Source: http://acet-usa.org/the-ptos-cover-up-of-the-secret-saws-program/
Timestamp: 2019-04-24 10:05:04+00:00

Document:
The U.S. Patent and Trademark Office (“USPTO”) has attempted to cover-up the function and true purpose of its Sensitive Applications Warning System (“SAWS”), a “deep state” program that has attracted substantial interest since it came to light in late 2014. SAWS has recently been a subject of 31 FOIA requests and PTO’s responses and replies to appeals on these requests. This article exposes the detailed workings of the SAWS and shows that the USPTO’s narratives that the SAWS is a patent quality assurance program is fiction; it shows that instead, the SAWS is an agency-wide program that even reaches the Board of Appeals, that allows USPTO officials to secretly exercise powers with which they were never vested by law, enabling them to choose on a whim winners and losers at the USPTO.
In 1994, the USPTO established, and since then secretly operated, the Sensitive Applications Warning System (“SAWS”) for designating (“flagging”) applications it deemed “sensitive,” to “apprise various areas of the USPTO of the prosecution of patent applications that include sensitive subject matter.” (ECF No. 11-4, Huntington Decl., Exhibit 2-3 at B31). The stated purpose of the program is “to help USPTO personnel in the Office of the Commissioner for Patents and the Office of Public Relations interact with the press about applications that may generate a high level of publicity.” (Id. at B32). The operation of the SAWS program was set forth in “Management Guidelines” – a directive issued to all Patent Examining Group Directors from the Deputy Commissioner for Patent Operations (“Directive”). (Id. at B72-76). The Directive prescribed flagging under SAWS patent applications “that, if issued, would potentially generate high publicity or would potentially have a strong impact in the patent community.” (Id. at B73, emphasis added). Designating applications as SAWS applications is based on extra-statutory criteria that have no bearing on patentability including, for example, applications “which have old effective filing dates (pre 6/8/1995, i.e. pre-GATT) and claims of broad scope (submarines),” or applications “which have objectionable or derogatory subject matter in the specification and/or drawing(s).” (Id. at B74). Each examining Technology Center (“TC”) establishes a list of “both general Corps‑wide SAWS criteria as well as Technology Center-specific SAWS criteria” as bases for flagging applications under the SAWS. (Id. at 72).
Examiners recommend flagging specific applications under the SAWS, but it is Supervisory Patent Examiners (“SPE”s) (who do not themselves examine applications) that “are responsible for determining which applications proceed through the SAWS program.” (Id. at B73, emphasis added). The bases for the SPE approval and notification alert to flag the application as SAWS is sent in “a short email … including a short explanation of why.” (Id. at B81).
The USPTO for decades kept the SAWS program secret. It also instructed that the application “file shall not indicate it has been identified as a SAWS application” and that the “Office shall not notify Applicant or any other party that any particular application has been identified as a SAWS application.” (Id. at B44, emphasis in original).
“Flagging an identified SAWS application [ensures] that the case does not issue until the flag has been removed.” (Id. at B74). Because an application flagged under SAWS cannot be issued, the USPTO also conceals from the applicant any examiner determination that it is allowable and the SAWS flag “will prevent a Notice of Allowance in the application from being mailed.” (Id. at B79).
Each TC establishes a TC SAWS Panel to further screen SAWS applications submitted to the panel and verify their designation as SAWS applications. (Id. at B75). Under the TC SAWS guidance, “If a case is to be reported as SAWS, the following information should be included in an email report that should be forwarded to the TC SAWS Panel” including identifying elements of the application, a “short summary of technology,” and an “Impact Statement.” (Id. at B100-101). “The Impact Statement can be prepared by performing an Internet search … of the invention, the inventors, and owner or assignee. Such information may include, but is not limited to financially important subject matter (Is the stock of the invention’s owner publicly traded? Have there been press releases about the invention?), politically charged subject matter, and subject matter which may raise legal or ethical objections.” (Id. at B100).
