Improving QPIDS

QPIDS is pretty good but it could be much better.  The point of QPIDS, of course, is that sometimes you find an urgent need to file an IDS at a time when, unfortunately, the Issue Fee has already been paid.  Before QPIDS, most applicants facing such a problem were stuck filing (and paying for) an RCE, with all of the drawbacks that come with it.

The concept of QPIDS is that you file (and pay for) two things — an IDS (at $180) and an RCE (typically $1200).  The Examiner then looks to see whether the reference cited in the IDS is not a problem (in which case you get your $1200 back and lose the $180) or presents an SNQ (substantial new question) as to patentability (in which case you lose the $1200 but get a refund of the $180).

The designers of QPIDS came up with a very odd procedure for QPIDS.  With QPIDS, the applicant would pay the $1200 fee up front.  But the applicant would not pay the $180 fee up front.  Instead, the applicant would be required to provide a Deposit Account number with an authorization for the $180 fee to be paid later.  The idea was that the Examiner would figure out whether or not there was an SNQ, and only after this evaluation the USPTO would know whether or not to pull $180 from the Deposit Account.  A clerk would learn of the Examiner’s findings about the SNQ and if there was no SNQ, then supposedly the clerk would only then charge the $180 and would then immediately refund the $1200.

In the early days of QPIDS the USPTO sometimes sort of followed this procedure, by which I mean that USPTO sometimes postponed the charging of the Deposit Account until after the Examiner had determined that there was no SNQ.  The other part of the procedure, refunding the $1200 if there was no SNQ, did not happen consistently.  In our office we ran into dozens of instances where half a year or more would pass and USPTO failed to refund the $1200 despite being obligated to do so.

With this procedure, the applicant was free to pick any method of payment for the $1200 fee.  (We always use a credit card for that fee, as we do for nearly all USPTO fees.)  With this procedure, however, the only permitted way to pay the $180 fee is by means of a Deposit Account.  The reason for this, I guess, is that of the many possible methods of payment at the USPTO, only exactly one method permits authorization-in-advance-for-a-possible-later-charge.  That one method is the Deposit Account.

In the case of our firm, at the time that USPTO announced the new QPIDS program we did not have a deposit account.  We had no need for it.  But to be able to provide QPIDS services to our clients, we were forced to set up and fund a Deposit Account.

It is a pain in the neck setting up and funding a Deposit Account.  If you have a Deposit Account, you are stuck constantly checking its balance.  If it ever happens to drop below a $1000 threshold, USPTO will ding you with a monthly service fee.  Among other things this means you are lending at least $1000 interest-free to the USPTO for months or years at a time.  But because of the present QPIDS procedure (and for no other reason), our firm is stuck maintaining a Deposit Account with all of its drawbacks.

What has happened within the past year, however, is that USPTO has abandoned the fiction that the collection of the $180 fee is somehow contingent upon whether the Examiner did or did not decide that there was an SNQ.  Instead, under present procedure, the USPTO simply collects the $180 up front, shortly after the QPIDS papers are filed.  So from the beginning of the QPIDS process, USPTO is in possession of both fees.  What should happen next (but very often fails to happen at all) is that once the Examiner figures out whether or not there is an SNQ, a USPTO person duly refunds either the $180 fee or the $1200 fee.  Under this new approach, in our office we often must pester the USPTO (sometimes more than once) to get the USPTO to refund whichever fee is supposed to be refunded.

The fact that USPTO often fails to refund either fee for half a year makes really a lot of extra work for our accounting department.  Each time we file a QPIDS, we spend $1380 of the firm’s money on behalf of a client.  Should we then mail a bill to the client, asking the client to pay us $1380 to reimburse us for the government fees?  That sort of doesn’t make sense given that we know perfectly well that (supposedly) eventually USPTO will refund one fee or the other.  But if the USPTO sits on the fees for half a year, and only after being asked (perhaps twice) to refund whichever fee is supposed to get refunded, and if we wait until then to bill the client, then we have lent $1380 interest-free to the client for half a year.  That does not make sense.

So what should USPTO to do improve QPIDS?  Clearly a first thing that USPTO should do is abandon the fiction that the charging of the $180 is somehow contingent upon the Examiner figuring out whether there is an SNQ.  Given that USPTO’s present procedure is to charge the Deposit Account instantly (long before the Examiner figures out whether or not there is an SNQ), USPTO should drop the artificial requirement that the only way to pay the $180 is by means of a Deposit Account.  USPTO should simply permit the filer to pay both fees simultaneously by whichever payment mechanism the filer prefers to use.

Letting the QPIDS filer pay the $180 fee up front would benefit both sides.  It would save the filer from having to set up and maintain a Deposit Account that the filer never wanted to set up in the first place.  And it would save USPTO personnel the labor costs and process flow steps associated with the completely manual present work flow of keying a $180 amount into some system that draws upon a Deposit Account.

