At the Intellectual Property Owners Association 2009 annual meeting on Sept. 14, PTO Director David Kappos described PTO funding as an “elephant-in-the-room kind of problem.” He said that the “economic downturn has brought to light fundamental flaws in the method of funding the USPTO.” Kappos warned that the economic crisis has caused a downturn in patent application filings, issuances and maintenance fee payments that will cause a $200 million shortfall for the PTO in fiscal year 2010, which will hamstring the agency’s ability to uphold its mission. Emergency measures include no hiring or overtime in 2010, which will shrink the agency’s payroll and its ability to reduce the patent backlog. Reuters reported that PTO revenues had dropped from $6.9 million a day in January 2009 to just $5.9 million by June.
The loss of $1 million a day is just one factor illustrating how the current funding system is unsustainable and jeopardizes the PTO’s stability. During the past four years, production increases were nearly double the increases in patent filings. Yet the PTO faces continuing backlogs and devastating reductions in revenue and programs. But for the PTO’s and Congress’ decisive action last spring, the PTO risked furloughs or layoffs.
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