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[Shane, 6-28-2024, JD Supra, “USPTO Proposes New Rules on Terminal Disclaimers: A Potential Setback for Patentees,” https://www.jdsupra.com/legalnews/uspto-proposes-new-rules-on-terminal-9892178/, accessed 7-7-2024, CM]

The United States Patent and Trademark Office (USPTO) recently proposed a significant change to the rules governing terminal disclaimers. The USPTO says that the rule change would “promote innovation and competition,” but is more likely designed to reduce the backlog of cases at the USPTO regardless of the cost to innovators, who will end up with weaker patents if they result from continuation applications with terminal disclaimers.

[Nat Watkins, 3-15-22, Designer Researcher at Nava, advocate for customer, patent holder, AI enthusiast, Wired, “Inside Big Tech’s Race to Patent Everything,” https://www.wired.com/story/big-tech-patent-intellectual-property/, accessed: 07-08-24, EP]

Around the same time, tech giants became increasingly interested in patents. As Steve Jobs reportedly said at the invention of the first iPhone, “we’re going to patent it all.” And patent it all Apple did—right down to the slide-to-unlock feature and beveled edges. In 2011, Google’s top lawyer, David Drummond, claimed that the average smartphone might be protected by up to 250,000 patent claims. Today, no one seems able to get an accurate count, but last month’s sale of all “legacy patents” from Blackberry’s terminated smartphone business fetched $600 million. Perhaps this explains why the patent office has been swamped by a two- to three- year backlog of applications since 2012. Carbon footprint tracker was published 18 months after we applied, as most patent applications are, but it could be years before I know whether I’ve been formally granted a patent. The USPTO receives about 650,000 patent applications annually and issues grants to about 350,000, according to recent numbers, so my odds are only a little better than half. 

The USPTO receives more than half a million patent applications every year and grants 350,000 of them annually. In a perfect world, each patent would be well-examined, describe unique inventions, and meet all relevant statutory checks on overpatenting — but the world isn’t perfect. Patents are frequently granted without meeting baseline, but hard-to-administer, standards, leading to significant legal disputes and economic harm. Opportunistic shell companies — for-profit non-practicing entities (NPEs) run by lawyers — acquire these patents and sue productive companies to extract a tax on innovation. The outcome is thousands of meritless lawsuits and waste, as businesses are often faced with a decision to settle with their accusers or go through the high expense of fighting back in court.

Your two-year wait for a patent is a function of volume and the USPTO’s ability to meet demand.

At the close of FY2023, 1,148,601 patent applications (including designs) were pending with USPTO and labeled as “pending prior to allowance.” That end-of-year inventory has remained relatively constant since it crossed the 1M line in 2006.

[Eileen McDermott, 6-5-24, Editor-in-Chief of IP Watchdog, “Organizations Tell USPTO Proposed 2025 Fees ‘Misuse’ Office’s Fee Setting Authority,” https://ipwatchdog.com/2024/06/05/organizations-tell-uspto-proposed-2025-fees-misuse-offices-fee-setting-authority/id=177505/, 7-9-24, EP]

PhRMA’s comments also noted that the USPTO currently has a growing examination backlog of nearly 800,000 applications as of February 2024, which contributes to continuing applications being filed 5-8 years after the earliest benefit date. The comments explained:

[Eileen, 6-28-2024, IP Watchdog, “Chevron is Out: SCOTUS Says Doctrine Flouts APA, Dissent Accuses Colleagues of ‘Judicial Hubris’,” https://ipwatchdog.com/2024/06/28/chevron-scotus-says-doctrine-flouts-apa-dissent-accuses-colleagues-judicial-hubris/id=178371/, accessed 7-7-2024, CM ]

The brief argued that the U.S. Patent and Trademark Office (USPTO) often “promulgates regulations without the public participation and vetting required by the Administrative Procedure Act, Paperwork Reduction Act, 44 U.S.C. § 3501 et seq., and Regulatory Flexibility Act, 5 U.S.C. § 601 et seq.” Furthermore, when the Office has been challenged in the past on such moves, the agency uses Chevron as a cover, it said. “The USPTO’s neglect of rulemaking procedure leads to regulatory costs that exceed $ 1 billion per year,” added the brief, citing an article by the brief’s author, David Boundy of Potomac Law Group.

