Revenue Shifting by USPTO Approved to Avert Patent Layoffs

On August 7, 2009, President Obama signed into law H.R. 3114, which provides the USPTO with the authority to transfer funds collected with regard to trademark applications to fund its patent operations.

The legislation aims to avoid possible layoffs or furloughs of patent examiners due to reduced fee collections on the patent side. Under the legislation, the USPTO can shift revenue to support patent operations until June 30, 2010, under the authority of the USPTO director. Any transferred funds must be repaid by no later than September 30, 2011. The total amount borrowed from trademark operations cannot exceed $70 million. Notably for patent applicants, the USPTO has been granted authority to repay any amounts borrowed by establishing a surcharge on patent fees.

In remarks delivered during his swearing-in ceremony, Director Kappos praised the work done to make these funds available, but indicated that he would prefer not to use the authority.