Today's New York Times has an op-ed by former patent judge and a high-tech executive recommending that a tax credit be given for each patent received. That is an incredibly bad -- and counterproductive -- idea. On the surface this may sounds like a great idea to incentivize invention. But the result is more likely to be a flood of dubious patent applications into an already overwhelmed patent office. As the authors point out, there is already a backlog of 1.2 million applications. How many more applications will be filed in hopes of gaining the tax credit? And how many of the dubious ones will simply clog a system that is already working hard to improve patent quality?
The authors of the piece rightly argue for more resources for the patent office. But creating a tax incentive to file more patents would undo any good that comes from allocating more resources.
Better to use the funds to make the R&D tax credit -- a proven method of spurring innovation -- permanent. Better yet, use the funds to expand the R&D tax credit into a knowledge credit tax credit.
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