First Action Non-Final Rejections

It is very common for the United States Patent and Trademark Office (USPTO) to reject claims in a First Office Action.  According to a study reported in June 2010 by Patently-O, the nation’s leading patent law blog, 73-98 percent of patent applications received a First Action Non-Final Rejection, depending on the Technology Center.  I am not sure that these percentages reflect the current rejection rates, but they remain high.

In October 2009, the then new Honorable David Kappos, the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office, visited the Virginia State Bar Section of Intellectual Property Law at the Omni Hotel in Richmond, Virginia, where he expressed his distain about the USPTO being referred to as the “US Patent and Rejection Office,” and indicated that he was driven to improve this image.

The late Auzville Jackson, Jr., a distinguished attorney in attendance, who at the time was 83 years of age, respectfully interjected that, as a member of the USPTO examining corps in the 1950’s, he was taught to reject claims, not to find allowable subject matter, which is what he experienced throughout his more than 50 years of private practice.  This illustrates that the USPTO has had a standing tendency to reject claims in patent applications, one trend that Director Kappos indicated that he wanted to change.

Since this meeting, I believe that the USPTO has taken steps to improve its image, but First Action Rejection rates remain high.

In November 2011, the USPTO hosted a Partnership Meeting to bring industry stakeholders and patent examiners and directors together to share ideas, experiences, and insights on best practices in advancing patent prosecution.  This meeting provided a forum for discussing how the USPTO could improve and expand its relationship with the community.

The First Action Non-Final Rejection rate was discussed.  The community concurred that the USPTO often rejected patent applications, citing prior art that was less relevant than that which applicants submitted under their Duty of Disclosure.  Clearly, one would expect the Examiners to conduct a search and cite new art, as the pending claims would not be expected to “read on” the prior art cited by the applicants.

It is the nature of the practice to draft claims that encroach upon, if not overlap to some extent, the prior art.  It is in the best interest of the applicant to present claims that would afford the applicant the broadest possible patent protection to which the applicant is entitled.  This practice is expected to solicit a rejection from the USPTO.

Our focus should not be on the rejection rate.  Instead, it should be on the allowance rate.  The allowance rate fluctuates over a period of time.  Between 1997 and 2001, the allowance rate peaked out over 70 percent.  Factoring winning appeals, the rate was even higher, possibly as high as 85 percent.  However, the USPTO was repute for issuing patents that should not have been allowed.

So the culture of the USPTO changed.  The allowance rate plummeted to nearly 40 percent in 2008.  However, under the leadership of Director Kappos, allowance rates have risen and are trending upward.  In the past three years, allowance rates have risen from 56-68 percent, and we expect the rates to continue to rise.  With the allowance rate trending upward, we believe it is now a good time for your application to be under consideration by the USPTO.

As a final note, I have seen First Action Allowances, which are often awarded to Applicants with lengthy pending claims.  The longer the claim, the more likely the claim may receive favorable consideration by the USPTO.  However, unduly long claims are generally undeservedly narrow, and thus fairly easy to design around (i.e., avoid infringement).

Drafting broad claims that solicit a First Action Non-Final Rejection is the proper course of action, as long as the pending claims are drafted to avoid the prior art of record without unnecessarily giving up the broad scope of protection to which the applicant is entitled, even if met with resistance from the USPTO.