Do the Numbers Work?
A Deep Dive Into the Data
Wednesday, USPTO sent an email with the subject line, "Patent Pro Bono Program Expansion to Benefit Inventors Nationwide" from the USPTO Director’s Forum Blog. The email and the posts extols the benefits of the Pro Bono patent program and USPTO's efforts to expand the program to all 50 states. The goal of the program, "Helping small businesses and independent inventors with limited resources" is admirable, enlisting patent attorneys is also admirable. We think that independent inventors and small firms, the creators of most new jobs in the US, need all the help they can get. Time for some digging around to see how this program works.
From the Email
According to the link to the Director's Forum Blog, here is how the program works. The Program requirements vary by region, but generally they require that:
- The inventor reside in a participating state;
- Earn less than a gross household income limit;
- Demonstrate minimal knowledge of the patent system; and,
- Have an invention to patent (as opposed to a mere idea).
If an inventor meets these requirements, and any other ones set by the regional program, then the regional program will attempt to match the inventor with a local volunteer patent attorney to represent the inventor.
The blog post sends you to the USPTO Pro Bono page which featured a video on how the program works.
Next we watched the USPTO video. It highlighted that getting a patent is not cheap because of the fees for legal representation during the patent prosecution process. USPTO noted that legal fees are the main barrier for getting a patent. So what are the fees?
According to a post at Richards Patent Law citing a 2008 presentation to an oversight hearing on USPTO,
The average cost of preparing a utility patent application:
- Preparation and filing of an original application of minimal complexity by a small patent firm (10 page specification, 10 claims) = $8,548.00.
- Relatively complex biotechnology/chemical cases = $15,398.00
- Relatively complex mechanical cases = $11,482.00
- Relatively complex electrical/computer cases = $13,684
Fees for a provisional application which comes before the non-provisional patent application runs around $2,000. So inventors deciding to do a provisional patent application first should expect to pay the additonal $2K. These seems low to us too but we digress.
Back to the Requirements
The video explained the requirements for participating in the program in a slightly different manner. To qualify the applicant:
- Must have an invention and not just an idea;
- USPTO recommends that the inventor "create a description of your invention" that provides guidance that would teach someone ordinarily skilled in the art how to make it; More demanding than minimal knowledge of the patent system
- The inventors effort should essentially take the steps to reduce the invention to practice;
- Demonstrate basic knowledge of the patent system;
- Complete a patent search to look for prior art; More demanding than minimal knowledge of the patent systemand
- Demonstrate financial need. Currently each program has varying maximum income levels.
USPTO also pointed out that,
The overarching goal is to make sure that no "deserving invention" goes without patent protection because the inventor can't afford to get a patent.
There was no explanation of what a "deserving invention" is. There are plenty of inventions that may not seem like much until they show up in the middle of a product or a process so we were having some difficulty wrapping our brains around what a deserving invention is. But any inventor who wants a patent so they can commercialize their idea had better have an elevator speech anyway so we'll let this one go.
Next Stop — The Federal Circuit Bar Association
Between the email and the exploration of the USPTO's program description things got a little more demanding. Let's see what the patent attorneys have to say. Time for a little more digging around.
The Federal Circuit Bar Association is the professional association for patent attorneys. The Federal Circuit Bar Association PTO Pro Bono page was a link provided by USPTO where folks should go to for more information on the program. Here is what you learn there:
In order to provide financially under-resourced inventors and small businesses with a volunteer pro bono provider, there must be minimal requirements to make sure those requesting pro bono assistance actually qualify for assistance and for referral to a regional program. First, an applicant must show that they understand the patent process and what they can do with a patent once received. This can be done through the showing of a USPTO issued filing receipt for a provisional or non-provisional patent application or by successfully completing a USPTO training module found on the pro se/pro bono page of the USPTO web site (http://www.uspto.gov/inventors/proseprobono/index.jsp).
USPTO says that the inventor needs to demonstrate minimal knowledge of the patent system, then they need to have a written description and have done a prior art search and reduced their invention to practice. The Federal Circuit Bar Association says that the applicant must show an understanding of the patent system and explain what they will do with a patent once received. The underserved inventor or small business can demonstrate that by showing their filing receipt for their provisional or non-provisional patent application. The Federal Circuit is providing pro bono support to a patent applicant AFTER they file their application.
So now they need to have learned a lot about the patent system, filed a patent application, reduced their invention to practice, done a prior art search, and be able to explain what they will do with a patent once received. The patent attorneys we've worked with recommend that you consult with an attorney or patent agent BEFORE you file to avoid making critical mistakes that might hinder your ability to get a patent later.
Which brings us to the money.
