Department of Commerce Reports that PTO Fee-Setting-Authority and Improved Post-Grant Patent Challenge Lead to Economic Growth

Doc-largeThe Department of Commerce has released a white-paper discussing the economic value of innovation and coupling that value to the need for reform of the US Patent Laws.  The report focuses on (1) the need for “timely patents” in order to successfully obtain venture capital financing; (2) the need for “high-quality” patents in the area of pharmaceuticals; and (3) the negative effects of poor quality patents and uncertainty in enforcement.  These background points are fairly well accepted. 

The more controversial aspect of the report are the Department’s policy conclusions. Namely, the Department of Commerce argues that (1) USPTO Fee setting authority (and what the Office does with that authority) will help to reduce the backlog; and (2) more broadly available and efficient post grant opposition proceedings will help reduce the cost of litigation. Finally, the report notes that the US patent office is “tax-free” in the sense that taxpayer money is not used to administer the office. The ability to avoid appropriations makes PTO reform a politically attractive policy lever.

USPTO fee-setting authority adds flexibility, allows the Office to more quickly raise needed funds, and also allows for the potential of aligning align fees with actual costs.  As an example, the white paper notes that “abandoned” applications pay only about one-third of the total examination costs.  That front-end cost is “subsidized by back-end patent issuance and maintenance fees that are assessed on successful applicants.”  The report states flatly that “With fee-setting authority, the USPTO could deliver on its aggressive goal of reducing to 20 months total average pendency. This anticipated 40% reduction in average pendency would offer greater certainty to innovators of all stripes, allowing for more timely and accurate R&D investments, and thus, substantially improve prospects for improvement in the Nation’s innovative performance and overall economic growth.”

A more efficient post grant review system would benefit the patent system offering a low-cost and quick mechanism to challenge weak patents. “These patents will then be taken out of the system, saving both potential litigation costs and costs to consumers from the exercise of unwarranted market power. . . . Indeed, almost every academic economist who has ever examined whether an enhanced system of post-grant review should be adopted has favored such adoption. . . . [E]nhanced post-grant review also offers advantages to those seeking to assert valid patents. Litigation-related delay in the resolution of validity contributes to uncertainty for technology investors, increasing the likelihood of underinvestment and mistaken investment, and adding transaction costs to technology commercialization.”

The report is titled “Patent Reform: Unleashing Innovation, Promoting Economic Growth & Producing High-Paying Jobs” and is signed by Professors Arti Rai (Chief Administrator of the USPTO’s office of External Affairs), Stuart Graham (Chief Economist of the USPTO), and Mark Doms (Chief Economist of the Department of Commerce).

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180 thoughts on “Department of Commerce Reports that PTO Fee-Setting-Authority and Improved Post-Grant Patent Challenge Lead to Economic Growth

  1. NAL is so-so, for her age she probably looks decent. At least in so far as a (not so?) recent corporate pic o her shows. But I would definitely not think she’s skanky. Save for her beliefs on patents.

  2. Well it is the female sex. But who I am referring to that it may be, looks more like a basketball player

  3. HBH sarah?

    I didn’t know you swung that way.

    HBH: The preferred, abbreviated form of Hobag Hottie, a term that applies to skankily attractive individuals (namely of the female sex).

  4. Idk guys, at least with a flat tax you can hold the government more accountable because you can see more clearly exactly what tax they’re taking. People would notice it more. Do you think they passed the bs tax lawls around 1916 because the people wanted their taxes to come from their payroll? Do you think that withholdings came about because THE PEOPLE wanted it? No, it was just another way to sux money outta the people without them getting too pissy. Fact is, considering ALL the taxes I pay currently my tax rate is probably somewhere in the neighborhood of 45%. That sht needs to go.

  5. I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote.

    Most of the people who did the real work back then weren’t allowed to vote.

  6. What is “so little” in your mind? 75% of the Federal revenues being paid by the top 10%, and you view that as being “so little”?

    That means the next 90% combined pay about 25% of federal income taxes; except as we know more than half of them actually pay nothing.

    That wouldn’t change much with a flat tax, or with any type of tax reform.

    Rich people still have more income per person than poor people, so they’re paying a percentage of a larger base amount. You’ll still have a small percentage of people paying a larger percentage of the tax unless you have a highly regressive rate structure.

    Also, a lot of the people who pay no taxes have very little income to be taxed under any system. You’ve got your standard lazy “liberal” welfare recipients that conservatives would have us believe make up the entire 40%, but also the disabled, the retired, children, stay-at-home spouses, people who are legitimately out of work because of the economy…

  7. BJA I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote.

    Hmm. Is that something that Woodrow Wilson wrote?

  8. Boiled, my point was obscured. I just meant that it won’t work if you have people voting who aren’t paying.

    My solution isn’t that people should be denied the vote, but that they should be made to pay “their fair share” (i.e., ANYTHING AT ALL).

  9. Ned, I believe in opportunity. I also know that the feds are not chartered to be in that business. Now is not the time to “find common ground”. We are going bankrupt. Period. We either turn it around, or drive it off the cliff.

    Socialism fails because you’re punishing hard workers and enabling freeloading. It’s that simple.

    Legal aristocracy is bad, see my second post. I’d prefer that, like when this country was set up, we ALL work and we ALL contribute and we ALL vote. My point was simply that it doesn’t work if you let the children run the house, the inmates run the asylum, or the welfare dependents run the country. It’s doomed to failure.

    Ned, you need to read up on “progress” if you think that they can be convinced that socialism is not the way to go. It’s central to that belief system, that utopia can be achieved here on earth through govn’t. That’s Wilson, not me. See American Progressivism: A Reader.

    As far as STATE programs go, I think you should get a voucher for a grade school education, and then be able to take out loans at fixed rates for any higher education you want. Everyone gets the same opportunity and access to those programs. I’ve also previously said that provisions for those who physically cannot provide for themselves should be made.

  10. “Boiled, I don’t even know who that is.”

    HERESY! Someone posting on a patent law blog doesn’t know Heinlein? Oh the shame of it, the shame of it! ;-)

    Seriously, Heinlein was a mid-20th century science fiction writer who had a lot to say about society and group morality in his stories. Your thinking along the lines of limiting voting franchise to taxpayers would have suited him pretty well.

  11. Boiled, I don’t even know who that is. I read a lot of very irrelvant people like John Locke, Thomas Jefferson, James Madison, Woodrow Wilson, FDR, Ben Franklin, etc.

  12. Bad Joke, yes and no. I would hope you would agree that a legal aristocracy is a bad idea. I would further hope you would agree in the concept of equal opportunity.

    Now the with regard to the latter point, I somewhat agree that it is better to provide everyone with a floor education, access to food and housing, and to some degree, health care. This does tend to convert the slogan of equal opportunity into reality.

    The problem I have with the a lot of the socialist agenda is that they not only want to help the poor, they want to hurt the rich. Further they want to the government to run everything as a state monopoly ignoring the reality that all monopolies are bad for society.

    A secondary problem is that by providing the basics of living essentially free of charge, we have created the opportunity to live one’s entire life on welfare, not unlike the situation of our Indian reservations. We need to fix this.

    BTW, I would argue that LBJ knew that his welfare legislation would lead to blacks and other poor people living in separate ghettos and that this was fully intended. Nixon pointed out that this would happen and argued that we should do everything possible to integrate blacks into society as a solution to poverty. Thus was born affirmative action. But the welfare state persisted and worked to segregate blacks nontheless.

    Regardless, our best argument with the socialists is to agree with them on certain principles that we all seem to share, and then argue that punishing the rich, monopolizing education or health care, does not help, but rather, hurts us all. I think they can also be persuaded that integration is the way forward and that welfare, structured as it is, impedes progress.

  13. MM writes, “[1] Not nearly so much as it bothers me that the ultra-wealthy get away with paying so little… [2] Speaking as someone who lives comfortably ….thanks to Uncle Sam and his generous grants and loans for higher education…. … [3] don’t understand the sentiment of making it more difficult for lower-income families and their children”

    [1] What is “so little” in your mind? 75% of the Federal revenues being paid by the top 10%, and you view that as being “so little”?

    That means the next 90% combined pay about 25% of federal income taxes; except as we know more than half of them actually pay nothing.

    [2] Speaking as a former ward of the state (foster child for the uninitiated) who clawed his way by working through several degrees with no assistance from anyone, much less Mooney’s Uncle Sugar (because by working during school, each year he’d learn that he made too much money to qualify), pray tell WHAT a discussion on spreading federal income taxes to the 50% of non-payers has to do with grant/FSL programs? Very nice and heartwarming story, though.

    [3] Speaking of heartwarming and fuzzy; just couldn’t help yourself, had to go and bring in the ubiquitous “[wrings hands] but… but… what about The CHILDREN” into the narrative, eh?

    How about teaching the children that proud citizens support their government, too? It’s not just for “the rich” to do so?

  14. Tired liberal lines by MM: why do you h@te poor people version.

    “I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up. Baffling, really.”

