Federal Regulators ‘Patent’ Another Bad Idea

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The shell game called the federal budget added another nut recently as media reports revealed that over the last 20 years, approximately $1 billion in fees paid by patent applicants has been diverted from its proper use at the United States Patent Office (USPTO).

Critics argue that, as a self-funded agency, USPTO should not be impacted by the “Sequester” game of chicken both sides of the aisle are playing.

The Medical Device Manufacturers Association (MDMA) slammed the USPTO fund shift in a May 31 letter to lawmakers charging, “This unwarranted diversion of fees has resulted in more than 600,000 unexamined patent applications and more than 31 months in the average patent pendency time – the wait time from a patent application’s filing until final action on the application by the USPTO.”

MDMA praised former USPTO Director David Kappos for making significant progress toward fixing this mess, but worried that those steps in the right direction would be  blocked if, “once again USPTO fees do not remain at the USPTO.

Many of those concerns were echoed by the Innovation Alliance, which noted  that the Office of Management and Budget (OMB) made the “unfortunate” decision to divert fees paid by patent applicants from their intended use at the USPTO to general government spending.

“This action is contrary to the plain language of the America Invents Act (AIA), which established a Reserve Fund into which all fees are to be deposited solely for use by USPTO, and unambiguous congressional intent,” said the Alliance. “If OMB’s decision is allowed to stand, patent certainty, U.S. competitiveness, and ultimately job creation will be adversely impacted.”

The Innovation Alliance offered up a discouraging history lesson,  “Congress chose not to set up a dedicated revolving fund for the patent applicants’ fees, Congressional leaders promised not to return to the practice of fee diversion.  OMB’s decision to apply the sequester to patent fees breaks that promise and will hamper USPTO’s efforts to reduce the almost three-year backlog of patent applications.   Modest progress has been made on the backlog in recent years, and it would be disappointing if the backlog began to move in the wrong direction again. ”

This allegedly happened during the Clinton, W. Bush and Obama administrations, and possibly earlier, making it a truly bipartisan bad idea.

Help may be on the way.

Senator Tom Coburn, (R-OK), has proposed an amendment that would “provide an immediate solution to this crisis” by creating a lockbox—a new revolving fund at the Treasury—where user fees that are paid to the PTO for a patent or a trademark go directly into the revolving fund for PTO to use to cover its operating expenses.

Under Coburn’s amendment, Congress would not have the ability to take those fees and divert them to other general revenue purposes.

It’s unclear what kind of traction a distracted Senate will give his plan. But let’s give that man a patent. He’s earned it.

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Federal Regulators 'Patent' Another Bad Idea
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Federal Regulators 'Patent' Another Bad Idea
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The shell game called the federal budget added another nut recently as media reports revealed that over the last 20 years, approximately $1 billion in fees paid by patent applicants has been diverted from its proper use at the United States Patent Office (USPTO).
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