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September 3, 2013

Sequestration cuts deny Silicon Valley a patent office

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Associated Press reporter Martha Mendoza writes how a promised satellite patent office for tech giant Silicon Valley—the top region in the world producing patents—is being denied thanks to sequestration cuts, despite the fact that patent offices are funded through patent fees, not taxpayer dollars.

Mendoza writes:

"While most of the country is feeling some pinch from the automatic budget cuts known as sequestration, tech leaders say this one is unique and unfair, because the Commerce Department's promised satellite patent offices were never going to be funded by taxpayers. Instead, they're supported by the $2.8 billion in annual patent fees collected from inventors, entrepreneurs and companies.

Silicon Valley firms seek more U.S. patents than any other region in the world, and San Jose is the nation's top patent-producing city, with 7,074 patents last year. And California is the nation's patent leader, with seven of the top 10 patent-producing cities.

The U.S. Patent Office currently has a backlog of 590,000 nationwide, and it can take more than two years to have an application reviewed."

IPI’s Merrill Matthews has noted that although the sequestration cuts are minimal, conservatives may have underestimated bureaucrats' willingness to lob the funding cuts toward where they’ll have the most draconian, painful impact.

"When companies are forced to make budget cuts, they look for ways that will have the least disruptive impact on their customers. Big-government bureaucrats, by contrast, look for the most disruptive options and will do their best to make life worse for their customers until they get their way."

And the impact is indeed painful for innovators in Silicon Valley. Mendoza writes:

A local patent office staffed with as many as 150 new examiners would have provided entrepreneurs with nearby staff familiar with high tech, and a streamlined process, business leaders said.

"The more educated about the technology the examiners are, the better job they're going to be able to do in figuring out what applications are patent worthy and which should be rejected," said senior patent counsel Suzanne Michel at Google, which has tens of thousands of applications pending.

Rep. Mike Honda, D-Calif., whose district includes Silicon Valley, said shelving the office "is going to set us back in terms of our own competitive edge, like trying to run a race with your ankles hobbled."

Click here to read Mendoza’s full article.


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