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In the wake of a controversial House vote stripping the U.S. Patent and Trademark Office of nearly one-quarter of its user fees for the next fiscal year, a Senate panel July 18 approved a spending plan more palatable to the intellectual property community. The move came during an Appropriations Committee mark-up of the fiscal year 2001 Commerce-Justice-State budget bill. In a unanimous vote, lawmakers agreed to let the PTO keep $1.039 billion of the $1.152 billion it is expected to earn in FY-01 but to divert $113 million from its coffers — exactly what the Clinton administration proposed in its February budget request. Moreover, American Intellectual Property Law Association Executive Director Michael Kirk said July 19, unlike the House plan, which caps PTO spending at the $1.152 billion level, the Senate appropriations bill apparently allows the agency to spend anything it receives over and above that amount. However, he cautioned, he had not yet seen the actual language of the bill. The Senate action stands in sharp contrast to last month’s House vote. On June 6, that body okayed the withholding of $295 million from the agency’s projected user fees, some $182 million more than the amount proposed by Clinton and now approved by the Senate committee. The massive diversion provoked concern from an IP community already fed up with the yearly budget maneuver, and prompted PTO director Q. Todd Dickinson to warn that the diversion, if enacted into law, could derail agency operations and stall the nation’s high-tech sector. In a statement released after the Senate vote, Dickinson said he was “very encouraged” that the appropriations committee raised the agency’s budget to the administration’s mark, and added he is “hopeful that the increase is maintained in conference.” Kirk called the Senate action “very, very good news” compared to what the House did, but said AIPLA’s “ultimate goal” is to “have the $113 million go to zero.” The PTO derives all of its money from fees paid by its customers, and receives no tax appropriations. Nevertheless, for the past few years, Congress and the White House have supported budgets that call for millions of PTO dollars to be withheld from the agency and used for other federal programs. Although the annual diversion has always irritated the IP community, opposition to it has grown stronger as the boom in high-tech patent applications has ratcheted up the PTO’s workload. Earlier this year, Rep. Howard Coble (R-N.C.), who chairs the House Judiciary Committee’s Subcommittee on Courts and Intellectual Property, floated legislation aimed at stopping the diversion by removing the PTO from the appropriations process altogether. The bill has not moved. Coble also tried last month to block the House from approving the $295 million diversion for FY-01, but his amendment to the CJS spending measure was defeated. On July 11, the American Bar Association adopted a resolution condemning the diversion of PTO user fees and urged Senate appropriators to restore full funding to the agency, ABA consultant Hayden Gregory said July 19.

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