    Let’s see, if my parents don’t work…. free school, free school food, free college, free college food and housing, free law school, free law school food and housing. Wow, that’s a tough way to get ahead.

    Now my parents worked. Property taxes for school, pay for food at school, 50k for college, pay for college room and board, 100k for law school, pay for room and board. Now I’m competing for work with 200k in debt versus a guy with zero debt.

    It’s just so hard for the “poor” to get a leg up, huh?

    MM, why do you h@te people who work for a living?

  15. Tired liberal lines by IANAE:
    You can’t be rich if everyone else has the same amount as you.

    Have you ever seen poor? We define poor as a house, car, big screen tv, DVD player, cable, phone, internet, computer, and a plate full of pizza and hamburgers. THAT’S RICH. WE ARE ALLLLL RICH. I’ve seen poor, and it didn’t look ANYTHING like a plate of pizza. In fact, it looked like starving to death.

  16. Boiled, you’re right about AGI taxable, etc.

    You’re also right about having a stake. I don’t care if it’s 1 dollar. But getting a handout as a “refund” and then CONTROLLING the mechanism for getting that handout is simply legalized theft.

    To have a stable system, you can’t have people voting themselves other people’s money. You’ll run out of other people’s money. But you know that. It’s a choice. To have a stable system, you either have people on the take who can’t vote because they’re on the take, or you simply don’t allow people to be on the take (unless some phyical disability or such applies) and allow everyone to vote. Anything else, and your system is doomed to failure, or so any rational person would surmise.

  17. MM, another topic on which you have no knowledge. Is there anything that you DO know anything about?

    Get away with paying so little taxes. BWHAHAHAHAAHAAHAHAH. Have you honestly NEVER read any report of the amount of taxes paid and by whom, or even any of the posts above your’s?

    What do you call this alternate planet you live on?

  18. You can’t be rich if everyone else has the same amount as you.

    Sure I can. I just might not be richer.

    most people wouldn’t pay it, and I therefore wouldn’t work it.
    Does that mean that someone else would be hired to work what you wouldn’t? That might not be a bad thing.

  19. BJA wrote, “Boiled, your nits picked are wrong. Deductions from income apply BEFORE you calculate your AGI and tax liability. Credits are applied against tax liability.”

    Just looked at my 1040 and both of us are putting some things in the wrong order. AGI is calculated by subtracting out certain expenses and just a few deductions such as SEP/SIMPLE plans, student loan interest, etc. But all the regular deductions (mortgage, charities) and exemptions are subtracted from AGI to give you taxable income.

    Anyways, while your idea of not allowing the non-payers to vote is attractive and the way you stated it was pretty pithy (“dependents”), it still bothers me and I wouldn’t agree to it.

    Instead, I want all Americans voting federally to have a vested interest in their federal government, even if it’s just a small stake.

  20. I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up.

    You can’t be rich if everyone else has the same amount as you.

  21. Doesn’t it trouble you that half of the taxpayers in this great nation of ours are completely divested of responsibility for paying into the general revenues?

    Not nearly so much as it bothers me that the ultra-wealthy get away with paying so little.

    Speaking as someone who lives comfortably in the top 4 or 5% (thanks to Uncle Sam and his generous grants and loans for higher education, as well as the decent public schools I had the good fortune to attend while growing up in my largely blue collar community), I really don’t understand the sentiment of making it more difficult for lower-income families and their children to get a leg up. Baffling, really.

  22. Ned, those ideas may sound great in the halls of a university surrounded by like minded yes men, but when the rubber meets the road and natural law comes into play in what we adults call “the real world”, it all falls apart, and Russia, Italy, Greece, Weimar Repulic, and the Roman Empire all fall apart.

  23. Adam, the rate question is really the marginal time, marginal cost, and opportunity cost question.

    I work about 60 hours a week average.

    Getting me to work the 35th hour is pretty darn easy. It doesn’t take much. Same for the 40th.

    The 50th is eating into my family time, and I’m ready to go home and not miss out on life.

    The 60th hour is eating into my sleep. You’re now going to have to pay me real money to stay at work.

    The 70th hour? You’re going to pay out the wazoo, or I’m going to the house.

    Now if you start taking more of my money the more hours I’ve worked, then that 70th hour will cost you TWO wazoos, most people wouldn’t pay it, and I therefore wouldn’t work it.

  24. Boiled, your nits picked are wrong. Deductions from income apply BEFORE you calculate your AGI and tax liability. Credits are applied against tax liability.

    I don’t care if they don’t pay in. Just don’t take a handout and call it a refund, and don’t vote. Letting your dependents dictate the house rules is bad at home, and it’s bad for the country.

  25. All, to understand how socialists think, you have to go back to their roots, Rousseau. For example, Rousseau believed that all economic inequality was immoral and created a moral imperative to end or reduce it. link to sparknotes.com

    His ideas were adopted with some force by the French revolution, and by all leftists since.

    When we talk to a socialist, we have to understand where they come from and not just say they are wrong. In the context of France of Rousseau’s era, dominated as it was by a legal aristocracy, some of what he had to say made sense.

  26. TINLA,

    Your numbers are inaccurate.

    If the top 5% make 66% of all income, and you go to a flat tax with no deductions/credits, then they would indeed pay 66% of the taxes. Right now though, the top 5% pay somewhere between 50-60% of all taxes, and I can’t find the number on what percentage of all income they make. It is DECIDEDLY less than 50-60%.

    Let’s look at another number. The top 20% recieve 45% of all income. They pay 83% of all taxes. So in other words, they’re paying double their “fair share”.

  27. BJA wrote, “Those deductions pretty much all have phase outs that “the rich” long passed.”

    Not to mention that even the deduction phase-outs don’t matter when you get smacked with AMT.

    It’s pretty disappointing every year to do my taxes according to the routine scheme and look like I might just break even, then do it via the AMT scheme and find out I have to cut a check for $5000.

    Wish they’d just let me stipulate that I’m going to get hit with AMT so I could skip the drudgery of doing the first return according to the regular scheme.

  28. BJA,

    If the whole world had the same policy of taxing the top 5% (who have 66% of the imcome and 95% of wealth and property) then you’d see different results. As it is, if we were to try and make them pay their “fair share,” they would just go somewhere else “trickle down” on the folks over there. If we ever do want to make people stop resting on their laurels, and make them “use or lose” that horded wealth, we’ll have to have a world government. I know that’s really scary and all, but that’s basically the only way I can think of that it would ever work.

  29. “If the current tax rate were 10-15% I bet you’d argue that 5-8% would be much more reasonable.”

    10 cents on the dollar is a heck of a lot less of a burden that 30 cents that you think I should be willing to cough up if I want that dollar bad enough.

    The problem is INSANE, your perspective is all wrong. I’d say, if you’re going to take 30 cents of my dollar, its not that I don’t want it bad enough, its just not really worth my time. The fact is, I might not get off the couch for 70 cents, but I will for 90 cents.

  30. BJA, “That 40% has zero federal AGI. They pay no state taxes either, and may get additional welfare in most states.”

    I get what you’re saying, but not necessarily agree with all of it. First, note they may well have >zero federal AGI, they just don’t have tax liability once the taxable income is calculated and after deductions and/or credits (yes, this is picking a nit, but there’s a reason). Then, it will depend on their own state tax scheme whether or not they have tax liability.

    And for any interested, I’m not against progressivity in general. I am against having approximately 50% of our voters not really having a true federal stake. Crap, tax them (the 50% of current non-paying folk) from 2% at the bottom to 5% or something at the top of that particular heap.

  31. IANAE,

    I assume from your comments then that you think we need more welfare, higher taxes on “the rich”, more unions, and more tariffs.

    How’s that working out in Europe, and why not just go to your utopia? It’s already there.

    We all know they’re broke, and you’re literally, definitively insane for suggesting that the same won’t be our fate.

  32. Boiled,

    You’re overlooking a number of things.

    That 40% has zero federal AGI. They pay no state taxes either, and may get additional welfare in most states.

    Their SS and medicare are vastly exceeded by their handouts.

    They simply exercise a right to sieze your money. There’s no two ways about it.

  33. IANAE, I think might be wrong about the flat tax being better for the rich. The top 5% in income make 66% of the money, but pay 33% of the taxes. Doesn’t a flat income tax by definition eliminate exclusions and deductions so that they would have to pay 66% of the taxes?

    On the other hand, maybe your are only contemplating a system that is neither progressive nor regressive in rate. But the rate is progressive now. So going flat would reduce taxes on the rich and increase them on the poor as you suggested. That must be what you mean.

    Of course, if it’s a sales tax as Forbes suggested, then they only pay taxes on what they spend. Whatever they horde is tax free until they spend it, and the rich are the ones who will have money left over. Going from an income tax to a flat slaes tax liek that would have greatly benefited the rich and robbed Congress of its influence, since they practice social engineering through deductions and exclusions.

  34. ping -

    We’re defining it differently. I’m using flat to mean flat rates; everyone’s tax liability is determined on a 10% basis, 12% or whatever.

