Monday, February 21, 2011

“The office can’t be made efficient in 18 months without a vast increase in finances"

Within an article in the New York Times titled U.S. Sets 21st-Century Goal: Building a Better Patent Office by Edward Wyatt , one finds several images about time. There is a picture of Director Kappos holding an Edison model lightbulb, an invention of the 19th century.

Following mention of the USPTO's first satellite office in Detroit, one has text:

That is only one of the signs that have many critics saying that the office has its head firmly in the 20th century, if not the 19th.

The most intelligent comment in the article is buried at the end, on the second page:

Mr. Kappos is also pushing an initiative that would charge patent applicants a higher fee to guarantee that their applications will receive a ruling within a year. But that initiative and others are not enough, said Paul R. Michel, who recently retired as chief judge for the United States Court of Appeals for the Federal Circuit in Washington, the main forum for patent appeals.

“The office can’t be made efficient in 18 months without a vast increase in finances,” said Mr. Michel, who has made evangelizing for an overhaul of the office a pet cause. “Small efficiency improvements will only make a small difference in the problem.”

The article creates a metric of (applications pending)/(applications issued): Much of the patent office’s decline has occurred in the last 13 years, as the Internet age created a surge in applications. In 1997, 2.25 patents were pending for every one issued. By 2008, that rate had nearly tripled, to 6.6 patents pending for every one issued. The figure fell below six last year.

VCs and patents come up: Venture capitalists often require start-ups to have a patent before offering financing.

There is an allusion to life in the corporate world: “There is no company I know of that would have permitted its information technology to get into the state we’re in,” David J. Kappos, who 18 months ago became director of the Patent and Trademark Office and undersecretary of commerce for intellectual property, said in a recent interview. “If it had, the C.E.O. would have been fired, the board would have been thrown out, and you would have had shareholder lawsuits.”

This talk about "shareholder lawsuits" reminded LBE of his interview with Japanese public television about Jan-Hendrik Schon. At the top of their list of questions about Schon/Bell Labs was "where were the shareholder lawsuits against Lucent" over the Schon fraud? Of course, although Schon produced one of the most staggering frauds in the history of physics (involving US patent applications, too), there weren't any shareholder lawsuits against his employer, Lucent. Lucent management, which had boosted Schon's work to the media, was not implicated. Where was the outrage? The CEO wasn't fired, the board wasn't thrown out, and you didn't have shareholder lawsuits. As to the Kappos remark, who is kidding whom here? Patent examiners were complaining about their computer system for years.

In the end, the NYT piece reads like a string of platitudes, stitched together.

The article also included the text:

Though the office’s ranks of patent examiners and its budget have increased by about 25 percent in the last five years, that has not been enough to keep up with a flood of applications — which grew to more than 2,000 a day last year, for a total of 509,000, from 950 a day in 1997.

***Of the remark abaut VCs and patents see

Venture capitalist stresses management; ideas are a dime a dozen
and earlier IPBiz posts, including
"Patents are not why we are investing"
Are patents a key feature for venture capitalist investment?
What do venture capitalists really think about patents?

Note also the 2011 IPO of a biofuel company who had 184 patent applications, but not a single issued patent! Not a single patent was required for financing that company.


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