The first installment of this series explored the basic analytical framework behind debates about patent reform. The details of the patent system that are being discussed in Congress are not likely to lead to important large shifts in overall rates of invention and patenting. Rather, the America Invents Act—pending in Congress—will likely impact the rate at which inventions are actually brought to market—commercialized—and the extent to which the large successful firms in our economy will be joined by, and face competition from, large numbers of small and medium-sized firms.
THE PATENT OFFICE: WHERE LESS IS MORE
Many good and hard working people work in the patent offices of the world, including our own. They are public servants doing important work. It may even make sense to give the Patent Office more control than it presently has over its own financial operations—a topic called fee-setting authority in the bill presently before Congress.
But a celebration of the true wonders of our Patent Office—both its examining corps and its leadership—does not mean it should be beefed up, as the pending bill would allow. Even a patent office brimming with Einsteins—remember, he actually started his career in one—would be no more effective even if it were allowed to deploy ten times the number of hours it presently does to examining patent applications. What is worse, it would do great harm.
To give some context, consider this convenient comparison: even taking into account the depths of the 2008 economic crash, our securities markets are the largest in human history and yet their flagship regulatory body, the U.S. Securities and Exchange Commission (SEC), has long operated with about half the staff and half the budget as the U.S. Patent Office. Despite the SEC’s important duties to protect a vast base of inexpert lay consumer investors, even the populist FDR administration expressly rejected suggestions that the agency should do searching examinations of its filings. Our securities system is premised on disclosure, not merit review.