[Congressional Record (Bound Edition), Volume 155 (2009), Part 12]
[House]
[Pages 16941-16943]
[From the U.S. Government Publishing Office, www.gpo.gov]




                U.S. PATENT AND TRADEMARK OFFICE FUNDING

  Mr. JOHNSON of Georgia. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 3114) to authorize the Director of the United 
States Patent and Trademark Office to use funds made available under 
the Trademark Act of 1946 for patent operations in order to avoid 
furloughs and reductions-in-force, and for other purposes.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3114

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORITY OF PTO DIRECTOR TO USE TRADEMARK FUNDS.

       (a) Authority.--
       (1) In general.--The Director of the United States Patent 
     and Trademark Office--
       (A) may use funds made available for fiscal year 2009, 
     pursuant to section 31 of the Trademark Act of 1946 (15 
     U.S.C. 1113), under the heading ``Department of Commerce--
     United States Patent and Trademark Office--Salaries and 
     Expenses'' in title I of division B of the Omnibus 
     Appropriations Act, 2009 (Public Law 111-8), up to 
     $70,000,000, to support the processing of patents and other 
     activities, services, and materials relating to patents, 
     notwithstanding section 42(c) of title 35, United States 
     Code; and
       (B) notwithstanding any other provision of law, shall, upon 
     the exercise of the authority under subparagraph (A), 
     establish a surcharge, in amounts up to $70,000,000, on 
     patent fees in effect under title 35, United States Code, to 
     repay any funds drawn down pursuant to subparagraph (A),
      if the Director certifies in writing to the Congress that 
     the use of the funds described in subparagraph (A) is 
     reasonably necessary to avoid furloughs or a reduction-in-
     force, or both, in the United States Patent and Trademark 
     Office, and does not create a substantial risk of a furlough 
     or reduction-in-force of personnel working in the Trademark 
     Operation of the United States Patent and Trademark Office.
       (2) Surcharges deposited in treasury.--All surcharges paid 
     under paragraph (1)(B) shall be deposited in the Treasury as 
     an offsetting receipt that shall not be available for 
     obligation or expenditure.
       (b) Limitations on Authority.--The authority under 
     subsection (a)(1)(A) shall terminate on June 30, 2010. The 
     surcharge established under subsection (a)(1)(B) shall take 
     effect no later than September 30, 2011, and all funds drawn 
     down pursuant to subsection (a)(1)(A) shall be repaid 
     pursuant to subsection (a)(1)(B) no later than September 30, 
     2014.
       (c) Definitions.--In this section:
       (1) Director.--The terms ``Director of the United States 
     Patent and Trademark Office'' and ``Director'' mean the Under 
     Secretary of Commerce for Intellectual Property and Director 
     of the United States Patent and Trademark Office.
       (2) Trademark act of 1946.--The term ``Trademark Act of 
     1946'' means the Act entitled ``An Act to provide for the 
     registration and protection of trademarks used in commerce, 
     to carry out the provisions of certain international 
     conventions, and for other purposes'', approved July 5, 1946 
     (15 U.S.C. 1051 et seq.).

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Georgia (Mr. Johnson) and the gentleman from Texas (Mr. Poe) each will 
control 20 minutes.
  The Chair recognizes the gentleman from Georgia.


                             General Leave

  Mr. JOHNSON of Georgia. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days to revise and extend their remarks and 
include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Georgia?
  There was no objection.
  Mr. JOHNSON of Georgia. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, this bill will help the Patent and Trademark Office 
retain educated and trained employees who face the possibility of 
furlough and reduction in force due to the current economic downturn.
  It is with great urgency that I bring this bill to the floor today. 
We have recently been informed by the Department of Commerce and the 
Patent and Trademark Office that the current downtrend in patent fee 
revenues could lead to employee furlough.
  The USPTO is a user-fee funded organization, and the downturn in the 
economy has led to a steep drop in revenues. USPTO management has 
already shaved over $120 million from its current budget through 
various cost savings; however, June's receipts show that those cuts may 
not be sufficient.

