Patent Reform, Still Pending

It has taken tentative steps in the right direction, with new ambitions to streamline the process and reduce backlog. But until legislation liberates the patent office, its mismanagement continues to amount to a tax on small businesses, say critics.

The Patent Office is in need of reform, say a growing choir of voices—and to fail to do so amounts to a tax on innovation. Currently, the United States Patent and Trademark Office (USPTO) suffers from a severe backlog—1.2 million applications stuck in limbo as recently as May, according to Inc. It takes about three years for patents to be reviewed for approval.

We are used to agencies being underfunded and backlogged. But in the case of the Patent Office, the money really should be there. The Patent Office in fact "generates a lot of money" on its own, according to Bijal Vakil, an intellectual property lawyer with the firm White & Case in its Palo Alto office. Getting and maintaining a patent costs a good deal of money, upwards of a thousand dollars a year, depending on which fees happen to apply in your case. "It's like going to a sandwich shop ... there's a huge a la carte menu"—a very expensive one—says Vakil. (Consider this sad, strange story via the blog Patently-O, about a "pauper" who ponied up $1,030 to protect a patent, only to learn a year later that he'd underpaid by $10 and left it unprotected.)

Where does the money go? According to White & Case's research based on Senate reports, over $700 million in revenue has been diverted from the patent office since 1991. Rep. Sensenbrenner (R, Wisconsin), known to be bullish on patents, recently testified that more than $160 million had been siphoned off from the USPTO this year alone.

The Patent Office is taking tentative steps in the right direction. During Fast Company's recent sit-down with Secretary of Commerce Gary Locke (pictured above), Locke said the Patent Office was "making great progress streamlining and reducing the time it takes to get a patent ... We're on a mission to get it down to 12 months." He highlighted a recent pilot program that fast-tracks 3,000 green tech patents, some of which have been turned around inside of six months.

"We absolutely applaud the Patent Office's direction," says Vakil. However, he notes that already half of the 3,000 slots available for fast-tracking have already been taken up. (Other law practices, though, have seen that as a slower-than-expected rate.) "We would submit it might make sense to make this a longer-term program, five or ten years, with no cap," says Vakil.

In the end, any lasting solution will need to be legislative. Back in May, Locke wrote an opinion piece in Politico about the need for patent reform legislation, calling innovation the "lifeblood of the U.S. economy." The legislation would grant greater authority over its fees to the Patent Office, and help cut down on costly litigation. Of course, attempts to reform the patent system before have stalled, though here's hoping 2011 will have brighter news. For the time being though, real patent reform—like so many patents—is pending.

[Image: Flickr user wilbanks]

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3 Comments

  • patent litigation

    I would be satisfied at this point if Congress could get its act together enough to pass a patent reform bill whose sole provision was to end fee diversion; the other so-called "reforms" the legislature has presented so far seem like no more than window-dressing in comparison.

  • staff staffer

    'over $700 million in revenue has been diverted from the patent office since 1991'

    This is misappropriation if not theft!

    Just because they call it patent “reform” doesn’t mean it is. Patent reform is a fraud on America.
    Please see http://truereform.piausa.org/ for a different/opposing view on patent reform.

  • Kyle Stebbins

    Might want to watch spelling in that first line. "Streamline" not "steamline"?