House Bill Would Let USPTO Keep All Of Its Fees
- Oct 30 2013 |
- Category: News
The USPTO is entirely funded by user fees, but it has often not been able to keep all of that money. Many times in the past, Congress has shifted a portion of the fee revenue to other agencies, including this year, when the office had to reduce its budget by about $120 million because of the across-the-board budget cuts known as sequestration.
Rep. John Conyers, D-Mich., introduced the Innovation Protection Act, H.R.3349, to permanently end any so-called fee diversion. He said at a hearing Tuesday that the inability of the USPTO to keep all the fees it collects is “the single most important problem facing our patent system today.”
“We need to give our examiners the resources they need to review and analyze the hundreds of thousands of complex and interrelated patent applications they receive every year,” he said.
The bill would establish a “public enterprise fund” into which all fees collected by the office would be deposited. It states that the money in the account “shall be available to the [USPTO] director until expended.” If passed, the bill would shield the USPTO from cuts even if sequestration continues, Conyers said.
As the House Judiciary Committee debated a separate bill aimed at reducing frivolous litigation by so-called patent trolls, Conyers said that fully funding the patent office could help end such suits.
“The most effective step we can take in responding to abusive patent litigation is making sure poor quality patents are not issued to begin with,” he said.
During his comments at the hearing, former USPTO Director David Kappos, now an attorney at Cravath Swaine and Moore LLP, urged the committee to pass Conyers’ bill and said that allowing full access to USPTO fees “must be job one.”
The America Invents Act created new USPTO proceedings that will require the office to increase staff, while it keeps working to reduce a backlog of pending patent applications and improve patent quality, he noted. But because the patent office is not able to keep all of its fees, “we’re looking at an agency having its lifeblood being drained away,” he said.
The practice of fee diversion was a key part of the debate over the America Invents Act before it was passed in 2011. An early version of the patent reform bill included a measure similar to Conyers’ bill that would let the USPTO keep all of its fees. Supporters said the government had diverted $800 million in patent office fees to other agencies since 1992.
However, the provision was removed because of opposition from some lawmakers who said letting the USPTO keep all of its fees would rob Congress of oversight authority over of the office.
Rep. Lamar Smith, R-Texas, added an amendment to the AIA that he said would end fee diversion and ensure oversight, but was widely criticized by attorneys and the Obama administration as falling short of that goal. After contentious debate, it was included in the version of the bill that was enacted.
Under the amendment, Congress appropriates a set amount to the USPTO each year. Any fees the office collected above that amount is placed into a reserve fund that Congress can then authorize the USPTO to spend on its operations.
Despite that provision, and the fact that the office receive no money from taxpayers, the USPTO was subjected to budget cuts this year when the sequester took effect.
When the federal government shut down this fall, the USPTO said it had enough money to keep operating for a few weeks, but would have to close if the shutdown continued beyond that point, because Congress would not have appropriated more of its collected fees. The shutdown ended before the office had to close.
Perhaps aimed at the concerns regarding congressional oversight, Conyers’ bill would require the USPTO director to submit an annual spending plan to Congress summarizing specific expense and staff needs, and to allow an annual independent audit of the office’s financial statements.
Article provided by: Law360 – THE NEWSWIRE FOR BUSINESS LAWYERS