Patent snafus cost U.S. $6.4 billion yearly

Milwaukee Journal Sentinel (Schmid) - The United States 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 backlogs and dysfunction at the U.S. Patent and Trademark Office, the agency that's supposed to protect and encourage innovation in America.

That figure, enough to provide an average round of venture capital funding to more than 1,000 start-up companies each year, comes from the first-ever effort to quantify the economic damage inflicted by the chronic delays at the Patent Office. It was calculated by London Economics, a British research group commissioned by the British patent office to study the impact of patent backlogs around the world.

According to the London Economics study, the U.S. leads the world in the cost of forgone innovation - employers and jobs that don't exist because they were impeded or snuffed out by inability to get a patent. The economic drag imposed by the European Patent Office, which represents 37 nations, amounts to less than a quarter of the U.S. cost. Japan, the world's second-biggest patent office behind the U.S., inflicts even less than half of the European losses.

At the root of the U.S. agency's current problems are nearly two decades of congressional raids on the fees collected by the Patent Office. From 1992 to 2004, Congress siphoned off $752 million into unrelated spending, which in turn left the agency unable to hire enough examiners to keep up with its mounting workload.

The current Patent Office administration, which took office nine months ago, has been fighting an uphill battle to get congressional funding to reform the agency. But Congress once again skimmed an additional $100 million in the current fiscal year...Striving to get Congress' attention, the Patent Office last month issued a white paper that concedes that the agency handicaps American innovation. The report corroborates many of the Journal Sentinel's findings. Read More