Archive for the ‘Intellectual Property Rights’ Category

Patent Office Inefficiency Gives Away U.S. Jobs

January 26, 2011

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 or 612/845-8091

Where’s the Anger About Chinese Stealing Ideas?

May 28, 2010

Lack of Response to Federal Investigation Is Puzzling.
Were You Ripped Off? Now Is the Time To Tell Your Story.

EDITOR’S NOTE: Shortly after I posted this story, I heard from my friends at the Motorcycle Industry Council (MIC) regarding a survey they are doing pertaining to the USITC investigation. I want to pass on this information to you, so you can participate, if you wish. The MIC is surveying members and compiling comments on IP infringement. If you’re an MIC member, you can find more information on the MIC survey here. The survey will take only a few minutes to complete. The MIC’s Paul Vitrano told me today that powersports companies are participating and providing data for an industry comment package. “The more responses that we receive,” he says, “the more thorough comments we will be able to submit. For details on the MIC project, contact Scot Begovich ( or Paul Vitrano ( or call the MIC at (949) 727-4211.

I’ve been hearing complaints about the Chinese stealing designs and ideas from other manufacturers for years— at EICMA, at Dealer Expo, in private conversations— it’s a topic that never fails to generate comments. Until now.

Now, when the federal government is investigating cases of Chinese companies stealing intellectual property, nobody wants to talk about it. I wrote about the investigation by the U.S. International Trade Commission (USITC) several weeks ago, but there’s been virtually no response from the business community. There’s a public hearing scheduled for June 15, 2010, but there’s been virtually no response from the powersports industry. Zero. None. Read my previous post here.

What’s up? Too busy? Don’t care? Don’t want to get involved? I suppose it doesn’t matter why no one has responded to the USITC’s requests for comments, the only thing that matters is that the commission isn’t getting the information it needs to help solve the problem.


Feds Investigate Chinese IPR Theft

May 7, 2010

Hearing Scheduled for June 15, 2010.
It’s an Opportunity To Tell Your Story.

Another federal agency has joined the battle on Chinese manufacturers who are selling illegal goods in the U.S. First, the Consumer Product Safety Commission (CPSC) took aim at Chinese with its child safety provisions, then the EPA (Environmental Protection Agency) began grabbing containers of Chinese powersports products as they entered U.S. ports looking for emissions violations.

Now the U.S. International Trade Commission (USITC) has launched an investigation into the effects of intellectual property rights (IPR) infringement on the U.S. economy and U.S. jobs. The investigation was requested by the Senate Finance Committee.

The investigation will study violations of copyrights, patents, trademarks, and design registrations.

The ITC  will  publish its findings in two reports. The first will provide a description of the types of reported IPR infringement and China’s related policies on procurement of “indigenous innovation” which could limit the sale of U.S. products within China. This could be of special interest to U.S. companies such as Polaris and Harley-Davidson as they attempt to expand into the Chinese consumer markets.

The second report could be much more explosive. It will describe the size and scope of IPR infringement by Chinese companies and the effect of these actions on U.S. jobs and on the sales and profits of U.S. companies. In addition to Polaris, Harley and Arctic Cat, among others, these companies include U.S. operations of Japanese companies such as Honda, Kawasaki, Suzuki and Yamaha, according to an ITC official.

Depending upon how broadly the ITC wants to define U.S. companies, it could include most powersports companies doing business here, including OEMs such as BRP, KTM, Piaggio and Triumph, as well as aftermarket companies.

The report on types of IPR infringement is due by Nov. 19, 2010, and the second— on the impact of these infringements— is due May 2, 2011.

In requesting the investigation, Committee Chairman Max Baucus (D-Mont.) wrote that more than 80 percent of goods seized at U.S. ports for IPR infringements came from China. He also noted that intellectual property accounts for more than 40 percent of U.S. economic growth.

As part of the investigation, the USITC will hold a public hearing  on June 15, 2010. Written comments also will be accepted. All written submissions, except for confidential business information, will be available for public inspection.

I’ve been hearing for years about how Chinese manufacturers steal designs and produce replicas of popular machines and PG&A items made by U.S.,  Japanese and other manufacturers. Now is your chance to step forward and describe how your products have been illegally copied and how you have been financially injured.

If you’re concerned about dealing with the ITC but want to tell your story, contact me. I can get your information to the ITC.

Here is important information if you wish to submit comments to the ITC:

June 1, 2010: Deadline for filing requests to appear at the public hearing.
June 3, 2010: Deadline for filing pre-hearing briefs and statements.
June 15, 2010: Public hearing.
June 22, 2010: Deadline for filing post-hearing briefs and statements.
July 9, 2010: Deadline for filing all other written submissions.
Nov. 19, 2010: First report due to the Senate Finance Committee.
May 2, 2011: Second report due to the Senate Finance Committee.

All Commission offices, including the Commission’s hearing rooms, are located in the United States International Trade Commission Building
500 E Street SW, Washington, DC.
All written submissions should be addressed to the Secretary, United States International Trade Commission, 500 E Street SW, Washington, DC 20436.

The public record for this investigation may be viewed here.

Project Leaders: Katherine Linton ( or 202-205-3393) and Alexander Hammer ( or 202-205-3271) or Deputy Project Leader Jeremy Wise ( or 202-205-3190).
Analyst, John Kitzmiller ( or 202-205-3387).  JD

Contact me with news tips or story ideas at or 952/893-6876.