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Reflections on 2013 and Some Thoughts on the Year Ahead

Posted: Monday, Dec 30, 2013 @ 7:55 am | Written by Peter C. Pappas | 4 comments
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Posted in: Guest Contributors, IP News, IPWatchdog.com Articles, Patent Reform, Patents, USPTO

2013 turned out to be a very big year for IP, and especially patents, and the year took a course that few would have predicted this time last year.  At that time, the senior team at the PTO was primarily focused on the imminent departure of our then-boss, David Kappos, and the end of what had clearly been an extraordinarily active and successful tenure.  The AIA had been almost entirely implemented, the new Patent Trial and Appeal Board was up and running, and most of us expected 2013 to be focused on implementation and execution of the AIA and the other initiatives that had been set in motion under Director Kappos.

But things turned out rather differently.  Nobody would have predicted a year ago that President Obama would personally call for additional patent reform legislation to curb patent troll litigation.  Or that a comprehensive patent litigation reform bill would speed through the House by a lopsided margin and be heading to Senate consideration with a full head of steam.  Nobody also would have predicted that the USPTO would also fall victim to sequestration and once again be denied full access to its fees so shortly after the passage of the AIA, which held forth the promise of full access to fees.  And few would have predicted that the PTO would be without stable political leadership since Dave Kappos left eleven months ago.  Or that a new Chief of Staff and a new Deputy and Acting Director would be named before a new Director was nominated.  This unusual and lengthy transition period has caused understandable concern in the IP community, but we should all be pleased that a new Acting Director has been named and will take the reins on an acting basis in just two weeks.



Sequestration Politics Places USPTO Satellite Offices on Hold

Posted: Sunday, Jul 21, 2013 @ 10:00 am | Written by Gene Quinn | Comments Off
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Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, USPTO

On Friday, July 19, 2013, Acting Director of the United States Patent and Trademark Office Teresa Stanek Rea explained on the Director’s Forum:

Today I want to update you on the progress of our satellite offices in Dallas, Denver, and Silicon Valley, locations we identified in July 2012 as part of an America Invents Act (AIA) mandate. Given current budget constraints under sequestration, our efforts to move into permanent spaces for those three locations will be delayed, but continuing to operate from the temporary spaces and striving to grow our presence in the satellite office locations remains a top agency priority.

The USPTO is getting caught up in the sequestration budget battles despite the fact that the USPTO is fully user funded. As a result the USPTO stands to lose close to $150 million in Fiscal Year 2013, which runs through September 30, 2013.

There is a legislative proposal pending in Congress that would exempt the USPTO from sequestration, which was filed by the Members of Congress that represent Silicon Valley. See PATENT Jobs Act Seeks to Exempt USPTO from Sequestration.  Silicon Valley would be the home to one of the new USPTO satellite offices if the agency had the money to open.



17 Members of Congress Push to Exclude USPTO from Sequester

Posted: Friday, Jul 5, 2013 @ 8:00 am | Written by Gene Quinn | Comments Off
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Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, USPTO

Congressman Frank Wolf

Congressman Chaka Fattah

On June 24, 2013, 17 Members of Congress wrote a letter to Congressman Frank Wolf (R-VA) and Congressman Chaka Fattah (D-PA), who are respectively the Chairman and the Ranking Member of the Subcommittee on Commerce, Justice, Science of the House Appropriations Committee.

The top three signatures belong to Congressman Mike Honda (D-San Jose), Congresswoman Zoe Lofgren (D-San Jose) and Congresswoman Anna G. Eshoo (D-Palo Alto). These Representatives collectively represent the Congressional Districts that make-up and abut Silicon Valley in Northern California. On June 28, 2013, they also introduced the Patents And Trademarks Encourage New Technology (PATENT) Jobs Act to exempt the United States Patent and Trademark Office (USPTO) from the what they sponsors called debilitating cuts imposed by budget sequestration. See PATENT Jobs Act Seeks to Exempt USPTO from Sequestration.

The letter to Congressmen Wolf and Fattah was short and to the point, saying: “We write to request your assistance in addressing the Office of Management and Budget’s (OMB) recent decision to sequester user fees which fund the United States Patent and Trademark Office (USPTO). As a result, almost $150 million in inventors’ fees in Fiscal Year 2013 have been locked in USPTO’s general fund. We request that the Approrpiations Committee allow USPTO to access the sequestered user fee funds.”



