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USPTO Plans Could Kill Small Business Innovation
bizwriter writes "If protecting inventions is at the heart of high tech competitiveness, plans afoot at the US Patent and Trademark Office (USPTO) will critically wound small companies. The agency's notorious 750,000 patent application backlog has long been the subject of heavy criticism. One of the key tools the USPTO wants to use is to raise fees so high as to directly reduce 40 percent of the backlog. That would mean setting filing and maintenance rates so high as to make it economically difficult, if not impossible, for many small companies to adequately protect their innovations, leaving large corporations even more in control of technology than they are now."
Why not keep the basic cost the same but increase it by 20% for every additional patent filed in a year?
New technology costs $$$, which the USPTO does not have. The Patent Office's budget is pretty much 1:1 based on the fees it collects, except when congress wants to siphon off some cash to spend on something else. Hundreds of millions of dollars were siphoned off in the 90's, leaving the Patent office with a massive backlog at least in part because it couldn't keep enough people or the correct equipment to keep up with the applications.
What would be nice is a tiered system, instead of the current Big/Small entity fee system now in place (small entity fees are 1/2 those of the large companies). Tie fees to the number of applications or patents you have. That way those responsible for the backlog pay more, while the small company with 2 patents doesn't get priced out.
2 year protection = normal price
5 year protection = three times normal price
10 year protection = ten times normal price
20 year protection = fifty times normal price
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Actually, high enough fees will have an impact on large businesses, but only if they are truly high enough to make it impossible for small businesses. Fortunately, there is a third choice.
A much better pricing scheme would be one that forces companies of all sizes to prioritize their patent filings and only file the ones that matter. I propose that the base filing fee be tiered based on the number of non-expired patents the company holds or has pending:
This would significantly reduce the number of crap patents. Right now, small entities get a lower filing fee, but that doesn't completely solve the problem, either. It just encourages small businesses to file too many patents. What matters is not how big the business is, but rather how many patents the business files.
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Obviously something is wrong with me because I'm not new here but I *did* read the article.
From the article: "Put bluntly, the USPTO would raise patent application and maintenance fees to such a level that massive numbers of applications will never be filed in the first place."
There is *nothing* to support this. The USPTO has already implemented a number of measures to shorten the patent approval process. I know of at least two specific programs that are in a variety of beta / roll-out modes. One is a fast track program for patents previously approved in foreign countries and the other is the Accelerated Examination (AE) program for those that are willing to do additional work up front and willing to limit the number of claims. The AE program has had approval rates as high as 80% and require a final disposition within 12 months!
I'm not a lawyer but am considering becoming a patent attorney and am currently finishing my second year of law school. There may be many points of contention with USPTO actions but I don't believe that they will be raising fees to the extent imagined by the doom-n-gloom author of the linked article. Frankly, if that somehow *did* occur it would likely be held to be invalid as a due process issue under the Constitution.
For those who may not be aware: the USPTO is largely self-funding and is one of the few (the only?) government bodies that has historically been able to run without additional funding. In fact since 1991 they have had $700 million diverted from their coffers. This is likely the reason behind their request to have greater control over the fees that they receive; by being able to retain surplus funds it gives them the flexibility to do things like increase hiring when the rest of the government is in a hiring freeze.
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The sale hole is very easily plugged: require all patent transfers to be registered, and another tiered fee paid by the buyer. No refunds on the original fee. In other words, the fee is charged every time a patent changes ownership, including the first time when it previously had no owner.