Congress's 2011 Budget Deal Leaves PTO With $2.9 Billion, Forgoes 15% Surcharge

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The agreement between Republicans and Democrats that averted a government shutdown provides for a $2.09 billion budget for the Patent and Trademark Office for the fiscal year ending Sept. 30.

Though that figure is well below the $2.322 billion the agency requested, the appropriation would not authorize the 15 percent surcharge on most fees that the PTO sought and that would have generated $224 million in fiscal year 2011. The $2.09 figure, then, is actually only $8 million short of the non-surcharge figures originally projected.

On the other hand, in FY 2010, the PTO collected $2.068 billion in application and maintenance fees for patents and trademarks, so the FY 2011 appropriation represents only a modest one percent increase.

Indeed, a BNA source at the PTO, speaking on background, said that the agency is currently projecting $2.2 billion in FY 2011 fee collections. While that year-to-year increase of six percent may be good news showing the health of the U.S. economy, it means that appropriators in Congress will divert $110 million to other governmental uses unless additional legislation gives that money back to the PTO.

The American Intellectual Property Law Association issued a press release summarizing letters it sent to House and Senate leaders April 12 that “expressed deep concern about the serious shortfall in the current legislation to fund the U.S. Patent and Trademark Office.”

Noting the prospect of diversion of the additional funds collected, the AIPLA complained that “the bill lacks the appropriations 'buffer' language included in previous bills to ensure that the Office may utilize the fee revenue that exceeds the original projected collections for the fiscal year.” The “buffer” typically included in appropriations in the past has been $100 million or more.

The Intellectual Property Owners Association published a story on its website making the same point about the absence of a buffer in the legislation. The IPO's Executive Director Herbert C. Wamsley called the outcome “extremely disappointing” and said the organization is “continuing to urge more funding for the USPTO.”

By Tony Dutra