USPTO Petition Process: Who Should Pay for the Burden of Inordinate Delays and “Mistakes”?Originally published on IPWatchdog
Julie Burke, Ph.D.
In our last article, Part VI, we reported significant Technology Center (TC)-to-TC variation in pendency and grant rates for petitions pertaining to premature final Office actions.
The USPTO Petition Timeline shows these types of petitions are currently decided in an average of 178 days with a 42% grant rate. Because the mere filing of a petition will not stay any period for reply that may be running (37 CFR Section 1.181(f)), a six-month delay in processing after final petitions effectively renders any such decision as futile. Without a decision resolving the status of the final Office action, Applicants are forced to choose between filing a Request for Continued Examination (RCE), a Notice of Appeal, a continuing application or letting the application go abandoned. In addition, beginning three months after a final Office action, Applicants face extension of time fees, including (for large entities):
- After three months: $220
- After four months: $640
- After five months: $1,480
As a result, Applicants often file an RCE within 90 days of receiving a final Office action to avoid being penalized by extension of time fees.
In Part IV, we reported many after final petitions are essentially held in abeyance, until after the RCE was filed. The RCE was then used as justification to dismiss long-delayed petitions as moot. Here, we identify instances where some petitions were not only granted after the RCE is filed, but the RCE fees refunded.
The USPTO Refunds RCE Fees… Sometimes
Using Petition.ai’s database, we identified five decisions which refunded RCE fees, including three which refunded associated extension of time fees.
These five fortunate Applicants were collectively refunded $5,650 in RCE fees and $1,000 in extension of time fees by decisions processed in 137 days, on average. The practice of refunding RCE fees appears widespread: Decisions A-E pertained to applications under examination in four Technology Centers. While MPEP Sections 1002.02 and 1002.02(c)3(a) authorize TC Group Directors as the sole Deciding Official for these types of petitions, Quality Assurance Specialists (QAS) occasionally act as the Deciding Official. For example, Decision A, refunding $850, was decided by a QAS. The five decisions in Table I were collectively signed by three different Group Directors and one QAS. Each decision refunded RCE fees, as follows:
Decision A withdrew the RCE stating the last Office action was incorrectly marked as final. The USPTO refunded the $850 RCE fee.
Decision B withdrew an RCE as improper stating the examiner erred in holding the last Office action final. Because the RCE should have been denied entry, the USPTO refunded the $1,200 RCE and $600 extension of time fees.
Decision C withdrew finality and vacated the RCE, refunding the $1,200 RCE and $200 extension of time fees.
Decision D withdrew the RCE as unnecessary because the Group Director determined the finality of the last Office action was premature. The USPTO refunded the $1,200 RCE fee.
Decision E pertained to a petition which was not entered into PAIR transaction history for at least 169 days. Two months after the RCE was filed, Decision E withdrew finality. Because no basis existed for filing the RCE, the USPTO refunded the $1,200 RCE and $200 extension of time fees.
Justifications for Refunding RCE Fees
The USPTO has at least five procedures in place to justify refunding RCE and associated fees:
MPEP Section 706.07(h) authorizes personnel to send a Notice of Improper Request for Continued Examination when an RCE is filed in response to non-final Office action. When finality is withdrawn via petition decision, the final Office action should be re-labelled as a non-final Office action. USPTO personnel should then check box 3 on PTO Form 2051, to refuse entry of an RCE filed in response to a non-final Office action and refund the RCE and associated fees.
The USPTO can simply withdraw an RCE (Decisions A and B) or vacate an RCE (Decision C).
37 CFR Section 1.26(a) authorizes the USPTO “to refund any fee paid by mistake.” As inferred from Decisions A-E, a mistake may refer to the USPTO’s (i) issuing the premature final Office action or (ii) delaying the petition decision until after Applicant files a response to the disputed final Office action. For example, Decision BBB (Part IV, Table 3) was not even entered into PAIR Transaction History until at least 246 days after filing. Applicant’s RCE, filed 189 days after the disputed Office action, was then used to justify dismissing the petition as moot on day 276. Surely the USPTO’s inordinate processing delay should qualify as a “mistake”! In similarly delayed decisions, the USPTO should certainly be on the hook for more than just conceding “[t]he delay in response to the petition is regretted.”
37 CFR Section 1.26(a) governs the filing of RCEs. The USPTO has authority under 37 CFR 1.183 to waive rules. As such, the USPTO has the authority to sua sponte waive the requirements of 37 CFR Section 1.26(a) in instances where RCE fees were collected in error, i.e. when finality of an Office action is determined to be premature.
The USPTO can treat RCEs as a type of “conditional” filing dependent upon the petition outcome. While the USPTO treats most “conditional” RCEs as an RCE, MPEP Section 706.07(h) provides an established exception. The Quick Path Information Disclosure Statement (QPIDS) submission is treated as a “conditional” RCE until the examiner determines whether any item in the information disclosure statement necessitates reopening prosecution. For similar reasons, the USPTO could treat an RCE filed with a petition to withdraw premature finality as a conditional RCE while the Group Director, or their subordinate, decides whether finality should be withdrawn.
What if an Initial Request to Withdraw Finality is Dismissed?
