Program Costs
Program costs totaled $1,424.0 million for
the year ended September 30, 2005, an increase of $134.8 million, or 10.5
percent, over FY 2004 program costs of $1,289.2 million. The USPTO’s
most significant program cost is personnel services and benefits, which
traditionally comprise over half 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, 2005, were
$802.2 million, an increase of $57.0 million, or 7.6 percent, over FY
2004 personnel services and benefits costs of $745.2 million. This change,
42.3 percent of the total increase in program costs, was a result of a
3.7 percent increase in the Federal pay scale, combined with a net increase
of 547 personnel, from 6,816 at the end of FY 2004 to 7,363 at the end
of FY 2005.
The USPTO directs maximum resources to the priority functions of patent
and trademark examination. For FY 2005, costs directly attributable to
the Patent and Trademark business areas represent 79.2 percent of total
USPTO costs. The remaining costs, representing support costs, are allocated
to the business areas using ABC accounting. Allocated costs in FY 2005
appear to increase, however a change in presentation is causing the increase,
not an actual increase in cost.
 D
Patents
Total costs for the Patent business area increased from $1,145.8 million
in FY 2004 to $1,253.1 million for FY 2005, representing an increase of
9.4 percent. The following table presents the major components of Patent
costs for the past four years.
Patent Costs (Dollars in Millions)
| Personnel Costs |
$ 535.5 |
$ 566.3 |
$ 603.6 |
$ 646.5 |
| Contractual Services |
123.4 |
125.1 |
150.4 |
156.1 |
| Printing and Reproduction |
65.2 |
72.7 |
71.8 |
68.9 |
| Rent, Communications,
and Utilities |
60.2 |
62.9 |
76.3 |
82.6 |
| Depreciation, Amortization,
or Loss on Asset Disposition |
41.3 |
36.4 |
32.5 |
26.1 |
| Other |
15.5
 |
18.8
|
21.3
|
25.7
|
| Direct Costs |
841.1 |
882.2 |
955.9 |
1,005.9 |
| Allocated Costs |
181.2
|
191.9
|
189.9
|
247.2
|
| Total Patent
Costs |
$1,022.3
 |
$1,074.1
|
$1,145.8
|
$1,253.1
|
| Percentage
Change in Patent Costs |
15.8% |
5.1% |
6.7% |
9.4% |
|
The USPTO’s most significant program costs relate to personnel
services, and account for 48.1 percent of the increase in total cost of
Patent operations during the past three years. Patent personnel costs
for the year ended September 30, 2005, were $646.5 million, an increase
of $42.9 million, or 7.1 percent, over FY 2004 personnel costs of $603.6
million. Rent, communications, and utilities, printing and reproduction,
and contractual service costs represent 24.5 percent of the Patent program
costs for FY 2005. Over the last three 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, and increased
spending on IT maintenance and development. In FY 2005, printing costs
decreased 4.0 percent, consistent with the decrease in the number of patents
issued. In addition, the increases in rental costs are temporary and will
begin to level off now that the move to Alexandria has been completed.
Patent costs were spread over four main patent products: utility patents,
design patents, plant patents, and PCT patents. Utility patents were further
broken down into the technology of the utility patent. The cost percentages
presented to the right 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 from
FY 2002 through FY 2004. However, total Trademark costs increased $27.5
million, 19.2 percent, over FY 2004 costs. The following table shows the
major components of Trademark costs for that period.
Trademark Costs (Dollars in Millions)
| Personnel Costs |
$ 72.3 |
$ 65.4
|
$ 72.6 |
$ 80.0 |
| Contractual Services |
18.2 |
19.9 |
22.3 |
23.2 |
| Printing and Reproduction |
2.2 |
2.6 |
1.2 |
0.8 |
| Rent, Communications,
and Utilities |
8.7 |
7.5 |
8.9 |
8.4 |
| Depreciation, Amortization,
or Loss on Asset Disposition |
3.9 |
4.5 |
4.9 |
6.1 |
| Other |
2.6
|
3.5
|
4.4
|
3.7
|
| Direct Costs |
107.9 |
103.4 |
114.3 |
122.2 |
| Allocated Costs |
30.8
|
28.6
|
29.1
|
48.7
|
| Total Trademark
Costs |
$138.7
|
$132.0
|
$143.4
|
$170.9
|
| Percentage
Change in Trademark Costs |
3.4% |
(4.8)% |
8.6% |
19.2% |
|
The most significant program costs relate to personnel services, which
represent more than 46 percent of Trademark cost of operations for each
of the past four years. These costs have increased $7.7 million, or 23.9
percent, of the increase in total cost of trademark operations during
the past three years. Contractual services have increased $5.0 million,
which represents 15.5 percent of the increase in total trademark costs
over the past three years, primarily attributable 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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