Commentary--A system that supports a critical element of our nation's economic competitiveness--the patent system--is at risk.
The United States patent approval system is underfunded and overburdened. That means nothing but trouble for American technology-based companies, entrepreneurs and the American economy.
Our resource-starved United States Patent and Trademark Office (USPTO) is a particular problem for the nation's computing and advanced technology industry. Absent the assurance and incentives provided by a strong patent, few companies will invest in next-generation technologies. And absent investment, there will be less innovation and job creation in the U.S. tech sector.
The recently ended lame-duck session of Congress began to address this issue by doing the easy thing: It passed a bill (H.R. 1561) to raise the fees inventors pay to obtain patents, fees that in turn support the USPTO. But Congress did not do the more difficult thing to address the problem, which would be to stop the diversion of funds from the USPTO to unrelated government programs.
The USPTO clearly has not had the resources to do its job. According to its own executives, if current USPTO resource levels are not improved, "more than 140,000 patents will not issue over the next five years." The time it takes to obtain a patent approval--a period that should be about 18 months--is now approaching four years for some technologies and could double to eight years by 2008. At recent budget levels, the backlog of initial reviews by qualified patent examiners could grow from the current level of 475,000 to 1 million.
In sum, the system is overwhelmed, underfunded and grinding to a halt.
These delays and uncertainty not only increase the cost of getting a patent, but also increase the uncertainty of business planning and investment. Few companies are willing to invest millions of dollars in innovations that may not get protection.
The problem is made worse by the growth of patent applications for inventions that are increasingly complex. Patents on mechanical inventions are often relatively straightforward. But in today's world, patents reach into biogenetics, complex computing and nanotechnology--areas of research and scientific development that have been developed only in the last two decades.
Overburdened by the flood of patent applications, the USPTO could simply push patent awards through the system without adequate assessment and review. But that only makes the problem worse. When patents of dubious quality pass through the system, it only undermines confidence in the entire system and opens wide the door to litigation.
For some time, businesses have urged Congress to address the problem by raising patent fees. Since the USPTO is funded solely through patent-filing and other user fees, businesses supported increasing them to provide the USPTO with the resources it needed. There was one critical condition that businesses put on raising the patent tax: Stop the diversion of these monies from the USPTO to unrelated programs.
Congressional diversion of money away from the USPTO is a big problem. Since 1992, approximately $700 million in USPTO user fees have been diverted to unrelated government programs. That is almost three-quarters of a billion dollars that could have gone to speed up patent approval and spur investment. It could also have gone toward improving patent quality that would reduce litigation costs.
In the lame-duck session, Congress embraced the increase in patent fees. However, it left open the possibility--or the likelihood--of continued huge fee diversions in future years. In fact, in the same bill that raised the patent filing fees, Congress diverted $30 million of those fees into non-USPTO programs. That was relatively modest compared with some earlier years--but it was $30 million that the resource-starved USPTO badly needed.
It doesn't seem too much to ask that the USPTO keep 100 percent of its own patent fees, particularly given its current state of affairs. The nation's businesses felt so strongly about this that they were willing to support taxing themselves for their inventions.
It seems only fair that the federal government use the funds for what they are meant for--protecting and providing incentives through a world-class patent system. To do anything less is a disservice to our inventors and entrepreneurs and a drag on our nation's competitiveness and productivity.
biography
Herb Wamsley is executive director of the Intellectual Property Owners Association.
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