    I’d prefer no deductions or credits, but I was not using “flat” that way.

    And no, for big unconsitutional fed govn’t types like IANAE, the fight is on the rate, not deductions and credits. The deductions and credits arguments are just window dressing. Marginal rates are exponential as it is. Most people pay nothing to the feds, or over 30%. The income range for lower marginal rates is very small because all of the deductions and credits phase out at the same points or lower than the rate increases. It’s like a step function. You either 1) are on the take or pay nothing, or 2) you pay over 30%; very few fall anywhere in between. When you hear a liberal talking about the deductions that “the rich” get, just write them off. Those deductions pretty much all have phase outs that “the rich” long passed.

  35. MM: “And taxes remain too low for $1,000,000+/yr earners.”

    This is an insane statement.

    Doesn’t it trouble you that half of the taxpayers in this great nation of ours are completely divested of responsibility for paying into the general revenues?

    Yes, they pay their 7.5% social security and medicare. Yes, depending on state of residence, they pay somewhere between 0% and 6+% of their income to their state. And if they own a home, they’ll pay real estate taxes.

    But half pay zippo into the general fund (not to mention many of them also get a small bit of a “refund” despite paying no federal IC taxes).

    Doesn’t it bother you that there’s a huge population of citizen voters who have no investment in the federal government except for the two social welfare programs?

  36. IANAE,

    eliminating the tax code would increase the marginal rate for 40% of the country.

    Boy, that’s a really inconvenient fact for you and your “fair share” buddies isn’t it?

  37. A flat tax just affects the rate, not the process.

    Specifically, a flat tax increases the marginal rate at the low-income end, and decreases it at the high-income end, relative to the current system.

    Wouldn’t that dig the welfare trap even deeper than it already is? How desperately do we really want to discourage poor people from getting off their couches and doing something taxable? Especially if we’re talking about reducing lower- and middle-class wages by reducing union power and otherwise making American labor competitive with the rest of the world so we can even have a domestic economy at all.

  38. BJA,

    But wouldn’t the flatness of the rate be the driver? As I understand it (poorly), isn’t the jockeying about the un-flat portion – which deductables, apply or not, which special circumstances apply and when, part of the battle? With flat, all that goes away.

  39. ping-

    No, flat wouldn’t.

    Most battles are for defining what consitutes income and expenses for purposes of determining income. A flat tax just affects the rate, not the process.

  40. “If you’re going to unevenly tax American based companies because they use facilities in countries with very low labor standards….. why wouldn’t they just leave altogether?.”

    BJA,

    Point well taken, but I still stand by being (generally) a politically conservative. I also pointed out I don’t necessarily think “taxation” (or tariffs) is necessarily the solution. What’s really needed is put the entire world on the same level playing field, not tilted like it currently is against America where labor costs tend to be high (but the standard of living is also better and with more consciousness of being safe and enviro-friendly), relative to those in India and especially China (who aren’t as concerned about safety or enviro-friendliness). China is particularly troublesome because they too often completey cut corners, including providing products that are toxic (witness, for example, the pet food scandal), put no restrictions on pollution (what I call poor stewardship of our global resources, unless it’s the Olympic games where they almost shut down their industry because of the pollution issue), etc. Europe isn’t much better as they discriminate against importing American agricultural products, yet then screams when we try to prevent “dumping” by them through the use of our ITC.

    At least some of this lack of “levelness” is our own fault as we don’t push as hard as we could or should with, for example, by using our International Trade Representative to make that playing field more level. Most significantly, we could do more for our American small businesses so they’re not so burdened by taxes, regulations, and so forth (I’m not saying allowing unsafe practices but at least heed the fact that smaller businesses can’t deal with huge amounts of bureaucratic paperwork like large businesses can).

    Most of my comments about “runaway flag businesses” are also directed at large, essentially multi-national companies that are simply “American” in name only, but offshore as many functions as they can or can get away with. What’s ironic is that at least some of the “offshoring” has not worked out very well and later, these same companies try to bring those functions back onshore. The trouble is that there isn’t anyone here to return to those functions because no one is training/going to school for those functions for obvious reasons (i.e., the opportunity has dwindled or disappeared offshore).

    Again, if you want to be treated as an American (and not a “foreign”) company, act like one that cares about American employees (also don’t get the idea I favor unions which I don’t) and American job growth. Unfortunately, larger companies don’t generally manifest that attitude (and in fact are generally shedding American jobs), but smaller companies do (which are our current job growth center). Given that, how would you propose encouraging larger companies who act like “real” American companies?

  41. Flat tax. That way everyone pays “their fair share” – That depends on what you mean by “fair”.

    My fair is more fair than your fair.

    Wouldn’t a flat tax wipe out half of all accountants and at least a third of the IRS?

  42. Oh so it’s okay to steal an idea from someone. Or a job from another. Because hmmm let me think. You need the quid? And I should serve you at a McDonalds?

  43. So do you know a Law firm named Barnes and Thornburg. Someone is yanking my chain here.

    I used the cell phone this morning calling another Law firm.
    And as I was leaving a message that was very informative. The call was dropped. That happens whenever I mention my problems from a cell phone.
    Ned aren’t you from Europe. Akin Gump?

  44. But what is very certain is that when a company gives up, and moves its production overseas, it is not a matter of greed. It is a matter of life or death.

    How is it “very certain” that when a company does something to save money it is a matter of “life or death”? What if that company tries to negotiate a better deal on office supplies? Also life or death? Or the usual slavish devotion to next quarter’s earnings?

    What an utterly INSANE thing to say. I give the full value of my efforts, I want the full value of each of my dollars…

    No you don’t. You think 10-15% tax is reasonable, so clearly this isn’t a principled stand about getting the “full value” of each of your dollars. You just want to be taxed less because you’d rather have the money, same as everyone else. If the current tax rate were 10-15% I bet you’d argue that 5-8% would be much more reasonable.

    not another six pack of 40s for the boyz in the hood.

    I wasn’t aware of that particular government program.

    Flat tax. That way everyone pays “their fair share”

    That depends on what you mean by “fair”.

  45. WOW, the progressive non-thinking intellectuals (i.e., Sarah, IANAE, Hutz) really out-did themselves last night.

    I’ll summarize:
    The solution to the current problem of job outsourcing and recession is to increase taxes on investors and business owners, increase taxes on companies, increase regulation, and place tariffs on goods produced by American based companies overseas.

    I continue to be amazed at how good your marketing efforts are to sell that pile.

    You’re going to take away the ability of business people to increase the size and scope of their businesses and make new businesses, increase tax expenses of American based companies, increase compliance expenses of American based companies, and THEN, increase the acutal price of good made by American companies relative to their foreign rivals?

    And this all helps who? How?

    You guys are EXCELLENT salesmen.

    Especially when you’re selling this to the people who LOSE THEIR JOBS under your plan; the businessmen, lawyers, and accountants who work and run this American based global companies.

    You guys are pretty determined to destroy the economy of America, huh?

  46. “Mr Smith, what methods would you suggest, other than tariffs, would be appropriate to penalize job outsourcing and/or promote job insourcing to this country?”

    Rewards are much more powerful than “penalties.”

    If you want jobs to stay in the U.S., make the U.S. more business friendly: reduce corporate taxes, reduce union influence, get rid of this ridiculous notion of limiting executive pay (unless the tax payer is funding it).

    I would say however, that perverse incentives to raise the short term corporate profits, like wide spread layoffs that are followed by executive bonuses should be disincentivized with extreme prejudice. Its like a human version of corporate pollution. You could offer tax credits but take them back retroactively in view of short sighted layoff pogroms.

  47. EG,

    You’re not a conservative, or you wouldn’t propose non-solutions. If you’re going to unevenly tax American based companies because they use facilities in countries with very low labor standards….. why wouldn’t they just leave altogether?

  48. IANAE,

    Flat tax. That way everyone pays “their fair share” instead of 47% of the country free loading and 40% of the country getting a check from me just for clogging the highways every day.

    “Liberal republicans”. The comedy of errors never stops with you. By definition, there is no such thing as a liberal republican or a progressive republican. They’re properly called RINO or Republican In Name Only. Which is why I dislike the republican party to begin with; they allow people to use the monikor who don’t believe in the fundamentals.

    You’re obviously beyond help, and so goes our country.

  49. “Anybody who doesn’t want to earn a dollar and give away 30 cents doesn’t want that dollar bad enough anyway”

    What an utterly INSANE thing to say. I give the full value of my efforts, I want the full value of each of my dollars…

    If not, I want something meaningful for that 30% – not another six pack of 40s for the boyz in the hood.

  50. sarah, et al., ouch!

    Many of you simply have no idea that companies have to fight every year, every month, every day, every hour to survive. If they produce products, they must always strive to produce those products with higher quality and lower price, else they will be eaton alive by their competition.