[[Page 16942]]

A budget shortfall is a very real possibility, which could necessitate 
furloughs and, if severe enough, a reduction in force.
  Now is not the time to impede the essential economic stimulating 
activity at the Patent Office. Now more than ever, we need to foster 
innovation to help the U.S. economy rebound.
  This century has seen an explosion in the number of patent 
applications filed, and even though the PTO has hired over 1,000 
examiners each year for the past several years, this explosion has led 
to a current inventory of about 1.2 million pending applications. That 
is 1.2 million potential patents that could provide the foundation for 
new businesses and new jobs.
  Because of this backlog, inventors are waiting an average of 32 
months to get their patents approved, and in some areas, such as 
communications and computer-related technologies, the wait is much 
longer. This backlog means a delay in the creation of new products or 
startup companies that would generate new jobs and research and 
development investment.
  Now is not the time to exacerbate this problem. Furloughing employees 
will only increase the backlog and the consequent delays. In order to 
help the USPTO get through the next year, we have identified an 
approximately $60 million surplus in the trademark operation at the 
USPTO.
  The bill we are considering today would permit the Director of the 
USPTO to use a portion of that surplus to prevent the furlough of USPTO 
employees. Rest assured, Mr. Speaker, this is not robbing Peter to pay 
Paul. Any trademark money used for patent operations will be recovered 
by a surcharge on the patent fees paid by those who benefit from the 
efforts of the patent workforce.
  I think it is pretty shameful that throughout the years we have not 
fully funded the number of employees that this agency needs to fulfill 
its mandate and so now in the 111th Congress we are seeking to use this 
lull period, if you will, because the number of applications will pick 
up, but we can use this period with our employees, our current 
employees, to put a dent in those 1.2 million applications that exist 
currently that are on file. This inefficiency in government with 
respect to the Patent and Trademark Office stifles commercial activity, 
and it just doesn't make any sense for the agency to not have been 
funded to begin with and staffed with an adequate amount of employees 
to meet the demand.
  It is our understanding, Mr. Speaker, that with the Department of 
Commerce and the USPTO agreement, that the money raised by the 
surcharge will be used to pay the trademark operation for the money 
borrowed from it. The surcharge will be no more and no less than what 
is needed to repay the loan.

                              {time}  1530

  This bill is a limited and temporary exception to the statutory fence 
built around trademark fees. It will last only until June 30 of next 
year and requires that all fees used for patent payroll purposes will 
be recovered through surcharges on the patent operation. And it 
ensures, Mr. Speaker, that furloughs or reduction-in-force will not 
occur in the trademark operation as a consequence of the patent 
operations needs.
  This bill will ensure that we retain the highly qualified and 
experienced patent examiners that helped innovators protect important 
technological gains, and we certainly need to do all that we can, now 
especially, to make it more efficient for those who would create new 
products in this rapidly changing environment that will lead to jobs 
for our citizens.
  I urge my colleagues to join me in supporting this important measure.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POE of Texas. Mr. Speaker, I yield myself such time as I may 
consume.
  Given the ongoing economic downturn in this country, patent fee 
collections at the Patent and Trademark Office are running short, based 
on earlier estimates. If things do not improve, the agency must 
initiate furloughs of its staff in the fall, an outcome that no one 
wants.
  Aside from affecting the individual workers, mostly examiners, these 
furloughs would create another setback in the effort to reduce 
application backlogs and expedite the processing of new applications.
  The agency has already reduced its operating plan for fiscal year 
2009 by $120 million and is pursuing another $125 million in cuts. But 
the PTO cannot accurately estimate at this time how much additional 
revenue it needs to survive through this fiscal year. H.R. 3114 
responds to this crisis by allowing the director to shift necessary 
funds from the trademark ledger to patent operations through June 30, 
2010, less than 1 year from now.
  The bill also requires the Patent Office to reimburse the Trademark 
Office for any funds reassigned to it within the CBO's 5-year scoring 
window. The bill also is an appropriate legislative response because 
trademark operations currently have a projected surplus of $60 million 
to $70 million.
  In addition, there is precedence for allowing such an intra-agency 
revenue transfer. Twice in the past 10 years, the Trademark Office 
borrowed more than $24 million from patent operations. This is an 
unfortunate but necessary response to a funding crisis at an agency 
that is crucial to the economic vitality of this country.
  American IP industries now account for over half of all U.S. exports 
and 40 percent of our economic growth. These industries provide 
millions of jobs for Americans with high-paying salaries. Patents 
encourage innovation and provide incentives to create, build, and 
market new products.
  Delays in obtaining patents stifle entrepreneurship in our country. 
We want new ideas, new technologies, and new patents. America has 
always been the Nation of great inventors. Now we must protect those 
inventors and their inventions with timely patents.
  Mr. Speaker, this bill won't cure all that ails the Patent and 
Trademark Office long term. For that we need the other body to confirm 
the new PTO director who will work with Congress to implement 
fundamental change to the agency; but failure to enact H.R. 3114 at 
this time will place PTO in an even deeper hole that jeopardizes agency 
jobs, harms the interests of inventors, and damages a crucial component 
of our national economy.
  I urge my colleagues to support H.R. 3114.
  Mr. ISSA. Mr. Speaker, I rise today in support of H.R. 3114, a bill 
to promote the success and vitality of the United States Patent and 
Trademark Office, ``USPTO.''
  The USPTO is integral in strengthening America's battered economy. 
Although there are those in this body that believe the federal 
government can spend our way out of the current financial crisis, this 
is a fallacy. It is through private commerce and investment that we 
will find the light at the end of the tunnel. For many sectors of our 
economy, patent protections provide tremendous incentive to invest.
  The USPTO is already faced with a tremendous backlog of patent 
applications. A reduction in labor force at the USPTO would only 
compound this problem. It is for this reason that we must make sure 
that the USPTO is not forced to lay off or furlough patent examiners. 
Allowing the USPTO Director to use funds made available under the 
Trademark Act of 1946 will help to ensure this does not occur.
  Innovation is the lifeblood of the U.S. economy. It is innovation 
which has and will continue to promote prosperity and wealth in the 
United States and aid in combating the recession in which we find 
ourselves today. I encourage my colleagues to support the USPTO and 
support this legislation.
  Mr. MORAN of Virginia. Mr. Speaker, I rise in strong support of H.R. 
3114, and commend the Chairman for his leadership in acting so swiftly 
to rectify this situation.
  The U.S. Patent & Trademark Office, located in my District, is funded 
entirely by the user fees it collects; it does not draw any taxpayer 
funds from the general Treasury.
  Like many other businesses and industries, the PTO has seen 
significant reductions in its revenues as a result of economic belt-
tightening by its customers. In response, PTO has already enacted over 
$140 million in budget cuts and cost-savings measures. PTO has 
instituted a hiring freeze, curtailed non-bargaining unit performance 
awards, stopped overtime for many workers and significantly reduced 
contracts, travel, supplies and other non-essential overhead expenses.

