MIL- WAUKEE - A year and a half after President Barack Obama appointed an IBM Corp. executive to fix the U.S. Patent and Trademark Office, its problems by several key measures have only worsened, as damage inflicted by years of congressional raids on its funding continues to make it all but impossible for the agency to keep up with its workload.
The result: More than 1.2 million patent applications, filed by inventors and entrepreneurs ranging from major corporations to garage tinkerers, are still awaiting final decisions, a number nearly unchanged from the levels of the past three years.
Also unchanged is a bureaucracy that publishes entire patent applications online 18 months after they are filed, whether or not they have been acted upon - and most often they have not, because the agency is so far behind.
That puts American ingenuity up for grabs, free to anyone with an Internet connection.
"In China, there are thousands of engineers who don't work in laboratories inventing new technologies," said Paul Michel, recently retired chief justice of the federal court in Washington, D.C., that handles patent cases. "They sit in computer rooms reading U.S. patent applications on the Internet. And they can use the technology anywhere in the world, including in America, for free."
"American economic security is threatened in a way Congress has failed to recognize," Michel said.
The Patent Office is meant to act as steward of the nation's newest and most competitive technologies, granting protection to innovative new products so their developers can commercialize them.
But beginning in the 1990s, Congress got into a nearly two-decade habit of draining funds from the agency, which is structured to be self-supporting by charging fees. So just as patent applications have become more and more complex because of the advance of technology, and as global competition exploded, the Patent Office found itself underfunded and understaffed.
Applications now languish so long that technologies can become obsolete before a patent is ruled upon. And the absence of patent protection in some cases allows infringers to steal new technologies, while legitimate inventions are unable to get licensed and start-ups are unable to get funding. Consider:
·The chronically understaffed agency imposed a hiring freeze in 2009 and lost examiners into most of last year, unable to replace them because of budget constraints. Since 2005, it has aimed to hire 1,000 to 1,300 new examiners each year just to chip away at the backlog, but only began to hire again starting in August.
·In 2010, the first full year under a new reform-minded administration, the Patent Office collected $53 million in fees that it was not allowed to keep, according to limits imposed by Congress. Neither has Congress approved the agency's 2011 budget, nor has it approved an agency fee increase, meaning it continues to operate at 2010 budget levels with a deficit of more than $1 million on each business day, agency officials said.
A Milwaukee Journal Sentinel investigation in 2009 illustrated how the agency's dysfunction impedes U.S. competitiveness and stifles innovation. A study released last year by Britain's patent authorities found that the U.S. wastes at least $6.4 billion each year in "forgone innovation" - legitimate technologies that cannot get licensed and start-ups that cannot get funding because of U.S. Patent Office problems.
Delays by the Patent Office often inflict the deepest damage on garage inventors and start-up companies that may have no other assets than their unprotected ideas.
"We're talking about America, right? We're the innovators. This is our future," said John Abendroth, an architect and inventor in Mequon, Wis., who waited more than nine years for his patent on a logistics network for routing trucks and cargo. "It's almost a paradox. It's counterproductive in every way."
It took longer than 11 years for a patent to be issued to George Davida, an expert in computer security and encryption from the University of Wisconsin-Milwaukee.
Davida's application, for secure ways to store personal biometric information on a smart card, was ahead of his time, said his patent attorney, Stephen Lesavich. He filed his patent application in 1999.
But Davida may have missed his best opportunities. Sometime after 2003, while the application was still pending, the Patent Office lost his application file, Lesavich said, citing his 4-inch-thick records.
"In 2008, I finally found a sympathetic clerk, who on her own went and found the file, which was lying on the floor of someone's office," Lesavich said. Dragging out the examination even longer, the application was sent to a different examiner, who effectively needed to start over, but instead handed it off to yet another examiner.
Davida's patent (No. 7,711,152) finally was issued in May - in the midst of a slow economy, and long after the 2001 terrorist attacks had made biometric data storage a hot technology.
"What he did miss, flat out, was that after 9/11, Homeland Security spent a lot of money on encryption security identification technologies," Lesavich said. "He missed that whole opportunity because it was sitting on the floor of the Patent Office."