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The U.S. Patent and Trademark Office (USPTO) issued new guidance on Feb. 12, 2024, regarding the use of artificial intelligence (AI) while developing new inventions. The U.S. Court of Appeals for the Federal Circuit previously held that an AI system cannot be named as an inventor on a patent, but its opinion left open the question of whether persons can be named as inventors when they use an AI system during the inventive process. President Joe Biden's Executive Order calling for guidance on this issue compelled the USPTO to act. Now, both examiners and stakeholders have some clarity regarding AI-assisted inventions.

[Matthew, 2018, Texas Law Review, “The USPTO’s Sisyphean Plan: Increasing Manpower Will Not Match Artificial Intelligence’s Inventive Capabilities,” Volume 96, No. 4, 874-889, , accessed 7-8-2024, CM ]

Putting the potential negative repercussions for other U.S. agencies aside, Abbott does not contend with the effects that listing an AI as an inventor would have on the patent backlog. Although, generally speaking, Abbott hopes that it would incentivize greater innovation.6464Abbott, supra note 2, at 1081. CLOSE This would most certainly increase the number of patent applications, exacerbating the USPTO’s backlog even more. And as previously explained, a growing patent backlog has severe repercussions for the U.S. and world economy.

Relatedly, Congress regularly delegates new authority to agencies. 110 This requires an agency to perform a balancing act and can lead to backlogs and delays as the agency seeks to address its new mandate while managing preexisting duties.111 During the implementation of a new program, there often is an increase in employee confusion over workflow patterns and objectives and how adjudicative tasks connect to the agency’s overall goals and priorities.112 Additionally, if new authority is delegated without a corresponding increase in resources to expand an agency’s capacity (as often is the case), implementation problems tend to develop in some or all agency programs as the agency becomes overloaded and overall performance suffers.113

B. Agency Structure

The United States Patent and Trademark Office (USPTO) experienced significant backup and processing delays during the COVID-19 pandemic. While delays have eased, they still haven’t gone away, due in part to the doubling of applications between 2020 and 2022. Overall, the trademark registration process has become notably more challenging in recent years, but there are ways to ease the burden.

Number of Applications Continues to Rise While Processing Times Continue to Lag

[Ryan J, 7-9-2024, Industry Week, “Patent Delays Are Up, But There Are Ways to Ease the Slog,” , accessed 7-9-2024, CM]

First, in recent years, the number of patent applications related to additive manufacturing has increased significantly, encompassing improved component design, manufacturing processes and equipment. A September 2023 report by the European Patent Office revealed that between 2013 and 2020, international additive-manufacturing technology patent applications grew at an average annual rate of 26.3%. For all other technologies, the average growth rate was 3.3%.

For Paul Reilly of Baker Botts, handling these lags is a firm-wide effort. He appreciates that the USPTO “has been working to address delays, including shortening response times or requiring extension payments”, but this also means that it is crucial to keep a close eye on the office to stay on top of any updates. Baker Botts’ branding, advertising and copyright team “closely monitors USPTO developments in real time and partners with clients to ensure timely reporting and responses to office actions”, Reilly explains.

Coates appreciates that “the USPTO’s examiners are also feeling this pain”, so the firm strives to be concise and collaborative when dealing with the office. He insists that phone calls and emails are effective, citing “several big wins working with the examiner directly”.

The USPTO's strategic goal to “promote the efficient delivery of reliable IP rights” recognizes the importance of innovation as the foundation of American economic growth and global competitiveness. Toward this end, the USPTO is committed to continuously improving trademark quality, as well as the accuracy and reliability of the trademark register. The agency will continue equipping trademark examining attorneys with updated tools, procedures, and clarifying guidance to effectively examine all applications. The USPTO will also retire legacy systems and integrate the use of emerging technologies to streamline work processes for greater efficiencies; adjust staffing levels; and refine core duties to ensure its ability to meet significant changes in filing volumes and a variety of improper filing behaviors.

The USPTO is also committed to improving trademark application pendency. The agency recognizes that applying for trademark registration is a key step for creators, entrepreneurs, and established brand owners as they move from generating ideas for new products and services to commercializing the resulting innovations in the marketplace. The USPTO is focused on incentivizing creativity and product innovation by removing unnecessary impediments or delays in securing IP rights, thereby bringing goods and services to impact for the public good more quickly.

If the problem is low-quality patents crowding out high-quality ones, the solution would seem straightforward: increase the quality of patents before they are issued. And indeed, the USPTO is working to do that. The agency has begun to devote more time to the upfront examination of patents and, in a 2022 Federal Register Request for Comment, signaled its exploration of new responsibilities to ensure that applications filed are “robust and reliable” through greater clarity and support for submitted claims.

