The U.S. Patent and Trademark Office is the biggest job creator on the planet. Yet — defying logic — Congress and the president cut $100 million out of its budget.
After a decade of wrangling, congressional Republicans and Democrats are about to enact the most sweeping patent reform legislation in 60 years. The America Invents Act has already passed the Senate and House (by votes of 95-5 and 304-117 respectively) and is now being reconciled by a joint Senate-House conference committee before being sent to the president.
What makes this bill significant, aside from the fact that both parties actually agreed on something, is its impact on American innovation and job creation. Without going into the particulars of this complex bill, suffice it to say that it is going to have a major positive impact.
No government agency has done more to generate good jobs in quantity than the U.S. Patent and Trademark Office (PTO). The new law should permit PTO to do that faster.
Political compromise always means settling for half a loaf. The missing half in the America Invents Act is that the House version permits “fee diversion” to continue. Currently, any patent filing fees PTO earns over its congressionally prescribed annual budget are diverted to the general treasury and cannot be used by PTO. Last year, that amounted to $100 million that PTO could have used to tackle the 700,000 (and growing) backlog of patent applications.
The backlog means delays in bringing innovation to work for the U.S. economy. The patent approval process currently takes three years, an unacceptable length of time. The quicker patents get approved, the more rapidly jobs get created and the economy prospers.
The Senate voted almost unanimously to get rid of fee diversion and let PTO keep the fees it earns. The House committee that approved the bill voted 32-3 to get rid of fee diversion. Despite that, the full House voted to retain it in deference to one influential member.
However, if the conference committee surprises us and approves a ban on fee diversion, look for PTO to hire at least 1,000 new patent examiners and for new inventions to become new companies needing new employees, and existing firms with stepped-up hiring requirements.
When my children were little, they would sometimes punish themselves with the idea of punishing their parents. Congress and the president seem hell-bent on doing something similar. One small example:
In the recent 2011 budget “compromise,” Congress and the president cut $100 million out of PTO’s budget for the remainder of fiscal year 2011. This was completely illogical. PTO does not affect the budget, since it does not use any tax revenues. Consequently, the agency will issue fewer patents in 2011 than in 2010 and the backlog will grow.
PTO is all about jobs. Without jobs, 24 million Americans lose not only their means of feeding, sheltering and clothing themselves and their families, they also lose their self-esteem and their hope for the future.
PTO is, hands down, the biggest job creator on the planet. Nothing puts people to work like innovation, and PTO is the mother of all innovation engines. Moreover, many of the jobs thus generated are good, high-paying ones. PTO costs the government nothing and gets trillions of dollars injected into the economy in return.
What is it Congress and the president do not understand?
Email Richard Hermann care of Messenger Post Media at email@example.com.