by Dennis Crouch
As federal agencies begin to respond to the new Republican Administration's agency reorganization directive, the USPTO finds itself in an unusual position. Unlike many federal agencies, the USPTO operates primarily on user fees rather than appropriated funds. However, this self-funding status does not exempt the agency from the new "Department of Government Efficiency" (DOGE) initiative requiring agencies to develop plans for "large-scale reductions in force" (RIFs) by March 13, 2025. opm-omb-memo-guidance-on-agency-rif-2-26-2025.
Depending on how Commerce Secretary Howard Lutnick and Acting USPTO Director Coke Stewart interpret and implement these directives, the impact on USPTO operations could be extremely disruptive. Lutnick has indicated he is in favor of major reductions in force, although not speaking directly about the USPTO. These negotiations continue behind closed doors while patent examiners, practitioners and applicants continue to sit in limbo about potential impacts on examination quality, processing times, and the stability of the U.S. patent system.
A new February 26, 2025 memorandum from OMB and OPM directs agencies to take serious steps toward shrinking their activity, workforce, and physical footprint. Agencies have been directed to focus on "maximum elimination of functions that are not statutorily mandated." The memo notes that agencies should narrowly interpret statutory requirements:
Agency leadership must confirm statutes have not been interpreted in a way that expands requirements beyond what the statute actually requires. Instead, statutes should be interpreted to cover only what functions they explicitly require.
An important note here is that much of the USPTO operation is guided by precedential cases that are effectively already interpreting the statutes. This would seemingly guide any interpretation offered by the agency director. Although some of this may seem dramatic, the Agency is part of the executive branch, and thus subject to the direction of the President and his sworn duty to "take Care that the Laws be faithfully executed." Cuts are ongoing, but major systemwide upheavals are unlikely for several more weeks. We should know more after the March 13 agency deadline.
The memo from OPM creates a framework for analyzing which USPTO functions might be vulnerable to cuts -- some aspects of this are discussed in below. The rest of this post talks through various USPTO functions -- considering ones that are statutorily mandated versus those that are discretionary as one approach to seeing where cuts might occur.