The permanent offices are a casualty of budget sequestration – cuts imposed by Congress across government services after budget talks with the Obama administration broke down. Under sequestration, the USPTO must hand over 5% of its income, or $150 million, to the US Treasury. As those who have protested against the application of sequestration to the USPTO have pointed out, the Office is funded entirely by user fees, not taxpayers’ money.
The America Invents Act required the USPTO to open three regional satellite offices by September 2014. A permanent office has already been established in Detroit (pictured, below). For now, the USPTO will continue to operate in Silicon Valley out of its temporary location, which it opened in Menlo Park in May. The temporary office measures about 4,700 square feet, while the permanent office would provide about 30,000 to 40,000 square feet. The GSA has been considering California locations including Santa Clara, San Jose, Sunnyvale and Mountain View for the permanent site.
In the meantime, tens of thousands of applications are awaiting a decision, and more are coming in every day. The number of patent applications has been increasing by 5% a year, according to USPTO acting director Teresa Stanek Rea. While former director David Kappos succeeded in reducing the backlog by 20% a year, the Office reported a backlog of over 90,000 applications as of April this year.
Even critics of the current patent system, who may not be particularly upset that fewer patents are now likely to be granted, should not be happy about sequestration being applied to the USPTO. While a case can be made that the present patent troll epidemic has been caused at least in part by examiners granting too many obvious or overly broad patents, starving the Office of resources is hardly the way to fix this. If anything, the pressure on examiners to deal with a heavy workload may lead to more rubberstamping of dubious patents.
Although sequestration would undoubtedly create problems for patent applicants if it were to continue, the situation is probably not as dire as it seems at first glance. In the case of the USPTO, it seems likely that a timely solution will found to the funding dilemma. Patents are essential to the existing business models of many corporations, and it is probably no coincidence that they are also a priority for politicians from both major parties at present. A bill introduced last month by Representatives Mike Honda, Zoe Lofgren and Anna Eshoo would exempt the USPTO from budget cuts up until 2021. Hearings are expected over the next few weeks.
It might be accurate in a literal sense to say that the search for a new Silicon Valley office has been “indefinitely” put on hold. Nevertheless, I expect that the search will be resumed fairly quickly, and that whatever solution is decided on will offer the USPTO more financial security in the coming years. If anything, announcing that planned offices in places like Silicon Valley – a hub of tech industry power – have been put on hold may expedite a resolution to the Office’s funding headaches.