Posts Tagged: "budget"

According to Eric Perrott, a trademark and copyright attorney with Gerben Law Firm, chatter among U.S. trademark officials and attorneys regarding the increase of potentially fraudulent Chinese applications became more serious about a year ago. At that time, people were noting an increase of applications from specific Chinese provinces including Shenzhen, considered by many to be the Silicon Valley of China. “There’s a clear pattern that you can tell with some of the applications,” Perrott said. “They appear to be marks with arbitrary names or made-up jumbles of words.” Perrott notes that filing for marks that have no translation in a foreign language allows an applicant to file a trademark application on the cheapest basis possible, removing the need to file a $50 translation fee.

This afternoon the House Budget Committee released a non-binding budget blueprint titled Building a Better America: A Plan for Fiscal Responsibility. As a part of this proposed fiscal year 2018 budget the House Budget Committee is proposing that the United States Patent and Trademark Office (USPTO) be made an independent agency.

The USPTO’s Obama holdovers Michelle Lee and Tony Scardino are simply co-opting the exact language used in Obama’s budgets for fiscal years 2015 to 2017 into Trump’s 2018 budget and then directly attributing Obama’s policies and statements to President Trump even though Trump has never taken a position on anti-patent legislation… Are these failed Obama era policies now carried over into the Trump Administration by Obama holdovers simply mistakes? Some sort of scrivener’s error? Or is it a direct attempt to carry over failed Obama policies in the name of President Trump? You be the judge. Perhaps you can tell me: Is Trump being googled by Obama holdovers? Or is Trump himself the swamp?

Under President Trump’s FY 2018 budget the USPTO will receive $3,586,193,000 from fees collected and to be available until expended. This appropriation would result in $0 being provided to the USPTO from the general fund of the United States. Any fees collected by the USPTO in excess of that amount would be deposited into the Patent and Trademark Fee Reserve Fund and remain available until expended. There does not appear to be any mention of any fee diversion anywhere, which would mean the USPTO has dodged the fee diversion hands of an often greedy federal government who over the last 30 years has frequently diverted user fees to other purposes.

With a proposed budget of $7.8 billion and $1 billion in cuts to identify, questions arise about where those cuts will come. Is the USPTO budget safe?Will the cuts be across the board cuts with the USPTO being asked to account for 35% of the $1 billion, which would reduce the USPTO budget to $2.967 billion for FY 2018? According to a chart prepared by the Intellectual Property Owners (IPO) Association, the largest single fee diversion came in 2011 when $209 million was diverted from the USPTO. If the USPTO must cut its budget by some $350 million that would far and away be the largest single year fee diversion in the history of the U.S. patent system.

Not only does the Patent Office handsomely charge for the acquisition and maintenance of a patent, they also handsomely charges for the right to challenge those patents after issue. On its face this creates a perverted incentive. The arms dealer nature of how the AIA has transformed the Patent Office is not lost on many within the industry. Add in the insecurity of the USPTO budget and the fact that the Patent Trial and Appeal board (PTAB) directly reports to the Director, thereby not enjoying any true judicial autonomy (at least on paper) and you would be hard pressed to have come up with a more conflicted structure or system.

What Kasich doesn’t explain, however, is how he achieved a balanced budget. As part of the Kasich-Clinton deal the budget of the United States Patent and Trademark Office (USPTO) was raided for additional money to help plug shortfalls elsewhere. The appropriations cap placed on the USPTO for fiscal year 1998 was $691 million, and according to the IPO $199 million was collected but diverted, which means 22.4% of fee collections were taken from the USPTO in FY 1998 and used for other purposes… Republicans, including Kasich, love to lay claim to the Reagan legacy. But President Reagan was a supporter of the patent system. He never would have tolerated raiding the USPTO budget for any reason. We know that because it was President Reagan that demanded a build up of the USPTO as part of his overall strategy to make America great again and compete with the Japanese for technology dominance.

At the end of her speech Pallante mentioned that she had just received a letter from the Senate Judiciary Committee, specifically sent by Senator Chuck Grassley (R-IA), who Chairs the Committee, and Ranking Member Senator Patrick Leahy (D-VT). The letter from Grassley and Leahy asked the Copyright Office to undertake a study and to report back on a number of software copyright issues. Pallante read a portion of the letter received from the Senate Judiciary Committee, which said: “As software plays an ever increasing role in defining consumer interactions with devices and products, many questions are being asked about how consumers can lawfully use products that rely on software to function.” She then remarked that this inquiry goes away from copyrights merely protecting expressive content, and further pointed out that the Senate is asking about works that are protected by copyright but still functional.

It’s unfortunate that NASA has had to operate in such a unfavorable climate, being pushed for more and more answers out of its space exploration program while suffering uncertainty in its federal funding amounts. It would be a mistake for Congress to ground NASA unless fine details on its Mars program are forthcoming. Having a goal oriented target has proven helpful for NASA, but scientific discoveries and the innovations that come therefrom are not easily or even appropriately quantifiable on a spreadsheet, business plan or budget. Historically, NASA space exploration mission objectives have led to great benefits for the American people, even when their plans and mission goals have been a little light on the technical details.

The Innovation Protection Act, one of the lesser known patent bills percolating in Congress over the past few years, would provide a source of permanent funding for the USPTO. The fees the USPTO collects would remain available to the USPTO until expended. This common sense idea has been floated for years, but it never seems to go anywhere. Appropriators have been unwilling to commit to allowing the USPTO to keep user fees, diverting $1 billion worth of collected fees from the USPTO according to the Intellectual Property Owners Association. This may not seem like much but is a lot of money, but for an agency the size of the USPTO it is a lot of money.

This latest budget increases the amount of money that will be available to the United States Patent and Trademark Office, although the amount specifically appropriated is less in FY 2016 than it was in FY 2015. This has lead some to incorrectly claim that the USPTO will have access to less funding in FY 2016 compared with FY 2015. According to the IPO, the FY “2016 budget proposes that the agency will draw from its operating reserves and other income to fund its total estimated obligations of $3.499 billion, including enhanced investment in its IT infrastructure.”