NOTE 3. Non-Entity Assets

Non-entity assets consist of amounts held on deposit for the convenience of USPTO customers and held on behalf of the World Intellectual Property Organization (WIPO) and the European Patent Office (EPO). Customers have the option of maintaining a deposit account at the USPTO to facilitate the order process. Customers can draw from their deposit account when they place an order and can replenish their deposit account as desired. Funds maintained in customer deposit accounts are not available for USPTO use until an order has been placed. Once an order has been placed, the funds are reclassified to entity funds. Also, in accordance with the Patent Cooperation Treaty, the USPTO collects international fees on behalf of the WIPO and the EPO. The amounts collected are
remitted to WIPO and EPO monthly.

Non-Entity Fund Balance with Treasury as of September 30, 2004 and 2003 (Dollars in Thousands) 2004 2003 Fund Balance with Treasury:     Intragovernmental Deposit Accounts $ 3,906 $ 3,266 Other Customer Deposit Accounts  66,863  71,141 Patent Cooperation Treaty Account   7,732   5,309 Total Fund Balance with Treasury $78,501  79,716 Cash:     Patent Cooperation Treaty Account     463     800 Total Non-Entity Funds $78,964 $80,516