A speedier application process at the U.S. Patent and Trademark Office holds the potential to spur a jump in work for Orange County’s intellectual property lawyers.
In 2010, the office issued some 244,400 patents across the U.S., up nearly 30% from 2009, according to data compiled by Bruce Itchkawitz, an intellectual property lawyer at Knobbe, Martens, Olson & Bear LLP in Irvine. That followed gains of just 5% in 2008 and 3% in 2009.
Itchkawitz runs a blog called OC TechInnovation, which reports on new patents issued to local companies. He recently found that the county tracked the national trend last year, with about 2,400 patents for an increase of nearly 33%.
Local attorneys have taken notice.
“We have seen an increase in our patent issuance rate as well,” said Ketan Vakil, a partner in the intellectual property practice at Snell & Wilmer LLP in Costa Mesa. “It encourages companies and individual inventors to file because they would have a good chance of getting an allowance.”
The speedier processing has been pushed along by the Obama administration.
David Kappos, director of the patent and trademark office, has set a goal of reducing the average wait time on patent decisions to less than two years by 2015. That’s about half the time patent seekers typically have faced.
The speed-up has gone into effect thanks to an increase in the number of patent examiners as well as new workflow practices at the federal office.
“The new director of the patent office has tried to reduce the backlog,” Itchkawitz said. “Part of that has been instructing the (patent) examiners that it’s not necessarily their job to reject applications, but to proceed in a timely manner.”
Patent examiners are experts hired by the government to research claims on patent applications. They’re often experts in very specific, highly technical niches in technology and other areas.
“When a new application comes to the patent office, they assign it to an examiner with the technical background to understand the application,” Itchkawitz said.
Examiners are supposed to look at the claims on a patent and compare them to what’s already out there, either in an existing patent or the public domain.
If a patent already exists, the examiner issues a rejection. If not, the process of issuing a patent proceeds.
For companies churning out new technology, the wait on patents can feel like a lifetime.
“With some technologies, that’s so long that it is not even worth patenting,” Itchkawitz said. “Computer software can fall victim to that. Advances happen so quickly that by the time you get your patent, it’s already passé.”
That’s a serious problem for companies such as Irvine-based communications chipmaker Broadcom Corp., which files applications for some 1,000 patents each year (see related story, left) .
“In past years, the patent office has been really overrun by the number of applications,” said Jeyhan Karaoguz, vice president of intellectual property and standards for Broadcom. “Last year we saw an increase in their processing rates and they started churning out bigger numbers of issuances. The wait times used to be upwards of five years, but now we’re seeing an average of three or four years.”
Financial Incentive
The patent office has financial incentives to move a bit faster because it collects fees on new and existing patents.
Broadcom’s Karaoguz estimates that each new patent filed costs about $5,000, a figure that includes processing fees. More money, in the form of “maintenance fees,” also goes to the government over the life of the patent.
“The government generates a lot of revenue from patents,” Snell’s Vakil said. “The patent office has seen revenues decline because the allowance rate was lower in years past.”
Vakil said the recent speed-up in processing has some of his clients taking a more strategic look at their intellectual property assets.
“Companies are probably having a greater focus on their IP to make sure they are getting high quality patents to obtain a competitive advantage and capture potential licensing revenues,” he said. “They are spending more time in working with the patent office, and that has helped out the patent rate.”
Vakil said he makes a point to speak directly with patent examiners if an application initially is rejected.
“We have been doing more interviews over the phone or in person with patent examiners,” he said. “ It creates a more friendly or cordial relationship with the patent office, as opposed to just going back and forth on paper.”
