USPTO Update: Funds Last Till 2nd Week of February

by Dennis Crouch

The USPTO has released additional information regarding its current operations and the ongoing Federal Government funding crisis.  Bottom line is that the PTO expects to continue its patent operations “until at least the second week in February.”  Things on DC appear to be thawing enough to provide hope that an appropriations bill will see some light before then.

Although the USPTO is user-fee funded, it may only spend money that has been appropriated by Congress.  This limit comes directly from the US Constitution, which says “No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law.” Article I, Section 9.

The most recent USPTO appropriations authorization ended on December 22, 2018 — seemingly cutting of the agency’s ability to spend money.  However, the USPTO has been setting aside previously appropriated money in an “operating reserve” fund for a rainy-day (or rainy month+).  It is this operating reserve that is now being spent and set to run-out in a couple of weeks.

Many federal agencies receive budget authority for a single fiscal year, and any money appropriated but not spent by year-end will lapse and no longer be available.  Thus, for instance, 31 U.S. Code § 1301 provides that an annual appropriation  “may be construed to be … available continuously only if the appropriation … (2) expressly provides that it is available after the fiscal year covered by the law in which it appears.”  USPTO appropriations ordinarily include the this type of additional express caveat that appropriated funds are “to remain available until expended.”  That provision allows the USPTO to set-aside its rainy-day fund from prior appropriations.

The aforementioned reserve fund is part of the USPTO’s strategic plan. And the plan particularly involves setting user fees at a high enough level to grow that fund to withstand even fairly unreasonable funding lapses.  One concern though is whether the USPTO fee setting authority covers such overage.  In particular, the USPTO is authorized to set fees “only to recover the aggregate estimated costs to the Office for processing, activities, services, and materials relating to patents (in the case of patent fees).” Adding a strategic operating-reserve-fund in case of a shutdown does not appear to fit within this list of cost bases.

33 thoughts on “USPTO Update: Funds Last Till 2nd Week of February

  1. 6

    Have not yet found the details of the three-week package.

    Does anyone know if this three weeks merely “extends” the last year appropriations levels (three weeks at those levels) or is something else (in other words, without yet a working annual appropriations budget and full mechanism, will the patent continue to draw down funds from its reserves)?

    (and yes, that entire “reserve” mechanism still needs a critical eye)

    1. 6.1

      The CR means the PTO stays open and is funded. If it didn’t, we would close before the three week CR even ends. I am sure it is at whatever funding levels the last CR was under.

      Also, would you rather the PTO establish reserves for shutdowns or other emergencies, or just not spend the money and let Congress say “we’ll take that, thanks!”.

      1. 6.1.1

        As to your last paragraph, the point is not to “what I would rather,” and the point is more to how that limited authority to set fees was constrained by the AIA for an aggregate amount.

        Slush funding means that the fees were not set in the agrregate.

        If in fact there is “excess,” no, I would not want a Na ked tax on innovator.

        But the “excess” is not a tax that only has the two options you list. An easy third option is a pro-rata refund to innovators that paid those “excess” monies in.

        1. 6.1.1.1

          Your third option is a big dream, but that’s never gonna happen and you know it. Government appropriations don’t work that way.

          1. 6.1.1.1.1

            It may be a dream, – but it is the only legally compliant and non-pure-Tax option on the table.

            But that is still besides the point that slush funding is NOT in line with the authority conferred by the AIA.

            1. 6.1.1.1.1.1

              Someone clearly thinks it’s okay, as the PTO already replinshed the reserve funds.

              1. 6.1.1.1.1.1.1

                IamI,

                “someone thinking it ok” has zero to do with whether or not it IS ok.

                That’s a rather obvious point that I should not have to remind you of.

      2. 6.1.2

        IamI,

        Thanks for your replies (here and elsewhere).

        I hear you when you say “CR means… and is funded. If it didn’t, we would close before the three week CR even ends” but I wanted to see the details and the mechanism FOR that funding.

        It may be a mere “extension” of the funding paradigm from the last annual process.

        But remember that the Office funding paradigm IS on an annual-type basis.

        Even without “shutdowns,” there is more to the picture for proper execution of the mechanisms that end up providing the funding.

        For example, the notion of the level of fees is based on a time-period estimation of work flow for the objects to which those fees pertain.

        It simply is off-kilter to blindly “extend” in time that which is a function of time. The mechanism is simply not so suited for such a simple process.

        Of course, this is not to say that that simple extension is what the CR does, but given the intricacies, I would rather not merely assume an “easy answer,” especially if that answer includes what amount to a “just because” when the situation ALREADY demands a high level of scrutiny than what has been provided (that slush fund is — and should be — deeply troubling).

