Washington—Senators Dianne Feinstein (D-Calif.), Tom Coburn (R-Okla.), Amy Klobuchar (D-Minn.) and Jeff Flake (R-Ariz.) today introduced the Patent Fee Integrity Act, a bill to protect and secure patent user fees paid by U.S. inventors and businesses and stabilize funding for the Patent and Trademark Office. 

            The bill protects the current user-fee system by placing those fees in a separate fund to prevent them from being raided for other purposes. Text of the legislation is available here. 

            The bill also includes provisions to ensure accountability for the PTO, requiring annual operations and spending plans be sent to Congress, as well as an annual independent financial audit. 

            “In 1990, Congress made the PTO a self-funded agency, but those funds are frequently plundered for other uses,” said Senator Feinstein. “Since then, more than $1.1 billion in user fees have been diverted. When fees paid by inventors are used for general purposes, they amount to a tax on innovation. Today’s bill prevents that from happening. If we fail to support the PTO and reduce delays in the patent process, we are contributing to a decline in American ingenuity, and that is something we should all work hard to avoid.” 

            “Keeping the funds at the Patent and Trademark Office is one the best ways Congress can take action on a jobs program,” said Dr. Coburn. “Instead of letting politicians in Congress raid PTO’s funds to pay for parochial pet projects, lawmakers should ensure that funds raised by patent fees stay at the PTO. Doing so will help shore up the PTO’s finances and alleviate the backlog of hundreds of thousands of potentially job-creating patent applications that are due a review.” 

            “Businesses deserve to know that the fees they pay will be used as intended and help improve the patent process—not diverted for unrelated purposes,” said Senator Klobuchar. “This bipartisan bill will help ensure the Patent and Trademark Office has the resources it needs to continue supporting innovative companies that are fueling growth and job creation in our economy.” 

            “I have long tried to ensure the Patent and Trademark Office is able to keep the fees it collects from U.S. inventors and businesses,” said Senator Flake. “The PTO needs these fees to ensure the timely and thorough review of patent applications. Delays in patent approvals stifles innovation and growth of businesses, and so Congress ought to do everything it can to ensure the PTO has adequate resources.” 

Background 

            For much of its history, funding for the Patent and Trademark Office was supported by taxpayer dollars. Then, in 1990, Congress established a 69 percent user fee “surcharge” to eliminate taxpayer funding.

            However, those funds are often used for other purposes. In 1992, $8.1 million in user fees were diverted. The amount diverted to non-patent issues increased steadily, rising to a high of $209 million in 2011. Since 1990, more than $1.1 billion in patent user fees have been diverted. 

            During those years, the length of time to secure a patent rose, from 18 months in 1991 to 35 months in 2010.

            The bill has wide support from the patent user community and has been endorsed by numerous large and small corporations and patent organizations.