In June 2009, President Barack Obama nominated David Kappos, former vice president and assistant general counsel of intellectual property law for International Business Machines Corp., as the new undersecretary of commerce for intellectual property and director of the U.S. Patent and Trademark Office. Following Senate confirmation, Kappos was sworn in to his post on Aug. 13, 2009, bringing an immediate change in philosophy to an office many perceive as broken.
The director reports to the secretary of commerce and oversees the office’s day-to-day operation, nearly $2 billion budget and roughly 9,000 employees. Beyond the normal challenges any new director would face, Kappos is taking over an office facing a serious budget shortfall. The economic downturn has led to reduced intellectual property budgets and, consequently, fewer patent application filings, issuances and maintenance-fee payments. Meanwhile, the patent allowance rate has dropped by about 40% since 2002. Not only does this affect short-term revenue from issue fees, but it leads to a decrease in application filings that affects the long-term financial prospects of future issue-fee and maintenance-fee payments.
