Is It Time to Privatize the Patent Office?

I am in New York City for the next few days for the PLI Patent Bar Review Course.  John White and I traveled up from Virginia together yesterday and we did what we so often do — talk patents.  A fun life we lead no doubt, but someone has to do it!  In any event, increasingly as we were talking about things we have heard from attorneys, retired patent examiners we know and frustrated clients, something that has been occurring to me with more frequency came to mind once again.  Is it time for us to seriously consider privatizing the United States Patent Office, or at least turning it into a quasi-governmental body that has autonomy to run as it sees fit?  I think the answer is a resounding yes.  This is a discussion long over due and I tend to think that objectively reasonable minds at the end of the discussion will come to the conclusion that a Patent Office controlled by Congress has little or no chance of ever fulfilling its Constitutional responsibility again.

Saying that Congress controls the Patent Office is something of a misstatement really.  It would be far more accurate to say that Congress starves the Patent Office and is constantly demanding more and more with less and less.  At a time when $1 trillion is spent like Monopoly money to put Trump like towers on Boardwalk and Park Place it is not only irresponsible, but down right embarrassing that our political leaders in Washington are starving our innovation agency while they hit the campaign trail with all the required high-tech, innovation and job growth platitudes that the evening news demands in 15 second intervals.  There is plenty of blame to go around with respect to how we got into this state, but does anyone think we can realistically get out of this mess without thoughtful Congressional assistance?  Then the real nightmare question becomes: Does anyone really think we will ever get thoughtful Congressional assistance?

The fact that any Congressional assistance seems unlikely, let along thoughtful Congressional assistance, is what leads me to ask whether the only answer is to either privatize the Patent Office or create a quasi-governmental body that does not report directly to either the Executive Branch or the Legislative Branch, but perhaps to a Board of Overseers made up of patent attorneys, inventors and corporate users of the Patent Office— you know, the stakeholders who seem to be the only ones any more that really care whether the Patent Office works, save of course those on the inside on the 10th floor who have the thankless task of making a broken system work the best it can without adequate funding, without enough patent examiners and with state of the art computer systems circa 1990.  How many of you are reading this on a machine that is 5 years old?  10 years old?  15 years old?  The problems facing the Patent Office truly boggle the mind.

I have said it in the past and I will say it again now, hopefully with enough force so that people will read it and understand it to be true, because I believe it to be 100% accurate.  One of the biggest problems facing the Patent Office is a lack of mentorship of the young examiners over the last 5 to 7 years.  On December 1, 2003, the United States Patent Office began its move to Alexandria, where the agency is headquartered presently.  The move was completed in 2005, at about the same time that the Patent Office announced a tele-work program because they didn’t have enough space for all of the employees at the new Alexandria location.  What happened?  The minute the new facility in Alexandria was open and the move complete the offices were inadequate in number to accommodate all of the USPTO employees.  Practically comical if it weren’t true and if the consequences haven’t been so terrible.

If you are running your business who would you allow to work from home?  Those who you trust enough to actually work from home and who don’t need supervision or motivation to work.  That was the same group of people the USPTO thought most appropriate to work form home.  It just so happens that those people were the ones with the institutional memory.  They were the ones with the experience over the years and could remember a kinder, gentler Patent Office that didn’t blame patent attorneys and applicants for all the problems facing the system.  These were the individuals who in years past would have been available to younger examiners to answer questions and provide the mentoring that is absolutely essential.  There has been a brain drain at the Patent Office and many of the day-to-day problems we are experiencing now are almost irreconcilably inter-twined with the inescapable truth that those with 5 to 6 years of experience, the very people doing the heavy lifting, were not properly mentored.

Those who know me know I talk patents to anyone and everyone willing to talk, and thankfully for most of us it is a calling and passion and not just a job.  What that means is I talk to a lot of people, and so does John White.  Some of those that we talk to regularly are retired patent examiners, some of whom man the inventor help line to answer questions.  John and I have both been told by several of those retired patent examiners that they get calls with some frequency from patent examiners wanting to know how to handle a particular situation.  The reply by the retiree taking the call: “Did you ask your SPE?  What did they tell you?”  The reply from the young patent examiner looking for help: “My SPE told me to call you.”

It is increasingly true that those who are becoming Supervisory Patent Examiners have grown up in a Patent Office that had those with the institutional memory and experience out of the building and working at home.  That is not a recipe for passing down knowledge and customs from one generation to the next.  It is a recipe for failure if you ask me.

The attrition rate at the Patent Office has also been a great concern.  This is what the Government Accountability Office (GAO) had to say in September of 2007:

From 2002 through 2006, patent examiner attrition has continued to significantly offset USPTO’s hiring progress. Although USPTO is hiring as many new patent examiners as it has the annual capacity to supervise and train, for nearly every two patent examiners it has hired over the last 5 years at least one has left the agency.

In early 2009 because patent filings were off dramatically compared to expectations the Patent Office instituted a hiring freeze, which has lead to a consistent monthly decline in the number of patent examiners.  So the attrition problem faced by the USPTO is, if anything, worse than identified by the GAO back in September of 2007.

No entity can continue to thrive when there is a brain drain and those who are new hires are largely left to their own devices to figure out the job for themselves without sufficient mentoring.  This is a trend that demands to be reversed, but how?  Congress did appropriate another $129 million to the Patent Office, allowing them to keep those funds collected rather than turn them over to the general Treasury, but what about the other $200 million or more in fees that the USPTO will collect in fiscal 2010 (which ends tomorrow) that they have to turn over to the general Treasury?  Simply stated, taking money from the Patent Office is called fee diversion in the industry but is nothing other than an innovation tax.  Innovators are paying excess fees to the Patent Office and the Patent Office can’t even use them to hire more employees, improve their IT infrastructure or find suitable office space so the work-at-home program can be eliminated.

The problems facing the Patent Office are monumental and I have no faith that they can adequately be addressed without Congressional assistance, an end to fee diversion and a lump sum appropriation so the Patent Office can reinvest in the institution.  I just cannot see that happening, which leads me to conclude that the Patent Office needs to break free of the chains of bureaucracy, operate like a business and be accountable not to Congress but to the stakeholders who pay for the services rendered.