The Directive and the TC SAWS guidance prescribe only two mechanisms for removing the SAWS flag from an application once it has been SAWS-flagged by the SPE: (a) through the TC SAWS Panel “screening mechanism to remove non-SAWS applications from their SAWS designation” based solely on “whether the application contains SAWS subject matter,” (ECF No. 11-4, Huntington Decl., Exhibit 2-3 at B75), or if (b) “the sensitive nature of the application has changed (i.e., Applicants elect non-sensitive subject matter, Applicants amend the claims to exclude sensitive subject matter)” (Id. at B81). Flagging an application under SAWS triggers no quality assurance process. The SAWS procedures neither prescribe nor identify any patentability quality assurance step, certainly not one that, if taken or completed, would result in the removal of the SAWS flag.
Rather, any procedure for escalation of review to higher level officials at the USPTO was merely informational: the Directive explains that verified “SAWS cases will be brought to the attention of the TC Group Director. The Group Director will bring them to the attention of the Deputy Commissioner for Patent Operations and the Deputy Commissioner for Patent Examination Policy.” (Id. at B75, emphasis added). Similarly, the TC SAWS guidance states: “[a]pplications identified and verified as containing SAWS material are reported to the Group Directors for transmittal to the Office of the Deputy Commissioner.” (Id. at B99, emphasis added). Neither the Directive nor the TC SAWS guidance provide for, or requires, any decision to be made by those higher USPTO officials (on allowance, patent issuance or otherwise) with respect to a SAWS-flagged application or related Impact Statement. Nor do the procedures provide that these officials find a basis for further patentability review.
The USPTO had no documented or affirmative procedures to remove the flag from verified SAWS applications within any time period after completion of its stated purpose – after “senior USPTO officials” have been “warned.” It thus becomes clear that as internally constructed, the SAWS program procedures were designed to trap by default such applications in USPTO’s purgatory indefinitely.
Further, the record reflected no statutory, regulatory, or informal authority or framework for any PTO decision on an application that is informed by the application’s SAWS status. This is because no decision or action on an application can be taken pursuant to secret annotations or designations not shared in writing with the patent applicant. 37 C.F.R. § 1.2 (“The action of the [USPTO] will be based exclusively on the written record in the Office.”) (emphasis added). According to the USPTO’s own explanation, the SAWS designation, as the acronym suggests, is merely an internal “warning,” “designed as an information gathering system to apprise various areas of the USPTO of the prosecution of patent applications that include sensitive subject matter.” (ECF No. 11-4, Huntington Decl., Exhibit 2-3 at B-31 (emphasis added)). The SAWS designation is simply designed to “help USPTO personnel in the Office of the Commissioner for Patents and the Office of Public Relations interact with the press about applications that may generate a high level of publicity.” (Id. at B-32, emphasis added). Examination and allowance of applications are totally independent of SAWS designation, as the SAWS Report is normally prepared at the time of allowance. (ECF No. 11-4, Huntington Decl., Exhibit 2-3 at B-83). “The intent is to minimize any direct impact on the examination process.” (Id., at B-92). In conclusion, the SAWS program had nothing to do with examination of an application on its patentability merits.
Please explain the people involved (by position; name not necessary), the factors considered, and the procedures used to make a determination that a patent application or issued patent should be removed from SAWS?
An application flagged as a SAWS application can be issued. A SAWS designation does not prohibit the allowance of an application, but instead brings to the agency’s attention applications of special interest, those that would generate high publicity or have a strong impact on the patent community. If during prosecution the sensitive nature of the application has changed, the SAWS POC can remove the application from the SAWS database.
Except for the counterfactual circumstance where “the sensitive nature of the application has changed,” the USPTO identified no “people involved,” “factors considered,” nor any “procedures used to make a determination” to remove the flag from a verified SAWS application because no such procedures existed. The USPTO’s answer that “an application flagged as a SAWS application can be issued” is false per se. In attempting to support this false statement, the USPTO’s sophistry is that “SAWS designation does not prohibit the allowance of an application.” But under the SAWS procedures, allowance of an application does not remove its SAWS flag and the flag prevents its issuance.
