The USPTO should be exempt from about $150 million in budget cuts from sequestration, because it pays for itself with its own user fees, and does not contribute to the budget deficit. SIIA supports a new bill to that end, called H.R. 2582, “Patents and Trademarks Encourage New Technology (PATENT) Jobs Act,” which was introduced by Rep Honda (D-CA), and co-sponsored by two fellow Californians — Reps. Lofgren and Eshoo (D-Calif.) on June 28.
Much of the debate over PTO funding hinges on whether patent payments are “voluntary” under the Budget Control Act, which was triggered this past March. The act exempts voluntary fees paid to the government from sequestration, and it would seem that the PTO would fall under this exemption. However, it was decided that user fees paid to the PTO are not “voluntary” because only the federal government can issue them. This line of reasoning is at odds with past treatment of PTO funds by Congress and the Administration.
When Congress passed and the President signed the America Invents Act (AIA) 21 months ago, it was explicitly recognized that fees collected by the USPTO are different from regular discretionary government spending. The act ensured that excess fees collected by the USPTO are used to fund programs to improve patent quality and pendency, and to ensure the continued provision of critical, time-sensitive services.
The budget cuts resulting from sequestration will put those efforts in jeopardy, delay the opening of new satellite offices throughout the country and exacerbate the current backlog of patent applications. If the USPTO is unable to reduce its backlog, it will diminish businesses’ ability to expedite new innovations into the marketplace. Sequester budget cuts may also hinder the USPTO’s efforts to improve patent quality, which could make it harder to tackle the growing problem of patent trolls.
SIIA is on record voicing its concerns about the effect of sequestration on the USPTO, and is very supportive of H.R. 2582. We urge Congress to immediately consider and pass H.R. 2582.
Keith Kupferschmid is General Counsel and SVP, Intellectual Property Policy & Enforcement at SIIA.