Financial Highlights: Statement of Net Cost
T he Statement of Net Cost presents the USPTO's results of operations by Patent and Trademark business areas. The following table presents the total results of operations for the past four fiscal years.
|FY 2001||FY 2002||FY 2003||FY 2004|
|Earned Revenue||$ 1,040.2||$ 1,061.4||$ 1,162.3||$ 1,239.0|
|Program Cost|| (1,016.6)
The Statement of Net Cost compares fees earned to costs incurred during a specific period of time. It is not necessarily an indicator of net income or net cost over the life of a patent or trademark. Net income or net cost for the fiscal year is dependent upon the phases of work that have been completed. The net income calculation is based on fees earned during the fiscal year being reported, regardless of when those fees were collected. Maintenance fees play a large part in whether net income or net cost is recognized. Maintenance fees collected in fiscal year 2004 are a reflection of patent issue levels 3.5, 7.5, and 11.5 years ago, rather than a reflection of patents issued in fiscal year 2004. Therefore, maintenance fees can have a significant impact on matching costs and revenue. In addition, the Statement of Net Cost calculation looks at groups of work that begin and end the fiscal year in various phases of their life cycle.
During fiscal year 2001, the USPTO's operations generated a net income of $23.6 million. In the following year, the significant increase in deferred revenue, combined with the significant increase in costs, resulted in a net cost rather than a net income. The fiscal year 2003 budget did not allow for significant cost increases, resulting in lower spending and a net cost of $43.8 million for the year. The modest increase in budgetary resources for fiscal year 2004 necessitated continued restrictions over program cost increases, resulting in a net cost of $50.2 million.