Fiscal Background on the USPTO

US Patent and Trademark Office –  Background
By Jacques M. Dulin
            The USPTO is a $1.2 Billion+ department of the US Government, employing over 6500 people including an estimated 2000+ Patent Examiners.  The PTO, now spread over 18 buildings in Crystal City, VA, is relocating into 5 new buildings a few miles SE in Alexandria, VA.  The construction is scheduled for completion in 2005. 
         President Bush proposed a 21% increase in the PTO budget to a requested $1.35Billion in recognition of the key role that the Patent System plays in protection of innovation as businesses create jobs in America. 
         The PTO cost for processing an application to issuance as a patent in FY 2003 was $3329. In contrast, applicants pay a portion of that amount in filing, publication and issuance fees, $1350 for individuals and companies having less than 500 employees, and larger companies $2400. In 2005 those numbers were highter, the small entity applicants paying $1530 in fees and the larger entities paying $3030. The balance is made up of a variety of other processing fees, such as patent copy charges, extension and petition fees, appeal fees, maintenance fees and the PTO share of international application (PCT) fees. Currently, the maintenance fees, due at 3.5, 7.5 and 11.5 years total $3500 and $7000 for the different sized entities. Total PTO fee collections in FY’03 was $1.16 B.
         The number of applications in the pipelines of the 124 countries that have patent offices is estimated at 11.9 million annually, and growing. Of the 189,597 US Patents issued in FY’03, 171,894 were utility patents and the rest were design and plant patents. 99,898 issued to US Citizens, and foreign nationals received 89,699. California inventors led the way with 23,351 while Washington placed 13th with 2570. Government Agencies received only 898 patents.
          The line in the PTO is long. Total patent applications pending as of Sept 30, 2003 were 762,914, of which 85,109 were ready for issue as patents, and another 3114 were being maintained secret as relating to the National Defense. 355,418 applications were filed in FY’03 and 96,176 were abandoned as unpatentable or lacking commercial interest.
         The average time to process the applications was 27.6 months but ranged from 27 months for chemical and materials engineering cases to 40.3 months for communications cases, including computer programs and business methods.
         In the past 10 years the number of applications filed has risen from 188,098 to 355,418, annually.  The average time of pendancy before a Patent Examiner examines the case is 18.3 months. The PTO set a target of 2% of cases to be filed electronically, but actual electronic filing was only 1.3%. There were 392 reexamination requests and 2721 appeals filed, with the applicants winning about half the time.
            The PTO has an extensive Examiner training program, the Patent Academy. In addition, The PTO has a Scientific and Technical Library and translation and electronic document processing and prior art search support capability that it is constantly expanding and updating.
           Over the past 10 years Congress has treated the Patent Office, and accordingly the US Patent System, as a revenue source, taking over $1 billion from the USPTO revenues (that exceeded costs), rather than lowering fees or letting the PTO spend that money on improving the operations and therefore the quality of patents.
Primary data source, USPTO Performance and Accountability Report, FY 2003; online at www.USPTO.gov

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