Monday, November 17, 2008

Perfect storm for raising patent application fees?

Some time ago, Reed Hundt, a Clinton appointee and Obama insider, suggested:

For a set dollar amount--say, $500,000--a firm ought to be able to buy a guarantee that its patent application will be reviewed and accepted or rejected within one year.

Hundt also recommended dropping patent allowances by about 90%.

A commenter on the pli blog discussed Hundt's proposals:

Let's apply some math. For Inputs let's have some Hundtisms:
Reduce patents by 90%
Triple the budget for the patent department
Double salaries.
Let's throw in some ultra expensive fees for special prosecution and charge (high) fees for anyone wanting to challenge a patent.
And let's change the rules about damages, so that they only accrue (if) when the case is settled (gee, how many times will we see things change only after years and years of prolonged legal battles, and who would be in a position to wage such wars of attrition(?)).

Since salaries do not constitute the entire budget, tripling the budget and only doubling salaries leaves a pretty penny. Throw in that only 10% of the current workload needs to be done and that's a lot of coin unaccounted for.

Why should the patent office make money when the rest of the government can’t? Tripling the budget and killing the income stream out to do the trick.

Bigger government, doing less, those in charge making the process they govern very attractive to well-moneyed concerns (who cares that the little guy, the backbone of America gets crushed in the change)...

Most technology shouldn't be patented anyway right? (Not sure what we’ll patent, but it will be expensive!)

I wonder if, while we are at, Mr. Hundt would like to get rid of some other 18th-century relics and start over - say, like the Constitution.

Patently-O had a post

Tim Wilson (Senior IP Counsel at SAS US) has been concerned about patent quality for some time. In part, the sheer number of patent applications being filed creates a host of problems. Wilson's solution is to raise patent fees – he says the fees should go as high as $50,000 for large corporate applicants. The result – according to natural tendencies of supply and demand – is that fewer applications will be filed and fewer patents will issue. In all likelihood, however, those that are filed will be better applications covering higher quality inventions.

This was followed by

Wilson did not simply pull his $50,000 figure out of his ear. Using the powerful computing resources of SAS, Wilson calculated an estimated demand curve for patent applications using both (1) historical filing reactions to increases in PTO fees and (2) an assumption that the budgets of corporate patent departments is fairly inelastic.

As with economists masquerading as law professors, this misses the basic point: it's about the information, stupid.


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