Privatizing patent searches

Congress has proposed a bill that would raise the fees that the U.S. Patent and Trademark Office (USPTO) could charge inventors who apply for patents. But the bill also calls for outsourcing U.S. patent database searches — a controversial move because only patent examiners, who are federal employees, have done such work.

If passed this year, the bill would add about $70 million to the agency's fiscal 2005 budget for information technology. But the bill has divided USPTO's managers and patent examiners, who are on opposing sides of the controversial issues of automation and outsourcing.

USPTO managers say that more automation and even outsourcing are necessary for the agency to become more efficient and productive. The backlog of patent applications is 475,000 deep, and inventors who file patent claims wait an average of two years for their claims to be processed.

However, patent examiners say the agency's automation efforts have had mixed results, and some have actually made examiners less productive. They maintain that hiring more examiners is the most sensible way to deal with the agency's expanded workload.

"Do you put the money into automation schemes, or do you put it into the human resources that are necessary and that are currently the bottleneck?" asked Ronald Stern, president of the Patent Office Professional Association, USPTO's examiners' union.

The bill, known as the Patent and Trademark Fee Modernization Act of 2004, passed the House March 3 and has moved to the Senate. It calls for increased patent fees to cover the agency's costs for processing claims. Another part of the bill would permit the outsourcing of patent searches. But there is one caveat: The only private companies that would be allowed to bid are U.S. companies using employees who are U.S. citizens to do the searches.

In addition, the would bill require the patent agency to test its assumptions about outsourcing with an 18-month pilot program before awarding any contracts. It is uncertain whether any company would perform patent searches for a price that USPTO could pay — and if the quality of the commercial searches would meet USPTO's standards, said Robert Weir, president of the nonprofit National Intellectual Property Researchers Association.

The patent fee increases would be used for, among other things, a backup data center to protect the agency's electronic data.

"The risk of not having a backup data center grows as we continue to evolve with our electronic government strategy," said Douglas Bourgeois, USPTO's chief information officer.

Bourgeois said the agency wants to use additional revenue to pay for adding

secure access controls to its electronic patent application folders and improving the messaging software that is part of the new electronic folders system. Patent researchers have complained that the electronic folders are so insecure that USPTO will not permit the public to access them.

Instead, researchers and patent attorneys must pay USPTO $200 for a paper or compact disc copy of a case folder. "We had more access when the official record was in paper than we do now when it is electronic," Weir said.

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Automation and outsourcing

U.S. Patent and Trademark Office managers and patent examiners have opposing views on automation and outsourcing.

USPTO managers say:

Investing in automation will improve the quality and timeliness of patent processing.

Outsourcing would shave up to five hours off the time it takes to process a single patent application.

Patent examiners say:

Investing in automation has been disproportionate to its benefits.

Outsourcing, at best, would achieve a time savings of two hours per patent application.

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