After finally winning a lengthy battle over fee diversion, in recent years the PTO is now able to keep all of its fees that it takes in from patent applicants and patent owners. The PTO is a fee-based entity that is supported by user fees and not by tax dollars from the general budget.
At the February PTO Roundtable on Deferred Examination, Acting Director John Doll confirmed that PTO filings were down about 1% from the previous fiscal year, about 6% below the PTO’s budget. Well, it’s apparently getting worse for the PTO. Director Doll is now projecting that filings will be down about 2% from FY2008. Other industry experts are putting the number as high as 10%.
“I talked to a large corporation today and they’re going through their patent portfolio to see what’s core,” said Doll, adding that the company could decide to abandon much of its portfolio.
The good thing about the number of filings going down means that the PTO will be able to cut into the current application backlog of over 800,000 applications, right? Not so fast. Because the PTO must pay the examiners to examine applications filed 2-3 (or more) years ago with revenue it receives today, it can no longer afford to hire additional examiners. Director Doll reported that the PTO has stopped hiring at this time.
“If we closed our doors today, it would take us almost two years to clear out our backlog.”
One has no choice but to question whether the PTO will ever be able to solve the pendency and backlog problems. If filings are down significantly this year, that, combined with the large reduction in the allowance rate, means that the PTO will be suffering from a lack of funds for a long time into the future. Fewer filings and lower allowance rates means less revenue from issue fees, maintenance fees, reexamination fees, and the like.
The PTO gets a significant amount of its revenue from maintenance fees due at 3.5, 7.5, and 11.5 years after a patent’s issuance. These fees have increased dramatically in recent years (currently, they are $980, $2480, $4110). Add that to the issue fee of $1510 and the PTO is losing $9080 for every application that does not issue and over $10,000 for every application that is never even filed and does not issue.
Maybe the PTO needs a bailout.