[[Page 16943]]

  In the meantime, we must ensure that the USPTO can continue to 
maintain its personnel level and perform its critical mission of 
examining and granting patents that promote innovation and create jobs. 
As a result, a serious budget situation has developed. Absent adoption 
of this legislation approximately 9,000 patent office employees would 
be subject to furloughs during the last pay period of FY09 (last two 
weeks of September).
  The Department of Commerce is monitoring the situation on a daily 
basis, and out of an abundance of caution, and to prevent a possible 
violation of federal law, the Department of Commerce is asking for a 
one-time funding fix from Congress to avoid the furlough of Patent 
Office employees.
  The Trademark Office, as distinct from the Patent Office, within PTO 
has a surplus of $60-$70 million. Without asking for new monies from 
Congress, the Treasury, or other agency programs funds, this bill 
before us would provide an immediate and one-time-only borrowing option 
that is accompanied by a statutory repayment period. In 1999 and 2005, 
the opposite situation occurred, and the Trademark Office received 
assistance from Patents totaling $24 million.
  In order for Americans to prevail against this economic downturn, and 
to remain competitive globally, we need to ensure new technologies, 
innovation, and products are fully funded. The new concepts and ideas 
promoted by the work of PTO are drivers for American economic recovery 
and growth.
  At such a time as this, America should be looking for its next Thomas 
Edison, Bill Gates, or Steve Jobs.
  This bill simply lets the USPTO's patent operation borrow from an 
existing balance held by the trademark operation, and only if 
reasonably necessary to avoid employee furloughs or a reduction in 
force. Payback of any borrowed funds is assured by a temporary 
surcharge on patent fees.
  This is a crucial juncture for the PTO. We need to remain at the 
cutting edge of global technological progress and achievement, or we 
risk lagging behind other nations.
  The bill amounts to an insurance policy for the USPTO to make sure it 
can cover its payroll for over 9,000 federal employees. I ask my 
colleagues to support it.
  Mr. POE of Texas. Mr. Speaker, I yield back the balance of my time.
  Mr. JOHNSON of Georgia. Mr. Speaker, I yield back the balance of my 
time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr. Johnson) that the House suspend the rules 
and pass the bill, H.R. 3114.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. POE of Texas. Mr. Speaker, I object to the vote on the ground 
that a quorum is not present and make the point of order that a quorum 
is not present.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the 
Chair's prior announcement, further proceedings on this motion will be 
postponed.
  The point of no quorum is considered withdrawn.

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