For some time now I have been writing about how a patent stimulus plan would revitalize the economy, but I am all fired up today after a flurry of comments and e-mail exchanges regarding some of my recent blog articles. It is way past time to rethink the patent application process and how patent prosecution is carried out by patent examiners. I know I am starting to sound like a broken record, a dog with a bone, or perhaps even the patent equivalent of Sean Hannity, harping on the same things over and over and over again, but it is necessary at times to get your message heard unfortunately. In any event, call me whatever you want, but the reality is that unless and until the Patent Office actually starts granting patents in a technologically relevant time frame there is little or no chance that innovation will lead to the growth that can and historically has pulled us out of troubled economic times. There is simply no benefit applying for a patent on a high-tech, cutting edge solution when that application likely will remain pending for at least 3 years, and more likely 4, 5 or 6 years. That is not a technologically relevant time frame. A technologically relevant time frame means a patent must issue before the invention is obsolete!
It is no great shock that during economic downturns a lot of creative innovators get pink-slips and are forced to chart their own course. When opportunity costs are zero you might as well follow your dream and attempt to monetize the inventions that you have been sitting on. Add to that the fact that the giants of industry get so large that they lose the ability to innovate, miss opportunities, weed out products and services that would succeed in favor of those that don’t, and it is no great mystery that during recessions the seeds are planted for the next round of technology boom. With Intel reporting a 55% decline in quarterly profits, particularly when history demonstrates that the computer market slows down in the second quarter rather than in the first quarter, it is not any stretch of the imagination to predict fresh layoffs are coming to tier 1 tech giants. The government needs to incentivize innovation and technology for the future. Until we get a functioning patent system there is little or no chance that the engine that can and would otherwise lead us back to prosperity will do that in any foreseeable time frame.
The time is now to come up with solutions, and luckily there are plenty that can be adopted. The fact that they do not cost much or are completely free is just a bonus, but also means that the mega-spenders in Washington, D.C. will likely miss what needs to be done in favor of spending a few hundred billion dollars here and there, hoping that something sticks to the wall.
In the comments to some recent posts there has been an extremely lively debate going on, and discussion about the fact that examiners do not and cannot read the full patent applications files has come up again. This deserves a lot of attention and should not be brushed off. An anonymous patent examiner has written to me and is suggesting that patent examiners read the specifications. That shouldn’t be a novel concept, but those in the industry know that it is revolutionary. Examiners are given few hours to spend on any application, and as one commenter known as TT explained:
The suggestion that Examiners should read the entire specification is simply naive. The time allotted by the USPTO for the entire prosecution of the case, from the first restriction, to first office action, then to allowance is so short that such reading is physically impossible.
TT is exactly right. It is naive to expect, and physically impossible to do. But why should that be the case? Everyone in the industry knows that patent examiners cannot read the entire application, let alone read much of the prior art disclosed (if any). It does take time to properly examine an application, and examiners are not given that time, pure and simple. But rather than accept this as reality, it is time to say that it is unacceptable and we can and must do better! Does it make any sense to have a presumption of validity when everyone in the industry knows that examiners don’t even read the entire application and are not given enough time to consider the application as much as is necessary to really know whether a patent should issue? It is really sad, insulting and unacceptable to have patent applications denied knowing that an examiner didn’t even consider the entirety of the invention or application. This does not fulfill the Constitutional mandate, and certainly does not help inventors, investors or the business community.
The government is spending well over $1 trillion on stimulus and the PTO budget is $2 billion. This is pathetic! The one agency that can create value out of thin air and help private industry develop the technology jobs of the future gets $2 billion a year and has to fund itself, while tax payers are asked to bail out companies and industries that failed. But wait, there’s more, and it gets worse. Not only have these companies and industries failed, many of those getting money from tax payers like you and me were the ones who are responsible for this economic meltdown in the first place! But wait, there is still more! Our leaders feel like they can borrow their way out of debt. Where does the insanity stop? We all know that eventually there will be inflation, probably hyper-inflation, and much higher tax rates will be necessary.
The American people are not stupid. The $1 trillion and growing that we are throwing at the economy has to come from somewhere. The saddest part is that we will get nothing for the $1 trillion plus we are spending, other than the continuation of companies that should go bankrupt and banks that raise interest rates and fees on the tax payers who bailed them out. How is that fair? It is not, it is pathetic. It is particularly pathetic given that the solution is right there for all to see. Increase the funding of the one agency that can create assets simply by saying they exist. You cannot create more real estate unless you are waiting hundreds of thousands of years for a volcano to make an island. You cannot print money without causing inflation. But the federal government can create valuable assets simply by issuing a patent and recognizing exclusive rights. The creation of these rights will get investors off the sidelines, create new industries and new jobs for millions of workers.
The Patent Office can create property simply by granting a patent, but either won’t, can’t or will when they get around to it after the technology is obsolete. The US patent system has gone from dysfunctional to bizarre to the type of stuff you just can’t make up because reality is far more tragic than fiction. If President Obama really wants to help the economy he needs to ask Congress to at least double or triple the USPTO budget, allow for the hiring of new examiners, cut pendency and move the economy ahead. Even at $4 billion a year or $6 billion a year it would be a bargain given what can be created and the economic boom that would ensue.
President Obama should also ask Congress to authorize regional Patent Offices, not because the USPTO building was too small the day it opened (which is the truth), but because you can only get so many qualified people with the appropriate science backgrounds to want to live within driving distance to Alexandria. While telecommuting is one option, that is not really workable because there is no cohesiveness built, and examiner telephone interviews with crying babies or barking dogs just don’t work, but are what happens.
Finally, the only substantive change we need in patent law to help the Patent Office is the adoption of the PTO view of Rule 56. If inequitable conduct actually related to fraud, like it is supposed to, and had to be plead with particularity, like the law requires for every other fraud theory, then the PTO could adopt a process that requires information from applicants rather than a hide-the-ball game. It would also lead to the submission of only the best prior art, rather than everything an examiner might want to see. It is folly to even talk about a reasonable examiner standard for disclosure. Not only did the USPTO specifically change that standard back in 1992, but examiners don’t even have time to read the applications submitted, so what makes anyone think that any justice is had by requiring applicants to submit more stuff that examiners won’t read? The only thing that the Federal Circuit view of inequitable conduct does is further the hide-the-ball process that is patent prosecution and unnecessarily lead to the loss of patent rights when mistakes are made.