It looks like the Patent Reform Act is no longer a done deal.  Tuesday afternoon, Rep. Harold Rogers (Chairman of the House Appropriations Committee) and Rep. Paul Ryan (Chairman of Budget) wrote a letter to Rep. Lamar Smith (Chairman of the Judiciary) insisting on maintaining the power of these two committees to control the Patent Office’s money received as user fees.

Section 22(c) USPTO Revolving Fund-

    (1) ESTABLISHMENT- There is established in the Treasury of the United States a revolving fund to be known as the `United States Patent and Trademark Office Public Enterprise Fund’. Any amounts in the Fund shall be available for use by the Director without fiscal year limitation.

In the past, Congress has been very fond of fee diversion — that is, diversion of user fees paid to the U.S. Patent and Trademark Office (USPTO) to other non-USPTO purposes.  For many years, Congress “diverted” about 10% of the fees that the USPTO collected into the general treasury of the United States. Since 1992 close to $1 billion in fees have been diverted.

Reps. Rogers and Ryan think that spending money should only be in the purview of Congress:

We strongly oppose this proposed shift of billions in discretionary funding and fee collections to mandatory spending. … Placing PTO spending on mandatory auto-pilot as outlined in H.R. 1249 would also hand the Congressional “power of the purse” — bestowed in the Constitution — to the Obama White House, and essentially eliminate the ability of Congress to perform substantive oversight of the PTO.

With the U.S. national debt currently at about $14,400,000,000,000 (yes, it’s really that many zeros), you could argue that putting Congress in charge of spending hasn’t exactly turned out swell so far.

Judiciary Committee Chairman Smith, Ranking Democrat Conyers, Subcommittee Chairman Goodlatte, Ranking Democrat Watt, and others on the Judiciary Committee have been committed to ending the diversion of user fees, particularly through support for Section 22 of the Act despite calls to remove it or to amend it in ways that would make it ineffective.

Sen. Tom Coburn then sent his own letter to Reps. Rogers and Ryan telling them to suck it:

Section 22 would not hand the “power of the purse” to the Obama Administration, put the PTO on “auto-pilot,” or eliminate the ability of Congress to perform oversight of the PTO. The “power of the purse” does not provide Congress authority over non-taxpayer funds. Although the PTO is subject to the appropriations process, it does not use taxpayer money. Rather, PTO receives fees paid by users who file patent and trademark applications—fees paid by small inventors, companies, and universities to protect their ideas and technology. Those fees are deposited into the general fund at the Treasury, and then PTO must request appropriations. However, when PTO’s fee income is greater than Congressional appropriations, we spend “excess” fees on other general revenue purposes, rather than providing applicants the high quality PTO services for which they paid.

What Now?

Go to www.house.gov to find your Representative’s contact info.  To schedule a meeting, many offices will want you to FAX in a request letter.   Second best is a phone call to your district office (not the D.C. office).   Third best but better than nothing is an email. You can get help with some of these contacts from Reform AIA.

It’s crucial to act now.

 

See the Rogers and Ryan Letter to Cantor here.

See the Coburn Letter to Ryan and Rogers here.

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5 Comments

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    […] Section 22 of the Judiciary Committee reported bill creates a mandatory revolving fund in the Treasury to retain all user fees collected by the USPTO and to use the funds to run the operations of that agency.  Section 22 is necessary to prevent user fees collected from patent and trademark applications from being redirected to other non-USPTO purposes. Over the last two decades more than $875 million in user fees has been redirected to other governmental purposes in what amounts to a hidden tax on innovation. […]

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    […] Patent Reform Act stumbles over control of money (Patent Baristas) (Patent Baristas) (Patent Baristas) […]

  3. Notice: Object of class WP_Comment could not be converted to int in /hermes/bosnacweb01/bosnacweb01ad/b2262/ipw.patentba/public_html/wp/wp-content/plugins/polldaddy/rating.php on line 7

    […] Section 22 of the Judiciary Committee reported bill creates a mandatory revolving fund in the Treasury to retain all user fees collected by the USPTO and to use the funds to run the operations of that agency.  Section 22 is necessary to prevent user fees collected from patent and trademark applications from being redirected to other non-USPTO purposes. Over the last two decades more than $875 million in user fees has been redirected to other governmental purposes in what amounts to a hidden tax on innovation. […]

  4. Notice: Object of class WP_Comment could not be converted to int in /hermes/bosnacweb01/bosnacweb01ad/b2262/ipw.patentba/public_html/wp/wp-content/plugins/polldaddy/rating.php on line 7

    […] Patent Reform Act Placed in Jeopardy Over Control of Money […]

  5. Notice: Object of class WP_Comment could not be converted to int in /hermes/bosnacweb01/bosnacweb01ad/b2262/ipw.patentba/public_html/wp/wp-content/plugins/polldaddy/rating.php on line 7

    […] Patent Reform Act Placed in Jeopardy Over Control of Money […]