Why Virtually Every USTPO Regulatory Action Is Economically Significant

If a regulatory action has $100 million per year, it must be economically significant. What is required to generate this much burden? For 12 major patent-related ICRs, USPTO estimates 12.9 million burden-hours just for attorneys, excluding paralegals and staff Using USPTOs default figure of $325/hour, the annual cost of attorney burden-hours $4.2 billion Why the true percentage is much lower: Rounding error alone > 2.38%. USPTOs methodology grossly understates actual burden. USPTO has many bootleg Information Collections. All economic costs resulting from regulatory action are excluded.

What increase in annual attorney costs is sufficient to exceed $100 million? 2.38%

Regulatory Review and the U.S. Patent & Trademark Office

PO Box 319 Mount Vernon, VA 22121 (703) 780-1850

Why Paperwork Burden Is Just the Tip of the Regulatory iceberg

USPTO is a major, under-reviewed source of federal regulatory activity. De minimis perturbations in paperwork burden alone are sufficient to trigger economic significance. Logically, the economic effects of regulatory actions are greater than paperwork burdens. USPTO rarely deems a rule economically significant. ROCIS reports 0 major rules submitted under EO 12291 (12.5 years) and 2 economically significant rules submitted under EO 12866 (17 years).1 Despite clear economic significance, USPTO apparently has never performed an RIA. USPTO now has a chief economist, but his portfolio does not include providing analytical support for rule making. USPTO imposes much of its regulatory burden via guidance. The main repository of guidance is the Manual on Patent Examining Practice (MPEP). The MPEP uses prohibited directive language (e.g., shall, must, require) tens of thousands of times. USPTO imposes additional regulatory burden via memoranda to the examining corps. Examples include guidance on obviousness (i.e., KSR v. Teleflex), computer-related and business method patents (i.e., In re Bilski), and restriction practice (Love/Bahr Memoranda). USPTO routinely denies the public a meaningful opportunity to comment on guidance. Typically there is no public comment period, and guidance is made effective on the date of publication (e.g., KSR, Bilski, 2010 Bahr Memorandum). Some guidance is not publicly disclosed (e.g., 2007 Love Memorandum). USPTO submitted for review 9.9 draft rules/year under EO 12291, but only 3.9 draft rules/year under EO 12866. Inference: USPTO deems most of its rulemaking nonsignificant, and thus exempt from OMB review. This includes regulatory actions subsequently shown to be economically significant (e.g., 2007 Markush Practice NPRM, 2007 BPAI Appeals NPRM, 2008 BPAI Appeals final). Revocation of EO 13422 denies OMB ability to formally review guidance.

Rule making constitutes a small fraction of USPTO regulatory burden.

Breadth of OMB oversight of USPTO rulemaking has measurably declined.

ROCIS uses the definition of major from 5 USC 801, not the definition in EO 12291.