PATENT Jobs Act Seeks to Exempt USPTO from Sequestration

Posted: Friday, Jun 28, 2013 @ 3:14 pm | Written by Gene Quinn | 3 comments
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Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, USPTO

Congressman Mike Honda, one of the sponsors of the PATENT Jobs Act.

Earlier today Congressman Mike Honda (D-San Jose), Congresswoman Zoe Lofgren (D-San Jose) and Congresswoman Anna G. Eshoo (D-Palo Alto) introduced the Patents And Trademarks Encourage New Technology (PATENT) Jobs Act to exempt the United States Patent and Trademark Office (USPTO) from the what they sponsors called debilitating cuts imposed by budget sequestration. Indeed, those who have followed this issue know that during the debate and ultimate passage of the America Invents Act (AIA) much was made of the ability of the USPTO to keep its fees and use them to support ongoing business operations. Written promises were made, no binding promises were enacted as part of the legislation, and few could have anticipated that so soon after the USPTO would once again be facing a budget shortfall. See Lack of Commitment to PTO Funding.

Even though the USPTO is funded solely by patent user fees, the sequester requires cuts of nearly $150 million in the agency’s funding. Without a legislative remedy, the shortfall effectively stops the agency from opening new, highly anticipated regional patent offices across the country, including one located in Silicon Valley. See USPTO Announces Satellite Office Locations. Not surprisingly, each of the sponsors of the bill represent districts in Northern California in the greater San Jose area, which explains their keen interest in the opening of the Silicon Valley satellite Patent Office location. Honda represents the 17th District, Lofgren represents the 19th District and Eshoo represents the 18th District.

The PATENT Jobs Act would enable USPTO to access the fee revenue sequestered in Fiscal Year 2013, which would otherwise sit unused and untouchable, and would add the USPTO to the list of agencies exempt from sequestration orders. This is not a new budgetary concept. Congress has recognized the uniqueness of user-fee-funded agencies in the past, exempting them from sequestration in the Statutory Pay-As-You-Go Act of 2010. The legislation follows a bipartisan letter sent earlier this week by members of the California delegation to the Commerce, Justice, and Science Appropriations Subcommittee asking for a remedy.



AIPLA Challenges OMB on USPTO Sequestration Funding

Posted: Wednesday, May 22, 2013 @ 12:49 pm | Written by Gene Quinn | 5 comments
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Posted in: AIPLA, Gene Quinn, IP News, IPWatchdog.com Articles, Office of Management and Budget, Patents

On Tuesday, May 21, 2013, Jeffery Lewis, who is the President of the American Intellectual Property Law Association (AIPLA), sent a letter to Sylvia Matthews Burwell, who is the Director of the Office of Management and Budget (OMB). In this letter Lewis, speaking on behalf of the AIPLA and its 15,000 members, challenged the legal interpretation of the budget cuts the Obama Administration says are required of the USPTO thanks to sequestration.

In the letter Lewis points out that the USPTO is at a critical point in the implementation of the America Invents Act (AIA), and this significant reduction in USPTO funding is based on an erroneous legal interpretation. Lewis also points out that the cut in funding to the USPTO is contrary to the promises made at the time the AIA was passed.

Those of us who followed the AIA debate and passage knew that it would only be a matter of time before the government reneged on its assurances that the USPTO would be allowed to keep 100% of the fees it collected. Senator Tom Coburn (R-OK) championed an amendment that ultimately failed, which would put into the Statute the requirement that 100% of fees collected be allowed to be used by the USPTO. That was rejected by Republican House leaders, who in turn promised in a letter that they would still provide 100% funding. A promise in a letter is, of course, worthless in Washington, DC.



“Substantial Budgetary Uncertainty” for the USPTO

Posted: Thursday, Apr 18, 2013 @ 10:08 pm | Written by Gene Quinn | 8 comments
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Posted in: Gene Quinn, IP News, IPWatchdog.com Articles, Patents, USPTO

Late this afternoon Teresa Rea, the Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, sent an e-mail to those who work for the USPTO. The e-mail was simply titled: “A Message from Teresa Stanek Rea.” The message was simple, the USPTO is facing “substantial budgetary uncertainty,” which is due to sequestration.