But there’s a catch: there is a tension between high patent quality and broad access to the patent system for first timers and entrepreneurs like Parrott. That’s because improving patent quality takes time and money. It takes effort on behalf of patent applicants to define the terms they’re using and clearly delineate what they consider the invention. It takes time to do prior-art searches and ensure the claimed subject matter is truly novel and nonobvious. And solutions like the one Lemley et al. proposed in Regulation of “paying for a thorough examination of their inventions” take, well, money.

These patent critics have called for new policies to change the behavior of inventors. The USPTO recently announced substantial fee increases and new “rules” that many argue actually amount to legislation to force behavior changes and decrease the number of patent applications that have historically been available to inventors. If implemented, these changes will significantly increase the cost and complexity of obtaining patents, but they will not address the perceived deficiencies in the patent system. Improving the operations of the USPTO, however, is the best opportunity to improve the patent system.

The United States Patent and Trademark Office (USPTO) proposes to set and adjust trademark fees, as authorized by the Leahy-Smith America Invents Act (AIA), as amended by the Study of Underrepresented Classes Chasing Engineering and Science Success Act of 2018 (SUCCESS Act). The proposed fee adjustments will provide the USPTO sufficient aggregate revenue to recover the aggregate costs of trademark operations in future years (based on assumptions and estimates found in the agency's Fiscal Year 2025 Congressional Justification (FY 2025 Budget)), including implementing the USPTO 2022-2026 Strategic Plan (Strategic Plan).

[United States Patent and Trademark Office, Published 1-22-21, Last updated 1-19-24, “USPTO implements the Trademark Modernization Act,” https://www.uspto.gov/trademarks/laws/2020-modernization-act, 7-09-24, EP]

Regulations implementing the Trademark Modernization Act of 2020 (TMA) went into effect on December 18, 2021. Individuals, businesses, and the United States Patent and Trademark Office (USPTO) now have new tools to clear away unused registered trademarks from the federal trademark register and the USPTO has the ability to move applications through the registration process more efficiently.

[Pushpendra Dwivedi, 5-11-24, Manager, Intellectual Property Management Services at Sagacious IP, “Mastering USPTO DOCX Formats: The Ultimate Guide,” https://ipwatchdog.com/2024/03/11/mastering-uspto-docx-formats-ultimate-guide/id=174167/, 7-9-24, EP]

The U.S. Patent and Trademark Office (USPTO) has been working diligently towards introducing a system supporting the submission of new patent applications in structured text, particularly utilizing the DOCX format, over the past few years. This transition has recently been realized, as the Office officially implemented DOCX filing starting from January 17, 2024. This consideration of filing in DOCX format stemmed from a Proposed Rule issued by the USPTO on July 31, 2019. The complete notification can be accessed from this link.

[Robert Pluta, Mayer Brown IP partner, trial lawyer, Wade Weaver, Mayer Brown IP associate, 12-18-23, “USPTO 2023 Year in Review: E-Filings and Rulemakings and AI, Oh My!,” https://ipwatchdog.com/2023/12/18/uspto-year-review-2023-e-filings-rulemakings-ai-oh/id=170521/, 7-11-24, EP]

“A practitioner can only hope that if these new rules are even partially effective, there will be a noticeable increase in efficiency for all parties involved.” The U.S. Patent and Trademark Office’s (USPTO’s) 2023 has been one marked by a push towards further modernization and reduction of environmental impact, while also attempting to increase administrative efficiency. The Office has also solicited and received zealous commentary from an interested public regarding proposed changes to Patent Trial and Appeals Board (PTAB) proceedings. Lastly, in continuation of last year’s prevailing theme, the USPTO has begun generating reports, holding listening sessions, and publishing Director’s blogs regarding the topic of artificial intelligence (AI) as it pertains to both inventorship and as a subject of invention.

[USPTO, 1-25-24, “Reminder: USPTO continuing modernization efforts by issuing certificates of correction for patents electronically,” https://www.uspto.gov/subscription-center/2024/uspto-continuing-modernization-efforts-issuing-certificates-correction#:~:text=Reminder%3A%20USPTO%20continuing%20modernization%20efforts,of%20correction%20for%20patents%20electronically, 7-10-24, EP]

Reminder: USPTO continuing modernization efforts by issuing certificates of correction for patents electronically

[Robert Pluta, Mayer Brown IP partner, trial lawyer, Wade Weaver, Mayer Brown IP associate, 12-18-23, “USPTO 2023 Year in Review: E-Filings and Rulemakings and AI, Oh My!,” https://ipwatchdog.com/2023/12/18/uspto-year-review-2023-e-filings-rulemakings-ai-oh/id=170521/, 7-11-24, EP]

Modernization, Reduction of Waste, and Lowering the Financial Bar for Small Entities

This proposed rule would apply to any entity filing trademark documents with the USPTO. The USPTO estimates, based on the assumptions in the FY 2025 Budget, that during the first full fiscal year under the fees as proposed (FY 2026), the USPTO would collect approximately $144 million more in trademark processing and TTAB fees compared to projected fee collections under the current fee schedule. The USPTO would receive an additional $99 million in application filing fees, including applications filed through the Madrid Protocol and application surcharges; $4 million more from petitions, letters of protest, and requests for reconsideration; $7 million more from SOU and AAU fees; and $35 million more for post-registration maintenance fees, including sections 9 and 66 renewals and sections 8, 71, and 15 declarations.

