After several years of often bitter negotiations, Congress has passed compromise legislation to reform the operations of the Patent and Trademark Office, making the office the second performance-based organization in the federal government.
The bill, which passed the House in August by a vote of 376-43, was rolled into the Senate's final omnibus appropriations bill. That bill passed overwhelmingly on Nov. 19 and President Clinton is expected to sign it shortly.
The legislation, dubbed the American Inventors Protection Act, will give the PTO increased flexibility in hiring and retaining personnel and in procuring new equipment. It also contains several changes to U.S. patent law, reduces patent fees, and directs the agency to work harder to encourage more independent inventors to file patent applications.
Though the bill will significantly increase PTO autonomy, the agency will remain part of the Commerce Department, and patent and trademark examiners will retain their civil service status. The Patent Office Professional Association, the PTO's largest union, did not oppose the measure after vehemently opposing previous proposals that would have removed examiners from the civil service.
PTO Commissioner and Assistant Secretary of Commerce Q. Todd Dickinson praised the bill this week. "I am particularly pleased that the legislation offers the agency the management and administrative autonomy it needs to provide better service and be more responsive to our customers."
Specifically, Dickinson praised the bill's provisions that free the agency from government procurement regulations, a huge boost for an agency that's already spending over $150 million/year on upgrades to its computer systems. PTO managers estimate that freedom from government procurement rules will reduce purchase delays by 60 percent.
The bill also reorganizes the top management positions at the agency. While the PTO commissioner will continue to be appointed by the President, the directors of the patent and trademark divisions, the number two and three positions within the agency, will now be hired by the Secretary of Commerce. The two will sign performance-based contracts that could yield large salary bonuses if a set of predetermined goals are met. The legislation, however, does not provide as much in the way of general personnel flexibilities as PTO managers had sought, though the agency will no longer be subject to government hiring freezes.
Another provision establishes an advisory board consisting of representatives from major corporations, independent inventors and the agency's unions. The board will meet regularly with PTO management in an effort to break down tensions between the agency and patent applicants.
And at least theoretically, the legislation will provide the PTO with more funding for facility upgrades, salaries, and other expenses. The agency is presently funded entirely by fees charged to patent and trademark applicants, but over $100 million of the agency's take is routinely skimmed off to pay for unrelated government programs. In fiscal 1999, Congress earmarked $116 million in PTO fees for other expenditures. Under the legislation, Congress could still spend PTO fees on non-PTO programs, but would have to reimburse the agency at some later date.
The PTO reforms are slated to go into effect early next year. The office is the second federal agency to become a so-called performance-based organization, a structure that includes procurement and personnel flexibilities and large performance bonuses for upper management. Last year, Congress made the Education Department's Office of Student Financial Assistance the government's first performance-based organization.