The backlog of applications at the U.S. Patent and Trademark Office show an agency in crisis, the U.S. Chamber of Commerce wrote recently to the incoming administration of President-elect Barack Obama.

A 31-page report issued on Dec. 23 was outlined by Chamber President Thomas J. Donohue. The Southeast Texas Record is owned by an affiliate of the U.S. Chamber.

According the report's executive summary, the UPTO has a backlog of 750,000 applications that await initial action.

"Despite the best efforts of the PTO's patent examination and support staffs, prevailing perceptions within the patent community are that the quality of patents issued is declining at a precipitous rate," the report states.

Reforms are particularly important , the report states, as patent reform legislation could by reintroduced in the 111th Congress which would assign new responsibilities to the USPTO.

According to the report, the USPTO faces the challenge of making "effective and efficient use" of a $2 billion USPTO budget derived only from user fee revenues, directing more than 9,000 employees many of whom have less than five years examining experience and coordinating domestic programs within an international frame work.

The Chamber's goal of the papers is to "stimulate a fresh dialogue on the best ways to improve the PTO's patent examination performance."

In a cover letter to the report, Donohue expresses a "fundamental belief that innovation is a vital engine for economic growth and global development, and that intellectual property rights are critical to promoting innovation."

The report recommends providing adequate resources to do the job, reform the patent examiner production system, rethink the current fee schedule and reform examiner and applicant incentives. The Chamber also advocates the appointment of a well-qualified undersecretary and director.

"Time is not an ally of the PTO," the executive summary concludes. "Decisions must be made, and new directions set immediately, to reverse the deterioration of the PTO."

Changes in the U.S. Patent and Trademark Office over the past 20 years

Budget $144 million
Patent Examiners 1,540
New Applications Filed 148,000
Total Backlog 268,000
Average Pendency Time 20 months

Budget $567 million
Patent Examiners 2,590
New Applications Filed 240,000
Total Backlog 481,000
Average Pendency Time 24 months

Budget $1,915 billion
Patent Examiners 5,960
New Applications Filed 463,700
Total Backlog 750,000
Average Pendency Time 32 months

Source: Recommendations for Consideration by the Incoming Administration Regarding the U.S. Patent and Trademark Office sponsored by the U.S. Chamber of Commerce.

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