USPTO Ramping Up Patent Approvals

from the this-is-not-a-good-thing dept

A bunch of folks sent over a silly and somewhat uninformed article claiming that the US Patent Office was aiming to block small businesses from filing patents by increasing the costs of patent applications so that only large companies could afford it. It's not worth wasting much time on that article, other than to say it's just wrong. The fee plans include an option to let small businesses and individual inventors qualify for cheaper fees -- which is actually something that I think is a problem. And, more importantly, the fee for filing a patent is a tiny fraction of the cost of getting a patent. The argument that the USPTO is looking to make it more difficult for small businesses to file for patents is incredibly uninformed. In fact, lately, the USPTO has been bending over backwards to make things easier for small businesses.

But, the article does mention, correctly, that the USPTO has been on a mission to decrease the amount of time it takes to review a patent. Now, the USPTO has been saying this for quite some time, and usually it's followed by talk of plans to hire more patent examiners. Of course, that's the wrong way to go about things. That's because the patent system doesn't scale, while the rate of innovation actually is scaling. The real way to decrease the time it takes to review a patent is to stop approving bogus patents. Seriously.

Unfortunately, it looks like the new USPTO, under David Kappos, may be going in the opposite direction.

In the late 90s into the early 2000s, the rate of patent approvals was quite high, leading to more patents being filed and more questionable lawsuits. After Lerner and Jaffe published their book Innovation and its Discontents, which highlighted the massive problems of the patent system -- including that examiners had more incentives to approve patents than deny them, the USPTO finally began to shift a little, and it actually began to get more difficult for patent approvals. Add to that a series of miraculously smart Supreme Court rulings on patent issues (with KSR's decision redefining how "obviousness" is measured being a small, but useful, step in the right direction), suddenly patent approval ratings dropped -- dropping from around 70% to around 50% in just a few years.

However, is all that being reversed? Patently-O recently pointed out that the USPTO appears to be approving patents at a much higher rate again, and there's lots of speculation as to why. Many assume that, as was noted in the original link above, Kappos and his boss, Commerce Secretary Gary Locke, are focused on reducing backlog. And so the incentives and pressure within the USPTO is to just approve patents to get them out of the way. If true, this is incredibly short-sighted and will backfire. The end result is that more bad patents get approved, and when bad patents get approved it increases bad lawsuits, followed by bad rulings for huge sums of money... leading more people to file for more bad patents hoping to win the same kind of jackpot.

There is, also, the more cynical argument, which is that since the USPTO is funded by fees, and as it is always looking to increase its budget (what organization doesn't?), it approves more patents to get more applications in, knowing that it can get more money that way. I'd like to hope this isn't the case, but either way, the pace of approvals is troubling.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
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    Anonymous Coward, May 10th, 2010 @ 1:16pm

    the article you point to is somewhat meaningless, because it doesnt show how many total patents were processed and what the accept / decline ratio is. if more patents are being considered each week because of increased staffing or better systems in place, then nothing has changed. the ratios would be important, the article is lacking information and any conclusions drawn from it would be misleading.

     

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  2.  
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    Steve R. (profile), May 10th, 2010 @ 1:53pm

    Question the Legitimacy of Patent Applications

    While the purpose of this post is discussing the article "Patent Office Plans Could Kill Small Company Innovation", the lingering fundamental question is the legitimacy of the patents applications being made.

    To quote from the article "The agency can’t add people fast enough to whittle down the pile. There are only two choices: lower standards and grant more patents to reduce the pressure or find ways to drastically cut back the number of applications.". The pile could probably be wittled down quite rapidly if all the absurd patents were tossed out.

    Alas, instead of questioning the validity of patent applications, we simply legitimize the submission of questionable patents which increases the workload.

     

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  3.  
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    Anonymous Coward, May 10th, 2010 @ 2:11pm

    Re: Question the Legitimacy of Patent Applications

    you are mistaking someones opinion for a hard fact. the only hard fact anywhere in this whole discussion is the number of approvals is up. we dont have anything else. have more people been hired? are there more experts on hand? have they streamlined systems? we dont know because all we have is opinion. the masnick is trying to suggest conclusions not supported by evidence, mostly just an attempt to pee on the patent system once again.

