Renewed Congressional Interest for Funding the Patent Office

By Gene Quinn
July 12, 2010

Congressman Conyers seems interested in providing funding to the USPTO

Recently the United States Patent and Trademark Office released its draft Strategic Plan for FY 2010 – 2015.  This may seem odd given that FY 2010 is almost over, ending on September 30, 2010.  So it is probably a better title to call it the FY 2011 – 2015 Strategic Plan, but there is no doubt as you read the document that under the guidance of Director David Kappos the USPTO has already well launched the short term Strategic Plan.  Now if Congress would only be wise enough to grant funding for the Patent Office to actually accomplish what needs to be done!

Truth be told, it would be enough for Congress to just (1) stop siphoning off money from the USPTO through fee diversion; (2) grant the USPTO fee setting authority; and (3) stand out of the way.  So my message to Congress would be this: put the pocketbook down, slowly step back and raise your hands over your head so we can see them!

Perhaps you are smiling, or even laughing, but for goodness sakes how did it get this bad?  As far as I can tell Congress didn’t engage in any meaningful oversight from at least 2001 to 2009 and is so dysfunctional that basic assistance cannot be provided, but raiding of the coffers is on the agenda.  The scene on Capitol Hill insofar as patent and innovation policy is concerned appears as if Monty Python has taken over the script in real life and is calling the shots.  Absurd!

I am reminded frequently (mostly by myself in an attempt to keep my sanity) that President Reagan constantly said that government wasn’t the solution, but rather the problem.  President Reagan had many ways to voice this government disapproval, from joking about being from the government and being there to help, to explaining his philosophy that government needed to set modest rules, not over regulate and stand back while Americans and US businesses succeeded.  The truth is we succeed in spite of government, not because of it.  Nevertheless, we do need the Patent Office to get its act together, which is something President Reagan understood.  If Congress won’t actually help (which is in my opinion a dereliction of duty) at least they could stand back.

You cannot help but read the USPTO 2010 2015 Strategic Plan without noticing that it clearly identifies most everything that needs to be done (in the coming days I will address some holes and offer suggestions to round out certain parts), but doing any more than just keeping the lights on will require additional funds.  Even as the Patent Office is getting more work they don’t get more money because Congress set the budget and as more work, and an associated increase of fees, rolls into the Office the excess goes to the general Treasury coffers.  So not only is there not enough money to fix things, there is also increased work and less money.  The folks at the PTO must feel like they are bailing water out of a sinking ship using a Dixie Cup!

The draft Strategic Plan seems to lay out the big ticket items that need attention over the next few years in order to once again achieve a functioning Patent Office.  I realize most are not going to read the 76 page draft Strategic Plan, so allow me to try and provide an abridged version so you can get a feel for the document, and the magnitude of the problems faced by addressing everything that needs to be done without any real prospects for Congressional assistance on the funding front.  On page 9 the document explains:

The USPTO must adopt more private sector business practices and market-driven services for patent application processing. The traditional “one-size-fits-all” examination timing does not work for all applicants. While seeking an optimal pendency time that is efficient for applicants generally, USPTO will seek to provide applicants greater control over the timing of examination, thereby allowing the USPTO to deploy resources in a manner that better meet the needs of innovators.

The USPTO must also improve the quality of application review. Without well-defined claims, the value of a patent is uncertain. Uncertainty means risk that a patent is invalid; risk that a patent does not protect the patentee’s product; and risk that a good faith competitor cannot determine its scope to responsibly avoid infringement. Such patents exact a high cost by decreasing public confidence in the IP system. On the other hand, the economic value of a patent increases when its metes and bounds are clearly defined and consistently interpreted under the law. Clarity leads to certainty, which enables efficient and confident determination of value. This in turn creates high value for high quality patents and bolsters public confidence.

It is critical that we strengthen the examination capacity of the USPTO, improve the quality of patents issued, and provide optimal timing for obtaining a patent. Enhancing quality for all, and allowing speedier examination for those applicants who need it, will increase value for the entire IP system and for our country.

The USPTO must identify and implement the efficiencies, tools and policies necessary to increase the number of applications it is capable of examining and disposing of (rejection or issuance), while improving quality. The USPTO has identified a twofold basis to attack the capacity challenge: increase examiner capacity and improve efficiency. Increasing examiner capacity includes hiring more examiners, but doing so in a smarter and more strategic way. It also includes improving efficiency by removing unnecessary barriers to efficient and more streamlined examination and by providing better IT systems and tools in the patent examination process. In meeting our capacity challenge, this strategic plan recognizes that, while examiner hiring is a significant contributor to pendency/backlog reduction, the USPTO must also focus on efficiency improvements generated by reengineering many systems and processes, including its IT systems.

Oh, well that’s all that needs to be done?  That should be manageable!

I really hate to sound like Chicken Little, but I can’t be the only one that sees that the patent system and the Patent Office is crumbling before our eyes.  Yet, so many are going about their business as if there is no great concern.  We need everyone with a vest interested to get involved, and soon!

Apparently I am not the only one noticing.  Earlier today Congressman John Conyers (D-MI), Chairman of the House Judiciary Committee, published an op-ed online with Roll Call.  In it he explains that “[p]atents protect investment, keep innovation in the marketplace and create countless jobs.”  He goes on to say that the Patent Office has a plan and Congress needs to step up and provide the funding because right now the Patent Office is “handicapping the American knowledge economy.”

