150+ Organizations Call for End to USPTO Fee Diversion

(A. Kotok)

Some 154 organizations sent a letter yesterday asking the House of Representatives leadership to preserve a section in the proposed patent reform legislation that lets the U.S. Patent and Trademark Office use collected patent fees to fund its operations. The organizations — representing companies, universities, and not-for-profit groups — sent the letter to Speaker of the House John Boehner and Democratic leader Nancy Pelosi.

Section 22 of H.R. 1249, the America Invents Act, creates the United States Patent and Trademark Office Public Enterprise Fund that captures all fees paid by inventors for patent review and filing. While the bill is still officially being debated by the House Judiciary Committee, floor debate and possibly a vote could occur as soon as this week.

The letter notes …

Unlike most other federal agencies, the USPTO earns fees paid by inventors, companies, research institutions, and universities that can offset every taxpayer dollar appropriated for its operations.  The sequestration of funds envisioned by Section 22 is necessary to prevent user fees collected from patent and trademark applications from being redirected to other non-USPTO purposes. Section 22 is necessary because over the last two decades more than $875 million in user fees has been redirected to other governmental purposes in what amounts to a hidden tax on innovation.

The letter from the organizations was prompted by another letter last week from House Budget Committee chair Paul Ryan and Appropriations Committee chair Harold Rogers, both Republicans, who opposed Section 22’s language in the bill. They called the language “putting PTO spending on auto-pilot” that would hand Congress’s power of the purse “to the Obama White House, and essentially eliminate the ability of Congress to perform substantive oversight of the PTO.”

In response the issue of oversight, the organizations’ letter notes …

If enacted, Section 22 would not abolish or hinder the oversight powers of Congress.  Congress will still be able to direct spending where needed within the USPTO but Congress will not, however, be able to divert funds or otherwise reduce the amount of revenue that the agency takes in and holds in reserve.  Congress may still conduct oversight hearings on USPTO operations.

The list of organizations signing the letter extends well across the ideological spectrum from the U.S. Chamber of Commerce to the AFL-CIO. Signers include most research universities, industrial companies (e.g., Caterpillar, Kodak, Weyerhaueser), information technology companies (e.g., IBM, Apple, Intel), and biotech/pharmaceutical companies (e.g., Eli Lilly, Novartis, Pfizer).

Read more: Regulatory Agency Funding Increases in Federal Budgets

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