Monday, December 14, 2009

IAM blog on permanent fee hikes at the USPTO

In a piece titled Bleak times at the USPTO make big fee hikes more likely , the IAM Blog paints a dark future for the US Patent Office.

IAM notes:

On top of the 2.3% decrease in patent filings, the annual report states - on page 49 - that maintenance fees, "the largest source of earned revenue by fee type", were down nearly 3% in financial year 2009. "As they are recognized immediately as earned revenue," the report states, "any fluctuations in the rates of renewal have a significant impact on the total earned revenue of the USPTO". It does, however, go on to say that as the US economy improves, renewal rates are expected to rebound.

IPBiz notes that the worst of the maintenance fee problem has yet to arrive at the USPTO. While the reported downswing arises mainly from decisions related to the current economic downswing, we will soon see the impact of changing patent grant rate from around 70% to less than 50%. One can't "rebound" by collecting a renewal fee on a patent application that was rejected.
We can thank the USPTO's draconian response to Quillen and Webster's fanciful "97%" allowance rate for this time bomb. We can thank the lemming-like mentality of various IP professors for elevating the 97% mirage to something that the USPTO felt obliged to deal with.

IAM concludes:

If such an idea were to catch on more widely, to increase its revenues significantly, the USPTO would either have to rely on foreign applicants, such as the Chinese, to boost application totals (this is bound to happen to an extent in any case), or they are going to have to increase fees - probably quite significantly. Kappos has already talked about a temporary rise of 15% to tide the office through its current troubles. I would not be surprised if that became permanent and also led to a number of other offices around the world doing something similar. As things stand, it is difficult to see a decent alternative to this, despite the howls of outrage it is bound to cause.

The IAM piece arises as a comment on a CNN article covered earlier by IPBiz [
"Patent filings are a very controllable expense"
]. Further, notwithstanding the rosy picture given by many blogs following the change from Dudas to Kappos, one notes that Kappos has been pretty clear that there are problems that are not going to be resolved quickly. What part of "the nose of the airplane is pointed down" are some IP blogs unable to comprehend?


Kappos on the USPTO: "the nose of this airplane is pointed down"


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