Patent Law

Convenience of Coincidence

By Gary Odom and Jordan Kuhn

Decisions made at the UPSTO have ironically spawned an anti-patent culture at the very institute created to protect innovation. These decisions have consequences. Conveniently though, the US economy has tanked, providing the PTO with a thick sheet of smoke to help veil countless managerial missteps. Knowing his role as smoke machine, Acting Director John Doll recently provided a financial update of the patent office, transferring blame and hoping for a bailout.

From the USPTO Broadcast:

Back in March, I provided you an update on the budget challenges facing our agency. Today, I'd like to let you know where we stand and what steps we're taking to address these challenges.

As you know, the USPTO is funded solely by user fees. This process means the USPTO develops its budget based on projected fee collections. As the economy has worsened, fewer people have applied for patents or paid to maintain the ones they have. Declines in trademark filings continue to be experienced too. Thus, the agency has seen significant reductions in revenue.  As a result, a serious budget situation has developed.

Right now, we are operating at a "break even" level. This means, if the current pace of fee collection holds, the USPTO expects to finish FY09 without a budget shortfall.

But just getting to "break even" in this climate has required sacrifices. In response to the decrease in fee collections, we have enacted a series of budget cuts and cost-savings measures, which have resulted in more than $120 million in savings. Thus far, we have instituted a hiring freeze, curtailed non-bargaining unit performance awards, stopped overtime, and significantly reduced contracts, travel, supplies and other non-essential overhead expenses.  These cuts, while necessary, have been difficult, and I want to personally thank you for your understanding.

With the support of Commerce Secretary Locke, we are also seeking further cost-saving measures, which will save an additional $20 million in FY09.

All of this has been done with an eye toward avoiding furloughs.

Yet we know that in the current economy, fee collection could continue to decline. The USPTO and the Department of Commerce are monitoring the situation on a daily basis, and out of an abundance of caution, we are asking Congress for its help. We're now putting forward a number of different options to bridge any possible gaps, and we'll also be soliciting ideas from members of Congress.

We will continue to keep you apprised of any new developments, and I thank you again for your support during this challenging time.

Doll assumes no responsibility for declining fee collection. Any idiot can see the most likely cause of revenue reduction: decreasing allowance rates from over 70 percent to around 40 percent in less than 10 years, therefore crippling maintenance fee collection; and, declining applicant morality due to this new found rejection mentality, leading to decreased filings. This particular idiot is apparently too lazy or too stupid to enact any real meaningful change.

While cutting spending through a hiring freeze, curtailing performance awards, and eliminating overtime may provide temporary relief, these measures may also drastically increase pendency rates, providing additional disservice to already dissatisfied applicants.

Full post as published by The Patent Prospector on June 26, 2009 (boomark / email).