Patents in the Knowledge-Based Economy (2003) / Chapter Skim
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Patent Quality - Are All Patent Examiners Equal? Examiners, Patent Characteristics, and Litigation Outcomes
Patent Quality - Are All Patent Examiners Equal? Examiners, Patent Characteristics, and Litigation Outcomes
Pages 17-53
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Patent Quality 17
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Our main findings are as follows: (iJ Patent examiners and the patent examination process are not homogeneous. There is substantial variation in observable characteristics of patent examiners, such as their tenure at the USPTO, the number of patents they have examiWe thank USPTO personnel for offering their time and insight, members of the STEP Committee on the Intellectual Property Rights in a Knowledge-Based Economy, Wesley Cohen, George Elliott, and an anonymous reviewer for their comments and suggestions.
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, there are no published studies of the empirical determinants of patent examiner productivity, or of linkages between characteristics of patent examiners and the subsequent performance of the patent rights that they issue.2 This chapter offers a preliminary evaluation of the role that some aspects of the examination process may have in determining the allocation of patent rights, in particular the consequences of specialization of examiners in specific technologies and their exercise of discretion in examining patent applications. Filling in this gap in our knowledge may yield a number of benefits.
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In the first part of the chapter, we review our qualitative investigation, in which we developed an informal understanding of the process of patent examination and investigated potential areas for differences among patent examiners to impact policy-relevant measures of the performance of the patent system. The key insight from our qualitative analysis is that "there may be as many patent offices as patent examiners." On the basis of this insight, we hypothesize that there may be substantial and quantifiable heterogeneity among examiners and that this heterogeneity may affect the outcome of the examination process.
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Nonetheless, our empirical findings suggest that USPTO patent examination procedures do allow for significant differences across examiners in the nature and scope of patent rights that are granted. This finding points to an important role for litigation and judicial review in checking the impact of discretion and specialization in the patent examination process.
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Although practitioners and USPTO personnel are intimately acquainted with these procedures, there has been little attempt to identify which aspects of the examination process can be linked through rigorous empirical analysis to the key policy challenges facing USPTO. Overall, our qualitative research phase included interviews with approximately 20 current or former patent examiners and an equal number of patent attorneys with considerable experience in patent prosecution.
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patents in relevant technology classes and subclasses, either through computerized tools or by hand examination of hard copy stacks of issued patents, and may then proceed to a word search of foreign patent documents, scientific and technical journals, or other databases and indexes. USPTO's Scientific and Technical Information Center maintains extensive collections of reference materials.
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In more mature technologies examiners may have only a moderate interest in nonpatent materials and a limited ability to easily or effectively search them. Although the scope of patent examination prior art searches has been criticized, our interviews of USPTO personnel suggest that senior USPTO management are keenly aware of external critiques of the examination process and that a variety of initiatives have been set in motion to address some of these limitations.
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For example, Supervisory Patent Examiners, as well as their supervisors, routinely evaluate data relating to the distribution of times to action and the number of actions required before "disposal" of an application through allowance, abandonment, or appeal. These measurements are one of the many tools that USPTO uses to refine the internal management of the examination process.
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Although some acknowledged that it changed their approach to interactions with applicants' attorneys, others claimed that it had "made no difference" for the day-to-day "balancing act" associated with allowing claims. This heterogeneous response to a single well-defined change in USPTO policy supports our hypothesis that examiners may vary in their approach to the examination process.
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Several features contribute to this potential for heterogeneity, including the formal emphasis on specialization, variation among Art Units and individual examiners in their approach to searching prior art, the fact that much learning is through an apprenticeship system with only a small number of mentors, and the existence of differences across groups and examiners in the time allocated to specific tasks and examination procedures. This heterogeneity might manifest itself in several ways.
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At the same time that this qualitative analysis formed the basis for our hypotheses concerning how examiners might influence the allocation of patent rights, it also suggested several limitations to any empirical work and some challenges that must be overcome before drawing policy conclusions from it. First, and perhaps most importantly, the analysis highlighted the importance of taking account of variation across technologies and patent cohorts in any empirical analysis.
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hypotheses associated with examiner characteristics. HYPOTHESIS DEVELOPMENT Our empirical analysis is organized around two sets of hypotheses, those reflecting the relationship between patent characteristics and examiner characteristics and those reflecting the relationship of patent litigation outcomes to patent and/or examiner characteristics.
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However, after controlling for technology and cohort effects, variation in the exercise of discretion and specialization may still lead to different citation levels, yielding our first hypothesis:8 Hi: Even after controlling for broad technology class, patent examiners will vary in terms of the average level of citations received by the patents they examine. In addition to this variation among examiners in their discretion and specialization, there is likely to be variation among examiners in their ability to use search technologies that identify the broadest range of possible prior art.
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Slower approval will be positively correlated with other dimensions of performance. The Impact of Examiners on Patent Litigation Outcomes Ultimately, we are interested in tying examiner characteristics to more objective measures of the performance of the examination process.
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This discussion motivates the following hypothesis: H5: The probability of a litigated patent being ruled valid will be declining with the examiner's average citations received per patent, declining with the self-citation rate of the examiner, but increasing with the examiner's average approval time. It is important to recognize that the relationship between validity and average citations per examiner is subtle, and difficult to interpret, because it measures the combined impact of discretion and specialization (i.e., the two distinct forces leading the average citations per patent to vary among examiners)
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By linking approval to other outcomes (such as validity rulings) , these hypotheses offer potential insight into the potential for trade-offs associated with speeding up the examination process.
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i4In future work it would be possible to conduct parts of our analysis of patent examiners on a much wider sample of individuals who performed this function at the USPTO. A useful feature of our small sample, however, is that each examiner in the sample has examined at least one patent that was "tested" for validity by the CAFC.
