Patent Law Should Protect Satellite Patent Office

Letter expresses concerns sequestration is inconsistent with the law creating satellite offices

Colorado U.S. Senator Michael Bennet is urging the Office of Management and Budget (OMB) to reevaluate its decision to sequester fees from the United States Patent and Trademark Office (USPTO) despite a 2011 law written to ensure the USPTO would have access to those funds.

OMB’s decision could exacerbate the current backlog of applications and delay the opening of new satellite offices like the one scheduled to open in Denver in February 2014.

The USPTO is funded entirely by the fees it collects, not tax dollars. The 2011 The Leahy-Smith America Invents Act (AIA) states that such fees may only be used for expenses of the USTPO.

In a letter to the Director of the OMB Sylvia Burwell, Bennet today wrote, “As you know, the statute ensures that the excess fees that the USPTO collected were dedicated to the organization’s activities. This provision sought to ensure that the fees collected from inventors and patent owners by the USPTO are used to provide critical, time-sensitive services, and provide certainty outside of the partisan gridlock in Washington.”

Bennet also noted that the AIA also underscores that the fees that USPTO collects, and which fund its operations, are inherently different than regular government spending and that Congress has previously sought to exempt from sequestration “activities financed by voluntary payments to the Government for goods or services to be provided for such payments.” 2 U.S.C. 905 (g)(1)(A).

“There’s broad agreement that the sequester is poor policy. It is damaging to our economy in Colorado and across the country and should be replaced,” Bennet said. “In the case of the Patent Office, however, the sequester does not apply. It is funded by the fees it collects and not tax dollars.”

Bennet sponsored the amendment to the AIA that empowered the USPTO to establish three new satellite patent offices across the country by 2014. He then led the state’s coordinated effort to bring a patent office to Colorado in 2012.

Bennet wrote several letters to President ObamaUSPTO Director David Kappos, and Commerce Secretaries Gary Locke and John Bryson, urging them to consider Colorado for a job-creating satellite office and circulated a petition supporting the effort. Bennet staff members joined Colorado business leaders to hand-deliver a package of support from Coloradans urging the USPTO to select Colorado as the location for a new satellite patent office. A report compiled by Bennet, the Metro Denver Economic Development Corporation, and the Colorado business community included an economic study that estimates a satellite office in Denver would bring hundreds of direct jobs and even more indirect jobs, as well as lead to economic activity totaling $440 million over the first five years of operation.

Text of the letter below:

The Honorable Sylvia Matthews Burwell
Director
Office of Management and Budget
1650 Pennsylvania Avenue, NW
Washington, DC 20503

Dear Director Burwell:

I write to express my concerns regarding the Office of Management and Budget’s (“OMB’s”) recent decision to reduce funding for the United States Patent and Trademark Office (“USTPO”) by almost $150 million due to the sequester.

This decision may exacerbate the current backlog of applications and delay the opening of new satellite offices.

The Leahy-Smith America Invents Act (AIA) is the product of six years of consideration in Congress and includes the first significant reforms to the nation’s patent system in nearly 60 years.  As you know, the statute ensures that the excess fees that the USPTO collected were dedicated to the organization’s activities.

This provision sought to ensure that the fees collected from inventors and patent owners by the USPTO are used to provide critical, time-sensitive services, and provide certainty outside of the partisan gridlock in Washington.  The AIA also underscores that the fees that USPTO collects are inherently different than regular government spending.

Finally, Congress has previously sought to exempt from sequestration “activities financed by voluntary payments to the Government for goods or services to be provided for such payments.”  2 U.S.C. 905 (g)(1)(A).

The current backlog of patent applications awaiting first review is now running just over 600,000 and the average pendency period for a patent application is three years.  If the USPTO is unable to access the fees it collects, it will diminish the office’s ability to reduce this backlog.  It may also delay the opening of new satellite offices throughout the country.

I therefore request that the OMB allow the USPTO access to its fees and ensure that the new regional office in Denver opens in February 2014, based on the USPTO's plan communicated earlier this year.

Thank you for your attention to this matter.

Sincerely,

Michael F. Bennet                                                                                                                              U.S. Senator