User-fee structure may jeopardize Patent Office improvements

The Patent and Trademark Office (PTO) implemented many of the improvements envisioned in its strategic plan by making spending cuts, one of the office's top officers said on Monday, but without congressional approval of legislation to raise fees the progress is in jeopardy.

Thanks to spending cuts, PTO hired 300 new examiners for patent applications this year, is ahead of schedule on implementing an electronic filing system, and improved oversight and evaluation of its processes, PTO Deputy Director Jonathan Dudas said at the Intellectual Property Owners Association's "PTO Day."

But he added that the improvements are "all in jeopardy" if Congress does not approve a bill that would let the agency raise its fees and assure that the money goes directly to the PTO rather than being diverted by the administration to other agencies. To make improvements, Dudas said, PTO "had to make cuts that absolutely can't be sustained," such as not buying new computers, dramatically curtailing travel and cutting training.

The legislation he mentioned is stuck in the political process, and the level of funding set to be provided through the appropriations process in fiscal 2004 is not anywhere near enough to make the necessary changes to the office, he said.

One of the big policy concerns has been the diversion of PTO fees to fill budget gaps throughout the government, but currently the appropriations process just meets the budgetary needs of the agency, so fees are not being diverted, Dudas said.

Unless the agency gets the money to hire more examiners and make other changes, the number of patents awaiting approval could jump to more than 1 million by 2008, he said. The average wait for patent decisions also will increase. The goal was to hire 750 examiners this year instead of just 300, he said.

The "most critically important" step is getting Congress to approve the fee increases outlined in legislation offered by Rep. Lamar Smith, R-Texas, Dudas said.

There were rumors that the bill might be added to the must-pass omnibus spending bill for fiscal 2004, but that did not happen. Dudas said he is unsure if there will be an opportunity to add the PTO language to that bill.

However, Dudas said having PTO funding being discussed alongside issues like Medicare at the end of the session gives him hope that lawmakers understand the importance of PTO reform and will debate the legislation.