House Rejects Coble Amendment on USPTO Funding

(June 25, 2000) The House rejected an amendment offered by Rep. Howard Coble on Friday, June 23, to increase FY 2001 funding for the U.S. Patent and Trademark Office by $134 Million. It failed on a roll call vote of 145 to 223.

The U.S. Patent and Trademark Office (USPTO) is an entity of the Department of Commerce that is responsible for the examination and issuance of patents and the examination and registration of trademarks. Through the issuance of patents, it encourages technological advancement by providing incentives to invent, invest in, and disclose new technology.

The USPTO is funded solely from user fees. However, since 1990 a part of the fees collected by the USPTO have been diverted to pay for other government programs. Companies that own intellectual property, and their trade groups, have never liked this arrangement. They have called it a hidden tax, and a tax on innovation. 

Rep. Howard Coble (R-NC), the Chairman of the House Judiciary Committee's Courts and Intellectual Property (CIP) Subcommittee, which oversees the USPTO, has long opposed this diversion of user fees. However, Rep. Coble now also cites the rapid growth in patent and trademark applications caused by the growth of the high tech industries as a reason for ending the diversion of funds, or increasing the funding for the USPTO.

The House began consideration of HR 4690, the Commerce Justice State (CJS) appropriations bill, on Thursday, June 22. Under the bill adopted by the House Appropriations Committee, approximately $247 Million dollars in user fees are diverted.

Rep. Coble's amendment is a compromise. It does not end the diversion. Instead it would increase USPTO funding by approximately $134 Million. Also, under House rules, the amendment needed to specify an overset against another item in the bill. Coble's amendment would reduce funding for the census, also a Commerce Department activity.

	Rep. Howard Coble (R-NC)

"I emphatically believe that the Patent and Trademark Office is a Federal priority that contributes in an overwhelmingly positive way to our national economy," said Rep. Coble during the floor debate on Friday, June 23.

He added that "patent applications are increasing by 12 percent and trademark filings by another 40 percent. Given this workload, and the current funding level contemplated by H.R. 4690, the agency will be forced to deal with manpower shortages and delays in implementing modernization efforts. Patents and trademarks will issue more slowly, which will cost this country profits, growth and jobs. My amendment is important to the American high-tech industry, the e-commerce revolution that is driving the United States economy."

Rep. David Dreier (R-CA) stated that "45 percent of the gross domestic product growth in our Nation over the past 5 years has come from the technology sector of our economy."

He continued that "we need to realize that the quality of life, job creation, and economic growth has hinged on our very, very important need to engage in global trade. ... I believe that the very important work that is done by the Patent and Trademark Office needs to be recognized and needs to be supported if we, as a Nation, are going to maintain our global competitiveness."

Rep. John Conyers (D-MI), ranking member of the House Judiciary Committee, stated that the current level of funding "is hurting the ability of the Patent and Trademark Office to service the creators and the inventors who are responsible for the current technology boom."

"This may be the Federal agency most responsible for the productivity, the innovation that is spurring our economic growth," Rep. Jim Moran (D-VA). "I do not like these offsets, but I also know that it is not right to be crippling the Patent and Trademark Office's ability to process the patents, the trademarks, the innovation that enable us to be the leader of the global economy. The reality is that the patents are now up by 12 percent, trademark applications are up by 42 percent. This bill has a 3 percent increase. We cannot keep pace with the demand."

Most of those who spoke against the Coble amendment stated that they opposed the offset to funding for the federal census.

Rep. Jose Serrano (D-NY), the ranking member of the CJS Subcommittee of the House Appropriations Committee, spoke in opposition to the Coble amendment. "But this amendment opens up a discussion which we thought we had put to bed last year and that is a discussion of the census and the Census Bureau. Taking money out of here will begin to cripple the followup work and the ongoing work that the Census Bureau has to do in order to follow up everything that we funded them to do last year."

Rep. Barney Frank (D-MA) responded to this argument by stating the original funding level for the census would be restored later in the appropriations process.

"Now, I join, I think, virtually everyone here, including the author of this bill, in not liking these offsets. I know, because I have been working with the gentleman from North Carolina on this, that he has tried very hard to deal with this offset issue. But I am going to vote for this amendment confident that the offsets will themselves be offset."

"We have a shadow budget. Thanks to the majority, we adopt a budget early in the year in the House that no one thinks is going to be paid serious attention to," said Rep. Frank. "We are going through an exercise now. We have to vote this thing out so we can get into a House-Senate conference and a negotiation with the President so the real budget will be adopted."

He continued that the purpose of the vote on the Coble amendment is to send "a strong statement that the Patent Office should be fully funded."

The amendment failed by a vote of 145 to 223. Republicans were more supportive that Democrats. Members who represent districts with high tech companies, or who have a record of supporting the high tech issues, mostly voted for the amendment.