Patent Law

Hunkering Down

By Gary Odom and Jordan Kuhn

The USPTO is battening the hatches for the turbulent waves of the current economic storm. Herein, today's "USPTO Weekly Extra - Budget Update: Supplemental on Training and Other Issues."

Budget Update: Supplemental on Training and Other Issues

In his video on March 16, Acting Director John Doll indicated that the USPTO would continue to pass on important information regarding filing rates and the budget to you. As Chief Administrative Officer Steve Smith did last week, we will continue to provide details on some of the issues covered in Acting Director Doll's video.

First, we would like to provide updated information regarding filing rates and the impact these changes have on our budget. We have been completely fee funded since 1991, and in many years, fees collected were diverted to support other government programs. Over the past few years, fee diversion has stopped, and Congress has appropriated all of the fees we collect back to the USPTO. The agency tries to forecast filing rates and to base our expenditures on the amount of money we will collect during the year.

Highlights of the current situation include the following:

? We are seeing downturns in both patent and trademark filings in fiscal year 2009 (FY09) year-to-date. We believe this is due to the current economic downturn, which has caused both large and small entities to reduce such activities.

? If patent filings continue at the current rate through the rest of FY09, we will end the year approximately 2 percent below where we were at the end of FY08. This is compounded by the fact that we had projected a growth in filings of five percent.

? Likewise, we are seeing a decline in the collection of a number of different patent fees--including filing, maintenance, and requests for extensions of time. If these collections continue at their current rates through the end of FY09, we will end the year collecting roughly $100 million below what we projected.

? Unfortunately, what we have heard from some international offices as well as U.S. filers is that we should expect much more significant drop-offs in filings and fee collections.

I also want to keep you posted on the actions we have taken so far in response to changes in filing rates. Other actions may be necessary if the filing rates decline further.

So far, the agency has taken the following steps:

? Hiring: After several years of hiring more than 1200 patent examiners per year, Patents has suspended further hiring at this time, but will honor all of the offers already extended. Agency-wide hiring has been significantly reduced to only those positions that are mission-critical.

? Awards and Bonuses: Many non-negotiated awards have been curtailed or suspended and will be reevaluated as the year progresses.

? Overtime: All non-production, non-revenue generating overtime has been suspended. Overtime that is revenue producing has been limited.

? Travel: All travel is being rigorously scrutinized by the business unit heads with the goal of reducing costs and focusing on mission-critical activities.

? Training: Most training, other than that required to sustain job-critical qualifications, has been suspended.

? Office Supplies: All business units have cut their remaining supply budgets by at least 25 percent.

? Contracts: We have reduced contracts and services.

? Events: Many agency events for employees and external audiences have been canceled or postponed indefinitely.

A few questions have come in regarding non-duty training and education programs. As noted in Acting Director Doll's video, all training that is not needed for job critical qualification has been suspended. This includes the three non-duty training programs: Non-Duty Hours Legal Studies Program, Non-Duty Hours Technical Studies Program, and After Work Education program. Employees enrolled in current courses already funded under these programs will be able to complete the courses they are currently enrolled in. Because the fees have already been paid, these courses are not affected in any way by the suspension.

For the Legal and Technical Studies programs, applications that had been fully approved by March 16 will be honored. Funding for any applications that had not been approved will be denied. An application that has been fully approved is one that has been signed and approved by first and second line supervisors as well as reviewed and approved by the Patents' training coordinator.

For the After Work Education Program, applications that have been fully approved by March 20, 2009 will be funded. Funding for applications submitted after that date by employees, other than those engaged in Trademark work, will be denied. Because of differences in agency funding rules between Patents' and Trademark's funds, we do have funding for technical support staff in Trademarks and in the Trademark Trial and Appeals Board. Applications from these employees will be processed as normal until further notice.

The agency has distinct agreements with POPA and NTEU Chapter 243 covering these training programs. These agreements contain special provisions regarding the continuing service agreement period in the event that the programs are suspended. If you are a program participant, please check your agreement for specifics.

As Acting Director Doll said in his video, we will continue to monitor filing rates and fee income. Maintaining employee salaries is the top priority. There are no plans to implement furloughs. We will keep you informed as additional budget information becomes available.

Thank you for your continued hard work during this period. We will continue to update you as we get more information.
 

Full post as published by The Patent Prospector on April 13, 2009 (boomark / email).