In contrast to Decisions A-E, other petitions filed by unfortunate applicants requesting withdraw finality and RCE fee refunds are often dismissed. (Part IV) Following an initial dismissal, any petition requesting review of the TC Director’s decision must be filed within two months. 37 CFR Section 1.181(f). These petitions, processed by the Office of Petitions, are generally decided by the Deputy Commissioner for Patent Examination Policy (DCPEP). The USPTO Petition Timeline reports a pendency of 134 days and a 0% grant rate. Consistent with the long pendency and zero grant rate, the USPTO notes these types of petitions are infrequently filed.
Should Petition Decisions Set Precedent?
While reviewing final agency decisions in the Petition.ai database, we found two directed to the question of refunding RCE fees. Both arose from the same application and, like most DCPEP decisions, both decisions supported Group Director’s decisions to not refund RCE fees.
What made these petitions unusual is the inclusion of other decisions, (here marked as Decisions C and E) based upon similar fact patterns which had been granted.
Decision F simply took the position that “decisions by other Technology Center Directors do not set precedent nor govern the outcome of the instant petition.”
The decision denied the refund request for the $1,300 RCE fee as not having been paid by mistake within the meaning of 35 Section U.S.C. 42(d), “regardless of any decision by the Office with respect to the petition to withdraw finality.” Decision F was deemed to be a Final Agency Decision, concluding “no further requests for reconsideration will be entertained.”
Undeterred, Applicant filed a renewed petition requesting reconsideration of Decision F. Key arguments in the renewed petition included:
- While the Decision is indicated to be a Final Agency Decision, it also must be recognized that the circumstances surrounding the actions taken and not taken in the Application by the USPTO requires correction of the mistakes in not complying with the PTO’s own rules and policies, and in dismissing the original Rule 181 Petition.
- Given the admonition that filing a Petition does not stay a period for response, having a Group Director hold off rendering a Decision on a Petition for four months, until Applicant is forced to file a RCE to keep a case alive, and only then rendering a Decision that filing a RCE renders the Petition moot, is not a practice USPTO upper management should condone.
- The decision contradicts Office rules, policy and procedures where a Rule 181 Petition to remove an obvious premature finality appears to have been held in abeyance until after the filing of an RCE.
- The rendering of dissimilar Decisions for similar Petitions constitutes an arbitrary and capricious lack of decision-making technique by the USPTO.
Inexplicably, the USPTO entertained this request for reconsideration of the Final Agency Decision F and issued a second Final Agency Decision G stating that inconsistent petition decisions “do[es] not establish a consistent USPTO practice upon which an applicant has a right to rely.” Emphasis added.
Decision G continued:
While petitioners argue that they have a right to consistent treatment and that inconsistent treatment is arbitrary and capricious, this argument does not support the position that the USPTO is acting improperly in the above-identified application. See Univ. of Mass. v. Kappos, 903 F.Supp.2d 77, 89 (2012) (an argument that the USPTO acted inconsistently in other application may raise the question of whether the USPTO acted arbitrarily and capriciously in those other applications, but does not establish that the USPTO is acting arbitrarily and capriciously in the application at issue.)
Table III lists case law relied upon in Decision G – all pertaining to denying refund of Notice of Appeal Fees paid under 35 U.S.C. Section 141.
Should decisions pertaining to refund of Notice of Appeal fees be relied upon as precedent for petitions requesting refund of RCE fees? Two distinctions between refund requests for Notice of Appeal and RCE fees stand out:
- Filing a Notice of Appeal changes jurisdiction from the Patent Corps to the Board of Appeals. In contrast, filing an RCE does not change jurisdiction. Before and after filing an RCE, the application is under the jurisdiction of the Patent Corps.
- Notice of Appeal fees are required by statute – 35 U.S.C. Section 141. The USPTO does not have the authority to waive a statute. In contrast, RCE fees are required by rule – 37 CFR Section 1.114 – which can be sua sponte waived or suspended via 37 CFR Section 1.183. Importantly, precedent set by Decisions A-E provides evidence that RCE fees are, in fact, refundable when finality of the prior Office action is determined to be in error.
The USPTO Should Carry the Costs of Inordinate Delays
- The USPTO has, in fact, refunded RCE and associated fees for some lucky applicants following determinations that finality was premature.
- The USPTO has several mechanisms at hand to end the RCE Catch-22 situation – where petition decisions are so delayed the Applicant is essentially forced to file an RCE, which is then used as grounds to justify dismissing the long-overdue petition as “moot” in view of the RCE filing.
- Each TC and each Group Director appear to have unchecked authority as to when and how petitions will be processed and decided, including the extent of delay permitted and level of personnel who decides such petitions. The Office of Petitions have acknowledged they “generally do[es] not oversee the process of how petitions are decided in the Technology Centers.” (Part IV)
- Arguments and evidence pointing to dissimilar decisions for petitions directed to similar fact patterns have been used by the DCPEP to support further inconsistent decisions.
- Final Agency Decisions are not final – the USPTO has entertained requests for reconsideration of a final agency decision.
In short, all applicants deserve to have their petitions treated in a consistent manner – consistent with other petition outcomes directed to similar fact patterns and consistent with the Office’s statutes, rules and policies. Inconsistency within the USPTO’s petition practice should not be used as a poor excuse for further inconsistency. As the petitioner aptly stated, “[i]t is the USPTO, not Applicant, that should carry the costs of inordinate delays in rendering Decisions on Petitions of premature finality.” Petition resulting in Decision G.