For people with a stake in technology and innovation, it would be hard to find a more important and a more over-worked government agency than the U.S. Patent and Trademark Office (USPTO). Yet at the very time that the agency’s budget has been cut, and it lacks a permanent director, Congress is weighing ideas to add even more to the workload.
The USPTO examines more than a half million patent applications and grants more than 270,000 new patents a year. It’s a labor-intensive workload that has quadrupled in the past 30 years and keeps growing at a rapid clip – much faster than its budget. Right now, in fact, the across-the-board budget cuts known as “sequestration” has taken $130 million out of the revenue the PTO brings in through service fees.
But, the USPTO isn’t facing just a money issue. The USPTO’s most recent director, David Kappos, stepped down ten months ago. The Obama administration has yet to nominate a replacement, and it would almost certainly take at least several months for the Senate to actually confirm that person. As a result, the USPTO has been led for the past ten months by the deputy director, Teresa Stanik Rea. Rea is an able public servant with a lot of expertise, but it’s hard to chart long-term strategy if you are in a caretaker role. And, Ms. Rea has announced that she, too, will be leaving the USPTO before long.
Despite these issues facing the USPTO, several bills now circulating in Congress would add to its burden. One example: the "Innovation Act" by Rep. Bob Goodlatte (R-VA), chairman of the House Judiciary Committee, includes a provision to greatly expand new rules to re-examine so-called “covered business-method” patents. Under current rules, companies can get an automatic re-examination only of business-method patents that apply to financial services. Goodlatte’s bill, echoing proposals by Sen. Charles Schumer (D-NY) and Rep. Darrell Issa (R-CA) would expand those re-examinations to all software patents.
Bernard J. Knight, who served as the USPTO’s general counsel from 2010 to earlier this year, warns in a column this week in CNET that the expansion could “set the USPTO up for failure.” He goes on:
“The USPTO must have sufficient resources and personnel to get the work done or it will fail. Judges need to be hired, IT systems must be upgraded, and courtrooms need to be built. All of this requires resources and a director with intimate knowledge of the new law and of the operations of the USPTO….It seems imprudent to expand the work of the USPTO to handle more cases to invalidate software patents when it has less money available to do the work.”
Pretty much everybody wants to reduce unnecessary patent litigation, and limit fraudulent demand letter practices, and improve the quality of patents on the front end of the system, at the USPTO. But loading more work onto the Patent Office, without providing the resources, is a recipe for tying the system up in knots and will only make things worse.