Coalition seeks to halt diversion of patent fees

A "who's who" of technology companies and manufacturers on Wednesday heightened their push to keep the Bush administration from redirecting Patent and Trademark Office funds in next year's budget toward unrelated projects by agreeing to a fee increase if such diversions stop.

In a letter to Office of Management and Budget Director Mitch Daniels, at least 77 companies and 22 associations that comprise the 21st Century Intellectual Property Coalition said they support the broad goals of a strategic plan outlined in June by PTO Director James Rogan. But the companies, including Hewlett-Packard, IBM, Intel, Microsoft and Red Hat said their support for the plan and the fee increase is contingent upon ending the longstanding diversion of such fees.

Over the past nine years, OMB and congressional appropriators have used more than $1 billion in patent fees to fund other programs, a practice that increasingly is despised by technology companies that are among those paying the fees. Last year, the Bush administration proposed a $192 million diversion, but slow growth in the number of patent applications meant that the actual figure was only $25 million.

"The threat is still there, and the real issue is whether [we are] willing to support a fee increase for more funding" that goes to the patent office, said Herm Wamsley, executive director of the Intellectual Property Owners Association (IPO), a driving force behind the letter.

"We think the PTO is in crisis. We think they need more funding and are prepared to support a reasonable fee increase," Wamsley said.

The signers of the letter said they "will strongly oppose any fee increase to support the plan that is not accompanied by an appropriate solution to diversion." Asked what solution to the fee diversion is appropriate, Wamsley said, "We need to see an end to that."

Technology-focused groups that signed the letter included AeA, the Information Technology Association of America, the National Association of Manufacturers (NAM), the Semiconductor Industry Association and the Software and Information Industry Association.

Wamsley and NAM Technology Policy Director David Peyton said they timed the letter to impact OMB's decision-making over the next several weeks. "We want the next two Bush budgets to come out differently from the first two Bush budgets," Peyton said. "This is our best shot to get them to do a fundamental reassessment of a Clinton administration policy."

The letter follows a longer Oct. 24 missive in which IPO and three other intellectual property groups largely pledged support for Rogan's PTO reform plan, which is focused on enhancing patent quality and reducing pendency, or the time it takes to award a patent. But the letter also itemized some concerns with the Rogan plan.