A Patently Obvious Way to Add Jobs

Help on the employment front? All it should take is a little invention, and that help is waiting for us at the underfunded patent office.

Over the past decade, I certainly have spent plenty of time pointing out both potential and actual problems this country faces, with none more severe than the protracted nature of the current employment situation.

How many are really unemployed?

(See the op-ed "Why I'm not hiring" from the Aug. 9 Wall Street Journal to find out how the math stacks up against employers; you'll need a subscription to view the full piece.)Msn.Video.createWidget('PlayerAd1Container', 'PlayerAd', 300, 213, {"configCsid": "MSNmoney", "configName": "player-money-articles-16x9", "player.vcq": "videoByUuids.aspx?uuids=a5194134-46bf-496c-b193-253685455064,e3c09499-0406-4afa-87c4-589bd0082346,8c7aa31a-2829-48eb-b319-c0bff94eb92c,153a80f6-dc7b-49da-80a1-2d04b47025a8,6383fabc-e71a-4d36-8c71-b272f63733e5,ffc2c43b-7024-d577-b05e-12969bdea3c9,f00b3544-2922-4bee-9c6b-a82d88e9c337,7fa6f526-80a1-48ca-9a0a-28569befe365,0b9fec01-6a23-42ac-9860-f50f26ca65ad,9a4cc63f-98b5-4c35-a611-af836b4f8ea3", "player.fr": "iv2_en-us_money_article_16x9-Investing-ContrarianChronicles"}, 'PlayerAd1');Msn.Video.createWidget('Gallery4Container', 'Gallery', 304, 150, {"configCsid": "MSNmoney", "configName": "gallery-money-articles", "gallery.linkbackLocation": "bottom_left", "gallery.numColsGrid": "3", "gallery.categoryRequests": "videoByUuids.aspx?uuids=a5194134-46bf-496c-b193-253685455064,e3c09499-0406-4afa-87c4-589bd0082346,8c7aa31a-2829-48eb-b319-c0bff94eb92c,153a80f6-dc7b-49da-80a1-2d04b47025a8,6383fabc-e71a-4d36-8c71-b272f63733e5,ffc2c43b-7024-d577-b05e-12969bdea3c9,f00b3544-2922-4bee-9c6b-a82d88e9c337,7fa6f526-80a1-48ca-9a0a-28569befe365,0b9fec01-6a23-42ac-9860-f50f26ca65ad,9a4cc63f-98b5-4c35-a611-af836b4f8ea3;videoByTag.aspx%3Ftag%3Dmoney_dispatch%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1;videoByTag.aspx%3Ftag%3Dbest%2520of%2520money%26ns%3DMSNmoney_Gallery%26mk%3Dus%26vs%3D1"}, 'Gallery4');Thus, it is with great pleasure that I can point to something positive. In the Aug. 5 New York Times, I read about an absolutely brilliant idea in the op-ed "Inventing our way out of joblessness." In it, Paul Michel and Henry Nothhaft discuss the potential for breaking the logjam at the U.S. patent office and what that might mean.

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Bureaucracy is the evil stepmother of invention Not being an inventor, I certainly had no idea that the patent office was in such a state of disarray. Though I'm not knowledgeable on the subject, one of the authors, it appeared to me, has enough credibility that I think we can take him at his word. Michel is a former chief judge of the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals.

Michel and Nothhaft cite a study showing that in the venture capital community, 75% of startups require some sort of patent to get financing. That makes it easy to see the connection between patents and new businesses.

The sad, though not surprising, problem is that the patent office can't get enough funding to do its job. According to the authors, since 1992 Congress "has diverted more than $750 million in patent fees to other purposes," which has created a backlog of -- get this -- 1.2 million applications, more than half of which haven't even been looked at yet.

Michel and Nothhaft propose spending $1 billion -- chump change when it comes to government outflows these days -- to get the patent office streamlined and staffed up so it can process applications at a reasonable rate.

The authors estimate that, based on historical patterns, about 60% of the backlog of 1.2 million applications would result in patents, and perhaps as many as 137,000 would go to small businesses. Of course, a more efficient patent office would process more patents in ensuing years. (My understanding is that the patent office needs the right kind of people, not just more bureaucrats, but that should be possible.)

The net of all that, Michel and Nothhaft say, would be something on the scale of 700,000 to 2 million jobs created, depending on what sort of estimates and variables one wants to use. At a middling range of their guess, or 1.5 million, each job would cost the government about $660, which obviously would be a mere pittance relative to the hundreds of billions of dollars wasted on useless government programs.

In addition, Michel and Nothhaft suggest that "Congress should also offer small businesses a tax credit of up to $19,000 for every patent they receive, enabling them to recoup half the average $38,000 in patent office and lawyers' fees spent to obtain a patent." I would imagine there could be additional incentives given on the tax front to help this process along, and I don't see any reason why a patent issued couldn't be fully reimbursed, assuming it ultimately met some sort of sales requirement.

With so many massive problems staring us in the face, it is almost criminally incompetent that an economic logjam like this is allowed to fester. I can't see why anyone would be against this, as no one's ox needs to be gored.

Continued: Working for somebody else's weekend More from MSN Money

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Bureaucracy is the evil stepmother of invention Not being an inventor, I certainly had no idea that the patent office was in such a state of disarray. Though I'm not knowledgeable on the subject, one of the authors, it appeared to me, has enough credibility that I think we can take him at his word. Michel is a former chief judge of the U.S. Court of Appeals for the Federal Circuit, which handles patent appeals.

Michel and Nothhaft cite a study showing that in the venture capital community, 75% of startups require some sort of patent to get financing. That makes it easy to see the connection between patents and new businesses.

The sad, though not surprising, problem is that the patent office can't get enough funding to do its job. According to the authors, since 1992 Congress "has diverted more than $750 million in patent fees to other purposes," which has created a backlog of -- get this -- 1.2 million applications, more than half of which haven't even been looked at yet.

Michel and Nothhaft propose spending $1 billion -- chump change when it comes to government outflows these days -- to get the patent office streamlined and staffed up so it can process applications at a reasonable rate.

The authors estimate that, based on historical patterns, about 60% of the backlog of 1.2 million applications would result in patents, and perhaps as many as 137,000 would go to small businesses. Of course, a more efficient patent office would process more patents in ensuing years. (My understanding is that the patent office needs the right kind of people, not just more bureaucrats, but that should be possible.)

The net of all that, Michel and Nothhaft say, would be something on the scale of 700,000 to 2 million jobs created, depending on what sort of estimates and variables one wants to use. At a middling range of their guess, or 1.5 million, each job would cost the government about $660, which obviously would be a mere pittance relative to the hundreds of billions of dollars wasted on useless government programs.

In addition, Michel and Nothhaft suggest that "Congress should also offer small businesses a tax credit of up to $19,000 for every patent they receive, enabling them to recoup half the average $38,000 in patent office and lawyers' fees spent to obtain a patent." I would imagine there could be additional incentives given on the tax front to help this process along, and I don't see any reason why a patent issued couldn't be fully reimbursed, assuming it ultimately met some sort of sales requirement.

With so many massive problems staring us in the face, it is almost criminally incompetent that an economic logjam like this is allowed to fester. I can't see why anyone would be against this, as no one's ox needs to be gored.

Continued: Working for somebody else's weekend More from MSN Money

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