How Congress Makes the U.S. Less Competitive

The New York Times reports today that that the Patent Office is opening up its first satellite office.  This opening is designed to help to deal with the backlog of 700,000 patents awaiting their first action by an examiner and the 500,000 patents that are in process.

Once patent applications are in the system, they sit — for years. The patent office’s pipeline is so clogged it takes two years for an inventor to get an initial ruling, and an additional year or more before a patent is finally issued.

The delays and inefficiencies are more than a nuisance for inventors. Patentable ideas are the basis for many start-up companies and small businesses. Venture capitalists often require start-ups to have a patent before offering financing. That means that patent delays cost jobs, slow the economy and threaten the ability of American companies to compete with foreign businesses.  

The Patent Office like the Postal Service is self supporting.  Application and maintenance fees generate "$2.1 billion in income" in 2010.   This has made the Patent Office an inviting target for Congress, which "over the last 20 years has diverted a total of $800 million to other uses, rather than letting the office invest the money in its operations." [emphasis added] 

While there are changes in Obama's budget to add resources to the Patent Office, previous Congressional actions suggests that Congress wants the revenue from the Patent Office more than the economic benefits generated by the patents the office issues.

"In two consecutive sessions, Congress has defeated a bill that would allow the patent office to keep all of the fees it collects."

The problems faced by the Patent Office in its dealings with Congress are quite similar to those faced by the Postal Service but on a smaller scale.   The impact on the economy is also similar as Congress's actions regarding the Patent Office and the Postal Service have had the effect of retarding the economic growth by making doing business in the United States more difficult and more expensive than it need be. 

Unfortionately for the Patent Office and the Postal Service fixing the problems do not have solutions that fit easily into political arguments that use words that poll favorably or fit within the 140 characters available in Twitter.   The willingness of members of Congress to adjust their language to fit real solutions to the budgeting and policymaking issues of the Patent Office and the Postal Service will determine if the country reverses the anti-growth policies that now exist.