Shedding light on 'backlogs'

The Scottish philosopher Thomas Reid observed almost three centuries ago,

There is no greater impediment to the advancement of knowledge than the ambiguity of words.

In the intellectual property field, most important concepts are well defined and this helps economists perform robust analysis. However patent backlogs isn’t one of them. A report published today (26 June 2013) looks at this.

Part of the ambiguity springs from the wealth of definitions used to describe the issue. To some offices, 'backlogs' refer to all applications waiting for a first examination, to others all applications pending a final decision, and to some 'excess' applications beyond office capacity. These are just examples and the list goes on. Lack of a common definition is just one of the issues though. Even if all offices agreed on one interpretation of the term 'backlogs', differences in patent systems tend to make comparative analysis quite difficult.

An example might help to clarify this. Say we define backlogs as applications pending a first office action. In the UK, the first office action is a search, whereas the USPTO’s first action on the merits is the equivalent of a search and exam in the UK. If the points chosen for comparison are not actually the same, differences in 'backlogs' cannot be interpreted in any meaningful way.

Overcoming the ambiguity of 'backlogs'

With input from the Patent Office Economists’ Network – the UK IPO and USPTO have developed a framework to facilitate measurement and cross-country comparisons of patent backlogs. The words of Thomas Reid left their imprint. Because of the ambiguity and connotation of the term 'backlog', lead authors Alan Marco, acting Chief Economist at the USPTO, and Benjamin Mitra-Kahn, Chief Economist at IP Australia and former Economic Advisor at the UK IPO, default to calling the entire stock of pending applications in a given office the 'application inventory'. In order to analyse the application inventory and its effects on pendency in a meaningful way, the authors first identify some common milestones in patent examination processes across both offices. Then, these milestones are used to break down the application inventory into three groups (or stocks).

Within each of the above stocks, it is possible to further distinguish those applications awaiting a patent office action and those awaiting an applicant response. This helps to determine whether delays are with the office or the applicant.

Method for universal points and stocks
Method for universal points and stocks

Using statistical analysis, the report highlights the relationship between application stocks and examination pendency (or application processing time). This helps to determine whether backlogs or application inventories actually matter – what role do they play in slowing down other incoming applications?

The joint UK-US report shows that changes in the different stocks have differential impacts on patent pendency and also on abandonment rates. Understanding these relationships is critical for better evidence-based policy making, particularly linked to the management of patent application processes and pendency. After all, it's very hard to manage something that hasn't been measured.

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