Today, House Judiciary Committee Ranking Member John Conyers, Jr. (D-MI), Reps. Jim Sensenbrenner (R-WI), Nadler (D-NY), Trent Franks (R-AZ), Zoe Lofgren (D-CA), Doug Collins (R-GA), Ted Deutch (D-FL), Dana Rohrabacher (R-CA), and Hakeem Jeffries (D-NY) introduced H.R. 1832, “The Innovation Protection Act.”  The legislation would create a revolving fund that will allow the U.S. Patent and Trademark Office (USPTO) to retain all of the user-based fees paid by patent and trademark applicants and use the fees to support certain services.

Specifically, the Innovation Protection Act would establish in the Treasury the United States Patent and Trademark Office Public Enterprise Fund to be used as a revolving fund by the Director of the USPTO without fiscal year limitation.  The legislation requires to be credited to or deposited in the new Fund: (1) appropriations for defraying the costs of USPTO activities; (2) fees collected under federal patent and trademark laws; and (3) any unobligated balances remaining in the Patent and Trademark Office Appropriation Account and in the Patent and Trademark Fee Reserve Fund.  This replaces the Patent and Trademark Office Appropriation Account, eliminates the Patent and Trademark Fee Reserve Fund, and provides a source of permanent funding for the USPTO.  The fees the USPTO collects are to remain available to it until expended.

The Public Enterprise Fund would cover: (1) ordinary and reasonable administrative, operating, and other expenses incurred by the Director for the continued operation of USPTO services, programs, activities, and duties relating to patents and trademarks; and (2) expenses incurred pursuant to obligations, representations, or other commitments of the USPTO.

The legislation also requires the Director, on an annual basis, to: (1) report to Congress with operation and spending plans, including financial details and staff levels broken down by each major activity; (2) provide for an independent audit of USPTO financial statements; and (3) submit a budget to the President.

RANKING MEMBER CONYERS (D-MI): “The current funding mechanism for the USPTO has failed the patent system by not preventing the diversion of nearly $150 million in collected user fees in fiscal year 2013 due to the sequester and the estimated $1 billion in fees diverted over the last two decades.  In essence, there is a tax on innovation in this country, and this bill would repeal it.  The permanent funding mechanism this bill creates is essential to encourage innovation and to ensure that our patent system remains the envy of the world.”

REP.  SENSENBRENNER (R-WI):  “I have long supported efforts to allow USPTO to use their patent application fees to upgrade the agency’s operational effectiveness and reduce backlogs. This bipartisan bill would improve the operations of the U.S. Patent and Trade Office and prevent the government from using money collected to process patents and copyrights for other purposes.”

REP. NADLER (D-NY): “Many of the challenges currently facing the patent system, especially the need to increase patent quality, could be solved if the USPTO had adequate funding.  The Innovation Protection Act would help ensure that the USPTO has the resources it needs by ending fee diversion.  I appreciate the leadership of Ranking Member Conyers on this important issue, and I am proud to join him on this legislation.”

REP. FRANKS (R-AZ): “Fueling the engine of genius, industry, entrepreneurship, and innovation is a bipartisan issue.  It is the role of Congress to protect this free-market economic engine.  I am happy to support Mr. Conyers’ bill, The Innovation Protection Act, which protects inventors, and the current user-fee system, by placing those fees in a separate fund to prevent them from being raided for other purposes.  As a patent holder myself, I firmly believe American inventors should get what they pay for - timely and thorough review of their patent applications.”

REP. LOFGREN (D-CA):  “The staff at the U.S. Patent and Trademark Office helps protect true innovation and cracks down on bad patents that stifle invention and entrepreneurship.  But when patent fees are endlessly siphoned away from the agency, the Patent Office can’t effectively examine the flood of applications they receive each year.  That’s why this bill is so important – it permanently restores the fees paid by patent applicants to the PTO and helps move our innovation economy forward.”

REP. COLLINS (R-GA): “The role that the Patent and Trademark Office plays in granting and arbitrating the patent rights enshrined in our Constitution cannot be understated.  They are stewards of the building blocks of innovation and creativity.  I’m pleased to join a bipartisan group of intellectual property leaders and bring a permanent end to fee diversion at the PTO.  The fees that inventors pay to the PTO should go back to the office and be used to better serve America’s inventors.  Promoting efficiency and quality at the PTO is the responsibility of Congress, and this legislation would go a long way to furthering those goals.”

REP. DEUTCH (D-FL): “If we want a patent system capable of protecting innovators and enforcing higher standards, responding to claims quickly and reducing costly and cumbersome litigation, then what we need is a fully funded and fully functional U.S. Patent and Trademark office.  The Innovation Protection Act represents a bipartisan and commonsense effort to begin meeting that need, and I look forward to working with U.S. Reps. John Conyers and Jim Sensenbrenner  to advance this legislation in the 114th Congress.”

REP. ROHRABACHER (R-CA): "The shifting of fees from their rightful place at the U.S. Patent and Trademark Office has been nothing short of a scandal, depriving inventors and those who invest in them of a timely and careful examination process.  The backlog of patent applications effectively lessens the USA's competitive position in the world.  This needs to be fixed.  I am happy to co-sponsor this bipartisan effort, which aims to restore American pre-eminence in global innovation.  Our creative geniuses have suffered from this bureaucratic dysfunction for too long.  Passage of the Innovation Protection Act will signal that Congress is coming to their rescue."

REP. JEFFRIES (D-NY): “The Innovation Protection Act is a good step in the right direction. It will provide much-needed funding and resources the USPTO needs as it continues to grow and provide world-class service to innovators and entrepreneurs across America. It is my hope that this common-sense, bipartisan measure will pass through this Congress and be signed into law as quickly as possible.”

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Click HERE for bill text of H.R. 1832, the Innovation Protection Act of 2015.