Trademark wait times at the USPTO are at an all-time high, with the backlog being blamed variously on the pandemic, a shrinking federal government workforce or rampant fraud committed by opportunistic filers.

While this is naturally a point of stress for practitioners and applicants alike, it can be leveraged with smart, strategic thinking.

Additionally, trademark attorneys have anecdotally noticed what appears to be a more challenging set of circumstances at the USPTO: a significant number of new examining attorneys and a more stringent view of which applied-for marks are likely to create confusion with already-registered marks. These factors likely add to the slowdown of application processing and an uptick in application rejections over the pre-COVID period. In March of 2024, the USPTO shared that it was currently reviewing applications submitted in June of 2023, with the average wait time for registration or resolution being nearly 15 months.

While the Office has data indicating that it will need more funds by 2025 to conduct its business, there are ways to increase funding fairly that would also place the Office on more secure financial footing going forward. One of the significant challenges the Office faces relates to how heavily examination services are subsidized using maintenance fees. Under the current fee schedule, the combined filing, search, and examination fee for large entities totals less than $2,000, but the cumulative operating costs per patent are around $6,000. It is not until the payment of the second maintenance fee, after seven years, that the Office reaches the break-even point. This means that an application that is abandoned just before issuance results in a net loss to the Office of around $4,000, and an issued patent that is abandoned prior to payment of the first maintenance fee results in a net loss of around $3,000.

Since it is the practice of some large companies to abandon applications or issued patents – sometimes in large numbers – before the first maintenance fee comes due, under the current fee schedule, the costs of examining these patents will be unfairly shifted to other patentees. This suggests that applicants, and especially large, sophisticated applicants, should be charged higher fees up front to ensure they pay their fair share and to prevent them from gaming the system. And, more generally, applicants should be paying more in order to fund better examination that will produce higher quality patents that their owners can have confidence will hold up in litigation. Although the Office is proposing some increases in early fees, in my view, they are not enough either to address the problems and potential abuses enabled by subsidizing examination with maintenance fees or to significantly increase the quality and accuracy of examination.

The USPTO, which is the national patent office and trademark registration authority, is an agency within the U.S. Department of Commerce. The Department of Commerce (DoC) last provided a Plan for Orderly Shutdown Due to Lapse of Congressional Appropriations on September 27th, 2021.[2] The DoC has not provided an October 2023 (or FY2024) plan.

Closely intertwined with the USPTO, intellectual property is deemed critical to National Security and the U.S. Economy. Under the Executive Branch or the White House Administration, The Office of the Intellectual Property Enforcement Coordinator (IPEC) works constantly to protect American IP to stop damaging and illegal IP theft[3] (i.e., “protection of property”). The IPEC is required to work closely with the USPTO.

The quality of issued patents drives the entire patent system. Valid patents fuel innovation, but invalid patents often have the opposite effect. Well-searched claims with clear boundaries, detailed disclosures with understandable teachings, and alignment with the proper statutes, rules and regulations, all contribute to a high-quality patent that an inventor can rely on and that appropriately apprises competitors and the public of the scope of the invention.

Although the U.S. patent system overall is still arguably the best in the world, there is room to do things better. Instead of leading the world in issuing robust and reliable patents, we are at risk of being surpassed by China in the innovation arena. It is incontestable that many improvements to drafting and prosecuting of patent applications can be made by both the applicants and examiners to provide more certainty to the validity of issued patents. Many of these refinements could be implemented easily, and if the patent community starts now to advance the patent examination process, we could significantly improve the strength of issued patents, enabling greater reliance and security for patent owners in making investments, reducing unnecessary litigation costs, and greatly diminishing the need for post grant procedures to review patent validity.

