Excerpt from Senate Report No. 106-404.
Re: Appropriations for the U.S. Patent and Trademark Office.
Date: September 8, 2000.
Source: Library of Congress.

Senate Rpt. 106-404 - DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATION BILL, 2001

H.R. 4690

DEPARTMENTS OF COMMERCE, JUSTICE, AND STATE, THE JUDICIARY, AND RELATED AGENCIES APPROPRIATION BILL, 2001

PATENT AND TRADEMARK OFFICE

SALARIES AND EXPENSES

The Committee recommends the administration's request of $1,038,732,000 for the Patent and Trademark Office [PTO] in fiscal year 2001. This amount is $167,750,000 above the fiscal year 2000 appropriation.

The Patent and Trademark Office [PTO] is charged with administering the patent and trademark laws of the United States. PTO examines patent applications, grants patent protection for qualified inventions, and disseminates technological information disclosed in patents. PTO also examines trademark applications and provides Federal registration to owners of qualified trademarks. The Patent and Trademark Office Efficiency Act was enacted on November 29, 1999 and under its provisions, PTO is subject to the policy direction of the Secretary of Commerce, but the agency has independent control of its budget, expenditures, personnel, procurement and other administrative and management functions of the agency.

The PTO has experienced significant growth in recent years due to the increase in applications for patents and trademarks. Trademark applications have exploded due to the number of Internet entities seeking to register their website names, and the high technology and biotechnology industries have accounted for the growth in patent applications. The Committee has provided the amount requested by the administration for the PTO in fiscal year 2001, but there is some concern that this funding level may be inadequate for the agency's needs. The Office of Management and Budget has determined that some of the fees collected by the agency should be withheld for 1 fiscal year and unavailable for expenditure. The withholding of fees has increased over the past 5 years, and in fiscal year 2001, it is estimated that 32 percent of the agency's fee collections will be unavailable for expenditure until fiscal year 2002.

The ability of the administration to formulate an adequate budget for PTO is further complicated by the failure of PTO to forecast its workload. The President's budget has underestimated the annual growth for patent and trademark applications for each of the past five fiscal years. The PTO has informed the Committee that they expect trademark applications to increase 40 percent over the number of applications received in 1999. In order to improve the accuracy of these critical forecasts and to ensure that an adequate funding level is requested for the agency, the Committee directs PTO to work in conjunction with the Office of Management and Budget to develop a workload forecast for the agency with advice from a representative sample of industry and the inventor community. The Committee directs that this forecast be used as a benchmark for future PTO budget forecasts just as OMB now uses the average of the 50 blue-chip economic forecasts as the benchmark for economic assumptions contained in the President's budget.

The PTO recently completed a study entitled `Official Insignia of Native American Tribes.' The study recommended that PTO create, maintain and update an accurate and comprehensive database containing official insignias of all State- and Federally-recognized Native American tribes. The Committee directs that the PTO comply with its own recommendations and create such a database.