However complicated applied sciences may have been back in 1836, when Congress first established the forerunner to the Patent and Trademark Office, they are infinitely more complicated today. Never has the PTO been more essential, more central to ensuring the system of nationwide patents contemplated by our Founding Fathers is possible than today.
Our PTO must have clear objective guidelines that enable an applicant to predict whether his or her application for a patent will be approved. That application process must move expeditiously, and at the end of that process, when PTO issues a patent, the inventor and industry must have confidence that the patent is of good quality and will provide good defense against future challenges.
In recent years, however, the Patent and Trademark Office has fallen short of these critical objectives.
Today, a patent applicant must wait over two years before an examiner first even picks up the application. Two years.
At this very moment more than 700,000 applications simply sit at the Patent and Trademark Office awaiting future consideration. Each one of those applications represents an idea that could create a job, or ten jobs, or 1000 jobs. If you file an application at PTO today, you can expect to wait just over three and a half years for an initial disposition, and should the PTO make an error in their examination, it would take three years more to appeal it.
In a world in which startup companies depend on patents to secure critical venture capital and other funding, these wait times are just too long. And while the PTO director, Kappos, has achieved some critical success and has begun to right the ship at the Patent and Trademark Office, he simply can’t accomplish acceptable and sustainable reforms without our action here in the Senate.
The American Invents Act takes a number of critical steps to improve the efficiency with which this country handles patents, all of them designed to make the U.S. more competitive in the global economy.
Mr. President, first, the America Invents Act will give the PTO the tools it needs to address the unacceptably long backlog of patent applications. In February 2009, despite an increasing need for qualified patent examiners, PTO had to institute a hiring freeze. PTO is a user fee supported organization, and so I believe it should be able to pass through the cost of staffing needs to patent applicants to ensure these wait times don’t continue to grow. This bill would finally give the PTO the authority to set its own fees rather than having to wait for an act of Congress to do so.
Another source of the back log is the issue of patent fee diversion, one with which I have long been familiar. Currently the fees paid by patent applicants, for the purpose of funding the cost of examination, can be diverted away from the PTO to the Treasury without justification by Congress.
Patent fee diversion cripples the ability of the Patent and Trademark Office to do its job and is essentially an unwarranted tax on innovation. In the past 20 years, more than $800 million have been diverted from the Patent and Trademark Office. And, though in recent years, almost no money has been diverted – thanks to the determined leadership of my colleague, Senator Mikulski, the PTO funding should never depend on shifting political fortunes.
Even in times of political favor, the mere possibility of fee diversion is harmful to PTO because it robs the ability of the Patent and Trademark Office to plan with confidence that a varying workload will be matched by future funding. This bill does not currently address the issue of patent fee diversion, but that is something I and others are working to change.
Ending fee diversion is perhaps the single most effective thing we can do to empower the Patent and Trademark Office to reduce the patent back log over the long term. That’s why I look forward to supporting Doctor Coburn’s amendment, which would ensure that the PTO has access to the fees that it charges, subject to continuing Congressional Oversight, of course.
The second thing that the America Invents Act does, to make the United States more competitive, is to improve the predictability and accuracy of the patent examination process. By transitioning to a first-to-file system, this bill will bring the United States patent system in line with the rest of the world. Under this first-to-file system, the PTO’s task of determining the priority of a patent application will be much more straight forward, because patent priority with depend on objective public facts rather than secret individual funds.
And to those smaller inventors that are concerned that the move to a first-to-file system will allow larger companies to beat them out in a race to the Patent Office, this bill contains important protections for all inventors, large or small. Even under the first-to-file system contemplated in this Act, an inventor’s patent priority is protected for a year if he or she is the first to publicly disclose that invention.
Not only does the America Invents Act make the patent process fair to inventors, but it will actually improve the quality of patents issued by the PTO by leveraging the knowledge of outside parties. This bill permits third parties to provide submissions regarding prior art before a patent issued, enhancing the ability of examiners to determine whether an application is truly an innovative idea worthy of the protection of a patent.
The bill takes another step forward towards improving patent quality by changing the way issuance in patents can be challenged. The America Invents Act introduces a nine-month post-grant review process during which third parties can challenge a patent on any grounds.
When you combine the new pre-issue and submission process and the new post grant review process, what I believe we will get is a more rigorous, more thorough vetting of patent applications. And I believe as a result, we will get stronger, higher quality patents because of this America Invents Act.
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