Patent Office Inefficiency Gives Away U.S. Jobs

by

Story of Stolen Ideas Familiar To Powersports Companies

President Barrack Obama’s call last night for stepped up innovation is right on the mark. Innovation and product development are two things that we do better than anyone else in the world.

Unfortunately, we may be giving away this advantage every day by disclosing our ideas and research before we can produce the related products and services. Losing intellectual property to unscrupulous foreign manufacturers is an all too frequent experience of many U.S. powersports manufacturers.

So, what’s the latest problem with protection of our ideas?

According to one recent report, the U.S. Patent Office is functioning so poorly that it can take years to act on a patent application, long after the application has been posted on the Internet and examined by potential competitors.

Here’s the story, according to a report prepared by John Schmid, a reporter with the Milwaukee Journal Sentinel newspaper that ran Jan. 16, 2010. The key points presented by Schmid include:

  1. Lack of funding and an inefficient bureaucracy are causing patent applications to be delayed in processing at the same time that they are released by the Patent Office on the Internet.
  2. Patent applications are published by the office online 18 months after they are filed, whether or not they have been acted upon. “That puts American ingenuity up for grabs,” writes Schmid, “free to anyone with an Internet connection.”
  3. Thousands of Chinese engineers sit at computers every day reading U.S. patents on the Internet. “They use the technology for free.”
  4. Applications are delayed so long that technologies often become obsolete before a patent is ruled upon.
  5. The agency took 3.82 years on average to process each patent it issued last year, up from 3.66 years in 2009.
  6. Some 1.22 million patents await a final decision today.
  7. Last year, a total of 708,000 applications were waiting an initial review.
  8. In 2010 the Patent Office collected $53 million in fees that it was not allowed to keep because of limits imposed by Congress. At the same time, its $2 billion annual budget—all of which comes from fees— is often used in part by Congress for other unrelated government purposes.
  9. A study conducted by British patent authorities estimated that the  U.S. wastes at least $6.4 billion each year in lost innovation— legitimate technologies that cannot get licensed and start-ups that can’t get funded because of problems at the U.S. Patent Office.

In his report, Schmid quotes Paul Michel, a former patent court judge: “Everyone goes around saying that innovation is the key to job growth and the key to recovery from the recession. But with the growth of applications and the continued neglect of Congress, the Patent Office is making little progress and in some ways is sliding back.” A lot of companies actually die waiting for the Patent Office, Michel says.

President Obama is on the right track in pushing innovation as an engine to job creation, but Congress should wake up and plug the leak at the overextended Patent Office so that we stop providing free ideas to the rest of the world.  JD

Contact me with story ideas and news tips at
joe@powersportsupdate.com or 612/845-8091

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