[Congressional Record Volume 144, Number 46 (Thursday, April 23, 1998)]
[Extensions of Remarks]
[Page E671]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 THE ``UNITED STATES PATENT AND TRADEMARK OFFICE AUTHORIZATION ACT, FY 
                                 1999''

                                 ______
                                 

                           HON. HOWARD COBLE

                           of north carolina

                    in the house of representatives

                        Thursday, April 23, 1998

  Mr. COBLE. Mr. Speaker, today I am pleased to introduce the ``United 
States Patent and Trademark Office Authorization Act for Fiscal Year 
1999,'' which contains the first actual decrease ever in patent user 
fees for our nation's inventors.
  The introduction of this legislation follows a hearing the 
Subcommittee on Courts and Intellectual Property of the Committee on 
the Judiciary held last month in exercise of its oversight 
responsibilities concerning the operations of the U.S. Patent and 
Trademark Office (``PTO''). The Subcommittee heard testimony from 
witnesses representing the Administration, PTO users, and PTO employee 
unions. This hearing covered the PTO's budget, including how its fee 
revenues are collected and spent, the expiration of the patent 
surcharge fee, the diversion of PTO funds to other government agencies, 
and other relevant issues.
  The Administration announced that in light of the lapsing of Section 
10101 of the Omnibus Budget Reconciliation Act of 1990 (``OBRA''), the 
patent fees established under subsections 41(a) and (b) of title 35 of 
the U.S. Code would revert to their pre-OBRA level. It was stated that, 
unless adjusted, the fee would fall $131,526,000 short of the amount 
the PTO needs to execute the program recommended by the President in 
his FY 1999 budget. To compensation for this reduction in fees 
revenues, Assistant Secretary of Commerce and Commissioner of Patents 
and Trademarks Bruce Lehman stated that an increase was needed in the 
base patent fees in an amount equal to the reduction in revenue which 
result from the lapsing of the surcharge authority.
  While I and other Members of the Subcommittee are very supportive of 
ensuring that the PTO is adequately funded to provide the services 
requested by patent and trademark applicants, the Administration's 
request received by the Subcommittee would actually raise $50 million 
more than the amount the President stated in his budget the PTO will 
need in FY 1999. Commissioner Lehman explained that this revenue, along 
with $66 million from FY 1998, would be used to fund other government 
agencies and programs. This continuing diversion of PTO fee revenues 
was strongly opposed by inventors and the trademark community, who pay 
for patent and trademark applications to fund only the services they 
receive from the PTO.
  The Patent and Trademark Office is 100 percent funded through the 
payment of application and user fees. Taxpayer support for the 
operations of the Office was eliminated in 1990 with the passage of 
OBRA. OBRA imposed an massive fee increase (referred to as a 
``surcharge'') on America's inventors and industry in order to replace 
taxpayer support the Office was then receiving. The revenues generated 
by this surcharge were placed into a surcharge account. The PTO was 
required to request of the Appropriations Committee that they be 
allowed to use the revenues in the surcharge account to support the 
portion of its operations these revenues represented. It was 
anticipated in 1990 that Congress would routinely grant the PTO 
permission to use the surcharge revenue since it was generated 
originally from fees paid by users of the patent and trademark systems 
to support only the cost of those systems.
  Unfortunately, the user fees paid into the surcharge account became a 
target of opportunity to fund other, unrelated, taxpayer-funded 
government programs. The temptation to use the surcharge, and thus a 
significant portion of the operating budget of the PTO, was proven to 
be increasingly irresistible, to the detriment and sound functioning of 
our nation's patent and trademark systems. Beginning with a diversion 
of $8 million in 1992, Congress increasingly redirected a larger share 
of the surcharge revenue, reaching a record level of $54 million in FY 
1997. In total, over the past seven fiscal years, over $142 million has 
been diverted from the PTO to other agencies and programs.
  Mr. Speaker, the time has come for Congress to stop diverting the 
fees of inventors and trademark applicants to fund other taxpayer-
funded government programs. Accordingly, in the United States Patent 
and Trademark Office Authorization Act, FY 1999, I am proposing a 
schedule of fees that would recover only the amount of money which the 
Administration has stated it needs to execute the program recommended 
by the President for the PTO in FY 1999 and FY 2000. This legislation 
not only fully funds the stated needs of the PTO, it will provide a 
real decrease in fees paid by patent applicants--the first actual 
decrease in fees in at least the last fifty years, indeed, perhaps 
since the patent system was established in 1790.
  The decrease in fees provided by this legislation will provide 
tangible assistance to America's inventors, while ensuring that they 
get their monies worth, especially since their creativity and ingenuity 
are so crucial to the welfare of our nation.
  I urge my colleagues to join me in authorizing one of our country's 
most important agencies in a manner that responds fully to both the 
stated needs of the Office and its users.

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