Please contact your Senators & ask them to support the Coburn amendment to end fee diversion

by Stephan Kinsella on September 13, 2011

As a practicing patent attorney I’m on a few email lists. I received the other day an email on such a that urged fellow patent practitioners to support legislation to prevent “patent fee diversion,” as if this political goal is an obvious and uncontroversial one for patent attorneys to support. This and other assumptions of the email bugged me, so I replied. The email, and my response, are below.

There is a significant chance of amending the patent reform bill (America Invents Act) so that it does not continue to allow patent office fee diversion. It is now clear that Senator Coburn will offer an amendment to end fee diversion. Essentially everybody agrees that fee diversion, the raiding of fees paid into the patent office is a bad thing and should be ended. The Senate voted 95-5 in March to end fee diversion. But the bill that eventually passed the House ( H.R. 1249) continues to allow fee diversion. The Senate should continue to stand by its original vote to end fee diversion by supporting the Coburn amendment.

Fee diversion should be formally ended by statute: there have been vows by Congress to end fee diversion before, but the practice has continued for about 20 years. Fee diversion has been largely responsible for crippling the patent office and causing a huge backlog of patent applications, an inadequate examiner corps and outdated computer system.

Please contact your Senators (http://www.senate.gov/general/contact_information/senators_cfm.cfm) ASAP and ask them to vote yes on the Coburn amendment that ends fee diversion. Senator Coburn will be offering this amendment to the patent bill, see his article below. The Senate already voted to end fee diversion by a vote of 95-5 in March. The Senate should stand by that vote. Let’s support Senator Coburn’s courage and integrity in offering this amendment. See his article below.

Thank you,

XXX

Patent Fee Diversion Is a Tax on Innovation by Senator Tom Coburn at http://www.nationalreview.com/corner/276344/patent-fee-diversion-tax-innovation-sen-tom-coburn

Excerpts from the article: “Fee diversion is the practice of congressional appropriators’ diverting fees that innovators and entrepreneurs pay when applying for patents and trademarks to other government programs. Fee diversion saps the lifeblood of the American economy — innovation and invention — in order to subsidize the desire of career politicians and appropriators in Congress to avoid hard choices. Fee diversion operates like a tax on innovation, because it requires entrepreneurs to spend more money.

The Senate has already voted to end fee diversion, by a margin of 95 to 5. …………I intend to give Senate appropriators the chance to back up that claim by voting on my amendment to end fee diversion. If my amendment fails, I will do everything in my power to slow the bill and highlight this egregious tax on innovation.

If politicians in Washington want to be taken seriously in the jobs debate, ending a practice that steals from job creators would be a good first step. ……. Congress should fix the patent bill immediately and restore my language ending fee diversion. If Congress does not make this fix, President Obama should veto it. Otherwise, he will be complicit in a scheme that is rigged to rob the very people we say we want to help — America’s job creators.”

My reply:

It is not true that everybody agrees fee diversion is a bad thing. The money collected by the PTO is somewhat arbitrary given the monopoly power (to grant monopoly patent grants) given to it by the state, and given that the PTO is basically “owned” by fedgov. Just as a parent company may do what it likes with a subsidiary, so here. It is not clear at all that all of the “profits” of the subsidiary-PTO are necessary to fund its operations. Suppose Congress ordered it to quadruple patent filing fees tomorrow. This may well result in a huge windfall. It is not immediately obvious that all the surplus profit would need to be diverted to the PTO for spending on operations. The idea that all of the fees the PTO generates (using the state monopoly granted to it) need to be kept by it to fund operations presupposes that it will never make a profit.

The opposition to fee diversion also rests on other controversial assumptions–namely, that it is good that the PTO be well-staffed and funded; and that the PTO itself is a good thing. For someone who believes patents are harmful and a plague that should be ended (and believe me there are many companies besieged by patent assaults who think this), they might prefer the PTO to be starved of funds to hasten its demise and/or the reduction in the perception of patent quality/legitimacy.

In short I think it is inappropriate for patent attorneys to automatically urge a political stance to their fellows based solely on their status as recipients of the patent system. It is an outright political stance and ought not to be characterized as anything else; the “should” in the comments below belies this. It is not something “everyone agrees to”; and I fail to see why a list of patent practitioners is to be used to push any political stance here any more than it ought be used to favor Republicans over Democrats or vice-versa. Or, if the list is to be used for political views, I’d like to urge everyone here to consider urging their lawmakers to severely curtail the anti-property, anti-market, anti-competition patent monopoly privileges that the unjust patent system generates.

I received no reply. Hmm, I’m thinking my fellow patent lawyers don’t like me very much…