By Gene Quinn
Over the last few months, I’ve chatted with several giants in the patent world – industry leaders who revere the concept of intellectual property, but have deep concerns with the existing patent system.
To one degree or another, they support patent reform – a concept that can trigger no small amount of debate in the inventing community.
So, who are these experts I’ve been talking to?
Dr. Gary Michelson –billionaire inventor and spine surgeon;
Jim Greenwood – former congressman and current president and CEO of the Biotechnology Industry Organization;
Francis Gurry – director general of the World Intellectual Property Organization; and
Randall Rader – who as of June 1 became chief judge of the United States Court of Appeals for the Federal Circuit.
My conversations with them are posted on my blog, www.ipwatchdog.com.
As I stepped back to reflect on these interviews, I saw common threads: (1) a thoughtful innovation policy can lead to real job growth; (2) by encouraging innovation the intellectual property systems of the world are undoubtedly a force for good; and (3) the growing pressures on patent offices around the world need to be addressed or else the patent system may become irrelevant.
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Michelson is a quintessential American inventor, who obtained more than 900 medical device-related patents worldwide. He ultimately sold his patent portfolio to Medtronic for $1.35 billion. Pretty good run. But he told me he could have done even better had the patent system worked more efficiently.
He wants to see a more inventor-friendly U.S. Patent and Trademark Office – one that boosts the American economy through innovation-fueled job growth.
Michelson believes the USPTO is underfunded, and bristles at what he calls the “innovation tax” in the form of fee diversions. The USPTO is wholly supported by application and maintenance fees. When the U.S. Treasury siphons money from the USPTO, that’s a tax … a tax on innovation.
Michelson also believes the USPTO needs to do a better job archiving prior art, which would make it easier for examiners to process applications. And he has a plan to condense the patent prosecution process – patents would be issued or rejected within six to nine months, not the years it often takes. Radical yes, but doable.
Meanwhile, Judge Rader worries that a flood of patent applications pouring over the transom will further bog the USPTO, which is grappling with a backlog of some 785,000 pending applications.
“The PTO and the Court have to be aware of the tremendous pressures on the patent system,” he said. “There needs to be some effort to deal with the quality of patents worldwide as the number of filings increases.
“Part of that answer might be an international work sharing (program),” he added, “where the United States, European, Japanese and other major patent offices can acknowledge each other’s work and save time on work that has already been done elsewhere.”
Indeed, it should be comforting that USPTO Director David Kappos and his staff are working to expand work-sharing agreements with foreign patent offices.
Gurry also addressed the backlog of patent applications.
WIPO estimates there are 3.5 million unprocessed patent applications around the world at the moment.
“We have to tackle that,” Gurry said. “That is not something that we can ignore. That spells in the long run the death of the patent system if we cannot cure that, because the demand is only going to become stronger.”
Gurry participated on a panel with Kappos at the BIO International Convention in May. The panel focused on spurring innovation, investment and creating jobs.
“I believe the intellectual property system is a force for good,” Gurry said. He noted the unfortunate reality that developing countries often believe the way to advance is to ignore intellectual property and produce knock-offs. That said, developing countries such as Vietnam that do embrace and exploit the IP systems of the world are becoming quite successful.
Greenwood’s BIO, one of the largest and best-organized technology industry organizations in the world, also weighed in on the IP debate.
“If this association is effective,” BIO’s Greenwood told me, “we accelerate the arrival of new drugs to fight disease, accelerate the arrival of new crops that can expand agricultural activity and feed more people and expand the development of new fuels and materials that make our human existence on this planet more sustainable from an environmental point of view.”
So once again, science and innovation show that they can be a force for extreme good in the world.
But without strong intellectual property protections, start-up companies simply cannot attract the capital they need to grow.
“For most (biotech start-up companies) the only thing that they have is intellectual property,” Greenwood added. “They may have a folder with their IP portfolio in it and not a place to file it. They start off with that and then they have to raise money to even begin to have microscopes and bricks and mortar and staff. It is on the strength of that intellectual property that they have to raise all of those dollars for a very long time.”
To have a vibrant, innovative community that drives scientific advancement, creates business opportunities and leads to the creation of jobs, something must be done to end the worldwide bottleneck of patent applications.
Yet at a time when science and innovation are making extraordinary breakthroughs, there are forces mounting that would seek to dismantle intellectual property protections, particularly patent protections. In fact, patents are being assailed from all sides, whether it be the ACLU challenging gene patents, open source and anti-patent advocates challenging software protections, or just garden variety anarchists protesting capitalism in general. Everyone with a stake in the innovation-patent-commercialization lifecycle needs to be vigilant.
Once again, it appears that patent reform legislation died on the vine – at least as of this writing. Perhaps that’s just as well. While the bill contained needed reforms, it stopped short of fully addressing fee diversions, the backlog and pendency issues.
Meanwhile, those of us who believe the patent system is fundamental to the U.S. economy will need to gear up for more battles and continue to champion the virtues of innovation and why protecting innovation with patents is essential.
Editor’s note: This article appears in the July 2010 print edition.