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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?
It isn't "could kill small business", rather, the whole thing has turned into "Designed to kill all innovators that don't have big backers".
It's the system, man.
The elites want total control. The patent system is but a small part of their game plan.
Muchas Gracias, Señor Edward Snowden !
Small entity inventors already get 50% off most USPTO fees, and USPTO Director Kappos has suggested creating a "micro-entity" inventor class for whom the fees would have an even smaller impact relative to that for large entities.
What's more, the backlog hurts small entity inventors much more than it does large entities. Small entity inventors are much more likely to rely on venture capital funding, and many VC outfits are unwilling to put money down without some patent protection on the table. If a small entity inventor has to wait for 3+ years to get that protection, they may end up folding before the patent issues. On the other hand, a large entity inventor has lots of stuff going on, and relies on its other business to keep things moving while they wait for their patents to issue, so the backlog has a much smaller impact on them.
Solving the backlog problem is ultimately going to require hiring more examiners, and that costs money. For an agency that is entirely fee-funded, being able to set those fees at appropriate levels is necessary to ensure that patents are issued in a timely fashion.
I think it's too early to panic. Having practiced before the USPTO for over 20 years, I've seen many times how the small inventor lobby works its magic to protect the small filers. In fact, I was disappointed that the article didn't even mention the two-tier fee system, providing smaller fees for small businesses, that's been in place for many years now. The PTO needs lots of fixes, but I agree that somethings need to change with the fee structure. Large companies can game the system by flooding the system with new applications, re-filing to wear down examiners, and taking frivolous appeals. Wise changes to the fee structures, which take into account these sorts of tactics, as well as increasing maintenance fees to discourage "wait and see" litigation, will be helpful to the small guy. Hopefully the PTO will show some wisdom.
New technology costs $$$, which the USPTO does not have. The Patent Office's budget is pretty much 1:1 based on the fees it collects, except when congress wants to siphon off some cash to spend on something else. Hundreds of millions of dollars were siphoned off in the 90's, leaving the Patent office with a massive backlog at least in part because it couldn't keep enough people or the correct equipment to keep up with the applications.
What would be nice is a tiered system, instead of the current Big/Small entity fee system now in place (small entity fees are 1/2 those of the large companies). Tie fees to the number of applications or patents you have. That way those responsible for the backlog pay more, while the small company with 2 patents doesn't get priced out.
... as it is designed so that the not-so-wealthy don't get to patent anything.
That poor guy may end up having to sell his invention to the wealthy elites, and the elites can then patent the thing and rake in much much much more $$$ with it.
And btw, it is happening.
Muchas Gracias, Señor Edward Snowden !
Easier fix - get rid of software and business method patents. "Oh, but we can't do that - we'd have so little work to do that we'd have to lay off people!"
In other words, you're suggesting the complete elimination of patents.
Which would not be a bad idea at all, mind you...
Circumcision is child abuse.
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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Unfortunately, the # of patents idea wouldn;t necessarily work. Big companies have lots of accountants who would just start up a subsidiary company and let them file their first patent. So Microsoft would still have millions of patents, but they'd be held by a thousand sub companies. They'd probably end up paying less than mom n pop innovators inc.
Still, charging for crap patent applications is a good idea - that'd shift the cost burden to 3rd party lawyers who'd charge you to ensure your application wasn't crappy. The patent office could then start to give such pre-verified applications a less rigourous overview (like they do currently with all patents :)
Yes, that's dangerous... Microsoft lawyers inc would pre-verify a patent on glass panes used to provide visibility of operating system function for human interaction.
The only way to proplerly solve the issue is to better define what a patent is. Say "software or software algorithms of any kind are not patentable items" would rip that backlog to shreds. And save business innovation as well, which would be nice.
Can you say "wholly owned subsidiary"?
"There is no real right or wrong, just what the majority accepts at the time."
Considering that small business is the engine of job growth and innovation, this is the dumbest idea to come out of USPTO ever. Imagine the world today if Apple, HP, and Microsoft were all prevented from flourishing. The internet would not exist, mainframes would still be king, silicon valley would not exist. Real innovation almost never comes from existing large companies.
I have mod points. The reign of terror begins now.
Here's what we do:
1. Create a new class of patent examiners who work from home. Vet and enlist a huge number of available experts to examine patents and be paid per examination. The USPTO could send an application right out to ten people conversant with any exotic field and get quick decisions.
2. Make patent applications free. Make renewal of granted patents increasingly more expensive with each passing year, so profitable patents are maintained and unprofitable ones are abandoned.
If Slashdot were chemistry it would look like this:Cadaverine
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.