July 14 (Bloomberg) -- The first-ever expansion of the U.S. patent office beyond the nation’s capital has Denver, Silicon Valley and Austin, Texas, envisioning the next Research Triangle and an accompanying jobs windfall.
Legislation giving the U.S. Patent & Trademark Office in Alexandria, Virginia, more budget autonomy starting next fiscal year clears the way for three new offices, in addition to a fourth in Detroit that had been in the works. Lawmakers including U.S. Representative Lloyd Doggett of Texas and Senator Michael Bennet of Colorado are lobbying for offices in their districts.
Moving the patent office beyond its suburban Washington, D.C., home base is intended to speed up an almost three-year-long patent approval process, which requires face-to-face meetings between inventors and agency examiners. The offices would bring jobs, including 100 planned for Detroit in the first year, and might serve as a magnet for companies looking to be near the new offices.
“It’s sort of like what Research Triangle did” by landing International Business Machines Corp.’s research facility, said LaCharles Keesee, 46, a former patent examiner who is now executive director for the Denver Office of Economic Development. “You could plant a scientific flag in the middle of your community and use that as a point of attraction to build an education community, an employment community.”
Research Triangle Park, in the Raleigh-Durham area of North Carolina, was created in the 1950s by a partnership of universities and corporations to boost the state’s economy. The development has at least 170 companies including IBM, Credit Suisse Group AG and Cisco Systems Inc., with 38,000 full-time jobs, according to the foundation that oversees the facilities.
California, headquarters for Apple Inc. and Microsoft Corp., led U.S. states in patents granted last year, with 27,337, about 13 percent of the total issued, according to government data. Texas followed with 7,545. Colorado, home to the U.S. National Renewable Energy Laboratory, ranked 14th, just after North Carolina.
Representatives of the patent agency, which employs about 9,500 people, including more than 6,000 examiners, wouldn’t say when the offices would open or discuss the selection process.
Representative Doggett, a Democrat, pitched his state’s capital of Austin to patent office Director David Kappos in an April 4 letter also signed by three Republican representatives from Texas. A central Texas location would benefit computer maker Dell Inc., based in Round Rock, and IBM, which employs technology workers in the area, as well as smaller companies.
Austin’s ‘Ideal Location’
Texas is building “a trail of world-quality innovation, research, and entrepreneurship, and it puts Austin at the center of the next generation of technological breakthroughs,” making it “the ideal location,” Doggett said in an e-mail response to questions.
Bennet and Senator Mark Udall, both Democrats, sent President Barack Obama a letter last year saying their state of Colorado is “perfectly suited to ensure a qualified workforce.” In a follow-up statement in February they said an office would create jobs and encourage innovation.
“As a gateway of the West, Colorado is perfectly situated to connect innovators and businesses across the country.” Bennet said in an e-mail in response to questions.
Carl Guardino, chief executive officer of the Silicon Valley Leadership Group in San Jose, California, which represents 345 area businesses including Apple, Google Inc. and Cisco said members of his group have met with 100 members of Congress to push for an office in California.
“You hunt where the game is and the game is here in Silicon Valley,” Guardino said in an interview.
While Keesee argued that Denver would be ideal, he said cities in the Northwest including Portland, Oregon, and Seattle should be considered, as well as Atlanta.
“As an examiner, it would be hard to overlook Atlanta” partly because of universities that have significant advanced programs in science and engineering, he said. “It’s a city that has all the things I just mentioned on steroids.”
For the patent office, the satellite offices would provide a bigger labor pool at a time when the agency is trying to increase the number of examiners and cut down on turnover. It also would mean greater proximity to inventors, when increased direct interaction is seen as a way to focus applications and speed up the process, known as a patent prosecution.
“It’s a challenge for any company in the country to have to go and defend their patent,” Erika Sumner, vice president for public policy for the Greater Austin Chamber of Commerce, said in an interview. “It makes sense to do it in a region.”
There are almost 700,000 patent applications awaiting the first review by an examiner, and it takes, on average, about 34 months for the agency to complete the process. Kappos has said the new offices would increase the number of face-to-face patent examinations, which would likely lead to more efficient and quicker reviews.
“It helps move things along,” said Christopher Ott, a trademark and copyright lawyer with Vorys Sater Seymour & Pease LLP in Washington and a former patent examiner. “Sometimes things don’t translate as well when you type them out.”
Legislation approved by the House of Representatives last month gives the agency more control over its funding, sets new rules on how applications and issued patents are reviewed, and authorizes the satellite offices. The bill needs to be reconciled with a Senate measure passed in March and then signed by Obama. The commitment for the Detroit office, made in 2010 prior to the legislation, had been put on hold after Congress limited the money the agency could spend this fiscal year.
Detroit Tech Boom
Detroit was selected first because of the area’s high percentage of scientists and engineers, as well as its patent output, the agency said in March. Expertise in cloud computing, mobile-software applications and energy management have been in demand as automakers including General Motors Co. and Ford Motor Co. replace car stereos with Internet radio and gasoline engines with motors powered by lithium-ion batteries.
Online streaming music providers Pandora Media Inc. and Mog Inc., have opened offices in the area. Google, based in Mountain View, California, has a facility in Birmingham, Michigan, where it’s been looking for sales associates to work with the auto industry. Technology job postings in the Detroit area doubled last year, making it the fastest-expanding region in the country for technology jobs, according to Dice Holdings Inc., a job-listing website.
The remote offices may also help the agency recruit examiners who may not want to live in the Washington area.
“When you open offices in places where people want to be, like Austin and California, it increases the likelihood you get people in the door,” Ott said.
While he has been lobbying lawmakers, Guardino said he hoped the decision would be left to the patent office and away from political influence. Silicon Valley would emerge as “the obvious location,” he said, even with its high cost of living.
Whatever the location, local officials agree it’s time for the patent office to expand its footprint to areas responsible for the most patents. Virginia and Washington, D.C. were ranked 20th and 49th in patents issued last year, trailing states including Arizona, Florida, Massachusetts and Wisconsin.
“The patent community is way too centralized in Washington,” Keesee said.
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