Patent filings fell in 2009 for the first time in 13 years, worrying Silicon Valley that it is losing its place as the leader in global innovation.
NEW YORK (CNNMoney.com) -- U.S. innovation slowed this year for the first time in 13 years as the recession cut into budgets, and costs to protect inventions rose.
The number of patent filings in the United States fell 2.3% in 2009 to 485,500 from 496,886 last year, according to a preliminary estimate by the U.S. Patent and Trademark Office. That makes 2009 the first year since 1996 in which businesses and inventors filed fewer patents year over year.
"That's unfortunate because [patent filings] are a reflection of innovation," said David Kappos, director of the Patent Office. "Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy."
At the same time, U.S. patents issued to inventors and businesses in foreign nations jumped 6.3% for the year. That's a worry for Silicon Valley, which has been a global leader for decades.
Most blame the recession for the drop in U.S. filings. As a result, many companies are opting to hold off on bringing new ideas to market until the economy improves substantially.
"Our patent filings were down 25% this year, and it was a direct macroeconomic issue," said Joe FitzGerald, deputy general counsel for tech security firm Symantec. "The overall company reduced spending, and patent filings are a very controllable expense. We might have filed four patents, but we filed three and made sure they were strategically significant."
Cost constraints
The application, processing and legal fees average about $15,000 per patent, but the cost to defend those patents in court after they've been granted typically runs between $3 million to $6 million, according to Bijal Vakil, partner in White & Case's intellectual property team in Palo Alto, Calif.
"Once you have a patent, you also have to go out and defend your own turf," said Henry Nothhaft, chief executive of Tessera, a San Jose, Calif.-based company that licenses its electronic miniaturization technologies to consumer electronics companies. "That has become more expensive lately due to the complexity of technology and globalization of economy, and it has caused some products not to come to market."
It could also become disruptive to American businesses down the road as filings from abroad pick up.
"We are in a dire economic situation, so its not unreasonable for businesses to have to cut their budgets," said Vakil. "But this trend could spell financial ruin for some U.S. companies. We've lost our competitive edge, and other companies from other countries stand to benefit."
If that trend continues, it could also spell trouble for the American worker, especially given the weak U.S. labor situation. The Obama administration has contended that the economic rebound will rely on innovative U.S. companies to hire workers to develop new technologies and ideas like clean energy and smart transit systems.
"Our top priority is to see jobs get created, and we need patents to get through the patent office to help create those jobs," Kappos said.
The system is broken
Pushing patents through the system is easier said than done: The decline in filings this year has brought to light a number of problems with the antiquated American patent system.
The Patent Office does not receive any taxpayer money. It is completely funded by fees levied on patent filing, processing and awarding. The Patent Office also hasn't changed its fee structure in decades, so it continues to charge a flat rate (roughly $1,000) for patent applications, regardless of the idea's complexity or the amount of work that needs to go into processing the patent.
As filings have dropped off, so too has the Patent Office's revenue, which sank by $200 million in 2009. As a result, the Patent Office has initiated a hiring freeze, stopped all overtime, cancelled a necessary IT upgrade and has lost between 40 and 50 patent examiners every month this year, said Kappos.
That means longer wait times for patent approvals and a growing backlog of filings. Currently, there are 740,000 patents pending, with an average wait time for approval of 40 months. The Patent Office isn't even able to look at applications for three years because of the backlog. That's an eternity for tech inventions, which tend to cycle through product generations in a year or so.
Ultimately, it creates a vicious cycle, since a large lag time only further discourages patent filers.
"People are looking at the system as it is now, and they're saying that waiting 40 months for a patent may not be worth it," said David DiMartino, spokesman for the Coalition for Patent Fairness, a group representing major Silicon Valley companies' desires for patent reform.
Another discouraging trend has been the rise in patent disputes. By June, there were already 15% more "post-grant" patent reviews filed by competitors to the filing company than there were in all of 2008.
