I have heard from others suggestions that the early 1980s saw increased applications for more than just the Federal Circuit, and I think that is a fair point. There were a couple big Supreme Court cases which went in favor of the patent owner. That together with a new Federal Circuit bringing unity to the law was an important step forward.

I will have to follow up with others who know more about patenting of genes in order to address whether that is slowing innovation. The only way that it could be slowing innovation is if what is being patented is a discovery rather than an invention, which may be what is happening. There were some high profile Federal Circuit cases in the early part of this decade that made it harder to get such patents. This has contributed to the lower allowance rate, but the thing that has really contributed is the “second pair of eyes” requirement. It first started off as only in business methods and then went into all technology areas, where in order for a patent to issue it would have to be allowed by 2 examiners. This lead to some senior examiners feeling like they had lost signatory authority, which they had. Low morale, double checking and a second set of quality review from OPQA caused examiners to fear making an error and it was perceived to be easier to reject than to allow and possibly make an error. So what you say may be a small part, but it is not the overwhelming part of why allowance went so low.

-Gene

Enter the gene patent.

Discovering a gene and patenting it was a slow process before 1983, the year Kary Mullis invented Polymerase Chain Reaction (PCR). PCR shortened the process of isolating a gene from weeks and months to a mere 2 hours. Needless to say, the process was sped up and companies raced to file patents for various genes leading to a surge in patent applications starting in 1983 up till these few years.

The problem was companies, biotech firms, and universities would all file for patents for fragments of genes, sometimes before they even knew what the gene really did. In the early 2000s, too many patents were issued and doctors around the world voiced that if this continues, new research would be slowed or halted because of the large amount, and relatively expensive royalty fees for each gene. THE PATENTING OF GENES IS ACTUALLY SLOWING INNOVATION. Already labs everywhere has given up on research either because of lack of funding or because they’re afraid of being sued for accidentally using a patented gene in their search for a cure. More about the controversy regarding this topic can be easily found through Google or any other search engine.

By about 2005, figures in the government began taking action to reduce the number of gene patents allowed. That transferred over to the USPTO reducing the allowance rate.

Again, I don’t mean to say your article is wrong, it’s just there are things like gene patents out there that could use a reduction in allowance rate in order to spur innovation.

Wow! Are you really that malevolent? Choosing a string of words and quoting them for the exact opposite point that was clearly intended. You must be a TV news reporter. Do you work for MSNBC?

What I said was: “If the USPTO does not alter course and issue patents in a technologically and economically relevant time frame no amount of scientific advances, innovation and entrepreneurial spirit will solve our economic problems.”

Indeed, advances that are patentable would solve the economic crisis, but if and only if the Patent Office actually issues patents, which they are not doing. With entire Art Groups not issuing any patents and an allowance rate of 42%, the US Patent Office has become the place where innovation goes to die… a true patent denial authority. And if you are being honest, you know that is completely true.

-Gene

I disagree, an amount of scientific advances which are patentable could very well solve our economic problems.

A low allowance rate does not create worthless patents, although it does mean that many innovations are not being protected. The reason patents were worth much less prior to the Federal Circuit was because they were invalidated left and right by the various regional Circuits, so protecting innovations with patents was seen as not the best use of resources. Once the Federal Circuit started to bring uniformity to patent law patents became worth more because owners knew they had a right that could be enforced, and more importantly knew what the target was with respect to defining an invention and claiming an invention so that the patent claims would be valid and the right strong.

-Gene

Thanks for the comment. I agree that it is not surprising that the chart shows growth in the number of applications. I think there are a lot of things that lead to that. You ask a good question about Bilski and whether that could account for fewer applications. I am sure that it accounts for at least some of the reduction in applications, at least with respect to those applications that were completely related to mental processes or business methods without any technical point of novelty.

-Gene

Great post. I couldn’t agree more with the premise re: innovation, CAFC pros and cons, PTO dysfunction.

I agree that the number of patent applications filed went up each year due to the creation and existence of the CAFC. However, in addition, I believe it important to note that the CAFC was a pro-patent entity unlike it’s predecessors and the individual circuits. The effect on the patent world was “Build it and they will come”. In addition in 1995 with State Street we added business methods which although noble and legitimate led to an abuse in patent grants. Couple all of this to ED Texas and NPEs, fraud and the duty of disclosure, as well as a number of other factors and it makes the patent world a very lucrative area of law for the successful litigant, the attorneys, etc. It is not surprising that the chart would show the growth that it does.

Of course everything I say is also a gross oversimplification, but I cannot help but wonder if the drop in filings is not a result of the strong push back on business methods culminating to date in Bilski, the move against grants as you note…I think the list can go on.

The problem I see is that the pendulum swingeth too far. That however is not a new problem of human nature. In the end, I too agree that change is needed. If the appropriate change is made which enables the continued protection and monetization of one’s innovations, and that is coupled to a clear and reasonable patent environment, then we will recover and grow this economy once again.

Scott B Garrison