U.S. Patent Office gets funding increase

The U.S. Patent and Trademark Office (USPTO) has received a budget increase of about 9 percent for the government's 2008 fiscal year, prompting praise from some tech groups.

The USPTO received President George Bush's full funding request of $1.9 billion in a budget bill passed by the U.S. Congress in mid-December and signed by Bush the day after Christmas. The Innovation Alliance, a trade group that includes Qualcomm, storage vendor LSI Logic and several small tech companies, applauded the budget increase, saying the money would help the USPTO better examine patent applications.

"In the face of significant budget challenges that saw many federal agencies' funding cut or held stagnant, Congress' choice to fully fund the PTO at the levels requested by the Administration demonstrates the value that our government leadership places on strong, high-quality patents to America's continued innovation," the Innovation Alliance said in a statement.

Patent Office funding has been one piece of a contentious debate in Congress over the past year on what changes are needed for the U.S. patent system. Several large tech vendors, including Microsoft and IBM, have supported legislation that would make sweeping changes to the U.S. patent system but would largely leave funding issues unaddressed.

Most groups involved in the patent debate agree that the USPTO needs better examinations in order to avoid issuing bad patents, and critics point to frequent questionable patents, including a 2005 patent for an antigravity device. Amazon.com's one-click ordering patent also has been widely criticized.

But the Patent Reform Act, passed by the House of Representatives in September, "doesn't get to patent quality at all," said Susan Mora, spokeswoman for the Innovation Alliance. "There are significant problems with it all around."

The patent legislation should include prohibitions against government budgeters taking patent fees to fund other agencies, Mora said. Congress ended the practice of patent fee diversion in 2004, but there's nothing stopping lawmakers from once against taking fees from the USPTO in a budget crunch, she said.

Supporters of the Patent Reform Act, likely to be debated in the Senate in February or March, say the bill does focus on patent quality. The legislation would create a new way to challenge patents after they've been granted.

The Patent Reform Act would also allow courts to change the way they assess damages in patent-infringement cases. Currently, courts generally consider the value of the entire product when a small piece of the product infringes a patent. The legislation would allow courts to base damages only on the value of the infringing piece.

Supporters of the Patent Reform Act say patent changes are needed because it's too easy for companies that own patents but don't market the inventions to sue other companies and collect huge damages.

Representatives of Microsoft, Symantec and the Business Software Alliance (BSA), which have all pushed for Congress to pass the Patent Reform Act, nevertheless agreed with the Innovation Alliance that more Patent Office funding was needed.

The IDG News Service is a Network World affiliate.