More Patent Offices in the US: Will This Encourage American Innovation?
Recently, the U.S. Patent and Trademark Office announced that they would be opening field offices in Silicon Valley, Detroit, Denver and Dallas. This is the first set of field offices to be opened. The America Invents Act of 2011 mandated this move. They did this in part in an effort to mend the country’s damaged patent system. While the effort is acknowledged, some think the effort is misguided. While it is assumed that the problem with the patent system is that applications are processed too slowly, the real problem may be that too many patents are granted. This means that more time is spent in litigation than actual innovation.
Patents give inventors the opportunity to make money off their innovations. Last year’s America Invents Act was operating under the premise that patents are in jeopardy because the Patent and Trademark Office aren’t doing a good job at processing the applications. Patent applications have surged greatly in the last few years and are creating a backlog. One report from the Commerce Department that the estimated backlog of 750,000 applications could cost the U.S. billions of dollars each year in foregone innovations. To help with this backlog, new patent examiners have been added as well as the aforementioned launching of field offices.
In theory, adding more workers is a great solution to this problem. In most industries, patents work as they are intended to, but in some industries like the growing digital sector, patents seem to cause more litigation than innovation. In this area, the costs of innovation are relatively low, so invention is driven by competition rather than monopolies like other industries. The problems arise for smaller players because the government distributes so many patents that it becomes difficult to invent something with out violating the big industries’ patents. This is okay for larger companies because they have the time and money to put together or buy plenty of patents. This is not the case at all for new entrants. Foregone innovation occurs with these new entrants because their resources are wasted on the cost of litigation rather than inventing great products.
While good intentioned, this patent reform may not perform as some hope. Rather than encourage competition and prevent monopolies, it may have the opposite effect.