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Patent Denials on the Rise

Inventors shouldn't count on a patent as a ticket out of the recession. Even though the number of patent applications is on the rise, the U.S. Patent and Trademark Office has been rejecting them at an unprecedented rate over the past few years. According to the Milwaukee Journal Sentinel, the PTO denied more than 59 percent of patents filed in the quarter that ended June 30 -- that's up significantly from the 35 percent rejection rate that prevailed between 1975 and 2004. The agency imposed stricter standards for issuing patents five years ago, partly in response to criticisms of setting the bar too low. But some claim that the PTO has gone too far and is rejecting valid patents simply to get rid of the backlog.

Many patent examiners agree, or at least contend that the PTO's policies encourage them to err on the side of rejection. According to Robert Budens, president of the trade union for the PTO's 6,300 examiners, there is a "culture of fear" among examiners that they'll be penalized or lose a bonus if they grant patents that are eventually rescinded.

In response to growing rejections, more applicants are filing appeals. Since Oct. 1, 2008, 6,280 appeals have been filed, although the Board of Patent Appeals affirms the PTO's decisions more than 70 percent of the time. Some say that the success rates on appeal shows that PTO's decisions are sound. But other experts say that even the appeal numbers are understated, since some of the appealed patents are resubmitted for further review rather than resolved by the Board.

Posted by Carolyn Elefant on August 17, 2009 at 04:57 PM | Permalink | Comments (0)


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