I understand what you are saying, and perhaps the downturn is more extreme than in the past, but one thing history has taught us repeatedly is that the companies at the top of the tech world are there for only a brief time. They do things that don’t make sense, like cutting R&D. The patent application numbers don’t lie. FY 2009 was the second highest year in terms of filings ever, and as we all know it has been a horrible economic climate for everyone. I just cannot believe the dip in filings is permanent. I can believe that those who have dipped will permanently dip, but there has always been others to fill the decrease.

I definitely agree with you that there is a perfect storm brewing. Between PTO mismanagement, KSR and Bilski things have gotten very ugly.

I am going to focus more on KSR and the law in 2010, but the trouble is that will require Congressional assistance. Getting Congress to do anything, even if it is bad, has proven to be impossible. I have been giving a lot of thought to this and I have a plan (sort of). Look for more to come in the early part of 2010.

I still want to convince you to write for IPWatchdog!

-Gene

- OOPS! One more notch in the low-quality belt.

From my experience with Chinese companies, they don’t even want the US attorney to review. They draft a Chinese style application, have it translated in China, and send it to a US firm for filing without review. The quality of the application leaves little for the US attorney/agent to prosecute as there are very broad claims with little or no support, thus no room for constructive amendments.

My assessment is that US Patent applications are going the same route as the US auto industry – lowest common denominator for quality (none) and soon it will all be outsourced to China anyway. At least we’re doing are part to help out with the deficit/trade balance.

To correct this situation we need to increase education, increase small businesses, and increase the quality of US products and services. Simply assembling parts from China will not suffice to correct this imbalance.

OH yeah, Happy New Year everyone!

Small and mid-size companies without significant in-house patent expertise, which is to say those who don’t yet understand the degree to which the patent system has been gutted over the past 5 years, are still filing. Japanese and Korean companies are still filing, and Chinese companies are ramping up big-time. I don’t have statistics, but I suspect if you ran the stats you would find major reductions in US-originated filings, which are being offset by Asian-originated filings.

If your practice is mostly small inventors then this reduction may not be visible to you. Consider yourself lucky.

I know you spend a lot of your energy focused on fixing the patent office. This is necessary but not sufficient. Unless we fix the underlying patent law, particularly the absurd standard for obviousness under KSR and patentable subject matter under Bilsky, the U.S. patent system will sink slowly into irrelevance. All this patent office reform stuff is just rearranging the deck chairs on the Titanic. The 40% allowance rate at the PTO was probably artificially low in 2004-2007. After KSR, a 40% allowance rate is probably artificially high. I don’t blame clients at all for opting out of the system right now.

I can foresee a future, not too far away, in which the primary role of the US Patent Office is to issue worthless patents to Asian companies, the technology sector analogue of a Wall Street investment bank selling worthless mortgage-backed securities–a useless government bureaucracy that exists solely for its own self-perpetuation.

I would have assumed the KSR decision may have caused many to not file or drop some applications. Bilski might do the same.

The unfortunate thing is that patent filings are hardly down at all and yet many are complaining that they are down dramatically. The popular press is buying into the myth that the recession is hurting US innovation and patent filings are down dramatically. That ignores reality, it ignores what has always happened in recessions and it covers up the real problems at the USPTO. Mismanagement is to blame for the drop, which is extremely minor in any event. The USPTO needs more money, and exaggerated claims that patent filings are down and harming US innovation will make it harder for the USPTO to get additional resources and fix the real problem, which is they ceased to grant patents and even take up cases in a reasonable time frame under Dudas.

-Gene

Jeff

I did not say that Ted was not accurately relaying his experience, but he did say “all companies stopped filing…” That is a blanket statement without support. The facts are what they are.

Fiscal Year 2009 for the USPTO had the second highest number of patent application filings ever. So clearly not all companies stopped filing.

I do feel bad for anyone who is having difficulty in business, particularly during a recession created by banks, Congress and irresponsible borrowers. The reality is that in every recession the big companies file less, which is a self destructive path. During recessions independent inventors, start-ups and small businesses file more. The only reason FY 2009 was not better was because of severe Patent Office mismanagement that bleed over into the beginning of calendar year 2009. Many in the industry openly talked about what the point was to file a patent application if you had only a 42% chance of getting a patent, had to spend many thousands of dollars and wait 4+ years for an answer. With those prospects the increase in filings by individuals, small businesses and start-ups were not as much as it otherwise would have been.

I know a lot of big firms are in trouble. I also know a lot of big firms are doing just fine. The small firms and solos that I talk to are doing great, and patent searchers report an enormous uptick in business over the last several months. All bodes well for a very strong FY 2010.

-Gene