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Patent Reform Coalition Calls for the End of Fee Diversion

in Congress/Intellectual Property/Patents by

WASHINGTON June 13, 2011 - The Coalition for 21st Century Patent Reform, the Coalition for Patent Fairness, the Innovation Alliance along with a group of universities sent a joint letter to Congress Monday recommending that any patent reform legislation end the diversion of user fees from the U.S. Patent and Trademark Office (USPTO).

In early March, the Senate passed the Patent Reform Act of 2011. The America Invents Act, a House companion to the Senate bill, is currently up for debate in the lower house. The bills would update many of the operations of the USPTO.

To bolster the operations of the PTO the bill would end the diversion of user fees from the USPTO budget into the general U.S. budget.

“Unlike most other federal agencies, the USPTO earns fees paid by inventors, companies, research institutions, and universities that can offset every taxpayer dollar appropriated for its operations,” the letter stated in part.

During the last 20 years, more than $875 million in user fees were redirected from the PTO for use by other agencies. A review by the Congressional Budget Office showed that by allowing the PTO to keep its entire user fees, direct funding by the federal government to the PTO would decrease by $725 million over the next 10 years.

The coalition fears that under the current budget climate the USPTO will lose more of the fees it collects, making it difficult for the agency to continue its operations at the current pace.

“We are very concerned that USPTO will continue to earn significantly more fees than the funds it is allocated.  That will render the agency less and less able to cope with the demands of the modern U.S. economy, increase the backlog and patent pendency, and ultimately surrender America’s lead in innovation to other economies.”

The group calls the re-direction of user fees a “hidden tax on innovation”.

The letter goes on to say that, “the funding of the USPTO via user fees is part of the implicit bargain between our nation and innovators wherein inventors make details about their inventions publicly available for the common good in exchange for a limited but exclusive intellectual property right.”

A full copy of the letter can be found here.

Rahul Gaitonde has been writing for since the fall of 2009, and in May of 2010 he became Deputy Editor. He was a fellow at George Mason University’s Long Term Governance Project, a researcher at the International Center for Applied Studies in Information Technology and worked at the National Telecommunications and Information Administration. He holds a Masters of Public Policy from George Mason University, where his research focused on the economic and social benefits of broadband expansion. He has written extensively about Universal Service Fund reform, the Broadband Technology Opportunities Program and the Broadband Data Improvement Act

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