inventor's tax

The U.S. Patent and Trademark Office is a fully fee-funded organization - i.e. the functioning of the PTO is completely dependent upon these fees for its operation.  The PTO does not receive additional funds from the U.S. Treasury.

One would expect, therefore, that the fees collected by the PTO are used to increase the capacity, efficiency and operations of the PTO.  This is not the case, however, and significant PTO fee "surpluses" are raided by Congress for other projects (i.e. Congressional "pork" projects).  The "inventor's tax" is a term given to these "surplus" fees paid by inventors and companies for filing, prosecuting and maintaining patents and which is diverted to other projects.

Many organizations believe the fee-diversion practice is unfair and contrary to the goal of providing improved quality and efficiency at the PTO.  Diverting fees paid by users of the PTO to pay for road projects is thus an "inventors tax".

As Melody posted earlier, the PTO is proposing fee increases and new fees for searches and examination.  As part of their support for the fee increases, patent practitioner and corporate trade groups have demanded that the fee diversions quit. 

Sounds simple.

It's not.  In the world that is Washington politics, the Congressional committees that oversee PTO funding is not willing to relinquish their oversight of the PTO budget.  Promises made to these trade groups are being broken and they are mad:

The authors called the Senate language "unacceptable" and said it "totally ignores the premise that initially secured the user community's support of a fee increase -- ending the 12-year practice of fee diversion."

"We need to maintain our Patent and Trademark Office; it's the best Patent and Trademark Office in the world," IPO Executive Director Herbert Wamsley said.

Wamsley and IPO members recently visited China and met with its patent officials. He said the United States needs to make changes to stay competitive. China is facing similar problems in the lag between patent applications and approval, a figure known as pendency.

"The Chinese patent and trademark office is working to improve itself at a time when ours is going in the wrong direction for lack of funding," he said.