Local Leaders Hope Patent Office Pending for L.A.

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Local Leaders Hope Patent Office Pending for L.A.
Morgan Chu

Eager to boost Los Angeles County’s image as a center for innovation, L.A. business and civic leaders are mounting an effort to snag a regional federal patent office.

But it’ll be a tough battle. Los Angeles is up against stiff competition from Silicon Valley, San Diego, Boston, New York and dozens of other areas vying for a regional office.

The jockeying has been intense and for good reason. A regional patent office would not only make life easier for patent attorneys, but it could also prompt research and development arms of major corporations to either set up or expand nearby, speed the transfer of new technologies from local research universities and encourage growth of intellectual practice divisions at local law firms.

“Having a patent office here would further spur innovation in Southern California,” said Morgan Chu, an attorney with the Century City office of Irell & Manella LLP and one of the region’s leading patent lawyers.

Chu said that research and development divisions of major corporations, entrepreneurs trying to bring new technologies to market, and law firms with intellectual and trademark practices would prefer to locate near a patent office.

“Over time,” he said, “you could see significant new resources coming into the region in all these areas.”

L.A. business and civic leaders are hoping their arguments will convince officials at patent office headquarters in Alexandria, Va., that this region is best suited for a satellite office.

The U.S. Patent and Trademark Office is planning two new satellite offices by mid-2014. Legislation signed by President Obama in September authorized three regional offices; one has already opened in Detroit. Many expect the agency to decide on the remaining two later this summer.

Making L.A.’s case

While most patent applications are online, patent attorneys say a small percentage of cases require face-to-face contact with examiners.

The goal of the legislation is to hire more patent examiners to reduce a three-year patent backlog and seek technical expertise in different parts of the country. The office is entirely funded through fees on patent and trademark applications.

Patent attorneys, inventor blogs and other patent industry observers believe that it’s a virtual certainty that California will get one of the satellite offices. But the competition is fierce over where in California that patent office should go. Besides Los Angeles, business leaders and elected officials in Silicon Valley, Orange County and San Diego are lobbying for their communities. The comment period closed earlier this year, although politicians and business leaders continue to bring it up on trips to Washington, D.C. The decision is now up to patent office administrators, who could choose the sites by Labor Day.

During the comment period, Los Angeles Mayor Antonio Villaraigosa, USC officials and local patent attorneys all sent letters making the case for Los Angeles. They cited figures showing the region generates the fourth largest number of patents in the nation.

However, Los Angeles County is a distant second in patents to Santa Clara County in Silicon Valley. Between 2006 and 2010, Los Angeles County generated 11,800 patents, compared with more than 40,000 for Santa Clara County. The numbers are for utility patents, which are defined as those with useful functions, as opposed to design patents, for example.

The L.A. region has three research powerhouse institutions with a combined budget of $2 billion: USC, UCLA and Caltech. The region is also home to the Claremont Colleges, the Art Center College of Design, the City of Hope, and dozens of other research and design institutions that generate patents.

Los Angeles also has one major advantage over Silicon Valley: the cost of living – especially housing – is cheaper. This is a crucial factor for patent examiners and other staff making salaries ranging from $90,000 to $120,000 a year. In the Federal Register announcement seeking comments for the satellite offices, cost of living was listed as one of the selection criteria.

If Los Angeles were to secure a satellite patent office, it could make things significantly easier for inventors, research and design facilities, and patent attorneys.

Gary Michelson, a surgical and biomedical inventor who became a billionaire when he received a $1.3 billion patent settlement payment from Minneapolis-based Medtronic Inc., said a local patent office would be a great boost for inventors. Michelson has been a fierce advocate for reforms to speed up the patent approval process.

In a phone interview last week, he said that inventors in California are at a disadvantage with their East Coast counterparts because they or their patent attorneys must fly across the country to meet with a patent examiner.

“One of the things that’s critical is the ability of the examiner to interview the patent applicant,” Michelson said. “It’s often best for the patent applicant and their patent to make the case in person to the examiner. It’s a significant burden for those of us on the West Coast and it does affect the research.”

Backers of the local effort to bring a satellite patent office here said it could bring other benefits over time. For example, research and development divisions of major corporations could decide to boost their L.A. presence to be close to the patent office.

“All other things being equal, it’s more attractive to house research and development divisions of major corporations near a satellite patent office,” said patent attorney Chu.

He added that intellectual property practices of major national law firms would step up their L.A. presence, both to have easy access to patent examiners and to recruit examiners to their own law staffs.

“It wouldn’t happen immediately, but over time, you would see law firms make these adjustments,” he said.

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Howard Fine
Howard Fine is a 23-year veteran of the Los Angeles Business Journal. He covers stories pertaining to healthcare, biomedicine, energy, engineering, construction, and infrastructure. He has won several awards, including Best Body of Work for a single reporter from the Alliance of Area Business Publishers and Distinguished Journalist of the Year from the Society of Professional Journalists.

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