[7-6-2024, Pattaya Mail, “Soft landing for global economy predicted, diversified investment advised,” https://www.pattayamail.com/thailandnews/soft-landing-for-global-economy-predicted-diversified-investment-advised-464856, accessed 7-12-2024, CM]

KBank Private Banking, in partnership with Lombard Odier, hosted a seminar titled “Repositioning Portfolio to Embrace Rate Cuts,” analyzing the global economy for the second half of 2024.

LONDON, July 8 (Reuters Breakingviews) - The world economy is defying the Cassandras. Despite widespread predictions of a slowdown, global GDP growth is accelerating. The United States is still the star performer but as it flags other regions are picking up the slack. Risks of damaging geopolitical confrontations abound. But for now investors can bask in an ideal economic environment.

“Steady but slow”. “Weak pace”. “Modest growth”. The latest predictions by, respectively, the International Monetary Fund, opens new tab, the World Bank, opens new tab and the Organisation for Economic Co-operation and Development, opens new tab do not make for cheery reading. Their common concern is that the global economy has been unable to regain its pre-pandemic cruising speed. As the World Bank points out, in 2024 and 2025 nearly 60% of countries, comprising over 80% of the global population, will grow by less than their average rate in the 2010s.

[Colby, and Kate, July 11 2024, Financial Times, “US inflation falls to 3% in June”, https://www.ft.com/content/696eb6b8-9002-4d07-816a-9642cd1634d4, Accessed July 11 2024, AMH]

US inflation fell faster than forecast to 3 per cent in June, leading investors to increase bets on interest rate cuts and pushing yields on Treasuries lower.

[Howard, 7-10-2024, Reuters, “Fed's Cook: US data consistent with a soft landing,” https://www.reuters.com/markets/us/feds-cook-us-data-consistent-with-soft-landing-2024-07-10/, accessed 7-12-2024, CM]

U.S. inflation should continue to fall without a significant further rise in the unemployment rate, Federal Reserve Governor Lisa Cook said on Wednesday.

[Alicia, 7-11-2024, CNN Business, “Prices fell in June for the first time since the start of the pandemic,” https://www.cnn.com/2024/07/11/economy/us-cpi-consumer-inflation-june/index.html, accessed 7-12-2024, CM]

(CNN) — Americans weighed down by fast-rising prices for three years just received more encouraging news on the inflation front.

The U.S. is "no longer an overheated economy" with a job market that has cooled from its pandemic-era extremes and in many ways is back where it was before the health crisis, Fed Chair Jerome Powell said in remarks to Congress that suggested the case for interest rate cuts is becoming stronger.

"We are well aware that we now face two-sided risks," and can no longer focus solely on inflation, Powell told the Senate Banking Committee on Tuesday. "The labor market appears to be fully back in balance."

If the United States’ economy were an athlete, right now it would be peak LeBron James. If it were a pop star, it would be peak Taylor Swift. Four years ago, the pandemic temporarily brought much of the world economy to a halt. Since then, America’s economic performance has left other countries in the dust and even broken some of its own records. The growth rate is high, the unemployment rate is at historic lows, household wealth is surging, and wages are rising faster than costs, especially for the working class. There are many ways to define a good economy. America is in tremendous shape according to just about any of them.

The American public doesn’t feel that way—a dynamic that many people, including me, have recently tried to explain. But if, instead of asking how people feel about the economy, we ask how it’s objectively performing, we get a very different answer.

The United States Patent and Trademark Office serves a critical function in the global economy by providing incentives for innovation and supporting new technologies. It is also an absolute unit, with an estimated budget of $4.3B for the coming year and a staff of more than 13,452 employees.[FN1] With that budget and workforce, the USPTO handles a lot of patent applications. A lot.

Research has shown that inventing and entrepreneurship are crucial to the United States’ economic success; however, it has also revealed significant disparities in opportunities to innovate across the country. The United States Patent and Trademark Office (USPTO) has a vital role in ensuring equity in innovation and is working to address these concerning statistics. Below, we explore how expanding access to the innovation ecosystem is key to both our nation’s competitiveness and our citizens’ well-being.

Maintaining our nation’s position as a leader in global innovation