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Jolting Congress on Patents

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Independent American inventors are becoming an endangered species. The numbers tell the story. In 1980, independent American inventors received 16 percent of U.S. patents granted. In 2000, it was 10 percent and in 2009, it was only 5.3 percent - a two-thirds drop in 30 years. This trend marks a threat to America's economic and national security future.

Yet, the danger seems not to be grasped by the Obama Administration. In September 2009, for example, the White House released a 26-page White Paper on innovation, which mentioned the word patents only twice and that in boilerplate sentences extolling the Administration's support for an undefined "patent reform."

The Congress has been even more cavalier. In the 109th, 110th and 111th Congresses, IBM and 14 other major Big Tech corporations persuaded the House and Senate Judiciary Committees that they were under legal siege by so-called patent trolls and thus were being forced to divert massive resources from R&D to lawsuits and extorted payments. Analysis revealed that these claims were phony -nothing but political propaganda designed to stampede Congress into enacting legislation that would enable these same corporations to infringe more easily and with only the most limited risk.

Amazingly, the Senate and House Judiciary Committees, which have jurisdiction and oversight authority over the U.S. patent system, accepted this corporate nonsense whole and failed to conduct oversight hearings on such serious charges.

Between January 2007 and November 2010, the Senate Judiciary Committee devoted a total of only 4 hours to public hearings on proposed patent legislation. Instead, their staff met privately with the various interests trying to work our out compromises that would enable the Congress to pass this special interest bill. Independent inventors and small companies were totally excluded from the substantive process. The House did no better.

Just before Thanksgiving, the likely Chairman of the House Judiciary Committee announced that enacting the same patent reform legislation rejected in the prior three Congresses was one of his top priorities in the 112th Congress.

Today, most Members of Congress are largely unaware that:

1. The personnel turnover rate at the Patent Office is an extraordinary 30 percent annually. Consequently, 80 percent of the patent examiners have fewer than three years of on-the-job experience.

2. The workload of examiners has increased by 70 percent since 1990 forcing them to perpetually accelerate their work and devote less time to analyzing applications.

3. The time taken to review a patent has gone from 18 months in 1990 to almost 35 months in 2010.

4. The computer system at the USPTO is antiquated.

5. The USPTO lacks adequate space for its workers; thus, a third are working at home.

6. Serial infringers have hijacked the Patent Office's post-grant review process in which patents issued are challenged in a lengthy, quasi-judicial process. Infringers are using these delays to exhaust a patent owner's resources with legal fees. The ploy is simple - when sued for infringement, the infringer challenges the patent's validity at the Patent Office -a process that can take years. In 2009, slightly more than 68 percent (630) of the 916 challenges to a patent's validity were litigation-related.

Congressional ignorance of these realities exists largely because the House and Senate Judiciary Committees have not met their oversight responsibilities and by that have failed to educate their colleagues on the role of patents in U.S. job-creation and the crisis within the Patent Office.

With a continuation of Democratic leadership in the Senate, the structural and policy status quo is likely to be maintained there.

The Republican takeover of the House of Representatives in the 112th Congress, however, offers a rare opportunity for the House leadership to remedy this deficiency in patent policymaking by removing the congressional authorizing jurisdiction for the U.S. Patent and Trademark Office from the House Judiciary Committee where the primary focus is on litigation which represents only a tiny fraction of the significance of the Patent System.

The House Science Committee is the ideal Committee to administer that responsibility. Its focus is on science, technology, development and ultimately jobs-related issues, matters which are both the life blood of the Patent System and its reason for being. the primary focus. The granting of patents and the strengthening of the patent system are very complementary.

In sum, the present allocation of responsibility for the patent and intellectual property process in Congress has resulted in failed oversight, allowed the patent system to decline sharply, and undermined independent inventors. A change of committee jurisdiction would jolt Congress and stimulate the new thinking now required.