According to the pro bono Frequently Asked Questions Handbook on the Federal Circuit Pro-Bono Program there is an income threshold for applicants,
"a target annual income of three times the federal poverty guidelines or less (using the U.S. Dept of Health and Human Services federal poverty guidelines.)"
The site notes that it may vary by region. So off we went to the DHHS website which defines the federal poverty guidelines to get a feel the income threshold.
According to the tables on the DHHS site the federal poverty guidelines are as follow. We added the 3X figures.
|Persons in family/household||Poverty guideline||3X the Guideline|
For families/households with more than 8 persons, add $4,060 for each additional person.
An Example — A Virginia Inventor
We used Virginia to see what the income level threshold would be for an inventor seeking help from the PTO Pro Bono program. According to the American Fact Finder from US Census Bureau, the average household size in Virginia is 2.54 people with an average family size of 3.06. So we went with a three person household.
Using three people as the household size, the inventor would need to have an income of less than three times (3X) the poverty level for three people of $19,790 or less than $59,370.
Patents for inventions are not for the faint of heart. Anyone who's read a patent knows that these are complex technical documents with complex science, technology, and engineering. Patents are characterized by the leading edge of innovation and discovery and in theory, discoveries that no one has seen before.
We wanted to know more about people who own patents. Here is what we learned. According to a report written by Jonathan Rothwell in a white paper called, The Hidden Stem Economy,
One recent survey found that 94 percent of U.S. patent inventors between 2000 and 2003 held a university degree, including 45 percent with a PhD. Of those, 95 percent of their highest degrees were in STEM fields, including more than half in engineering.
Mr Rothwell also cites the characteristics of Mid-to High-Level STEM workers in the United States relative to overall working Population in 2011 shows
High-STEM jobs in any field have a median income of $59,767 Super-STEM jobs, jobs where the person has knowledge of more than one STEM field, is $68,061; the median income for all US workers is $38,677.
The income level of an engineer, computer scientist, or other STEM worker is about $59,767 for the individual or $397 more than the $59,370 eligibility threshold for a family of three based on the Pro Bono requirements in the Federal Circuit PTO Pro Bono handbook. Each week we look at the average number of inventors on patents by type. This week utility patents, those covered by the Pro Bono program, averaged 2.8 inventors (3 whole people). Chemical patents, a type of utility patent averaged 3.5. We haven't been able to find the Pro Bono program criteria for teams of inventors but a two household number for a team of inventors would likely be require both households to be below the $59,370 threshold if USPTO even allows these inventors to participate.
Next we went to the Bureau of Labor Statistics Occupation handbook to see what they had to say about median incomes based on the types of jobs found in STEM fields. Here is what we learned about the median pay for the jobs that are associated with the top classes of patent grants. According to the Bureau of Labor Statistics the median pay for key occupations associated with the top categories of patents are significantly higher than three times the federal poverty level:
- Chemical Engineers make $94,350
- Mechanical Engineers make $80,580
- Computer Scientists make $102,190
- Electrical and Electronics Engineers make $89,630
- Aerospace Engineers $103,720
- Computer Hardware Engineers $100,920
- Microbiologists $66,260
A deeper look finds even more STEM jobs significantly above three times the federal poverty level. This is why every economic and workforce development professional in the US is on a quest to draw more STEM jobs into their towns.
The Take Away
The Income Threshold Is Too Low
The effort to get independent inventors and small businesses support through the pro bono program is admirable but the income threshold numbers seem to preclude the majority of independent inventors from participating. To be able to create a patent application that reflects a contempory invention that is often deeply steeped in leading edge science, technology engineering and mathematics, the inventor is likely to be in a field with salaries above 3X the federal poverty level. This threshold also disproportionately impacts millenial inventors who aren't married, have smaller households, or are in dual income households. There aren't a lot of college educated engineers working in engineering jobs who are making less than $35,010.
Legal Fees Are High for All Inventors
Even inventors making significant salaries like those samples from the top patent classes will be impacted by needing to pay $8,000 to $15,000 in legal fees. Because of the nature of patent work, most patent attorneys require a retainer and for fees to be paid along the way. USPTO is right, the major barrier for inventors who want to patent their inventions are the legal fees.
Participation May Be Low
It doesn't look like individual inventors and small businesses seeking to patent an invention would fall within the household income targets identified for the program. If these inventors can write a description, get the drawings done, file a patent application, get a receipt, do a prior art search, and explain how they plan to commercialize their invention, all without the assistance of a qualified patent agent or attorney, maybe they can get the job done without the assistance of a Pro Bono attorney.
USPTO Met Its Requirements But...
USPTO has met it's commitment under the American Invents Act to develop a program to assist independent inventors but it doesn't look like many inventors will qualify.