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Statement of Budgetary Resources

Bar chart summarizing annual growth in available budgetary resources for fiscal years 2007 to 2011. Values are as follows in millions of dollars:
FY 2011 $2,338.6; FY 2010 $2,161.6; FY 2009 $1,981.2; FY 2008 $1,916.6; FY 2007 $1,794.5.

Bar chart summarizing application filings for fiscal years 2007 to 2011. Values are as follows in thousands: 
Trademark: FY 2011 398.7; FY 2010 368.9; FY 2009 352.1; FY 2008 401.4; FY 2007 394.4.
Patent: FY 2011 536.6; FY 2010 510.1; FY 2009 486.5; FY 2008 496.9; FY 2007 468.3.

During FY 2011, total budgetary resources available for spending was 8.2 percent over the amount available in the preceding year, with a 30.3 percent increase over the past five fiscal years. The increase in budgetary resources available for use is depicted by the graph to the right.

Through FY 2008, the increase in available budgetary resources was used to fund the increased cost of additional human capital to address the backlog of patent applications. In FY 2009, the increase in available budgetary resources minimally covered inflationary increases and was $200 million less than planned for. As a result, budget reductions and cost-savings measures were implemented. However, while fee collections were showing a rebound at the beginning of FY 2010, the USPTO was operating under a smaller appropriation that was based on the FY 2009 financial picture with lower than average fee collections. This was a result of the slower economy and actual collections in FY 2009. The lack of enactment of the 15 percent increase on certain patent fees as proposed in the FY 2011 President’s Budget resulted in an appropriation $241.3 million less than planned for and requested in the FY 2011 President’s Budget. As we are an Agency funded entirely by user fees, this affects our operations significantly.

As the economy has begun showing signs of recovering, the Patent and Trademark application filings have also been slowly recovering.

The USPTO was provided appropriation authority to spend anticipated fee collections in FY 2011 for an amount up to $2,090.0 million. This was less than the amount of total fees collected in FY 2011. When spending authority is less than fee collections, the additional fee collections are temporarily unavailable. As a result of the AIA, the USPTO was provided with the authority to collect additional offsetting collections beginning September 26, 2011 of (1) a 15 percent interim surcharge on certain patent fees that will continue until each fee is adjusted by regulation and (2) fees paid by patent applicants to request expedited, prioritized examination. This authority provided the USPTO with $4.8 million of additional budgetary resources. However, after the enactment of the AIA, there was a rush on fee payments during the 10 days from enactment to the fee increase effective date of September 26, 2011. As a result, during FY 2011, the USPTO collected an additional $208.9 million in fees that were temporarily unavailable for spending.

The following charts present the source of funds made available to the USPTO in FY 2011, and the use of such funds representing FY 2011 total obligations incurred, as reflect on the Statement of Budgetary Resources.

Pie chart summarizing sources of funds made available in fiscal year 2011. Values are as follows in millions of dollars:
Operating Reserve: $222.7.
Recovery of Prior Year Obligations: $15.2.
Patent Fee Collections: $2,071.5.
Trademark Fee Collections: $232.1.
Other Collections: $6.0.   Pie chart summarizing uses of funds in fiscal year 2011. Values are as follows in millions of dollars: 
Patent: $1,409.5.
Trademark: $98.2.
IP Policy, Protection, and Enforcement: $29.4.
IT Allocated: $302.9.
Other Allocated: $320.9.

USPTO operations rely on patent maintenance fees to fund a portion of the work being completed each fiscal year. During FY 2011, maintenance fees collected increased $146.2 million, or 21.7 percent, from FY 2010. However, a large part of the increase in maintenance fees were paid during the 10 days before the 15 percent surcharge increase – making a lot of the increase unavailable for spending. As maintenance fees are one of the largest sources of budgetary resources and are recognized immediately as earned revenue, any fluctuations in the rates of renewal have a significant impact on the total resources available to the USPTO. To some extent, renewals recoup costs incurred during the initial patent process. As shown on page 63, the renewal rates for all three stages of maintenance fees increased during FY 2011. The renewal rates have rebounded as the economy rebounds.

As defined earlier, temporarily unavailable fee collections occur when the USPTO is not appropriated the authority to spend all fees collected during a given year. During FY 2011, the USPTO collected $208.9 million in fee collections that were designated as temporarily unavailable. As a result, the $581.2 million in temporarily unavailable fee collections at the end of FY 2010 increased to $790.1 million at the end of FY 2011.

Temporarily Unavailable Fee Collections
(Dollars in Millions)
  FY 2007 FY 2008 FY 2009 FY 2010 FY 2011
Fiscal year fee collections $1,783.2 $1,879.3 $1,874.2 $2,068.5 $2,298.9
Fiscal year collections appropriated (1,771.0) (1,879.3) (1,874.2) (2,016.0) (2,090.0)
Fiscal year unavailable collections $12.2 $— $— $52.5 $208.9
Prior year collections unavailable 516.5 528.7 528.7 528.7 581.2
Subtotal $528.7 $528.7 $528.7 $581.2 $790.1
Special fund unavailable receipts 233.5 233.5 233.5 233.5 233.5
Cumulative temporarily unavailable fee collections $762.2 $762.2 $762.2 $814.7 $1,023.6

The above chart illustrates amounts of fees that Congress has appropriated to the USPTO for spending over the past five fiscal years, as well as the cumulative unavailable fee collections.

These cumulative unavailable fee collections remain in the USPTO’s general fund account at the U.S. Department of the Treasury (Treasury) until appropriated for use by Congress. In addition to these annual restrictions, collections of $233.5 million are unavailable in accordance with the OBRA of 1990, and deposited in a special fund receipt account at the Treasury. Effective in FY 2012, all additional unavailable fee collections will be deposited in a new fee reserve fund created by the AIA. It is anticipated that fee collections in the fee reserve fund will be appropriated for use by Congress.

As the USPTO returns to financial health, the Agency will use the new authority in the AIA to set fees so that we are able to manage patent and trademark revenue fluctuations and properly align fees in a timely, fair, and consistent manner.

United States Patent and Trademark Office
Last Modified: 01/03/2012 14:04:42