For example, Gilbert Hyatt’s `263 pre-GATT application that the USPTO admitted was flagged under SAWS is a case in point. By 2003, this SAWS application had several allowed claims including those for which the Appeal Board had reversed the examiner’s rejections. But the USPTO took no action on the merit since then (15 years) despite Mr. Hyatt’s repeated petitions for action. See Hyatt’s Mandamus Complaint, (pp. 62-68). Two months after Mr. Hyatt sued the USPTO in a mandamus action to compel the issuance of the allowed claims in the `263 application, the PTO finally acted. But instead of issuing those claims, the USPTO reopened prosecution with an office action starting examination all over again. See Hyatt’s Opposition to USPTO’s Motion to Dismiss (p. 10).
Even paying the issue fees for allowed SAWS applications does not rescue them from PTO’s purgatory. For example, four of Gilbert Hyatt’s pre-GATT applications that were allowed and for which he paid the issue fees were withdrawn from issuance while at the USPTO’s Printing Division. For years after the withdrawal, the USPTO had not acted on them despite repeated petitions by Mr. Hyatt to do so. These applications are still pending. See Hyatt’s Mandamus Complaint, (pp. 14-16).
Had there actually been mechanisms or “procedures used to make a determination” to remove the SAWS flag from verified SAWS applications, the USPTO had a golden opportunity to identify them in answering Senator Moran’s direct question. Alternatively, the USPTO could have explained that even though the SAWS procedures did not provide for removal of the flag from verified SAWS applications, a senior USPTO official could exercise some unspecified discretion to remove the flag from these applications after they were “reported to the Group Directors for transmittal to the Office of the Deputy Commissioner.” But to do so would have required the USPTO to “come clean,” identify the “people involved,” and admit that there were no “factors considered” except those at the whim of such “people involved.” The USPTO opted for neither alternative and instead evaded the question by materially misleading the Senator with a false answer.
In covering up the actual function of the SAWS program, the USPTO could not explain why the Board of Appeals received the SAWS information pertaining to applications on appeal. It could not explain why such SAWS information was relevant to the Board in considering examiner patentability rejections, so the USPTO decided to simply deny that such SAWS information is considered at the Board – a denial that belies the evidence produced by the USPTO itself.
In response to a congressional committee’s direct question whether Board judges receive SAWS information, then Acting Director Michelle Lee provided a written answer on January 9, 2015 that materially misled Congress. She contended that there was “no formal or official process to make [Board] judges aware that patent applications involved in appeals to which they are assigned are subject to the [SAWS].” Of course, the whole secret SAWS program was never “formal” nor “official,” but the SAWS information was “informally” passed to the Board nonetheless, as evidenced by PTO’s own records discussed in Section 1.
USPTO’s material misrepresentation of the Board’s use of the SAWS information was not limited to Congress. The USPTO attempted to mislead a federal court as well. The USPTO’s declarant testified under oath in FOIA court proceedings that the Board’s Chief Judges “were not reasonably likely to have records responsive to [Huntington’s] FOIA requests,” and therefore their records and computers were not searched for SAWS-related material. (ECF No. 18-1, Suppl. Heaton Decl., ¶ 4). The judge noted, however, that the USPTO’s evidence is “at odds with earlier emails submitted by Huntington that suggest that SAWS reports were in fact sent to the Board … and that the Board was to be alerted when an appeal involved a SAWS application.” (Memorandum Opinion, ECF Doc.-20, at 20 (January 18, 2017)).
Under the patent laws, the Director is charged with general management and supervision of the Office and of the issuance of patents, as well as the management of examination of patent applications. To this end, the USPTO has put in place quality controls to ensure that patents are properly issued or properly denied. The SAWS program is one such quality control effort.
The [SAWS] program is one of many practical, internal efforts that the USPTO has in place to ensure that only the highest quality patents are issued by the Agency. By bringing an additional quality assurance check to a very small number of pending patent applications, the USPTO helps ensure that those applications that could potentially be of special interest, are properly issued or properly denied. An application flagged for such a quality assurance check undergoes the same types of examination procedures as any other patent application, and is held to the same substantive patentability standards.” Id. at 1139 (emphasis added).
The USPTO intends to describe the SAWS program in a forthcoming Manual of Patent Examining Procedure [“MPEP”] release. And, to help ensure that this quality assurance program continues to operate well, the Agency is currently reviewing the program and will work to ensure that the program does not subject applications to unnecessary delays. Id. at 1131 (emphasis added).