     

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  4.  
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    HI, May 10th, 2010 @ 2:46pm

    Some facts

    Here's a chart showing the patent allowance rate from 1975 to 2006:
    http://www.patentlyo.com/patent/PatentlyO2006059.jpg
    From a historic range of 60-70%, the allowance rate started going straight downhill in 2003 to a bit over 50% in 2006.
    From 2006 on the allowance dropped further to about 40% at the beginning of 2010. That is an absurd rate, never before seen in U.S history to my knowledge.

     

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  5.  
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    Hulser (profile), May 10th, 2010 @ 2:47pm

    Re: Question the Legitimacy of Patent Applications

    The pile could probably be wittled down quite rapidly if all the absurd patents were tossed out.

    My thoughts exactly. Fair enough if you don't agree that rejecting more patents is the right option to reduce the backlog, but to not even acknowledge that it is an option is greatly shortsighted.

     

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    Hulser (profile), May 10th, 2010 @ 2:56pm

    There is, also, the more cynical argument, which is that since the USPTO is funded by fees, and as it is always looking to increase its budget (what organization doesn't?), it approves more patents to get more applications in, knowing that it can get more money that way.

    I'm not saying that this couldn't be the thought process of the USPTO, but I think the logic is flawed, specifically the "it approves more patents to get more applications in" part. Why would approving more patents get more applications in? When some inventor or company has a "great idea" that they want to patent, I don't think they first look up the recent approval/rejection stats for the USPTO. They go see a lawyer and get the ball rolling because they have a "great idea". Maybe it would reduce the applications by some, but I personally don't think it would be as much as is apparently driving this line of thought.

    As I alluded to in another post, they don't even seem to be considering the option of just rejecting more applications. "Nope, sorry. Your idea is completely obvious and even though I'm not an expert in this field, it took me all of two and a half minutes to find over a dozen examples of prior art. Rejected. Better luck next time." Pocket the applicaiton fee, mark one off the backlog list, and move onto the next.

     

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  7.  
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    HI, May 10th, 2010 @ 3:21pm

    I'd like some

    "As I alluded to in another post, they don't even seem to be considering the option of just rejecting more applications."

    I'd like some of what you're smoking. Life is good when pesky facts don't get in the way.

     

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  8.  
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    Mike Masnick (profile), May 10th, 2010 @ 3:33pm

    Re:

    As I alluded to in another post, they don't even seem to be considering the option of just rejecting more applications.

    Well, there's the issue that with the patent system, if rejected, you can just keep trying over and over and over again. There is no real "final" rejection in the process. So this actually can clog up the system even more, and the examiners know that, since they have to spend time dealing with people coming back and continually trying to get a "rejected" patent approved. So it's sometimes easier to just approve to get rid of it, and let someone else deal with the consequences.

     

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  9.  
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    Adam Wasserman (profile), May 10th, 2010 @ 3:40pm

    where to put those pesky lawsuits

    Mike wrote:
    "The real way to decrease the time it takes to review a patent is to stop approving bogus patents."

    and Hulser wrote:
    "As I alluded to in another post, they don't even seem to be considering the option of just rejecting more applications."

    Well, as I have pointed out before (but so directly): in our litigious society and entitlement culture, lawsuits over patents are inevitable because everyone wants a piece of a monopoly so they can get rich without really working.

    Suing someone is the next best thing to a patent because it still does not involve anything real work for the plaintif, the lawyers do all the work, and if there is the possibility of a sweet monopoly at the end of the rainbow there will be plenty of folks willing to roll the dice.

    I maintain that the USPTO can do nothing to stem the tide of lawsuits as long as the prospect of easy street exists.

    What the USPTO can influence however, is *who* gets sued. If they start rejecting patents it will be the USPTO that gets sued.

    If they approve patents willy nilly than it is everyone else that gets sued.

    And as far as any danger to the USPTO themselves because of causing all of these lawsuits through irresponsible patent approval... if I were they I would not be worrying. If they were going to get into any trouble for it it would have been quite a while ago.

    Presidents come an go, but their IP maximalist overlords look to me like they are good for another decade or so before the bubble bursts.

