FICPI/AIPLA Colloquium on
THE PATENT OFFICES’ BACKLOG CRISIS
17 - 18 June, 2010

Over two days last month FICPI hosted jointly with AIPLA, the American Intellectual Property Law Association, a successful colloquium in Edinburgh, Scotland for the patent community on the major problem of the backlog in pending applications in many patent offices.  The severity of the problem may be readily pictured from the estimate that each additional year’s pendency of patent applications before the EPO, JPO and USPTO has a cost to the global economy of £7.6 billion.
 
The meeting followed the proven format of the three previous colloquia that have been jointly hosted by FICPI and AIPLA, in 2001, 2003 and 2007, and was attended by high level officers of patent offices, including Mr Robert Stoll, Commissioner for Patents at the USPTO, intellectual property organisations and user groups from around the world, who between them gave about 40 presentations to the audience and concluded with a patent office panel discussion.
 
The first day was moderated by Q. Todd Dickinson, the Executive Director of AIPLA, and started with welcoming comments by Peter Huntsman and Alan Kasper, the Presidents of FICPI and AIPLA.  There then followed sessions on the Scope, Sources and Economic Consequences of the Backlog Problem, Impediments to Solutions, Dealing with the Backlog Problem and its Interrelationship with Other Issues such as quality.
 
The day finished with an impressive dinner at the National Gallery of Scotland, which was opened to the attendees and a short walk from the colloquium venue, with all participants seated at a vast single table.
 
The second day was moderated by Peter Huntsman and had a single patent backlog theme, a Critical Review of Proposed Strategies to deal with it.  The various strategies covered included official fees and claim restrictions, filing and prosecution restrictions, divisional and multiplicity of invention restrictions, deferred and multi-track examination, unexamined rights, worksharing, supplemental searching and outsourcing, and harmonisation of patent laws and practices.  The colloquium ended with a panel discussion of senior officers from the major patent offices present reacting to what they had heard, and was followed by an informal question and answer session with Robert Stoll and a seminar on the Patent Prosecution Highway.
 
Full copies of the transcripts of the various presentations and panel discussions from the colloquium will be available very shortly at www.ficpi.org, but we are pleased in the meantime to provide the following summary of the transcripts.
 
FICPI thanks all those involved in the planning and running of the colloquium, including those who put time aside to participate and our co-hosts AIPLA.
 

1.    Is there a backlog?

Representing the Trilateral offices, Mr Wim van der Eijk, Vice President for Legal/International Affairs at the EPO, clarified that every patent office needed a certain stock of applications in process; however, the number of overdue patent applications has been growing over the last 10 years.  This is an issue recognised by major offices around the world, publicised by the press and one that worried people inside and outside the patent community for its potential to lead to economic and innovation problems.  While the ideal pendency time varied for offices, applicants and third parties, Mr Andrew Bartlett, Divisional Director, UK IPO, found that an increase in backlogs, no matter how they are defined, was a cause for concern within offices.  Dr Arti Rai commented that backlogs are not necessarily a problem for all industries at all times and Mr Kim Finnilä, President of epi termed it a ‘situation’ rather than a 'crisis'.  Mr Jim Boff from CIPA said that a Google search on the term ‘patent backlog’ produced results from as early as 1948, showing it was not new and should not be surprising.

2.    What is the Economic Impact?

Mr Bartlett referred to the LSE UK report launched in March, which headlined a cost estimate of £7.6 billion to the global economy for each additional year’s pendency at the EPO, the JPO and the USPTO.  Mr Sean Dennehey, Assistant Comptroller and Director of Patents, UKIPO, added that whatever the actual figure, it was definitely a large and negative one.  The LSE report stated that despite the potential for these costs to escalate, the evidence suggests that, at current levels, there are few noticeable effects.  However, Mr Bartlett countered that even if current levels of the backlogs are not a problem, they are going to get steadily worse in the near future.

3.    What are the drivers?

Mr van der Eijk believed the recent UK study defined drivers for the backlogs as:

• The increasing numbers and complexity of applications.
• The extended scope of patentable subject matter, leading to more applications in the overall technology field. 
• A lowering of the threshold for patent protection, potentially fuelling more applications.
• Globalisation, as applications are increasingly filed across territories.

