Download June 9, 2000 - American Bar Association

The Honorable Judd Gregg
July 12, 2000
Page 1
July 12, 2000
The Honorable Judd Gregg
Chairman, Subcommittee on
Commerce, Justice, State and Judiciary
Committee on Appropriations
United States Senate
Washington, D.C. 20510
The Honorable Ernest Hollings
Ranking Member, Subcommittee on
Commerce, Justice, State and Judiciary
Committee on Appropriations
United States Senate
Washington, D.C. 20510
Dear Mr. Chairman and Senator Hollings:
The Subcommittee on Commerce, Justice, State and Judiciary is scheduled to
mark up the Commerce, Justice, State and Judiciary appropriations bill for FY2001 in the
near future. I am writing on behalf of the American Bar Association to express
opposition to provisions in the bill, as passed by the House, which deny authority for the
United States Patent and Trademark Office (USPTO) to spend $295 million in user fees
to be collected in Fiscal Year 2001. Since the USPTO is funded entirely by user fees, the
House-passed bill would, if enacted, lead to serious degradation in the provision of
government services which are vital to the innovation and technology which fuel our
nation’s economy.
The American Bar Association believes that it is important for the USPTO to be
able to utilize, in the year in which it is collected, all the revenue derived from user fees
paid to fund the services provided by the Office. Congress itself has established these
user fees so as to produce the revenue needed to fund the services of the USPTO, and the
Office cannot function effectively if a substantial portion of that revenue is denied to the
Office. While we do not believe that the withholding of any such user fees is justified, we
strongly oppose the provisions in the House-passed bill that would withhold from the
USPTO such an astronomically large amount of user fee revenue.
The President’s budget proposal calls for withholding from USPTO use $368
million in user fees to be collected in FY 2001. Since that proposal would allow the
USPTO to spend in FY 2001 $255 million in user fees collected in previous years, the net
effect of the President’s proposal is a funding shortfall of $113 million based on
anticipated user fee collections. Such a withholding of over $100 million—about ten
percent of funding needed to run the Office—would seriously jeopardize the ability of the
USPTO to support the vital areas of our economy which the Office serves.
While the President’s proposal is ill-advised and damaging, the House proposal is
devastating. It proposes withholding still an additional $182 million over what the
President’s Budget calls for, bringing the total withheld to $295 million. The result
would be funding for the USPTO at a level that is 25% less than the fees collected to run
the Office.
The House Judiciary Committee, the authorizing Committee for the USPTO,
asked the Under Secretary of Commerce for Intellectual Property for his assessment of
the impact of the funding cuts proposed by the Subcommittee. His response is extremely
The Honorable Judd Gregg
July 12, 2000
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disturbing. Under Secretary Dickinson reports that all hiring would have to be stopped.
This includes not only expansion hiring to accommodate the ever growing demand for
services, but also replacement hiring. As a result of such staffing reductions, services
would be drastically slowed and reduced. The time delay in acting on trademark
applications is expected to double, and action on patent applications would be slowed by
one-third. Reduction and delay in services will result in a reduction in fee revenue,
setting off a downward spiral that could be extremely damaging to technological and
innovative sectors which are so vital to our nation’s economic and social health.
We urge you in the strongest possible terms to reject these crippling funding cuts,
and to provide the USPTO funding to run the Office that is equal to the fee revenue
collected.
Sincerely,
Robert D. Evans
cc: Members, Subcommittee on Commerce, Justice, State and Judiciary
Q. Todd Dickinson, Under Secretary of Commerce for Intellectual Property and Director
of the United States Patent and Trademark Office