Those cases are expensive to defend, and are sometimes used by large companies to delay smaller companies' technologies from coming to market or to prevent them from being released at all, according to Brian Pomper, executive director of the Innovation Alliance, a coalition of mostly small high tech companies in support of strong intellectual property rights.
As a result, the Patent Office, lawyers and companies alike are clamoring for patent reform. Bills in the House and Senate, which are on schedule to be passed in the spring, would give the Patent Office the authority to adjust its patent fee structure and give juries direction on setting awards for patent disputes, among other reforms.
Some advocates argue that the bills are far from perfect, particularly because they could make it easier for big companies to repeatedly bring smaller innovators to court. But for the most part, businesses and government officials are eager for Congress to act.
"The American innovative spirit is stronger than ever. If we're able to get patent reform through, we absolutely can take processing times way down and get innovations through to the marketplace," said Kappos, who estimates that legislation will help reduce the average wait time to as little as one year.
Sunday, December 20, 2009
Thursday, November 19, 2009
Monday, July 6, 2009
Can university research catapult us to a new era of global prosperity?
{Source: An excerpt of the discussions from the LinkedIn group Global Academic Innovation Network (GAIN) }
Richard Litman, Patent Attorney - The great thinkers of the world became the catalyst for technological enlightenment and economic growth in past centuries. Ingenuity catapulted the world’s economy to new horizons.
Electricity, oil, nuclear power and other sources of energy fueled the growth of the global economy in the last century. With electricity came lighting, electronics and the age of information technology. With oil came the proliferation of automobiles, jet airplanes and the use of plastics. The nuclear era brought even further discoveries in medicine, space exploration and energy.
Economic prosperity can return, and return quickly, through good old-fashioned ingenuity.
The stimulus for economic recovery and expansion in the 21st century will come from the world's most plentiful resource: the human capital of people. Innovation is the answer for this century just as it has been in the past.
Universities that have adopted this core philosophy have become catalysts for economic vitality. It is a proven formula for sustainable growth of the economy.
Our global economic woes can be cured by technological innovation and the growth of small and large businesses fueled by university research. It may take a cure for cancer or some new form of energy to catapult the economy back to an era of prosperity. It could be that incremental improvements on existing technologies are all that is needed for our return to prosperity. Universities need to embrace this spirit today. Those which foster an environment where creativity and out of the box thinking are part of the core culture will help the global economy thrive in the 21st century.
An investment in university based innovation is one of the best investments we can make to stimulute the economy for a new era of enlightenment and worldwide economic growth.
Suddha Sattwa Basu, Analyst - Almost all of the large and medium scale leading universities of the world resembles any average small to medium sized company. And this large-to-medium scale which I am talking about is the scale of research output from these universities. The net volume and quality of the cumulated research output from a multi-faculty university is always the primary measure of the true quality of that particular university in consideration.Now this net resarch output is in a way the Intellectual Capital of the institution, which will include number of PhDs passing in one year, quality oftheir thesis work, number and quality of post-doctoral fellows, international accredition, number of patents - filed/granted, technology/patent license agreements, activity of the university technology transfer offices, software copyright enforcement practices followed, trade mark licensing of the valued university logo, start up companies formed as incubations on the university campus, charismatic nobel laureate teachers, iconic past students, great money funding from good relationships with government and large global corporations and above all a cross disciplinary peer culture of out-of-the-box thinking which is driven by an eccentric creative urge that runs equally through the veins of teachers and students alike. When we have all the above components in a perfect mix then we have the "ideal university innovation ecosystem". This in turn changes everything around us...people,patents,products,processes..everything.This will always be the way forward.
M. Karen Walker, Advisor at State Department Global Partnership Initiative We also must remember to consider the quality of the questions and rationale for lines of inquiry. Having worked in research in government laboratory and interagency settings, I can attest to the importance of requirements generation, involvement of end-users in the research program, and consistently reinforced yet flexible expectations. Hmmm ... perhaps there is a role here for the Humanities after all!