Mr Takeshi Ueno, Vice President of JIPA reminded the audience that JIPA is the largest users’ organisation in the world, whose members file a significant number of applications worldwide and, echoing Mr van der Eijk’s comments, he found that a primary concern in the economic aspect is timeliness.

Mr Yongkwan Lee, Vice Chair, KINPA Committee of International Affairs, conceded that Korea’s pendency rate was relatively low, thanks to KIPO’s active and consistent policy to shorten the pendency period, which had declined rapidly in recent years.  The largest factor in Korea’s backlog is the increase in patent applications.  Mr Koichi Minami, Deputy Commissioner of the Trilateral III JPO, noted that the JPO had a forced peak of applications after shortening the examination request period in 2002.  Mr Chang Ryong Kim, Deputy Commissioner of the KIPO, noted that, although there had been a steady increase in patent applications over the last 10 years, there had been a recent decline due to the global economic crisis.
 
Mr Jacques Combeau, Advisor to the Chairman of the Patents Working Group, Business Europe, defined the reasons that may lead companies to an excess of filings: high inventive activity; exclusivity; company image; using patent pools; portfolio value.  He also added three reasons for companies to slow the patenting process: ensuring the right protection for the invention; time for patent scope adjustment according to the market; shared patent uncertainty burden.  Mr Combeau suggested that companies, patent offices and patent agents should work together in seeking solutions, rather than spending time painting the other side as bad, a view echoed by Mr Mark Guetlich, Managing Director Global IP – Europe, SAP AG.

4.    Quality

Mr Bartlett reminded the audience that offices are acutely aware of the need for quality and a high presumption of validity in the patents that were granted; therefore, everything they did was geared towards not affecting the quality of patents granted.  Quality was a key factor when discussing the backlog situation.  Mr Marc Adler, President of Marc Adler LLC and a member of the USPTO’s Patent Public Advisory Committee, defined quality as improvement of the certainty that the claims granted would withstand litigation.  Mr Matthew Goodwin, Vice President Global Head of Patents at Unilever PLC, believed that for the practitioners this all started and ended with preparing and filing quality applications that meet the conditions for patentability. 

Dr Rai stated that the USPTO was undertaking a very significant work stream on quality issues, noting that quality varied dramatically across different technology areas.  Mr Ueno said that it was not easy to compare the quality currently achieved with several years ago or before.  However, the JPO had enhanced productivities with examiners examining more cases a year, per person, in response to an increased backlog several years ago and had received no major complaints from JIPA members or others in the industry.

Mr Matthew Bryan, Director PCT Legal Division WIPO, referred to the PCT Roadmap – and the feeling that quality, if increased, would result in increased confidence among patent offices, leading to an overall reduction in duplication and workload.  Therefore, increasing PCT quality and examination quality tracked through to a workload reduction.  Mr Jan Modin, Special Reporter Patent Issues at FICPI, added that the PCT roadmap had received a lot of positive responses.  However, Mr Sam Helfgott, Member of Council for the ABA-IPL Group, argued that quality was just one step.  Also necessary were to change the atmosphere for examiners and the time allotted to examiners for them to do their job. 

Metrics were felt to be very important.  One issue was the need for quality metrics to be above suspicion.  Dr Rai said that this had led to the creation of a USPTO quality taskforce. 

How examiners are evaluated can have an impact on allowance rates.  When the USPTO quality review focused on whether a patent should issue after examination was complete, allowance rates went down because an examiner was less likely to receive a bad rating for rejecting an application than allowing it.  Allowance rates have risen now that the quality review is directed at reviewing examination as it proceeds rather than an emphasis on reviewing the final result. 

1.    Deferred Examination

Mr John Orange, FICPI President of Honour, said deferred examination might provide a solution to the backlog as it let the attrition rate increase as one went further and further out into the lifespan of the patent, as people lost interest.  It was found that some applicants are not that concerned about delayed examination: it eliminated unnecessary examination and reduced backlog.  Mr Ueno explained that JIPA found that, in most cases, early issuance was not what users focus on.

