When President Obama delivers his speech on jobs and economic growth on Thursday evening, there’s a good chance that he will mention patent reform as a driver of job growth.
With landmark patent reform legislation pending in the Senate, the President might point to the imminent reforms as an example of how his administration is trying to position the United States to be both globally competitive, as well as forward-looking with the types of well-paying jobs that the reforms will generate.
The only catch: The legal community is highly doubtful that the reforms — which could come up for a vote in the Senate as early as this week — will spur any big changes in the current incentive structure for inventors and innovators, and indeed could make it worse.
“One frustrating aspect of the reform bill for me is that Congress and the President are attempting to call it a ‘Jobs Bill,’ patent law expert Dennis Crouch told TPM. Crouch is a law professor at the University of Missouri and the founder of the widely-read blog PatentlyO.
“It’s a very seductive label,” he continued. “Especially because the Bill does not involve any tax changes (other than user-fee increases) and only barely increases the overall government budget. The truth is, however, I don’t see any way that this particular bill is going to lead to any genuine job growth.”
Anecdotally at least, other lawyers seem to agree. Mark Lemley, a Stanford Law School professor and practicing lawyer who’s widely regarded as a pre-eminent authority on patent law, told Politico, “It’s nonsense to say we’ll have thousands of new jobs because of this legislation.”
Specifically, the academics are reacting to congressional lawmakers’ claims that reforming the patent system will spur economic growth and thus create jobs.
One of the main problems with this line of reasoning is that it’s not clear that the reforms in the legislation will lead to higher quality patents. Most of the changes in the legislation address procedural issues, such as switching the United States over to a system that awards patents to those who file for them first rather than those who can prove that they invented something first.
Other changes address procedures for challenging patents after they have been granted. For example, the legislation sets up a process to challenge the validity of patents at the United States Patent and Trademark Office that could theoretically save companies from having to mount full-on, much more expensive legal fights in federal court.
But the most glaring problem is that the current version of the legislation that the Senate is considering still gives congressional appropriators the keys to the USPTO’s kitty, meaning that the department doesn’t still have ultimate control of the money that it generates from its filing fees, which means in turn that the office may not have full control over its own finances to manage the processing of patents in a speedier fashion.
The ending of “fee diversion” is crucial to getting the USPTO up to speed in processing patent applications quicker, many in the patent law community charge.
“The Innovation Alliance believes there is no more important step we can take to promote the health of the innovation ecosystem in the United States,” said the group’s Executive Director Brian Pomper in a Wednesday statement on the legislation. “That is especially true in light of the variety of new resource-intensive responsibilities and procedures H.R. 1249 assigns to the USPTO. We remain committed to the goal of working with this Congress to end fee diversion permanently.”
After six years of intense fighting over the issues between various industry and inventor factions, everyone in Washington. D.C., who has ever been involved in patent reform is keen to see a deal done. So Sen. Pat Leahy (D-VT,) the legislation’s principle author and champion in the Senate, and Majority Leader Harry Reid (D-NV) are pushing their colleagues to approve the legislation without considering any amendments, even though many people want the fee diversion process to end.
Ironically for Obama, Sen. Tom Coburn (R-OK) is in the process of offering an amendment that would end fee diversion, but Leahy, who wants to hustle the bill along before it loses momentum, is urging his Senate colleagues not to pay attention to the amendment, and just to approve the bill.
Stay tuned.
