The following essay was written by Secretary of Commerce Gary Locke and originally published in Politico. Locke is the former Governor of Washington and former partner at Davis Wright Tremaine. As you may know, the US Patent & Trademark Office operates as a branch of the Department of Commerce.
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As Congress hurtles toward the midterm elections, there are two things everyone agrees Washington needs to keep working on: spurring job creation and promoting continuing economic recovery.
Fortunately, there’s legislation now before Congress that has bipartisan support, can boost our economy and doesn’t add a cent to our federal debt. This bill aims to fix the outdated patent system, which has left the U.S. Patent and Trademark Office with a backlog of 750,000 applications — a backlog that’s threatening America’s ability to innovate.
And that’s a big problem, because innovation is the lifeblood of the U.S. economy. The introduction of new products and services accounts for three-quarters of America’s annual growth rate since World War II. This innovation is fueled by businesses, inventors and entrepreneurs who depend on patent protection to attract capital investment and to promote and protect their products and services in the global marketplace. Today, America’s patent system – and by extension our entire innovation system – isn’t working. As a result, we are jeopardizing our edge in the global economy.
America may still be a world leader in key metrics of economic success – like levels of entrepreneurship, R&D investment and IT infrastructure – but a report last year from the Information Technology and Innovation Foundation concluded that no advanced economy has done less than the United States to improve its competitive position over the past decade. President Barack Obama sees the urgency of this problem and has announced a formal National Innovation Strategy, which, among other things, calls for doubling the budgets of agencies like the National Science Foundation so they can better support the basic research that spawns new products and services.
But to unleash the full power of America’s innovators, we’ve got to repair an overloaded and inefficient patent system. The unacceptably long backlog at the patent office – in which the average time it takes to grant or deny a patent is more than 34 months – is a striking signal of the system’s dysfunction. Since taking over at the patent office last August, David Kappos has already made significant strides in reforming the workplace, improving productivity and boosting morale. These steps and others have been applauded by all sectors of the innovation community. But additional, desperately needed reforms require action by Congress. The Commerce Department just released a white paper that quantifies the effect America’s patent system has on the economy and job creation and describes the benefits of two key elements of pending patent reform legislation.
First, Congress will grant fee-setting authority to the patent office, which will enable it to adjust the actual costs of the services it provides. This could contribute significantly to the office’s ability to reduce the application backlog by 40 percent. Second, creating an enhanced post-grant review procedure within the office will provide an alternative to costly – and often lengthy – litigation. It could also provide greater marketplace certainty – at lower cost. This review procedure is expected to be 50-100 times less expensive than litigation.
The patent reform legislation being considered by both chambers will also improve patent quality, streamline the patent examination process, promote international harmonization of patent law and limit litigation expenses. All these provisions will foster innovation and contribute to long-term economic growth. As we move forward on reforming our patent laws, we need to remember that the ultimate goal is to create more American jobs that can provide dignity, security and a sense of hope for the future. After a decade fueled by speculation and short-term thinking, the United States needs to refocus on nurturing innovations that generate real value for society and spur sustainable job creation. It’s not the role of the federal government to predict or dictate exactly how this new economy will take shape. Our job is to create the right set of incentives, regulations and laws that allow innovators to experiment with new ideas, build new businesses and follow their dreams. Patent reform legislation is a key part of this strategy. To promote continued economic recovery, it is critical for Congress to create a business environment that fosters innovation and risk taking ‹ accelerating economic growth and job creation and expanding America’s ability to innovate. Now is the time to act. Congress should seize this opportunity and send patent reform legislation to the president’s desk. Gary Locke is the secretary of commerce.