What Is the Probability of Receiving a US Patent?

Abstract

TABLE OF CONTENTS Introduction I. Data and Methodology II. Patent Examination in United States A. The Examination Process B. Continuation Procedures III. Allowance Rates Across Technology Fields IV. Allowance Rates Across Inventor Types V. Conclusion Appendix INTRODUCTION Inventors choose to protect their inventions with patents for a variety of reasons. (1) A key element of inventors' cost-benefit calculus regarding patents is expectation that their will succeed. Unfortunately, there is little information about historical rates at which United States Patent and Trademark Office (USPTO) grants This lack of information about probability of obtaining a makes it difficult for inventors to determine best way to protect their intellectual property. The absence of systematic evidence on allowance rates also skews policy discussions about examination standards employed by USPTO. Some scholars argue that USPTO grants patents too easily, pointing to patents like Beerbrella (U.S. Patent #6637447), swinging methods (U.S. Patent #6368227), and a user-operated amusement apparatus for kicking user's buttocks (U.S. Patent #6293974). These scholars argue that a large number of such frivolous, rubber-stamped patents are hindering, rather than promoting, U.S. innovation system. (2) For example, some entities, often referred to as patent trolls, allegedly obtain patents with dubious claims solely to extract rents from genuine inventors who may appear to be infringing on entities' Judge Posner recently opined that the problem of trolls is a function in part of promiscuity with which office has issued patents. (3) Despite numerous allegations of USPTO laxity and calls for reforms based on anecdotal observations of silly patents, few studies have attempted to calculate actual percentage of U.S. that succeed. The calculation of allowance rates, while seemingly simple, is complicated by several aspects of examination process. First, that are initially rejected after examination can produce new, closely related called continuations. Continuations are difficult to track, but may ultimately emerge as Second, USPTO publishes examination outcomes only for granted applications, if filed before November 29, 2000, or for pending eighteen months after application date if filed on or after November 29, 2000. (4) Third, applicants alter claims in their during examination process. The allowance of some patentable claims within an application is not same as allowance of an application as it was filed, and this distinction should be taken into account in any discussion of allowance rates, particularly as it pertains to extent of scrutiny associated with examination process. In this study, we address above challenges by analyzing unique application-level data available internally at USPTO. The data tracks 2.15 million utility filed from 1996 to 2005 and examined until June 30, 2013, by which time 99.8% of progenitor had been granted or abandoned. (5) Progenitor applications are unrelated to any previously filed U.S. applications. This allows us to link each progenitor application to related subsequent produced by various continuation procedures. We can thereby accurately estimate probability of allowance without limitations of previous studies based on partial samples of published or exit cohorts. (6) In order to capture complexity of examination process, we calculate three measures of allowance rates: (i) first-action allowance rate, proportion of progenitor allowed without further examination; (ii) progenitor allowance rate (or simply, allowance rate), proportion of progenitor allowed without any continuation procedure, and (iii) family allowance rate, proportion of progenitor that produce at least one patent, including outcomes of continuation that emerge from progenitor applications. …