Inventors are filing an exploding number of lawsuits against companies that appropriate their products illegally — and a new report puts the blame for these costly disputes squarely at the feet of the federal government.

The U.S. Patent and Trademark Office is so focused on rewarding its employees for the number of applications they review that the quality of patents they give out is in jeopardy, according to the Government Accountability Office.

The result is that licenses conferring someone’s sole right to an invention are “unclear and overly broad” and vulnerable to infringement by competitors.

The patent office “does not have a consistent definition of patent quality that is clearly articulated… or fully developed measurable goals and performance indicators to guide and evaluate work towards the agency’s quality goals,” GAO said in an audit requested by Congress that has not been made public. A copy of the report was obtained by The Washington Post.

Just the threat of litigation can deter innovators from coming up with new products, GAO found.

It’s the third review in 15 months to find weaknesses in the quality of patents granted to intellectual-property focused industries like electronics and pharmaceuticals, a crucial sector of the U.S. economy that contributes more than $5 trillion a year to the gross domestic product. The government issued 326,000 patents last year, according to federal data.

In a critical report on deficiencies with quality assurance, the inspector general for the Commerce Department, the patent office’s parent agency, found in April 2015 that patent officials have almost no way of knowing whether their examiners are doing a good job.

Three months later, an independent review of the patent and trademark office’s award-winning telework program by the National Academy of Public Administration found the system stresses “quantitative production over quality” and questioned whether examiners were working hard enough. That report was done in response to a Washington Post report on a coverup of time and attendance fraud at the agency.

GAO, which conducted its audit from 2014 to 2016, focused on how poor patents are contributing to the recent rise in litigation. Lawsuits in federal district courts over the illegal use of inventions have exploded in recent years, with 5,000 filed in 2015, up from 2,000 in 2007, the audit said. More than 8,000 defendants faced litigation last year, up from 5,000 in 2007. Most disputes concern new computer technology and software.

Patent officials began taking steps last year to address quality control, holding public forums with experts and stakeholders to get their ideas and launching a pilot program that asks a sample of the 8,300 examiners to show clearly what steps they took in their reviews.

“The more patents are correct and clear, the less confusion we’ll have in the market and the less litigation we’ll see,” Patrick Ross, the agency’s communications director, said in an interview.

But GAO noted that patent officials, to improve quality, still are focusing too much on the timeliness of reviews, customer service and “process or production goals” rather than quality. And they have not tied bonuses and performance reviews to quality, which needs definition. Is a good patent broad, or clearly defined? How does it prove that the invention is novel, useful, not obvious and clearly described?

In a survey auditors did of a sample of employees, one wrote that “without a working definition, management’s focus on patent quality is meaningless.”

“Without such goals and indicators, USPTO cannot determine whether it is meeting its goal of enhancing patent quality,” auditors wrote.

The inventory is large: As of April, the agency had a backlog of about 550,000 pending patent applications. Reviews take 16 to 26 months.

Examiners are rated largely on their production, auditors said, and they are given different times to complete reviews based on the experience of the examiner and the technical level of the field. For example, someone working on an artificial intelligence review gets an average of about 31 hours to complete it, while an application for exercise devices takes an average of 17 hours.

Timeliness and production produce bonuses: From fiscal 2009 to fiscal 2013, examiners who met these goals got an extra $6,000 a year, GAO said, citing the inspector general’s office.

But they are not rated for quality work. Examiners work fast, creating “an environment where patents may be granted that do not fully meet patentability standards,” GAO found.

The last time the patent office studied its production quotas was the 1970s — although several years ago, employees got another two-and-a-half hours for each review. GAO said the current system leaves makes it almost impossible to know how to get the best quality work from its staff.

“We work very closely with our unions to determine the right amount of time to meet our goals,” Ross said. Last fall, he said, examiners were again given more time to review applications in some fields.

GAO recommended that the agency define what is a good patent, update its performance goals for reviewers and figure out how bonuses for production may be compromising patent quality. Patent officials agreed with the recommendations.

“The strength of the U.S. system relies on the granting of strong patents, ones that are truly novel and non-obvious inventions, those that are true innovations and not the product of legal gamesmanship,” House Judiciary Committee Chairman Bob Goodlatte (R-Va.), who requested the audit, said in a statement.

The committee has called patent office Director Michelle Lee to testify in September. Goodlatte called the hearing “an important opportunity for the Judiciary Committee to conduct the appropriate oversight to ensure that our intellectual property laws are being implemented fairly and in line with Congressional intent.”

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