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Nanotechnology patent problems blamed on unionization

Small Times reports on a meeting held in Oregon among a wide variety of nanotechnology-based business participants, at which many commercialization challenges were discussed. One was difficulties encountered with the U.S. Patent office:

Start-ups expressed frustration with the U.S. Patent and Trademark Office (USPTO). Long waits for patent award decisions make it difficult for them to get venture funding and to secure corporate partners. In response, [Under Secretary for Technology at the US Department of Commerce, Robert] Cresanti noted that the issue was well understood at the highest levels, but that the training and retention of qualified patent examiners was proving to be extremely difficult. Once trained, nano patent examiners are able to secure private industry jobs at three times the salary provided by the USPTO, which is limited in its ability to counter-offer due to strong union forces.

This sounds like an arms race that the patent office cannot win. Not only is it outgunned financially and in terms of flexibility, but it is also charged with the task of declaring an invention to be new and different enough to warrant a 20-year monopoly or not— in a world of rapidly increasing technological complexity, how can they keep up? Maybe I’m confused, but this process looks increasingly unsustainable to me, in terms of understandability and fairness. How can inventors cope unless they are backed up by huge companies with a large legal staff? Countries that derive an above-average fraction of their economic strength from small entrepreneurial companies will be put at an increasing disadvantage as this continues. That’s unfortunate. Maybe it’s time to explore other models.

Perhaps Community Patent Review can help. It’s great to see this idea making such fast progress since it was first described at the Accelerating Change conference in 2005. —Christine

7 Responses to “Nanotechnology patent problems blamed on unionization”

  1. zoobab Says:

    Privatising the examination system would also change a lot the speed of the patent process.

    Right now, there are no monetary incentives to challenge patents if you are not a stakeholder affected by the patent, and that’s not the Community Peer review project that will change something.

  2. Harry Says:

    The Community Patent Review is unlikely to help at all in accelerating the patent examination process. If anything it is likely to slow down a grant because the Examiner may have substantially more documents to review before grant is made. OK – some peer reviewers may provide detailed arguments, but others are likely to throw a whole load of documents with comment and the Examiner may look for the “needle in the haystack”.
    What we need is more initiatives like the Patent Highway Project where one patent office does the first (major) job and the other offices review the work and apply their own criteria.

  3. Phillip Huggan Says:

    For example, to do research with Golden Rice, a newer high-yield strain of rice, there are over 60 overlapping patents to deal with for prospective Golden Rice innovators.

    A researcher couldn’t and shouldn’t have to deal with each patent individually, but if they could all be merged somehow together under the same patent umbrella, said researcher could spend more time innovating rather than learning how to be a lawyer.
    I’m picturing one group of patent examiners who “tack on” new patents to existing ones, and later a second more detailed analysis that perhaps redistributes the royalty shares for each “clump” of patents.

    There is a conflict of interest if patent offices are privatized.

  4. Harry Says:

    With respect to Phillip Huggan, I do not think it is ever going to be possible to group the patents under the “same umbrella”. Many voluntary attempts at patent pooling have been blocked by the US Dept of Justice and/or EU Competition Authorities as they are seen to be “anti-competitive” (because companies don’t compete but collaborate).

    There are some attempts at providing a one-stop shop for patent licences – see for example, the Public Intellectual Property Resource for Agriculture at UC Davis.

    Actually the patent office in Europe at least does a pretty good job at distributing similar technologies to the same Examiner.

  5. Phillip Huggan Says:

    I didn’t handicap political feasibility, just technical efficacy. Probably a patent regime innovation would most easily be instituted in a small patent jurisdiction (say, Singapore if they have one) and could be used as a case study.

    I skimmed the PIPRA site and that isn’t what I meant (PIPRA itself doesn’t have teeth; seems more like a patent office Google for a given product/technique), though it is an admirable collaberation. PIPRA is University and industry stakeholders investing lots of effort to fix the patent morass. Rather than taking effort in instituting suboptimal patent licenses, and then taking even more effort to untangle the mess for a given product industry, it would save taxpayer money and increase consumer qualities-of-living (and life expectancy in the case of PIPRA) not to issue a tangle of patents in the first place.

    It was wrong and Stalinistic of me to suggest indexing royalties or revenues for a given patent tangle, but expiry dates or annual patent renewal fees would be a much simpler strategy.

    Suppose Christine patents a burger flipper that also applies seasoning salt and pepper. That patent is good for 20 years. Then I come along and get my blood-sucking lawyers to look at her patent, and I patent a burger flipper that has a little thimble for BBQ sauce. Now if I’m actually competing with Christine, that is good. But if I’m just using my patent to hound Christine’s business for royalties, well that sort of parasitic behaviour (even though competitive within the consumer market) is bad.
    Now if the patent office were to take a look at my books and see I was just a firm that sued other firms and facilitated no manufacturing activity, it could decrease the lifetime of my patent or it could jack up the annual fees (ideally redistributing this to other members of the patent tangle that are making burger flippers). It can take longer than a decade to bring a drug to market and only weeks for a utensil, so the prescription would be different for every product life-cycle class.
    Perhaps it is simpler to increase the patent fees the more “tangled” the existing product patent repitoire is. $500/yr for Christine’s 1st patent. $600 a year for mine. Ideally, the % of my income statement I use for administrative expenses (litigation/lawyers) rather than product operating expenses; that % should be deducted from my patent’s lifetime.
    If half of my business is lawyers and that cuts my patent lifetime in half, I won’t be such a leech in the first place.

  6. john doll, commissioner for patents, u.s. patent and trademark office; robert budens, president, patent office professional association Says:

    Contrary to the frustrations expressed by start-up companies and the misinformation set forth in the April 9, 2007 Nanodot article “Nanotechnology patent problems blamed on unionization”, relative to strong union forces limiting the ability of the United States Patent Office (USPTO) to compete with private industry jobs and employers, USPTO Management and the Patent Office Professional Association (POPA/Union) are in accord on the importance of attracting, hiring, and retaining the very best patent examiners to work at the Agency.
    To that end, in 2006 USPTO worked with POPA to obtain a 7% across-the-board pay increase for patent examiners. This pay increase, which increased an existing special pay rate, went into effect in November 2006 and means that Patent Examiners earn about 10 % more than they would on the Washington-Baltimore locality federal pay scale. Further, in 2006, with POPA’s cooperation, the USPTO was able to provide recruitment bonuses for new hires in competitive art areas. Similarly, and again with POPA’s cooperation, the Agency is exploring the possibility of expanding the use of retention bonuses.
    The USPTO – with the support of POPA – has put into place employee and family friendly workplace flexibilities that include flexible and compressed work schedules; a hoteling program (work from home while sharing office space one day during the week); a lap-top computer program (work overtime from home); a telework program that allows employees to work one day a week at home while keeping their offices at USPTO headquarters, and a compensatory time program where employees can earn/use up to 400 hours per year.
    John Doll
    Commissioner for Patents
    U.S. Patent and Trademark Office
    and
    Robert Budens, President
    Patent Office Professional Association
    U.S. Patent and Trademark Office

  7. Christine Peterson Says:

    Dear Mr. Doll and Mr. Budens:

    Thanks for the clarification and new information on this challenging issue.

    We wish you the best of luck in attracting and retaining excellent patent examiners.

    –Christine

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