The USPTO is set for a considerable increase in income according to the President's budget plans announced on 13th February. The budget projects fee collections for 2013 of $2.95 billion, a 9% increase on 2012 revenues.

The rise is to be partly funded by increases in charges. On 7th February the USPTO announced projected fee changes for mid-2013. While some costs are to be reduced, the majority will go up - some of them substantially so. Patent examination charges, for example, will soar by over 200%, while maintenance fees will also be hiked considerably, by between 26% and 61%. These changes come on top of a 15% fee increase which was implemented in September last year.

The office points out that some of the increases are needed to better align fees with the cost of providing the service: such cost-matching explains the suggested 83% rise in fees for a request for continued examination, for example. All changes are currently being debated: a hearing was held at USPTO headquarters this week, with a second one due to take place in California next Thursday (23rd February).

Perhaps the most significant aspect of the rises is that the USPTO should be able to hold onto the funds that it generates; this after $100 million of USPTO-collected funds were diverted to other parts of the federal government last year. The America Invents Act was originally intended to end diversion as an issue forever, but the final legislation signed into law failed to do that. However, a spokesman for the UPSTO has confirmed to IAM that future fee diversion is not on the cards at the moment: “The office is currently able to keep all of the money that it makes from fees. Under the AIA any fees over what the offices projects go into a fund set aside for those fees. USPTO then can ask Congress for permission to spend that money.” In practice, this will allow the office to plan and implement much-needed improvements to its services – something that users have been demanding for many years as pendency times have risen and perceptions of quality have fallen.

The President’s budget states that speeding up the application process is a priority. “The USPTO has committed to achieving an average first action patent pendency of 10 months and an average total patent pendency of 20 months by 2015 and 2016 respectively,” it says (down from 28 and 33.7 months for 2011). To achieve this, the additional funds will be spent on hiring and training new staff, improving the office's IT system, and the opening three new satellite offices. Detroit has already been announced as the first venue; locations vying to house the other two sites include San Jose, Denver, Pittsburgh, and Honolulu.

However, some of the money raised is also destined for a reserve fund. This is part of the office’s 2010-2015 strategic plan, which aims to have around three months operating reserve in order to protect against fluctuating income or disruption in the future. While such rainy-day money may be a sensible idea, it could prove controversial in the current economic climate. Even though diversion may not happen this year or next, if the USPTO manages to build up a healthy cash reserve, it could be vulnerable to raids by other, cash-strapped, parts of government at some time in the future.

Patentees may be unhappy about having to fund this piggy bank through fee increases; while there will also be claims that the rises will deter applicants in the first place. And if the volume of applications does fall by a significant amount, it will have an impact on overall fees raised. However, a slight drop in applications need not be a bad thing. If the office’s users give more thought to their applications and whether to submit them in the first place, it could mean examiners can spend more time on the ones they do receive: something that will surely have a positive impact on the quality of the grants that are finally made. And that is what everyone wants, isn’t it?

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IP management, IP politics, Patents