Deep in the American Invents Act is a new authority granted to USPTO. The Director is now able to grant certain economically important products, processes, or technology free prioritized patent examination.
…subject to any conditions prescribed by the Director and at the request of the patent applicant, provide for prioritization of examination of applications for products, processes, or technologies that are important to the national economy or national competitiveness without recovering the aggregate extra cost of providing such prioritization.
The USPTO, formerly a facilitator of US economic prosperity granting an exclusive right to inventors to make, use, and sell their inventions in the US may now become an arbiter of and active participant in the designation of inventions that are important to the national economy and national competitiveness. The narrative goes that the patent system shouldn't hinder getting important products to market. Getting our most important technologies patent protection sooner will help create lots of American jobs designing, manufacturing, selling, and servicing the new inventions covered by patents. Letting certain inventions jump the line is important to all of our economic well-being because they are economically important and maintain American competitiveness. And the authority covers products, processes, and technologies all very broad categories of of invention.
This new economically important and national competitiveness feature of the patent system raises very interesting policy and implementation questions. How exactly will the Director of the USPTO determine which technology is important to the national economy or national competitiveness? Does the Director simply say, this is important so get on it? Does the Patent Bar and intellectual property owners lobby their Congress people with the boogieman of if we don't have these patents pronto that the Chinese are going to take over some critically important sector of the global marketplace? How exactly will economic importance and competitiveness be decided?
What is it about the skill set of the people at USPTO that leads Congress to believe that enables the Office to know which science and technology will contribute to the economy? The people at USPTO routinely cover the vast spectrum of human endeavor reviewing new, emerging, nascent science and technology and despite all the whining, they do a pretty good job at it. It is a very down in the weeds job focused on nuanced issues about what is new and what is not. That's not the same as determining what is going to be a hit in the marketplace, or what technology will drive job creation, or the timeframe when these economically important things will take place. As USPTO knows, invention is messy.
Patent economics is messy too. USPTO has only had a Chief Economist for a few years. A lot of the early work by the Chief Economist's office was focused on outreach and rallying the patstat community. Straight up economic analysis of the outcomes of intellectual property decision-making is not for the faint of heart. If you are a big player you can afford to hire the pros to analyze your part of the patent universe. You can afford to read toney intellectual property publications that still have subscription prices in the stratosphere. Even if you are a skilled economist, science theorist, or a science and technology innovation researcher the lack of comprehensive data about even the most basic stuff about patents — who owns them, who licenses them, what is being made that uses the inventions, who paid for the research that led to these inventions — makes econometric modeling and economic forecasting daunting, and well, unreliable. And how will views on economically important technology held by the government jibe with thodr of the companies that make stuff? ATMs put a lot of bank tellers out of work but for banks these devices were pretty economically important. Same with robots that put cars together. How will those stars align?
Do you think that USPTO (or any of us) had the foresight to know that patent on the swipe to unlock feature on a personal digital electronic device would be important to the smartphone juggernaut or that an alkali-aluminosilicate sheet toughened glass from Corning would change the user experience of mobile device users? Gorilla Glass™ an innovation that started down its inventive path 40 years ago originally focused on such mundane things as tableware, windshields, and ophthalmic products.
The velocity of innovation
The velocity of innovation is accelerating at such a pace that product cycles are compressing. Innovation is also becoming increasingly granular. Markets now arrive, evolve, and dissolve in the time it used to take just to reduce an invention to practice or file a patent application. How will the "economically important technology" decisions made by USPTO avoid being overtaken by events? In some fields patent terms are becoming increasingly irrelevant as patented inventions are obsolete before ever be making it to the consumer. Look at in the film-based anything business, or patents for the ergonomically designed physical keyboards for thumb typing on mobile devices. Consider those round, bulky lighted pager systems for letting you know your table is ready. They are being replaced with, "Can you give me a mobile number and we'll text you when your table is ready business methods." Economically important to the restauranteur. Not so much for the people who make and sell custom paging solutions. And then there is Uber. This firm is changing the taxi business. The Uber smartphone app lets you hail a clean, black towncar with leg room operated by a professionally attired driver and pay the fare without having to even dig in your purse. Uber's wireless bring your own device (BYOD) business methods have made those clunky, annoying, taking up too much knee room in the back of an old cab blasting taxicab credit card payment systems almost extinct. (Thank you.) How quickly did these businesses eviscerate the value of the previously economically important inventions in thousands of payment system patents?