    In almost any situation where an American company is moving production overseas they are doing so because they have no choice. America imposes costs on companies in many different ways that we should address and consider in order to keep American companies and American jobs here. But what is very certain is that when a company gives up, and moves its production overseas, it is not a matter of greed. It is a matter of life or death.

    So do not point your fingers at corporate America. Point your fingers at yourself. You, America, are the problem.

  51. Well I for one think it’s time to charge so much (when a company leaves here that it’s not cost productive to buy from them) so they can’t sustain themselves in our market.I don’t expect our borders to close. But when you are an american company that hires and works the people and the economy, and some other Greedy american company decides they can turn a higher profit at the cost fo Jobs in america. Then it is time to take drastic measures. And if the Government finally realizes that drastic times call for drastic measures. This country will be great again. Otherwise the tea Leaves are already understood. And this absolutely nothing to do with the Right or the Left. My God wake up Congress. Who do you think you are working for?

  52. it’s still way better to earn more money than to earn less, and it’s still way better to be rich than to be poor.

    I love the way this is put – completely inarguable. Not sure how it relates to the discussion, but truisms are always good.

    However, I would definitely trade “earn a dollar and give away 30 cents” for “earn a dollar and give away 15 cents”, arbitrary or not.

    I also don’t know what wanting the dollar bad enough has to do with any position under discussion. If the question comes down to the opportunity cost of a net seventy cents, I’d have to know what the competing opportunities are.

    Mr Smith, what methods would you suggest, other than tariffs, would be appropriate to penalize job outsourcing and/or promote job insourcing to this country?

  53. I’m sorry but 30% or more is a high rate. 10%-15% would be reasonable.

    Those numbers sound completely arbitrary.

    Sure, we’d all prefer to be taxed at lower rates, but how do you know what rate is reasonable and what rate is too high? I mean, other than by checking which administration enacted the rate.

    Even at 30%, it’s still way better to earn more money than to earn less, and it’s still way better to be rich than to be poor. Anybody who doesn’t want to earn a dollar and give away 30 cents doesn’t want that dollar bad enough anyway.

  54. “No one in this country is taxed at a high rate;”

    If you believe this, then I would suggest YOU are the perversion.

    I’m sorry but 30% or more is a high rate. 10%-15% would be reasonable.

    “We need to reintroduce tariffs”

    Isn’t that what Smoot and Hawley said? It led to a deepening of the Great Depression.

    Great idea PutzHutz let’s deepen suffering.

  55. “America is supposed to be a free capitalist nation.” – I must have missed the part in civics that wed the political to the economic. Must have been a good surf day.

    I feel all scholarly, quoting myself.

    Those “too many companies” are simply being companies. Even though the Supremes think that companies have a voice like individuals, they do not have “citizenship” in the same sense as individuals. Asking them to constrain themselves to act in the best interest of any particular country is an arbitrary and fruitless exercise. You cannot ask, you must demand.

  56. “(4) We need to reintroduce tariffs on companies that move jobs overseas for taking advantage of poor labor standards, unsafe working conditions, environmental destruction, socialized medicine, and all the other reasons companies move jobs overseas.”

    Lionel,

    I, a political conservative, agree with your last point. There are too many companies HQed here that are “American” in name only. They act just like “run away flag” ships do, owing allegiance to no nation, including ours. Tariffs may not be the right answer, but someting needs to be done to prevent “offshoring” of our economy. Sorry, I’m an American, first, last, and always.

  57. A perversion calling itself Adam Smith wrote:

    “If I tax everyone at a high rate, except those on the dole, there will be no incentive to invest and grow.”

    (1) No one in this country is taxed at a high rate;

    (2) The people who make the most do not pay the highest rate as most of their income is capital gains. Plus social security is such a small part of their taxes, they do not even see it.

    (3) If you wantb to lower corporate taxes and simply raise taxes on those who receive the most income, I am all for that. Actually someone who makes $100M should not be motivated to make more money as those are the people who create and/or participate in crazy financial shenanigans. If the money they earned was actually tied to real value such as production, I would have less problem with it.

    (4) We need to reintroduce tariffs on companies that move jobs overseas for taking advantage of poor labor standards, unsafe working conditions, environmental destruction, socialized medicine, and all the other reasons companies move jobs overseas.

  58. they’re liberals. They enjoy raising taxes and not paying them

    What, you mean like all those rich liberal Republicans who want to raise taxes on people other than themselves?

    Seems to me it’s perfectly capitalist to want to keep all your money while the government takes someone else’s money to buy you stuff. Unless I’m mistaken in my understanding that capitalists generally like accumulating money and dislike giving their money to other people.

  59. Mooney/INSANE are examples of those special kind of 1d1ots who actually ENJOY paying taxes…

    Speaking for myself, it pains me greatly that a substantial portion of my Federal taxes is spent on pointless wars (including the military welfare program) when it could be spent on improving various aspects of the country’s infrastructure. But still worth it, overall. And taxes remain too low for $1,000,000+/yr earners.

  60. “You’ve made the point that the amount of money involved might be different. You have yet to make the point that shuffling around the tax burden between taxable entities is more or less wealth-redistributive depending on whether the amount is known in advance or whether it is intended to incent behavior you personally agree with.”

    Look INSANE I can’t argue with stuuupid. The fact is taxes are immediately wealth redistributive. Tax credits are not. If I unburden someone, I’m not burdening someone else, especially if by unburdening them, I cause economic growth which increases tax revenues without increasing marginal rates. I could even see an increase in revenues despite decreasing marginal rates when the economy heats up sufficiently due to my tax credit “stimulus.”

  61. Because paying less taxes than your competitor is the most important thing ever for corporations. There are no other considerations.

    There’s the consideration of “we didn’t bother to check whether we could save some taxes by moving”. There’s also the consideration of “what do you mean, the country? I’m getting me a PO box in the Cayman Islands!”

    But yeah, taxes are important. Just as important as anything else that costs companies money. Except subsidies, of course. Subsidies are completely different from tax breaks.

  62. BJA Why not move your corporate headquarters to a lower tax jurisdiction to better compete with your rivals?

    Right. This is why every single corporation in the country is headquartered in the lowest tax jurisdiction in the country. Because paying less taxes than your competitor is the most important thing ever for corporations. There are no other considerations.

  63. Ok I am in the process of doing it again RWA. I did it before. But now I see they have completely joined. and for the sake of doing it again.
    Here we go again.

  64. IANAE, funny you should mention Raegan.

    It’s funny because it’s true. Wait, no. The opposite of true. Because I wasn’t the one who brought up Reagan.

    Couple that with the utter destruction of all business in the US, and this is a hole that we’re not getting out of for quite some time, if ever.

    You can cut that out, there’s no tax credit for melodrama.

  65. Thus, I am trying to make the point that a tax credit is different from a direct subsidy and is generally not wealth redistributive.

    You’ve made the point that the amount of money involved might be different. You have yet to make the point that shuffling around the tax burden between taxable entities is more or less wealth-redistributive depending on whether the amount is known in advance or whether it is intended to incent behavior you personally agree with.

  66. IANAE, funny you should mention Raegan.

    Which year was it that he had a 1.5 trillion deficit? Which year did he spent nearly 4T?

    Face it, no matter how good you think socialism is, it doesn’t work. You run out of other people’s money. We have simply NEVER spent like this by any metric whatsoever. Couple that with the utter destruction of all business in the US, and this is a hole that we’re not getting out of for quite some time, if ever.

  67. “I said that the government giving you money they took from you in the first place is the same as the government letting you keep your money.”

    No it isn’t.

    First of all, a tax credit is not “giving me money that was taken from me in the first place.”

    Its a promise not to tax me based on an uncertain amount of money I spend on a incented, economically fertile behavior. The amount of the expenditure, the credit, and the net benefit is not known a priori.

    A direct subsidy is giving me money that was taken from someone else to incentivize a kind of behavior, usually unproductive, such as poverty.

    Thus, I am trying to make the point that a tax credit is different from a direct subsidy and is generally not wealth redistributive.

  68. lionel, you’re a putz. I’m amazed that supposedly smart people have such a loose grasp on basic economics. If you tax a business, it’s a cost. They raise prices. Who’s paying their fair share again?

    If you tax companies, they’re going to avoid that. Why not move your corporate headquarters to a lower tax jurisdiction to better compete with your rivals?

    Then we’re short again? So you raise taxes again?

    You guys are nothing short of geniuses IANAE and Lionel.

  69. And I thought it was Roosters?

    The PTO rejects roosters, because so many people claim bigger ones than they can demonstrate possession of.

  70. If you live in Kansas, does that decide your a SURE republicsan vote? Would that be a hereditary concept? Or would that be DNA? Oh my golly I have just come up with something other than DNA. RNC! Golly I have graduated form worthless to worth less. LOL

  71. In other news, the teabaggers are asking that USPTO deposit accounts be updated to accept payment in the form of chickens.

  72. Addendum to my 1:51 post: And I’m pretty sure in the case of at least one of my competitors, that many of the oppositions were filed just for the purposes of training the younger in-house EP patent attorneys and justifying their sizeable London patent attorney staff.

