Patent office assailed for move to raise fees

Members of a House panel and several industry experts on Thursday blasted the Bush administration's proposal to raise the fees for patent and trademark applications, dubbing the plan a de facto tax increase.

Intellectual property experts and several members of the House Judiciary Courts, the Internet and Intellectual Property Subcommittee said they oppose the Patent and Trademark Office (PTO) plan to raise the fees to patent an invention or trademark a brand name.

"The last thing we need to do is raise taxes on new inventions," Massachusetts Democrat Martin Meehan said, citing the economic slump. Representatives of the International Trademark Association (INTA), the American Intellectual Property Law Association (AIPLA) and the American Bar Association (ABA) agreed.

PTO Director James Rogan said the proposed fee hikes are necessary to tackle a mounting backlog of patent applications and to help fund Rogan's proposed plan for a massive overhaul of PTO business practices. The groups countered, however, that the majority of funds from the fee increase likely would be diverted for other governmental spending.

We would support a "reasonable increase in statutory fees," said Michael Kirk, executive director of AIPLA, but he added that the "fee bill is designed" to divert $162 million from the PTO.

Kathryn Barrett Park, INTA's executive vice president, added that Rogan's strategic plan has not yet been cemented, so it would be premature to ask for fee increases "when the need for these increases has not yet been established."

Under a bill to reauthorize PTO programs in fiscal 2003, the fees for patent applications would increase more than 19 percent and 10 percent for trademarks. Although the proposed increases are characterized as a one-year surcharge, opponents say that only a portion-$42 million-of the $207 million raised from the increase would benefit the agency.

Republican Reps. Darrell Issa of California and Chris Cannon of Utah also denounced the idea as a tax increase but offered support for a recommendation by Charles Baker, who heads ABA's intellectual property section, that the PTO raise patent maintenance fees, not application fees.

Witnesses also pressed lawmakers to stem the diversion of PTO revenue into other government activities. Subcommittee Chairman Howard Coble, R-N.C., said the panel would try to work conciliatorily with congressional appropriators on the matter. But he warned, "It's not likely that the diversion process will be turned off imminently."

Panelists also denounced a proposal to enable patent applicants to outsource the searches necessary to determine that their inventions are new and a plan to impose a "punitive" fee on applications. Savings incurred by outsourcing patent searches "will not really be greater," Baker said, noting that they could be as low as 5 percent and could diminish patent validity.

Rogan countered that something must be done immediately to address the growing problem of pendency, or the time it takes to issue patents. Punitive fees compel applicants to submit only necessary information and deter other practices that are contributing to the dire backlog, he said.

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