While the U.S. government avoided a shutdown over federal budget cuts, the budget agreement has had a negative effect on funding that the United States Patent and Trademark Office (USPTO) receives. Although the USPTO could cover all the funding it requires through the fees it charges, its fees go first to the central government which then decides how much the USPTO actually receives. The central government does not return to the USPTO the full amount of the fees collected. The patent community has unsuccessfully battled for years to change this process. As a result of the budget deal, the USPTO will receive even less. In response, the USPTO has announced the following cutbacks:
- “Track One” of the “Three-Track” program introduced in February 2011, intended to offer expedited patent examination for a fee and scheduled to take effect on May 4, 2011 is postponed;
- The opening of a planned satellite office in Detroit, as well as consideration of other possible satellite office locations, is postponed;
- Hiring, both for new positions and backfills, is frozen;
- IT projects will be scaled back;
- Funding for Patent Cooperation Treaty (PCT) outsourcing (mainly for searches) will be substantially reduced;
- Employee training will be reduced; and
- All overtime is suspended.
The overall outcome of these changes will be to increase pendency of U.S. patent applications. Searches for PCT applications filed with the United States as searching authority may be particularly slowed. Of course, the central government’s budget negotiations continue and this situation may change as a result.