On June 28, 2005, the House IP Subcommittee referred an anti-fee diversion bill, called the Patent and Trademark Fee Modernization Act of 2005 (HR 2791). This bill, similar to a bill introduced last year, is the latest in an ongoing sequence of attempts to reform funding of the USPTO.

The latest bill would establish a system to refund fee income in excess of PTO expenses and would allow the PTO to determine the rules for allocating the refunds . There is widespread agreement that the PTO is doing a less than stellar job in examining patents, although there is considerable disagreement as to the cause. But, many critics agree that lack of funding is exacerbating the problems at the PTO, with a substantial portion of PTO income diverted to non-IP related uses, amounting to several hundred million dollars per year.

Our take? While this bill has broad bi-partisan support, it is unlikely to pass, as budget negotiators are looking for any source of revenue to fill shortfalls. But, hope springs eternal, and now may be the time to write your Congresscritter on the importance of a well-functioning and well-funded PTO.

On the other hand, perhaps the PTO is taking the wrong role in the patent examination process, leading to inefficiencies and gaming by the participants. But, that's a subject for another article.

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