     

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  10.  
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    Hulser (profile), May 10th, 2010 @ 4:15pm

    Re: Re:

    Understood. It just seems to me that with some relatively small tweaks to the incentive system at the USPTO, you could shape this behavior. Is there a fee for resubmitting a rejected patent? If not, put one in place. If there already is, increase it. To account for patents that are actually improperly rejected, maybe make some kind of graduated pricing model for each resubmission.

    The more I read about how the USPTO works, the more I think that much of the problem with patents could be resolved with, not major shakeups that would require congresional intervention, but small changes to how some reviewers get their quarterly performance evalutations.

     

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  11.  
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    nasch (profile), May 10th, 2010 @ 4:28pm

    Re:

    Why would approving more patents get more applications in?

    Because people see that you can get a patent on pretty much anything, so they file patents on pretty much anything, hoping to sue someone later and strike it rich. These days it seems you don't have to actually invent something to get a patent, so it's a get rich quick scheme. I don't know how prevalent this is, but it definitely happens. And if it became really hard to get a patent, it would stop happening.

     

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  12.  
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    Anonymous Coward, May 10th, 2010 @ 4:33pm

    Re: Re: Question the Legitimacy of Patent Applications

    "the only hard fact anywhere in this whole discussion is the number of approvals is up. we dont have anything else."

    We have the constant parade of ridiculous patents, does that count for anything in your world?

     

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  13.  
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    Anonymous Coward, May 10th, 2010 @ 4:36pm

    Re: I'd like some

    Just looking at some of the patents that receive approval, it would be quite humous to see some that are rejected. What is amazing, is that people pay the submission fee thinking their stupid idea will be approved, what is even more amazing is when it is approved.

     

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  14.  
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    Hulser (profile), May 10th, 2010 @ 5:30pm

    Re: Re:

    Because people see that you can get a patent on pretty much anything

    Point taken. I guess I was focusing on the legitimate applicants, not the people or corporations who knowingly submit a ludicrous patent application. To account for these, should the system change to eliminate the system whereby the USPTO is paid for every submission? Yeah, that would be nice. But I don't see that as very likely. I stand by my thought that the president or somebody in the government could mandate a much less drastic change and still see a significant improvement and damn what the USPTO thinks or what their incentives are.

     

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  15.  
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    Hulser (profile), May 10th, 2010 @ 5:42pm

    Re: where to put those pesky lawsuits

    What the USPTO can influence however, is *who* gets sued. If they start rejecting patents it will be the USPTO that gets sued.

    So, has the USPTO ever been sued? I've never heard this as a concern before. I can understand the argument that their motivated by the cash that comes in from applications, but I would think they're quite insulated from the possibility of being sued. If you submit a patent application and it's rejected a number of times, I would think (hope) that the buck stops at the USPTO, otherwise the court system really would be clogged up with cases against the USPTO instead of with patentholders against other companies.

    I honest don't know how this works now, but it would seem to me that the USPTO would have to win just one lawsuit that confirms them as the final arbiter of what gets a patent and that would be it, not individual lawsuits over every rejected patent.

    If they were going to get into any trouble for it it would have been quite a while ago.

    That's true enough. But it's also the very reason that their incentives need to be changed. No white knight is going to step in and publicly call the USPTO on the millions (perhaps billions) of wasted dollars that have been expended because of their bungling approval of bogus patents. But, some government official might be able to affect some small tweaks to their incentive system that would produce big results in the right direction.

     

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  16.  
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    Hulser (profile), May 10th, 2010 @ 5:56pm

    Re: I'd like some

    So, your response is say that I didn't support my argument with facts and yet you didn't supply any facts (much less supporting opinions) of your own? The next time you critisize someone for not having a valid argument, you might want to actually do so by having a valid argument.

     

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  17.  
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    Anonymous Coward, May 10th, 2010 @ 7:33pm

    Re: Re: Re: Question the Legitimacy of Patent Applications

    totally irrelevant to the discussion at hand. we also have an illegal immigration problem in the us and it has nothing to do with what is being discussed here either.

