April 2004--With the growing prominence of technology in every industry, patents are playing an important role in our economy. A recent panel study by the National Research Council suggests certain improvements could help the U.S. Patent and Trademark Office (PTO) function better.

The National Research Council, part of the National Academy of Sciences, issued a report on April 19 with some recommendations for making the patent system more flexible, open and reliable.

To help combat the rising cost associated with acquiring and defending patents, the report recommended the PTO grant patents to the first person to file for protection--though this person may not necessarily be the inventor. The PTO currently issues patents to the first person to conceive and develop an invention, which sometimes results in long and costly battles over who developed an invention first. The also panel suggested the creation of an "open review procedure" by Congress, in which third parties can challenge recent patents in front of the PTO's administrative patent judges when questions about a patent's validity arise.

The report called for increased cooperation and synchronization of the United States, European and Japanese patent-examination systems in order to encourage trade and investment and reduce costs.

The panel also recommended research involving patented inventions be given protection from liability for patent infringement, which would be a change from current policy. In 2002, the Federal Circuit Court ruled scientific research was part of the "business" of universities, and thus that research involving patented inventions was not protected from liability.

Perhaps most important, the report suggested the government allocate more funding for the PTO. It found the volume of applications--over 300,000 per year--is threatening to overwhelm the office, creating a backlog of pending cases and threatening the quality of the PTO's work. More funding, the report said, could allow the PTO to hire more people.