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Some $70 million in U.S. Patent and Trademark Office fees will shift to the U.S. government’s coffers unless Congress moves to let the agency keep the money by the fiscal year’s end on Thursday. PTO fee collections are expected to top the agency’s $2.016 billion fiscal 2010 authorized spending limit by that amount, according to the Intellectual Property Owners Association (IPO). The association learned of the surplus during a PTO public advisory committee meeting on Sept. 23. Last month, the agency won the right to keep some of the extra money. Its fiscal 2010 spending threshold includes an additional $129 million that President Obama authorized the agency to spend on Aug. 10. Diversion of the PTO’s fees to other government programs is controversial in intellectual property circles, and this is the most significant potential diversion since 2004, said IPO executive director Herb Wamsley. That’s because Congress has been setting PTO budgets at an amount equal to estimated collections, but the fiscal 2010 estimate was too low, Wamsley said. “The $129 million supplemental [funding] closed some of the gap but more is needed,” Wamsley said. “We are trying to persuade Congress to include language in the continuing resolution [funding bill] which will be passed by Thursday,” Wamsley said. “I would assume others are working on that as well.” Getting Congress to pass the $129 million supplemental appropriation was a real political accomplishment, said Q. Todd Dickinson, executive director of the American Intellectual Property Law Association (AIPLA). “That extra $70 million is at risk,” Dickinson said. “We would actively encourage both the Congress and administration to find ways to give the PTO access to that $70 million as well.” Intellectual property groups want the PTO to keep the fees it collects so it can hire more patent examiners and cut the massive patent application backlog. During a Sept. 8 discussion with reporters about his first year in the job, PTO director David Kappos said the agency cut the backlog from “737,000 and change in July to [about] 728,000 at end of August.” “The hiring of additional patent examiners to reduce the very large backlog of unexamined applications is where the greatest need is,” Wamsley said. He said this issue is unrelated to efforts to trim government spending. “This is not general taxpayer revenues,” Wamsley said. “This is simply making the patent fee collections available for the purposes for which the taxpayers intended the money to go.” Any diversion of funds from the PTO is a “tax on innovation,” said Alexander Poltorak, founder and chairman of American Innovators for Patent Reform, a coalition of inventors, companies and licensing executives. “This is not what we want to do in our country whose only competitive advantage is innovation.”

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