Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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Patent Office: Part of the growth in the regulatory burden

Mike Konczal examines whether the burden of government regulation has gotten worse, sees that in aggregate it has, and then digs down to find that it is due almost entirely to the activities of Homeland Security link here. Irrelevant for a blog on IP you will say. But wait.

In the end he notes that "One of the biggest winners over the past 9 years was the Patent and Trademark Office, which went from 6,128 employees to 10,098 employees." His comment on that: "Given how much patents are used to shut down competition and let the largest companies rent-seek, this is probably the anti-growth part I would flag. For those who know it better, is it a symptom of court decisions? Are they playing catch-up to industry demands?"


John wrote: "the burden of government regulation has gotten worse". The regulatory burden in many cases is fostered by the private sector for the sole purpose of eliminating competition. So it is hypocritical for the private sector to complain about the regulatory burden.

The New York Times had the following article: "Cellphone Carriers Try to Control Signal Boosters". In that article the times writes: "In March, CTIA-The Wireless Association, which represents cellular service providers, filed a complaint with the Federal Communications Commission demanding stricter regulation of signal boosters. The commission is considering whether to let Mr. Kirkland and an estimated one million other homeowners continue to use them." (emphasis added).

The Times also writes: "In other words, CTIA wants cellular service providers to control who makes boosters, who sells them and to whom. Not surprisingly, the leading manufacturers of cell signal boosters like Wilson Electronics of St. George, Utah, and Wireless Extenders of Norcross, Ga., do not like this idea."(emphasis added)

There needs to be greater recognition that the government regulatory burden is really a creature of the private sector itself.

The regulatory burden in many cases is fostered by the private sector for the sole purpose of eliminating competition. So it is hypocritical for the private sector to complain about the regulatory burden.

This treats "the private sector" as referring to a single monolithic entity that acts in unity. There's no hypocrisy in the left hand saying one thing while the right hand does something opposite when it's John's left hand but Mary's right hand...

But your larger point is one I agree with. A few bad companies (and in some cases entire cartels) promote much of the regulatory burden that then saddles whole sectors (including innovative startups that would challenge those cartels).


Your question:

For those who know it better, is it a symptom of court decisions? Are they playing catch-up to industry demands?"


Neither. The USPTO backlog began during the 1990s and has continued to grow. The USPTO, which is fully self-funded, has kept asking for the authority to hire more people, primarily examiners, to stay in step with the number of applications filed.

The growth in applications is coming for several reasons. First is the direction of business. As business in the U.S. has become more high tech and research oriented, the number of patent applications has increased. Second, the growth in the number of applications from foreign countries has been significant, which would be expected as other countries expand their ability to innovate. In general, the number of patent applications has tracked fairly well with R&D expenditures worldwide.

@Fedoroa - You are correct that I used an overly broad a brush.

@Anonymous - An inconvenient truth regarding the USPTO backlog, is the questionable legitimacy of many of the patent applications. Want to reduce the USPTO backlog/workload, the USPTO should start rejecting patent application for things that should never be patented such as products of nature, business methods, and overly broad concept designs.

Clearly this is a situation where a bureaucracy is using the workload excuse to aggrandize itself rather than evaluating the legitimacy of the patent applications.


The USPTO does not get to pick what it gets to review. The USPTO is required as a matter of law, enacted by Congress, to review all patent applications within the framework of rules established by Congress, except when Congress has not made its position known, which leads to...

"Products of nature" and "business methods" were both the results of litigation. The only way to change the system is for Congress to make rules that narrow the scope of patentability. This position was affirmed, again, by the Supreme Court in the Bilski decision. Do not point at the USPTO for something that Congress needs to fix.

As for "overly broad concept designs," part of the problem has been an understaffed USPTO.

The USPTO does not appear to be aggrandizing itself, but does appear to be trying to do the job that Congress asked it to do. It does not evaluate the "legitimacy" of patent applications, since they are all equally legitimate. However, they do attempt to determine whether a patent application is worthy of being a patent.

As for whether the USPTO does a good job at identifying patentability, the best reference we have for that is the number of lawsuits that appear to be without merit (though I am unsure of who determines "merit" and whether the suit was based on an "overly broad concept design" - these things often appear to be a matter of opinion rather than a matter of fact). Again, it is difficult to identify those that have merit within a system of patents rather than those that do not.

What we do know is that there are somewhere around 2700 lawsuits in the U.S. (give or take, the number varies a couple of hundred per year) relating to patents each year. Assuming that all 2700 suits are for individual patents (which is problematic since there are often multiple suits for the same patent(s) and many of these suits are against patent holders for false marking suits), and considering that there are probably around 1.7 million U.S. patents in force, and that every one of these suits is for a patent on an "overly broad concept design" (which is not true because many of the litigated patents are very narrow and there is copying that happens), then the maximum USPTO error rate per year is 0.1%. In comparison to other systems organized by man or goverments, that error rate sounds phenomenally low.

The story on which I drew in writing this piece was that the raw data on government regulation showed a rapid and prolonged increase. But on examination, it almost all turns out to be the patent office. Conclusion: The charge that the bureaucrats have increased regulation is simply wrong. Good comments all around. Thanks.

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