     

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  18.  
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    Willton, May 10th, 2010 @ 7:35pm

    Re: Re: where to put those pesky lawsuits

    So, has the USPTO ever been sued? I've never heard this as a concern before. I can understand the argument that their motivated by the cash that comes in from applications, but I would think they're quite insulated from the possibility of being sued. If you submit a patent application and it's rejected a number of times, I would think (hope) that the buck stops at the USPTO, otherwise the court system really would be clogged up with cases against the USPTO instead of with patentholders against other companies.

    Every time an applicant appeals a rejection from an Examiner, the case goes before the Board of Patent Appeals and Interferences ("BPAI") at the USPTO. If the BPAI agrees with the Examiner, the applicant can appeal that decision to the Court of Appeals for the Federal Circuit. And if the applicant gets an adverse decision there, there is always the opportunity for the applicant to have his case heard by the Supreme Court of the United States. That's how Bilski v. Kappos made it to SCOTUS's docket.

    Every time the applicant appeals such a decision, the USPTO is being sued.

    I honest don't know how this works now, but it would seem to me that the USPTO would have to win just one lawsuit that confirms them as the final arbiter of what gets a patent and that would be it, not individual lawsuits over every rejected patent.

    You apparently don't how it works, because anyone remotely acquainted with the patent system knows that the applicant's right to appeal an adverse decision by the USPTO is statutory (i.e., it was provided in a law passed by Congress). If the applicant did not have such a right, it would give the USPTO the freedom to be arbitrary and capricious in rejecting patent applications without judicial oversight.

     

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  19.  
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    Anonymous Coward, May 10th, 2010 @ 7:49pm

    Re:

    "any conclusions drawn from it would be misleading."

    Not if the conclusions drawn are correct ones.

    The purpose of Mike's post is merely to ask questions and state the various possibilities, make suggestions, state his opinion and suspicions, not to claim that he has all the answers and that his answers are definite. Notice what he said.

    "there's lots of speculation as to why."

    See the word speculation. Do you know what that means?

     

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  20.  
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    Anonymous Coward, May 10th, 2010 @ 7:53pm

    Re: Re: Question the Legitimacy of Patent Applications

    "you are mistaking someones opinion for a hard fact."

    No one is doing that.

    "we dont have anything else."

    and why not? Why isn't our government being transparent about these things if they have nothing to hide?

    "the masnick is trying to suggest conclusions not supported by evidence"

    We are asking legitimate questions based on the past history of the patent office.

     

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  21.  
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    Anonymous Coward, May 10th, 2010 @ 7:58pm

    Re: Re: Re: Re: Question the Legitimacy of Patent Applications

    "totally irrelevant"

    TAM, stop being an idiot.

    It is relevant. If someone has a criminal background there is an increased chance they will commit a crime in the future when compared to someone without a criminal background. If the U.S. has a history of granting bad patents then it we have every reason to ask questions and our opinions are based the evidence of the patent offices background.

    "and it has nothing to do with what is being discussed here either"

    Your right, the illegal immigration issue has nothing to do with what's being discussed, I don't know why you brought this up. But the patent offices history does. We shouldn't ignore history when trying to make future decisions, that's retarded. Before passing a law we first look at states and countries that tried something similar, we look at their history and current state, and we try to determine if such policy is beneficial to society or not. We don't merely ignore history and start passing laws and blindly repeating the same mistakes we made before.

     

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  22.  
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    Anonymous Coward, May 10th, 2010 @ 8:03pm

    Re: Some facts

    So 50 percent of all advancement requires a patent? That sounds absurd. We should not assume that such a high percentage of advancement requires a patent or else such advancement would not occur otherwise. Plenty of advancement occurs perfectly fine without patents, there is no evidence to suggest that patents even do much to encourage advancement, yet you believe that 50 percent of all advancement would not occur without patents? A patent should be for things that are non obvious to those trained in the field, not merely non obvious to the normal Joe Blow, and I highly doubt that 50 percent of all advancement is non obvious to those trained in the field.

     

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  23.  
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    Anonymous Coward, May 10th, 2010 @ 8:05pm

    Re: Re: Some facts

    and remember, patents should only be granted to promote the progress, they should not be granted for any other reason. I don't see how granting a patent on 50 percent of all requests does much to promote the progress.

