USPTO Satellite Offices on Hold

By Donald Zuhn --

On Friday, USPTO Director David Kappos addressed the impact of budgetary constraints on some of the Patent Office's plans for the coming year.  He did so on his Director's Forum blog, where the Director (at right) noted that following enactment of the budget for FY 2011 on April 15, the Office's total spending authority through the end of the fiscal year (i.e., September 30, 2011) had "been limited to $2.09 billion."  "Given this level of spending authority," he explained that the Office would "have to make significant reductions for the current fiscal year."  Stating that the USPTO had "not come by these decisions lightly," and that he "recognize[d] that these measures will create new challenges for our ability to carry out our agency’s mission," Director Kappos listed a number of USPTO initiatives and policies that would be postponed, suspended, or reduced "[e]ffective immediately and until further notice."

As we noted last week, one of the programs that will be postponed is the Track 1 (or prioritized examination) portion of the Enhanced Examination Timing Control Initiative (see "USPTO News Briefs," April 21, 2011).  The opening of the USPTO satellite office in Detroit is also being postponed, "as well as consideration of other possible satellite office locations."  Office personnel will certainly feel the impact of the FY 2011 budget, with all hiring being frozen, employee training being reduced, all overtime being suspended, and "all other non-compensation-related expenses, including travel, conferences and contracts" being reduced.  In addition, the Director noted that IT projects will be "scaled back," and that funding for Patent Cooperation Treaty (PCT) outsourcing will be "substantially reduced."

The Director's post was preceded by a somewhat more detailed e-mail message the Director sent to USPTO employees.  The Intellectual Property Owners Association (IPO) made the text of that message available on Friday.  In the e-mail, the Director notes that the Office's $2.09 billion spending limit means that the Office "will be unable to expend the additional $85-100 million in fees that we will be collecting during this fiscal year -- funds that we had anticipated being able to use to fund operations this year."

It appears that only patent operations are to be affected, as the trademark side of the Office will be "unaffected and will maintain normal operations."

In view of the budget problems highlighted in the Director's e-mail and blog post, it certainly is a case of what a difference a week -- or in this case two weeks -- makes.  On the heels of the December 2010 announcement of the Detroit satellite office (see "USPTO News Briefs," December 21, 2010), and the Office's indication that it was looking at other locations for satellite offices (as well as provisions in the America Invents Act that would provide for the establishment of three or more satellite offices; see "'Reform' at the U.S. Patent and Trademark Office"), several groups had begun lobbying for satellite offices in their "backyards."  On April 6, the Austin American-Statesman reported that House Judiciary Chairman Lamar Smith (R-TX) and Reps. Lloyd Doggett (D-TX), John Carter (R-TX), and Michael McCaul (R-TX) had written to Secretary of Commerce Gary Locke and Director Kappos formally asking them to consider Austin for a regional office.  The article noted that Silicon Valley had also begun a lobbying effort to secure a satellite office, and that Denver and Atlanta were considered to be contenders.  A Law360 article (subscription required) on April 14 noted that the Silicon Valley effort was in full swing, with Director Kappos meeting with IP insiders in a town hall event to discuss plans for modernizing the Patent Office.  The USPTO has posted a draft of the Director's address on its website.  While the draft does not mention satellite offices, the Law360 report notes that attendees indicated that the Director had said that Silicon Valley met several of the Office's key considerations.  However, with the spending limits imposed on he Office by the FY 2011 budget, satellite office lobbying -- like satellite office consideration -- is now on hold.

Comments

[Bruce Lev]

The PTO is FEE based and does NOT require funding from government coffers. So, I do not see why all these programs are being cut due to government spending cuts. In fact, the federal government takes back a large percentage of the fees obtained by the PTO. So, simply let the PTO keep all their generated fees and these programs will continue and grow.

[H Neustadt]

I agree with Bruce. I was looking forward for an office in Detroit and this type of nonsense is no different than raiding SS for other activities. Truly a shamful act by the ethical sense of the word.