Transaction Related Savings

This was a savings program implemented by a bank in an effort to increase the amount of transactions customers were making with their debit cards.  The incentive was that for every transaction completed with the card one dollar would be transferred from the customer's checking account to their savings account.  Although a one dollar transfer does not sound significant, some customers do not keep a substantial amount of funds in their checking.  The bank's mental model was that they could assist their customers in saving money (through the automated transfer) and use this to promote an increase in their amount of debit transactions.  The unintended consequence here was that as the amount of transactions was increasing so too was the amount of funds being transferred and this in turn led to overdraft fees. 

The mental model of the bank was flawed in the respect that it seemed to be using a narrow model boundary and was not cognizant about how this policy may interact with others in place.  It was concerned with the short-term increase in transactions (their goal) and failed to consider the possible adverse effects of the diminishing checking balance (the time delay).  Also, the interaction between this incentive program and their overdraft policy was not considered or was perhaps not given ample attention.  As the system played out over time the bank ended up actually deterring customers from making debit transactions for fear of a resulting penalty.

USPTO Patent Application Pendency

For approximately 15 years patent application pendency (the time it takes for the USPTO to process a patent application from application date to approval/denial status) at the USPTO has been increasing.  The economic disasters over the last 10 years along with other factors have been the cause of the real exponential growth in the backlog and turnaround time.  The main variable to consider when determining the evolution of this problem is the budgetary issue/lack of funding at the USPTO.  Fees imposed on patent applicants make up approximately 70 percent of the Patent Office's budget.  Along with the economical stresses on potential applicants, there has also been a significant decrease in the patent allowance percentage (those applications that are actually approved and patented) in order to increase patent quality.  These factors have applicants discouraged to invest in a patent application and in turn leads to less fees collected by the PTO for funding.  All that being said, this has led to limited hiring of patent examiners and as a result the application pendency time has increased and created a reinforcing system.  The amount of backlog has overwhelmed the limited workforce.  There are various elements, both hard and soft, included in this complex system.  The hard elements, for example, would include the amount of fees collected, the patent allowance percentage, the amount of incoming applications, the number of examiners, the backlog volume, and the amount overtime worked by examiners.  What makes this system so complex is the number of soft factors.  Some of the most significant would include the ethical reliability of management, that is, the validity of the data being presented, the future attrition of the workforce, and finally the unknown future economic trends.

Note:  The factual data included in this blog regarding the USPTO was taken from information presented on the website http://www.ipwatchdog.com/ .