  73. Adam Smith writes, “Now you’re back peddling and … …This is what deer do when they are caught in the headlights.”

    No, no, backpeddling is what the unicycle-riding circus bears do when caught in the headlights.

    Them there deers, they just kinda stand there frozen, waiting for that big “thump”.

  74. Are you saying a socialist country is non productive:? I know you are not speaking of America… But whom are you speaking of? Show me the data that says that anyway. Enlighten us.
    I would like to know about all this crap they claim is taking us down that road.
    I sure am glad I am on the down draft. didn’t they say that about Clinton? Is that the mind set? If you vote democrat, you are a socialist?
    inquiring minds want to know.

  75. The government exists to provide national defense, build roads and settle disputes. Anything else is intermeddling.

    We’ll just get rid of that nasty, intermeddling patent system then, shall we?

    So INANE where did you receive your statist indoctrination?

    From the constitution.

    Now you’re back peddling and saying that you didn’t say this or that, or take this or that position.

    I didn’t. I don’t care about what approach to taxation creates or destroys wealth. If you want to argue the point, show me where I took this or that position.

    I said that the government giving you money they took from you in the first place is the same as the government letting you keep your money. I don’t know why you feel the need to strawman that profoundly uncontroversial statement so you can disagree with it. You’re allowed to accept the obvious, even if it comes from someone you often disagree with.

  76. Its OK, INANE, I know you’re having trouble with the analysis. Now you’re back peddling and saying that you didn’t say this or that, or take this or that position. This is what deer do when they are caught in the headlights.

    If I tax everyone at a high rate, except those on the dole, there will be no incentive to invest and grow. I will take from the productive and give to the non-productive with no net growth in my economy. Pure redistribution. And I am subsidizing non productivity, thus encouraging more of it. Highly un-sustainable.

    If, on the other hand I reduce taxes, and I give 10% of the population who are engaged in productive pursuits a tax credit and, as a result the population experiences a level of prosperity that increases wages, everyone is better off and my tax revenues actually INCREASE without having redistributed any wealth (no taking from A and giving to B). In fact because I reduced taxes overall, I actually CREATED wealth.

  77. RWA writes, “When was the last time you saw a real corporate R&D department? Its been decades since corporations funded in-house R&D on a large scale.”

    RWA, not sure what world you live in or what you consider to “real” corporate R&D, but I know of many companies that are funding R&D in the range of 200-400 million US a year. That seems like “real” funding of R&D to me. Maybe those you’re connected with slacke way back after that (what, 2003 or `04?) IRC change (and even before the change, the IRS started demanding more and more in the way of outcome-proof to get the tax credits), but that doesn’t mean all or even many necessarily did.

    That is, unless the underlying premise is incorrect and for you, “real” R&D is not in the range of hundreds of millions?

  78. Paul F. Morgan writes, “Furthermore, if some company is so concerned about a patent that it would file an opposition against it [not cheap], should that not attract a troll company to buy an interest in that patent to assert it against such self-identified target?”

    Actually, if oppositions in the US look anything like at EPO, there’s not as much self-identifications of targets as one might suppose.

    Many companies inventing in the same space routinely oppose one another on nearly every grant. There’s not a whole lot of suspicion that the opponent is necessarily infringing; it’s just trying to keep the space cleared as a strategy for possible futures.

  79. If you give tax credits, the economy grows and gross tax receipts increase without having to raise the marginal tax rate.

    I didn’t say anything about the marginal tax rate, did I? All I said was that the money has to come from someone else.

    Also, I never advocated any particular tax policy, so I don’t know who you’re trying so desperately to disagree with.

    Regan sure was right about that…

    Didn’t Reagan run up a huge debt during his administration?

  80. “The government exists to make America a better place”

    Wrong. The government exists to provide national defense, build roads and settle disputes. Anything else is intermeddling.

    WE are supposed to be the ones who make America a better place. The government is a necessary evil.

    So INANE where did you receive your statist indoctrination?

  81. ping writes, “As Ned indicates, tinikering such as this makes the patent areana the sport of Kings.”

    Yes, well, we don’t have Kings here in America, now do we?

    But they do still have Kings over the pond in Europe, don’t they?

    And the EPO has a post-grant opposition period, doesn’t it?

    Why then, Q.E.D. you have been shown to be correct that instituting a post-grant procedure will make of the patent areola the sport of Kings.

    Riiiiight.

    @SteveM and his 1.99 disclosures – that would be just fine if the Examiner’s were capable of putting 2 and 2 together. Inasmuch as they are NOT, a post-grant review is the better option.

  82. I’m confused.

    Understatement of the year.

    America is supposed to be a free capitalist nation.

    I must have missed the part in civics that wed the political to the economic. Must have been a good surf day.

  83. Oook on this

    “And in turn, they have to tax someone else ”

    Not if the economy grows as a result of the credit. That’s the same hackneyed old saw to justify tax and spend.

    If you tax the crap out of people there is no growth. If you give tax credits, the economy grows and gross tax receipts increase without having to raise the marginal tax rate. Regan sure was right about that…

    But I’m sure you can’t “get” that kind of dynamic complexity… It blows your simple little babxxn mind.

    It’s kind of like a garden. In a democratic (more tax) garden all the rosebuds are pruned off as soon as they appear and the plant dies within a season.

    In a republican (less tax) garden, only a few select buds are pruned off and the plant flourishes and grows larger year after year.

    Increased taxes = death
    Reduced taxes = flourishing life

  84. So, is the Constitution advocating Government hand-outs to all?

    It’s very confusing, even to those of us on this side of the pond. The constitution seems to imply that the government should provide free military protection for everybody, instead of leaving each person to defend his portion of the country with whatever personnel he can afford to hire (should he choose to have his money dedicated to that purpose) and letting the free market decide. And then it restricts the free market further by letting Congress give some people exclusive rights to perfectly copyable products and services.

    America is supposed to be a free capitalist nation. That’s why the founding fathers made sure Congress didn’t have any powers to regulate commerce or tinker with the free market.

  85. What’s this “promote the general Welfare” language?

    It can’t be as socialist as it sounds, can it? Is there a useful commentary in, say, Wikipedia?

    Welfare = hand-outs, right? So, is the Constitution advocating Government hand-outs to all? I’m confused.

  86. but we’re going to make an exception and let you keep it

    Translation: We are going to do nothing and call it us doing something.

    It seems that the Office isn’t the only portion of the government that likes to define things creatively. Now let’s get back to defining “quality” in a way that the Office can get high marks every year as the ship sinks.

  87. Sorry Mooney, er I mean INANE, but when the government doesn’t take my money, they are not “allocating” it.

    Sure they are. They’re saying “there’s a tax that would allow us to take that money, but we’re going to make an exception and let you keep it”. Remember, these are tax credits we’re talking about. Of course, letting you keep it is exactly the same as taking it and then giving it back. And in turn, they have to tax someone else more (or print more or borrow more, if you don’t care for zero-sum) to let you keep that money, because the tax credit doesn’t change how much they spend.

    I would consider redistribution as taking my earnings from me and giving it to someone else, not letting me keep more of what I earn to encourage more of my economic activities.

    You consider it a tax credit when you get to keep more money (to encourage your economic activities, of course), but a subsidy/redistribution when other people get to keep more money (because they’re a bunch of freeloaders, of course). Sounds like a Republican talking point. Ronald Reagan had a similar definition of “recession”. You use the bad word when you’re the victim, right?

    I’m not sure how they wound up becoming a tool of socialism.

    That probably started when the government decided to collect money from people who made money, and use it as they saw fit to benefit society as a whole. So, pretty much right at the very beginning. That’s the whole point of taxation. The government exists to make America a better place (whether or not it successfully does so is not something I’d care to discuss at the moment), for which it requires money, and taxation of any kind does not exist in a free market economy.

    Oook.

  88. “how is any instance of the government allocating money…”

    Sorry Mooney, er I mean INANE, but when the government doesn’t take my money, they are not “allocating” it. I would consider redistribution as taking my earnings from me and giving it to someone else, not letting me keep more of what I earn to encourage more of my economic activities. Since increasing R&D encourages investment and growth there is a net gain to society. Redistribution on the other hand assumes a zero sum game.

    Its a subtle distinction, but I know how you are with “nuances.” I will grant that tax credits are an indirect form of subsidy, but I’m not sure how they wound up becoming a tool of socialism.

  89. BJA

    “A company’s profits are THEIR money, not the government’s. A subsidy is when you get someone else’s money.”

    However, they get to use our justice system to enforce contracts and IP rights, they get the benefit of an educated and healthy populace, They get limited liability if they are a corporation, their employees don’t live on site, so they get the benefit of roads or public transportation.

    Those are all reasons for them to pay their fair share of taxes. Tax breaks and subsidies are qualitatively the same. If a subsidy exceeds an entities total tax burden, consider it a negative tax.

  90. and tilting at it, and that party ain’t me.