    2. 6.2

      I read the bills on congress.gov. They extend at the FY2018 appropriation rate until Feb 15. Three weeks would not add more than a minor amount to the reserve fund. Assuming a general government shutdown on Feb 16, I’d expect the PTO to remain operating until sometime the week of March 4.

      1. 6.2.1

        Thanks Examiner X.

        The link is helpful to a point, but there are many different appropriations bills listed. Which one has the language affecting Patent Office operations?

        I ask because the devi1 may well be in the details.

        Just basing what may be with out those details may not be accurate. But if I understand your thrust, the appropriation “rate” is merely being extended past the initial and actual annual period for which the USPTO had authority to set fees.

        I have to wonder if there is real impact here based on the letter of the law and the actual appropriations mechanism that such a simple “extension” does not take into account, and for which, any fees charged are a violation of the AIA limited authority.

        I fully “get” that a simple view of “Let’s extend the window and ‘keep things the same'” IS what is being attempted. But the mechanisms simply are not that simple, either in practice or in actuality, and just because an act is simple to take does not mean that the simple act is in accord with the law. After all, lot’s of things that the government decides to do are not in accord with the law that constrains the government.

  2. 5

    Unfortunately, three weeks is not a long enough time to build back up the reserve fund, so if the government does shut down again at the end of this short-term CR, the PTO will likely close for real this time. Hopefully, however, the thorough-going futility of the past 35 days will have convinced all parties that there is no upside to another shutdown. No one wins, everyone loses.

    1. 5.1

      ANY “building back the reserve fund” action need be critically reviewed as to the propriety of such actions, given the (due recognized) “in the aggregate” limitation that accompanies the limited powers of the Office per the AIA.

      That should be made clear in every instance of discussions of the slush fund.

      Furthermore, I have not seen any of the details of this three week “reprieve” and have to wonder if this will at all affect the Patent Office, in which the larger problem is one of an overall appropriations bill that provides for normal operation funding.

      In other words, do the details of the reprieve include any sense of the underlying required appropriations process (or waiver thereof) that is necessary for Office operations (outside of the slush fund)?

  3. 4

    Perznit Derpderp sure is the world’s best dealmaker!

    LOL

    Seems like there’s more brown people in the country already. So scary! Next thing you know they’re going to file patent applications with multiple inventors, totally disrespecting The Sovereign.

    LOLOLOLOLOLOL

    1. 4.1

      Your emotions are out of control and your posts make zero sense.

  4. 3

    Both the house and the senate have—in the last two months—already passed the same bill to open the government. The House, however, did not pass the bill by a veto-proof majority. Of course, a veto-proof majority only matters if there is to be a veto.

    In other words, if this problem were entirely in the hands of the legislature, it would already be solved. The only hold-up in the real world is the president. He can lift this shutdown in a (literally) a minute if he wants to. He can do it the hard way (wait and stall until the suffering of the American people gets worse) or the easy way (open the government now, and then let negotiations proceed openly to address his putative boarder security concerns).

    I like the easy way. I hope that those around the president can make him to appreciate the advantages of the easy way. If not, the inconvenience of a closed USPTO will be enormously dwarfed by the inconvenience of an insufficiently vigilant FDA, or TSA, or FAA, or FBI, etc.

    1. 3.1

      Sorry – but your own words do not support your assertion.

      That is: “did not pass the bill by a veto-proof majority. Of course, a veto-proof majority only matters if there is to be a veto.

      Has there been a veto?

      A mere threat of a veto is not the same as an actual veto. If Congress has been cow’d by a mere threat, they are partly to blame.

      And yes, the hard way is, well, hard.

      And unpleasant.

      For everyone – but also, the ENTIRE issue is just not a one-party-to-blame thing, and pretending otherwise does no one any favors.

      1. 3.1.1

        Of course this is a pure Re pu k k ke created issue, you st. Oopit pr ck.

    2. 3.2

      Watching this diseased party and its sick ps y ch o water carriers swirl down the tube is going to be fun.

      1. 3.2.1

        link to lawyersgunsmoneyblog.com

        Republican senators clashed with one another and confronted Vice President Pence inside a private luncheon on Thursday, as anger hit a boiling point over the longest government shutdown in history.

        “This is your fault,” Sen. Ron Johnson (R-Wis.) told Majority Leader Mitch McConnell (R-Ky.) at one point, according to two Republicans who attended the lunch and witnessed the exchange.

        “Are you suggesting I’m enjoying this?” McConnell snapped back, according to the people who attended the lunch.

