Patent Stimulus to Solve Great Depression II

By Gene Quinn
March 2, 2009

As scary as it is, it is becoming harder and harder to believe anything other than that we are in another period of depression, call it the Great Depression II.  The Dow Jones industrial average closed today at 6,763.29, which marks the lowest close of the Dow since April 25, 1997.  It also means that we are now 52.4% off the high of 14,279.96 on Oct. 11, 2007.  It is also an undeniable historical truth that on September 3, 1929, the Dow hit a high mark of 381.17. And over a similar length of time, it fell 54.7% to 172.36 on January 2, 1931.  See Dow Jones decline rate mimics Great Depression.  So we are one more AIG bailout away from the 54.7% decline in the Dow experienced during the Great Depression.  Oh, wait, we just had another AIG bailout, which is what the talking heads and economic pundits seem to think caused the 300 point drop in the Dow today.  I am sure the AIG bailout didn’t help, but let my hypothesize that the real reason the Dow was down 300 points today was because I wrote last night that patent reform legislation was imminent.

Right about now, assuming you are still reading, you are thinking — has he lost it?  Does he really think he caused the Dow to drop 300 points, or that the drop was due to something as innocent as patent reform?  While I would love to think I could affect the market, any more I can hardly affect my own life or finances, like the rest of everyone in the world, so no, I really don’t think that the drop today was about patent reform, but it could have been had anyone stopped to think about it long enough to get scared about what is undoubtedly headed our way courtesy of Senator Leahy.  Patent reform legislation that will cost manufacturing jobs and reduce research and development investments by $66 billion is exactly the WRONG thing to do at this juncture.  Are you listening Senator Leahy?

Our brilliant leaders have been telling us without passing multiple hundreds of billions of dollars in stimulus spending immediately our economy would fall apart, the recession would deepen, and we would enter into another depression.  NEWSFLASH… spending trillions of dollars is NOT helping!  How could anyone think that we could spend our way to prosperity?  If spending leads to prosperity then there would be no need for bankruptcy courts and everyone would be fine.  In fact those with the most debt would be in the best shape.

So what do we do?  Whether you are a Republican or a Democrat you must recognize that during times of economic trouble corporations layoff a lot of creative and talented people, including engineers and scientists.  During recessions those who are laid off, being lef to their own devices, move forward with their own creative innovations that couldn’t gain any traction inside Mega-Corporation.  This leads to the foundation of new technologies and innovations that will spawn the next wave of high-tech companies that will lead us out of the recession.  But the way things are going right now at our center for scientific knowledge… the US Patent Office… this is not going to happen.  If we really want to get out of this economic downturn we need a Patent Stimulus Plan.  Yes, that is a PSP, not of the Sony variety though, a PSP of the get us the heck out of this miserable recession/depression variety.

Our brilliant leaders seem to love stimulus packages, so maybe, just maybe, this will have a chance.  The nice thing about this Patent Stimulus Plan is that it will cost only a small fraction of the amount of money we have already wasted on failed economic stimulus.  What we need to do is have President Obama issue an Executive Order directing the Patent Office to start allowing patents.  A 42% allowance rate during the first quarter of 2009 is wholly unacceptable. See PTO Hiring Freeze and Budget Problems.  The decline in allowance rates since 2004, the time that the Dudas Administration took over the Patent Office, is leading to fewer patents being issued and that means less investment possibilities for small businesses and start-ups who desperately need to attract investors interest in order to get off the ground.  And getting off the ground is exactly what small businesses and start-ups need to do to start to get us out of this nightmare of a economic downturn that seems to have been largely created thanks to the inattention of many of our leaders, both Republicans and Democrats.

You are probably thinking this isn’t much of a stimulus plan because it doesn’t spend any money, other than the cost of the paper for the proposed Obama order and the ink in his pen that will be used to sign the order.  But as those annoying infomercials say, wait… there is more!  A backlog of 800,000 patent applications that are pending and have not even been considered on any level by a patent examiner is unacceptable.  Why would anyone want to get a patent when you apply today and if it is a real invention where there is a lot of innovative activity you have to wait 8 to 11 years to get a patent, which are the current estimates used by experts familiar with the likely time applications filed today will have to wait in high-tech areas.  So while you are at it President Obama, order the Patent Office to issue a patent UNLESS there is a reason to deny it.  In other words, direct the Patent Office to actually follow the law and issue patents immediately as is required by 35 USC 102.

