Fee Diversion Continues at U.S. Patent and Trademark Office: $70 Million in Fees Is Currently at Stake!

Proposed 2011 USPTO Budget Does Not Appear to Include Fee Diversion, but Actually Does!

October 20, 2010 – The U.S. Patent and Trademark Office (USPTO) collected approximately $70 million in fees over and above the agency’s authorized budget for Fiscal 2010 that ended September 30, 2010. American Innovators for Patent Reform is petitioning Congress to turn that $70 million back to the USPTO, to end fee diversion in Fiscal 2011 and beyond, and authorize the USPTO to keep all the fees it collects.

AIPR President Alexander Poltorak was recently quoted in an article, “Patent Office Set to Lose $70 Million Unless Congress Acts,” that appeared in the September 28th edition of the National Law Journal. Any diversion of funds from the PTO is a "tax on innovation," according to Dr. Poltorak. "This is not what we want to do in our country whose only competitive advantage is innovation."

On August 10, Congress authorized the U.S. Patent and Trademark Office to keep an additional $129 million in fees that it would collect over the balance of Fiscal 2010, and the USPTO announced that it would use this additional funding to hire additional patent examiners in an effort to reduce the current patent application backlog. As the end of the current fiscal year drew near, the Patent Office projected that it would collect an additional $70 million in fees over and above the additional $129 million it was authorized to keep.

On September 29, Alexander Poltorak wrote to:
• Sen. Barbara Mikulski, Chairperson of the Senate Appropriations Sub-Committee on Commerce, Justice, Science and Related Agencies
• Sen. Richard Shelby, Ranking Member of the Senate Appropriations Sub-Committee on Commerce, Justice, Science and Related Agencies
• Rep. Alan Mollahan, Chairperson of the House Appropriations Sub-Committee on Commerce, Justice, Science and Related Agencies
• Rep. Frank Wolf, Ranking Member of the House Appropriations Sub-Committee on Commerce, Justice, Science and Related Agencies

In his letter, Dr. Poltorak urged these members of Congress to enable the USPTO to keep the additional $70 million it collected in fees in Fiscal 2010, and to eliminate fee diversion in the agency’s Fiscal 2011 budget. “Permitting the U.S. Patent and Trademark Office to keep all the fees it receives to fund its own operations is fair, common sense, practical and a sound investment in the future of this country,” wrote Dr. Poltorak. “We urge you to enact legislation that will enable the USPTO to keep for its own use the approximately $70 million it will collect in Fiscal 2010 over and above the current Congressional authorization, and to keep all fees in Fiscal 2011 and beyond.”

The Fiscal 2011 (October 1, 2010 through September 30, 2011) budget for the U.S. Patent and Trademark Office is currently proposed to be $2.322 billion by the House Appropriations Sub-Committee on Commerce, Justice, Science and Related Agencies, with fees to be collected by the agency also projected to be $2.322 billion. On the surface, it appears that this budget includes no fee diversion. However, American Innovators for Patent Reform has learned that the USPTO submitted a higher estimate of revenue for Fiscal 2011. That means that fees collected by the U.S. Patent and Trademark Office over the authorized $2.322 billion would not go to the Patent Office, but be diverted to the U.S. Treasury.

Before adjourning on September 30, Congress passed a Continuing Resolution that rolls over funding for all federal agencies at Fiscal 2010 spending levels. When Congress re-convenes after the November election, it will address funding for all federal agencies, including the U.S. Patent and Trademark Office.

We urge all AIPR members – as well as all Americans concerned about keeping America the global leader in innovation – to write to your two U.S. Senators and your U.S. Representative requesting that they return the $70 million surplus from Fiscal 2010 to the USPTO, and that they end fee diversion in the Patent Office’s 2011 Fiscal Year budget!