AIPLA | Oral Statement by Charles Van Horn

Oral Statement of Charles E. Van Horn
before the
Subcommittee on Courts and Intellectual Property
of the
Committee on the Judiciary
United States House of Representatives

Mr. Chairman:

The AIPLA wants the United States Patent and Trademark Office to be the best patent and trademark office in the world. The prompt issuance of valid patents and the early accurate indications regarding the registerability of trademarks and service marks are critical to our nation's inventors, companies and the American public. Through your leadership, Mr. Chairman, this Subcommittee has played a leading role in strengthening the USPTO, and improving its ability to meet the challenges and opportunities in the 21^st Century. The robust growth in the number of patent and trademark applications, coupled with the implementation of significant changes to our patent system provide a unique opportunity for the USPTO to serve the best interests of our country. Unfortunately, the Administration and Congress continue to undermine the vitality of the U.S. patent system and handicap the USPTO in its ability to accomplish its noble mission.

The users of the patent and trademark systems have been unfairly subjected to a decade of fee diversion by the Congress and the Executive Branch. Increasingly over the years, larger and larger amounts of fees collected by the USPTO have been diverted to other programs through a variety of mechanisms in the form of patent surcharge fees and the capping of the amount of fee revenue that the USPTO was permitted to use.

Unless this pattern of fee diversion is stopped, the USPTO will not be able to provide the level of services commensurate with its responsibilities. The successful implementation of recent reforms and keeping pace with the growth in application filing rates, requires adequate funding. At least one of the impacts of the continued fee diversion will be even longer times to obtain patent and trademark protection-coming at a time of accelerating technological and business development. Past experience has clearly demonstrated that the USPTO cannot keep pace with increased filings while the Administration and Congress continue to divert increasing amounts of PTO fee revenues.

Unfortunately, the proposed FY2001 budget transmitted to Congress on February 7^th proposes to continue this destructive pattern of fee diversion. The FY2001 budget proposes to prevent the Office from spending an additional $113M in FY2001. This will bring to a total of $368M in fee collections which the Office will have received during the period from FY1999 to FY2001, but will have been denied the ability to use to process the work for which the fees were paid.

The treatment by the Executive Branch and the Congress of the fee collections of the USPTO is a national disgrace. The economic projections of the Congressional Budget Office reveal a worse case expected budget surplus of $148B for FY2001-FY2005. Yet, in spite of this prosperity, the President's budget proposes to take $577M in USPTO fees and divert it to other purposes for the same period. This gives new meaning to the expression "penny wise and pound foolish."

Mr. Chairman, the AIPLA implores you and the members of this Subcommittee to take the lead in breaking this increasingly harmful pattern of fee diversion. There has been no time in the last 30 years more opportune then the current era of budget surpluses, or more appropriate than the current era of unparalleled innovation, to end this plague. The men and women of the Patent and Trademark Office can successfully meet the challenges and opportunities that they face today, but we must give them the support they need and deserve. Both political parties profess to support nurturing and encouraging the nation's leadership in development and application of new cutting-edge technology for the benefit of the American public. It is time to put meaning into these platforms and end once and for all this destructive and misguided diversion of USPTO fee income. The AIPLA pledges, Mr. Chairman, to work with you and the members of this Subcommittee in any way you wish to achieve this goal. Thank you very much Mr. Chairman.