State of Innovation

Patents and Innovation Economics

The Federal Government’s Contempt for Patent System and Constitution

The Solyndra scandal  demonstrates the Federal Government’s complete contempt for the Patent Office and the Constitution.  The bankruptcy of Solyndra means that the federal government will have to pay out $535 million in loan guarantees.  This means a single, politically connected company is going to absorb over half the shortfall in the Patent Office funding over the last two decades.  If that money had been spent on the Patent Office it would have benefited thousands of companies and creating millions of jobs.  Instead, this $535 million resulted in the employment of about 500 employees over a couple of years.

The right of inventors to their inventions, patents, is guaranteed in Article 1, Section 8, Clause 8 of the Constitution.  The only rights mentioned in the original Constitution are the rights of inventors and authors.  Congress has stolen over $1 billion in user fees from the patent office in the last two decades.  The Patent Office is the only self funded agency in the federal government.  This theft represents a tax on innovation and jobs.  It now takes 3 years on average to obtain a patent and in areas of more complex technology it is not unusual for it to take 5-10 years to obtain a patent.  If it took that long to obtain title to your house or car or stock you would think you were living in a third world country.  Justice delayed is Justice denied.

The federal government thought it was a lot more fun to play venture capitalist for a green energy company than fulfill its Constitutional duties.  Nowhere in the Constitution is the Federal Government given the power to play venture capitalist and this company is in no way is related to our national defense.  This is a stark case of how far our government has strayed from the Constitution.  They are funding companies without legal authority to do so and stealing user fees from the Patent Office which is their Constitutional responsibility.

The only way to increase our real per capita income is to increase our level of technology.  In the United States that means we have to invent.  Without a patent most technology startup companies cannot obtain funding.  Without funding they do not create the new technologies that create high quality jobs and increase our standard of living.



September 15, 2011 - Posted by | News, Patents | , , , , , ,


  1. I think neither the excuse to give the loan guarantee or the excuse now being given for Solyndra’s bankruptcy make sense. Solyndra’s problems were blamed on the economy but prior to that Venture Capitalists have already lost $billions chasing green energy.

    The economics just aren’t there even in a robust economy. At the current level of supply and demand fossil fuel companies can always price alternative energy out of most markets.

    They say it failed because nobody anticipated the Chinese flooding the market with cheaper solar panels. That isn’t true either. Long before Solyndra received the loan guarantee they already knew who they were losing sells to.

    But I think the American Tax Payer got off cheap and I’m glad this failed as big as it did and as quickly as it did and is getting as much press as it is. Prominent VCs having been pushing Washington hard to increase funding for research; and to increase the number of graduating scientists and engineers. This of course offsets the investment they have to make in research and will allow them to pay lower salaries.

    VCs like John Doerr of Kleiner Perkins Caufield Buyers have been promising the world that energy represents a bigger VC boom than the PC and Internet Boom combined. The reason given is that more people use electricity than use the internet. Well by that logic more people drink water and breathe air; therefore filters, cooling and heating systems should be the largest economic boom possible.

    I’m glad this fraud was exposed as quickly as it was before we lost even more. The VCs have already lost $billions of private investor money chasing green energy and they want us to join the sinking ship. Now let’s hope Washington remembers this lesson as the VCs continue to ask for more.

    Comment by Matthew Artero | September 15, 2011 | Reply

  2. True, but didn’t we learn the same lessons with Jimmy Carters Shale oil project in the late 1970s. This is just pure power politics, where theft is legalized.

    Comment by dbhalling | September 15, 2011 | Reply

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