[Congressional Record Volume 144, Number 147 (Thursday, October 15, 1998)]
[Senate]
[Pages S12639-S12640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              PATENT AND TRADEMARK OFFICE REAUTHORIZATION

  Mr. LEAHY. Mr. President, I am pleased that the Senate has passed the 
United States Patent and Trademark Office Reauthorization Act, Fiscal 
Year 1999, H.R. 3723. This bill, which passed the House of 
Representatives on May 12, 1998, is an important measure that would 
benefit all American inventors and would, for the first time in the 
history of the U.S. patent system, reduce patent fees.

[[Page S12640]]

  The United States Patent and Trademark Office (PTO) is totally funded 
by user fees. Prior to 1990, the PTO was funded through a combination 
of user fees and taxpayer revenue. However, in a deficit reduction 
exercise in 1990, taxpayer support for the operations of the PTO was 
eliminated and user fees were substantially increased by the imposition 
of a surcharge on patent fees. The temptation to use the surcharge has 
proven to be increasingly irresistible to Congress and the 
Administration, to the detriment of sound functioning of our nation's 
patent system. Through Fiscal Year 1998, a total of $235 million has 
been diverted from the PTO to other unrelated agencies and programs.
  At the urging of the inventor community, Congress allowed the 
surcharge to sunset at the end of Fiscal Year 1998. This means, 
however, that Congress must take affirmative action to adjust patent 
fees or the PTO will suffer a drastic reduction in revenue for the 
current fiscal year which will leave it unable to hire the patent 
examiners needed to reduce the time required to get a patent to 
eighteen months. Prompt processing of patent applications is 
particularly important for those inventors who need their patents to 
raise risk capital.
  The Administration forwarded a draft bill to the Congress which would 
have continued patent fees at the current levels. However, in an 
oversight hearing before the House Judiciary Committee, Commissioner 
Lehman stated that the PTO would be unable to use all the revenues that 
would be generated if patent fees were to be continued at their current 
level in fiscal year 1999. Commissioner Lehman stated that keeping fees 
at their current level would generate $50 million in excess fee revenue 
which the Administration planned to divert to other government 
programs. The response by the House of Representatives was to craft a 
bill, H.R. 3723, that would adjust patent fees to provide all of the 
money which the PTO indicated that it could use in fiscal year 1999, 
but which would not generate an unneeded $50 million simply to support 
other government programs.
  In the absence of any action on H.R. 3723, Congress had to include 
specific language in the continuing resolution signed by the President 
on September 25, 1998 addressing the level of patent fees that the PTO 
could charge. Section 117 of Public Law 105-240 provides that the PTO 
can continue to charge patent fees at the same level that existed on 
September 30, 1998 through October 9, 1998. As I previously noted, 
patent fees at this level are higher than they need to be to fully fund 
the PTO in fiscal year 1999. In a fiscal year when there are debates 
over how to use the billions of dollars of budget surplus, it is 
inappropriate for Congress to require the PTO to charge inventors more 
than the cost of rendering the services which they receive. By enacting 
H.R. 3723 we serve American inventors and provide them with the first 
real patent fee reduction in the history of the nation. This bill is 
good for American inventors and good for the United States.

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