    Think again Maxie – until you recant your “universality” philosophy and your failure to acknowledge the superior US patent system, the tilting is all you baby.

    BJA,

    You are not listening to what IANAE is actually saying – “how is any instance of the government allocating money anywhere not redistribution of wealth?
    He has carefully sidestepped the truth of what you are saying and is now talking about only what the government allocates and processes. By default, IANAE cannot be wrong because he is now only talking about the instances of the government allocating something – the government must be involved by the very definition. Sure, you two are now talking about slightly different things, but IANAE is simply not wrong.

  91. IANAE, this is America, not Venezuala, Cuba, or Russia.

    A company’s profits are THEIR money, not the government’s.

    Funny you should say that, because the American constitution gives the American government the power to take that money.

    A subsidy is when you get someone else’s money. That is, the govn’t is paying you to do something unprofitable instead of you not doing it or doing less of it. A tax credit means YOU KEEP YOUR OWN PROFITS. What’s so hard to understand about that?

    I guess the part I don’t understand is why it’s such a big deal whether they let you keep your money or whether they tax it and then give it back.

  92. IANAE, this is America, not Venezuala, Cuba, or Russia.

    A company’s profits are THEIR money, not the government’s. A subsidy is when you get someone else’s money. That is, the govn’t is paying you to do something unprofitable instead of you not doing it or doing less of it. A tax credit means YOU KEEP YOUR OWN PROFITS. What’s so hard to understand about that?

    Maybe it just takes a capitalist to grasp the distinction, or at least someone who understands the American tax structure.

  93. Too hasty. I wanted also to observe that you can start asserting your EPO patent the day it issues. Oppositions can still be filed timely, up to 9 months later, and won’t necessarily delay the onward march of the infringement proceedings.

  94. Mr Hutz, I don’t understand. Given that an opposition at the EPO cannot be filed till after the patent issues, how does such a filing delay issue. 70% of all oppositions filed at the EPO are by German speaking opponents, for at least two good reasons. Such oppositions are to the apps of their competitors. You should take them as a compliment and an opportunity.

    Anybody can do a “Peer to Patent” on an app pending at the EPO, to delay issue, but you are not talking about Art 115 EPC are you.

    Who is “Joe” by the way? Your real name perhaps.

  95. EG,

    I never responded to your response to my post. I have no actual evidence. I will say that one major german company filed oppositions to registering 9 of our EP patents, most seemingly solely for the purpose of delaying issue.

    Joe

  96. ping, we see things from a different viewpoint. Remember the headline in the London Times that everybody laughs at: “Fog in the Channel: Europe Cut Off”?.

    I’m also reminded of that thing about motes in the eye.

    As to “your windmill”, there’s only one party in this debate seeing one, and tilting at it, and that party ain’t me.

    Nevertheless, this conversation has started to bore me. And I’m sure I’m not the only one.

  97. CAFC changes the scope set by the DC

    Except maxie, I am not the one that ever claimed some universality of patent law (that was you).

    this is not what I mean by “universal”… to name but three.
    Why stop there? If there are so many that are not universal, perhaps you should come up with a better name for your windmill.

  98. EG: there are now 37 EPC Member States. Each has its quota of Examiners at the EPO. Only two EPC States have English as their language. Just 9% of EPO employees have English as their first language. All EPO Examining Staff must be competent in all three official EPO languages, English French and German. For an attorney, it helps to see English language claims through the eyes of a person with German or French as first language. After all, where are you going to be litigating your hard-won European patent, England, or mainland Europe?

    As you might imagine, EPO panel members have zero tolerance of attorneys who want to play “lawyers’ games” with the English language. Substance Rules. Hence: not many claims.

    I’m surprised at your lack of surprise, I tell my clients ( based on my experience) that the only thing that’s certain, at oral proceedings, is that there will be at least one surprise along the way.

  99. Regarding the 1940′s efforts toward an opposition, see Janss, Mark D., “rethinking re-examination: toward a viable administrative revocation system for US patent law,” 11 Harv. J.L & Tech. 1 (Fall, 1997)at 13, including the cited footnotes, including FN 30, that cites “report of the national patent planning commission, 78th Congress (1943), reprinted in 25 JPOS 455, 463 (1943).

    here’s a partial quote:

    “In contrast to the 1936 recommendation, the 1943 National Patent Planning Commission proposed a revocation proceeding
    unaccompanied by any pre-grant opposition proceeding. Under the proposal, any member of the public would be
    entitled to initiate a proceeding in the PTO to challenge the validity of an issued patent until six months after patent issuance.
    [FN114] The proposal mentioned no restrictions on challengers’ participation, and gave either party the right to appeal
    an adverse determination directly to the Court of Customs and Patent Appeals. [FN115] However, responding to
    concerns about the financial burden on the patentee, the commission recommended that a “public defender” be made
    available to represent the patentee in the new proceedings. [FN116] The commission also recommended that district
    courts adjudicating validity be required to certify the record to the PTO to obtain an advisory opinion as to validity.
    [FN117] Once again, however, Congress was not persuaded to act. [FN118]
    *30 The United States rejected these early proposals primarily because of the perception that even a restricted publication
    and opposition scheme entailed significant private costs. Patent application pendency would be lengthened, generally
    raising the cost of obtaining patent protection, and there appeared to be few commensurate benefits arising from the
    existence overseas of much more complicated administrative review proceedings. [FN119] Moreover, adopting the twotiered
    hierarchy would have required the United States to create a scheme for publication of pending patent applications,
    [FN120] a matter that remains controversial even today.”

  100. MaxDrei,

    I’m sure you’ve got plenty of “war stories” to tell us, and I, for one, wouldn’t mind hearing some. As you correctly point out, my experience with EPO oppositions is fairly limited (and quite far in my past). Know just enough to be dangerous!

    Your observation on how the alternative claims proposal works is definitely on point. It isn’t as complex as I may have made it sound. Of course, you’re not allowed to complain of “surprise” but then I was warned to be prepared for this to happen, so nothing I saw came as a “surprise.”

    What also made that oral hearing I attended interesting was that we and Unilever asked for the hearing to be conducted in English. As the Luxembourg chief panel member pointed out at the beginning, English was not the native language of any of the panel members, including the Primary Examiner (German) and the remaining panel member (French). Even so, we still got along fine.

  101. Oh ping you are trying too hard. Last time I looked, the CAFC changes the scope set by the DC rather more often than people think it should. So, on your logic, patent law is not even universal between the first and second instance in the USA. You will grasp it one day, that this is not what I mean by “universal”. Novelty is universal, so too obviousness, enablement, sufficiency and claims to define the scope of protection. Things that are not “universal” include: Best mode, FtI, 112/6, to name but three.

    Paul Morgan, you are right about the differences between EPO and USA-style opposition. You are right that there are differences in scope set by different courts. Can you demonstrate that the variance in Europe, country by country, is greater than the variance between different courts in the same country. After all, judges differ, but all EPC countries work to the same statutory provisions concerning scope of protection. When it comes to predicting whether the court will find infringement or not, is the record in the USA better or worse than in Europe. In your country, is it the 50:50 cases that get litigated? In such cases, who can say in advance whether or not there is infringement, and isn’t it to be expected that different courts will come to different conclusions (particularly if they employ different procedures and fact-finding practices)?

    EG: do I have war stories, of oppositions at the EPO? Too many to mention. Oppositions at the EPO are what I do. Just a few of the literally thousands that are filed each year.

    Readers, I should explain. When EG writes of his experience in an EPO opposition that:

    “Unilever submitted 5 different claim amendment proposals”

    think of that as nothing more complex than a simple set of claims with claim 1 followed by just 5 dependent claims. For the EPO does not address the dependent claims. If claim 1 is bad, then the patent is revoked. So better have by then filed at least one “auxiliary request”. Five would be better. More than 10 is not so common, because it is rare to have more than 10 steps, of increasingly convincing validity, with a corresponding written description in the app as filed, between claim 1 and your Best Mode.

  102. tax credit =/= subsidy

    A subsidy is paying a farmer not to farm, or to paying them to grow a particular crop and agreeing to buy it.

    Tax credit is the government giving you a break for spending your own money by not exacting a tax. I can’t believe I have to spell this out.

    So the difference is between (1) the government letting you have more money than it otherwise would by giving you more money, and (2) the government letting you have more money than it otherwise would by taking less money?

    Do your patents rest on such fine distinctions?

    Tax credits do NOT redistribute wealth, they create it.

    If the government is taxing you less, they have to tax someone else more, borrow more (and tax your grandkids), or spend less, to make up the difference. How is that not redistribution of wealth?

    For that matter, how is any instance of the government allocating money anywhere not redistribution of wealth?

  103. Plus get different claim scope interpretations in different countries, etc.

    Why Paul, I find that highly impossible giventhat MaxDeir has been spouting on about his “universal” patent law. Are you saying that it is not even universal in the EP?

    Maxie,
    Have you been misleading us?

