Deferred Examination of Patent Applications: Implications for Innovation Policy

John R. Thomas
Visiting Scholar

Recent congressional interest in the patent system has in part focused upon the capabilities of the U.S. Patent and Trademark Office (USPTO). Many experts have expressed concern that the USPTO lacks the capacity to process the large number of patent applications that it receives. The USPTO's growing inventory of filed, but unexamined applications could potentially lead to longer delays in the USPTO patent-granting process. 

Under current law, a USPTO examiner automatically reviews each patent application that is filed. Some observers have suggested that the USPTO instead adopt a system of "deferred examination" in order to alleviate its growing backlog. Under this system, the USPTO would not automatically review each application. Applicants would instead be required to submit a specific request for examination. Failure to file such a request within a specified time period—typically ranging from three to five years—would result in the abandonment of the application. 

Deferred examination may hold potential benefits. For example, some inventors who file a patent application may subsequently decide ultimately not to expend further resources in obtaining a patent on that technology due to marketplace developments or other reasons. The USPTO then does not need to review those applications, allowing others to move through the agency more quickly. Deferred examination may be particularly suitable for enterprises that sell products, including pharmaceuticals and medical devices, that may have a long development cycle and be subject to regulatory approval. Proponents of deferred examination observe that numerous foreign patent offices have used this system for many years. They further explain that given increasingly lengthy delays, the USPTO effectively operates under a de facto deferral regime today. 

On the other hand, some experts believe that deferred examination holds negative consequences. Deferred examination may cause many years to pass between the time an application was filed and the date a patent issues. Other firms may not know for some time whether their new products will infringe a patent that resulted from deferred examination. It is also possible that applicants could use the system strategically. They may choose to defer examination, monitor the industry, and then amend their applications in order to obtain patents that cover the successful products of their competitors. Opponents of deferred examination are also skeptical that a significant number of applications will "drop out" of the USPTO if this system were adopted. They also explain that the USPTO currently allows applicants to delay prosecution for up to three years, but that this procedure is rarely used. 

Designers of a deferred examination system may potentially manipulate a number of parameters in an attempt to maximize potential benefits while minimizing perceived disadvantages. Among these parameters are the maximum length of the deferral period, the ability of third parties to request examination of a deferred application, the framing of the system as an "opt-in" or "optout" procedure for applicants, pre-grant publication of deferred applications, the fee structure, the impact of deferred examination upon patent term, and the availability of third party "intervening rights" for patents that issue from deferred applications. Options for implementing deferred examination include both legislation and USPTO rulemaking.


Date of Report: May 27, 2010
Number of Pages: 17
Order Number: R41261
Price: $29.95

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