After the USPTO had concealed the program from the public for decades and denied its use for withholding issuance of allowable applications for years, the USPTO now invoked the Bart Simpson defense: “I didn’t do it. Nobody saw me do it. I promise not to do it again.” The promise for above-board openness purporting SAWS to be “this quality assurance program,” was a transparent canard; none of the SAWS procedures involve any patentability quality control steps and, in any event, no description of the SAWS program ever published in the MPEP as promised. Acting Director Lee’s statement that an application flagged under SAWS is “flagged for such a quality assurance check” is simply made-up fiction – it is flagged for a totally different purpose and effect.
The USPTO’s statements in federal court also pushed the fictional “quality assurance” narrative. The USPTO’s declarant in a FOIA court case testified that inclusion in the SAWS program could result in the application receiving an internal quality assurance check. (ECF No. 14-4, Heaton Decl., ¶22, ECF No. 18-1, Supp. Heaton Decl.,¶¶ 8, 9.) But that same USPTO’s declarant testified that a SAWS flag has nothing to do with an examiner’s patentability decision on issuance: “A SAWS application underwent the same type of examination procedure as any other patent applications and was held to the same substantive patentability standards.” (ECF No. 18-1, Supp. Heaton Decl.,¶9). And the SAWS procedures neither prescribe nor identify any additional patentability quality assurance review that is triggered when a SAWS application is flagged or allowed.
The [SAWS] was developed in 1994 to allow patent examiners to alert leadership when a patent might issue on a sensitive matter. Only a small number of applications examined over the last twenty years were ever referred to the SAWS program. And today, unlike when the SAWS program was created, most applications are published eighteen months after submission, exposing them to public scrutiny and the potential for third-party submissions of prior art. Upon careful consideration, the USPTO has concluded that the SAWS program has only been marginally utilized and provides minimal benefit.
As the USPTO notified the public in January, the Agency has conducted a review of the SAWS program. After completing that review, the USPTO has decided to retire this program. Any applications currently in this program will now proceed through prosecution absent any additional SAWS-related processing.
The Agency will seek public input as part of its ongoing Enhanced Patent Quality Initiative on whether there were any quality-enhancing features of the SAWs program that are not already captured through the typical examination and prosecution process.
Here, the USPTO carries its fictional “quality assurance” narrative for SAWS to levels that are facially so absurd as to insult the public’s intelligence. First, the conditions under which “most applications are published eighteen months after submission, exposing them to public scrutiny” long existed since the publication provision of the American Inventors Protection Act of 1999 (AIPA) came into effect. The PTO’s explanation that this is a reason to retire the program now is a non-sequitur. This stated reason to retire the SAWS program existed for 15 years – why then did the USPTO keep the SWAS program during all these years?
The identification of SAWS applications was made “throughout the Patent Corps,” (ECF No. 11-4, Huntington Decl., Exhibit 2-3 at B-74) in a process that “is continual in nature and 100% of applications within the Technology Center are reviewed” for potential SAWS designation. Id. at B-100. Yet, this all-encompassing scope of review had none of the attributes of a patent quality assurance process.
Under the Inspector General Act of 1978 (as amended) the USPTO was to provide the IG with “access to all records, reports, audits, reviews, documents, papers, recommendations, or other material available … which relate to programs and operations” of the USPTO subject to the IG’s audit. 5 U.S.C. App. § 6(a)(1). The IG audit report states that the USPTO provided access to its operating procedures, the quality assurance policies, procedures, and practices of TCs and the Office of Patent Quality Assurance (OPQA). It also facilitated interviews of USPTO officials and representatives from the Patent Office Professional Association (the patent examiners’ union). See USPTO Patent Quality Assurance Process, Final Report No. OIG-II-006-I, p.2 (November 5, 2010).
