Program costs totaled $2,148.1 million for the year ended September 30, 2011, an increase of $141.1 million, or 7.0 percent, over FY 2010 program costs of $2,007.0 million. The USPTO’s most significant program cost is personnel services and benefits, which comprise approximately 70 percent of USPTO’s total program costs. Any significant change or fluctuation in staffing or pay rate directly impacts the change in total program costs from year-to-year. Total personnel services and benefits costs for the year ended September 30, 2011, were $1,514.0 million, an increase of $114.6 million, or 8.2 percent, over FY 2010 personnel services and benefits costs of $1,399.4 million. This change was predominantly the result of a net increase of 703 personnel, from 9,507 at the end of FY 2010 to 10,210 at the end of FY 2011.
The USPTO directs maximum resources to the priority functions of patent and trademark examination, as well as IP policy, protection, and enforcement worldwide. For FY 2011, costs directly attributable to the Patent, Trademark, and IP protection business areas represent 83.9 percent of total USPTO costs. The remaining costs, representing support costs, are allocated to the business areas using ABC accounting. Allocated costs increased 12.9 percent over the past year in line with increased IT investments.
Total costs for the Patent business unit increased $380.3 million, 24.8 percent, from FY 2007 through FY 2011. The Patent organization’s most significant program costs relate to personnel services, and account for 109.0 percent of the increase in total cost of Patent operations during the past four years. Patent personnel costs for the year ended September 30, 2011, were $1,281.6 million, an increase of $109.4 million, or 9.3 percent, over FY 2010 personnel costs of $1,172.2 million. Rent, communications, and utilities, printing and reproduction, and contractual service costs represent 15.3 percent of the Patent program costs for FY 2011. From FY 2007 through FY 2008, contractual costs increased in line with the overall increase in Patent costs due to increases in the number of patents issued and increased spending on indexing and scanning documents for the electronic file wrapper, offset by minor decreases to printing and reproduction. From FY 2009 through FY 2011, contractual costs decreased in line with the budget cuts implemented agency-wide.
Patent costs were predominantly spread over two patent products: utility patents and 371 filings (an international application designated to the U.S. that has entered the national stage). The cost percentages presented 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.
Total costs for the Trademark business unit decreased $12.7 million, 6.2 percent, from FY 2007 through FY 2011. The Trademark organization’s most significant program costs relate to personnel services, and account for most of the increase in total cost of Trademark operations during the past four years. This increase of $12.3 million was offset by other cost increases and decreases. Contractual services have decreased $13.7 million over the past four years, which represents the majority of the total Trademark cost change over the past four years, as a result of being able to rely more on automated tools, rather than contractors. Cost allocated to the Trademark organization decreased over the past four years, but increased over the past year in line with increased IT investments.
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 below 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.
Intellectual Property Policy, Protection, and Enforcement Worldwide
Total costs for IP Protection increased $10.9 million, or 34.0 percent, from FY 2007 through FY 2011. The most significant program costs for IP Protection in FY 2011 relate to personnel services, and account for 40.5 percent of the total cost for IP Protection operations. The next largest cost associated with the policy, protection, and enforcement of IP worldwide is contractual services, which include joint project agreements. These costs were incurred in line with the Strategic Goal 3 activities discussed on pages 31 to 37.