I don’t know Austan Goolsbee, but I like him, mostly because he seems to get what’s wrong with the current patent system. Back in March, while I was busily writing about how patent office delays might be responsible for small business failures, Austan was busily shooting a White House White Board video about the same thing. Both Austan and I come to the same (inescapable) conclusion: by the time the patent office gets around to evaluating a company’s patent application, about 1/3 of them no longer exist.
Unfortunately, Austan also (incorrectly) claimed that passage of the America Invents Act will reduce patent pendency by 40%. While that may have been possible before, the White House should take a long look at H.R. 1249, the latest incarnation of the reform package. Far from providing the revolving fund, the bill passed by the Republican controlled House of Representatives amounts to little more than a $600M innovation tax that will be paid (initially) by inventors, and in the long run by Americans as a whole. In its place are a fee hike and a designated slush fund controlled by the House Appropriations committee.
Austan praised the post-grant review procedures created by patent reform. Unfortunately, like pendency, post-grant review adds increasing uncertainty venture-backed companies can ill afford. An issued patent easily subject to additional, protracted bureaucratic red-tape at the behest of incumbent competitors offers little more protection than a mere pending application.
What’s more, the bill adds these new procedures without a guaranteed source of funding to carry them out. Last month, Austan Goolsbee was ousted in favor of Alan Krueger, who doesn’t seem to have a publicly stated position on patent reform.
If the White House is serious about fixing the patent system, as opposed to be serious about looking like its serious about fixing the patent system, the President should veto this tax on innovation and insist that Congress vote on a bill that addresses patent office funding first, and addresses the remaining problems later.