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Financial Highlights: Program Costs

 

 Pie Chart summarizing program costs for fiscal year 2004. D  

P rogram costs totaled $1,289.2 million for the year ended September 30, 2004, an increase of $83.1 million, or 6.9 percent, over fiscal year 2003 program costs of $1,206.1 million. The USPTO's most significant program costs related to personnel services and benefits costs, which traditionally comprise over 50 percent of USPTO's total program costs. Any significant change or fluctuation in staffing or pay rate patterns directly impacts the change in total program costs from year to year. Total personnel services and benefits costs for the year ended September 30, 2004, were $745.2 million, an increase of $45.6 million, or 6.5 percent, over fiscal year 2003 personnel services and benefits costs of $699.6 million. This change was a result of a 4.4 percent increase in the federal pay scale, combined with a net increase of 93 personnel, from 6,723 at the end of fiscal year 2003 to 6,816 at the end of fiscal year 2004.

Costs directly attributable to Patent and Trademark business areas represent 84.7 percent of total USPTO costs. The remaining costs, representing support costs, are allocated to the business areas using ABC accounting. Allocated costs have virtually remained at a constant percentage of total costs over the years, ranging from 16.7 percent in fiscal year 2001 to the current 15.3 percent.

 Graph summarizing program costs directly attributable to Patent and Trademark business as well as allocated costs for the last four fiscal years. D  

Patents

Total costs for the Patent business area increased from $1,074.1 million in fiscal year 2003 to $1,145.8 million for fiscal year 2004, representing an increase of 6.7 percent during the period. The following table presents the major components of Patent costs for the past four years.

Patent Costs (Dollars in Millions)
Component FY 2001 FY 2002 FY 2003 FY 2004
Personnel Costs $458.0 $  545.8 $  580.5 $  616.3
Contractual Services  103.6    125.0    127.0    151.7
Printing and Reproduction   53.0     65.3     72.7     71.8
Rent, Communications, and Utilities   54.3     63.7     66.0     79.6
Depreciation, Amortization, or Loss on Asset Disposition   38.6     41.9     37.2     32.9
Other   30.6
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    25.6
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    21.0
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    22.7
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Direct Costs  738.1    867.3    904.4    975.0
Allocated Costs  144.4
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   155.0
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   169.7
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   170.8
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Total Patent Costs $882.5
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$1,022.3
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$1,074.1
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$1,145.8
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Percentage Change in Patent Costs    13.0%      15.8%      5.1%      6.7%

 

 Pie Chart summarizing patent costs by product for fiscal year 2004. D  

The most significant program costs relate to personnel services, and account for 60.1 percent of the increase in total costs of Patent operations during the past four years. Patent personnel costs for the year ended September 30, 2004, were $616.3 million, an increase of $35.8 million, or 6.2 percent, over fiscal year 2003 personnel costs of $580.5 million. Rent, communications, and utilities, printing and reproduction, and contractual service costs represent 26.5 percent of the Patent program costs for fiscal year 2004. Over the last four years, these costs increased in line with the overall increase in total Patent costs due to additional rental costs for the new USPTO headquarters in Alexandria, Virginia, fluctuations on patents issued and printed, and IT maintenance and development.

Patent costs were spread over four main patent products: utility patents, design patents, plant patents, and PCT. The cost percentages presented at left are based on direct and indirect costs allocated to patent operations and are a function of the volume of applications processed in each product area.

 

Trademark

Total costs for the Trademark business unit were largely unchanged over the past four years. The following table shows the major components of Trademark costs for that period.

Trademark Costs (Dollars in Millions)
Component FY 2001 FY 2002 FY 2003 FY 2004
Personnel Costs $ 74.3
$ 74.4 $ 67.1 
$ 74.0
Contractual Services   13.6   18.4 20.1   22.4
Printing and Reproduction    2.5    2.2  2.6    1.2
Rent, Communications, and Utilities    9.1    9.3  7.9    9.3
Depreciation, Amortization, or Loss on Asset Disposition    5.0    4.0  4.6    5.0
Other    3.8
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   3.7
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 3.8
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   4.6
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Direct Costs  108.3  112.0 106.1   116.5
Allocated Costs   25.8
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  26.7
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25.9
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  26.9
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Total Patent Costs $134.1
double underline
$138.7
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$132.0  
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$143.4
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Percentage Change in Trademark Costs    3.1%    3.4%    (4.8)%      8.6%

 

 Pie Chart summarizing trademark costs by product for fiscal year 2004. D  

The most significant program costs relate to personnel services, which represent more than 50 percent of Trademark cost of operations for each of the past four years. These costs have remained virtually constant over the past four years, with an overall decrease of $0.3 million. Contractual services have increased $8.8 million, which represents 94.6 percent of the increase in total trademark costs over the past four years, primarily related to the increase in scanning contracts as the USPTO moves to a fully electronic workplace.

The Intent to Use cost includes costs related to examining both the application and the additional intent to use disclosures. The overall cost percentages presented to the right are based on both direct costs and indirect costs allocated to trademark operations and are a function of the volume of applications processed in each product area.


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Last Modified: 10/5/2009 11:47:32 AM