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Approps, Judiciary panels reach patent fees agreement

Members of the House Appropriations and Judiciary Committees have reached an agreement on legislation that would increase user fees for the Patent and Trademark Office and prevent any of those fees from being diverted to other federal programs, sources close to the negotiations said Thursday.

"There are still a few issues to be resolved, but the big issue on this bill always has been the diversion of USPTO fees to unrelated programs," said Herb Wamsley, executive director of the Intellectual Property Owners Association.

House sources confirmed that an agreement had been reached, but declined to offer details. Wamsley, whose group was involved in the negotiations and supports the agreement, said the compromise language would establish a reserve fund for any fees collected by PTO in a given year that exceed Congress' appropriation to PTO for that year. Money in the reserve fund would then be rebated to the companies that paid the fees. But Wamsley said that if an annual PTO appropriation equaled or exceeded the amount of fee money collected by the agency, there would not be any rebates for that year.

"The important thing, in our view, is that we expect that you won't see a rebate every year," Wamsley said. "This rebate system is a way of preventing [fee] diversions, but the users don't want the money back. They just want to make sure all the money goes to the PTO."

Wamsley said the compromise language would be added to the bill as an amendment, most likely by Judiciary Chairman Sensenbrenner, when the PTO bill moved to the floor after the Presidents Day recess.

The compromise language would not affect the bill's modifications to the PTO fee schedule, which Wamsley said would probably increase the agency's fees by an average of 15 to 20 percent. The agreement also does not address concerns raised earlier this week by House Small Business Chairman Donald Manzullo, R-Ill., who told the House Rules Committee he hoped to offer a floor amendment that would freeze PTO fees at present levels for "small entities" -- including not-for-profit organizations such as colleges and universities. Manzullo told the panel that without his amendment, the legislation's revised fee structure would "crush the little guys," especially inventors at colleges and universities that had a limited budget for protecting their intellectual property. The Manzullo amendment prompted House leaders to pull the PTO bill from the floor this week; it had been scheduled for debate Wednesday.

House Judiciary Courts, the Internet and Intellectual Property Subcommittee Chairman Lamar Smith, R-Texas, the bill's chief sponsor, said lawmakers would examine the bill's potential impact on small businesses before it moved to the floor.

"We're taking the session break to iron out the details," Smith said Thursday. "In almost all cases, small businesses pay half as much in fees as large business. Under the proposed legislation, we will continue that precedent. One remaining issue is how much of the increase in fees small businesses will pay."