Phil Clare - Associate Director at Oxford University Research Services - I agree that Universities are central to our economy and society. If anyone doubts that, spend five minutes imagining how the world would develop if we suddesnly took them all away. My one note of caution is that we must remember the variability of timescales here. It takes at least three years to produce an undergraduate, six or seven for a PhD student, decades for GPS to use the mathematics developed to explore Einstein's work in satnavs. Investment in universities will drive the future knowledge economy, but it's no magic bulllet to drive up share prices next week... All of us in the great Universities of the world are deeply conscious of the need to maximise the impact of what we do on society. I worry that some expectations are a tad unrealistic though!
Erik Van Lennep, Strategy Consultant - "The great thinkers of the world became the catalyst for technological enlightenment and economic growth in past centuries. Ingenuity catapulted the world’s economy to new horizons......"
I do believe that academic institutions and public research, especially "action-research" have a great deal to offer in setting a new standard and opening innovative pathways, outside the box. But, and this is a serious BUT, it will not likely be something driven by the mega-universities, which are so cumbersome and politically hobbled that in many aspects internal communication is dysfunctional. I think the possibility of fresh directions and economic recovery are more to be found in smaller universities and colleges which can move more quickly and flexibly, whose need to compete successfully for students keeps them closer to the cutting edge. The other place I expect to see novel and appropriate solutions evolve is in collaborative work involving many stakeholders from academia to industry and community.
The true value in my mind, the acid test for universities' relevance, must always lie with the quality of education they offer, with the engagement and enlightenment and enthusiasm developed in their students and graduates. This is what universities are meant to be, and the justification for their founding. I agree with the list of outputs and values suggested by Suddha Sattwa Basu earlier, but I also want to note that these have evolved as a result of universities first and foremost creating environments for high quality learning, and most especially...questioning.
The fact that academia has historically sheltered and nurtured bright minds to stay on and deepen their research, ideally in an atmosphere which encourages a challenging depth of questioning is essential to what we now need them to provide in terms of innovation and socio-economic policy development. Yes it's a slow process, and in some cases unnecessarily so. An important direction to watch is "action-research", which like action-learning, values the information gathered in tandem with real-life project development.
To find ways in which universities, industry, policy makers and funders can work together to fulfill pressing human needs, from the economic to the inspirational, we will need to unhook university funding from big industry, and then renegotiate what that valuable connection is about. We need to return university research as much to real world and community solutions as we do to corporate IP arrangements and profit sharing. A fresh look, engaging more stakeholders would open some exciting and constructive new arrangements. Industry in the end will still benefit, probably even more than before, but so will community, researchers, and above all, the students
Richard Litman, Patent Attorney - The great thinkers of the world became the catalyst for technological enlightenment and economic growth in past centuries. Ingenuity catapulted the world’s economy to new horizons.
Electricity, oil, nuclear power and other sources of energy fueled the growth of the global economy in the last century. With electricity came lighting, electronics and the age of information technology. With oil came the proliferation of automobiles, jet airplanes and the use of plastics. The nuclear era brought even further discoveries in medicine, space exploration and energy.
Economic prosperity can return, and return quickly, through good old-fashioned ingenuity.
The stimulus for economic recovery and expansion in the 21st century will come from the world's most plentiful resource: the human capital of people. Innovation is the answer for this century just as it has been in the past.
Universities that have adopted this core philosophy have become catalysts for economic vitality. It is a proven formula for sustainable growth of the economy.
Our global economic woes can be cured by technological innovation and the growth of small and large businesses fueled by university research. It may take a cure for cancer or some new form of energy to catapult the economy back to an era of prosperity. It could be that incremental improvements on existing technologies are all that is needed for our return to prosperity. Universities need to embrace this spirit today. Those which foster an environment where creativity and out of the box thinking are part of the core culture will help the global economy thrive in the 21st century.