A major concern regarding deferred examination was the uncertainty for third parties – a significant reason for the lack of support.  Mr Todd Dickinson of AIPLA said that the USPTO held a roundtable on deferred examination in 2009 and a major topic was whether or not third parties could trigger the request for examination – the possibility that third parties could examine incognito was something that could minimise uncertainty.  Mr Gilles Requena, head of European and International Affairs at the French Patent Office INPI, noted that under the current French legal framework less than 1% of national patent applications were subject to third party observations.  Mr Bryan recalled the PCT meeting where there had been significant agreement on third party observations.  The PCT system will incorporate a way for third parties to submit their relevant prior art in relation to published PCT applications.

Following an extensive debate, Mr van der Eijk stated that the EPO had decided to not continue the discussion on deferred examination.

Mr Lee said that despite a five-year deferral period and an increase in the percentage of deferred applications, the number of application requests continued to grow in Korea, contributing to the backlog. 

From a UK perspective, Mr Bartlett did not advocate any kind of deferral system, singling out two major contributory elements to the backlog cost estimated in the LSE report: the delay in getting patents granted reducing the incentive to innovate; and the protection given as a quasi‑monopoly while an application is pending for something that might never be granted, leading to a delay in third party innovation.  From a company perspective, Mr Carl Horton, Chief IP Counsel of General Electric, signalled caution on deferred examination since it can build cost into fund-restricted Offices and push out patent grants from year to year.  Mr Goodwin also expressed concern over deferred examination, which he considered certainly not an incentive to file quality patent applications.  Mr Adler suggested that deferred examination could lead to increased uncertainty and even secrecy in the process.  Mr Minami believed that the colloquium was showing that an important factor in reducing the backlog was to remove uncertainty.

Mr Doug Norman, IPO President, said that the IPO had historically opposed deferred examination; due to the sheer number of patent applications in the United States, deferred examination could cause massive problems for manufacturers as a result of the uncertainty.

However, Mr Ueno explained that due to the volume of applications the JPO has to handle, being able to skip one‑third of the examinations as a result of examination not being requested following deferral was beneficial both to the patent office and to the applicants. 

2.    Multi-Track Examination

Mr Robert Stoll, Commissioner for Patents at the USPTO, found different projects for application acceleration fairly onerous to applicants and stated that the USPTO was looking at a three-track system: Accelerated, standard and deferred examination.
 
Dr Rai explained the three track system as a simple market-based mechanism for providing people with the pendency they need.  She believed that the USPTO Three‑Track policy did recognise the reality that backlog is not a one‑size‑fits‑all problem. 

Mr Norman said that the IPO were still studying the new USPTO multi-track examination proposals but had some reservations.  The IPO was still concerned about deferred examination and the need to make accelerated examination sufficiently expensive to cover the resources required for that track and avoid the normal track being slowed down. 

Dr Rai highlighted that in the US, as a very practical matter, applicant-driven worksharing was likely to face timing problems unless the USPTO implemented Three-Track, because they currently examine faster than many other offices, and so they could not reuse the work of other offices until they put certain applications on a slower track.  That was specifically the case with applications that were first filed in other jurisdictions.  Three-Track system was an office-driven worksharing component.  If worksharing was to be solely applicant-driven, it might be difficult to scale rapidly, and so the USPTO were very interested in the possibility of office-based and office-driven worksharing.  Mr Lee explained that KINPA had aimed for an improvement of examination efficiency through their Three‑Track examination system.

Mr Ueno explained the systems of accelerated, expedited examinations and even super‑accelerated examination the JPO had in place, where required petitions were relatively straightforward.  Another fast method was PPH, although translation of applications was liable to add to the cost.  From a corporate perspective, Mr Horton of General Electric said that patent holders such as themselves were looking for certainty early predominantly. 

3.    Quality Searching

There was agreement that quality patents required quality searches, otherwise there would simply be a rise in litigation.  Mr Byran said that following feedback from the user community the supplementary international search system was created within the PCT, which enabled the applicant to request one or more additional language-based searches, from offices which were willing to offer this service.  This took into account the growing linguistic diversity in the prior art. An increasing number of countries were considering joining this.  He said that PPH was proof of concept that outside searches could be useful, desirable and can assist in reducing unnecessary duplication.  Because WIPO managed the PCT, they were particularly happy about the tie-up between PCT and PPH.
  
