Issue 108 | September 16, 2003
USPTO Fee Change Update
 With the yearly fee increase for changes in the Consumer Price Index about to take effect at the U.S. Patent and Trademark Office on October 1, 2003, the current spending bills moving through the upper and lower houses of Congress make fee restructuring and an end to fee diversion appear unlikely for the 2004 fiscal year.

The USPTO had been lobbying the legislature for passage of its "Fee Modernization Act of 2003" (discussed in Issue No. 52 of this newsletter) as a source of additional funding from which to achieve the objectives outlined in its Strategic Plan. However, both the Senate appropriations bill, "S 1585," and the House appropriations bill "HR 2799," for next year fall short of the PTO's "budget estimate" request:

Appropriations, 2003$1,182,000,000
Budget estimate, 2004$1,395,055,000
House allowance$1,138,700,000
Committee recommendation$1,217,460,000

According to the Senate's Committee Report 108-144 on its version of the appropriations bill,
The Committee vigorously supports the USPTO's efforts to attain these objectives, but questions the assumption that past failure to attain these objectives was the result of inadequate funding and that future ability to attain these objectives is dependent upon the hiring of hundreds, if not thousands, of additional personnel. In particular, the Committee is aware of technologies that would greatly improve the quality of patent examinations at very low cost.

Because the legislation has not been enacted, the USPTO does not yet have the authority to increase its fees. The fiscal year 2004 request for the USPTO, which assumes the fee increase, is therefore artificially high. While the Committee supports the objectives of the Strategic Plan, the Committee's allocation [from the general fund] will not allow it to absorb the difference between funding requested and funding available. Until the legislation and the fee increase are enacted into law, the Committee expects USPTO to immediately begin implementing the programs and achieving the objectives of the Strategic Plan within current funding levels.
House Report 108-221 for the House version of the appropriations bill similarly notes that
The Committee remains concerned that the Congressionally-directed five-year Strategic Plan for the PTO has not been implemented. This plan calls for some of the most sweeping changes to the patent review process in 200 years, and the Committee supports these recommendations. However, the Committee is concerned that a number of improvements proposed in the Strategic Plan will not be implemented. The Committee is not convinced of the prudence of appropriating additional resources for a process that is in need of and is undergoing a systematic overhaul.
So, there it stands in a classic political gridlock. Congress says it wants action before funding, and the PTO says it needs funding before taking action. Watch for more finger-pointing, and little else, unless either side can turn this issue into a political football that resonates with the public.

For more on this issue, please contact the author, Bill Heinze (bill.heinze@tkhr.com) at Thomas, Kayden, Horstemeyer & Risley in Atlanta, Georgia USA.

The information contained in this email is provided for informational purposes only and does not represent legal advice. Neither the APLF nor the author intends to create an attorney client relationship by providing this information to you through this message.