        BWahahahah!!!

        1. 3.2.1.1

          You are laughing at something that wrecks your own tendency at one-bucketing…?

          How clueless are you?

    3. 3.3

      I like the easy way. I hope that those around the president can make him to appreciate the advantages of the easy way.

      Looks like the president’s advisors have gotten him to see sense. The WaPo is reporting that there is an agreement to temporarily reopen government without wall funds. That is the right outcome. Once the government is re-opened, negotiations can proceed.

      One cannot negotiate with hostage-takers. Once the hostages are released, however, there is no obstacle to ordinary bargaining to achieve a win-win outcome.

      1. 3.3.1

        Nancy just sliced off Perznit Derpderp’s mutated mushroom and ate it for breakfast.

        Awesome.

        Time for Ann Coulter to show Derpderp who’s boss! LOL

      2. 3.3.2

        Elliot Higgins has the best line I have seen so far. “Trump wanted a wall, but he got a cave instead.”

        1. 3.3.2.1

          This is also a good line.

    4. 3.4

      Both the house and the senate have—in the last two months—already passed the same bill to open the government. The House, however, did not pass the bill by a veto-proof majority. Of course, a veto-proof majority only matters if there is to be a veto.

      The house also didn’t pass it in the same session as the senate – once the dems got in the repubs in the senate wouldn’t pass the same bill they had just passed. Your statement places all the blame on Trump (which is accurate) and none on McConnell (which is inaccurate).

      It’s true that if there was only a legislature there would have been no problem. But make no mistake that given the EXISTENCE of the president it is one member of the legislature (McConnell) who is part of the problem.

      The inability of Republicans to stand up to their base ever since 2010 has been the largest problem of the past decade. Fortunately, (and I am supremely confident in this political prognostication) Father Time is undefeated, and the problem will eventually solve itself. The only question is if the republican party goes with it.

      1. 3.4.1

        The house also didn’t pass it in the same session as the senate – once the dems got in the repubs in the senate wouldn’t pass the same bill they had just passed. Your statement places all the blame on Trump (which is accurate) and none on McConnell (which is inaccurate).

        You are, of course, entirely correct. I was—with a dose of willful obtuseness in the service of making a political point—being more generous to Sen. McConnell than he rightly deserves. The shutdown was also partly of McConnell’s making.

        Still and all, the president now has seen sense. All parties can agree to open the government. Here is hoping that this newfound outbreak of common sense has some staying power.

  5. 2

    One of the suggestions of the Taft Commission was making the PTO an independent agency. Guess we could make PTO a self funding independent agency? As the independent agencies are effected by the shutdown. What about Fanny and Fred? Of course, during the time of the Taft administration, no one would suggest that a PTO privy court was even remotely possible under the Constitution.

    1. 2.1

      Agency funding (of any sort of government agency) is necessarily through the appropriations mechanism.

      I am open to seeing some actual “out” that takes the pertinent limitations into consideration. One possibility might well to be to privatize** the venture and make it NOT a government agency per se…

      **Make no mistake – such would not be a panacea, and would surely bring its own set of ills.

  6. 1

    Bottom line is that the PTO expects to continue its patent operations “until at least the second week in February.”

    Conversely, all authority to work overtime was just ended, so in fact patent examination has already begun to slow. The second week in February will just be a hard stop.

    1. 1.1

      Overtime is approximately 1 hour per examiner per week, less than 4% of examining time.

      1. 1.1.1

        Overtime isn’t evenly distributed, it’s concentrated, and its concentrated in primaries. Primaries have less time allowed per action than all other examiners, so cutting their time has more effect than cutting the average examiner hour.

        Rather than each examiner losing an hour (which would have less than 4% practical effect on true output), instead every tenth examiner is not doing 2-3 counts, which means an applicant won’t get their first action this biweek, and three more won’t get their amendments, which delays examination for four “stakeholders.” That is patent examination slowing. Next week, of course, the same applies, and in addition to four stakeholders who had a two week delay, there will be eight stakeholders who are either delayed (if some non-overtime stopgap is performed) or “dropped” altogether (if the office closes).

        In other words, even though you’re cutting 4% of the examining time, the practical effect is that far more than 4% of actions are in fact being delayed or dropped – it’s probably closer to 10% – and it is cumulative. Saying the average overtime is less than 1 hr per examiner hides the fact that essentially what happened is the office furloughed the top 4% of its workforce early – it’s no different than if the office randomly picked some of its primaries and told them not to come to work, because three primaries each doing 20hrs overtime is essentially (after other time, holidays and leave) four primaries, and that fourth primary is now furloughed.

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