Bloomberg News

Congress Must Ensure Patent Office Funds, University Leaders Say

October 05, 2011

(For more stories on the summit, see EXT2 <GO>).

Oct. 5 (Bloomberg) -- Congress must keep its pledge to let the U.S. Patent and Trademark Office have control over all the fees it collects to promote innovation and spur job creation, university leaders and corporate executives said today.

“One of the great impediments to an effective PTO is the funding to just get the people power in place and move things through the system,” Massachusetts Institute of Technology President Susan Hockfield said during a panel discussion today in Washington. The event was sponsored by Harvard University and the Business Roundtable, an association of corporate leaders, and hosted by Bloomberg News.

“We have had a massive acceleration in the amount of work we sent to these people,” Hockfield said. “They are just tied in knots trying to develop a system to make processing these patents efficient.”

Under legislation signed by President Barack Obama on Sept. 16, the agency would be able to set its own fees and have greater control to use all of the money it collects. The law would eliminate a practice under which Congress has diverted almost $1 billion since 1990 from the agency, which pays for itself through fees collected from patent and trademark applicants and owners.

The measure, which marks the biggest change to the U.S. patent system since at least 1952, passed with broad bipartisan support after a decade of discussions and negotiations among industry groups. The law seeks to bolster legal protection for inventions by setting new rules on applications and creating procedures to review issued patents.

Innovation Leader

“It relaunches the U.S. as the world’s leader in innovation policy,” said PTO Director David Kappos. The goal, he said, is to “get the science transferred quickly from the lab to the commercial space.”

The agency’s funding has already been thrown into doubt just weeks after the bill’s passage. A provision that would ensure the patent office has access to all of the fees it collects wasn’t in a bill to keep the government running through Nov. 18 that was signed today by Obama. That means the agency is limited to spending at a rate based on the $2.1 billion budget for fiscal 2011, rather than the $2.7 billion projected for the current fiscal year, which started Oct. 1.

“We are continuing to work with Congress as well as within the Administration to explore mechanisms that might enable the USPTO to access funds” above the $2.1 billion level for fiscal 2011, patent office spokesman Peter C. Pappas said in an e-mail.

Reduce Backlog

The PTO has said it needs full funding to hire more workers and improve its computer system to reduce a backlog of 670,000 applications awaiting first review by patent examiners.

“We need to get the money” to the patent office, said Stanford University President John Hennessy. “We’ve got to invest in order to make this process faster. That’s an American competitiveness issue.”

The corporate executives and university leaders said the patent legislation could serve as a template for other issues facing the business community, such as visas granted to skilled foreign workers.

“We worked this out because we recognized it’s in our mutual interest to do that,” said Eli Lilly & Co. Chief Executive Officer John Lechleiter.

--Editors: Michael Shepard, Romaine Bostick

To contact the reporter on this story: Susan Decker in Washington at sdecker1@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net


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