-
Poor Economic Forecast and Patent Prosecution:
- Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;
- Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;
- Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.
- Good: When times are tough, folks save their scraps. Patents are one way to do that;
- Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.
- I spent a summer at Heller Ehrman while in law school. The firm dissolved earlier this fall. Using Patent Buddy, I graphed the number of registered patent practitioners at Heller over the past several years. Their patent department shows problems stretching back to 2007.
- Figure 2 below shows the same information for the law firm of Akin Gump. Patent Buddy’s data comes directly from the PTO’s enrollment database. That database is usually a bit outdated because many patent attorneys are slow to update their records.
- Obama’s Choice as the next head of the Department of Commerce is New Mexico Governor Bill Richardson. Gov. Richardson was Energy Secretary under Clinton.
-
New Blogs (new to me):
- Some places are hiring patent attorneys: Apple; Ultradent; Quine IP Firm; Invention Law Group (IV); MoFo; Roche; Wenderoth; Connolly Bove; Gordon Reese; GWU; Ward & Smith Firm; Myers Dawes; Young & Thompson; Pacific Biosciences; Amin Hallihan.
Scratch the references to “per person”. It’s been a long night.
Just do a cost per unit of energy over time – the population is already included as the demand factor.
4$ gas and 145$ oil last year was just warning.
Of course, now that gas is back below 2, the warning has been forgotten.
It’s all about the energy.
patpor, thanks.
I have thoughts on how to address this.
I can’t say I have solutions, because the word “solution” implies that, somehow, we can keep the unsustainable mess going.
The absolute key to the whole situation is energy.
When you see that, you see everything.
You want to know what drives the people who rule this world?
Do this.
Dig up or create a graph that represents cost of unit energy per capita. Include energy from all sources – oil, nat gas, coal, nuclear, wind, solar.
Do it only for the modern world – that is, don’t include the millions of technologically destitute in the equation.
What you’ll see will scare you to the point where you’ll never have a good night’s sleep again.
The graph will show that the trough of the graph is behind us. That is, the cost per unit of energy per capita is increasing steadily.
And there’s nothing we can do about it.
You could write a book on it.
I am.
In the end, 20th century America will be seen as an aberration – a small divergence from the norm as massive amounts of cheap oil were consumed rapidly, thereby giving the impression of a new economic paradigm.
So there is no solution. Cost of energy per capita will continue to increase for the rest of our lives, unless there is a radical decline in population or unless we figure out how to work fusion. As cost of energy per capita continues to increase, GDP per person must decline.
It’s as simple as that. The only reason we haven’t seen this effect over the last 20 years is because the American Empire has been able to mask the increasing cost of energy per person by borrowing money to create GDP.
But there is a definite limit to how long the borrow/create GDP game can last.
And we are about at the limit.
It’s over, except for the crying.
The first step to understanding the situation is to understand that there is no “solution”. That is, the old way cannot be preserved.
Get past that step, and where we’re going as a country/world/species becomes quite obvious.
GP: Couldn’t add another thing. Excellent analysis. Any other solutions besides let ’em fail? Central planning is what the government is trying for, and if it succeeds there will be no need for new patents. If the government had tried this back in the late 1900’s we would still have our buggy whip factories up and running. Thanks for the insight.
The main problem this big tech companies have is that their products are being commoditized. Patents are a way to prevent that and to preserve pricing power in a time of deflation. Large companies (such as a certain networking company that announced bad news today) that have adopted essentially an anti patent stance in response to the relatively small problem of patent trolls should reconsider whether patents could be more of an economic benefit to them.
Re: “Good: Patents .. can be more easily sold or licensed [by] companies looking for alternative cash streams [or] to sell-off portions of the corporation.. [or] bankruptcy..”
That is not necessarily in the public interest if the patents are sold to trolls who will use them to sue other economically strapped companies to extract their needed cash, directly or by higher litigation costs. [Even if the patents are objectively invalid, since the PTO will sit on their reexaminations until it is too late].
Somebody wrote:”Patent litigators will tend to involve a higher percentage of non-registered folks since it is not a requirement of the practice. ”
Well, not a formal requirement anyway.
