the art, to make an adequate search and to consider a new specification or a fairly complete amendment within a period of 3 or 4 hours. . . . We feel that today much of the technical literature is not searched by the Patent Office examiners. We know that our own searches invariably develop references which we believe are closer than those developed by the Office."

Since at that time a patent application normally received 3 Office actions, the last one being final, it received about 12 hours of examination by the Patent Office. From those figures it should be quite evident what basically is the cause of patent invalidity. It is extremely interesting to note that at the present time patent applications receive the same inadequate type of examination.

Patent applications are presently filed at the rate of about 90,000–100,000 per year. To keep the backlog at the same level at least this number of patent applications must be disposed of annually by the Patent Office, i.e., by allowance or abandonment. Because of various factors such as leave, etc., assuming that an examiner works 1650 hours per annum, a typical GS-13 examiner without signatory authority is expected to obtain 110 disposals per annum. This averages out to 15 hours/disposal. The situation is far worse with respect to a typical GS-15 examiner, having a full signatory authority, who is expected to obtain as high as 147 disposals with an average of 11.5 hours/ disposal. Any comment that this represents adequate examination of a patent application is woefully inadequate.

III. THE U.S. PATENT OFFICE: ITS ROLE IN FOSTERING PATENT INVALIDITY Much has been written recently concerning the causes of patent invalidity, but practically nothing relates to the role of the Patent Office in fostering patent invalidity. Only a few scattered comments can be found in the legal literature, such as the following:

"[The Patent Office has got to be the sickest institution that our Government has ever invented. It is just as far as I can see an attritional war between the patent applicant and the patent examiner who apparently got paid on the piece work for how many patents they could put out." Judge Miles W. Lord, September 8, 1971, United States v. Charles Pfizer & Co., Inc., et al, (Tetracycline civil damage suit), 4-71 Civ 435 (D. Minn.).

What exactly is going on in the Patent Office that would cause a judge in a Federal District Court to place such a vitriolic comment in the record of a legal controversy S

It should hardly surprise anyone that the Patent Office, operating under present practices and procedures, is at least one of the prime causes for patent invalidity. There is also hardly any question that some of the practices are a result of the demands made upon the Patent Office with respect to decreasing, or at least maintaining at the same level, the backlog of unexamined applications. But the question here is simply whether or not there can be any justification for the practices and procedures employed by the Patent Office in order to meet the demands made, regardless of what they may be, when it is glaringly apparent that they must inevitably result in a flood of invalid patents. Exactly what are the practices and procedures, and why must they foster patent invalidity?

A. The Quota System

What is involved in any quota system is always a subordination of quality to quantity in order to meet some production goal. This is true even on an automobile assembly line. But the quota system in the Patent Office goes far beyond this. It is not merely a question of subordinating quality to quantity in order to meet a production goal. What is involved is a total obliteration of the concept that there can even be a requirement of quality, regardless of how low it may be, in the examination of patent applications. It is hardly any wonder that examiners refuse to become concerned with the quality of the examination they perform, when the result thereof will be punishment, not reward. How can such a system do anything but foster invalid patents?

1. The numbers game

The quota system has produced many strange results. Examiner productivity is measured in terms of the number of cases he allows, the number of cases which become abandoned (these two together are considered disposals) and,

strangely enough, the number of new cases he acts on. Abandonments can hardly be controlled. The prime factor in productivity is therefore allowances, because they are easiest. The temptation for an examiner to allow a case, when he must meet a production goal, is almost unbearable. The validity of any patent issued under such circumstances is highly suspect. But there is even a greater evil involved. If an examiner allows a new case on the first action, he then gets double credit, i.e., one credit for acting on a new case and one credit for allowing the identical case. In other words, he need work only half as hard as any other examiner and attain the same production rating. If an examiner is not meeting his quota because he is low on allowances and low on abandonments, he can then resort to the expedient of making up the deficiency, at least temporarily, by acting on a sufficient number of new cases. Normally speaking, an action on a new case is the most time consuming one, involving an understanding of the specification and claims, searching the prior art, writing on Office action, etc. If an examiner resorts to this expedient in order to meet his production quota, the time he spends on each new case is severely curtailed and the quality of the examination thereof must inevitably be lowered.

