White House continues to divert patent, trademark funds

The Bush administration will propose a 21 percent budget increase for the Patent and Trademark Office for fiscal 2003, but it also wants to continue the practice of siphoning money from PTO fees to meet other funding needs, according to administration officials.

The administration has earmarked $1.37 billion for the PTO in fiscal 2003, a 21.2 percent increase over the fiscal 2002 funding level, PTO chief James Rogan said during a teleconference Thursday.

Rogan praised the budget hike: "Nobody can argue with the fact that it is an incredible investment in the work here," particularly when budget increases for non-defense agencies average 3 percent.

David Peyton, director of technology policy at the National Association of Manufacturers, is pleased about the budget increase, but he said it is not a relevant comparison to other agencies.

"The relevant comparison isn't between the PTO and the Weather Service. The relevant comparison is how much work they have to do," Peyton said, and unless the office gets enough money to significantly boost staff, make all of its functions electronic and put the proper management structure in place, the significant backlogs that have plagued the agency will remain.

Rogan also noted that the administration has proposed a one-year surcharge on patent and trademark fees that is expected to raise $207 million. Of that sum, $162 million would be earmarked for homeland security and economic security, and $45 million would go to PTO. The surcharge would add 19 percent to the patent fee and 10 percent to the trademark fee.

Peyton argued that the proposed diversion of surcharge funds is "completely arbitrary," and because it is designated for homeland security and defense, anyone who complains will be "painted as unpatriotic."

The designation is "purely an accounting convention" devised because the administration had $162 million it needs for homeland security and did not want to make cuts elsewhere, Peyton said.

Rogan noted that the budget increase would help the agency hire 950 new patent examiners and fully move to electronic filing by 2004.

"One of the fights that has been going on for years is over the fee issue and the diversion of fees," Rogan said. During a time of war and recession, the agency gets a funding boost, keeps statutory fees and gets a portion of the surcharge, and that should been seen as "an incredible investment in the work we do," he said.

The additional examiners will help the agency process 60,000 more patents each year, a PTO official said. Each year, the agency gets about 300,000 patent or trademark requests, and it takes an average of 25 months to process the applications.

Peyton argued that the PTO should have gone electronic a decade ago, and unless all possible resources are channeled into digitizing the office, he will go back to Capitol Hill to urge lawmakers not to divert needed funds from the PTO.

This budget cycle is shaping up to be "another exercise in damage control," Peyton said.