In a financial move that could only make sense to Washington, DC politicians, the federal government, under H.R. 1473 (the Full-Year Continuing Appropriations Act) has cut $100 million from the US Patent and Trademark Office (USPTO) Budget. The move is purely political because the USPTO budget is derived directly from fees collected from inventors and entrepreneurs through filing fees. By reducing the USPTO budget, federal accountants and politicians can state to taxpayers that they have reduced federal spending by $100 million. No doubt the money taken from the USPTO will be used for other non-IP related purposes.
Although $100 million only about 5% of the USPTO’s annual budget, the cuts ask for $100 million from the next five months, which would represent a 10% cut in spending over that time period.
The fee reduction has had an immediate affect on the operations at the USPTO. Last week, David Kappos, the USPTO Director wrote:
In view of the funding cuts reflected in the final budget and affecting the U.S. government as a whole, we will be unable to expend the additional $85-100 million in fees that we will be collecting during this fiscal year—funds that we had anticipated being able to use to fund operations this year.
… Further, I am mindful of the fact that we may very well be operating at the FY 2011 level for the foreseeable future. As a result, we have had to make some difficult decisions in order to ensure the responsible stewardship of the agency.
There have also been numerous additional policy changes that include:
- No overtime;
- Hiring freeze;
- Training limited to “mandatory training”;
- PCT search funding is cut severely;
- Detroit satellite office is indefinitely postponed;
- IT infrastructure investments eliminated except for “mission-critical” issues;
- Track One expedited patent examination program (Fast Track) indefinitely postponed; and
- Mandatory reductions in expenses including travel, conferences, and other contracts.
The Fast Track program was to help expedite the processing of patents, in view of the current 700,000 patent application backlog. The added fee cost for the Fast Track option was to be $4000/application. On a positive note, the Fast Track would be of more benefit to large companies than to independent inventors, so to some extent, the postponement of the Fast Track tends to puts independent inventors back on a level playing field with large corporations.
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