Who’s Driving This Bus Anyway?

by BILL WADDELL

By most accounts we are on the verge of shutting down the US government.  To that I can only say, thank goodness.  Much more government and manufacturing in this country would be dead all together. A case in point is the America Invents Act, touted as the the "first significant change to the U.S. patent system since 1952".  According to David Kappos, director of the U.S. Patent and Trade Office, "What we'll see is a job-creation engine turned loose."  Only in Washington could that conclusion be drawn from this curious bit of legislation that whizzed through the Senate 95-5.

The high point of the Act is to change the effective date of a patent from the "first to invent" to "first to file".  The invention date – when your idea is protected now – is the date you think up the idea and work continuously on fleshing it out and commercializing it.  You don't have to actually have the patent to be protected – just be working in that direction.  It seems to me that an idea must be invented before a patent can be filed to protect it … by definition, therefore, changing from 'first to invent' to 'first to file' means that inventors will be protected by patents later as a result of the new law than they are now.

Another big change is that the Patent Office will be able to set its own fees and handle its own money, rather than have Congress set the fees for patent filing.  There will be a new tiered pricing scheme for patents depending on the complexity of the idea.  According to Kappos, "that change would bring in an additional $300 million."  The Patent Office examines some 500,000 patent applications a year, and the math is pretty simple. If those 500,000 patents are going to bring in an extra $300 million, the average patent cost is going to go up by $600.

Patents take three years to be approved these days, and the changes (i.e. the extra money) are supposed to shorten that to a year.  The thing is, however, nobody except pharma and a few others wait for the patent to be approved to start commercializing their inventions.  The new gizmo is protected from time of invention anyway, so just about everyone gets on with making and selling inventions long before the patent is issued – that's why it seems that better than half the stuff at Walmart says 'patent pending'.

So where in all of this is the "job creation engine" being "cut loose"? The effective date of patents is being pushed out from date of invention to date of filing, and patents are going to cost $600 more.  The official patent date will be earlier, but no one cares about that.  The obvious answer – at least obvious to everyone outside of Washington - is that the "job creation engine" won't be "cut loose" at all.

The real folly of Washington thinking can be found in Kappos explanation for the $300 million figure.  After all, why not make it $600 million and issue patents in six months?  "With that boost, Kappos thinks the USPTO could halve its backlog to 350,000 applications. That's the ideal inventory level, he said, since it would give each patent examiner enough work to stay busy, but also ensure that most patents get approved within a year of submission."

The three year process to issue patents could not be a clearer example of a Theory of Constraints problem begging to be solved.  Eli Goldratt could phone in the steps needed to whack the delay down to a year.  But then Goldratt knows that the objective is to balance flow, rather than balance capacity, and Mr. Kappos is a former IBM lawyer who would rather maintain the "ideal inventory level" that will "give each patent examiner enough work to stay busy."

Harry Reid says it looks like the government is headed toward a shutdown.  We can only hope that this is not just another of his empty promises – we can't stand much more of this kind of help with the "job creation engine."