Congress convened in a rare session last Sunday. On that sleepy news day, the U.S. Senate passed an appropriations bill leaving the U.S. Patent and Trademark Office funding for 2010 essentially the same as 2009. President Obama should send this bill back. The USPTO is solely funded through fees. But Congress controls the purse strings. The USPTO has fewer examiners now than it did at the start of this year. The agency faces a $200 million budget shortfall. It’s instituted a hiring freeze and can’t pay for needed IT upgrades. Why Congress would leave the USPTO underfunded to the tune of $200 million – particularly during a time of nascent national economic recovery – is vexing.
Worse, the bill omitted language that would have allowed the USPTO to realize up to $100 million more if actual 2010 fees exceed estimates. Excess revenue would be diverted to the Treasury. Diverted. To. The. Treasury. My reaction was a head-slapping WTF!
The late Bob Rines and other IP warriors fought fierce battles against fee diversions years ago. While they lost their legal tussle, they prevailed when the government ended those diversions. Allowing fee diversions to resume – should it come to that – when the USPTO faces so many challenges is a wholly misguided reversal of previous policy.
I met with USPTO head David Kappos earlier last month. He made a compelling case that his office should be allowed to set (read: raise) fees and institute certain policies without Congressional approval. Innovation happens at light speed. Waiting for an act of Congress to raise fees and deliberate on agency policy hamstrings the USPTO and by extension innovation, Kappos argued. I agree.
He needs to raise fees to hire more examiners. He needs more examiners to tackle the persistent backlog of patent applications and, more pressing, pendency. The number of pending applications was 735,961 in 2009, a drop from an all-time high of 771,529 in fiscal year 2008. Yet it’s not a concrete trend and it likely has very little to do with increased efficiencies at the USPTO.
More applicants than ever are abandoning applications, according to the 2009 Performance and Accountability Report, issued mid-November. What it doesn’t show is why. Many likely are bailing because of frustrating, costly delays. It now takes on average 34.6 months to get a patent, compared with 29.1 months in 2005.
Kappos is instituting sound policies to address the backlog. I like his proposal to fast-track patents for independent inventors and small entities, provided they abandon one of their less-pressing applications. I appreciate the argument that no one should be compelled to abandon a viable patent application for the chance at jumping to the head of the line. But it’s voluntary. On this score, he’s demonstrating greater concern for his constituency than the previous regime.
His other fast-track initiative for eco-friendly patent applications is another winner. Likewise, Kappos has improved relations with USPTO union workers, is overseeing a Lean Six Sigma Process Improvement Program, and seeks to continue telework and other efficiencies, including sharing certain examination work with foreign patent offices to reduce redundancies.
Kappos is doing his part to help rehab the troubled USPTO. Too bad Congress is leaving him twisting in the wind.