In 1990, Congress substantially increased the fees associated with obtaining and maintaining patents and trademarks. But what Congress gives it can also take away—which is exactly what it’s been doing.
The fee increase was designed to recover the costs of processing patent and trademark applications. While user fees may cover more than the cost of operating the United States Patent and Trademark Office (USPTO), some of those fees may be siphoned off to a general revenue pool to fund other government programs.
This diversion of user fees to fund unrelated government activities is unfair to those who pay the fees, and it’s damaging to our nation's economic health and progress.
According to Marla Page Grossman, former minority counsel to the Senate Judiciary Committee under Senator Leahy (D-VT), and author of the new IPI report, Diversion of USPTO User Fees: A Tax On Innovation, the practice of diverting USPTO user fees to the general Treasury—and then forcing the USPTO to rely on the uncertainty of annual congressional appropriations for funding—undermines the rhetoric of pro-innovation government policy.
Patents are crucial to fostering invention, innovation and investments, all of which are essential to the core strength of our nation’s competitiveness in the global economy. Redirecting patent fees to fund unrelated items is a tax on innovators that is not used to advance the purposes of innovation.
User-fee diversion has deprived the USPTO of funds necessary to effectively plan for long-term personnel and operating needs. The result is that the patent system is slower, less efficient and more costly than necessary. By March 2008, the number of backlogged applications was approximately 760,000, hindering the public’s access to intellectual property protections.
This situation cannot be allowed to continue. We only mortgage our future as innovation leaders by continuing to drain earned revenue from the PTO to send it to amorphous government projects.
It is fundamental to any meaningful patent reform that the USPTO be able to rely on a permanent and stable source of funding to effectively engage in the long-term planning necessary for the issuance of timely, high-quality patents.