Silicon Valley Congressional Delegation Proposes PATENT Jobs Act

June 28, 2013
Press Release

Reps. Zoe Lofgren (D-San Jose), Mike Honda (D-San Jose) and Anna G. Eshoo (D-Palo Alto) introduced the Patents And Trademarks Encourage New Technology (PATENT) Jobs Act today to exempt the United States Patent and Trademark Office (USPTO) from the debilitating cuts imposed by budget sequestration (bill text). Even though the USPTO is funded solely by patent user fees, the sequester requires cuts of nearly $150 million in the agency's funding. Without a legislative remedy, the shortfall effectively stops the agency from opening five new, highly anticipated regional patent offices across the country, including one located in Silicon Valley. The USPTO currently has a patent backlog of 640,000 applicants, and the new offices were announced to speed the process for start-ups and innovators who can face a costly two-year wait for a patent to be issued.

"It is very short-sighted to hold back the new products and cutting edge technologies that can grow our economy," said Rep. Lofgren. "Our bill is very simple and reaffirms a long held belief that inventors who pay fees should receive speedy services and patents for their inventions. The services and speed these new offices offer can make the difference for products to go from the drawing board to the marketplace faster, benefiting all of us with the growth and job creation that come with it."

"USPTO is funded entirely by fees paid to the agency, making it fundamentally different than other government spending," said Rep. Honda. "Congress intended for these fees to be used solely to carry out USPTO's operations, not the government at large. Our bill will prevent the application of sequestration to USPTO fee revenue so that the Silicon Valley office can open as scheduled and USPTO can continue the progress that has been made on reducing the patent application backlog, which is vital for ensuring America's economic competitiveness."

"The U.S. Patent Office has been crucial to economic growth and innovation in America. Sequestering this self-funded agency is illogical and sets it up to fail," Rep. Eshoo said. "These cuts will exacerbate the patent backlog and stifle efforts to connect Silicon Valley innovators with a satellite patent office. Our legislation will enable USPTO to implement reforms and programs years in the making so that the agency can continue to foster the wealth of knowledge and innovation across America."

The PATENT Jobs Act would enable USPTO to access the fee revenue sequestered in Fiscal Year 2013, which would otherwise sit unused and untouchable, and would add USPTO to the list of agencies exempt from sequestration orders. This is not a new budgetary concept; Congress has recognized the uniqueness of user-fee-funded agencies in the past, exempting them from sequestration in the Statutory Pay-As-You-Go Act of 2010. The legislation follows a bipartisan letter sent earlier this week by members of the California delegation to the Commerce, Justice, and Science Appropriations Subcommittee asking for a remedy.

USPTO announced the selection of Silicon Valley for one of four new regional patent offices last summer. The decision was broadly hailed at the time to strengthen the connection between our nation's preeminent innovation hub and USPTO, help start-ups and inventors access USPTO resources more easily and effectively, and expedite patent processing for entrepreneurs.

A number of trade and industry groups and bar associations have joined in calling upon the Office of Management and Budget (OMB) and Congress to address the application of sequestration to USPTO and are supportive of efforts to exempt USPTO from sequestration:

Endorsed by the American Intellectual Property Law Association, the American Bar Association, Coalition for 21st Century Patent Reform, and the Intellectual Property Owners Association;

The Silicon Valley Leadership Group are calling on OMB and Congress to address the problem; and

A coalition of AdvaMed, California Healthcare Institute, CONNECT, the Innovation Alliance, IFPTE, MDMA, NTEU, NVCA, POPA, and WARF have called on Congress to "rectify this unacceptable diversion of fees by restoring to the USPTO all of the fees being paid in 2013 and ensure that future across-the-board cuts will not impact fees paid to the USPTO."