An investment in university based innovation is one of the best investments we can make to stimulute the economy for a new era of enlightenment and worldwide economic growth.
Suddha Sattwa Basu, Analyst - Almost all of the large and medium scale leading universities of the world resembles any average small to medium sized company. And this large-to-medium scale which I am talking about is the scale of research output from these universities. The net volume and quality of the cumulated research output from a multi-faculty university is always the primary measure of the true quality of that particular university in consideration.Now this net resarch output is in a way the Intellectual Capital of the institution, which will include number of PhDs passing in one year, quality oftheir thesis work, number and quality of post-doctoral fellows, international accredition, number of patents - filed/granted, technology/patent license agreements, activity of the university technology transfer offices, software copyright enforcement practices followed, trade mark licensing of the valued university logo, start up companies formed as incubations on the university campus, charismatic nobel laureate teachers, iconic past students, great money funding from good relationships with government and large global corporations and above all a cross disciplinary peer culture of out-of-the-box thinking which is driven by an eccentric creative urge that runs equally through the veins of teachers and students alike. When we have all the above components in a perfect mix then we have the "ideal university innovation ecosystem". This in turn changes everything around us...people,patents,products,processes..everything.This will always be the way forward.
M. Karen Walker, Advisor at State Department Global Partnership Initiative We also must remember to consider the quality of the questions and rationale for lines of inquiry. Having worked in research in government laboratory and interagency settings, I can attest to the importance of requirements generation, involvement of end-users in the research program, and consistently reinforced yet flexible expectations. Hmmm ... perhaps there is a role here for the Humanities after all!
Phil Clare - Associate Director at Oxford University Research Services - I agree that Universities are central to our economy and society. If anyone doubts that, spend five minutes imagining how the world would develop if we suddesnly took them all away. My one note of caution is that we must remember the variability of timescales here. It takes at least three years to produce an undergraduate, six or seven for a PhD student, decades for GPS to use the mathematics developed to explore Einstein's work in satnavs. Investment in universities will drive the future knowledge economy, but it's no magic bulllet to drive up share prices next week... All of us in the great Universities of the world are deeply conscious of the need to maximise the impact of what we do on society. I worry that some expectations are a tad unrealistic though!
Erik Van Lennep, Strategy Consultant - "The great thinkers of the world became the catalyst for technological enlightenment and economic growth in past centuries. Ingenuity catapulted the world’s economy to new horizons......"
I do believe that academic institutions and public research, especially "action-research" have a great deal to offer in setting a new standard and opening innovative pathways, outside the box. But, and this is a serious BUT, it will not likely be something driven by the mega-universities, which are so cumbersome and politically hobbled that in many aspects internal communication is dysfunctional. I think the possibility of fresh directions and economic recovery are more to be found in smaller universities and colleges which can move more quickly and flexibly, whose need to compete successfully for students keeps them closer to the cutting edge. The other place I expect to see novel and appropriate solutions evolve is in collaborative work involving many stakeholders from academia to industry and community.
The true value in my mind, the acid test for universities' relevance, must always lie with the quality of education they offer, with the engagement and enlightenment and enthusiasm developed in their students and graduates. This is what universities are meant to be, and the justification for their founding. I agree with the list of outputs and values suggested by Suddha Sattwa Basu earlier, but I also want to note that these have evolved as a result of universities first and foremost creating environments for high quality learning, and most especially...questioning.
The fact that academia has historically sheltered and nurtured bright minds to stay on and deepen their research, ideally in an atmosphere which encourages a challenging depth of questioning is essential to what we now need them to provide in terms of innovation and socio-economic policy development. Yes it's a slow process, and in some cases unnecessarily so. An important direction to watch is "action-research", which like action-learning, values the information gathered in tandem with real-life project development.