The USPTO was therefore obligated under the IG Act of 1978 to disclose the patent quality assurance features of the SAWS program to the IG during the audit if Acting Director Lee’s statements were correct – if the “SAWS program is one such quality control effort.” However, the IG audit did not include the SAWS program among the quality control processes. This omission was not only in the IG audit report of 2010 referred to above; none of the other quality assurance audits conducted by the IG during the life of the SAWS program ever mentioned the SAWS. See Patent and Trademark Office – Patent Quality Controls Are Inadequate, Audit Report No. PTD-9977-7-0001 (September 1997); Status of USPTO Initiatives to Improve Patent Timeliness and Quality, Final Report No. OIG-11-032-I (September 29, 2011).
Nor was the SAWS mentioned or reviewed by a panel of academic experts who reviewed the quality assurance programs at the USPTO. A detailed 11-page description of several quality assurance procedures at the USPTO makes no mention of the SAWS. See National Academy of Public Administration, U.S. Patent and Trademark Office: Transforming to Meet the Challenges of the 21st Century, (January 2006), pp. 61-71.
The USPTO’s own descriptions of its patent quality assurance processes also fail to make any reference to the SAWS program. Its presentation on the Patent Quality Assurance Program (2006) contains much detail but nothing on SAWS. The USPTO’s detailed descriptions, including quality assurance process flow chart, provided as background for contractors for bidding on an expert study of its patent quality assurance programs makes no mention of the SAWS program. See USPTO Request for Quote (RFQ), Patents Quality Management Program Assessment, DOC52PAPT0901007, (2009).
The inescapable conclusion is that, contrary to the USPTO’s narrative, the SAWS program had nothing to do with quality assurance. Had it been such a program, it would have been disclosed and reviewed as such. A PTO violation of the IG Act of 1978 by concealing from the audit the “quality assurance features” of the SAWS program appears far less plausible than the simple alternative explanation that the SAWS program had no such features to be disclosed.
Remind me the USPTO policy regarding SAWS cases. If Applicant calls me (which they will) asking me regarding the status of an Application that I have allowed but is under SAWS flag, what should I tell them? That the case is under SAWS review and for an update they should contact Peter Paras [the TC SAWS Specialist]?
NO …. you do not say anything about it being a SAWS case. Just tell them that it has been submitted by you for [sic] and appears to be going through some additional review which happens every now and again. I would have them contact either Peter or myself.
Here, the SPE’s choice of words is instructive, given that the examiner did not identify the SAWS application involved. Without having that detail, the SPE nevertheless tells the examiner to misrepresent the facts and to tell the applicant that the application “appears to be going through some additional review.” While the TC SAWS Specialist is involved with the “SAWS review,” it is not a patentability quality review.
To be sure, allowed SAWS applications may have been subject to “additional review” after their return to examiners because they could not be issued. But that “additional review” was not because someone found a specific identifiable allowance error. Rather, it was mere pretext for recycling the SAWS application in USPTO’s purgatory. Thus, the “quality” process for SAWS applications was turned on its head: from the normal quality assurance process wherein issuance is denied because an error is found, to one in which a search for an “error” is initiated because issuance is denied in the first place.
We are done with the case, it is ready for issue complete with that most ancient form of allowance a blue slip.… I have been waiting for a resolution concerning whether it is cleared for issue by “the powers to be” who have been holding up the issue for the past several years.…If you know anything more please let me know I’d love to get the thing out of the office.
The response of the SPE was redacted due to a protective order at USPTO’s request but it referred to the Office of the Deputy Commissioner for Patent Examination Policy – by inference, the “powers to be.” But the USPTO did not act on the allowance decision and did not issue the application. Instead, shortly thereafter, December 2002, the USPTO reopened prosecution in this application and restarted examination all over again. See Hyatt’s Mandamus Complaint (p. 17).
The sequence of events in this `771 application shows that it underwent no “quality assurance check” any time during the “past several years” after it had been allowed. During that time it was “ready for issue complete with that most ancient form of allowance a blue slip.” That “most ancient form of allowance” indicates long delay with no action – not a “quality check.” Instead, only when internal questions arose as to why it is not being issued “several years” after it had been allowed, the response was to continue to “hold up the issue,” but as a pretext, prosecution was reopened for “additional review.” Now, 16 years later, this SAWS application is still pending.
