Archive for September 30th, 2009
According to US Patent and Trademark (USPTO) Power Point presentation the allowance rate has again fallen to 41% by mid year 2009.
This continues the sad trend of falling allowance rates that started in 2002. Why has the allowance rate changed so dramatically in the last six years? Sometime early in this decade, the USPTO started to define the “quality” of examinations by the allowance rate. The USPTO tracks the allowance rate of every examiner and grades the quality of their examinations by their allowance rate. If one examiner’s allowance rate is higher than the average allowance rate of the group they work in, their examination of applications is considered to be of lower quality. If an examiner never allows any patent applications, they will be considered to have the highest quality examinations. This has created a perverse incentive for examiners. There has been some rumors that the new director, David Kappos, of the USPTO intends to change this, but the continued drop in the allowance rate is discouraging news.
We know that in all areas of economics where it has been tested private property rights encourage economic activity. We also know that when the government establishes incentives, it always results in more of the incentivized activity. We also know that countries with the strongest patent laws have the most innovation and the greatest technology diffusion and vice versa those countries with weak or non-existent patent laws have little or no innovation and little technology innovation. Despite this Mr. Kinsella and the anti-patent crowd ask us to believe that patents do not follow the normal rules of economics and logic. As Thomas Paine pointed out in his book The Age of Reason, extraordinary claims require extraordinary evidence. Mr. Kinsella and the anti-patent crowd have provided no evidence that patents harm innovation.
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