To find ways in which universities, industry, policy makers and funders can work together to fulfill pressing human needs, from the economic to the inspirational, we will need to unhook university funding from big industry, and then renegotiate what that valuable connection is about. We need to return university research as much to real world and community solutions as we do to corporate IP arrangements and profit sharing. A fresh look, engaging more stakeholders would open some exciting and constructive new arrangements. Industry in the end will still benefit, probably even more than before, but so will community, researchers, and above all, the students
Tuesday, June 16, 2009
India’s Global Powerhouses - How they are taking on the world By Nirmalya Kumar, with Pradipta Mohapatra and Suj Chandrasekhar; Harvard Business Press
According to James Lamont in his article "Passage from India" where he reviewed this new book authored by the acclaimed author, Professor Nirmalya Kumar, one particular value of the book lies in its concise case studies. Where the reader quickly gains a sense of how personality and circumstance combined to produce change and opportunity. Interviews with top executives extract a sense of business culture and vision beyond the company mission statement. A humorous appreciation of history and coincidence also helps illuminate the corporate histories that show how Indian ideas and management techniques have global application, and how Indian executives easily adapt to the wider business environment.
Professor Kumar’s insights in this book are captivating for the common reader of most busniess literature. This prowess was easily achieved by Prof. Kumar as he straddled both the academic and corporate worlds by sitting on boards of Indian companies, while enjoying a career that has taken him from the US to the UK, via Switzerland. Neither the seat in the boardroom, nor the distance of London, has blunted his wonderment.
The book is really a superb anthology of business successes in India written with a narrative which is elegant and pacy both. I finished reading the book in one shot.
The authors have used their unmatched research wisdom in analyzing the dawn of new and old Indian businesses alike. Extensive discussions on questions like "When can a company call itself "global" ? " What should be the ideal organizational culture of a truly global company?" " How is an Indian Multinational different from a "born - global" Indian multinational ? - Are all well sequenced to stimulate a distinct thought process in the mind of most readers of the book. The book also succesfully brings in sociological and political insights from the dynamic co-existence of the myriad of Indian demographies. However, a more detail oriented treatment on the life and work of some of the great contemporary Indian business leaders leading their comapnies to unforeseen global heights, could have been a welcome addition. Moreover, a few instances where promising Indian companies failed in their global expansion strategies ( Eg: - where big trans-boder M&A deals turned out to be disastrous) and the new pricing models which are emerging within the new breed of Indian outsourcing industry (Eg:- Legal Process Outsourcing & Knowledge Process Outsourcing [LPO & KPO] ) could have also been added for more depth to the scope of this excellent book.
Professor Kumar’s insights in this book are captivating for the common reader of most busniess literature. This prowess was easily achieved by Prof. Kumar as he straddled both the academic and corporate worlds by sitting on boards of Indian companies, while enjoying a career that has taken him from the US to the UK, via Switzerland. Neither the seat in the boardroom, nor the distance of London, has blunted his wonderment.
The book is really a superb anthology of business successes in India written with a narrative which is elegant and pacy both. I finished reading the book in one shot.
The authors have used their unmatched research wisdom in analyzing the dawn of new and old Indian businesses alike. Extensive discussions on questions like "When can a company call itself "global" ? " What should be the ideal organizational culture of a truly global company?" " How is an Indian Multinational different from a "born - global" Indian multinational ? - Are all well sequenced to stimulate a distinct thought process in the mind of most readers of the book. The book also succesfully brings in sociological and political insights from the dynamic co-existence of the myriad of Indian demographies. However, a more detail oriented treatment on the life and work of some of the great contemporary Indian business leaders leading their comapnies to unforeseen global heights, could have been a welcome addition. Moreover, a few instances where promising Indian companies failed in their global expansion strategies ( Eg: - where big trans-boder M&A deals turned out to be disastrous) and the new pricing models which are emerging within the new breed of Indian outsourcing industry (Eg:- Legal Process Outsourcing & Knowledge Process Outsourcing [LPO & KPO] ) could have also been added for more depth to the scope of this excellent book.
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