On restrictions to searching, Mr Michael Brunner, Secretary General of AIPPI, highlighted that the European Patent Convention (EPC) originally laid down a clear division between the activities of the searching and examining divisions of the EPO.  Mr van der Eijk said that the EPO’s utilisation project would come into force on 1 January 2011, where information from other offices would help gain better search data on applications.  He noted that the EPO would initially require the information to be supplied by applicants.

4.    Utility Model

Mr Herb Wamsley, Executive Director of the IPO, said that many concerns about utility models related to the quality of the patent rights, with the utility models of some countries having little or no examination.  He said that the IPO’s preliminary research concluded that utility models were not an alternative in the United States or a solution to backlog problems. 

5.    Unexamined Right

Mr Orange stated simply that the beauty of the unexamined right, as in many countries, is that there is no backlog because examination is totally dispensed with.  Several countries in Europe do not examine in the traditional patent sense, but the Dutch in particular had gone from a rigorous examination into a non‑examination system in their national route.  However, Mr Wamsley noted that Thomas Jefferson had tried this in 1790 and the result had been 43 years of non-examination – a lesson the US did not want to repeat. 

6.    Decentralised Filing

Mr Orange suggested that it was not as attractive to regionalise patents as it once had been.  One of the consequences of the new filing fees and claim fees in Europe, notwithstanding the translation savings that came from the London Agreement, is that the cost of going through the EPO is now in some cases significantly more than the cost of going into individual countries.  From a North American perspective, most of the clients could cover Europe simply by applying in three countries: UK, France and Germany.

7.    Emerging Markets

Dr Martin Michaus, President of ASIPI’s Foreign Relations Committee, cited the situation in Brazil which had 3,785 locally derived patent applications in 2006 – a low number for an emerging market – but 20,000 applications by non-residents.  Most of the applications filed in this region came from other parts of the world, unlike the PCT filings from the residents in those countries.  Dr Julio Cesar Moreira, Technical Assistant of Patents Directorate, said that the Brazilian INPI had restructured to deal with increases with targets for decreasing application time to 40 months by 2014.

Picking up on emerging markets, Mr Bartlett could see that see that domestic applications still easily outweighed the number of international applications filed by local applicants, but there was a concerning trend where developing countries experienced a spike in international applications some time after a spike in national applications. 

8.    Contractual Arrangements

Mr Orange alluded to new business methods, particularly those inventions directed to software as an area that has traditionally been anti-patent, where the future might involve a reliance on contracts and standards to safeguard IP rather than traditional patent protection.

1.     Funding and Fees

A preferred USPTO solution to the backlog there is full fee funding, with no diversion.  Dr Rai suggested that the wholly fee supported USPTO suffered a substantial amount of its current backlog difficulty as a consequence of the $750 million of fee collection that was diverted from its coffers during the 1990s, a situation that could recur.  Mr van de Eijk echoed Dr Rai’s comments that their organisations’ only sources of income were fees.
 
Professor Dennis Crouch of the University of Missouri believed that all patent offices are reconsidering their fee schedule, with possibly a shift from a lower filing fee to a higher filing fee.  He reasoned that a higher filing fee would probably get fewer applicants, and in theory, higher quality applications.  However, he added that if you increase the filing fee such that the major cost is at filing rather than examination, abandonment of applications may not increase.  Therefore it would really be more of a money maker than a behaviour shifter. 

Fees can be applied to change behaviour; however, Mr Finnilä said that the EPO's 2007 decision to change their fee structure had intended to influence the behaviour of applicants, but had not changed their behaviour at all.  On the other hand, the later substantial claim fee change actually resulted in a decrease in income, while the increased internal renewal fee rates raised income.  Mr Larry Welch, Chair of the Patent Practice (International) Committee, IPO, reasoned that applicants did understand that offices needed to charge applicants for the extra work but punitive fee schedules or denials of the ability to claim subject matter are not favoured by applicants, and could provide disincentives for innovation.  It was suggested that the setting of high claims fees, such as in the EPO, has resulted in the drafting of incredibly complicated claims which were much more difficult to examine. Indeed, Mr Minami, noted that faster applications have an economic impact for applicants and offices as resources can be saved or redistributed on both sides.

