Funding and Performance at the US Patent and Trademark Office

The article investigates the relationship between the USPTO's performance, in terms of the speed and quality of its patent examination, and the resources allocated to the Agency through the annual Congressional appropriations process. I find that average patent pendency at the USPTO nearly doubled from 18.2 months in 1991 to 35.3 months in 2010. I argue that unanticipated increases in patent applications and inadequate resources at the USPTO to deal with the increases, precipitated by Congressional diversions of the Agency's revenues to other agencies have contributed to the explosion of pending applications and delays in patent examination. However, data on various aspects related to the quality of patent examination do not support the view that examination quality at the USPTO has declined during the last two decades. I investigate the provisions of the Leahy-Smith America Invents Act of 2011 and conclude that while the Act retains Congressional oversight of the USPTO's purse, it provides the Agency with some leeway to set its own fees and use its revenues to cover the costs of patent examination. These changes may allow the USPTO to better deal with the existing backlog of patent applications and future vagaries in the number of applications