     

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  24.  
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    Anonymous Coward, May 10th, 2010 @ 8:22pm

    Re: Re: Re: Re: Re: Question the Legitimacy of Patent Applications

    who is tam? the only question here is why more patents are being approved. there is no discussion about the validity of past patents or part policies or anything else. just there are more patents approved. if you want to grind your anti-patent axe, try it in another thread. the masnick has you corrupted into answering any challenge with an unrelated attack, rather than staying on topic. worse than a bunch of birthers.

     

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  25.  
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    Anonymous Coward, May 10th, 2010 @ 8:26pm

    Re: Re: Re: where to put those pesky lawsuits

    "Every time the applicant appeals such a decision, the USPTO is being sued."

    I think when s/he said "sued" he meant as in for damages (like monetary damages). Yes, you could federally appeal a decision made by any federal or state agency, assuming that you first exhausted all other available options and especially the options that the agency itself provides (ie: federal agencies often provide their own appellate process), but I don't know if I would call that suing? It's not like you're appealing a lawsuit, you're merely appealing a patent rejection, there was never a lawsuit to begin with. and if you do sue someone directly, perhaps for damages (not sure if federal agencies benefit from sovereign immunity, they seem to implicitly), I don't know if an appeal is considered suing (it's not like you're starting a new lawsuit) or the continuance of an existing lawsuit.

    but I can see your point, the USPTO probably doesn't want to deal with appealing too many patent rejections. If some court later rejects a patent then they rejected it at the efforts of the plaintiff / defendant, it didn't cost the USPTO any effort or money to appeal anything.

    So in a sense the USPTO has two incentives to approve patents. One: it doesn't have to worry about financing appeals and going expending efforts on the appellate process. Heck, the patent office probably knows that many of the patents it grants may get rejected, but it wants the plaintiffs to have to put up with the rejection and potential rejection appellate process and save itself the energy.

    and Two, more patent approvals = more people applying for patents = more filing fees = more income.

     

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  26.  
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    Anonymous Coward, May 10th, 2010 @ 8:46pm

    Re: Re: Re: Re: Re: Re: Question the Legitimacy of Patent Applications

    You are TAM, the Anti Mike, and everyone knows it.

    "there is no discussion about the validity of past patents or part policies or anything else."

    Then you must have a reading comprehension problem. Of course there is, we are the ones discussing it, have you not been reading the discussion?

    "if you want to grind your anti-patent axe, try it in another thread."

    Instead, why don't you stop telling others what to do in an attempt to censor views you don't like. Can't defend your position? Seek to censor others. Sorry that your wish to censor those who criticize your opinion isn't working out for you.

     

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  27.  
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    Anonymous Coward, May 11th, 2010 @ 4:58am

    Re: Re: Re: Re: Re: Re: Re: Question the Legitimacy of Patent Applications

    (crickets)

     

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  28.  
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    staff, May 11th, 2010 @ 7:52am

    shill

    "In fact, lately, the USPTO has been bending over backwards to make things easier for small businesses. "

    Thus far all we've seen are promises. Coming from a Patent Office who for years has forced us to fight to get our patents, and proposed new rules that would kill us; we'll believe it when we see it.

    You are the only one bending over here -for large infringers who are paying you to write these lies.

     

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  29.  
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    Anonymous Coward, May 11th, 2010 @ 7:55am

    Re: shill

    "You are the only one bending over here -for large infringers who are paying you to write these lies."

    Lol. Good one shill. I almost though you were TAM and that you were serious until I saw the name. Lol. It's amazing, the pro IP people (like the RIAA) say things that are so amazingly absurd that it's often tough for me to decipher sarcasm from an attempted serious argument. We simply can't tell the difference.

     

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  30.  
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    HI, May 11th, 2010 @ 9:21am

    Re: Re: Some facts

    "So 50 percent of all advancement requires a patent?"

    Were you ever involved in a decision whether to file a patent application? Most advances are kept as trade secrets. It costs $10k or more to file an application, and $20k or more to get a patent. Companies are selective about what they apply for (ever heard of a patent committee?), and still were getting only ~35% of their applications approved a year ago (now it looks like the allowance rate is heading up toward the 50% range). Most people don't blow $20k without doing some homework in advance.

