How to Use Patent Pendency in Patent Research and Patent Evaluation

People often ask me what is the deal with patent pendency as a “value indicator.” How can a long pendency be important or significant, especially since most patent professionals know that a long patent prosecution time (pendency) often leads to narrower claims and subsequently narrower patents?

The answer may surprise you. In this short article, I explain the intuition behind the logic. I then back it up with some real data. Finally, I give you an example of the patent with the longest pendency granted so far in 2015. I think you’ll find that the patent is exceptionally valuable.

 

What is Pendency?

Pendency is the amount of time (measured in days) between the file date and the grant/issue date of a patent. It is the number of days the patent was in prosecution or being examined by the patent office before it was granted.

 

Patent lifecycle chart showing all milestones in the life of a typical patent.  The Pendency or "Pendency Gap" is the number of days between the file date and the grant date of a patent.

Patent lifecycle chart showing all milestones in the life of a typical patent. The Pendency or “Pendency Gap” is the number of days between the file date and the grant date of a patent.

 

How Pendency Works in AcclaimIP

Each week AcclaimIP increments the pendency field for all non-granted patents by 7 days. By contrast, the pendency column is set on an issued patent’s grant date and no longer moves forward.

AcclaimIP stores patent pendency data for every patent and every application in the Pendency field, which has the field code, ANA_PEND. The Pendency field can be displayed as a sortable column in the Search Result window. The field is a numeric field that you can query using range queries.

For example:

ANA_PEND:[2200 to *]  –>  Finds patents with pendency more than 2200 days.

Average and median pendency has decreased in the past half decade with a current median pendency of about 3.1 years.

Average and median pendency has decreased in the past half decade with a current median pendency of about 3.1 years.

The chart above shows a histogram of patent pendency for all US patents granted in 2014. The red Pareto line shows the percentage of the whole. Notice that about half of all patents are granted by the three-year mark, and then the curve starts to flatten out until just a handful of patents are granted with pendencies longer than 10 years. The median patent pendency in 2014 was just over 1100 days.

Examining the red Pareto line, you’ll notice that only 5% of all patents granted in 2014 had pendencies greater than 7 years.

 

What is the Intuition behind Pendency as a Value Indicator?

Patents with short pendencies tend to be more valuable. Patents get worse as pendency rises, but at some point, patents start getting better as pendency rises to more than about 7 years.

Patents with short pendencies must have had a short pendency for some reason. They could have been fast tracked through the patent office, in which case the assignee had good reason to make the financial investment in the fast track process. Alternatively, they could have gone through on the first pass with no subsequent office actions, which often narrow the claims and devalue the patent. Normal utility patent applications usually don’t receive their first office action until about 18 months after they are filed, or about 550 days. You can consider a short pendency to be from 2 to about 3 years depending on the Art Unit.

 

This slingshot bouncer patent for a trampoline had a short pendency, not because of its value, but because of its novelty and ease-of-examination.

This slingshot bouncer patent for a trampoline had a short pendency, not because of its value, but because of its novelty and ease-of-examination.

I am not saying that all patents with short pendencies are valuable. Consider for example, the “Slingshot bouncer” described in US8747240 B2. This patent has a pendency of only 634 days probably because it was easy to examine and certainly novel, not because it is extraordinarily valuable.

But important patents are often easy to examine as well, and may cruise through the patent office because of their level of novelty. Consider patent US8455908 B2 “Light emitting devices.” I am not a subject matter expert on LEDs, but this invention seems to be a significant step forward in the area of improved brightness of LEDs. The ‘908 patent has a very short pendency of only 529 days–less than half the median pendency!

 

As Pendency Goes Up, Patent Quality Goes Down (to a point)

If office actions are required during patent prosecution, there is generally some question about the patent’s novelty, or patentability. More office actions often result in a narrower patent, a less valuable patent, and one in a crowded technology. This conjecture is probably not too controversial for most patent agents and attorneys since they experience this everyday.

But look at the chart below. Using the Length of Claim 1 as a measure of a patent’s quality, you can see that after about the 7-year mark, the number of words in the claim starts trending back down!

Patents tend to have longer claims and pendency rises, but after about 7 years, the trend reverses!

Patents tend to have longer claims and pendency rises, but after about 7 years, the trend reverses!

What do you think is going on here? I think it varies, but we do know a couple things.

First the level of investment certainly goes up. An applicant willing to continue to fight for the patent after seven years has something major at stake, and he or she is willing to continue to invest in the patent prosecution.  For lesser patents, most rational people would have given up.

Also, interference proceedings take time to resolve.  Generally patents in interference are important enough to fight over.  You may have your own theory why this is the case, but we do know two things.

  1. After 7 years, patents contain fewer and fewer words in their first independent claims.
  2. Extremely long pendencies (10+ years) reflect a high percentage of tier 1 patents.
Sorting by the patent pendency column lets you quickly view the patents with very long or very sort pendencies.

Sorting by the patent pendency column lets you quickly view the patents with very long or very sort pendencies.

An Extreme Example of a Patent with a Long Pendency

Maybe the most interesting patent published so far this year is the patent with the longest pendency of all. US8926966 B1 “Cloned glutamic acid decarboxylase” is a patent owned by the University of California covering the GAD enzyme to treat autoimmune disorders, more practically Type 1 diabetes.

It took 19.6 years to grant, and the file wrapper contains 115 documents where 40 to 50 is more typical. What’s even more interesting is that this patent was filed pre-TRIPS which means it is valid for 17 years after its grant date. Filed in 1995 but valid until 2033! It is the most recently published patent that one could consider a true submarine patent!

 

How to Use Pendency in Your Patent Research

As with all patent value indicators, pendency is not black and white, it can only be stated as true in the aggregate. A statement like, “Patents with extremely long pendencies are more likely to be breakthrough inventions” is true across all patents, but any one patent with a long or short pendency may be terrible.

It may be helpful to use the pendency value as a substitute for the complexity of the patent’s prosecution history.  Pendency can help you to find exceptional patents with very simple prosecution histories or very complex ones.

Use pendency as a value indicator just like you would any others. I always make sure that I sort my search result by pendency to see if there are any outliers. I pay attention to them and make sure they are not something special. I do this for all the value indicators such as family size, citations, length of claim one, and RVI.  I don’t ever want to miss the patents with exceptional data points in my analysis.

 

TTFN

Matt Troyer

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