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Comment by benbataille | Hacker News Reader

PTO is never going to stop issuing crappy patents. There is a huge conflict of interest there.

It's easy. Every time someone files a patent, the PTO gains the filing fees. If they don't check too much, people file a lot and they win a lot. If they check, it means first more cost for them, then less patent filed hence less money.

Now, what happens to them, when they accept bogus patents ? Answer : nothing. The PTO is simply not accountable for that.

No surprise they have no incentive to do their work properly.

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Government agencies don't really work like that. The PTO doesn't get to give itself raises based on profits. The PTO's behavior is based on legislation, court interpretation and a small sliver of their own interpretation after the direction they receive from those more powerful government bodies. Last year there were about 577,000 patent applications [1] at $180 each for a little over $100M in revenue. That's fantastic if you're most companies, but just a tiny portion of the federal budget.

The current patent situation is a failure of the federal government to understand and legislate contemporary technology, not a misalignment of incentives.

1. http://www.uspto.gov/web/offices/ac/ido/oeip/taf/us_stat.htm

While I agree that there is a failure to understand contemporary technology, I also think the incentives given patent examiners are misaligned. They're rewarded for applications processed; they're not graded on the number of bad patents they reject.

A patent is a deal we, the people of the US, make with an inventor: add significantly to the sum total of our technical knowledge, and in exchange, we'll give you a time-limited monopoly on the technique you invented. The problem is that there isn't anyone unambiguously charged with making sure this is a good deal for us: that the knowledge we're getting is worth the price we're paying. It's technically the PTO's responsibility, and they do make some effort, but the incentives given patent examiners don't encourage them to be hard-nosed about it.

Currently, I don't think patents about to be granted are reviewed by the examiners' supervisors or anything like that. Seems to me there should be an internal committee that reviews every patent about to be granted by junior examiners, and an occasional one of those about to be granted by senior examiners, to verify its quality. Repeatedly approving applications that then get rejected by this committee should slow an examiner's promotion progress.

But right now, there isn't even a way to get a patent revoked in a court because of obviousness or triviality. Prior art is basically the only way to attack a patent.

It's the entire system that is built around the assumption that 'obviousness' is too difficult to measure objectively, and that protection is vastly more important than anything else, so we should always err on the side of protection when laying the boundary of what should be patentable and what not. In other words, better to have 1000 bad patents than running the risk of having 1 idea that should be patentable being rejected by accident.

No thought is given to the enormous damage this does to our industry.

i suppose obviousness could be 'tested' for if the end result of the patent can be deduced by only looking at the end result and not reading any of the patent filing.

Yes, I've had this thought too. Have a panel of engineers who get to see a description of the problem the invention supposedly solves, but get no information about how it solves it. If any of them come up with the same idea within a couple of days, it was obvious.

That isn't the whole story on incentives, at least from the USPTO's perspective. While it is true that the overall budget is set externally (by Congress, for the most part), the money that the patent offices is allowed to actually spend is limited by the fees they collect [1]. So while they can't directly get themselves raises by drumming up more fees, they do protect themselves from layoffs and pay cuts by keeping the fee pipeline going.

Separately, so far as I know, there's no reason to think that the USPTO is immune from typical bureaucratic incentive misalignment. More applications do mean more work and the simplest way to deal with more work is to get more people to do it. More people would increase the bureaucratic fiefdom of USPTO decisionmakers (who are first in line in terms of deciding how to handle more work) and the increased fees coming from the increased applications are at least a good starting point when arguing for a budget increase next year. This is a weaker incentive chain than "the USPTO isa business funded by filing fees", but it is still a significant one.

[1] http://www.patentlyo.com/patent/2011/08/usptos-future-budget...

Uh, where did you come up with $180 each?

The PTO revenue is vastly greater than that, and the vast majority is diverted to other agencies.

The actual PTO revenue is 2.2 billion in 2011

I googled and found a basic filing fee was $180. But even 2.2 billion isn't really enough to create significant monetary incentives for the government to issue patents given that the 2012 federal budget was 2.5 trillion. There are far greater monetary incentives to finding the right patent structure that allows companies to turn profits, pay taxes and hire people who also pay taxes.

The basic filing fee only includes literally submitting the application itself :)

There is an examination fee of 720, a search fee of 600, and an issue fee of 1780.

There are also often plenty of other fees :)

The actual fees for an average patent are closer to 10k per filing, sometimes a lot more.

Aha. Thanks for the info! Good to know.

Conflict of interest is one reason, but there are others. The process that PTO use, is one based on 19th century condition.

19th century administrative standards is very simple and got bright lines; they don’t require a great deal of expensive investigation. The assumption of the 19th century patent system is that everything that should be patented already is patented already.

Like other 19th century administrative structures, the patent office assumes that all it can be expected to do is to look in its own files and to make rough binary determination - 0 or 1, novel or obvious or not - on the basis of the consultation of its own administrative record.

This mean that PTO's job is to only answer questions based on its own records. A invention is novel if the clerk can't find a similar invention in the office. A invention is non-obvious, if the clerk do not consider the invention to be a natural extension of any existing files.

PTO stills live in that system while everything else has evolved forward during the 200 years that has passed, including what type inventions that are patentable. This mean that a large number of invention never got filed when they got discovered. If a patent application then get sent in several decades later, the result is simple. The patent office grants the patent because the invention is not in the archive.

This is crazy. We should not use 19th century administrative process in the 21st. We should not assume that government knows everything, or that their records can stretch over inventions when such inventions was unpatentable. Doing 20 years governmental intervention into the market should be a serious undertaking where the government are responsible if such intervention cause serious harm or is done faulty.

Following are fees collected by the USPTO for utility patents. The first three (280+600+720=$1,600) are collected before a patent is granted, to check if the a patent is grantable. If patent is granted, the USPTO has basically done all the work, but it stands to collect another $2,080 in issue and publication fees and $12,600 in maintenance fees to keep the patent in force for it's full 20 year term.

So for a rejected application, the USPTO gets $1,600. For an accepted application that results in a 20-year patent, the USPTO gets $16,280.

Plus, it's more work to reject a patent than it is to issue it. To reject a patent, the Office has to explain why the invention should not get a patent. To issue a patent, the Office merely has to accept the Applicant's claim that a patent should issue. Issuing a patent gives ten times more money for less work.

Fee schedule from http://www.uspto.gov/web/offices/ac/qs/ope/fee031913.htm:

Basic filing fee - Utility 280.00; Utility Search Fee 600.00; Utility Examination Fee 720.00; Utility issue fee 1,780.00; Publication fee for early, voluntary, or normal publication 300.00; Patent Maintenance Fees Due at 3.5 years 1,600.00, Due at 7.5 years 3,600.00, Due at 11.5 years 7,400.00.

First, the majority of PTO revenue is from maintenance fees, not filing fees (this doesn't change your point, i'm just correcting you :P)

See http://www.uspto.gov/about/stratplan/ar/2011/mda_06_01_03.ht...

A large portion of PTO revenue is actually diverted to other agencies/budgets.

Google "PTO Revenue diversion". This has been an issue for various reasons for years.

So issuing more patents does not actually help the PTO in that sense, because they don't get the money they earn anyway.

They still have no real incentive, and don't really see themselves as the gatekeepers they really should. So you are right, but for the wrong reasons.

At least one good start would be for them to stop calling people filing patents "customers", as if it was their job to serve these folks.

Are the USPTO managers paid according to the fees they collect? Are they not on a fixed salary?

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