    What you have is a few bad patents getting a ton of press, and the countless good applications that are stuck in the PTO getting no press at all. Perhaps we should also abolish all cars since some are defective. And you don't read about the company or technology that never makes it because investors won't invest in technology that's too easy to rip off.

     

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  31.  
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    Anonymous Coward, May 11th, 2010 @ 12:15pm

    Re: Re: Re: Re: Re: Re: Re: Question the Legitimacy of Patent Applications

    i have to ask you again who is tam? i am not tam. if i was this tam person, why would i not use the name? you however appear to be a techdirt employee or maybe mike himself paid to insult certain posters. that is sad. i dont want to censor you, i just want to keep the discussion on point. you are taking it off on a tangent in part by attempting to bait me. i see that as a techdirt employee who realizes that the discussion is going in a way that will show how stupid some of the posts are on this site. instead of discussing the post, they try to redirect to something else, usually the same old axes grinding no matter what the topic. its a nice try but you are so damn transparent.

     

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  32.  
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    Ronald J Riley (profile), May 13th, 2010 @ 3:03pm

    USPTO's Collective IQ drafs TechDIRTs By Over 1000 fold :)

    Mike Masnick, I have a great idea for you. You are funded by fees for your services, right? I think it is reasonable to think that what you do is motivated by those fees in the same way that you think USPTO operations are motivated by fees, right?

    There is a fundamental difference though, yours is a very very small operation which you can easily force everyone to march to the same drummer while the USPTO is a large operation with many conflicting interests.

    Another difference is that the USPTO is loaded with many very bright people, while TechDIRT appears to have people with more limited capabilities and even if TechDIRT's staff had comparable capabilities the USPTO's aggregate IQ still dwarfs TechDIRT's by over three orders of magnitude :)

    Chew on that for awhile.

    Ronald J. Riley,


    I am speaking only on my own behalf.
    Affiliations:
    President - www.PIAUSA.org - RJR at PIAUSA.org
    Executive Director - www.InventorEd.org - RJR at InvEd.org
    Senior Fellow - www.PatentPolicy.org
    President - Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (810) 597-0194 / (202) 318-1595 - 9 am to 8 pm EST.

     

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  33.  
    identicon
    step back, May 14th, 2010 @ 4:54am

    Liar liar, Masnik pants a fire

    @ comment 8 Masnik writes:
    "if rejected, you can just keep trying over and over and over again. There is no real "final" rejection in the process. So this actually can clog up the system even more, and the examiners know that, since they have to spend time ..."

    There are multiple deceptions embedded in that response (@8).

    (1) Firstly, the second Office Action is almost always a "Final" rejection.

    (2) Second the clock keeps ticking down on the inventor's 20 year time limit, and trust me, patent examiners know very well how to suck down on what time is left. They automatically get and almost always suck out the first 14 months plus 4 months for every round of response.

    (3) Third, few inventors can be their own patent attorneys or agents. It is very costly to hire an attorney/agent and an inventor's funds are finite. So just running out of money equals a final rejection. All an examiner has to do is cycle an inventor of limited means though a couple of cycles of soak and rinse and the financial consequences equate to a final rejection.

    (4) Masnik would like his readers/followers to believe in the myth of the evil and fabulously rich patent troll who is just sitting there under the bridge with all the time in the world to milk the patent system for all it's worth while contributing nothing in return.

    (5) The reality is often the other way around. The Patent Office is (was?) the troll milking poor inventors out of everything they have while taking their invention disclosures and publishing them for everyone else to freely take of while giving the inventors nothing in return for their efforts. Liar liar. Recant thy misinforming brimstone and fire.

     

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  34.  
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    Adam Wasserman (profile), May 21st, 2010 @ 11:28am

    Re: Re: Re: Re: where to put those pesky lawsuits

    >I think when s/he said "sued" he meant as in for damages

    No I did not. I meant as having to go to court in any way, for any reason, which is unpleasant and does not do much for one's career at the USPTO.

     

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