To help tackle quality and the backlog by reducing the number of applications to be examined, Mr Minami said that the JPO intended to refund half of the fee payable for requests for examination providing applicants met certain criteria where applications were abandoned before the JPO started examining the application.  During the last year there were more than 30,000 requests for such refunds.  Mr Satoshi Moriyasu, Director of the International Affairs Division at JPO, thought that - like deferred examination requests - this refund system was considered an effective measure.  It effectively meant an increase in numbers of abandoned applications, for which it became unnecessary to conduct examination. 

Mr van der Eijk conceded that the EPO had not helped themselves with procedures such as the Extended European Search which - in providing early clarity on applications - had led to a reduction in paid renewal fees and therefore less income.

2.     Recruitment  and outsourcing

Recruitment

Dr Rai saw the resolution of the USPTO fee issues as a chance to address the short-term problems of securing examiner overtime and hiring more examiners, but also longer-term problems of retention and attrition.
Mr Brunner noted that restrictions on salaries in some countries and budget restrictions could mean that attracting the right calibre of examiners and then retaining them could be difficult, leading to poor and delayed examination with multiple rounds of argument.  Mr van der Eijk saw recruitment as an option not at the top of EPO’s list; with no intention to have a real expansion of the workforce.  Mr Bartlett posited that recruitment had long been a classic way to deal with increased workloads – but was no longer acceptable, especially in these straitened times.  He suggested innovation should come to the fore in dealing with increased workloads – especially for government funded organisations such as the UK IPO.  Mr Adler added that simply increasing manpower under an inefficient system can make some progress, but at a high cost.

A report from SIPO, noted that the Chinese Office had received funding to significantly increase manpower with highly qualified examiners since 2001.  Mr Minami said that the JPO had significantly increased the number of patent examiners following tough negotiations with the Japanese government by meeting special conditions.  Mr Kim of KIPO echoed this, but after efforts by government their number of examiners had more than doubled since 2000.  He said that 42% of the current examiners had a PhD, and recruiting highly qualified examiners was one of the main factors in ensuring KIPO examinations were of the highest quality.  Following government approval in June, Dr Julio Cesar Moreira said that a new organisation structure for the Brazilian INPI would increase divisions and 180 new examiners over the next two years to specifically reduce the backlog. 

Outsourcing

Dr Rai said that government agency status led to constraints in outsourcing.  While in an ideal world there might be more room for specialisation, outsourcing would represent an unacceptable division of labour.  However, Mr Minami said the JPO believed that specialist outsourcing was highly efficient, aiming for 249,000 (67%) of expected searches in 2010 to be outsourced to organisations that specialise in particular areas of technology assigned by the patent office in advance and that must meet certain legal requirements.  Mr Kim said that KIPO believed outsourcing alleviated the examination workload within KIPO, especially combined with better training for internal examiners.  Seiyoung Yoon, Senior Deputy Director of the International Cooperation Division of KIPO, explained that over the first five years from the start in 1996 KIPO outsourced about 50% of all applications, and in 2009 they started outsourcing PCT international searches.  KIPO tried to strike a balance between search experience and workload reduction.  According to a KIPO study in 2008, search costs were about 50% higher for outside searches than for KIPO’s examiners.  Yet, in spite of the high cost, outsourcing remained a viable solution because of the difficulty of recruitment.

Efficiency

Mr Danny Huntington saw efficiency of the workforce as paramount - it was rare in his experience to have a patent application with multiple inventions that were not related.  Already having a system like the PCT where, if one wanted additional inventions searched one paid additional search fees, he suggested having examination fees for the additional inventions examined.  He argued that the appropriate thing was to give examiners incentives to examine more than one invention.  In addition, technology should be examined promptly to see where it could tackle efficiency and the backlog.

