America Invents Act – Patent Office Funding

Under-funding of the Patent Office, and its consequences,  is well-documented.

The situation boils down to Congress returns only a portion of the fees collected by the USPTO from applicants, patentees, and others through other processes such as reexaminaton.  Due to chronic under-funding, resulting in a reduced number of patent examiners, a backlog of patent application has grown for decades, causing an ever-increasing delay between submission of an application and a first response from the examiner.  While inefficiencies in the USPTO may partially reduce this delay, it is inescapable that more funds are needed to make a meaningful reduction in the pendency.

Congress comes to the rescue.  Right?

The answer to that question comes down to the subtle differences between the way the USPTO was funded pre- and post-AIA.  Pre-AIA, all the fees collected by the USPTO were directed into Congress’ general fund, with which it funds all programs that do not have special allocations already made.  From that enormous pot, Congress decides how much to dole out to various programs and agencies, including the USPTO.

 

Post-AIA, the fees collected by the USPTO can no longer be put into Congress’ general fund.  Instead, a
“Reserve Fund” is created in the Treasury Department, into which all fees that are collected that exceed the amount allotted to the USPTO by Congress (that part doesn’t change) for the fiscal year are deposited.

In my, and many others in the industry, opinion, this is a step in the right direction.  Although the funds are not immediately available for Patent Office use, no fee collected by the Office can be siphoned off to fund other government programs.  In a way, the new funding strategy self-insures the Patent Office against unexpected revenue shortfalls, either in the Office itself or for the entire government.  Congress can always reduce the amount of funds they allocate to the USPTO, but any reduction will not free up money to be used elsewhere.  This seems to keep Congress from shooting itself in the foot by continuing the practice of under-funding the USPTO.  The Government has recently exulted the benefits IP provides to the U.S. economy.  Conventional and popular political wisdom tells us “jobs = tax revenue,” so by removing barriers to acquisition of IP, i.e. long pendencies in examination, there is a likelihood that economic growth will result.  Preventing Congress from remedying near-term problems with solutions having long-term detrimental effects makes everyone, Congress and the public, all the better off.