The USPTO collects fees for trademark-related services at different points in the trademark application examination process and over the registration life cycle. In FY 2023, application filing fees made up about 54% of all trademark fee collections. Fees for proceedings and appeals before the TTAB comprised 3% of revenues. Fees from other trademark activities, petitions, assignments and certifications, and Madrid processing totaled approximately 5% of revenues. Fees for post-registration and intent-to-use filings, which subsidize the costs of filing, search, examination, and the TTAB, comprised 38%.

Estimating prospective aggregate costs is accomplished primarily through the annual USPTO budget formulation process. The annual budget is a five-year plan for carrying out base programs and new initiatives to deliver on the USPTO's statutory mission and implement strategic goals and objectives. First, the USPTO projects the level of demand for patent products and services. Demand for products and services depends on many factors that are subject to change, including domestic and global economic activity. The USPTO also considers overseas patenting activities, policies and legislation, and known process efficiencies. Because filing, search, and examination costs are the largest share of the total patent operating costs, a primary production workload driver is the number of patent application filings (i.e., incoming work to the USPTO). The USPTO looks at indicators such as the expected growth in Real Gross Domestic Product (RGDP), a leading indicator of incoming patent applications, to estimate prospective workload. RGDP is reported by the Bureau of Economic Analysis (www.bea.gov) and is forecasted each February by the OMB (www.omb.gov) in the Economic and Budget Analyses section of the Analytical Perspectives and twice annually by the Congressional Budget Office (CBO) (www.cbo.gov) in the Budget and Economic Outlook.

The expected production workload must then be compared to the current examination production capacity to determine any required staffing and operating cost (e.g., salaries, workload processing contracts, and publication) adjustments. The USPTO uses a patent pendency model to estimate patent production output based on actual historical data and input assumptions, such as incoming patent applications and overtime hours. An overview of the model, including a description of inputs, outputs, key data relationships, and a simulation tool is available at https://www.uspto.gov/learning-and-resources/statistics/patent-pendency-model.

Patent fees are collected for patent-related services and products at different points in time within the patent application examination process and over the life of the pending patent application and granted patent. Maintenance fee payments account for about half of all patent fee collections and subsidize the cost of filing, search, and examination activities. Changes in application filing levels immediately impact current year fee collections, because fewer patent application filings mean the USPTO collects fewer fees. The resulting reduction in production activities also creates an out-year revenue impact because less production output in one year results in fewer issue and maintenance fee payments in future years.

The USPTO's five-year estimated aggregate patent fee revenue (see table 3) is based on the number of patent applications it expects to receive for a given fiscal year, work it expects to process in a given fiscal year (an indicator of patent issue fee workloads), expected examination and process requests for the fiscal year, and the expected number of post-issuance decisions to maintain patent protection over that same fiscal year. Within the iterative process for estimating aggregate revenue, the USPTO adjusts individual fee rates up or down based on cost and policy decisions, estimates the effective dates of new fee rates, and then multiplies the resulting fee rates by workload volumes (including elasticity adjustments) to calculate a revenue estimate for each fee. For the aggregate revenue estimates shown below, the USPTO assumes that all proposed fee rates will become effective on January 18, 2025. Using these figures, the USPTO sums the individual fee revenue estimates, and the result is a total aggregate revenue estimate for a given year (see table 3). The aggregate revenue estimate also includes collecting $50 million annually in other income associated with recoveries and reimbursable agreements (offsets to spending).

Climate change poses an "existential threat" to life on Earth, prominent scientists warned Tuesday, in an assessment on this year's avalanche of heat records and weather extremes that they said are hitting more ferociously than expected.

With expectations that 2023 will be the hottest year on record, regions across the planet have been scorched by deadly heat waves.

Intellectual property drives technological advancements, and the USPTO expanded the program on June 6, 2023 to include more technologies. That expanded scope makes progress on a goal of net-zero greenhouse emissions. It incentivizes inventors and companies to create and continue working on climate-friendly innovations, allowing them to expedite the patent examination process for inventions that contribute to mitigating climate change.

The program meets the pressing need for innovative solutions to combat climate change by expediting what can be a long process. It seeks to empower innovators to bring their protected ideas to market more quickly, contributing to global efforts to reduce greenhouse gas emissions and build a more sustainable future. This program will only be available until June 2027 or until 4,000 petitions have been granted. As of February 27, 2024, 583 petitions have already been granted.