Perhaps Congressman Conyers is the legislative Jedi Knight that Congresswoman Zoe Lofgren (D-CA) claimed he was back on Wednesday, May 5, 2010, when David Kappos was testifying before the House Judiciary Committee. Conyers did write that uncertainty about patentability, legal challenges and high costs of litigation causes a chilling on investment and research that may lead innovators not to seek patents. He reasoned: “From Congress’ perspective, this is a poor outcome because trade secrets do not enrich the public knowledge and do not foster subsequent innovation.”

A tip of the hat to legislative Jedi Knight Conyers. Now, if he can just deliver and match his rhetoric with real action. Following my advice (see above) about putting the pocketbook down and slowly stepping back would be a start. Even better would be to throw a rounding error in the direction of the USPTO for patent affairs.  With MANY trillions of dollars spent between the Congress and the Federal Reserve, seemingly to no avail, isn’t it time to spend more modestly and on things that actually could work?

I am tired of watching plays called from the playbook of plays that have never worked.  We should be calling plays from the playbook made of of plays that have worked, with focus on those that work all or most of the time, like lowering tax burdens and incentivizing start-ups and small businesses to expand.  To paraphrase John Madden, there is no reason to stop calling a play that is working.  You don’t move to a different play because it looks good on paper.  Stick with what works until it stops working.  Low taxes and a pro-innovation policy that provides incentives for individuals, start-ups and small businesses has always worked.  I can’t be the only one who realizes that.

So now the question is this: what can we do to help move Conyers and the others along?  During the claims and continuations debacle the Patent Office was about to squarely take aim on US innovators and pull the trigger.  Dr. Tafas and GlaxoSmithKline stood up, followed by 50 or more amici briefs.  Some of those amici briefs were filed jointly by several small technology based companies pooling together to tell their story.

During the Bilski matter there were again 50 or more amici briefs filed at the United States Supreme Court, mostly by large companies and organizations that had a public policy interest.

Where are the amici now?  Where are the concerned citizens, the concerned small tech companies, the start-ups that base their entire company value on intellectual property?  Where are those looking for funding but cannot find it because the Patent Office moves too slowly?  Where are those companies that have first round funding?  You do realize that without patents to show for your effort that when you need to get to the second round it will be extremely difficult, perhaps impossible, to convince the money folks to give you more of the green you need to continue to operate and move forward, right?

The truth is there is no case pending before any court, so there are no amici briefs going to come rushing in, but that doesn’t mean that we shouldn’t be involved.  Eventually the Congress is going to have to listen to the people and the companies that employ the people and the companies and individuals who donate money to them.  I realize that over the last year or more the government hasn’t exactly listened to the people, and perhaps the best thing that can be said is that they have not been governing by public opinion polls.  But over the course of the next several months we might have a unique opportunity, and perhaps the renewed interest in the patent system and the Patent Office showed by Congressman Conyers is just the opportunity to get involved and rally behind what we all know needs to be done — FUND THE PATENT OFFICE!

I have been told that when people and companies speak out in sufficient numbers Congress pays attention.  That obviously wasn’t the case for some big ticket items of legislation during FY 2010, but we can’t just give up and become defeated.  The Strategic Plan for 2010 – 2015 lays out a great many things that need to be done, and whether we like it or not those things cannot be done without funding.

The irony is that the 111th Congress has spent more, and has spent faster, than any other Congress in the history of the United States.  Still, they cannot find the time or money to fix the Patent Office, which has largely been a problem of their own creation given they have diverted fees and starved the Patent Office of resources for so long.

It is time to stand up and be counted.  When those in Congress clue into just how bad off the Patent Office is it is time for us all to become concerned.  Perhaps it is self serving, knowing that the Democrat leaders are marching their minions to slaughter in the 2010 midterm elections due to the sad state of the economy, how stimulus has failed and an unacceptably high unemployment rate.  They know, as Conyers points out and Kappos constantly preaches — the patent system can and does create jobs and spur economic growth when it is functioning.

Mobilize the forces everyone.  Congress feels the pressure associated with an extraordinarily bad economic climate heading into the 2010 midterm elections.  Anything they can do to look bullish on jobs and growth has a chance, and the fact that it is also objectively the correct thing to do makes it even better.

The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. 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 2 Comments comments.

  1. Robert K S July 12, 2010 4:57 pm

    It is appropriate to legislatively consider the funding of the Patent Office as a problem separate from any proposed changes to the Patent Act.

    I am all for ending fee diversion–it ultimately constitutes an innovation tax–but I do have my concerns over full fee-setting authority. What I don’t want to see happening is the Patent Office becoming bloated on fees, increasing the costs of its services without improving the services themselves. A household monster that can set its own diet will only grow larger and insist on consuming ever more, and is also apt to get lazier when it comes to doing its chores. In the long run, this could be a recipe for self-destruction. At the very least, Congress should impose some reasonable caps on fees for small entities, and amend them only as appropriate to adjust for inflation, or provide provisions for automatically doing so.

    In any case, this funding crisis is a separate issue from, and deserves to be addressed independently of, the S.515 Patent Reform bill, regardless of how much Kappos feels the two should be enacted as one and the same piece of legislation.

  2. patent litigation July 14, 2010 4:01 pm

    Didn’t Conyers recently introduce legislation (an alternative patent reform bill) that would end fee diversion and give the USPTO fee-setting authority? Granted, given Congress’s chronic inability to enact meaningful patent reform, Conyers’s bill might come to nothing. But at least he’s making an effort. One problem could be that patent law practitioners aren’t nearly as proactive at lobbying as is the Hollywood bloc. Major-league players in the entertainment industry always seem to get results. Maybe those in patent law should try to learn from that example.
    http://www.washingtontimes.com/news/2010/may/25/patent-reform-misses-the-mark/