End of “modern” economics is close at hand.
The lie being told is that there is a “credit crunch”. If that was the case, then the solution would be simple.
Have the .gov charter 10 banks and capitalize them each with 70 bill, or 1/10 of the bailout money that is currently being earmarked for the pockets of GS and MS banksters.
Limit the newly chartered banks to a 9 to 1 reserve ratio.
That means that the newly chartered banks could loan out 7 trillion in new loans, and, given that they would be chartered expressly for that purpose, they would.
End of credit crunch.
So why hasn’t this been done?
Because the crisis is not a credit crisis at all.
The crisis is simply that the credit limit of most Americans, and indirectly American companies, has been reached.
It’s like a dying man with a full belly and the doctor is clamoring for more food for the patient.
The answer is not more debt. Debt is, of course, the problem. What we need is less debt.
In other words – let ’em fail. All of ’em.
I’m looking for change, but all the faces I see filling the Obama Admin are just the same yahoos from a few years back.
On the bright side, the “transition” from Bush to Obama is going to be seamless, because it’s going to be more of the same, just with much better articulation.
What’s that Einstein said? About repeating your actions and expecting difference results?
Dennis:
What is the intended suggestion of posting the Akin Gump graph below the Heller graph? That AG is somehow in trouble because of a registered patent attorney decline? Or simply a reflection of the economy? I think it is a bit misleading to place the figure there without discussion. Many AmLaw 100 firms have eliminated prosecution because it is difficult to support PPP > $1M that way. That may be an alternate explanation at many large firms, including AG or Heller. That alternate explanation illustrates why this metric might not be useful to “predict trouble” at a firm. It is possible Heller’s decline in registered lawyers reflected an intended drop in prosecution work at a time when they were focusing on shifting to more profitable patent litigation. Patent litigators will tend to involve a higher percentage of non-registered folks since it is not a requirement of the practice. Heller clearly had problems much greater than a loss of 30 registered lawyers over a two year period.
‘author Nassim Taleb writes about “narrative fallacies” which are simple minded feel-good stories we tell ourselves, like the idea that history repeats itself.’
History does indeed repeat itself. Anyone who’s ever done a patent search can tell you that.
“* Bad: Patent value is based on potential market for patented products when the market shrinks, so does the value of the patents;”
Not sure about the logic here. While the statement may seem to make sense it is not well supported. A patent is “valuable” when its return is more than the cost of obtaining/maintaining it. It is not always easy to identify the “market” and even if shrinking, a patent may allow a competitor to close out the competition and increase the share.
“* Bad: Patent prosecution is generally a cash-heavy endeavor, and many firms are low on cash/credit;”
If this means that patent activity is overhead activity then yes, but so is management, and in times like these, such overhead activities take on great new importance.
“* Bad: The smaller market and lack of cash may also depress research & development expenditures – potentially leading to a time-lagged depression in patent applications.”
Take the automotive sector for example, while research in some areas may be off, research in others is at an all time high.
“* Good: When times are tough, folks save their scraps. Patents are one way to do that;”
What is a scrap? How are patents a way of “saving scraps?” This sounds like a Depression era platitude.
“* Good: Patents are something that can be more easily sold or licensed (as compared with trade secrets, for instance). Companies looking for alternative cash streams; to sell-off portions of the corporation; or to retain some value in bankruptcy may look to patent protection.”
I doubt that a patent would be more easy to sell or license in this economy than, say, a state of the art wave solder machine…
All in all, I dislike these sort of binary “good” “bad” assessments of such a complex area of law and business practice.
My fervent hope is that tough economic times will shake out the suckers and poseurs.
Speaking of which, its strange to hear Mooney mention anything about the failure of this blog, because it would mean he would have to spend all his time in the Starbucks across the street annoying the patrons and staff alike with his snarky “musings.”
Thanks for the “reasons why” ; and sorry for the repetitious posts…I really did not hit the “post” button 3 times (remove if you’d like, Dennis).
