Group calls for more patent office resources

The U.S. Patent and Trademark Office needs funds to hire more examiners and deal with patent lawsuit reforms working their way through the U.S. Congress, a tech-focused think tank said.

Congress needs to end a long-standing hiring cap at the PTO and it needs to end the recent practice of diverting millions of dollars in patent fees back to the U.S. general treasury, said the Information Technology and Innovation Foundation (ITIF), in a paper released Tuesday.

“The PTO’s resources are not keeping up,” said Julie Hedlund, author of the paper. “The patent office doesn’t not have the resources it needs to do its job.”

The PTO has a backlog of more than 700,000 patent applications, Hedlund noted. Although Congress did not divert fees from the PTO in 2005 and 2006, the PTO sent back nearly $2 billion to the nation’s treasury between 2000 and 2004, and there’s nothing stopping Congress from diverting fees in the future, the paper said.

ITIF’s call for an end to fee diversion is the major way the think tank differs from proposals in the Patent Reform Act, now being considered in both the Senate and the House of Representatives. But the paper also advocates several changes to the patent system that would make it more difficult for patent holders to sue and collect large damage awards in infringement cases, suggestions that echo several proposals in the Patent Reform Act.

A separate bill, introduced last Wednesday, would end patent fee diversion.

“We really think that this is the year for patent reform,” Hedlund said. “The system is not getting better, it’s getting worse.”

Several large tech vendors have pushed for patent changes, arguing it’s too easy for patent holders to collect huge damages when a small part of an IT product is found to infringe a patent. Small inventors, pharmaceutical makers, and some small tech vendors have opposed the bill, saying many of the changes would allow large competitors to infringe patents without meaningful penalties.

Like the Patent Reform Act, the ITIF paper advocated a new post-grant procedure to challenge patents. But instead of a nearly unlimited post-grant opposition window, now in the bill, the ITIF would allow opposition more than a year after the patent is awarded only if the patent holder sues a third party for infringement.

Still, the ITIF supports PTO programs that would allow more peer review of patents, Hedlund said. Patent examiners typically have only about eight hours to determine whether there’s a prior invention that would invalidate the patent application, she said.

“How does one person find a needle in a haystack?” she said. “Involving the public in these processes helps weed out poor quality patents.”

Opponents of major patent changes have argued that greater post-grant review would weaken patents and hurt companies trying to raise money to market their patented inventions. But the potential benefit of better quality patents outweighs the concerns, she said.

Some in the audience of the ITIF’s press conference disagreed. The proposed post-grant opposition programs could bring uncertainty to the value of patents, said Peter Harter, vice president of public affairs for Intellectual Ventures, a company focused on new inventions. Post-grant challenges “can be used by large businesses to clobber the little guys,” he said.