Joff Wild

This blog generally does not do politics, but sometimes politicians behave so bizarrely, so irrationally and so stupidly that something just has to be said …

I am not a US citizen, I have no profound insights into the US political system and I recognise absolutely that it is completely up to the US to decide how it wants its patent system to be structured and funded. But that does not stop me looking on in amazement as US legislators seriously contemplate denying the US Patent and Trademark Office the opportunity to modernise its IT infrastructure, initiate a long-term examiner recruitment programme, establish satellite offices, significantly reduce the backlog and, in turn, improve the quality of granted patents. All of this, it seems pretty clear to me, would greatly help the kind of innovative, R&D-based companies that these same US legislators constantly champion as crucial to America’s future.

There is no doubt that the language recently installed in the House version of the America Invents Act does not end fee diversion. If it is approved this means that the USPTO will not be able to keep the revenue it generates. Instead, as is the case now, the office will be dependent on Congress determining how much it can spend from year to year. The new provision says:

If fee collections by the Patent and Trademark Office for a fiscal year exceed the amount appropriated to the Office for that fiscal year, fees collected in excess of the appropriated amount shall be deposited in the Patent and Trademark Fee Reserve Fund. To the extent and in the amounts provided in appropriations Acts, amounts in the Fund shall be made available until expended only for obligation and expenditure by the Office.

In other words, USPTO directors from one year to the next will not know how much cash they will have until Congress tells them. Consequently, they will have no ability to plan for anything other than the short-term. And that means they will not be able to invest in the kind of projects and strategies that will bear fruit over the medium to long term. The result will be an inadequate IT system, less examiner recruitment than necessary, lower retention of key staff, longer application procedures, more mistakes during those procedures, greater uncertainty for applicants, less investor confidence in patent-dependent industries, fewer jobs created and lower tax receipts than would otherwise have been the case.

For a legislator looking to create a situation that makes it more difficult to reduce the deficit and cut government spending, it would be difficult to come up with a better set of circumstances. But aren’t US legislators – especially Republican ones – constantly saying that cutting the deficit and reducing government spending are their over-riding priorities? That is, of course, when they are not claiming that they believe in the power of innovative US SMEs to drive the US economy forward.

Overall, the US patent system is probably the best there is when it comes to creating incentives to turn inventions into innovative products and services that people want to buy. It’s one of the reasons why the US has led the word in this activity for many years. But there is one area in which the US is clearly not at the top of the tree, or even close to it, and that is in the way its patent office functions. A number of other offices have better IT, better examiner retention and issue higher quality patents. That really does not make sense when you consider how many applications the USPTO receives each year and how much money it collects.

It would be easy to start to change things and it would not cost the US taxpayer an extra cent. In time, the results would actually mean the US taxpayer could pay less. From afar, it’s very difficult to understand why so many of America’s legislators cannot see this. Are they really that thick?