2. Superficial treatment of the most complex cases

Another equally strange result of the quota system is that the most complex cases receive the least thorough prosecution, a practice which must inevitably result in the issuance of invalid patents. How could such an obviously destructive practice arise, and, even further, how can it be permitted to continue unabated? The answer to these questions is simple; it is the result of a quota system administered in a manner which borders on absurdity.

The key here is complexity, i.e., obviously some cases require more time for examination than others. But the simplest way to administer a quota system is to make the absurd assumption that all cases are of the same level of complexity. Thus, in any examining group all cases are assumed to be of the same order of complexity, even if more than fifty examiners are involved. Cases involving nothing more, for example, than making a mixture of metals useful as an alloy (Exhibit A) are deemed to be as complex as cases involving the production of synthetic diamonds (Exhibit B). An example of other equally complex cases is the production of exotic boron containing compounds (Exhibit C).

If the officials of the Patent Office were to be questioned on this issue, they would undoubtedly answer that different arts have received different complex. ity factors. However, these factors appear to be purely mythical because no examiner has ever been told exactly what is the complexity factor for his par ticular docket. Even if such complexity factors did exist, they certainly did not arise as the result of any legitimate statistical study. It is not too well known, but they arose as the result of politics. The officials having the most influence got the best deal they could, i.e., an assignment of a complexity level as high as possible, for the examiners under them so that they (the officials) personally could benefit by having a lower case load assigned to them. In the not too far distant past all examiners (Office-wide) were adjudged to have cases of exactly the same complexity, and their efficiency was measured by the number of Office actions they produced per week. There is nothing to lead one to believe that the present system really differs in essence from the former system.

3. Misuse of computer resources

Perhaps the strangest result of the quota system is the use of extremely expensive computer time to keep production records on examiners which are complete to the nth degree. Production records show, for well over 1000 examiners, such diverse factors as the number of new cases acted on, the number of allowances, the number of abandonments, etc. They also include such other esoteric items as balanced disposals, hours per balanced disposal, and so on, ad infinitum. What possible justification can there be for employing valuable computer time to compile this mountain of production records, essentially nothing but a mass of trivia, and not of the slightest consequence when pursuing a goal of processing patent applications to produce patents of the highest possible validity.

In view of the urgent necessity of finding some way to employ computers to aid an examiner in the examination of patent applications, the spectacle of

employing a computer for nothing more useful than the compilation of infinitely detailed production records is almost ludicrous. Admittedly, no one has yet demonstrated how to successfully employ a computer to completely search all patent applications. But progress has been made in employing computers for search purposes, particularly in the area of the chemical arts and particularly by the British Patent Office. If the U.S. Patent Office is not aware of this, there is no excuse therefor. Further, all domestic patents in a recently revised chemical class (Class 423) are completely coded at least as to process conditions employed. All that remains to be done is to place this information into an information retrieval system, e.g., a computer. Three years at least have gone by since this coding project was completed, and nothing has been done with it. And during all of this period computer time available to the U.S. Patent Office has been employed for nothing more useful than the creation of examiner production records. There certainly appears to be a complete misunderstanding here of exactly what projects should receive priority with respect to the use of computer time.

4. The bounty system

Any quota system must inevitably lower the quality of the product which is produced under it. Just taken by itself the devastating effects it produces are cause enough for alarm. But the U.S. Patent Office has succeeded in adding even one more refinement which serves to lower the quality of the product produced under its quota system still further. This is the bounty system, i.e., an extra reward for exceeding an assigned quota which by itself leads to a lower quality product.

The system employed here is very simple. If an examiner succeeds in exceeding his assigned quota by 10 percent, he then receives a bounty of $350.00. The total number of hours he spends per annum in examination of applications is still the same, so that the end result must be less time spent on examining each case. The resultant quality of the product is thus lowered even more. This is not a trivial issue. According to one published report this bounty system was the cause of much wrangling between the former Commissioner of Patents, Gottschalk, who wanted to abolish this system, and the former Assistant Commissioner, Wahl, who favored it. Chemical Week, August 1, 1973 page 13. [Exhibit D].

