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PTO's Annual Report Reveals Declining Revenue and Application Numbers, Plus Dip In Backlog
The U.S. Patent and Trademark Office's (“PTO”) fiscal year 2009 annual report indicates declining revenue and patent filings. Notably, there was both a dip in the backlog of patent applications and an increase in the time it takes for the agency to issue a patent. Some lawyers believe the former can be attributed in part to applicants abandoning applications because of the economic downturn.
Off Budget
The report, which the agency recently released without fanfare, detailed the agency's $135.9 million budget shortfall, or 6.8% of its $2.01 billion forecasted revenue. Fee collections totaled $1.87 billion. (The report can be found at www.uspto.gov/about/stratplan/ar/2009/index.jsp.)
In the report, PTO director David Kappos' message noted: “[T]he Agency found itself in a financial crisis and was forced to freeze hiring, curtail mission critical programs, and cut back in key efforts relating to the Agency's mission.”
Part of the PTO's budget troubles can be pegged to the estimated 2.3% decline in patent applications filings, to a preliminary count of 485,500 filings from an actual 496,886 filings in fiscal year 2008.
Patent filings increased for a number of years, but the fiscal year 2009 dip reflects economic conditions, says David Dykeman, a Boston intellectual property and technology shareholder at Greenberg Traurig.
“Companies are devoting less money toward patent filings and filing fewer applications in the current economic downturn,” says Dykeman.
Trademark application filings drop- ped by a more dramatic 12.3%.
Some Good News
On a more positive note, the backlog dipped by nearly 5% to 735,961 applications in the queue, down from 771,529 in fiscal year 2008. The 23% surge in the disposal of patent applications during fiscal year 2009, from 396,228 to 487,140 applications, helped trim the backlog.
But lawyers say at least some of the backlog cut is unrelated to PTO efficiency. Dykeman observes that some applicants are walking away from pending applications instead of paying fees at the next stage of processing.
“The untold story about the increase in disposal rates may be that many more applicants are abandoning applications due to a lack of financial resources in the current economic downturn,” Dykeman says.
Applicants who stay committed to their applications are waiting longer for patents to issue ' an average of 34.6 months, compared with 32.2 months in fiscal year 2008.
“It continues the trend of longer delays at the patent office,” Dykeman says. “That's been the story for the past few years.”
Dykeman and many other intellectual property lawyers are optimistic that Kappos, who was confirmed by the Senate on Aug. 7, will successfully overhaul the agency.
Since coming aboard, Kappos has created fast-track programs for green-technology patent applications and for applications from inventors from small organizations.
According to Kappos' message in the report, the PTO's goal is to cut overall patent processing time to 20 months.
“The glimmer of hope is that director Kappos is well aware of this backlog and is implementing programs to address it directly,” Dykeman says.
Sheri Qualters is a Staff Reporter for The National law Journal, an ALM affiliate of The Intellectual Property Strategist. She can be reached at [email protected].
The U.S. Patent and Trademark Office's (“PTO”) fiscal year 2009 annual report indicates declining revenue and patent filings. Notably, there was both a dip in the backlog of patent applications and an increase in the time it takes for the agency to issue a patent. Some lawyers believe the former can be attributed in part to applicants abandoning applications because of the economic downturn.
Off Budget
The report, which the agency recently released without fanfare, detailed the agency's $135.9 million budget shortfall, or 6.8% of its $2.01 billion forecasted revenue. Fee collections totaled $1.87 billion. (The report can be found at www.uspto.gov/about/stratplan/ar/2009/index.jsp.)
In the report, PTO director David Kappos' message noted: “[T]he Agency found itself in a financial crisis and was forced to freeze hiring, curtail mission critical programs, and cut back in key efforts relating to the Agency's mission.”
Part of the PTO's budget troubles can be pegged to the estimated 2.3% decline in patent applications filings, to a preliminary count of 485,500 filings from an actual 496,886 filings in fiscal year 2008.
Patent filings increased for a number of years, but the fiscal year 2009 dip reflects economic conditions, says David Dykeman, a Boston intellectual property and technology shareholder at
“Companies are devoting less money toward patent filings and filing fewer applications in the current economic downturn,” says Dykeman.
Trademark application filings drop- ped by a more dramatic 12.3%.
Some Good News
On a more positive note, the backlog dipped by nearly 5% to 735,961 applications in the queue, down from 771,529 in fiscal year 2008. The 23% surge in the disposal of patent applications during fiscal year 2009, from 396,228 to 487,140 applications, helped trim the backlog.
But lawyers say at least some of the backlog cut is unrelated to PTO efficiency. Dykeman observes that some applicants are walking away from pending applications instead of paying fees at the next stage of processing.
“The untold story about the increase in disposal rates may be that many more applicants are abandoning applications due to a lack of financial resources in the current economic downturn,” Dykeman says.
Applicants who stay committed to their applications are waiting longer for patents to issue ' an average of 34.6 months, compared with 32.2 months in fiscal year 2008.
“It continues the trend of longer delays at the patent office,” Dykeman says. “That's been the story for the past few years.”
Dykeman and many other intellectual property lawyers are optimistic that Kappos, who was confirmed by the Senate on Aug. 7, will successfully overhaul the agency.
Since coming aboard, Kappos has created fast-track programs for green-technology patent applications and for applications from inventors from small organizations.
According to Kappos' message in the report, the PTO's goal is to cut overall patent processing time to 20 months.
“The glimmer of hope is that director Kappos is well aware of this backlog and is implementing programs to address it directly,” Dykeman says.
Sheri Qualters is a Staff Reporter for The National law Journal, an ALM affiliate of The Intellectual Property Strategist. She can be reached at [email protected].
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