A next area of improvement is that USPTO needs to consistently carry out the refund promptly after the Examiner has determined the presence or absence of an SNQ.   It is unacceptable that USPTO sits on the money for half a year or more and then only gives back the money after being asked (perhaps twice) to do so.

A final area of improvement is to make QPIDS available for design patent applications.

What?  QPIDS is not available for design patent applications?

Yes.  At present, QPIDS is not available for design patent applications.  Why?

To make sense of this (to the extent it is possible to make sense of this), we are stuck reviewing how it worked in the old days.  In the old days, an applicant who had used up their two Office Actions and wanted two more Office Actions purchased them by filing a File Wrapper Continuation.  The FWC was a sticker that was applied to the front of a physical paper patent application file and its significance was that the Examiner could see by looking at it that the applicant had paid for two more Office Actions.  The price for an FWC sticker was the same as the price for the filing of a new patent application.

A chief reason why FWCs were so important is that in the old days, drawings were India Ink on Bristol Board and it was very expensive to get new Bristol Board drawings hand-drawn for use in an ordinary continuation.  And the new drawings were, by definition, non-identical to the old drawings since the human hand could not be relied upon to do the exact same movements at two different times.

At some point somebody at the USPTO decided that a new three-letter acronym (more accurately, three-letter initialism) was needed, and the Continued Prosecution Application (CPA) came into existence.  I never understood what the problem was about FWCs for which the CPA was the solution.  But anyway all of us practitioners back then duly switched from one paper form to another paper form.  The old form said “FWC” across the top and the new form said “CPA” across the top but otherwise everything about it was exactly the same.

The understanding was that the FWC or CPA was legally a new patent application and was not the same patent application as its parent.  The new patent application just happened to have the same application number as the application of the parent application.  And the filer enjoyed the luxury of not having to send in a specification or claims or drawings or abstract for this new patent application, because they came directly from the parent in an automatic way.  This saved the cost of having to pay the draftsperson to draw up new Bristol Board drawings with India Ink.

So that situation persisted for many years.  Practitioners were accustomed to it.  Practitioners briefly wondered why the acronym had changed from FWC to CPA and then stopped thinking about it.

Next, somebody at the USPTO decided that there was some sort of problem with CPAs.  Or maybe somebody at USPTO decided that there hadn’t been a new three-letter acronym in a while and a new TLA was needed just to keep everybody on their toes.  But anyway the RCE (Request for Continued Examination) got invented at the USPTO.  And it was announced that as of some date, if you wanted to purchase two more office actions, and if your case happened to be a utility case or a plant case, the way to accomplish this purchase would henceforth be the RCE rather than the CPA.

So for the long-suffering practitioner whose quotidian work was utility patent prosecution, the document employed for this purpose which originally had “FWC” at the top of the page, and that later had “CPA” across the top, now had “RCE” across the top.  Nothing else changed really but there is is, everything stays the same except it says “RCE” across the top.

Well one thing changed.  The legal significance of the RCE differs from the legal significance of the CPA (and the FWC before it), in that the RCE is legally the same application whereas with the CPA (and FWC) the second application is a different application that merely happens to have the same application number as the parent.

This turns out to be important in many ways.  For example if you get a case on the Patent Prosecution Highway (which means it is “special”), and if you then file an RCE, then the case that was “special” before is still special after.  It’s the same patent application the whole time.  In contrast if you file a continuation, it is not automatically “special” just because its parent was “special”.

Back to our QPIDS discussion.  We recall that with QPIDS, you file a sort of “contingent RCE” that comes into being only if the Examiner decides there is an SNQ.

But recall that when the USPTO decided it needed a third new TLA (the RCE), for reasons known only to the USPTO, the USPTO said that the shift from CPA practice to RCE practice would occur only for utility and plant cases, not design.  To this day I am unaware of any really good reason why the shift did not occur for all three kinds of cases.  But the simple fact is USPTO preserved CPA practice in design cases.

Meaning, you can’t file an RCE in a design case.  You could try, but it would not work.  USPTO would refuse to let you purchase two more Office Actions by means of an RCE if your case happens to be a design case.

Meaning, you can’t file a QPIDS in a design case.  If you run into one of these big problems where you find the urgent need to file an IDS in a case where the Issue Fee has already been paid, and if you have the further bad luck that your case happens to be a design case, then you can’t use QPIDS to try to fix the problem.

USPTO ought to improve QPIDS by extending it to design cases.  How to do it?  Should USPTO belatedly change it so that the way to purchase two more Office Actions in a design case is an RCE instead of a CPA?  Or should USPTO simply revise QPIDS so that for design cases the contingently filed document is a CPA document instead of an RCE document?  I don’t know whether one approach or the other would be better.

In summary:

1. USPTO should permit the QPIDS filer to pay both fees up front using the payment mechanism of the filer’s choice.
2. USPTO should promptly refund the appropriate fee rather than sitting on the money for six months and forcing the filer to have to ask for the refund.
3. USPTO should extend QPIDS to make it usable in design cases.

Please share your thoughts in a comment to this blog article.