Thursday, April 06, 2006

Advocating For A Better Mousetrap

TCS Daily introduces a new intellectual property columnist , who advocates patent system reform in his first piece.

This sure goes on my list of regular reading. It's hard to think of a topic more relevant and far-reaching for business, technology, and those individuals whose intellectual capital we must both exploit and protect.

Well, first, as almost everyone involved in the patent reform debate acknowledges, we must fully fund the PTO. The Patent Office is the gateway to the inventive kingdom. It must be properly populated, furnished, and reinforced.

Sadly, the opposite situation prevails. There are not nearly enough examiners to review, revise, and recognize incoming patent applications. There is a backlog of approximately 400,000 such applications -- inventions just sitting around, gathering dust, preventing their inventors from exploiting the fruits of their labor. For the typical application, two years elapse from filing to issuance, a period expected to rise to four years by 2008 (most biotech and electrical patents already take four years to issue).

Delays like these stifle innovation, plain and simple. Would-be inventors are more inclined to throw up their hands, keep their inventions to themselves, and/or embark on the risky path of trade secret protection over their ideas.

Here's something I didn't know:

The Patent Office is one of a kind: a federal agency that actually produces more revenue than it absorbs, year after year. Unfortunately, as reported by a partner at my firm in this Boston Globe article, between 1992 and 2001, $500 million was siphoned from the PTO to fund the rest of the federal government. Many more hundreds of millions have been filched from the Patent Office's coffers since then.

Fee diversion hurts inventors twice over: first, their fees subsidize the entire federal bureaucracy, not simply the office to which they make their checks out. And second, the PTO is unable to put that extra money -- generally, 10-20 percent of its annual revenues -- to use where it's most needed: ensuring accurate and timely review of applications.

I have a lot to learn in this area, but simple common sense dictates that the situation is not just unfair and counterproductive, but carries potentially negative consequences--in innovation, time and even money--for all of us in myriad ways and areas.

This debut column touches upon much more than what's excerpted here. It will be worth watching to see how this regular feature develops.