Patent Reform Won't Create the Kind of Jobs Obama's Looking For

The bill passed as a job creator, it doesn't really do that

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There's a patent war raging between the big technology companies, and no one seems to doubt the need for a reform of the patent laws. Last night the Senate passed a long awaited reform bill, the America Invents Act, reports The New York Times's Edward Wyatt. "After rejecting proposed amendments to a bill approved by the House last June, the Senate voted 89 to 9 to pass the bill, completing an effort of at least six years to overhaul the patent office’s operations and the procedures by which patents can be challenged." President Obama is expected to sign the legislation, "a central piece of his focus on promoting jobs," soon. Patent reform advocates hoping legislation would have an impact on innovation and halt big companies from buying up patents and suing competitors, will be disappointed by this bill, which has limited provisions that actually help big companies. That's because this legislation isn't really about innovation; it's about a much higher priority: jobs. The America Invents Act will not fix the broken inventing process, but it will apparently benefit businesses, and that's good enough for the Senate. Sounds great. Unfortunately, the types of jobs it will create aren't the ones we want.

The bill's main provisions include changing the system from a "first to invent" to a "first to file" system, which Senator Patrick Leahy claims will improve patent quality and thus "benefit business across the economic spectrum," reports Wyatt. The thinking goes that the previous rule caused a lot of bad patents, which suffocated innovation and thus job creation, and led to expensive legal disputes. The new rule "will eliminate costly legal disputes over who invented something first" explains The Wall Street Journal's Amy Schatz. This creates jobs on two levels. First, as Senator Leahy argues, it means we will have better inventions. "Higher-quality patents will infuse greater certainty into the patent system, which will better incentivize investment in American businesses, create jobs and grow our economy." But really, it just employs a lot of lawyers, argues Ars Technica's Timothy B. Lee. "It's popular with large companies because they can afford to hire full-time patent attorneys to help them file patent applications quickly."

Along with big corporations, the patent office itself gets to add more bodies. The bill also includes a provision that gives the patent office the authority to set its own fees. The office can use this money to help with the backlog of patent applications, thus creating more jobs, explains Lee. "This will likely allow the hiring of more patent examiners to tackle the huge backlog of patent applications."

So the bill helps big companies and one government organization, but it hurts small businesses and kills jobs in general. Those who can afford the lawyers needed to fast-track the process, otherwise known as big, rich companies, will hire. But the bill hurts the little guy, explains Wyatt. "Several groups representing small businesses, entrepreneurs and early-stage investors have said that change puts small companies, which usually account for the bulk of new jobs, and individuals at a disadvantage to large companies that employ fleets of patent lawyers." Also, the first to file system doesn't create better patents, but actually worse ones. "This bill is unequivocally a job killer," Valerie S. Gaydos, a Baltimore-based investor in early-stage companies told Wyatt. "It will create a rush to the patent office, with innovators seeking to file anything and everything. The applications will be less complete, less well written and it will create more of a backlog."

As unemployment stagnates, the Senate is always looking for ways to claim job creation. This patent reform masqueraded as job reform not only fails to change the broken patent system, but doesn't create the type of jobs we want.

This article is from the archive of our partner The Wire.