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For years, patent lawyers have been clamoring for faster and better service at the Patent and Trademark Office in Washington, D.C. President Bush signed a bill in December that is supposed to fund many of those long-sought improvements by significantly increasing patent fees. But some IP lawyers doubt whether all of the changes will be made. They are also unhappy because Congress will continue to skim the PTO’s revenue to fund other federal agencies. “Money, money, money,” grumbles J. Jeff Hawley, chief patent counsel for Eastman Kodak Company in Rochester, New York. “This will cost us a lot of money.” John Hogan Jr. agrees. “This is a significant increase,” says Hogan, director of intellectual property at Wyeth, the New Jersey-based pharmaceutical giant. “To be honest with you, it’s tough with tightened [corporate] budgets.” Filing fees for new patents have jumped 25 percent, while the cost of filing an appeal rose even higher. The appropriations bill also added new fees for searches and examinations. Yet more charges will be imposed on filings that exceed 100 sheets of paper and three claims. Large companies will pay the full fees in order to subsidize discounted rates for smaller entities. Hawley estimates that Kodak will face more than $1 million in additional patent-related fees this year. He has instructed his IP staff to conduct a “cost-benefit analysis” when writing patent claims. As an example, he says that before Kodak lawyers “write that extra page [that results in a patent filing] costing $50 instead of $15, they need to make sure that the [patent examiner's] judgment is going to come out differently.” Hogan says that Wyeth is also looking at ways to adjust its IP strategy in reaction to the fee increases. He says that submitting fewer filings is one option to be considered. Patent counsel might have been a little happier to fork over the extra bucks if all the money went for PTO improvements. But Congress over the past 15 years has regularly diverted part of the fees collected by the agency to fund other federal programs. Congress and the White House came close to reaching an agreement in early 2004 to stop the fee diversion. But lawmakers on Capitol Hill backed out of the deal at the last moment. Hawley thinks politicians simply could not stop using patent-related revenues for “pork projects like the Lady B therapeutic horseback ranch.” (The Lady B Ranch, located in Apple Valley, California, was included in the same appropriations bill as the PTO measures.) As a result, in-house attorneys don’t think much will be altered at the PTO besides the fees. Hogan visited the patent office toward the end of 2004 to hear about upcoming changes. “It would be nice if there was better service or better quality, but I’m not expecting it,” he says. Brigid Quinn, a PTO spokeswoman, says she understands the frustration over fee diversion. But she adds that the agency has “every intention” of using the estimated $370 million in added revenue it will collect over the next 22 months to hire and train 1,800 new patent and trademark examiners. The agency’s goal, she says, is to reduce its nearly two-year backlog of applications. Eriq Gardner is a reporter for Corporate Counsel magazine, which is affiliated with IP magazine.

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