Patent Office backers rip Bush plan to divert funds

The Bush administration plans to divert $207 million of $1.14 billion in revenues that are anticipated by the Patent and Trademark Office (PTO), according to details of the Commerce Department's fiscal 2002 budget released Monday.

Although the official budget describes its proposed $1.14 billion as a "10 percent increase" over the fiscal 2001 budget of $1.04 billion, officials in the intellectual property and technology communities point to the diversion of funds as the key figure. Many are deeply disappointed with the number, which they said was nearly twice the $117 million diversion proposed last year by the Clinton administration.

Speaking last week before the House Judiciary subcommittee that oversees the PTO, Ronald Myrick, president of the Intellectual Property Owners Association, said he was distressed by rumors that the Bush administration would withhold more than $100 million fees.

"This practice of fee withholding has had and continues to have a damaging impact on the quality and timeliness of patent examination and PTO plans for adopting the latest information," Myrick said.

When President Bush's budget numbers were released Monday, Intellectual Property Owners Association Executive Director Herb Wamsley noted that the average patent took 25 months to review in fiscal 2000, and that that number was projected to rise to 26.2 month in fiscal 2001 and 26.7 months in fiscal 2002.

"The goal should be going down, not up," Wamsley said. "It is at unacceptable levels."

"We've had a bad pattern of about 10 years of Congress milking the agency as a cash cow," David Peyton, director of technology policy at the National Association of Manufacturers, said of the practice of redirecting PTO revenues. "Unfortunately, we see that continuing."

Last year, then-President Clinton estimated fiscal 2001 PTO revenue at $1.2 billion and proposed reducing the number by $117 million, but House appropriators cut the number to $900 million. Under pressure from the Senate, however, funding was restored to Clinton-backed levels.

Because patent applications have been up an estimated 12 percent this year and are projected to rise again next year, the revenues have proved a tempting target for White House budget officials and members of the congressional appropriations committees.

House Judiciary Courts, Internet and Intellectual Property Subcommittee Chairman Howard Coble, R-N.C., has led the charge against diverting the funds. He told appropriators to "keep their grubby paws out of the PTO's coffers" and has offered legislation that would permit the agency to keep all its fees.

"They talked that about [the PTO budget] as if it was a 10 percent increase," Q. Todd Dickinson, a former PTO commissioner in the Clinton administration, said of Bush's budget proposal. "It is technically correct, but it is not fooling anyone because the diversion is the critical figure. That is disingenuous because of the amount of increase in work, because of the inventory" of patents to be reviewed, and because of new, unfunded requirements stemming from the passage of the 1999 American Inventors Protection Act, he said.