  104. A law firm or attorney is almost never a “real party in interest” and could get itself into a serious attorney disciplinary proceeding for even making such a missrepresentation.
    —————-
    EPO oppositions are not comparable to anything existing or proposed in the U.S. There is no estoppel and no prosecution history or file wrapper problem and you can re-argue invalidity again later in a national court invalidity trial. Plus get different claim scope interpretations in different countries, etc.

  105. For the record “Stuffer”

    tax credit =/= subsidy

    A subsidy is paying a farmer not to farm, or to paying them to grow a particular crop and agreeing to buy it.

    Tax credit is the government giving you a break for spending your own money by not exacting a tax. I can’t believe I have to spell this out.

    Its a sad state indeed when simpletons like “Stuffer” feel empowered to join the debate yet clearly have no clue about even simple issues like what a tax credit it.

  106. “redistribution of wealth through tax credits”

    Tax credits do NOT redistribute wealth, they create it. A decidedly un-socialist idea.

  107. “USPTO fee-setting authority adds flexibility, allows the Office to more quickly raise needed funds, and also allows for the potential of aligning align fees with actual costs. As an example, the white paper notes that “abandoned” applications pay only about one-third of the total examination costs. That front-end cost is “subsidized by back-end patent issuance and maintenance fees that are assessed on successful applicants.” The report states flatly that “With fee-setting authority, the USPTO could deliver on its aggressive goal of reducing to 20 months total average pendency. This anticipated 40% reduction in average pendency would offer greater certainty to innovators of all stripes, allowing for more timely and accurate R&D investments, and thus, substantially improve prospects for improvement in the Nation’s innovative performance and overall economic growth.”

    The first part of this quote is code for:
    “If the PTO is allowed to raise the filing fees high enough, then only large corporations with ‘worthy’ inventions could afford to apply, so application pendency will be reduced, because those meddlesome independent inventors (a.k.a. ‘trolls’) and small businesses will be priced out of the system and not take up the PTO’s valuable time.”

    The second part about investments and performance is code for: “With those independent inventors and small businesses out of the picture, the corporations will be free to steal any inventions they choose without consequence.”

  108. David,

    Very interesting. When you get the time, can you elaborate on your statement? Not that I don’t believe you (I do), but I would like to know more about what the PTO did wrong here, as they do have in the past a bad “track record” here.

  109. The PTO broke the law again, this time the Information Quality Act. The data is absent, the conclusions are totally non-transparent and non-reproduceable. Arti Rai styles herself an administrative law maven — what gives here? Just because she now works for the PTO she’s taken on “Any Inconvenient Law Can Go Fly a Kite” attitude of the rest of the Office?

  110. “But if you take a look at how often, say, Kimberly-Clark and Procter & Gamble go against each other at the EPO, it’s more or less on every issue certificate. Why’s that then, and who’s getting hurt?”

    Lionel,

    By “opposition-happy” I meant frequency, and yes it’s in certain technology areas (probably chemical v. EE which you say is fairly quiet). As an ex-P&Ger I know all about the battles with K-C, although the ones I got into involved Unilever (the US-based company is or was Conagra).

    The one opposition that I attended the oral hearing (in 1992) saw us against a Unilever EPO patent where Unilever submitted 5 different claim amendment proposals (I was warned by our EPO attorney that this would likely happen), only the last which was entered by the opposition board. I took a look at, and told our EPO attorney that it changed nothing substantively about our position that the Unilever application lacked an inventive step. I was right as the opposition announced at the conclusion of the hearing that Unilever’s application was invalid for lack of inventive step.

    BTW, do you have any “war stories” you can relate about your experiences with EPO oppositions?

  111. must be time for my boring “fix”

    How about just doing the job of examination right the first time..?

    whaaa? you mean actually work?

  112. “Since the socialistsdemocrats took away the corporate R&D tax credits”

    And I always though that redistribution of wealth through tax credits was a socialist idea, silly me. Which part of free market economy dictates government subsidies?

  113. EG, as you say, the EPO admits additional evidence while the opposition is running. Curiously, it is obsessed with the bizarre thought that it has a duty to the public and to the courts, not to unleash (good word that) bad patents on the European public.

    But it sees the process getting out of hand and is tightening up.

    What do you mean by “Europe is opposition-happy”? That Europe is content with its 30 year old system? Or that too many oppositions are filed at the EPO. Which art area are you in? You won’t see much opposition activity at the EPO in EE areas. But if you take a look at how often, say, Kimberly-Clark and Procter & Gamble go against each other at the EPO, it’s more or less on every issue certificate. Why’s that then, and who’s getting hurt?

  114. “A 9 month window is almost completely useless. I see this process hardly being used and certainly not by the bigger corporations.”

    Lionel,

    I would be perfectly fine if that became the reality. But having dealt with and been involved with EPO oppositions a few years ago, that may not happen. Europe is definitely “opposition-happy” and that attitude could cross the Atlantic to us State-side.

    One big difference though is that EPO oppositions have an “ever-changing” factual record, including appeals of opposition decisions. That likely won’t happen in the USPTO because of our American tradition of establishing the factual record and then not allowing it to be change unless there’s a “really good reason” to do so.

  115. But then, I’m not a professional investor of somebody else’s money, and in need of a comfort blanket.

    The metric you’re looking for is “risk tolerance”. A highly risk-averse investor (and VCs are, as a rule) would much rather see an issued and enforceable patent with its presumption of validity and claims no longer subject to (easy/required) amendment than somebody’s opinion of what might issue at some unknown future date based on a supposedly exhaustive prior art search.

    But if it is going as fast as it possibly can, is it delaying issue?

    If.

    Even the PTO thinks it can go faster if it can hire more people to do the work.

  116. “A couple hundred thousand to resolve all questions of validity outside of the suit is a drop in the bucket and should reduce litigation costs overall”

    How about just doing the job of examination right the first time..?

  117. Have any of you people that are so outraged by the needless cost that would be caused to patent owners by post-grant opposition checked the cost of litigation to enforce a patent lately? Or the cost of defending against such a lawsuit? Realistically, only the most well capitalized can afford patent litigation. A couple hundred thousand to resolve all questions of validity outside of the suit is a drop in the bucket and should reduce litigation costs overall.

  118. So, Paul, if it’s speed to issue that’s of decisive importance,just move to a pure registration system. Patents handed out the next day, on demand, like candy.

    Oh, but wait a minute, that won’t do. Without their comfort blanket issued to them by the USPTO, those investors are too terrified to move.

    Now, remind me, how long does it take, to make a comfort blanket that actually works?

    Philosophically, I don’t agree that the key event is “issue”. If I were an investor, I should want to base my opinion on:

    1) a complete picture of what the inventor has filed and

    2) an exhaustive prior art search of that subject matter.

    Then I can make up my own mind what subject matter I can get through to issue, in the fullness of time. In many respects, the longer I have something pending, the more potent is my position.

    So, PTO, don’t give me early grant. Instead, give me a more trustworthy search report.

    But then, I’m not a professional investor of somebody else’s money, and in need of a comfort blanket.

    I’m not sure that “delay” is the right word. To me that suggests that the PTO is deliberately setting cases to one side. But if it is going as fast as it possibly can, is it delaying issue?

  119. “Define large scale R&D”

    …if you have to ask, then you wouldn’t understand. It was not so long ago that corporations had large patent departments set up right next to the PTO to support their even larger corporate-sponsored fundamental RRRRRR&D programs. Since the socialistsdemocrats took away the corporate R&D tax credits, you don’t see that so much any more.

  120. It’s not the grim spectre of estoppel that requires identification of the real party in interest, because for all you know the law firm might be the real party in interest. Sure, they’re paid to have an interest, but in a sense that’s what interest really means.

    The way to force identification of the real party in interest is to have something akin to a standing requirement. Law firms wouldn’t have standing except perhaps to oppose Gene Quinn’s patent, so they’d have to file oppositions as agents rather than as parties just to make the opposition stick.

  121. Define large scale R&D. Admittedly, where I work, it’s more like

    r & DDDDD

    But there is still and work done in-house and it’s a sizable company.

  122. Apparently some of the above are assuming that the real party in interest would not have to be identified, just because that is the case for [only] ex parte reexaminations now.
    But ex parte reexaminations uniquely do not allow any participation at all by an opposer filing the reexam request [so that whatever a patent owner asserts or argues is unrebutted] and thus also uniquely have no estoppel provisions which would require identification of the real party in interest. Also of course they are strictly limited merely to patent or publication prior art. Not even public use or on sale bar dates, or obvious 112 deficiencies, can be considered.

  123. “so that we can cut our R&D departments a”

    As I have pointed out before, the small inventors and startups ARE the corporate R&D departments. And the corporations only have to pay when they buy them up – AFTER they have proven themselves viable, with funding and a portfolio.

    When was the last time you saw a real corporate R&D department? Its been decades since corporations funded in-house R&D on a large scale.