B. Lack of a Meaningful File Wrapper Record

The determination of the validity of a patent in a court proceeding is obviously very much dependent upon the nature of the file wrapper record. It desirably should be complete as possible. All possible issues concerning the validity thereof should have been thoroughly explored. The best prior art should have been cited and applied, and a clear case for the allowability of the patent claims over this prior art should have been set forth in the record. This is the ideal. What is the reality? Obviously file wrapper records in the past approached the ideal with varying degrees of success. But the present trend in Patent Office procedures does not serve to improve the file wrapper record: if anything, it degrades it so that it has minimal value.

Changes in practice in the Patent Office in recent years have had only one effect, i.e., they have only served to impair even more whatever value a file wrapper record might have in a court for determining the validity of a contested patent. Only two of these practices will be discussed here, i.e., (1) the use of the PO-1142 in the first Office action, and (2) the insistence of the Patent Office that the time for prosecution of a case be shortened by insisting that all amendments be acted on within two months of receipt and further that all second actions be made final. See Exhibit E for details. These two practices taken together have materially lowered whatever chance there might be for a patent to be held valid in a court proceeding. The result thereof is only a mere skeleton of an administrative proceeding; there is no flesh on the bones.

1. The PO-1142 form

The criticisms which have been made of this first Office action are many; see Woodbridge, "PO-1142," 54 JPOS 429 (July 1972). [Exhibit F]. The only thing that need concern us here is the effect of the PO-1142 form upon the validity of an issued patent. Its effect can be considered nothing less than disastrous. As pointed out by Woodbridge, a major fault thereof is brevity. One simply cannot explore legal issues, such as the application of 35 U.S.C. 103, in

a single sentence or even two sentences, which is about all that the PO-1142 will permit and all that the Manual of Patent Examining Procedure recommends. [Exhibit G]. If a patent is issued with only a PO-1142 first Office action and an applicant's response thereto in the file wrapper record, this hardly aids in buttressing the presumption of validity accorded by statute to issued patents. If the PO-1142 fails to clearly point out the issues involved, which it can hardly do in view of its brevity, there is lack of opportunity for a patent applicant to present a clear and convincing case for the patentability of his claims. There cannot be much doubt as to what will happen to a patent with such a file wrapper record, when one considers the hostility of judges to patents with much better supporting records.

The exact reasons for the adoption of the PO-1142 by the Patent Office have apparently never been made public. But clearly it was intended to save examiner time, if nothing else, so that he could more easily attain the produc tion goals set for him. Therefore, the issue to be decided again is whether or not satisfaction of production goals is to be permitted to emasculate a file wrapper record to impotency.

2. The insistence of the Patent Office on shortening prosecution time

Note the following statement by former Commissioner of Patents Gottschalk (page 6 of Exhibit H):

"It might seem to some that we are shooting for two inconsistent goals: A meaningful examination and the issuance of strong patents on one hand, and on the other, the accomplishment of this process in a short period of time.

"I want to emphasize, however, that in our effort to reduce pendency, we do not intend to sacrifice the development of an adequate record of all important issues, or meaningful examination, or justice and fair treatment for the appli cant. On the contrary, I believe we can cut down on pendency time without adverse affect on the examination process."

The difficulty here is that just how these desirable results can be obtained in a shorter pendency time, without adverse effect on the examination process, is never spelled out. And it would appear to any reasonably objective person that, for reasons more fully developed below, shortening of pendency time must inevitably lead to the issuance of invalid patents.

One could advance many sound reasons for shortening the pendency of an application in the Patent Office, e.g., advancing the date of expiration of the monopoly which has been granted. But it does not appear that this is the real reason why the Patent Office has adopted a policy of shortened pendency time. It is very likely that the real reason for this policy is not that discussed above, but rather may be that the Patent Cooperation Treaty cannot be ratified unless all U.S. Patents are either issued as patents or become abandoned within 18 months from the date of filing.

Commissioner Gottschalk in his May 31, 1972 Memorandum for ALL Employees stated:

"*** it is desirable as a practical matter, that our average pendency for patent applications be down to about eighteen months before we implement the Patent Cooperation Treaty. * We are striving to reach an eighteen month average pendency goal by the end of Fiscal "75".

