Patent approval has been rising, but that doesn't necessarily mean more innovation

By Cale Guthrie Weissman , written on September 13, 2013

From The News Desk

The percentage of patents that the United States Patent and Trades Office (USPTO) has risen dramatically. But does this mean that American inventiveness has reached a new high? Not quite. In fact, it's actually the opposite. It speaks to the current methods the USPTO has adopted when considering patent applications, and the way patent lawyers may be operating to ensure patent approval. 

This comes from a paper that looked at patent application data over the past 17 years, including how many were approved and how many were re-submitted patent applications. While the number of approved applications is increasing steadily, it's important to notice that the number of new or original applications being submitted has remained at generally the same number since 2008.

In short, there has been no increase in new applications. The acceptance rate is just rising dramatically. Since 2008 there have been about 300,000 original applications each year (with this number slightly decreasing between 2008 and 2010). Whereas, the number of applications increased dramatically since 2008, from 156,540 to 248,305 issued patents. That's an increase in approved patents from 60 percent to almost 89 percent.

There are a number of reasons for this. First, there is a severe patent backlog. Those grouped in the backlog are the years-long pileup of applications awaiting action by a USPTO examiner and those caught in application limbo. Since 1996 the total number of backlogs has increased dramatically. From 1997 to 2008 it surged 339 percent. In 2008, however, the backlogs started to decrease. Since then, the backlog has dropped 18 percent, which may be because the USPTO altered its application methodology.

David Kappos, who was the director of the USPTO from 2009 until early 2013, has been lauded for bringing more efficiency to the USPTO, which, like any government entity, is notorious for its endless bureaucracy. As Dennis Crouch from patent-centric blog Patentlyo writes, "we have public statements from [former USPTO] Director Kappos suggesting intention to move toward a higher allowance rate."

But higher efficiency to some may mean lower standards to others..

In addition, Crouch claims that while the USPTO has changed course in analyzing applications, patent lawyers have done the same. He writes:

I have a working hypothesis that applicants have increased their reliance on [various] tools as mechanisms to self-select the best application for filing and abandoning the patents even before filing a non-provisional.
In essence, Crouch is saying that patent applicants and lawyers are relying on tools like filing Requests for Continued Examination (a request lawyers use to renegotiate their applications with the USPTO when they have been denied). This goes with the report's data, which show a significant increase of re-filed patents being approved.

So, on one hand we have patent lawyers finding new ways to get their patents through, and on the other hand we have a supposedly "efficient" USPTO approval system that may not have as much oversight as we'd like. This sounds like a haven for patent trolls, right?

Professor Chris Cotropia, a co-author of the paper, is aware that this recent uptick isn't speaking well toward American innovation. This is because a great deal of the patents being approved are just rehashed old ones (that is, the Requests for Continued Examinations that are being reconsidered). At the same time, he doesn't think this should be considered synonymous with the enormous surge in patents during the 1990s, when most patent trolls began filing their applications.

He points to recent reforms made as a potential glimmer of hope. "We've had a lot of reforms," he told me. "Not just at the legislative level, but in the judiciary." Such reforms include the “Patent Litigation and Innovation Act,” and the “Stop the Offensive Use of Patents (STOP) Act.” So now Cotropia thinks people should wait and see. Of course, it takes time to see glimmers of improvement. But, as he puts it, that's "just the way the system is built."

Others, of course, disagree. Take, for example, EFF's Julie Samuels, who told me a few weeks ago, "the laws are skewed toward getting people rich." To her, the current iteration of patent law necessarily inhibit innovation, because of the ways lawyers can maneuver around USPTO standards. This can translate into poorly worded patents getting passed, which is precisely how patent trolls make their money. In addition she maintains that patent law is too focused on monetary renumeration and not on the ideas behind the patents.

Cotropia doesn't think things are that dismal. "We are still a fairly innovative country -- especially in the software and IT space."

Whether we enact more reform or keep things as they are now, it's probably going to be at least ten years before we really see the what sort of consequences this paradigm of patent approval will bring.