  124. One statement in this Report that anyone familiar with actual important uses of patents should be able to agree with is:
    “[PTO]Delays are particularly problematic for startups with high growth potential. While the startups discussed in Section II were able to secure patents – and venture funding – in a timely fashion, many other startups have encountered difficulties.”

  125. This dovetails nicely with the reduced awards and increased “review” in the patent reform bill.

    Finally, we’ll get rid of those pesky individual inventors and startups so that we can cut our R&D departments and make some real money. /off sarcasm/

  126. assuming you can deal with the fact that many 3rd party reexams are filed by “agents” fronting for the real party in interest who wants to remain anonymous.

    That’s easy enough to deal with. Those “agents” are well accustomed to billing the real party in interest for their time and passing on disbursements. The PTO isn’t responsible for who gets the ultimate bill, only for allocating costs between the parties.

    should that not attract a troll company to buy an interest in that patent to assert it against such self-identified target?

    That’s why the identified target is Dewey, Cheatham & Howe, Attorneys At Law, and you never find out that the party paying their bills is BigCo USA Ltd.

  127. A 9 month window is almost completely useless. I see this process hardly being used and certainly not by the bigger corporations.

  128. Ned, with only 9 months after issuance to do so, I would like see a wager offered as to how few parties would actually be “forcing a small inventor or firm into an expensive opposition against their will and with no prospect of getting help from a contingency fee law firm” (and risking estoppels).
    Furthermore, if some company is so concerned about a patent that it would file an opposition against it [not cheap], should that not attract a troll company to buy an interest in that patent to assert it against such self-identified target?

  129. Good link from Brett above, which reminds us all that the cost of post-issue opposition proceedings rather depends on the extent of discovery that they will tolerate.
    EPO practice suggests that there is a factor of at least 100 between a cheap and cheerful opposition and a “no stone unturned” case. And that’s without the gearing effect of common law fact-finding like discovery and cross-examination. Yippee.

  130. Ned,

    A great suggestion for post-grant oppositions. And making the loser of a 3rd party reexam pony up for the expense they caused would also be a great addition, assuming you can deal with the fact that many 3rd party reexams are filed by “agents” fronting for the real party in interest who wants to remain anonymous.

    Now if we can only get the Senate in S.515 to consider the brilliance of this suggestion and put your proposal in. But that might be asking them for too much fairness and balance in post-grant oppositions, especially given the forces in whose pocket they are. Still, a great idea who’s time has hopefully come.

  131. Cut-throat? You mean like, doctors, surgery, that sort of thing. As far as I can see, with doctors in Europe, the assiduous US corporations are much quicker off the mark than their European competitors, to acquire the status of Exclusive Licensee of the good doctor’s patent portfolio. Are these Americans (like J&J) not Big enough or is the European doctor not little enough for the world in which you live ping?

    You have to factor in, of course, that this European doctor has made a valuable invention. I’m not sure you (and other readers) are doing that yet, in the “real” world where your inventors live.

  132. Maxie,

    Yes, I thought a simple one word answer to your question might be too “opaque” for you.

    Suppose the patent owner is a little guy. An approach from Big Corp asking for a licence is OK, isn’t it?

    I actually laughed out loud reading that. I see that real world cut-throat business is also “not your field“.

  133. I’ve read the Paper now. Majors on economics, which is not my field.

    Presumably Opponent has the burden of proof. Fail to get to a preponderance, and the patent sails serenely on. Green light for asserting the patent as well, no?

    For Government servants keen to master their workload and nurture the PTO bank account, what’s the likely attitude towards the prior art materials put up by an Opponent. Same as any prior art brought to light in Europe? Dismissal, perhaps?

    Unless the Opponent pays such a large fee that he’s entitled to correspondingly large payback by the PTO, and the PTO likes to encourage others to stump up such large fees? After all, everybody has to eat.

    Readers, have you ever seen what happens in the EPO when some member of the public shows prior art to the Examiner. Mostly it’s given the cold shoulder. But the Applicant is grateful, for now he can be even more sure that he’s dealt with the best art.

    So, I still think parties will think long and hard before they oppose anything. If the target patent looks as if it might still have a kick in it, they will leave well alone, unless they decide to put together an opposition in draft and, before they file it, show it to the patent owner and ask for a licence.

    Suppose the patent owner is a little guy. An approach from Big Corp asking for a licence is OK, isn’t it?

  134. Maxie,

    The answer to “encourage those applying to the PTO for patent rights to take to issue only that which will easily withstand such petitions” is a simple “no”. As Ned indicates, tinikering such as this makes the patent areana the sport of Kings.

  135. A naive question: Just as the threat of discovery and cross-examination keep hands clean, would not the threat of post-issue petitions for revocation encourage those applying to the PTO for patent rights to take to issue only that which will easily withstand such petitions?

    And, if so, there won’t be many petitions filed, will there? There will be some filed to intimidate, of course, just as there are patents asserted to intimidate, right. Intimidation is part of the game, judges can award costs against vexatious or oppressive litigants, and there ought to be a level playing field, I think.

    So, all that remains is to find the right legal provisions that set up the possibility of such petitions (I am supposing that what you have already, inter partes re-ex, doesn’t work).

    Consider the 30 years of experience at the EPO. With post-issue opposition, one third of opposed patents don’t survive. But even so, not many patents are opposed. Why might that be? Perhaps because an expensive attack on validity that fails is one that does the patent owner a very big favour, by substantially raising the presumption of validity, the deference due to the patent and its power to intimidate all those (including the petitioner) who want to use the invention. Little guy should be pleased if Big Corp opposes. What better proof of the commercial value of his invention is there? Is no investor interested in coming to the defence of the opposed patent? Will there ever be a better chance to screw a licence out of Big Corp?

    I haven’t yet read the Commerce Dept Paper. Perhaps there’ll be more from me, when I have.

  136. Paul, yes, as there is always an appeal.

    And, if the patents are as bad as they say they are, potential defendants would be happy to pay the fees.

    But, my god, not all citizens are created equal and the mighty can and will abuse the small just because they can. It is the way of the jungle, might makes right. Only the most cynical can argue that forcing a small inventor or firm into an expensive opposition against their will and with no prospect of getting help from a contingency fee law firm, somehow improves the system. What is being proposed here is grossly unfair. We might as well declare the patent system dead except for the high and mighty.

  137. The “Figure 1″ above, purporting to show the time between patent issuance[?] and trial suit resolution, is inconsistent with other data showing that most patent suits are NOT based on newly issued patents,filed as soon as they issue, as this Figure’s legend seems to suggest, and that many suits are on older patents asserted against products that did not exist when the patent issued. [Not surprisingly, as otherwise those products or their invention dates might be prior art unless the patent application was pending for a long time.]

  138. The number of [proposed] oppositions or post grant reviews will be be far less than even the small number of inter parte reexaminations, so small a percentage of total PTO cases as to be insignificant from a PTO budget standpoint, especially as limited to only 9 months after issuance, and thus NOT a valid reason to force everyone threatened by an invalid patent into multi-million dollar litgation or a shake-down settlement.
    Certainly it could have high fees, but can you really see PTO staff members deciding the usual disputes over what attorney fees were reasonable and necessary or not?

  139. Ned, IANAE, and GH are 100% correct.

    The requestor must pay all costs; and/or the PTO should then defend (or work w/the patentee to do so) the patent that they allowed.

    Look. We don’t need any post grant opposition.

    What anyone who cares (or should) should do instead is what the pharma cos do–hire staff to carefully watch all the new filings/pubs; and file 1.99 disclosures … and/or the office could institute an easier, longer-than-two-months system for cos to challenge pending patents BEFORE they’re issued.

    It’s just not right–especially not to the many 1000′s of small entities like myself–to have to deal with and pay for any post-grant review baloney.

    Think you’ve got some great 102/103 prior art?

    Have some 101/112/etc args you think are just super?

    Don’t think we deserve patents on our inventions?

    Then do the right thing and take your best shot–during their prosecutions–not after.

    Thankfully; given his words of support for the “little guy,” I don’t see Mr. Kappos and his team going along with this terrible idea.

  140. I suggest that we really need the requestors to pony up.

    Sounds like a good plan. It would still be cheaper for them than litigation, and it would be optional so they couldn’t really complain about the terms.

  141. “So long as the PGR costs do not exceed $100k…”

    Well, may I suggest that we make the opposition no cost to the patentee by requiring the requestor to pay the reasonable attorney fees of the patent owner?

    In the early ’40s, Congress scrapped oppositions because they could be so expensive that patents could become the exclusive domain of the wealthy. They considered appointing public defenders, but then just scrapped the idea entirely.

    I suggest that we really need the requestors to pony up. Today they can file a request for reexamination at a modest cost an impose hundreds of thousands of dollars of expense on a patentee, but at no further cost to themselves. This is unjust.

    They should pay the full costs imposed on the patent owner regardless of the result.

  142. Let’s put out a report saying how great “innovation” is, let’s talk about how increasing fees is great too (we can all get more money), and then, in the same breath, let’s talk about quietly ruining the system with an endless post grant opposition quagmire.

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