Funding for Fiscal Year 2011 has been a thorny issue for quite a while now. Congress did not pass a Fiscal Year 2011 budget in the Fall of 2010, as they are supposed to do. It is widely believed Congress punted on this responsibility because of the 2010 elections and fear of the electoral response to budget negotiations in the election cycle. That, however, lead to a series of Continuing Resolutions that funded the government on a limited basis. The last Continuing Resolution (or CR) ran out on April 8, 2011, with an 11th hour agreement, which was ultimately passed by Congress and signed into law by President Obama the following week. When the dust had settled the United States Patent and Trademark Office did not fare well at all, with $100 million be diverted from the Patent Office. That lead to the Office today announcing severe austerity measures because they don’t have the funds available to operate as a going concern.
Employees of the USPTO learned today about these unfortunate choices necessitated by Congress choosing to inadequately fund the Patent Office.
- All overtime is suspended until further notice.
- Hiring for new positions and backfills is frozen for rest of the year.
- Funding for employee training will be limited to only mandatory training for the rest of the year.
- The opening of the planned satellite office in Detroit is postponed indefinitely. Consideration of other satellite offices is also postponed indefinitely.
- Only limited funding will be available for mission-critical IT capital investments. No funds are available for the long needed IT update.
- The much anticipated and highly touted Track One expedited examination program will be postponed until further notice.
- All business unites will be required to reduce all non-compensation related expenses, including travel, conferences and contracts.
- Funding for contracting of Patent Cooperation Treaty (PCT) searches will be significantly reduced.
How the mighty have fallen. Did you know that none other than Thomas Jefferson was the first patent examiner in the United States? See Historic Press Releases. Did you know that from 1841 to 1876 the Declaration of Independence was entrusted to the Patent Office and put on public display? See Declaration of Independence A History. Did you know that in 1865 President Abraham Lincoln’s second inaugural ball was held in the model room of the Patent Office? See Inaugural Ball. How is it possible that an Agency with such history is being underfunded? It would be one thing if Congress were willfully ignoring the Patent Office, and frankly that would be better. Congress is willfully taking money from the revenue generating Patent Office, which is nothing more than the imposition of a national innovation tax.
I am disgusted beyond words. The United States Patent and Trademark Office is a user fee funded agency. Not a single penny of taxpayer money goes to the USPTO! To the contrary, since 1992 Congress has diverted approximately $1 billion of fees collected by the USPTO for purposes other than running the agency, which is why the Patent Office is an agency in decline. The diversion of these fees explains that fact that as of the end of March 2011 there are still over 708,000 patent applications that are awaiting first consideration by a patent examiner. Rather than hiring and authorizing overtime for the most productive patent examiners the PTO has to throw up its hands and cease trying to make progress, treading water at best, but more likely drowning. Pathetic!
March 2011 statistics demonstrate that the time to a First Office Action is on average 25.3 months, and when you factor in the filing of a Request for Continued Examination the average pendency of applications is 41.6 months. What is an RCE? It is what you file when you reach the end of an examination without having a patent capable of being issued. If you don’t want to give up you pay a fee for additional consideration by the Patent Office. I always tell my clients that they need to factor in the filing of one RCE. This is because in the first review the patent examiner will touch the application 2 times, and it really takes about 3-4 touches from the examiner in order to negotiate allowable claims. That means you need to file an RCE, and in cases that have an RCE filed the average pendency of an application is 63.3 months — that is over 5 years!
There is no great surprise why we are having a jobless recovery. Innovation can lead us to greater job creation but most commercially relevant innovation stays stagnant on the shelfs of the Patent Office for an average of 5 years or more. In many cases that is well past the useful life of the technology, making obtaining a patent largely an academic exercise.
Simply put, patents lead to investment, investment leads to job creation. If we want job creation we simply cannot tolerate a Patent Office that has third-world IT systems and is so underfunded that it cannot actually do what it is supposed to do, which is examine patent applications and issue patents on deserving innovations.