Still no money being spent?  Well, why not rehire all those examiners who have retired and let them dig into the backlog.  Pay them and let them keep their retirement income as well.  Yes, let them double dip!  Also hire retired patent attorneys to review applications.  And why not start a pilot program that outsources patent prosecution.  I would be more than happy to accept that responsibility, and I know I could put together a team that could do patent prosecution better, faster, quicker and more accurate than what is being done by the Patent Office because the focus will be on working with applicants to allow claims that deserve to be patented.  The time is well past for rejections and for the ex parte process.  The time is now for government examiners, or private outsourced examiners, to work with applicants to find allowable matter if it exists and allow it.  To do this in an effective manner patent prosecution history needs to be irrelevant and non-discoverable during litigation.

Finally, this Patent Stimulus Plan requires that the Patent Office suspend all fees for those who are small entities.  Small business, inventors and entrepreneurs are going to be the ones who start the hiring.  Small businesses employ 70% of America, and if small business can seek more economical protection for their innovations then they will be able to grow bigger and faster and better compete with Mega-Corporations that are laying off employees left and right.

No doubt many will disagree with this Patent Stimulus Plan, and if that is the case GREAT!  The more people that disagree the more likely it has a chance to succeed, which is a sad commentary on the state of things in Washington, DC.


About the Author

Eugene R. Quinn, Jr.
President & Founder of IPWatchdog, Inc.
US Patent Attorney (Reg. No. 44,294)

B.S. in Electrical Engineering, Rutgers University
J.D., Franklin Pierce Law Center
L.L.M. in Intellectual Property, Franklin Pierce Law Center

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Gene is a US Patent Attorney, Law Professor and the founder of IPWatchdog.com. He teaches patent bar review courses and is a member of the Board of Directors of the United Inventors Association. Gene has been quoted in the Wall Street Journal, the New York Times, the LA Times, CNN Money and various other newspapers and magazines worldwide

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and founder of IPWatchdog.com. Gene is also a principal lecturer in the PLI Patent Bar Review Course and an attorney with Widerman Malek. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 5 Comments comments.

  1. Global American Media March 3, 2009 12:28 am

    I believe you. You caused the caused the Dow to drop 300 points simply by thinking about it. I can do that too. It happens to me all the time.

  2. Global American Media March 3, 2009 12:32 am

    lol. I also believe everything else your saying is very, very, very true.

  3. Demeron Skouson March 3, 2009 12:44 am

    Excellent piece!

    Another need for entrepreneurs and small businesses is for help in getting their new product off the ground into a state a business can actually function and make money.

    The patent is part of the process, and often necessary. By itself the desired outcome (a money making business entity) will not be possible. So along with getting patents issued in a timely manner, let’s get the new ideas developed and out to market quickly so the businesses can get moving.

  4. Dick Troll March 3, 2009 12:28 pm

    1. It’s not the AIG bailout. Its the AIG counterparty bailout. AIG’s london branch and other opaque and unregulated anti capitalists have created a 600 trilliion dollar monkey that rests on the world’s back. AIG is respnsbible for approx 50 trillion of this mess.
    2. Do you really think that Bernake and Obama have never heard of creative destruction? But they are faced with the choice of deciding whether we have a healthy forest fire that we should let burn or a worldwide nuclear meltdown. Perhaps they deserve some slack.
    3. As you have already pointed out patent reform legislation is now largely irrelevant. What’s left is a batttle between the electronics industry and big pharma. But there is still the issue of patent office reform legislation.
    Gaming the system has been SOP, indeed de rigeur as patent applications exploded.
    4. What you offer is a full employment act for examiners and lawyers. But it sure would be nice if we could show that all those patents were actually influencing productivity. Let’s get rid of patent thickets, defensive cross licensing schemes and the presumption of patent validity. Then perhaps we can get a giimpse of the small number of inventive ideas really worth patenting. If there are any.

  5. Gene Quinn March 3, 2009 5:59 pm

    Dick-

    I agree that we need to get rid of the presumption of validity. I have been writing about that for some time now. I think we need a dual system. Path one is a full examination that leads to the presumption of validity and path two is a registration system without a presumption, or perhaps only a minor presumption. There can be variations, but the key is to get examiners to stop wasting precious time on silly patents and focus primarily on those that are commerically viable. I plan on writing more on this topic in the future. If you have thoughts I would love to hear them.

    -Gene

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