The PCT requires publication of all still pending patent applications within 18 months of filing. This cannot be done under present U.S. law; 35 U.S.C. 122 forbids this. And so the U.S. Patent Office is attempting to demonstrate that all cases can be allowed or abandoned in 18 months, whereby the PCT can be ratified even under existing U.S. patent law. Exactly why this should be a desirable goal is far from clear, especially when it is realized that shortened prosecution time inevitably lessens the possibility that the patents issued will be valid. The price to be paid appears to be too high merely for the sake of international cooperation.

The greatest defect of shortened prosecution time is that it practically eliminates all recent literature references and recent foreign patents as possible sources of prior art against patent applications; such recent material is of extremely great value. Literature references cannot be searched as such; reliance must be placed on abstracting services and, more specifically, the literature abstracts and indexes they issue. Again, it is useless to attempt to search abstracts themselves. The search indexes must be available to do this. And this is wherein the defectiveness of shortened prosecution resides. There is a great

time lag in the issuance of the search index, for example, presently from 1 to 11⁄2 years with respect to chemical abstracts. See Exhibit J. The Office goal for Fiscal Year 1975 is to attain initial examination of an application within 6 months of filing, even less than the present 10.5 months. A literature search cannot be made under these circumstances.

The other material defect of shortened prosecution time is that it will positively eliminate consideration of nearly all recently issued foreign patents, especially those not written in English. Foreign patents do not appear in an examiner's search files instantaneously. It takes much time until they are transmitted here from abroad, and are processed through the Scientific Library, e.g., to have an English abstract affixed thereto or a translation of at least one claim (for what it is worth). There must then be a determination of where to place it in the examiner's search files. This procedure is presently haphazard at best; shortened prosecution time will act as a guarantee that they will never be considered at all.

C. Obviously Illegal Practices

It is certainly well established that the Rules of Practice have the force of law if not contrary to statutory law, and they must be observed not only by applicants for patents but also by the Patent Office itself. However, it is quite apparent that the Patent Office does ignore these Rules of Practice, and the result therefore, of course, cannot be anything but an invalid patent. These violations of the Rules of Practice range from the obviously illegal to the not obviously illegal, but which reasonably objective persons would agree constitute a non-observance of the Rules of Practice. In any event it is apparent that any patent issued, in which nonobservance of the Rules of Practice was involved, can readily be held to be invalid by a court.

As an example of a clear violation of the Rules of Practice, attention is directed to the Office Form POL-327. Note the following extract therefrom:

“4. All of the claims being allowable, prosecution on the merits is closed in this application and the Notice of Allowance or other appropriate communication will be sent in due course, in view of:

Rule 133 (b) states: "In every instance where reconsideration is requested in view of an interview with an examiner, a complete written statement of the reasons presented at the interview as warranting favorable action must be filed by the applicant."

Since prosecution is closed and the case stands allowed by the POL-327, there is not even any need to comply with Rule 133 (b); the violation of the Rule is indisputable.

D. Misplaced, Unqualified and Unnecessary Highly Paid Personnel, etc. It hardly seems open to debate that the actual examination of patent applications should be conducted by those most qualified to do so, in order to ensure the highest possible validity for the patents which are issued by the Patent Office. The higher officials should actively assist in attaining this goal of valid patents. The disregard of these principles by the administrative officials of the Patent Office is blatant.

1. Legal training

It seems evident without debate that patent examiners perform a quasi-legal function. The desirability of legal training for examiners, and especially those of primary grade who operate without any kind of review of their work product, is considered to be self-evident. But the Patent Office does not pay the slightest attention to this type of training.

Up until about 1960 it was required, in order to attain the grade of primary examiner, that the candidate therefor must have at least obtained a law degree. Bar membership was considered desirable, but not a necessity. Thereafter the requirement that primary examiners must have at least a law degree was abolished. There are at least two hundred examiners in the U.S. Patent Office who are primary examiners. Although exact figures are not easily obtainable, it is well known that only a very small minority of these primary examiners have a law degree. It would hardly appear, even to a layman, that