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In computing statistics across examiners, we weight examiner characteristics by the number of times that each examiner shows up in our data. Table 1 gives variable definitions, and Table 2A presents descriptive statistics for our linked data sets on CAFC-tested patents, CAFC-tested primary examiners, and patent histories of these examiners.
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Cumulative Patent Production as Secondary Examiner Share of All Citations to Own Prior Patents (see Figure 5) Number of broad technology classes of patents on which the examiner has experience Herfindahl-type measure of distribution of examiner's patents across broad technology classes Cumulative Years Observed as Issuing Examiner (both primary and secondary)
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2180.38 1395.65 Examiner Citations 14201.68 12673.34 Examiner Cites Per Patent 6.32 3.49 Secondary Experience 207.05 137.67 Self-Cite 0.10 0.06 Examiner Specialization 0.75 0.20 Experience (years) 18.67 5.67 3-Month Volume 41.52 35.66 Although the CAFC-tested patents are quite selective, there is little reason to believe that the CAFC-tested primary examiners are very different from the population of all examiners.
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Consistent with our discussion in the third section, we evaluate a reduced-form model of the sensitivity of validity to examiner characteristics as well as a more nuanced instrumental variables estimation that only allows examiner characteristics to impact validity through their predicted impact on characteristics unique to the CAFC-tested patent. The Nature of Examiner Heterogeneity Our analysis begins with a set of figures that display the heterogeneity among examiners along four distinct dimensions: experience, the level of citations received per patent, the degree of self-citation, and the degree of technological specialization in the patents examined.
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PATENTS IN THE KNOWLEDGE-BASED ECONOMY 0 1000 2000 3000 4000 5000 6000 7000 8000 9000 Number of Patents Examined We next turn to an evaluation of the extent to which examiners specialize in particular technology classes over the course of their career. One simple way to measure this specialization is to compute the number of distinct technology classes appearing among the patents examined by a particular examiner.
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25 `,, 20 <~ 15 IL ~ ~ 10OO . ~ .~ .6 .8 Herfindahl Index of Technological Specialization FIGURE 3 Technological specialization of examiners.
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is relatively low, particularly given the technological specialization of examiners, some examiners have self-citation rates more than three times the sample mean. Another method for understanding the importance of heterogeneity across examiners is to use ANOVA analysis to formally test for the presence of examiner effects in several key statistics associated with the examination process.
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The results indicate that examiners matter: A significant share of the variance in this sample in the four variables capturing the volume and pattern of citations by and to a particular patent (Citations Made, Citations Received, Originality, and Generality) is accounted for by fixed examiner effects, with a particularly strong efTABLE 3A Analysis of Variance of Patent Characteristics (N= 289,441; 196 Examiner Effects; 36 Technology Subclass Effects; 24 Cohort Effects)
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The overall level of self-citation, experience (both in terms of years as well as the total level of issued patents) , and a measure TABLE 3B Analysis of Variance of Patent Characteristics by Technology Class Fraction of Variance Explained by Examiner Effects Variable Chemical ICT Drug/Med Electronic Mechanical Other Citations Made 0.123 0.054 0.104 0.078 0.054 0.059 Citations Received 0.058 0.099 0.110 0.066 0.076 0.072 Approval Time 0.098 0.083 0.074 0.116 0.053 0.053 Claims 0.033 0.027 0.028 0.022 0.031 0.037 Generality 0.084 0.112 0.078 0.086 0.055 0.081 Originality 0.087 0.964 0.044 0.063 0.069 0.082
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(4 4) Examiner Characteristics Examiner Cites Per Patent 2.68 1.83 1.82 1.69 (0.41)
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As we emphasized in the second section of this chapter, these findings suggest the importance of controlling for detailed technology classes and cohorts in our analysis as we seek to evaluate the sensitivity of validity findings to examiner characteristics. We begin our analysis in Tables 5 and 6, which compare the means of examiner characteristics and patent characteristics, conditional on whether the CAFC ruled the patent valid.
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This stands in useful contrast to the most naive interpretation of hypothesis H4, which predicts that Experience should be positively correlated with Validity. In contrast, consistent with the suggestion in hypothesis H5, invalid patents do seem to be associated with examiners who have a higher average citation rate.
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Once again, these "negative" results must be interpreted with caution given the special nature of the sample; they might suggest that a mechanical relationship between examiner experience and the outcomes of validity rulings, if it exists, may be more subtle than some would argue. 22Both Tables 7 and 8 employ a linear probability model, either OLS or IV.
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As we have emphasized in our hypothesis development, the interpretation of this result is subtle. On one hand, the results provide evidence that even highlevel litigation outcomes are related to examiner characteristics that result from two key features of the organization of the USPTO specialization of examiners in narrow technology areas and exercise of discretion by examiners in allowing claims.
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This finding motivates our final set of regressions, using the instrumental variables procedure, in Table 8. As discussed in the third section of this chapter, we investigate the mechanism by which Examiner Cites Per Patent might affect patent validity rulings by restricting its impact to the citation rate of the litigated patent.
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In other words, even relying on a test that only allows examiner effects to matter through their impact on the citation rate of the litigated patent, and controlling for differences in the timing and type of litigated technology, we find that the CAFC invalidates patent rights associated with examiners whose degree of specialization or exercise of discretion results in an unusually high level of citations received. DISCUSSION AND CONCLUSIONS We have conducted an empirical investigation, both qualitative and quantitative, of the role that patent examiners play in the allocation of patent rights.
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First, patent examiners and the patent examination process are not homogeneous. There is substantial variation in observable characteristics of patent examiners, such as their tenure at the USPTO, the number of patents they have examined, the average approval time per issued patent, and the degree of specialization in technology areas.
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. "Patent Examination Procedures and Patent Quality." In W
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