Patent Pending: Silicon Valley’s patent office could be snatched from jaws of sequester

150 150 John Guenther

If you’re still wondering how the sequester might be putting some drag on the California economy, you could look in the Silicon Valley. Mandatory budget cuts are slowing the roll of a patent office which was scheduled to open in the state’s innovation capital this year. But luckily there’s legislation out there to stop the sequester from taking a bite out of Silicon Valley’s entrpreneurial machine.

“It’s counter productive and it doesn’t just hurt us because we’re missing 100 or 150 jobs at the patent office, it could be much more,” said Emily Lam, senior director of health care and federal issues at the Silicon Valley Leadership Group, where she has helped spearhead the patent office application and planning process. “In an era where the economic recovery is so delicate, the new office will help grease wheels of innovation.”

In a Senate commerce bill, Senator Diane Feinstein inserted some important words which will help a new patent office in Silicon Valley go into full operation and move into a permanent home–in a region responsible for the most U.S. patents out of all metro regions, 10,256 in 2011, to put a number on it.

“Congress passed a bill to create these vital satellite patent offices using funding generated by patent applicants, not the taxpayer,” said Feinstein in a statement. “Even in this challenging budget environment, it made no sense to penalize the satellite office program, particularly the office in Silicon Valley, which is a center of innovation, home to more than 100 colleges and universities, and 27 percent of the country’s venture capital investment.”

Even though the U.S. Patent Office is funded through patent fees, the sequester hit the USPTO with $150 million in cuts and effectively stopped the opening of five new patent offices across the country.

The Silicon Valley office opened a temporary office and was on track to expand into a full-fledged, permanent office for issuing patents and providing business services for startups in the region. 

The patent system also faces a heavy backlog, which Lam says would be alleviated with the new offices. And simply by issuing patents and helping startups get going, that should boost the economy and, eventually, government revenue.

First, Congress members Anna Eshoo and Mike Honda, representing Silicon Valley districts, jumped to the rescue and introduced a bill in June to exempt the USPTO from the cuts and allow it to spend their revenue raised from patent fees. Then Sen. Feinstein got behind the effort by adding USPTO budget language to the Commerce, Justice and Science Appropriations bill last week, hopefully to exempt the office from the sequester.

“I feel like they’re getting a raw deal because they can’t use their own money,” said Lam. She added the fee revenue also was in danger of being raided for other uses, not just held back by the cuts. 

Legislation similiar to Feinstein’s introduced last week would exempt FDA programs run with user fees from sequestration.

Something like a patent office in California seems like a no-brainer in one of the state’s high-tech bright spots. The USPTO even invited representatives of the five world’s biggest patent offices to a meeting in June in Silicon Valley, the spot without a permanent office.

Lam said The Leadership Group gives credit to the work of the area’s Congressional delegation and the temporary office’s director, Michelle Lee, are doing to get it back on track.

“We hope that other members of Congress see that it’s not just something that would benefit this area,” said Lam. “It benefits the economy as a whole and entire region. [Lee] needs to have the ability to get this office started and build on the momentum it’s had.”


John Guenther

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