Bennet questions sequester of $150M in patent office funds, warns of Denver delay

Denver Business Journal

June 4, 2013

.S. Sen. Michael Bennet, D-Colo.


Andrew Harrer | Bloomberg

U.S. Sen. Michael Bennet, D-Colo.

Heather Draper

Reporter- Denver Business Journal

U.S. Sen. Michael Bennet, D-Colo., is urging the Office of Management and Budget (OMB) to re-evaluate its decision to sequester about $150 million in fees from the U.S. Patent and Trademark Office (USPTO), saying the move could delay opening a new satellite patent office in Denver.

The permanent Denver satellite patent office is scheduled to open at the Byron G. Rogers Federal Building in Denver in February 2014.

Three administrative patent law judges are working in a temporary space at the Denver Federal Center at West Sixth Avenue and Kipling Street in Lakewood until renovations at the downtown federal building are completed.

But the sequester could put that planned opening in jeopardy and exacerbate the large backlog of patent applications, according to Bennet.

In a letter today to Sylvia Burwell, director of the OMB, Bennet wrote: “As you know, the statute ensures that the excess fees that the USPTO collected were dedicated to the organization’s activities. This provision sought to ensure that the fees collected from inventors and patent owners by the USPTO are used to provide critical, time-sensitive services, and provide certainty outside of the partisan gridlock in Washington.”

The main patent office and the four satellite patent offices in Denver, Detroit, Dallas and in Silicon Valley are designed to be funded by fees collected from patent applicants and owners.

Under the sequester, 5 percent of those fees are being diverted to the general fund instead of a patent office reserve fund, according to a May 3 Reuters report.

The America Invents Act of 2011 dictated that that those funds would go to back to the U.S. patent office.

Bennet said AIA underscores that the fees the U.S. patent office collects, and which fund its operations, are different than regular government spending, and that Congress has sought to exempt from sequestration “those activities financed by voluntary payments to the government for goods or services to be provided for such payments.”

“There’s broad agreement that the sequester is poor policy. It is damaging to our economy in Colorado and across the country and should be replaced,” Bennet said. “In the case of the patent office, however, the sequester does not apply. It is funded by the fees it collects and not tax dollars.”

The USPTO announced in July 2012 that Denver was one of the three metro areas (in addition to Detroit, which had already been awarded a branch) to be awarded a satellite branch of the USPTO — a long-sought victory for the area that could mean an estimated $439 million in economic impact over five years.

Landing the office has been a major goal of the city’s business and economic-development leaders for years as a boost to Colorado’s bioscience, aerospace and alternative-energy industries, and as a source of high-paying jobs.

Bennet sponsored the amendment to the AIA that empowered the U.S. patent office to establish three new satellite patent offices across the country by 2014, and he led the effort to land that office in Colorado.

Heather Draper covers banking, finance, law and the economy for the Denver Business Journal and writes for the “Finance Etc.” blog. Phone: 303-803-9230.

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