America Falling Behind in Innovation
China will soon be able to crown itself the world’s king in yet another category crucial to a nation’s economic health, surpassing the U.S. along the way.
By next year, China should become the world’s leader in patent filings, according to a new study conducted by Thompson Reuters.
Sitting at third right now, China’s patent filings are outpacing those in Japan and the U.S. so much so that by this time next year, China should be considered the world’s leader in innovation.
From 2003 to 2009, patent filings in the U.S. increased at an average annual rate of 5.5 percent. In China, they increased 26.1 percent.
The fact that China is soon going to surpass the U.S. in yet another vital economic measure is disconcerting for two reasons.
One, patent filings are a measure of technological prowess and innovation. Because of America’s failed trade policies, manufacturing has been offshored at an increasing rate. Not pnly are our factories, jobs and wealth transplanted overseas, but so is precious technology.
Last year’s domestic patent filing figures really illustrate that point. Last year, patent filings fell for the first time in 30 years. While U.S. patent filings fell 2.3 percent, U.S. patents issued to foreign nations and inventors jumped 6.3 percent
Secondly, America could retain some of its innovational prowess if it were to properly reform its outdated, expensive and cumbersome patent filing process.
While it only costs roughly $15,000 in fees and other expenses to file for patent protection, it costs anywhere from $2 to $5 billion to defend the patent in court.
Moreover, the patent office is under-funded, under-staffed and ill-equipped to handle the massive number of patent filings each year. There is currently a 40 month wait time simply to have a patent application reviewed, discouraging many would-be inventors.
As the system is currently set up, it favors large corporations with billions to spend instead of small businesses and entrepreneurs. In 2008 alone, IBM successfully filed 4,000 patent applications and Microsoft filed 2,000.
In his latest book, Saving Capitalism, author and economist Pat Choate said that patent reform is desperately needed to spur innovation, which will in turn lead to job creation.
According to Choate, the Patent Office must be better funded in order to process patent applications much more quickly. Choate also suggests the Patent Office needs to return to a secret application process so ideas can be tweaked and not stolen by competitors, and it also needs to do a better job of protecting small inventors against big corporations that do their best to thwart the efforts of any competitor.
“America faces the great economic danger that Congress and the president will immobilize the economy by unwittingly crippling the patent system. In reality, fostering innovation with strong patent protections and a well-run Patent Office is the surest, least expensive way to bring the nation out of the current depression and create long-term, noninflationary, self-sustaining economic growth,” Choate writes.