By Mike Munday
Tech News Frontiers Editor

A small, but key group of Nevada and Southwest inventors, investors and innovators in Reno, Nev. heard April 5 the U.S. Patent & Trademarks Office (USPTO) chief call pending Senate legislation, Senate Bill 515 -- favored by large patent-holders such as IBM, 3M, and General Electric -- secondary or irrelevant to USPTO critical needs.

"I don't get up every morning wallowing in misery because we don't have patent reform legislation. I get up in the morning with the patent problems of the USPTO," said U.S. Department of Commerce Under Secretary and USPTO chief David J. Kappos, in answer to questions about whether new legislation was necessary for the patent office.

"So I am going to make USPTO much better whether we get new legislation or not," Kappos said. "There is more than one way to solve our problems," he added, "whether we have any particular legislation or not."

Arranged by U.S. Senate Majority Leader Harry Reid (D-NV), the meeting was held on the University of Nevada at Reno campus where Kappos detailed much of what has happened since he took over the agency Aug. 13 to better USPTO services for all its customers, whether small, independent, academic inventor or large, corporate holder of patents in technologies, software or the bio-sciences.

"There are some tools I can tell you are badly lacking at USPTO," said Kappos, pointing to the antiquated state of USPTO information technology systems. "Lack of funding is a real issue."

Of vital concern to Kappos, his staff and many applicants for patents of new technology are the backlogs for applications and patent appeals. "It's very hard to cut down on a huge backlog with a lack of funding," Kappos said. "Lack of funding hits you at every corner at the USPTO."

"Just do the math," he said pointing out that for the more than 17,000 appeals he said were in process, fewer than 100 administrative patent judges are handling appeals of patent examiner rejections, contested cases or interference proceedings.

"We'll all be dead and gone by the time we get rid of the backlog of appeals at the current rate. It is so overwhelming and it all comes down to the resources you need. It comes down to money," he said.

This was no ordinary seminar for independent inventors.

Along with Kappos, a former USPTO chief, now head of the American Intellectual Property Law Association and former lead patent counsel for GE, Q. Todd Dickinson, was in attendance. Representatives from IBM and IGT (International Gaming Technologies), Nevada's largest high-tech manufacturer, also were present. But it was the independent inventors and entrepreneurs who occupied the question-and-answer period after Kappos spoke, presenting his agency's accomplishments for that "small" patent holder of whom perhaps 60 attended the meeting.

These individuals are by no means insignificant in the impact their inventions have had for American commerce or global innovation. While Kappos only twice specifically commented on SB 515 unprompted by audience questions, the legislation was on the minds of the independent inventors and entrepreneurs on hand.

Gil Hyatt, credited, after a 20-year fight for recognition, with the invention in 1970 of the single-chip microcontroller, called SB 515 "a sure way to reduce risk for the mega-holding companies at the expense of the small inventor who takes great risk and deserves his reward." Because of challenges made after Hyatt received his patent award, his microcontroller patent was successfully challenged by Texas Instruments, although by that time Hyatt had already collected considerable royalties.

Reno-resident Robert Block, inventor of the TV pay-per-view system, noted that changes in the patent system that SB 515 would make, would hamper small firms' ability to assure investors that the rights to the invention would be owned and rewarded in the marketplace long enough for there to be a return on the investment.

"If that's not there," Block told TNAZ, "small, innovative business in Nevada and elsewhere will just dry up and blow away."

Patrick Johnston, CEO of dockon, a Reno-based start-up company providing compound antennas for the wireless industry, also said he was concerned with the ability of investors to realize returns. Johnston is a high-tech start-up specialist and noted that investors in the current economic period are difficult to find.

"If we could not assure that the property rights to our invention were solid and sound, we would not likely have found the investors we now have," he said.

Perhaps the most pointed comment was made by Don Costar, founder in 1987 of the Nevada Inventors Association. "We are aware of this monster in the background called Senate Bill 515," Costar said. "And we know that you and USPTO will have to implement that beast, and that scares the hell out of us."

Kappos told those gathered, "I did not come to work for you to give up on anything."

"We have at USPTO unbelievably dedicated, extremely knowledgeable people," Kappos said. They are "hell bent on improving the agency and attacking the problems that everyone in this room agrees are the most important problems for USPTO."

In separate comments with TNAZ, Kappos noted that while head of patent law for IBM, he had authored portions of the legislative proposals that have preceded and evolved into SB 515. But in his confirmation as USPTO head, he was required to "give up well over a million in equity," sell his IBM pension, and to take a "90 percent reduction in salary," and "to clear out all conflicts to come work with our government."