A story in the March 13, 2009 edition of the National Law Journal reports that patent applications in fiscal year 2009 are slightly lower than at the same point last year and, if the trend continues, 2009 filings could be as much as two percent lower than 2008. The drop in filings first came to light during testimony by Herbert C. Wamsley, executive director of the Intellectual Property Owners Association (IPO), before the Senate Judiciary Committee on March 10.

The drop comes after several years of steady increases in filings and a 7.5 percent drop in processing fees during the first five months of fiscal 2009. In fiscal 2008, filings jumped 5.7 percent over the previous year, reaching a record 448,003 filings.

"The severe worldwide economic recession is having a dramatic effect on the resources available to patent and trademark departments in U.S. companies," Wamsley said in his written testimony to the Senate committee. "We know of no comprehensive survey of U.S. industry, but IPO has received numerous reports of sharp cuts in the budgets of company patent departments and lower projections for the number of patent applications that will be filed in the U.S. and abroad in 2009 and subsequent years."

According to Venable partner Michael Gollin, the economic downturn may be only one factor. He cited recent U.S. Supreme Court and U.S. Court of Appeals decisions that have increased the cost of patent application prosecution dramatically. At the same time, he said, "funds available for patenting are surely shrinking, as reflected anecdotally by many of our clients, who are reducing their prosecution budgets."

"Some clients are choosing to keep their innovations secret and others are just taking their chances instead of protecting their work," said Gollin, chairman of Venable’s Life Sciences Group. "Also, there is no good avenue for challenging the weakest patents absent a litigation."