Updated - US tries to clear patent logjam

US Patent Office's latest ruse to flush out pending backlog

US logjam blamed for diminishing US competitiveness

The United States Patent and Trademark Office (USPTO) has released details of its latest scheme to reduce its woeful backlog of unprocessed pending patents.

The 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, and even the head of the USPTO itself, for diminishing US economic competitiveness and costing millions of jobs.

Consequently, under the Project Exchange programme, the USPTO is offering applicants with multiple pending patent applications a deal whereby they can fast-track one application in exchange for withdrawing an unexamined application.

“Project Exchange will help us reduce the backlog and enable us to process applications quicker,” said David Kappos, under secretary of commerce for intellectual property and director of the USPTO.

The scheme will be limited to 15 applications per entity until the end of this calendar year and applies only to patents filed before the inception of the scheme.

On Tuesday 18 May, two US senators – one Democrat and one Republican - introduced a bill that would temporarily increase the fees for filing patents and ensure the money was directed to clearing the backlog.

The proposed Patent and Trademark Office Funding Stabilization Act seeks to impose a temporary 15 per cent increase on fees and prohibit Congress from diverting patent fees away from the agency, a practice which has starved the USPTO of funds in the past. Under current budget proposals, $200m in patent fees would be diverted into the Obama administration's general fund.

The bill would also allow the agency to hire more examiners and improve patent quality, senators John Conyers Jr and Lamar Smith said in a statement.

The proposal is in addition to wider-ranging patent legislation which has been languishing in the senate since its introduction in March 2009.

Earlier this month, Kappos confessed to the biotech industry that the patent backlog in the US is suppressing the creation of “millions of potential jobs”.

"Hundreds of thousands of ground-breaking innovations are sitting on the shelf literally waiting to be examined ,” Kappos admitted. “Jobs are not being created... companies not being funded, businesses not being formed – there's really not any good news in any of this.”

For years, economists have been warning US politicians that the logjam in patents is damaging US competitiveness. The warnings have become more shrill with the rapid rise in patent filings from emerging nations such as China and India.

Kappos has said that up to 80 per cent of US economic output since 1945 has been dependent on innovation and accompanying IP protection.

The patent backlog has been building up for a decade: over 400,000 patents applications were received by the USPTO in 2005 alone.

The Byzantine operations of the USPTO have been widely blamed by politicians, lawyers and other commentators for the backlog. However, legal analysts also point to the fact that the USPTO grants patents on business methods, creating a flood of low-grade filings and clogging the US district court system with dubious litigation from so-called patent trolls.

The US position of granting patents to business methods contrasts with other patent jurisdictions, such as the UK and most EU countries, where a patent is granted only for "a technical solution to a technical problem”.

Similar warnings about the competitiveness in a highly globalised world have been sounded in the EU over the years. Recent moves by the European Commission to harmonise Europe's fragmented patent regime seem to indicate that these warnings are being heeded.

Kappos, an ex-IBM executive, took over the USPTO last August with a mandate to tackle the agency's systemic problems and has been credited for gradually increasing the USPTO's transparency and for his outspoken criticism of its performance.

Various attemptshave been made to cull the USPTO's backlog over the last five years.