It sounds like we are heading back to the days, not so long ago, where the USPTO was underfunded and overworked.
Teresa Rea, the Acting Under Secretary of Commerce for Intellectual Property and Acting Director of the United States Patent and Trademark Office, recently sent an e-mail to all USPTO employees explaining that the USPTO is facing “substantial budgetary uncertainty.” This financial uncertainty is due in part to sequestration cuts that will hit the USPTO, but also because the USPTO is bringing in fees that are substantially lower than what was projected for FY 2013. This double whammy means that USPTO officials are scrambling to determine what can be cut in order to continue the mission of the Office.
With respect to fee revenue being lower than anticipated, Acting Director Rea explained to USPTO employees: “As we moved through the first months of Fiscal Year (FY) 2013, it was clear that our patent fee collections were tracking lower than our plan at the start of the year.” This trend seemed to continue, if not worsen, when fees were significantly raised effective March 19, 2013. That this would occur would have seemed obvious to anyone in the private sector.
Raising fees almost always means that consumption will be reduced. Only in the case of a necessary monopoly, such as a natural monopoly, would one ever assume that an increase in cost would not be met with a decrease in consumption. But even then, with such things as gas prices, we know that there is a point at which prices go too high and consumption is cut. I have to wonder whether the decrease in filings and revenue was brought on by the USPTO so dramatically raising fees.
Innovation is fragile and needs to be nurtured and incentivized. Combine the lengthy process to obtain a patent, and the uncertainty with respect to fundamentally important issues such as patent eligibility, with the ever-more onerous disclosure requirements mandated by the USPTO and Federal Circuit, and it is easy to predict that at least some innovation would be driven underground by increased fees.
In terms of sequestration cuts, Rea explained: “While we do not yet know what the precise impact will be, sequestration will represent a significant additional reduction to our spending plans this year on top of our already reduced revenue estimates.” What this means is that most hiring at the USPTO will cease, travel will be curtailed or cut altogether, training will be curtailed or cut altogether, and IT modernization projects, such as Patents End2End, will cease.
Even Robert Budens, who is President of the patent examiners union (POPA), doesn’t have any answers to provide because he is not receiving any information from Office officials either. This prompted him earlier in the week to send an e-mail to patent examiners, which in part explained: “POPA can no longer feel confident that there will not be significant negative impacts on our bargaining unit members. I still do not believe that there will be furloughs in the immediate future, but unfortunately, I can’t say that furloughs may not raise their ugly head at some point ahead. I do believe that this development may well adversely impact hiring, overtime availability, and possibly even bonuses.”
For the complete e-mails send by Acting Director Rea and Robert Budens see: “Substantial Budget Uncertainty” for the USPTO.
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