I don’t doubt that the recession is hurting some, perhaps many, in terms of filing decisions. What I am really referring to is the overall number of patent applications. Big companies do silly things in a crisis, like cut R&D and protect less — as if that is a strategy to advance. Really it is a strategy to stagnate and ultimately take a step back to new competition. But this is a natural process that happens all the time in the patent world, and for a very long time this dip has been more than taken up by new businesses filing. In a recession a lot of creative people get laid off, and they start their own companies. Lately, however, it has been increasingly difficult for small businesses to get patents, and the pendency is ridiculous. There seems to be one track for big companies who get patents quickly, and another for small businesses that get dragged out. So many are questioning (or were through at least the first quarter of 2009) whether filing made sense, particularly when the allowance rate hit a low of 42%.

So I don’t doubt the stories you are being told, but without previous Patent Office incompetence in the previous regime the overall numbers would be an all time high for FY 2009 even though large businesses are not doing as much filing.

If you are interested in writing something for publication regarding what you are hearing I would love to publish it.

-Gene

I’m well thanks – hope you are too.

Something like two thirds of the discussions we have are with US-based clients, and many of them are telling us they’re filing fewer applications of all sorts – including US applications – because the recession is hurting them. This isn’t something we heard at all until a couple of years ago, but now it’s a relatively common comment.

Unless they’re all lying, the recession is therefore having SOME impact, and that’s all I’m suggesting.

Now, would there have been more applications filed if the USPTO was doing a better job? Very possibly. That doesn’t negate the argument about the recession’s impact.

Finally, I’m not that surprised design patents have been hit hard. As you say, they are (rightly or wrongly) considered the poor cousin of “proper” patents. As such, I suspect they’re thought of as “nice to have if you can afford them”, and therefore one of the first classes of IP rights many applicants feel can be put on hold until finances recover.

regards
Jeff

I should probably write something more at length about this, and probably will later this week. The total number of US patent applications filed in fiscal year 2009 was down a little more than 11,000 versus fiscal year 2008. Notwithstanding, Fiscal 2009 saw more patent applications filed than any other year other than fiscal year 2008. In fact, Fiscal year 2009 saw more than 18,000 more patent applications filed in the US than in fiscal year 2007, which was not a year in which there was a recession.

I am sure international filings are down as a result of the recession and I don’t doubt many are choosing to file in fewer countries, but the US is the dominant market and I doubt many are deciding to file less in the US. Certainly, during recessions there will be some, perhaps big and notable companies that file less during a recession, but this is historically outpaced by individuals and start-ups that pick up the slack. Essentially, during bad times big companies do exactly what they should not do, which is cut R&D and cut patent budgets. Then when things turn around they fall way behind and the next wave of new, hot companies takes over.

The question I ask is this: would US filings be more in fiscal 2009 had the Patent Office not had a 5 year policy of “reject, reject, reject”? Had the USPTO not driven the allowance rate so low, and lengthened the pendency to ridiculous lengths would US filing have been more in fiscal 2009? I think the answer is a resounding YES. Would there have been more than an additional 11,000 patent applications filed? I think the answer is yes. Have the USPTO not tried to kill innovation for so long their projections for fiscal 2009 would have likely been accurate and there would have been an increase over fiscal 2008. Some are affected by recession no doubt, but the story hear is that during one of the worst recessions ever, and at a time when the USPTO ceased to be in the patent granting business, it was still nearly a record year in term of patent applications filed.

More to come!

I hope all is well.

-Gene

Gene, I agree it’s a complex issue, but no impact at all?

We speak to huge numbers of clients (and potential clients) every month, across the US, Europe, Australasia, Israel, etc, and we KNOW they are choosing to file less often and in fewer countries for financial reasons. The change has been palpable over the last 18 months.

We’ve heard stories of patent managers being brought into meetings with the CEO and finance director and given a revised budget, mid-year, requiring them to immediately cut their IP spending by 30 or 40%.

We’ve seen largish clients who filed in the same set of countries month after month for all their cases suddenly start filing in a smaller set of countries for most applications, reserving the full set for mission critical IP.

And we’ve been told by at least some clients to expect a period of less work due to them having to reduce the number of applications filed, again solely for financial reasons.

Perhaps half of our clients are patent firms and they relay similar stories.

I agree it’s a complex issue, and I’m not for a moment suggesting everyone’s suddenly decided to cut back their filings. But I don’t think you should dismiss one of the biggest recessions since the Great Depression as having had no impact at all on filings.

regards
Jeff

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