At this point I don’t know exactly the level of financial crisis at the USPTO, but it doesn’t sound good. The USPTO is a fee generating entity that runs largely on the fees it collects and this year projections have been well above realized revenue. With there already being a deficit, looming sequestration cuts could significantly harm USPTO productivity, which will cause harm to the innovation industry in the United States.

This is particularly alarming given the recent substantial raising of patent related fees for most applicants. How can the USPTO charge more and more for less service? The industry has already been uneasy about these substantial increases in fees, but most were willing to swallow hard as long as it meant a better functioning and faster moving patent process. It certainly doesn’t sound like a better functioning, faster moving patent process is on any relevant horizon at the moment. So the industry faces the prospect of paying more while returning to painfully slow processing of applications. A true nightmare scenario.

In addition to the aforementioned e-mail from Acting Director Rea, another e-mail was recently sent to union members from Robert Budens, President of POPA, the examiner’s union. Budens hypothesizes that there is an unofficial “gag order” placed upon USPTO officials by the White House. Budens has a reputation as a straight-shooter who is liked and well respected. For him to make such an assertion there must be some identifiable rationale on which he is relying. I have always understood Budens to have a good working relationship with USPTO management. The mere fact that he can’t get answers could justifiably raise suspicions. Of course, it may be because USPTO officials themselves don’t have any answers and are scrambling to address budget deficiencies, but you would think that could have been conveyed directly.



New Patent Fees: USPTO Exercises Fee Setting Authority

Posted: Thursday, Jan 17, 2013 @ 7:51 pm | Written by Gene Quinn | 5 comments
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Posted in: America Invents Act, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, USPTO

The United States Patent and Trademark Office (USPTO) was granted fee setting and adjusting authority with respect to patent fees in the Leahy-Smith America Invents Act (AIA), which was signed into law on September 16, 2011. The fee setting (or adjusting) process is not a simple process. As you might expect, there are numerous hoops the agency was required to jump through before making the fees final. Those hoops have been jumped through and the final rules on patent fees will publish in the Federal Register on Friday, January 18, 2013.

Most of this final rules package on fees will go into effect 60 days later, with some portions not becoming effective until January 1, 2014. For example, in response to public comment, small and micro entity fee reductions for international application transmittal, filing, processing and search fees will be effective January 1, 2014 to permit adequate time for operational changes associated with international systems and forms.

One major step in the fee setting process was the publication of proposed fee rules in September 2012.  In response to public comments received after those proposed rules were published the USPTO modified some of its revenue and performance targets in the final rule, allowing the agency to reduce certain fees.



Call to Action: Super Committee Addressing USPTO Funding

Posted: Friday, Nov 11, 2011 @ 7:15 am | Written by Gene Quinn | 12 comments
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Posted in: Congress, Gene Quinn, IP News, IPWatchdog.com Articles, Patents, US Economy, USPTO

News broke several days ago that Senator Jon Kyl (R-AZ) has raised the issue of funding for the United States Patent and Trademark Office in his role as a member of the so-called Super Committee, which is charged with finding $1.2 trillion in budget cuts over the next 10 years. See Super Committee Considering an End to USPTO Fee Diversion.  This means the patent community has another chance to urge Congress to do the right thing and adequately fund the USPTO.  Everyone in the patent community can and should get involved and be heard — patent attorneys, patent agents, patent bar groups, patent bloggers, corporations, inventor groups, inventors and industry organizations such as the ABA IP Section, the AIPLA and IPO. It is time to get involved!

Many will recall that recently we came up to the doorstep of putting an end to fee diversion through the creation of a revolving fund for the USPTO.  The revolving fund proposed by Senator Tom Coburn (R-OK), would have tied a revolving fund together with taking the USPTO out of the appropriations process.  This would have meant that the USPTO would be guaranteed to keep 100% of the user fees collected without Congress being able to divert fees over and above what they specifically appropriated.  The revolving fund made it into the enacted America Invents Act, but not the part about taking the USPTO out of the regular appropriations process, which essentially just kept the status quo.