What are the benefits of accelerated examination anyway? For product companies, accelerating patent examination or accelerating the publication of important patent applications advances competitiveness and prevents the honorable competitors from getting into a company's space. It's a pricy proposition that many young companies and individual inventors cannot afford regardless of the reengineered fee schedule. To reap the benefits of this high cost endeavor, you need to be pretty skilled in the art of patent drafting and assembly of high quality patent documents to get the patent through USPTO quickly and get the return on investment for paying for the accelerated examination in the first place. Does the ability to pay for accelerated examination result in other important patent applications piling up waiting for examination? Does granting accelerated examination for free (or prioritized examination as worded in the law), provide a pathway for people with disruptive technology to get to the marketplace faster than they would have otherwise?
And another question — while USPTO is selects certain technology as being economically important what of other not so economically important products, processes and technology? Which really economically important products, processes, and technology to inventors and assignees waiting to be examined is being shoved further back in the queue? Is there an economic opportunity cost of delaying these applications? USPTO has a patent application backlog that, as of this writing, is over 630,000 patent applications and an average pendency of 30+ months. Would the Office's energy be better spent accelerating the examination of all patent applications versus accelerating the examination of a small subset of hand picked inventions? And what of the young guns, young companies that historically create disproportionately higher numbers of new jobs. Will they participate?
The digital natives
Many young digital native inventors and entrepreneurs who are out there creating new industries are not fans of the patent system to begin with, that is until the first time the patent posse comes looking for royalties and then with the guidance of their more experienced wise and sageous counsel, they get on the patent bandwagon big time. But we digress. These inventors and entrepreneurs are discouraged from reading patents, (fear of inequitable conduct); or getting patents, (patents are evil, open source is king.) They are generally disinclined to focus on patents a situation that usually lasts until they become aware of Microsoft's Android and Linux licensing revenue program via phone call, or registered letter. These folks who are totally surprised when the sophisticated patent monetization organizations come calling with their detailed evidence of use (EoU in the acronymia of the patentsphere) with claims chart and diagrams and non-disclosure agreements offering a to license their technology for a fair, reasonable, and non-discriminatory rate kind of. Are these people going to take advantage of accelerated examination programs when they don't embrace patents to begin with and espouse "the patent system is broken" as their IP mantra?
And finally, there's that pesky matter of abandonment. As we wrote a couple of weeks ago when we looked at Mr. Reuven Brenne's editorial on shorter patent terms or terms that vary by industry, the renewal rate is 87% at 1st renewal interval (3.5 years); 70% at the second renewal (7.5 years); and down 47% at the final renewal (at 11.5 years). What will happen to these economically important patents going forward? Will they be abandoned at the same rate? Will they stick around longer because the inventors and assignees saved money getting the patent? Abandonment data provides an interesting nondiscriminatory yardstick for measuring whether a patent has value to its owner. If the maintenance fees aren't being paid, someone has made a decision it's not worth it or hasn't been able to convince their bankers, investors, patent trolls, or parents, that it's worth keeping this property right active. How will patents granted as a result of accelerated examination differ from the norm or will they?
All of this brings us to the USPTO Green Technology Pilot Program.
In December 2009, USPTO announced a program to — "accelerate the development and deployment of green technology, create green jobs, and promote U.S. competitiveness in this vital sector." On the day of the program's announcement on the eve of the United Nations Climate Change Conference in Copenhagen, Denmark, Secretary of Commerce John Locke said, "Every day an important green tech innovation is hindered from coming to market is another day we harm our planet and another day lost in creating green businesses and green jobs."
The Green Technology Pilot Program provides the framework to explore Section 25 America Invents Act economically important questions using a specific set of patents and outcomes and assess the impact of the program — who came out to play, what invention got patents, how long it took, how people described the benefits of their invention to secure the coveted free pass to a shorter patent prosecution cycle and whether program delivered on the economically important goal articulated for the program. Perfect.
Up Next — Discovery and analysis of the Green Technology Pilot Program