by Dennis Crouch
The USPTO does not receive any funding from general taxation sources. Rather, the agency is fully funded by the fees paid by patent applicants and patent owners. Unfortunately, this link between fees and USPTO spending is based upon tradition and the usual approach rather than any actual requirement that the fee revenue be available for office expenditures. The result is that Congress maintains the USPTO purse strings.
In a bipartisan vote, the Senate recently passed the Continuing Appropriations Resolution, 2013.[1] That resolution was necessary because fiscal year 2013 begins October 1, 2012 and executive agency spending had only been appropriated through fiscal year 2012.
The continuing resolution is a six-month gap filler and allows the USPTO and many other federal agencies to continue to spend money at the rate set for fiscal year 2012.
President Obama had asked for a increase in USPTO appropriations and that particular issue would likely receive bipartisan support.[2] The problem for the USPTO is that it is continually swept up as a small part of the contentious budget debate that often results in across-the-board solutions. One reason for this is that federal budget accounting counts USPTO revenue as government revenue and USPTO spending as government spending. Thus, cuts in USPTO spending are in-fact budget cuts.[3]
Taking a step back, why shouldn’t some portion of the USPTO revenue be used for general government spending, i.e., deficit reduction or market infrastructure expenditures? In particular, how is taking 10% from the USPTO worse increasing income, payroll, or business profit taxes – especially since a significant number of patent owners are foreign entities that pay no other federal taxes. USPTO maintenance fees (renewal fees) are essentially property taxes – perhaps they should be treated as such.
[1] Continuing Appropriations Resolution, 2013, at http://thomas.loc.gov/home/gpoxmlc112/hj117_eh.xml.
[2] USPTO Proposed Budget Just Shy of $3B, at http://www.patentlyo.com/patent/2012/02/uspto-proposed-budget-just-shy-of-3b.html.
[3] Federal Budget Cuts = USPTO Budget Cuts?, at http://www.patentlyo.com/patent/2011/04/federal-budget-cuts-uspto-budget-cuts.html.