The USPTO proclaimed the “retirement” of the SAWS program in a March 2, 2015 announcement on its website. It provided no details on whether or how applications will be “unflagged,” nor what “retirement” means except to say: “Any applications currently in this program will now proceed through prosecution absent any additional SAWS-related processing.” But applications that have been verified as SAWS, receive no “additional SAWS-related processing” – no “processing” is necessary for keeping an application in the SAWS status. The record since March 2015 on every application known to have been flagged under SAWS shows no discernable difference in their treatment. None of the allowances previously entered in these applications have been restored and none have issued.
For example, the USPTO has sat on Gilbert Hyatt’s `263 application with no action since 2003. Nothing happened after the “retirement” of SAWS in March 2015 – the USPTO continued to sit on it for more than another 3 years until two months after Mr. Hyatt sued the USPTO in a mandamus action to compel the issuance of the allowed claims. But instead of issuing those claims, the USPTO reopened prosecution with an office action starting examination all over again. See Hyatt’s Opposition to USPTO’s Motion to Dismiss (p. 10).
Similar fate befell the other pending applications of Gilbert Hyatt, wherein the `771 application discussed above that was “on hold” never got “off hold” and is still pending notwithstanding the “retirement” of the SAWS. And despite the “retirement” of the SAWS program, the USPTO continued to delay action on Mr. Hyatt’s `450 application filed in 1996 after the GATT deadline for patent term law change. Because such post-GATT applications have a patent term of 20 years from filing regardless of when they issue, the USPTO ran the clock out on this application by providing no action on the merits since 2002. By 2016, the application had no patent term left even if it were to issue. See Hyatt’s Mandamus Complaint (pp. 68-71).
As described in further detail in companion ACET post, Corliss Burandt did not fare any better on his pre-GATT application. After withdrawing the allowance of his application in 2011 when the examiner admitted it was flagged under SAWS, the PTO did not restore the allowance after the “retirement” of the SAWS program. Instead, the PTO issued a final rejection, accusing Mr. Burandt of prosecuting a “submarine” application. He appealed. The examiner’s answer had the hallmarks of SAWS recycling, wherein the examiner played a “shell game” by withdrawing rejections entered in prosecution and raising new grounds of rejection. After further prosecution, a petition, and a decision on petition, the application is still pending.
The harm of the SAWS program is irreparable even if no flagging occurs today. Applications that were previously allowed but withheld from issue due to a SAWS flag when they were supposed to issue have been materially prejudiced. They were delayed in USPTO purgatory for years and still stand rejected today under new patent law. The delay for years and decades is highly prejudicial to such old applications because the USPTO now applies new patent law to reject applications that were written under practices and patent law environments of years past.
A patent specification drafted decades ago to support a claim under 35 U.S.C. § 112 may be insufficient to support such a claim today. The Federal Circuit has explained that a specification cannot always support expansive claim language and satisfy the requirements of 35 U.S.C. § 112 “merely by clearly describing one embodiment of the thing claimed.” LizardTech v. Earth Resource Mapping, Inc., 424 F.3d 1336, 1346, (Fed. Cir. 2005). In LizardTech, claims to a generic method of particular image processing were held invalid under 35 U.S.C. § 112, first paragraph, because the specification taught only one particular method for doing so, the court found no evidence that the specification contemplated a more generic method. As a result, claims that can be obtained today may be narrower than those first allowed in a SAWS application that never issued.
Therefore, nothing in the USPTO’s purported “retirement” of the SAWS program can salvage the applications once flagged under SAWS from peril. Many applicants’ patent rights have been irreversibly impaired and nothing can remove the SAWS indelible “deep-state” scar on our patent system.
In conclusion, the SAWS is a program for withholding issuance of patentable claims and is not a “quality assurance” program. While the program may guarantee that no issuance errors occur in SAWS applications, it is only because none are issued. The USPTO created a “quality assurance” cover-up story to avoid accountability for this ultra virus program. The program allows USPTO officials to secretly exercise powers with which they were never vested by law to deny patents based on non-statutory criteria the USPTO made up through self-help. The SAWS program thus allowed USPTO officials to choose winners and losers on a whim and has disproportionately targeted individual and small entity inventors.

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