America’s antiquated patent filing system is in severe need of an upgrade, but a bill to do just that has, like most other issues that come before the world‘s most deliberative legislative body, been stalled in the senate.
The Patent Reform Act, introduced by Sens. Patrick Leahy (D-VT) and Orrin Hatch (R-UT), would be the first major patent reform in the U.S. in five decades and could fix what many view as a generally broken and outdated system.
The U.S. Patent and Trade Office, which oversees the process, is woefully underfunded. The office is facing a backlog of 700,000 applications and an average wait time of over three years.
The process for disputing a patent is also a mess - long, arduous and prohibitively expensive for many smaller businesses. The cost in fees and other expenses just to file for patent protection usually costs in the neighborhood of $15,000. Defending a patent in court can cost anywhere from $2 to $5 billion.
The bill, currently stalled in the senate, would streamline the process and make it more affordable for small businesses and entrepreneurs to develop and protect technology. First it would move the U.S. to a first-to-file patent system, like the rest of the Westernized world. The U.S. now has a first-to-invent system that encourages endless litigation to determine who invented something first.
Secondly, the bill would allow the patent office to set its own fees, which would be less expensive for smaller companies and simpler patents. The fees would allow the office to raise revenues, hire more staffers and cut down on the backlog of applications.
Those two improvements alone could greatly speed up the process and encourage innovation, but the bill also seeks to improve the system in other ways as well. The bill lays out clear rules and time limits for challenges to patents, provides incentives for bringing patents to market, which discourages the hoarding of patents and allows third-parties a post-grant review of patents.
“This new legislation contains a combination of provisions that will improve patent quality; will provide a more efficient mechanism for administratively challenging the validity of patents; and will provide more discipline and certainty in damages calculations and willfulness determinations,” Leahy wrote about the bill in March.
In his latest book, Saving Capitalism, author and economist Pat Choate said that patent reform is desperately needed to spur innovation, which will in turn lead to job creation.
According to Choate, the Patent Office must be better funded in order to process patent applications much more quickly. Choate also suggests the Patent Office needs to return to a secret application process so ideas can be tweaked and not stolen by competitors, and it also needs to do a better job of protecting small inventors against big corporations that do their best to thwart the efforts of any competitor.
“America faces the great economic danger that Congress and the president will immobilize the economy by unwittingly crippling the patent system. In reality, fostering innovation with strong patent protections and a well-run Patent Office is the surest, least expensive way to bring the nation out of the current depression and create long-term, noninflationary, self-sustaining economic growth,” Choate writes.