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October 01, 1995
PTO 95-29

Contact:
Richard Maulsby
(703) 305-8341

Press Release, 95-29

PTO Responds to Senate Appropriations Budget Allocations for Fiscal Year 1996

Congressional action that cut $56 million from the Commerce Department's Patent and Trademark Office budget for fiscal year 1996 will hurt the department's efforts to encourage innovation and seriously jeopardize its programs aimed at preserving America's edge in technological competitiveness, the PTO said.

Deletion of the funds by the Senate Appropriations Committee amounts to an unfair tax on America's inventors and intellectual property owners, the agency said.

"Cuts in funding to the department's PTO reflect an apparent lack of concern for the long-term impact these cuts will have on the country's economic growth and competitiveness," PTO Commissioner Bruce A. Lehman said. "It is yet another example of a lack of understanding in Congress of the important role the Commerce Department plays in promoting America's economic vitality," he continued.

Although the PTO operates without using any taxpayer funds, as was the intention of the act, these surcharge funds have repeatedly not been fully appropriated. As of FY '95, this shortfall between the money charged to PTO customers and the money appropriated by Congress amounted to nearly $60 million. The Senate markup would nearly double the cumulative shortfall of all previous years combined, leaving a total shortfall of over $114 million.

The FY '96 budget request by the Clinton administration for PTO was set to recover the estimated costs of operation for the year, without any additional money set aside a reserve. The cuts as proposed by the Senate Appropriation Committee markup would leave the PTO in the position of being forced to cut products and services in order to reduce outlays to make up for the shortfall.

Although plans for reductions in spending have not been finalized, cuts may have to come from the suspension or delay in capital improvements for information technology such as the suspension of major software development to allow for electronic filing or to allow PTO examiners to have desktop access to a database of prior art. These information technology improvements are designed to lower long-term costs and to improve customer service by facilitating quicker examination, reduced pendency, and the provision of higher quality patents. Additionally, other programs may be hurt. Under consideration are slowing down the hiring of new examiners, postponing efforts to improve the quality of work life, reducing training opportunities for examiners, and letting pendency rates rise.

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