US Patent Office wins cash to clear log jam

Move could help speed patent approval for technology innovations

Filing fees which went into the Federal budget will be kept by the US Patent Office

The US Patent and Trademark Office (USPTO) took a long stride nearer much-needed reform this week when president Barack Obama signed legislation which will enable the office to keep more of the revenue it generates from patent-filing fees.

For years, the USPTO has been overwhelmed by a mountainous backlog of unexamined patents, many of them for technology innovations.

The under-funded agency currently has 1.2 million applications pending, of which more than 700,000 have not even been opened for preliminary examination.

The backlog is blamed by US politicians for diminishing US economic competitiveness and costing millions of jobs. Recession and the rise of China as a patent-filing nation has focused US efforts to overhaul its patent system.

Various schemes have been tried to clear the log jam over the past five years. But more recently a growing chorus of voices has been calling for greater funding, so that the USPTO can employ more patent examiners.

David Kappos, under secretary of commerce for intellectual property, appointed USPTO director a year ago, has staked his job on securing more funding.

Cash generated by filing fees has previously disappeared into Federal funds and has not been kept by the USPTO. However, P.L. 111-224, the United States Patent and Trademark Office Supplemental Appropriations Act 2010, gives the USPTO the authority to spend an additional $129m (£82m) of the fees the agency will collect in 2010.

Due to an improving economy and increased patent examination productivity, the agency projects it will collect nearly $200m more than the $1.887bn collected last year.

The bill was a response to Obama's request to Congress on 12 July to provide the USPTO with access to all the fees it will collect in 2010. In that request, the president said the money would “support efforts to reduce backlogs in processing patent applications – by spurring innovation and reforming the USPTO to make them more effective.”

“This additional funding will allow us to continue the progress we’ve made in improving the USPTO and the patent process so that patents can be issued more quickly, investment in new technology and new products will be accelerated and much-needed jobs will be created,” said Kappos.

Investments include hiring new examiners, enabling additional examiner overtime and improvements to USPTO processes and IT systems, he added.

The US is not alone in seeking to overhaul its patent system: the EU has also been struggling to unify patent mechanisms across member states.

However, patent lawyers and other commentators point to a fundamental difference between the US and European systems, in that the former allows business methods to be patented, while the latter does not, relying on the test of “a technical solution to a technical problem”.

This, it is said, has created a flood of spurious patents in the US, overwhelming the USPTO with unexamined filings and constipating the US court system with battles between patent trolls – organisations that chase alleged patent infringers as a way of making money – and their victims.