Would have thought a governorship a better platform for higher office than the head of Commerce…is NM a one-term-only state?
Talking about boredom; with all the huge $$$ problems we’re having here in CA, ask our esteemed gov Arnold how badly he was wishing he could afford to be bored.
This blog is too big to fail.
“Their patent department shows problems stretching back to 2007.”
Maybe you have found a leading economic indicator, Dennis?
“anyone have any thoughts on why someone would trade in a US state governorship to be the head of the Dept of Commerce”
Sec. Commerce is also seen as one of the more political cabinet members, so someone who likes to “play the game” or has higher aspirations (Richardson did run for POTUS this year) might be interested.
In serious recessions, short-sighted companies do indeed cut R&D, and thus new patenting, heavily. Smarter companies realize that the excess manufacturing capacity and inventory and the reduced customer demand of a recession makes pure price competition brutal if not fatal without desirable new (and preferably patented) product-differentiating features.
Dear “Step Back,” that was more than anectodal. I have personally seen more than 50 patent attorneys laid off over the years, including two large batches, and confirmed that all quite promply get new jobs as patent attorneys, which is not a bad statistical sample. Of course if one insists on only living in S.F., or some other overly desirable location, that will make it harder.
“anyone have any thoughts on why someone would trade in a US state governorship to be the head of the Dept of Commerce”
If you think you know how to make the world a better place and do not care about “status” then head of the Department of Commerce gives you a much greater ability to have an impact. Or perhaps – once you are the biggest fish in the pond an ambitious fish will start wishing for a bigger pond. Maybe Richardson is setting the stage for becoming Vice President in 2012, and / or President in 2016.
PFM:
“I have yet to see a good patent attorney unemployed very long in the past 44 years myself.”
In his book, The Black Swan, author Nassim Taleb writes about “narrative fallacies” which are simple minded feel-good stories we tell ourselves, like the idea that history repeats itself. That which was, surely will return again. But the past is no assurance of the future. I hope you will turn out to be right, but have no reason to believe in your comforting anecdote.
Steve M,
Richardson was US Sect. of Energy before he was governor of New Mexico. So he is hardly clueless about the runnings of a Federal bureaucracy or about the trade and energy troubles the US is in.
bored of being governor; looking for something different
Steve M: Richardson’s at the end of six years as NM governor and I believe is term-limited, so he can’t serve past 2010. If you’re going to make the jump, now is the time.
…anyone have any thoughts on why someone would trade in a US state governorship to be the head of the Dept of Commerce?
…anyone have any thoughts on why someone would trade in a US state governorship to be the head of the Dept of Commerce?
…anyone have any thoughts on why someone would trade in a US state governorship to be the head of the Dept of Commerce?
The drop after 2002 was the dot com bust. If you look, most prosecution focused firms had a drop in the number of attorneys in the 2002 timeframe.
As to attorneys and agents changing registrations, I just checked on Patent Buddy, and some of our former attorneys who have been gone for 3 years still show up on the rolls registered to our firm. We do forward mail, so they’ll likely not get in trouble with the new OED rules. But it’s still surprising.
I am not an economist, but I play one on the internet. My guess is that the $ is in for a big drop in the near future.
IIRC there were a number of predominantly patent practice law firms that dissolved when the “techno bubble” burst and the aftermath in the 2001-2002 time frame.
Re: “..many patent attorneys are slow to update their records.” [PTO practitioner registration address.] [All too true.]
BUT NOW, anyone planning to avoid disciplinary action for unlicensed practice under the brand new rules had better fix their current registration address before next spring when the PTO Office of Enrollment and Disipline will send out the new registration forms with the new registration fee demand, because they have indicated there will be no sympathy for any practitioner who does not get that PTO mailing and respond in time – they will be automatically removed from the PTO practitioner roster and prohibited from further practice before the PTO without a formal reinstatement process.
—
Re the above “economic gloom and doom” list, one reason I became a patent attorney was that my father told me that he had noticed that his patent attorney was still busy in the depths of the 1930’s depression. I have yet to see a good patent attorney unemployed very long in the past 44 years myself.
Comments are closed.