Budget shortfalls and the rising costs to guard inventions contributed to a 2.3 percent decrease in the number of U.S. patent filings in 2009, CNNMoney.com reported.

According to a preliminary estimate by the U.S. Patent and Trademark Office, the number of filings dropped to 485,500 from 496,886 last year. The report signals a slow down in U.S. innovation for the first time since 1996.

“That’s unfortunate because [patent filings] are a reflection of innovation,” said David Kappos, director of the Patent Office. “Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy.”

The recession, which most blame for the reduction in filings, is causing companies to postpone bringing new ideas to market until they see a substantial improvement in the economy.

“Our patent filings were down 25 percent this year, and it was a direct macroeconomic issue,” said Joe FitzGerald, deputy general counsel for Symantec, a tech security firm based in California. “The overall company reduced spending, and patent filings are a very controllable expense. We might have filed four patents, but we filed three and made sure they were strategically significant.”

According to Bijal Vakil, partner in White & Case’s intellectual property team in Palo Alto, Calif., the application, processing and legal fees run about $15,000 per patent. But the cost to defend those patents in court after they’ve been granted is generally between $3 million and $6 million, he said.

“Once you have a patent, you also have to go out and defend your own turf,” said Henry Nothhaft, chief executive of San Jose, Calif.-based Tessera Technologies Inc. “That has become more expensive lately due to the complexity of technology and globalization of economy, and it has caused some products not to come to market.”

Silicon Valley, which has been pegged as a global leader in innovation for decades, also has to worry about an increasing number of U.S. patents being issued to inventors and businesses in foreign nations. That figure climbed 6.3 percent for the year.

“We are in a dire economic situation, so it’s not unreasonable for businesses to have to cut their budgets,” Vakil said. “But this trend could spell financial ruin for some U.S. companies. We’ve lost our competitive edge, and other companies from other countries stand to benefit.”