Senate Appropriations Committee Increases USPTO Funding

(July 19, 2000) The Senate Appropriations Committee quietly approved the FY 2001 CJS appropriations bill with an increase in funding for the USPTO over the levels requested by the Clinton administration and passed by the House last month.

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 an increasingly large amount of these have been diverted to pay for other government programs. High tech 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.

Intellectual property trade groups, and companies that own intellectual property, lobbied the Senate Appropriations Committee intensively to stop the diversion of fees.

The Senate Appropriations Committee met on Tuesday afternoon, July 18, to mark up two appropriations bills, including the FY2001 Commerce, State and Justice (CJS) bill.

	Sen. Ted Stevens (R-AK)

Sen. Ted Stevens (R-AK), Chairman of the Committee, presided. He wore his Tasmanian devil tie to signal members that he intended to expeditiously mark up the bills.

The meeting lasted over two hours, and completed the mark up of both the Energy appropriations bill and the CJS bill. However, while most members of the Committee appeared and spoke, not one word was said about the USPTO, patents, trademarks, or intellectual property.

At the tail end of the meeting, after most of the members of the Committee had departed, Sen. Judd Gregg (R-NH), the Chairman of the CJS Appropriations Subcommittee, offered his "manager's amendments". He did not explain their contents. Nor was there any debate or discussion of the amendments. The Committee then approved them without a recorded vote, and adjourned.

Members of then press asked Sen. Gregg for copies of the amendments. He declined to provide them. Tech Law Journal has also requested copies of the amendments, or at least, copies of the USPTO language, from four staff members of the full Committee or CJS Subcommittee. All refused.

Tech Law Journal also spoke after the hearing with Herbert Wamsley, the Executive Director of the Intellectual Property Owners Association. He stated that he had assurances from committee staff that "they restored very substantial funding to the USPTO."

He elaborated that the House passed bill would withhold $295 Million in user fees, based on the USPTO's current estimate of how much fee revenue they will get." However, under Sen. Gregg's amendments "all of the money would be available except $33 Million."

"We are very pleased with the Senate action," said Wamsley. "We are hoping that in the House Senate conference the conferees will insist on the Senate numbers."

The full Senate has yet to pass the bill. However, Wamsley does not expect a Senate floor fight over USPTO funding.

This would then leave it to the House Senate conference committee to resolve the difference. The House version of the bill, which is backed by House CJS Appropriations Subcommittee Chairman Harold Rogers (R-KY), diverts an estimated $295 Million in user fees to other government programs.

Rep. Howard Coble (R-NC), the Chairman of the House Judiciary Committee's Courts and Intellectual Property (CIP) Subcommittee, which oversees the USPTO, is leading the fight to end the diversion of user fees. He offered an amendment to the House bill which would have increased USPTO funding by $134 Million. It failed on a roll call vote of 145 to 223.