3.      Better training

Mr Wamsley queried the varied productivity of examiners between patent offices, where a USPTO examiner might process 80 applications per year while a JPO examiner would process 200.  Mr Stoll indicated that more needed to be done to review this, and to ensure quality was in line with each step of the process.  Mr Minami said that the JPO had embarked on a campaign to educate and change applicant behaviour to improve the quality of applications filed and reduce the filing of unnecessary applications.

4.     Better infrastructure

Dr Rai also saw the resolution of the USPTO fee issues as a chance to address an antiquated IT system that required huge amounts of money to live up to 21^st century standards.  Mr Alan Kasper, AIPLA President, considered a common application format, the universal use of XML, to be key points in increasing quality and decreasing backlog. Mr Kasper said that common application formats would take care of a huge problem of cost from the perspective of the attorney, the user and offices.

5.     Worksharing

Worksharing in Search and Examination
 
Mr Bartlett referred to a study which suggested one in three of the applications being dealt with within patent offices is a duplicate.  He suggested that offices need to be a little bit more inventive in the way that they handle this.  Mr Minami suggested that in 2008 a total of 990,000 applications were filed with the trilateral offices, approximately 260,000 of which were duplicated.  Dealing with such a huge number of applications, the objective of the trilateral offices was to avoid duplication and so a variety of worksharing approaches were being developed, including the increasing use of PPH and JPFAST. 
 
Most approval for worksharing came at the search level rather than examination.  Mr Goodwin thought worksharing for searches was easy and uncontroversial, but until there was harmonisation of standards for patentability, it may not accomplish a lot.    Mr van der Eijk saw the impact of globalisation growing, and summarised that there were 250,000 applications that could benefit from some form of worksharing, because they are in more than one office.  The EPO felt that worksharing platforms were crucial, developing PPH, Triway and others alongside the excellent PCT.  Dr Michaus found that most South American offices recognised the searches of the European Office and USPTO, and the lack of good search reports was what contributed to the situation in Venezuela where no patent had been granted in at least six years.

Mr Ueno said that the JIPA proposed four concepts for increased worksharing and harmonisation: same format, same search, same examination, same patent.

Mr Tim Roberts, former President of CIPA, agreed that it was a simple point that the more offices can agree on, the more patent offices can accept each other’s work.  Ms Anne Rejnhold Jorgensen, Chair, B+ Group; Director Policy and Legal Affairs of the DKPTO, saw that the backlog problem could form a driver to the move towards harmonisation of patent laws and practices.  However, she cautioned that reuse of work amongst the patent offices also required trust and transparency between the offices.  It was Mr Minami’s understanding that harmonisation initiatives at both local, national and regional level would be able to create pressure on harmonising the structure throughout the world.  Therefore they did not need worksharing for the sake of worksharing.  Dr Rai stated that Director Kappos of the USPTO has made a very strong commitment to implementing worksharing to the maximum extent possible in order to avoid inefficient duplication. 

Mutual Recognition

Mr van der Eijk sounded a note of caution on ‘Mutual Recognition’ where an office might give up a certain authority to decide on an application and just take over the decision made by someone else, as opposed to utilisation - worksharing – where one was not bound by the decision taken by another office, but could utilise what they had done.  In discussions within the EPO, they came to the final conclusion that for Europe mutual recognition is not seen as the way forward, but rather utilisation and worksharing where the EPO is very active.  He  pointed out the ten Foundation Projects which the EPO think will lead to an enhancement of efficiency by the avoidance of duplication of work, and also an enhancement in quality. 

Mr Bartlett issued a call that offices should not be scared of worksharing, which should not be mutual recognition.  He reminded the audience that it was standard practice for lots of examiners to look to the work that has been done on an equivalent application from another country and to make good use of it through existing mechanisms such PPH and the PCT itself.  Speaking on behalf of the Vancouver Group of the UK, Canada and Australia, Mr Dennehey described worksharing initiatives between three offices that already had many comparators.  However, the Group applied mutual exploitation as an office‑driven process, where further work was done by another office only if felt necessary, contrary to the applicant driven one like the PPH.  The group had quality-sharing arrangements, where they tried to use this exchange in an open and transparent way amongst the three offices.  Mr Helfgott stated that in no way should any office relinquish their independence for making a final determination, so time must be given for an examiner to make use of searches and then add his own signature.  He thought that acceptance from applicants and clients would come from the reduction in cost, backlog and the results.

