APPENDIX 22.-TOP 200 CORPORATIONS RECEIVING U.S. PATENTS IN APPENDIX 23.—Gross BUDGET AUTHORITY AND NON-FEDERAL OFFSETTING FUNDS Table 1 Gross Budget Authority and Non-Federal Offsetting Funds* Coast Guard 2,444,893 5,327 0.2 2,651,658 National Oceanic and 1,855,913 31,832 1.7 1,949,392 Atmosphere Administration * Source: Budget of the United States, fiscal year 1992 APPENDIX 24.-NEWS ARTICLE FROM NEW TECHNOLOGY WEEK, "MASSIVE PROTEST ERUPTS IN PATENT COMMUNITY," JUNE 3, 1991 NEW TECHNOLOGY Monday, June 3, 1991 Volume 5, Number 23 Massive Protest Erupts In Patent Community The Patent and Trademark Office is entering probably the most controversial period in its 200-year history. A proposal to raise fees to small companies and individual inventors by 91 percent this year on top of a 69 percent increase that took effect eight months ago is causing a contentious, heated debate within the normally quiet patent community. The proposed fee increase is also leading to a debate over the constitutionality of an individual's right to obtain patents. Patenting and invention is becoming only a rich man's pursuit, say those opposed to the increase. The debate will come to a head on June 12, when the Patent and Trademark Office (PTO) plans to hold an open hear ing addressing the issue. Sparking the controversy is the PTO's desire to increase its budget by $110 million next year, a 25 percent increase. But the five-year budget resolution agreed to last year by President Bush and Congress requires the Patent and Trademark Office (PTO) be a fully usersupported entity, a concept that flies in the face of the Patent Office's 200-year history, says those opposed to the increase. "The individual inventor is being crushed," says B. Edward Shie singer, a noted patent attorney and prolific inventor. "The fee schedule is horrendous and is bad news for the small entrepreneur and inventor and not neces sarily good news for the larger inventor," says patent attorney Warren Low of Arlington, Va. "Government fees shouldn't keep people from using the patent system and we're at that point now," says Michael Blommer, executive direc BY RICHARD MCCORMACK tor of the American Intellectual Prior to 1982, the patent system Those opposed to the usersupported system say that Congress is not "securing" anything for inventors. By relinquishing financial funding of the PTO to its users, Congress is said to be giving up its statutory oversight of the system. Those who are paying for the system rightfully want to control how their money is being spent. "An agency that isn't publicly funded isn't accountable to Congress," says one House Judiciary Committee staff member. "We don't want to oversee another Post Office." For most people, though, the bigger issue is the terrible signal it sends on how the administration feels about assuring America's techno logical strength into the future. The $351 million needed to run the PTO this year "is peanuts compared to what we spend for one aircraft car rier," says Shlesinger. "It was inven tion that built this great country and if we don't continue to give incendives, we won't reap the rewards." Most major U.S. corporations were started by individuals who had no financial resources whatsoever, but were able to easily get a patent for their idea. McCormick, Deere, Land and Xerox, all fall into that category, and the list goes on. That may no longer be the case. "Plain and simple, the $6,000 [required to get and maintain a patent) which doesn't include the attorney's fee is far too much money" for the aver (Continued on next pagel Patent Unrest... Continued from page anal age American to afford, says Shlesinger. "We've got people who don't understand that the benefits of our patent system are the tax dollars coming from new industries which are more than covering the operation of the Patent Office," says Shlesinger. "They've gotten away from the theory of the system." The Patent Commissioner doesn't see it this way, though. “Several organizations have opposed enactment of our proposal and have alleged that the fee increase implemented last November and the proposed increases will deter many large corporations and small enterprises from seeking patent protecdon...They [are]wrong," says PTO Commissioner Harry Manbeck. The PTO is still receiving an increasing number of applications this year, despite the 69 percent increase in fees. This was also true after a major fee increase went into effect 10 years ago. Since then, the number of patent applications has risen 51 percent, and patent applications by small entities have increased from 32,000 to $8,000. "Anybody can play with statistics," counters Blommer of the American Intellectual Property Law Association. "The fact is, that in 1974, U.S. applicants filed as many patent applications as they did in 1988. We've got a real bad record here in the U.S. in terms of filing applications." Wealthy foreign firms are more apt to pay increases. Moreover, it's impossible to measure patent applications that didn't come in as a result of the higher fees. One of the big problems is that the people who are most affected by the increased "tax" on inventors are not organized and have no political clout. There are no real faventor organizations in this country," says Blommer. "There is just nobody who is in charge of innovation in this country. Nobody sees the patent office as part of the larger picture." The Technology Administration at the U.S. Department of Commerce is not at all versed on the issue, said a spokesman. And the President's Office of Science and Technology Policy was unable to answer any questions due to a lack of knowiedge of the issue. The appropriate subcommittees in Congress are beginning to wrestle Mondic“. June 3, 199! NEW TECHNOLOGY WEEK with the problem, however. "Fran- This is particularly true for the QUO nancing the PTO solely with Unfortunately, because of the budget reconciliation bill of last year, Hughes finds himself in a financial straightjacket. "We're going to have to be as innovative as we can to try to locate money," he says. So where is the extra money in the system? "At this point, I have no idea," he responds. UOTABLE "One organization, the Industrial Biotechnology Association, states that its members will be unable to afford our proposed fees-less than $7,000 over an average 13-year period per patent. Yet this is an industry that invests $100 million to $200 million per invention. In addition, the industry expects to receive revenues of $2.9 billion in 1991 and expects to receive $50 billion in the year 2000. One could certainly question how companies that can make such investments and receive such returns cannot afford $7,000 in fees-half of which are paid after the patent grant-to protect an invention in the world's wealthiest market." ➡HARRY MANBECK, Current Commissioner of Patents and Trademerks. "For nearly two centuries e (patent) grant for from 14 to 17 years has suddenly been cut down to four years. Nearly 40 percent of the patents granted to individuals in the past nine years have expired for failure to pay the extension fees required before the end of the four-year term. Many inventors become discouraged when they have been unsuccessful initially in marketing their inventions. Four years is insufficient time to find out if they have something worthwhile. "Prior to the establishment of these four-year grants in 1982, inventors had 17 years to market their ideas without payment of any extension fees. "Fallout from the impact of these new fees has carried over to the U.S... government patents. Over 50 percent of these patents issuing in the last nine years have been allowed to expire even though the potential value of these inventions by the government could have been maintained for the full 17 years, had the extension fees been paid." -B.EDWARD SHLESINGER, of Shlesinger, Arkwright & Garvey in a March 28, 1991 letter to President Bush, "The time scale of Invention is a long one. Results do not come quickly. Inventive developments have to be measured in decades rather than years. It takes patience to stay with an idea through such a long period. In my case, I am sure I would not have done so if it were not for the hope of the eventual reward through the incentives offered by the patent system.” -CHESTER CARLSON, inventor of Xerography. "I find it very strange that while the Department of Commerce through the National Institute of Standards and Technology, has earmarked some $35 million to be granted to large and small industrial organizations to develop new technologies, while the Department of Energy gives grants to inventors to help them develop their energy-related inventions, and while other agencies of the Federal and State governments are doing everything possible to improve the competitive position of our industries, the Patent Office, the base of our technology, has to raise the price the inventor has to pay for the protection he needs from the patent system.” -JACOB RABINOW, Previous Vice President of Control Data Corp. and Currently a Consultant to the National Institute of Standards and Technology. |