

140, 280, 560, 1120, 2240, 4480, 8960, 17920, 35840.....

Eventually it becomes too expensive for trolls to keep trying and the USPTO has extra money so they can hire more people to keep up with demand.
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 8:16pm

Tread carefully
The way I see it, patents have become synonymous with landmines.

Want to market and sell some innovative new gadget you've designed & built? Gotta make sure you equip yourself with an anti mine vehicle of protective patents. Wouldn't want to brave that minefield unprotected, a fledgling company could wind up dead otherwise.
[ link to this | view in thread ]
Anonymous Coward, 5 Aug 2016 @ 9:08pm

Abolish Intellectual Property
The idea of owning ideas is crazy.
[ link to this | view in thread ]
orbitalinsertion (profile), 6 Aug 2016 @ 1:35am

Re: Quality vs Quantity
It's like they work in a prosecutor's office or something.
[ link to this | view in thread ]
orbitalinsertion (profile), 6 Aug 2016 @ 1:38am

Re:
Wetness is a conspiracy of the left and Big Water aimed at taking away your rights.
[ link to this | view in thread ]
Angetenar, 6 Aug 2016 @ 6:45am

Re:
Not where I live. I live in a "dry" county. The law says so, I believe it, and that's that.
/s
[ link to this | view in thread ]
Anonymous Anonymous Coward (profile), 6 Aug 2016 @ 7:20am

Re: Quality vs Quantity
It's more like they think more patents are an economic stimulus. That would only be true if the patents were good and it was brought to market. How many junk patents are brought to market successfully?

BTW, economic generation in the legal industry is not appropriate economic stimulation.
[ link to this | view in thread ]
Pherkad, 6 Aug 2016 @ 7:36am

Re: Re: Quality vs Quantity
BTW, economic generation in the legal industry is not appropriate economic stimulation.

Why not?
[ link to this | view in thread ]
Anonymous Anonymous Coward (profile), 6 Aug 2016 @ 7:51am

Re: Re: Re: Quality vs Quantity
Because it does not 'produce' anything. Quality patents would produce something, create jobs, increase taxes collected, flow money to suppliers and investors, etc. You know, economic activity rather than just the lawyers paycheck, the harm to unjustly sued defendants, and whatever paltry winnings the bad patent persecutor receives.
[ link to this | view in thread ]
John Fenderson (profile), 6 Aug 2016 @ 7:59am

Re: Re: Re: Quality vs Quantity
Because the law is supposed to be about justice. To emphasize profit-making is to degrade its primary purpose.
[ link to this | view in thread ]
John Fenderson (profile), 6 Aug 2016 @ 8:02am

Re: Tread carefully
A million time this. I know the software industry the best, and in the software industry it is essentially impossible to write a nontrivial program that doesn't violate some bogus patent or another. Worse, it's essentially impossible to even be able to predict whether or not that program is free of patent violations prior to release.
[ link to this | view in thread ]
Pherkad, 6 Aug 2016 @ 9:34am

Re: Re: Re: Re: Quality vs Quantity
Because it does not 'produce' anything.

It produces "profits". I, for one, like profits.

I've often wondered why the US doesn't just become one big law firm. The Law Firm of The United States of America. With all citizens educated from childhood to become either lawyers or enforcers (military/police). The whole country could then make it's money by suing the rest of the world. Of course, we would have to be able to enforce our judgments. But, we already have by far the world's largest military. Perfect.

With all that money flowing in then we wouldn't have to actually "produce" anything ourselves. We could just buy physical "products" from other countries. Necessary domestic labor could be provided by imported foreign labor on temporary work visas. Would you rather dig your own ditch or have the money to hire someone else to do it for you? I'd rather have the money.

All it takes is lawyers and guns.
[ link to this | view in thread ]
Pherkad, 6 Aug 2016 @ 9:35am

Re: Re: Re: Re: Quality vs Quantity
Because the law is supposed to be about justice.

The question was about economics, not justice.
[ link to this | view in thread ]
Anonymous Anonymous Coward (profile), 6 Aug 2016 @ 10:29am

Re: Re: Re: Re: Re: Quality vs Quantity
Of all the lawyers that currently exist, what percentage are actually capable? Now you want to have everybody else in the US study to be less than capable lawyers...to make money by suing the rest of the world?

I think you might want to check out ISDS, which already does that. The only people happy about it are corporations, lawyers (and then only a few of them), and the people negotiating who will get cushy jobs after their government obligations lapse.

Oh, and just listen to the screaming taking place about moving jobs overseas. Right or wrong, there are a bunch of people unhappy about that.

One last thing. Producing profits in your scenario only benefits the lawyers, and maybe some trickle down services like restaurants and dry cleaners. Hardly a way to keep 350 million people working.

Try again.
[ link to this | view in thread ]
Pherkad, 6 Aug 2016 @ 10:51am

Re: Re: Re: Re: Re: Re: Quality vs Quantity
I think you might want to check out ISDS, which already does that.

It's a start, but it stops way short.

The only people happy about it are corporations, lawyers (and then only a few of them), and the people negotiating who will get cushy jobs after their government obligations lapse.

So why can't that be all of us?

Oh, and just listen to the screaming taking place about moving jobs overseas.

Let those jobs go overseas. We'll keep the good ones here. Lawyers can always produce more work for themselves (and the enforcers).

One last thing. Producing profits in your scenario only benefits the lawyers,

And enforcers. You left them out.

maybe some trickle down services like restaurants and dry cleaners.

Provided by foreign workers, not US citizens. Remember, US citizens would not have to lower themselves to doing such work at all. We would hire it all done for us.

Hardly a way to keep 350 million people working.

On the contrary, it's the perfect to keep an army of 350 million lawyers and enforcers fully employed.
[ link to this | view in thread ]
Stosh, 6 Aug 2016 @ 10:52am

Simple solution....if one of your crappy patents is overturned later in court, you lose all your "gold stars" for fast approvals....
[ link to this | view in thread ]
Pherkad, 6 Aug 2016 @ 10:59am

Re: Re: Re: Re: Re: Re: Quality vs Quantity
Oh, and I realize that not everyone is cut to be either a lawyer or enforcer. But there are many ancillary jobs that go along with those. Such as law clerks, etc.

But remember,the more lawyers you have, the more you need. It's an inexhaustible job market.
[ link to this | view in thread ]
Anonymous Coward, 6 Aug 2016 @ 5:18pm

"That will wake patent lawyers up to the fact that they shouldn't be submitting so many crappy patents, as it'll be a total waste of time and money."

Their time and money?
[ link to this | view in thread ]
Agena, 7 Aug 2016 @ 7:16pm

Re: Re: Re: Re: Re: Re: Re: Quality vs Quantity
I think I read about a small, oil rich, middle-eastern country where basically all the citizens are wealthy and all the physical labor is provided by foreign temporary workers. This sounds like the same thing but based on lawyers instead of oil.
[ link to this | view in thread ]
Wendy Cockcroft, 22 Aug 2016 @ 5:45am

Re: Re: Re: Re: Re: Quality vs Quantity
Why do economics and justice have to be kept separate? Such an attitude seems to cause more problems than it solves.
[ link to this | view in thread ]