Bilateral Agreements

Mr Guetlich thought patent offices could do much more to create worldwide systems that would allow maximum flexibility for options of paths through the system, whether one wanted to go slow, fast, cheap or expensive. 
Mr Brunner, Secretary General, AIPPI suggested that a host of bilateral agreements between a range of patent offices including PPH could not be said to be a great success in significantly reducing backlogs.  However, it was noted that SIPO was looking to extend bilateral and multilateral agreements as part of its overall campaign to reduce backlog.

PCT and PPH

Mr Dennehey said that the PCT was probably one of the best worksharing arrangements; everyone said so, but everyone also agreed that it did not work as well as it should.  Mr Kim of the KIPO stated that one of the major reasons for the longer pendency period is the surge in PCT international searches, mostly from the USPTO which had increased substantially since 2005. 

Dr Rai said that the USPTO agreed that the PCT is a core piece of worksharing, adding that the USPTO saw no contradiction or tension even between PCT and PPH.  On the contrary, they see PCT as an integral input into PPH.  One well known advantage of PPH was that it doubled allowance rates when applications come through it. 

Mr Minami said that in order to extend the reach and efficacy of work sharing, the PCT would require further reform.  PPH, for instance, needed to be made more user friendly.  He said that the five largest IP offices, which account for 76% of the world’s applications, have been implementing 10 foundation projects as part of the effort to increase worksharing. However, it would be necessary to accelerate this project, including the implementation of a common search and examination environment.  Mr Kim said that KIPO had already set up PPH projects with seven countries including Japan, the US, the UK, Denmark, Russia and Canada.

Mr Jesper Kongstad said that DKPTO had asked Danish users how they judged their experiences so far on the use of the PPH system currently between Denmark and Japan, Korea, United States, Canada.  They found the processing to be fast - especially with the USPTO.  First office actions were received very quickly; the number of communications was significantly reduced resulting in great cost savings for users, and the propensity to grant has increased rapidly.  Danish users are extremely satisfied with the PPH agreements, and the signals that are received from big business are that further conversion into the PPH system will be expected in the future. 

Mr Richard Wilder, Associate General Counsel for IP Policy, Microsoft and Chair of the Task Force on Worksharing of the IP Commission, ICC, supported the PCT as the preeminent vehicle for worksharing on global patent applications, but also urged development of other mechanisms including the IP5’s PPH efforts and the like.  Mr Horton was a little disappointed that the PCT had not resulted in more worksharing than might have been originally expected.  While Mr Goodwin sounded caution on PPH, recalling an unsuccessful PPH application before the USPTO, there was a clear message from the USPTO to persevere.

Mr Helfgott believed that the bulk of new proposals, including worksharing, had already been answered by PCT, which had been in existence for 25 years.  He said that putting money into PCT would bring backlog numbers down.  Mr Bryan questioned whether PCT had lost its chance, but while Mr Helfgott acknowledged that there was no longer a monopoly for PCT, he considered this the first time PCT could reach that objective of avoiding duplication with more commitment from the patent offices.  He did not disagree with other worksharing systems, but he did not think enough push was being applied to PCT to address the bulk of it.

6.    Rules, Reforms and Awareness

There was clear support for more harmonisation to simplify examination processes.  However, Mr Brunner of AIPPI saw political or policy issues dominating the backlog – with harmonization having at least as much to do with policy as financial or legal issues, and wider political issues surrounding IP causing something of a hiatus in international efforts towards harmonisation in recent years.

For South America, Dr Michaus saw a concern that not enough native applications were being filed and regardless of treaties and patent applications - public policies and how governments invest in research and development in the region had to be changed to push innovation to the top of the agenda.  Mr Bryan suggested that the ongoing PCT Working Group in Geneva had shown that there a lack of complete understanding both in patent offices and in the diplomatic community about the very issues we are discussing here.  Raising awareness was a key to the backlog issues.  Mr Brunner agreed that the general failure of governments to recognise the truly global nature of the patenting process at least in most cases, had led to national and regional patent offices adopting their own solutions to their specific problems.